scotts garments limited - Kotak Securities [PDF]

RED HERRING PROSPECTUS April 12, 2013 Please read Section 60B of the Companies Act, 1956 Book Building Issue

SCOTTS GARMENTS LIMITED

[Scotts Garments was formed on 01/12/1992 as partnership firm under the Indian Partnership Act, 1932. The partners of Scotts Garments promoted a Private Limited Company under Companies Act, 1956 as ‘Scotts Garments Private Limited’ vide Certificate of Incorporation dated 01/03/2002 issued by the Registrar of Companies, Bangalore, Karnataka and acquired the business of “Scotts Garments”. The Company was subsequently converted into a public company and the name was changed to ‘Scotts Garments Limited’ and received a Certificate of Change of Name on 19/06/2007. The Corporate Identity Number of the Company is ‘U18101KA2002PLC030185’] Registered Office: 481-B, Peenya Industrial Area, Peenya IV Phase, Bangalore – 560 058; Tel.: +91-80-40858585/41179001/41179002/41179003; Fax: +91-80- 41179007 / 28362452; Website: www.scottsgarments.com; Contact Person: Mr. S. Guruswamy Babu, Company Secretary & Compliance Officer; E-mail: [email protected] PUBLIC ISSUE OF 1,05,06,954 EQUITY SHARES OF ` 10/- EACH (“EQUITY SHARES”) OF SCOTTS GARMENTS LIMITED (THE “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF ` [•] PER EQUITY SHARE (INCLUDING SHARE PREMIUM OF ` [•] PER EQUITY SHARE), AGGREGATING TO ` [•] LACS (THE “ISSUE”). UPTO 4,50,000 EQUITY SHARES WILL BE RESERVED IN THE ISSUE FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (THE “EMPLOYEE RESERVATION PORTION”). THE ISSUE LESS THE EMPLOYEE RESERVATION PORTION IS REFERRED TO AS THE “NET ISSUE”. THE ISSUE WOULD CONSTITUTE 26.95 % OF THE POST ISSUE PAID –UP CAPITAL OF THE COMPANY. THE NET ISSUE TO PUBLIC WOULD CONSTITUTE 25.80 % OF THE FULLY DILUTED POST ISSUE PAID UP CAPITAL OF THE COMPANY. PRICE BAND: ` 130/- TO ` 132/- PER EQUITY SHARE THE ISSUE PRICE IS 13 TIMES OF THE FACE VALUE AT THE LOWER END OF THE PRICE BAND AND 13.2 TIMES OF THE FACE VALUE AT THE HIGHER END OF THE PRICE BAND THE PROMOTER OF THE COMPANY IS MR. NASEER AHMED In case of revision in the Price Band, the Bidding/Issue Period will be extended for three (3) additional working days after revision of the Price Band subject to the Bidding/Issue Period not exceeding ten (10) days. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to the Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”), by issuing a press release, and also by indicating the change on the website of the Book Running Lead Managers and at the terminals of the Syndicate Member. The Issue is being made through the 100% Book Building Process wherein 25% of the Net Issue shall be allocated on a proportionate basis to eligible Qualified Institutional Buyers. Further, 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only and the remaining QIB portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. If the aggregate demand by Mutual Funds is less than 5% of the QIB portion, the balance Equity Shares available for allocation in the Mutual Fund portion will be added to the QIB portion and be available for allocation proportionately to the QIB Bidders.. Further, not less than 40% of the Net Issue shall be made available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue shall be made available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. RISK IN RELATION TO FIRST ISSUE This being the first issue of Equity Shares of the Company, there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares is ` 10/- per equity share and the Issue Price is [•] times of the face value. The Issue Price (as determined by the Company, in consultation with the Book Running Lead Managers, on the basis of assessment of market demand for the Equity Shares offered by way of book building) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares of the Company nor regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Company and the Issue including the risks involved. The Equity Shares issued in this Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Red Herring Prospectus. Specific attention of the investors is invited to the statements in the section titled “Risk Factors” beginning on page. 1 of this Red Herring Prospectus ISSUER’S ABSOLUTE RESPONSIBILITY The Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Red Herring Prospectus contains all information with regard to the Company and this Issue, which is material in the context of this Issue, that the information contained in this Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The Equity Shares of the Company are proposed to be listed on Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”). The Company has received in-principle approvals from these Stock Exchanges for the listing of the Equity Shares pursuant to their letters dated 21/12/2010 and 11/01/2011 respectively. For the purpose of the Issue, BSE is the Designated Stock Exchange. IPO GRADING The issue has been graded by CARE and has been assigned the IPO Grade 3 indicating average fundamentals vide their letter dated 01/03/2013. For further details and rationale of grading please refer page no. 30. BOOK RUNNING LEAD MANAGER TO THE ISSUE

KEYNOTE CORPORATE SERVICES LTD. The Ruby, 9th Floor, Senapati Bapat Marg, Dadar (w), Mumbai – 400028 Tel: +91–22– 30266000-3; Fax: +91–22– 30266088 Website:www.keynoteindia.net E-mail: [email protected] Contact Person: Mr. Girish Sharma SEBI Registration No.: INM 000003606 AIBI No.: AIBI/ 040

CO-BOOK RUNNING LEAD MANAGER TO THE ISSUE

REGISTRAR TO THE ISSUE

CANARA BANK - MERCHANT BANKING DIVISION LINK INTIME INDIA PVT. LTD. Himalaya House, 407,4th Floor, 79, Mata Ramabai Ambedkar Marg, Mumbai – 400 001 Tel: +91–22-22677405/06 Fax: +91–22-22677404 Website: www.canarabank.com E-mail: [email protected] Contact Person: Mr. Vasant Sapkale SEBI Registration No.: INM 000002558

C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai – 400078 Tel: +91–22-25963838/25946970 Fax: + 91–22-25946969 Website: www.linkintime.co.in E-mail: [email protected] Contact Person: Mr. Sachin Achar SEBI Registration No.: INR000004058

ISSUE SCHEDULE BID/ ISSUE OPENS ON : THURSDAY, APRIL 25, 2013

BID/ ISSUE CLOSES ON : MONDAY, APRIL 29, 2013

SECTION

TABLE OF CONTENTS Definitions and Abbreviations

Page No. i

Presentation of Financial Information and Use of Market Data

viii

Forward Looking Statements and Market Data

ix

I

RISK FACTORS

1

II

INTRODUCTION

PART I

III

Summary of the Industry & Business of the Company

12

Summary of Financial Data

19

The Issue

24

General Information

25

Capital Structure

34

Objects of the Issue

44

Basis of Issue Price

64

Statement of Tax Benefits

66

ABOUT THE ISSUER COMPANY Industry Overview

75

Business Overview

86

Regulations and Policies

123

History and Other Corporate Matters

129

Management

139

Promoter and its Background

153

Promoter Group

154

Dividend Policy

165 PART II

IV

V

VI

VII

FINANCIAL STATEMENTS Report of the Peer Review Auditor, M/s G Anantha & Co, Chartered Accountants

166

Management Discussion and Analysis of Financial Conditions and Results of Operations

198

LEGAL AND REGULATORY INFORMATION Outstanding Litigations, Material Developments and Other Disclosures

205

Government/Statutory and Business Approvals

208

Other Regulatory and Statutory Disclosures

219

OFFERING INFORMATION Terms of the Issue

231

Issue Structure

233

Issue Procedure

238

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF THE COMPANY Main Provisions of the Articles of Association of the Company.

VIII

279

OTHER INFORMATION Material Contracts and Documents for Inspections

315

PART III Declaration

317

Scottts Garments Limited L DEFINITIONS AND AB BBREVIATIO ONS CONVENT TIONAL OR GENERAL G TERMS T TERM Companiess Act FCNR Acco ount Financial Year/ Y Fiscal/ FY Indian GAA AP Insurance Act A IT Act IT Rules SCRA SCRR SEBI SEBI Act SEBI Reegulation/ (ICDR) Reg gulations SEBI Insideer Trading Regulation ns

DESC CRIPTION The Companies Acct, 1956, as am mended from ttime to time. Foreig gn Currency N Non Residentt Account The peeriod of twelv ve months en nded March 311 of that partiicular year. Generrally Accepted d Accounting g Principles in n India. Insuraance Act, 19388, as amended d from time to o time. The In ncome Tax Acct, 1961, as am mended from time to time. The In ncome Tax Ru ules, 1962, as amended a from m time to tim me, except as stated otherw wise. Securiities Contract (Regulation) Act, 1956, as amended fro om time to tim me. Securiities Contracts (Regulation n) Rules, 1957,, as amended from time to o time. Securiities and Exch hange Board of o India consttituted under the SEBI Act. Securitties and Exch hange Board of o India Act, 1992, 1 as amen nded from tim me to time. SEBI The SE EBI (Issue of Capital C and Disclosure D Req quirements) Regulations, R 2 2009. The SE EBI (Prohibitiion of Insiderr Trading) Reegulations, 19992, as amend ded from time to o time, includ ding instructiions and clariifications issu ued by SEBI frrom time to timee.

ISSUE REL LATED TERM MS TERM Allotment/ / Allotmentt of Equity Shaares Allottee ASBA/ Applicaations Supported by Blo ocked Amount ASBA Acco ount ASBA In nvestor/ Bidders ASBA Form m

DESC CRIPTION Unlesss the context otherwise reequires, issue of Equity Sh hares pursuan nt to this Issue. A succcessful Bidder to whom th he Equity Sharres are allotteed pplication for subscribing to t an issue, co ontaining an authorization a n to block An ap the ap pplication mon ney in a bank k account.

Accou unt maintaineed by an ASBA A Bidder with h a SCSB whiich will be blo ocked by such SCSB S to the ex xtent of the Biid Amount off the ASBA Biidder ASBA A Prospeective Investo ors in this Issu ue who intend d to Bid/apply through ASBA

Bid cu um Applicatio on form for ASBA A Investor intending to subscribe through ASBA A Basis of Alllotment The ba asis on which h Equity Sharres will be A Allotted to Bid dders under the t Issue and which w is descriibed in section n titled “Issuee Procedure” on page no.2238 Bid An in ndication to make an offfer, made during d the Bidding B Perio od by a prospeective investo or to subscriibe to the Eq quity Shares at a price within the Price Band, B including all revisions and modiffications thereeto. Bid Amoun nt The highest h value of the option nal Bids indiicated in the Bid-cum-Ap pplication Form and payable b by the Bidderr on submissiion of the Bid for this Issuee. Bid/ Issue Closing Datee The daate after whicch the membeers of the Syn ndicate will not accept any y Bids for this Isssue, which shall be nottified in a widely w circulaated English national newsp paper, a Hind di national new wspaper and a regional neewspaper. Bid/ Issue Opening Datte The da ate on which h the memberrs of the Synd dicate shall sttart accepting g Bids for this Isssue, which shall be the date notified in a widely circulated d English nation nal newspaper, a Hindi nattional newspaaper and a reg gional newsp paper. The fo Bid-cum-A Application orm in terms of which thee Bidder shalll make an offfer to subscrib be to the Form/App plication cum Equity y Shares of th he Company and a which wiill be consideered as the ap pplication Bidding Fo orm for allo otment in term ms of the Red d Herring Pro ospectus. i

Scottts Garments Limited L TERM Bidder Book Build ding Process BRLM CAN/ Con nfirmation of Allotment Note Cap Price Co-BRLM Cut-off

Depository y Depositoriees Act

DESC CRIPTION Any prospective p in nvestor who makes a Bid pursuant to the terms off the Red Herrin ng Prospectuss and the Bid--cum-Applicaation Form. Book building meechanism ass provided u under Sched dule XI of the t SEBI ations, in term ms of which this Issue is m made. Regula Book Running Leead Managerr to this Isssue, in this case being Keynote orate Services Limited. Corpo The note n or advicce or intimatiion of allotm ment of Equitty Shares sen nt to the Bidderrs who have b been allocated d Equity Sharres after disco overy of Issuee Price in the Bo ook Building Process. P The upper u end of the Price Baand, above w which the Isssue Price willl not be finaliz zed and abovee which no Biids will be acccepted. The Co-Book C Runn ning Lead Manager to thiis Issue, in th his case being g Canara Bank Merchant M Ban nking Divisio on The Isssue Price fin nalised by thee Company in n consultation n with the BR RLM and Co-BR RLM. Only R Retail Individ dual Bidders and Employ yees applyin ng under Emplo oyee Reservattion Portion who are app plying for a maximum m bid d amount not ex xceeding ` 2,,00,000/- are entitled to B Bid at the Cu ut-off Price, for f a bid amoun nt not exceed ding ` 2,00,0000/-. QIBs and d Non Institutional Bidderrs are not entitleed to Bid at th he Cut-off Prrice. A Bid su ubmitted at Cut-off C Price is i a valid Bid at all price leveels within the Price Band A depository reg gistered with h SEBI und der the SEB BI (Depositorries and a amended frrom time to tiime. Particiipant) Regulaations, 1996, as The Depositories D A Act, 1996, as am mended from m time to timee.

Depository y Participant

A dep pository particcipant as defin ned under the Depositoriees Act. Such branches b of tthe SCSBs wh hich shall collect the ASBA A Forms and d a list of Designated d Branches which h is available on o http://ww ww.sebi.gov.iin/pmd/scsb b.html or at su uch other websitte as may be p prescribed by y SEBI from tiime to time Designated d Date The daate on which funds are traansferred from m the Escrow Account to th he Public Issue Account afteer the Prospeectus is filed with the Reg gistrar of Com mpanies, Bangaalore, Karnataaka, following g which the Board B of Direcctors shall allo ot Equity Sharess to successfu ul Bidders. Designated d Stock Excha ange In thiss case being th he Bombay Sttock Exchang ge Limited. Draft Red Herring The Draft D Red Heerring Prosp pectus filed with w SEBI, which w does not n have compllete particulars on the priice at which the t Equity Sh hares are offeered and Prospectuss/DRHP size off the Issue Eligible NR RI’s NRI frrom such juriisdiction outsside India wh here it is not unlawful to make an offer or o invitation under the Isssue and in reelation to wh hom the Red Herring Prospeectus constitu utes an invita ation to subscrribe or purch hase the Equitty Shares offered d thereby Employee, Employees or o nt and full-tim me employeee, working in India or “Emplloyee” meanss a permanen Eligible Em mployees (in the t abroad d, of the issu uer or of the holding h comp pany or subsidiary compaany or of Employee Reservation that material m asso ociate(s) of the issuer whose finan ncial statemeents are Portion) consollidated with tthe issuer’s fiinancial statem ments as per Accounting Standard S 21, or a director off the issuer, whether w who ole time or pa art time and does not includ de promoters and an immeediate relative of the prom moter (i.e., any y spouse of that person, or any parent, brother, b sisterr or child of that person or o of the spousee) Employee Reservation The po ortion of the Issue, being a maximum of 4,50,000 Equity Shares which is Portion not ex xceeding 5% of the post issue capitaal of the Com mpany, available for allocattion to the Employees, as per Reg gulation 42 of the SEBII (ICDR) Regula ations, 2009. Equity Shaares Equity y Shares of the t Company y of face valu ue of ` 10 each unless otherwise o specifiied in the con ntext thereof. ii

Scottts Garments Limited L TERM Escrow Account

DESC CRIPTION Accou unt opened w with Escrow Collection B Bank(s) and in whose fav vour the Bidderr will issue cheques or drafts in reespect of thee Bid Amoun nt when submiitting a Bid. Escrow Ag greement Agreeement to be en ntered into am mong the Company, the Registrar R to th his Issue, the Esscrow Collecction Banks, the BRLM and a Co-BRLM M in relation n to the collecttion of the B Bid Amountss and dispatcch of the reffunds (if any y) of the amoun nts collected, to the Bidderrs. Escrow Co ollection Bank k(s) The baanks, which aare registered d with SEBI as a Banker (s) to the Issue at which the Esscrow Accoun nt for the Issu ue will be opeened, in this case being Axis A Bank Limiteed, HDFC Bank Limited, IndusInd I Ban nk Limited, Canara C Bank and a IDBI Bank Limited. L First Biddeer The Bidder B whosee name appeears first in tthe Bid-cum--Application Form or Revisiion Form. Floor Pricee The lo ower end of the Price Baand, below which w the Isssue Price willl not be finaliz zed and below w which no Biids will be acccepted. Indian Nattional A citiizen of Indiaa as defined under the Indian Citizenship Act, 1955, as amend ded, who is not n an NRI. Issue The isssue of 1,05,006,954 Equity Shares of ` 110 each fully y paid up at the t Issue Price aggregating a ` [•] Lacs. Issue/ Bidd ding Period The period betweeen the Bid / Issue I Openin ng Date and the t Bid/Issuee Closing Date inclusive i of b both days and d during whicch prospectiv ve Bidders can n submit their Bids. B Issue Price The final price at which w Equity y Shares will be issued and allotted in terms of the Reed Herring Prrospectus or the t Prospectu us, as determiined by the Company C consulltation with th he BRLM and d Co-BRLM, on o the Pricing g Date. Key Managem ment Officers vested witth executive powers p and th he officers at the level imm mediately Personnel/ /Key Manag gerial below w the board off directors of the t issuer and d includes an ny other perso on whom Personnel/ /KMP the isssuer may decllare as a key management m personnel Margin Am mount The am mount paid by the Biddeer at the timee of submission of the Biid, being 100% to t all applican nts Mutual Fun nds Meanss mutual fund ds registered with SEBI pu ursuant to thee SEBI (Mutuaal Funds) Regula ations, 1996, aas amended from f time to ttime. Mutual Fun nds Portion 5% of the QIB Portiion Net issue The Isssue other thaan the Equity y Shares inclu uded in the Employee E Resservation Portio on, subject to o any additio on of Equity y Shares purrsuant to any y undersubscrription underr the Employeee Reservation n Portion. Non Institu utional Biddeers All Biidders, includ ding sub-accounts of FIIss registered with w SEBI which w are foreign n corporate o or foreign ind dividuals, that are not QIB Bs or Retail In ndividual Bidderrs and who have Bid fo or Equity Shaares for an amount a moree than ` 200,0000/-. Non Institu utional Portio on The po ortion of this Issue being not n less than 40% of the Net N Issue conssisting of 40,22,7 782 Equity S Shares of ` 10/- each agg gregating ` [••] Lacs, avaiilable for allocattion to Non In nstitutional Bidders. B Non Syndiicate Memberr Brokerrs forming p part of nation nwide brokerr network off Stock Exchanges in terms of SEBI circu ular no. CIR/C CFD/14/20122 dated 04/100/2012 Offer Docu ument Draft Red R Herring Prospectus/ Red Herring Prospectus/ Prospectus Pay-in Date Bid/Isssue Closing Date or the last date speccified in the CAN sent to o Bidders receiving allocation n who pay less l than 1000% margin money m at thee time of ng, as applicaable. biddin The peeriod commeencing on thee Bid/ Issue O Opening Datee and extend ding until Pay-in-Periiod the Bid d/Issue Closiing Date; Price Band d The price p band o of a minimum price (“Floor Price”) of ` 130/- and the maxim mum price (“C Cap Price”) off ` 132/- and includes reviisions thereoff. iii

Scottts Garments Limited L TERM Pricing Datte

DESC CRIPTION The daate on which the Company y in consultattion with the BRLM and C Co-BRLM finaliz zes the Issue P Price. Prospectuss The Prospectus, P to o be filed with w the Reg gistrar of Co ompanies, Baangalore, Karnaataka containiing, inter alia, the Issue Priice that is determined at th he end of the Bo ook Building Process, P the size of this Issue and certain other inform mation. Public Issu ue Account Accou unt opened w with the Ban nker to this IIssue to receeive monies from f the Escrow w Account and a from the SCSBs from m the bank acccounts of th he ASBA Bidderrs for this Issu ue on the Dessignated Datee. QIB Portion n Consissts of 25,14,2238 Equity Sh hares of ` 10 each aggreg gating ` [•] laacs being 25% of o the Net Isssue, availablee for allocatio on to QIBs. 5% of the QIB B Portion shall be b available fo or allocation on o a proportio onate basis to o Mutual Fun nds only. Qualified Institutional I A mu utual fund, v venture capittal fund and foreign ven nture capital investor Buyers or QIBs Q registeered with th he Board; a foreign f institutional invesstor and sub b-account (other than a sub-aaccount which is a foreign n corporate or o foreign ind dividual), registeered with the Board; a pub blic financial iinstitution as defined in seection 4A of the Companies Act, A 1956; a scheduled s com mmercial ban nk; a multilatteral and bilaterral developm ment financia al institution;; a state ind dustrial deveelopment corporration; an inssurance comp pany registered with the Insurance Reegulatory and Development D Authority; a provident fund with minimum co orpus of upees; a penssion fund witth minimum corpus of twenty five twenty y five crore ru crore rupees; Natiional Investm ment Fund sset up by reesolution no. F. No. 2/3/22005-DDII daated Novem mber 23, 20055 of the Government G o India of publisshed in the Gaazette of Indiaa. Red Herrin ng The Red R Herring Prospectus issued i in acccordance with h Section 60B of the Prospectuss/RHP Comp panies Act, which w does not n have com mplete particu ulars on the price at which h the Equity Shares S are offfered and sizze of this Issu ue. It carries tthe same obligaations as are aapplicable in case of a Pro ospectus and will be filed with the Registtrar of Comp panies, Banga alore, Karnataaka at least three t days beefore the openin ng of this Issu ue. It will beccome a Prospeectus after filiing with the Registrar R of Com mpanies, Bangalore, Karnaataka, after prricing and allo ocation. Refund acccount The acccount openeed with the Refund R Bankeer, from which refunds, (excluding refund ds to Bidders applied thro ough ASBA), if any, of thee whole or paart of the Bid Am mount shall b be made Registrar/ Registrar to o this Link In ntime India Pvt. P Ltd. Issue Resident Retail R Indiviidual A Rettail Individuaal Investor who w is a perso on resident in n India as deefined in Investor Foreig gn Exchange M Management Act, 1999 Retail Indiv vidual Bidderrs Indiviidual Bidders (including HUFs H and Elig gible Employeees) who hav ve Bid for an am mount less thaan or equal to o ` 200,000 in any of the biidding option ns in this Issue. Retail Portiion Consissts of 35,19,9334 Equity Shaares of ` 10/- each aggregaating ` [•] Laacs, being not lesss than 35% o of the Net Isssue, availablee for allocation n to Retail In ndividual Bidderr(s). Revision Fo orm The fo orm used by the Bidders to t modify thee quantity off Equity Shares or the Bid prrice in any off their Bid-cum m-Applicatio on Forms or any a previous Revision Form((s). Stock Exch hanges Bomba ay Stock Excchange Limited and the N National Stocck Exchange of India Limiteed. SCSB is a Banker to an Issue registered u under SEBI (Bankers to an a Issue) Self Certified Syndicate Regula ations, 1994 and which offers the seervice of maaking an Ap pplication Bank (SCSB B) Suppo orted by Block ked Amount and recognized as such by y the Board. Cities as specified iin the SEBI Circular C no. CIR/CFD/DIL C L/1/2011 datted April Specified Cities C 29, 20011, namely, Mumbai, Chennai, C Kolk kata, Delhi, Ahmedabad,, Rajkot, iv

Scottts Garments Limited L TERM

DESC CRIPTION Jaipurr, Bangalore, Hyderabad, Pune, Barodaa and Surat for f submissio on of Bid Cum Application A b by ASBA Bidd ders. Syndicate The BR RLM and Co--BRLM and th he Syndicate Member. M Syndicate Agreement A The ag greement to b be entered in nto between the t Company y and the mem mbers of the Sy yndicate, in reelation to the collection c of B Bids in this Isssue (excludin ng Bids from ASBA A Bidders submitting their Bids at ccentres other than Specifieed Cities) Syndicate Member M Keyno ote Capitals L Limited Transaction n Registration The sllip or documeent issued by y the Syndicatte Member to o the Bidders as proof Slip/ TRS of regiistration of th he Bid. Underwriters The BR RLM and the Syndicate Member. Underwritiing Agreemen nt The Agreement A am mong the Und derwriters an nd the Compaany to be enteered into on or after a the Priciing Date. Y RELATED TERMS T COMPANY TERM “SGL”, “Scotts” “the Company””, “We”, “us”” and “our” Articles/ Articles of Association n

DESC CRIPTION xt otherwise requires, refeers to Scotts Garments Liimited a Unlesss the contex public limited com mpany incorporated underr the provision ns of Compan nies Act, 1956. The Articles A of Asssociation of th he Company i.e., Scotts Gaarments Limitted.

Auditors

The Statutory Au uditors of th he Company y, being M/ /s Siddaiah & Ram, ntants, Firm Registration n no. 03860S S. The Peer Review Charttered Accoun Audittor of the Company being b M/s. G. Ananthaa & Co., Chartered C Accou untants, Firm m registration No. 0055160S, Peer Review N No. FRN 0051660S/002610. The Board B of Direcctors of the Company or a committee co onstituted theereof. Direcctor(s) of the C Company unlless otherwisee specified. Canarra Bank Veenture Capita al Fund in its status and a as Trusstee and Invesstment Manag ger of Emerg ging India Grrowth Fund (the fith fund d) of the Canbank Venture Capital Fund d Gherzzi Eastern Lim mited

Board of Directors/ D Boaard Director(s)) Emerging India Growth Fund CVC CF V Project Consu ultant /Gherzi/G GEL Memorand dum/ Memorand dum of Association n Registered d Office of the Company

The Memorandum M m of Association of the Com mpany. 481-B B, Peenya Indu ustrial Area, Peenya P IV Ph hase, Bangalorre – 560058

Y RELATED TERMS T AND D ABBREVIA ATIONS INDUSTRY TERM/ AB BBREVIATIO ON AEPC CAD CAM CARE IPO O Grade 3 CARE BBB B (Triple B) CARE A33+ (A Threee Plus)

DESCR RIPTION/FUL LL FORM Apparell Export and P Promotion Co ouncil Computter Aided Dessign Computter Aided Maachine Averagee fundamentaals Instrum ments with thiis rating are considered c to o have moderrate degree of o safety regardin ng timely seervicing of fiinancial oblig gations. Such h instrumentts carry moderate credit risk. Instrum ments with thiis rating are considered c to o have moderrate degree of o safety regardin ng timely paayment of fiinancial oblig gations. Such h instrumentts carry higher credit risk as compared d to instrum ments rated in the two higher v

Scottts Garments Limited L TERM/ AB BBREVIATIO ON DESCR RIPTION/FUL LL FORM categoriies. CDR Continu uous Dyeing R Range CVCFL Canbank Venture Caapital Fund Liimited DEPB Duty En ntitlement Passs Book EU Europeaan Unions GATT Generall Agreement o on Tariff and Trade Kg Kilogram m MFA Multi Fiibre Agreemeent M Ha Million Hectares Sq. Mts Square Meters M TUFS Technollogy Upgradaation Fund Sccheme ABBREVIA ATIONS ABBREVIATION

FULL FO ORM

AGM

Annual General Meeeting

AMBI

Associattion of Merch hant Bankers of o India

AS ASBA AY BSE

Accountting Standard ds issued by the Institute of o Chartered Accountants A o India. of Applicaation Supporteed by Blocked d Amount Assessm ment Year Bombay y Stock Exchaange Limited.

BG/LC

Bank Gu uarantee/ Lettter of Credit

CAGR

Compou unded Annuaal Growth Rate.

CDSL DP ECS

Central Depository Services S (India a) Limited. Depository Participan nt Electron nic Clearing S System

EGM

Extra Orrdinary Geneeral Meeting of o the shareho olders.

EPS

Earning gs per Equity Share. S

ESOP

Employ yee Stock Optiion Plan

FCNR Acccount

GDP

Foreign Currency No on Resident Account. A Foreign Exchange Management Act, A 1999, as amended from m time to timee and the regulations issued th hereunder. Foreign Institutional Investor (aas defined u under SEBI (Foreign ( Insttitutional Investorrs) Regulation ns, 1995, as am mended from m time to time)) registered with w SEBI under applicable law ws in India. Financiaal Institutionss. Foreign Investment P Promotion Bo oard, Departm ment of Econo omic Affairs, Ministry of Finan nce, Governm ment of India Foreign Venture Cap pital Investorss registered with w SEBI under the SEBI (Foreign Venturee Capital Inveestor) Regulattions, 2000. Gross Domestic D Prod duct

GIR Numb ber

Generall Index Registtry Number.

GoI/ Goveernment

Governm ment of Indiaa.

HUF `/INR / Rs./ R Rupees IPO I.T. Act NAV NECS

Hindu Undivided U Faamily. Indian Rupees, R the leegal currency of the Repub blic of India. Initial Public P Offer The Inco ome Tax Act, 1961, as amended from tim me to time Net Assset Value. Nationa al Electronic C Clearing Serviice

FEMA FII

FIs FIPB FVCI

vi

Scottts Garments Limited L ABBREVIATION NEFT NR NRE Account NRI/Non--Resident Indian NRO Acco ount NSDL NSE P/E Ratio PAN RBI RBI Act RoC/Regisstrar of Companies RoNW RTGS USD/ $/ US$ U

FULL FO ORM Nationa al Electronic F Fund Transferr Non Ressident Non Ressident Extern nal Rupee Acccount A perso on resident ou utside India, as a defined under FEMA an nd who is a ciitizen of India orr a person of Indian origin n, each such term t as defin ned under thee FEMA (Deposit) Regulation ns, 2000, as am mended. Non Ressident Ordinaary Rupee Acccount Nationa al Securities D Depository Lim mited. Nationa al Stock Exchaange of India Limited. Price/Earnings Ratio o. Permanent Account N Number. The Resserve Bank of India. The Resserve Bank of India Act, 1934, as amend ded from timee to time. Registraar of Compan nies, Bangalorre, Karnataka Return on o Net Worth h. Real Tim me Gross Settlement The Uniited States Do ollar, the legall currency of the United Sttates of Amerrica.

nding the foreegoing: Notwithstan a.

In the section titled d “Financial Statements” S on page 166 of this Offer D Document, deefined terms shall s have the meeaning given to t such termss in that sectio on.

b. In the section titled d “Main Proviisions of the Articles of Association A of the Compan ny” on page 279 2 of this Offer Document, D deefined terms have h the meaaning given to o such terms in the Articlees of Associattion of the Compaany.

vii

Scottts Garments Limited L PRESENT TATION OF FINANCIAL L INFORMA ATION AND USE OF MAR RKET DATA A d otherwise, the financiall information n used in thiis Red Herrin ng Prospectu us is derived from the Unless stated Company’s restated fina ancial statem ments as of O October 31, 2012, March h 31, 2012, 2011, 2 2010, 22009, and 2008prepared d in accordan nce with Indiian GAAP an nd the Companies Act and d restated in accordance with w SEBI Regulations, as stated in the report of the t statutory A Auditors. ular year. Un nless stated otherwise, o Our fiscal yeear commencces on April 1 and ends on March 311 of a particu references heerein to a fiscaal year (e.g., fiscal f 2012), arre to the fisca al year ended March 31 of a particular year. In this Red Herring H Prosp pectus, any discrepancies d in any table between thee total and th he sum of thee amounts listed are duee to rounding g-off. All referencees to ` or ‘Ru upees’ or ‘Rs.’’ are to Indian n Rupees, thee official currrency of the Republic R of In ndia. One crore is the unit u in the Ind dian numberiing system reepresenting 100 million or 1100 lac and on ne lac is the u unit in the Indian numb bering system m representing g 100,000; thu us, for examplle, ` 10 crore equals ` 100 million. All references r to ‘$’, ‘US$’ or o ‘U.S. Dollarrs’ are to Unitted States Do ollars, the officcial currency of the United d States of Am merica. Market data used in thiss Red Herring g Prospectus has been ob btained from industry pub blications and d internal Company rep ports. Industrry publication ns generally sstate that the information contained in those publicaations has been obtaineed from sourcces believed to t be reliable but that theirr accuracy an nd completeneess are not gu uaranteed and their reliiability canno ot be assured. Although thee Company believes b the m market data ussed in this Red d Herring Prospectus is i reliable, itt has not beeen independ dently verified d. Similarly, internal Com mpany reporrts, while believed to be b reliable, hav ve not been verified v by an ny independen nt source.

viii

Scottts Garments Limited L FORWARD D-LOOKING G STATEMEN NTS AND MARKET DAT TA We have inccluded statem ments in this Red Herring Prospectus which w contain n words or phrases p such as “will”, “aim”, “is liikely to resu ult”, “believe””, “expect”, “will continu ue”, “anticipaate”, “estima ate”, “intend””, “plan”, “contemplatee”, “seek to o”, “future”, “objective”, “goal”, “prroject”, “sho ould”, “will pursue” and d similar expressions or o variations of such expreessions, that aare “forward-llooking statem ments”. All forward--looking stateements are su ubject to risk ks, uncertaintiies and assum mptions abou ut us that could cause actual resultss to differ maaterially from those contem mplated by thee relevant forrward-looking g statement. Important I factors that could c cause acctual results to t differ materially from th he expectation ns include, am mong others: • General economic and d business co onditions in th he markets in n which we op perate and in the local, reg gional and national and internatiional econom mies; • Changess in laws and regulations r reelating to the industries in n which we op perate; • Increased d competition n in these industries; • The Com mpany’s abillity to succeessfully impleement the growth g strateegy and exp pansion planss, and to successfu ully launch and a implemen nt various prrojects and business planss for which funds f are beiing raised through this Issue; • Our abiliity to meet caapital expendiiture requirem ments; • Fluctuatiions in operatting costs; • Unanticipated variatio ons in the durration, size an nd scope of th he projects; • Our abiliity to attract and a retain qualified person nnel; • The effecct of wage preessures, seaso onal hiring paatterns and th he time requirred to train an nd productiveely utilize new emp ployees; • Changess in political and a social con nditions in Ind dia or in otheer countries th hat we may en nter, the mon netary and interest rate r policies of India and other countrries, inflation n, deflation, unanticipated u turbulence iin interest rates, equ uity prices or other rates or o prices; • Any adv verse outcomee in the legal proceedings p iin which we are a involved. For a further discussion of factors th hat could cau use our actua al results to d differ, see the sections tittled “Risk Factors” “Bu usiness Overv view” and “M Management’ss Discussion and a Analysis” beginning on o pages 1, 86 and 198 of this Red Herring H Prosp pectus respecctively. By theeir nature, ceertain market risk disclosu ures are only estimates and could bee materially different from m what actuaally occurs in n the future. As a result, actual futuree gains or losses could materially differ d from th hose that hav ve been estim mated. Neitheer we nor thee Book Runn ning Lead Manager, no or any of its respective r afffiliates have any a obligatio on to update or otherwise revise any statements reflecting circumstances arising a after th he date hereo of or to reflectt the occurren nce of underly ying events, eeven if the underlying assumptions a do not comee to fruition.. In accordan nce with SEB BI requiremen nts, we and the Book Running Leaad Manager will w ensure th hat investorss in India aree informed off material dev velopments u until such time as the grant g of listing g and trading permission b by the Stock Exchanges. E

ix

Scottts Garments Limited L SECTIO ON I - RISK FACTORS An investmen nt in Equity Sh hares involves a high degree of risk. You sh hould carefullyy consider all of o the informattion in this Red Herring Prospectus, in ncluding the risks and unccertainties desscribed below, before makingg an investment in the Company’s Eqquity Shares. If any of the foollowing risks occur, o the busiiness of the Coompany, financcial condition and a results of operations could suffer, the trading prrice of the Eqquity Shares coould decline, aand you may lose all or paart of your investment. The T financial an nd other relatedd implications of risks concerrned, whereverr quantifiable have h been disclosed in the risk factors mentioned m below w. There are certain c risk facctors mentioneed where the efffect is not qu uantifiable andd hence not disclosed. RISK FAC CTORS INTE ERNAL TO THE T COMPA ANY 1. 1

Contingen nt liabilities not provided d for, which if i materializes may have an adverse effect e on our financial condition n and future fiinancial perfo ormance. The contin ngent liabilitiies not provid ded for as on 331/10/2012 are a as follows: Particularrs

Amou unt (` in laacs) 2213.40 115580.30 1875.00 119668.70

Letter off Credits issueed by banker of the Compaany Liability on account of o export oblig gation Estimateed Amount off Capital Com mmitment Total

In the eveent, any of thee above contiingent liabilitties crystallizees it may hav ve an adverse effect on ourr financial condition and future fiinancial perfo ormance. 2. 2

We shall be applying for f licenses an nd approvalss to various statutory and d regulatory bodies b for the proposed factory un nit to be set up at Kagal for which pa art of the isssue proceeds sshall be utiliized at an ap ppropriate time. Furtther, for the project p at Doddaballapur our company y is yet to obttain certain approvals. a In the event there is delay d in obta aining the licenses and ap pprovals it may m affect the commencem ment of opera ation and financialss of the Comp pany. As a part of expansion n strategy we have set up n new factory at a Doddaballaapur for manu ufacturing of garments and propo ose to set up another a facto ory at Kagal fo or knitting an nd fabric proccessing for wh hich the issuee proceeds shall be utilized. u We sh hall be apply ying for licensses and appro ovals to vario ous statutory and regulato ory bodies for the prroposed facto ory unit at Ka agal at an app propriate tim me. Further, fo or the project at Doddaballlapur our company is yet to obttain certain approvals for which appliccations have already been n made. The details of which aree as under: 1. 2.

Approval from A m Chief Inspector of Facttories, Karnattaka State, No.3, N 1st Crosss Road, Gan ndhinagar, Bangalore – 5660 009 for licen nse under Facctories Act 19 948 and its rulles; A Approval from m Departmentt of Ecology and a Environm ment; Karnataaka

Our Company C shaall apply for registration with Centraal Excise and Joint Director General of o Foreign Tradee at an approp priate time. For th he knitting an nd processing g unit to be seet up at Kagaal the followin ng licenses an nd approvalss are to be obtain ned. Presently y, the Compa any has not b been allotted land and hence we shall make appliccations for the reequisite appro ovals post allo otment of land d. 1 2 3 4

Approvall from Maharrashtra Pollutiion Control Board B License under u Factoriees Act License under u Shops and a Establishm ment Act Other Com mmercial reg gistrations und der the indireect tax authorrities.

1

Scottts Garments Limited L Our Company C shaall also apply y for any otheer licenses an nd approvals as required for commenccement of operaations. In the event of delaay in obtainin ng the licensess or approvalls, it may affeect the comm mencement of facttory operations and the fin nancials of thee Company. 3. 3

We have business rela ationship and d association with Bomba ay Rayon Fasshions Limiteed (BRFL) forr last few h cross in nvestments in n the shares of o our Companies and enj njoy trade rellationship years. Wee and BRFL have with each h other. Our Promoter P Mr.. Naseer Ahm med is one of the non-execu utive and non n-independen nt member on the Bo oard of BRFL L. Our propossed Project off Knitting an nd Fabric processing at Ka agal Industriial Textile Technolog gy Park, dev veloped by Kagal K Industtrial Textile Technology Park Privatte Limited iss an SPV promoted d by BRFL. Fu urther, B.R.M Machine Tools Pvt. Ltd, a group g compan ny of BRFL has also invessted in the equity shares of our Company. C Allso some of the promoterrs & Promotter Group Co ompanies of BRFL B are ders/directors in few of ourr group compa anies. sharehold Our Company enjoys business b relationship with h Bombay Ray yon Fashionss Limited for last few yearrs. During F.Y.2011-1 12, our Comp pany has enteered into vario ous purchasee and sales traansaction with BRFL aggreegating to `7864.02 lacs. l Our Pro omoter Mr. Naaseer Ahmed d is Joint Vice Chairman (non executive and non-indeependent) in BRFL. Our Compan ny holds 12,61 1,397 equity shares s i.e. 0.994% of the paaid up capitall of BRFL. BR RFL holds paid up equitty capital of o our Company y. Our proposeed Project 20,00,000 equity shares i.e. 7.48% off the present p of Knittin ng and Fabriic processing g is at Kagall Industrial Textile T Techn nology Park,, developed by Kagal Industriall Textile Tech hnology Park Private Limitted, an SPV promoted p by BRFL. Furth her, B.R. Mach hine Tools Private Liimited, a grou up company also a holds 30,,05,500 equity y shares i.e. 11.24% of the present p paid up equity capital off our Comp pany. Also some s of the promoters & Promoter Group Com mpanies of BRFL B are sharehold ders/directorss in few of ou ur group comp panies. The details d of shareholding of BRFL B related entities e or directorsh hips in our group g compan nies are appeearing betweeen page no.1155 to 163 un nder the secttion titled “Promoteer Group”.

4. 4

Our Comp pany and BRF FL have enterred into a joiint Memorand dum of Underrstanding (MOU) with Go overnment of Karnattaka for settiing up of texxtile units att 12 locationss in Karnatak ka. Our Com mpany and BR RFL have mutually agreed to ind dependently set s up textile units u at 5 and d 7 locations respectively. The present p project at Doddaballlapur is one of o the locatio ons forming part of MOU. Our Com mpany and BR RFL had sub bmitted a joiint proposal to Karnatakaa Udyog Mittra (KUM, a Govt. Of Karnatakaa undertaking g responsiblee to facilitate investment and a assist inveestors in the state) for settting up of units at 122 locations. On O acceptancce of the prop posal, a joint MOU was en ntered by ourr Company, BRFL B and Govt. of Karnataka K at Global G Investtors Meet on 3rd/4th June 2010. For detaiils of MOU, please p see section titled “History and Other Corporate C M Matters” appeearing on pa age no.133. T These location ns include 2 units at Doddaballlapur and on ne each at Haassan, Thippaansandra Villlage – Kolar, KGF Appareel Park, Gowrribidanur, Chikkaballapur, Chitra adurga, Shim moga, Mudho ol, Siddlaghattta and Sriniv vaspura. Ourr Company and a BRFL have muttually agreed d on setting up u independeent projects at a 5 and 7 lo ocations respeectively of th he said 12 locations. Our Compan ny has propossed to set up units at Dodd daballapur, H Hassan, Thipp pasandra villaage-Kolar, K.G.F. Ap pparel Park an nd Sidlaghattta whereas BR RFL is plannin ng to set up u units at other seven locatio ons. There would not be any investment by ou ur Company in n the units to be set up by BRFL and vicce-versa.

5. 5

Our export revenue ha as contributeed more than n 90% of the total revenu ue in last few w financial y years. Our nue is concen ntrated in Eu uropean Regiion. In the ev vent of any economic substantial portion off sales reven n these region ns our revenuee would be su ubstantially im mpacted. turmoil in ness model primarily p focu uses on the export e of man nufactured Ready R Made Garments G to European Our busin and otherr regions of the t world. In n the last few w years we haave earned more m than 90% % of revenuee from the exports off our garmen nts to internattional clients of other cou untries especiaally in Europ pe. We believ ve that the factors lik ke, sound und derstanding of European faashion trend, diligent in prroviding the quality q produ uct, timely delivery schedule s and customer rela ationship hass helped us to o increase ourr customer baase at Europeaan region. In F.Y.20111-12, Europeean region con ntributed aro ound ` 32373..00 lacs valuin ng around 766% of total ex xport sales which incclude countriees like, Germa any, UK, Fran nce, Spain, Denmark and o others. Our business b modeel couples us with th he global econ nomy that prrovides opporrtunities to taap the differen nt market seg gment and att the same time also links us with h the risk of economic e dow wnturn and th he volatility in n global finan ncial marketss that may 2

Scottts Garments Limited L have an adverse a impa act on our bu usiness. In thee event we are unable to sustain or in nsulate the bu usiness or hedge thee financial position, the ad dverse econom mic and geopolitical condiitions may ressult in large impact i on our financcial standing. 6. 6

Our majo or portion off the sales in F.Y.2011-12 was from to op ten custom mers. Any losss of order frrom these customerss may have ad dverse impact on the finan ncials of the Company. C Our sales revenue is dependent d on n top 10 custo omers who acccounted for approx 80.66% of total salles in F.Y. 2011-12. The T major contributor of sales s for F.Y..2011-12 was Best Seller – Denmark, contributing 62.60%, 6 of total reven nue from opeerations wherreas the other major contrib butor was BR RFL with 7.79% and Old N Navy, USA with 4.44% %. We presen ntly do not haave any long tterm contractt or agreemen nt with our cu ustomers and hence the sale to each e customeer is depend dent on our ability to manufacture m quality prod ducts that meet m their specificatiion and deliv very schedule. In the eventt we are unab ble to meet theeir requiremeents or expecttations for reasons beyond our co ontrol it may lead to loss of orders fro om these custtomers and affect the reveenues and profitabiliity of the Com mpany.

7. 7

Raw mateerials constittute a significcant percenta age of our tota al expenses. Any A increase in raw materrial prices and any decrease d in thee supply of ra aw materials could materiially affect ou ur business. % of our tota al expenses off ` 42852.14 la acs and ` 427704.84 lacs Raw mateerial cost consstituted 67.722% and 51.78% in F.Y.201 12 and F.Y.20011 respectiveely. Our prim mary raw material is cotto on, polyester and denim fabrics f for manufactu uring of thee garments. Presently, w we purchase raw materiaal from the domestic maarket and internatio onal market. Though T the prices p of raw material have been stablee in the recentt past but theere can be no assuraance that the prices p of our raw materialls will remain n at same lev vels. Any upw ward trend in n prices of raw materrial would haave adverse efffect on the bu usiness and fiinancials. Any mateerial shortagee or interruptiion in the sup pply or decreease in the qu uality of raw material m due to factors beyond ou ur control cou uld result in increased i pro oduction costss that we may y not successffully be able to t pass on to custom mers, which in n turn would have h a materiial adverse efffect on our bu usiness.

8. 8

The cost of the knittin ng and fabricc processing project at Kagal is based d on the estim mates as giv ven by the he deploymen nt of the issu ue proceeds is i entirely att the sole Technicall consultant – Gherzi Easstern Ltd. Th discretion n of the compa any. The fund requirement for the propo osed project aat Kagal is ba ased on the esstimates as giiven by Gherzzi Eastern Ltd. Therre is no guarantee that thee estimates will w prove to be accurate aand any signiificant deviatiion in the estimates could adverssely impact th he operationss and sustaina ability of the company. c Deeployment off the issue proceeds is entirely at the sole discretion of the company and d no indepen ndent agency has been app pointed to monitor itts deploymen nt.

9. 9

We have not n yet placed d orders for part p of the pla ant & machin nery and misccellaneous fixxed assets requ uirements for our prroject at Dod ddaballapur and a for the en ntire plant & machinery fo or the propossed project att Kagal as specified in the Objects of the Issu ue except for the second hand h machineeries. Any deelay in procurement of plant & machinery, m eq quipment, etc. may delay tthe implementtation schedu ule which may also lead to o increase in prices of o these equip pments, futuree affecting ou ur costs, reven nue and profittability. ose to purchaase plant & machinery m worth ` 17204..15 lacs and miscellaneou m us fixed assetss worth ` We propo 2612.50 la acs from thee proceeds off this Issue. We have allready comm menced the purchase p of p plant and machinery y and miscelllaneous fixed d asset for Dod ddaballapur Project. P As reegards the pro oject at Kagall, we have not yet pllaced orders for f plant & machinery m &m miscellaneous fixed assetss as specified in the section n ‘Objects of the Issu ue’ except forr the second hand machin neries. We may m be requireed to obtain fresh f quotatio ons at the time of placement p of orders with h the supplieers and the same may delay d the pro ocess of ordeering and procurem ment of plant & machinerry, equipmen nt, etc. Subsequently it m may also delaay the implem mentation schedule. We may also o be subject to o risks on pricce escalation of plant & maachinery and other equipm ments that

3

Scottts Garments Limited L we requirre. Hence ourr project coulld face time aand cost overr-run which ccould have an n adverse effeect on the operation ns of our Com mpany. 10. 1 We have not n tied up orr made any arrrangements in respect of incremental w working capital requiremeent for the objects off the issue. We have not tied up for f incremental working ccapital requirrement for prroposed expa ansion as statted in the chapter “Objects of th he Issue” beg ginning on page p no. 44 of o this RHP. We shall ap pproach our banks b for enhanced limits at an n appropriatee time. If we are unable to t tie up for working cap pital requirem ment, our operation ns and financiaal performance will be adv versely affecteed. 11. 1 We have issued i Equity y Shares undeer Pre-IPO pllacement prio or to the date of the Red Herring H Prospectus at a price thatt is lower than n the Issue Prrice. We have issued 17,39,130 equity sh hares of ` 10/ /- at an issuee price of ` 1115/- per equ uity share to Emerging India Gro owth Fund CV VCF V underr Pre-IPO plaacement priorr to the date o of the Red Heerring Prospeectus. The price at which w equity shares s were alllotted to CVC CFL which is lower than th he Issue Pricee. The funds raised by way w of the Pre-IPO P Placem ment shall be utilized tow wards the ob bjects of the IIssue. For s “Objects of o the Issue” on o page 44. further deetails, please see 12. 1 If we are unable to ob btain required d approvals and licenses in timely ma anner, our bu usiness and operations o may be ad dversely affeccted. We may from f time to time, t require certain appro ovals, licensees, registration ns and permiissions for un ndertaking our busin ness for which h we are requ uired to mak ke application ns to the resp pective statutory body. If we fail to obtain an ny of the req quired approv vals or licensses, or renew wals thereof, in a timely manner, m or at a all, our business could c be adv versely affecteed. For further details pleease see section titled “G Government/ Statutory and Busin ness Approva als” beginning on page no o. 208 and paaragraph w.r.tt Approvals/ /Certification/Licenses required for f the propossed project ap ppearing on p page no. 217 & 218 of this R Red Herring Prospectus. P 13. 1 We may not n be able to implement our business a and growth sttrategy accord ding to our cu urrent plans The succeess of our bussiness largely depends on our ability to o effectively im mplement and d execute ourr business and grow wth strategy. We plan to grow g relation nships with existing e clientts and develo op relations with new clients wh ho are seeking g to fill volum me orders on an ongoing basis. b This wiill reflect a ch hange from ou ur current practice of o taking ordeers on a non-p permanent baasis. Provided d that this strrategy is succcessfully impllemented, these new w client relatio onships may help grow ou ur business, however, h they may also prove p to be diifficult for us to effecctively manage. We do no ot have previous experien nce in filling h high volume orders on an n on-going basis. If we are unab ble to effectiively managee long-term relationshipss based on large l orders, we may o efforts to grow our bu usiness. Furth her, lengthy qualification q experiencce an adversee impact on our processes required by large U.S S. and Europ pean value rretailers may y limit our ability a to seccure new vaalue retail w are unablee to secure neew customerss in the futuree as a result of our not meeeting such customerss. Further, if we qualificatiion requiremeents, our busiiness, financiaal condition and a results off operations could be mateerially and adversely y affected. 14. 1 We have been allotted d Land in Pllot No. D-3, D-4, A-3, A--10, A-11, S-443, S-44 and S-45 (P) adm measuring 57567.00 sq s meters at Apparel A Park k Industrial A Area, I Phase,, Doddaballa apur by Karna ataka Industrrial Areas Developm ment Board (K KIADB) on lease cum sale arrangementt for a period d of ten years (10 years). In n terms of agreementt dated 28/02/ 2/2011 betweeen our Compa any and KIAD DB we are reequired to exp port 100% off the total productio on in value terms, t per an nnum startin ng from the third t year frrom date of taking posseession i.e. 13/12/20100. In the eveent we do no ot comply wiith the coven nant then KIA ADB may ta ake appropria ate action against uss or levy a peenalty as fixed d by Governm ment of Karna ataka under th he applicablee laws and reggulations. We are raising resourrces to set up u new manu ufacturing un nits at Appaarel Park Ind dustrial Area,, I Phase, Doddaballlapur. We ha ave been allo otted land on n plot no. D-33, D-4, A-3, A-10, A A-11, S-43, S S-44 and d S-45 (P) admeasurring 57567 sq q. meters for total consid deration of ` 619.00 lacs by b KIADB. This T land waas initially 4

Scottts Garments Limited L allotted on lease-cum-sale basis forr period of 6 years vide alllotment letteer dated 25/003/2010. Subssequently, our Comp pany (lessee) entered into a lease cum sale arrangem ment with KIA ADB (lessor) vide agreem ment dated 28/02/2011 for a revissed period of ten years (100 years). Durring the subsistence of thee lease period d and also thereafterr, that is durin ng the interreegnum betweeen the expiry y of the lease p period and th he execution of o the sale deed, the lessee shall pay p to the lesssor yearly ren nt of ` 14,225/ /- and mainteenance charg ges of ` 1,06,6888/-. The other coveenants includ de: - The Lessee L shall ob btain the neceessary clearan nce from the Department D o of Ecology and d Environmen nt. - The L Lessee shall crreate maximu um possible ad dditional emp ployment opp portunities an nd provide a minimum m of 80% % of the emplloyment to th he local peoplle on an overaall basis. How wever, the lesssee shall emp ploy 100% of thee local people in case of Group C and D categories. - The personal p officeer appointed by b the Lesseee shall be a Kaannadia. - The Lessee L shall provide p atleaast one-perso on in each diisplaced famiily of the ersstwhile lando owners in respecct of the land allotted to yo ou depending g upon their qualification q aand suitability y to the post. - The Lessee L shall make m arrangeement for rain nwater harveesting and grround water recharging in n the plot allotteed in consultaation with Eco ology and En nvironment Department. - The Lessee L shall start s the industry after o obtaining neccessary licensses/ clearancces/approval from the conceerned, such ass Governmentt of India, Staate Governmeent, Local Bod dies, and Statu utory Bodies etc. - Exporrt 100% of thee total production in valuee terms, per annum a startin ng from the third t year fro om date of taking g possession. In the eveent, we are unable u to fulfiil the conditio ons as specifiied in the agrreement and the allotmen nt letter, it maybe considered as non n complian nce and the lesssor may takee appropriatee action again nst us or levy a penalty as fixed by y Governmen nt of Karnatak ka affecting o our Company operationally y or financiallly or both. 15. 1 We have been alloca ated land by y KITTPL att A-1, Kagal Industrial Textile Tech hnology Park k, KagalHatkanan ngale Five Star Indl. Area a, Kagal – Diist Kolhapur, Maharashtrra to be taken n on leave an nd license basis for a period of 5 years for thee knitting and d fabric proceessing unit. Th he said land is yet to be allotted a to our Comp pany. In the ev vent land is not n allotted to the Compan ny, we shall b be required to o identify new w location for setting g up the unit which w may leead to delay a and cost over runs in the project. We have been allocateed 40,000 sq. meters of lan nd by Kagal Industrial I Teextiles Techno ology Park (P P) Limited (KITTPL) pursuant to o Share Sub bscription Ag greement (SS SA) dated 188/01/2012 executed e betw ween our Company y and KITTPL L and in term ms of letter daated 15/09/20012. In termss of the same,, the said land d shall be allotted to o our Compaany on paym ment of `500.00 lacs towards the allotm ment of 50,00,000 equity shares of KITTPL of o the face va alue of `10/- each and th he Company entering into o a leave and d license agreeement by paying an n amount of `100.00 lacs as a non reefundable dep posit. The otther terms an nd conditionss shall be finalized at the time of o entering in nto leave and d license agreeement. In th he event land d is not allottted to the Company y, we shall be required to identify i new location for setting s up thee unit which may lead to d delay and cost over runs in the prroject. 16. 1 We are dependent on our managem ment team fo or success wh hose loss cou uld seriously impair our ability a to a expand business b efficiiently. The lo oss of servicce of the seniior managem ment could continue to manage and seriously impair the ab bility to contiinue to mana age and expan nd the businesss efficiently. Our succeess largely deepends on thee continued services s and performance of our manaagement and other key employeees. The loss of o service of the t senior maanagement co ould seriouslly impair thee ability to co ontinue to manage and expand th he business effficiently. 17. 1 Our busin ness is depend dent on our manufacturin m ng facilities. The T loss of orr shutdown of operations at any of our manu ufacturing faccilities may have h a materrial adverse effect on ourr business, fin nancial cond dition and results off operations. We presen ntly have tw wenty one man nufacturing u units function nal at Karnattaka and Tam mil Nadu. Ou ut of total units 3 aree owned, 1 iss on lease cum m sale and 17 are on lease basis. Our maanufacturing facilities are subject to operating g risks, such as a the breakd down or failu ure of equipm ment, power supply or processes, p perrformance 5

Scottts Garments Limited L below exp pected levelss of output or o efficiency, obsolescencee, labour disp putes, strikess, lock-outs, continued c availabilitty of servicees of our external contraactors, earthq quakes and other natura al disasters, industrial accidents and the need d to comply with w the directtives of releva ant governmeent and judicial authoritiess. nvironmental concerns the Hon’ble Hig gh Court of Ta amil Nadu paassed an ordeer to shut dow wn all the Due to en printing and a dyeing un nits located at a Tirupur. Th his order led to the tempo orary shutdow wn of our two o printing and dyein ng units at Tirupur T from February 20111 to Augustt 2011- Our u units re-comm menced the activity on complying with the conditions c off Tamil Nad du Pollution Control Boaard. The said d closure afffected the pany to a certtain extent. No N assurance can be given n that such clo osure/shut down d may financials of the Comp not occur in future. Ou ur business, financial f cond dition and ressults of operaations may bee adversely afffected by any disruption of operations at our facilities, inclluding due to o any of the faactors mention ned above.

18. 1

We had made an ap pplication da ated 26/11/20007 for registtration of which h was refuseed by The Registrar of Trade Ma arks, Chennaii under sectio on 11 of the Trade T Mark A Act, 1999 beca ause similar trademark t was alrea ady on the reecord of the registrar r for tthe same/ sim milar goods/ sservices. Therrefore, we have moved another application a da ated 08/06/2012 with our n new logo . The samee is yet to be registered in the name of the Company. In ca ase our new trademark t is not registereed in the nam me of the com mpany and th he same is n any groundss by the Regisstrar of Trade Marks it may be suscepttible to be useed by any third parties refused on which ma ay affect the business. b m an appllication dated d 26/11/20077 for registratiion of our log go under the class 18, 22, 23, 24, 25 We had made and 26 of o the Trade Marks Act 1999. The R Registrar of Trade T Markss, Chennai isssued an ord der dated 19/12/2008 objecting the t applicatio on on the relaative grounds of refusal under u section n 11 of the Trade Mark milar trademarrk is already on the record of the registrar for the same/ similaar goods/ Act, 1999 because sim services. In I view of this, we have filled a new app plication vide application d dated 08/06/2012 for regisstration of our new logo l . In case our new n trademarrk is not registered in the name of com mpany and th he same is refused on n any ground ds by the Regiistrar of Trad de Marks it may m be suscepttible to be useed by any thiird parties which ma ay affect the business. b

19. 1 We may not n be able to fulfil our exp port obligatio ons. We have obtained liccenses under Export Prom motion Capittal Goods Sccheme (EPCG G) to benefit from the concession n given on th he duty levieed by the Go overnment. As A per the liceensing requirrement underr the said scheme, we w are requireed to export goods g of a deefined amoun nt within eigh ht years failing which it maay lead to payment of waived du uty alongwitth the interesst and penalty y. As on 31/ /10/2012 our export oblig gation is ` 15580.30 lacs. l 20. 2 We have entered e into related r party transaction aggregating to t ` 54302.50 lacs during FY F 2011-12. For F details of the sam me please refeer to “Promin nent Notes” a appearing on page p no.10. T There can be no n assurance that such transactio ons will not have h an adveerse effect on our business, s, financial co onditions, ressults of opera ations and prospects.. Our Prom moter, Directo ors and Key Managementt Personnel maybe m deemeed to be interrested to the extent of equity shaares held by them t or theirr friends and relatives. Ou ur Promoter m maybe interessted in the traansactions entered in nto between our o Company y and themsellves as well ass between our Company and a our Group p Entities. We have entered e and may m continuee to enter into o related party y transactionss. During F.Y.2011-12, the aggregate related paarty transactio on was `54302.50 lacs of which w `48040.0 00 lacs pertain ns to Corpora ate Guaranteee given by KMP, `1998.00 lacs tow wards remuneeration to KM MP and the balance b of `6064.50 lacs pertains p to traansactions with Asso ociate Compa anies. The details of the saame are appeearing on pag ge no.10 undeer “Prominen nt Notes”. While we believe that all a our related d party transaactions have been b conducted on arm’s length l basis, we w cannot 6

Scottts Garments Limited L assure you u that we cou uld have achiieved more faavourable term ms had such transactions been b entered into with unrelated parties. There can be no assurance th hat such tran nsactions will not have an n adverse effeect on our business, financial conditions, results of operatio ons and prosp pects 21. 2 Some of our o group com mpanies have made losses in past threee financial yeears. Any prollonged lossess by group companiees could resultt in reduction n of reputation of our Com mpany. p companies which have made m losses in n past 3 finan ncial years aree tabulated beelow: Our group (` in lacs) Sr. No. 1. 2. 3. 4. 5. 6. 8. 9. 10. 11. 12.

Na ame of the com mpany

2009-10

22010-11

2011-12

Scotts Fashioncciti India Limiited Scotts Plantatio ons Private Lim mited Scotts Metals an nd Mines Priv vate Limited Scotts Infrastru ucture and Deevelopment P Private Lim mited GF FI Infrastru ucture Deveelopment P Private Lim mited Co oppers Coin Realty R Privatee Limited Scotts Apparelss Private Limiited Scotts Fashionss Private Limiited Scotts Wears Prrivate Limited d Scotts Knits Private Limited Inm mark Retail Private P Limiteed

(0.533) (93.774) (0.411) (0.188)

(0.47) (63.07) (0.11) (0.25)

(00.05) N N.A. (00.11) (00.14)

(0.055)

(0.27)

(00.06)

(0.333) (0.177) (0.211) (0.255) (0.266) (0.255)

(0.26) (0.15) (0.18) (0.18) (0.20) (7.16)

(00.15) (00.22) (00.27) (00.19) (00.37) (899.39)

22. 2 We have experienced negative n Opeerating Cash F Flow in the Financial F Yea ar 2010-11 an nd 2007-08 an nd cannot rule out th he possibility y of such nega ative cash flow ws in future. We have reported neg gative cash flo ow from operrating activitiies for the fin nancial year ending e March h 31, 2011 and Marcch 31, 2008 to t the tune of o ` 5.90 lacss and ` 1,080.30 lacs respectively and d cannot rule out the possibility y of such neg gative cash fllows in futurre. In the eveent of negativ ve cash flow, the Compan ny will be required to t arrange thee funds at a co ost to meet th he shortfall. 23. 2 There are restrictive co ovenants in th he agreementss with the Ba anks/Institutiions from whom we have borrowed, b which am mong other thiings, require the t Company y to obtain prrior permissio on from them for certain acts a which may limitt Company’s discretion in these matterss. We have entered into o various loaan agreementts with Canaara Bank, EX XIM Bank and d State Bank k of India towards long term borrowings b and a working g capital faciility. There are a restrictiv ve covenants in these nts with the Banks/ B Institu utions from w whom we hav ve borrowed,, which amon ng other thing gs require agreemen the Comp pany to obtaiin prior perm mission from m them for ch hange in Man nagement, deeclaring divid dend and undertakiing of new prroject etc. whiich may limit Company’s discretion d in tthese matters. 24. 2 Our inabiility to upgrade to the lateest technology y may adversely affect ourr growth, marrket position and profitabillity Advancem ment in tech hnology may require us tto make add ditional capittal expenditu ure for upgraading our manufactu uring facilitiees so as to co ompete with o our various competitors. c I the event that In t we are not n able to respond to t such techn nological advaancement in a timely man nner, we may y lose our com mpetitive edg ge thereby adversely y affecting ourr profits. 25. 2 We may be b subject to industrial i unrrest, slowdow wns and increeased employeee cost India has stringent labo our legislation that protectts the interestts of workers,, including leg gislation that sets forth detailed procedures p for f dispute resolution r an nd employee removal and legislation n that imposees certain 7

Scottts Garments Limited L financial obligations on employeers during eemployment and upon rretrenchmentt. Under Ind dian law, employeees also have a right to esta ablish trade u unions. Althou ugh our emp ployees are no ot currently u unionized, we cannot assure you that they will not unionizze in the futurre. If some orr all of our em mployees unio onize or if we experiience unrest or o slowdownss, it may beco ome difficult for f us to main ntain flexible labour policiees and we may experience increassed wage costs and emplo oyee numbers resulting an impact on ou ur financials. 26. 2 Inability to visualize the t dynamic and a changingg trend of fash hion may ham mper the dem mand and grow wth of the Company y. We procu ure order from m different cu ustomers on the merit of our design an nd quality which w are syncchronized with the dynamics d and d changing treend of fashion n industry. We W are subjectt to uncertain nties that are aassociated to fashion n industry and d any inabilitty on our partt to understan nd the prevailing trend of our target maarket may hamper our growth prospects. EXTERNAL E R RISK FACTO ORS 27. 2 Disruptio on in services of third party y transport prroviders may y affect our bu usiness operattions Our Com mpany is dep pendent on th hird-party trransport prov viders for th he supply of raw materiaals to our manufactu uring units an nd delivery of o our produccts to our custtomers. Transsport strikes by b members of o various Indian tru uckers’ union ns have taken n place in th he past, and could take place p in futurre, thereby caausing an adverse effect e on our timely receiipt of suppliees of raw maaterials and our ability to o deliver ourr finished products to our custom mers on timee, thereby ad dversely impaacting our bu usiness. Furth her, any increease in oil he transportaation cost resu ulting in an im mpact on our profitability. p prices, maay lead to the increase in th 28. 2 Industry is i prone to freequent changges in governm ment policies, any material changes in the t duty struccture may adversely y impact our financials f Our indu ustry is pronee to changes in governmeent policies in n respect of ttaxes, levies, and excise duty. d Any material changes c in thee duty structu ure may adveersely impact our financialss. 29. 2 Competitiion from oth her domestic producers / unorganized d sector may y adversely affect a our co ompetitive position and a our profittability We face competition c frrom other exiisting domesttic producerss and potentiaal entrants to the industry y in which we operatte that may adversely a affeect our comp petitive positiion. Loss of m market share and competition may adversely y affect our prrofitability. We W also face co ompetition fo or customers ffrom other pllayers in the organized o and unorg ganized mark kets. We expeect competitio on could increease with new w entrants com ming into thiss industry and existiing players co onsolidating their position ns. Some of our o competito ors may have access to sig gnificantly greater resources and hence h the abillity to compette more effecttively. 30. 3 Environm mental regulattion imposes additional co osts and may affect the ressults of our op perations We, like other o produceers, are subjecct to various central, c state and local env vironmental, health and saafety laws and regullations concerrning issues such s as damaage caused by y air emission ns, wastewater discharges, solid and hazardous waste hand dling and disp posal, and thee investigation n and remediiation of conttamination. These T laws and regullations are inccreasingly beecoming strin ngent and may in the futurre create substantial envirronmental compliancce or remediiation liabilitiies and costss. These lawss can imposee liability for non-compliaance with health and d safety regullations or cleaan up liability y on generato ors of hazardo ous waste and d other substaances that are dispossed of either on o or off-site, regardless off fault or the legality l of thee disposal actiivities. 31. 3 A slowdo own in economic growth in i India coulld materially y and adverseely affect the Company’s results of operation ns and financiial condition Our perfo ormance and the quality and growth of our busin ness are depeendent on thee health of th he overall Indian eco onomy. There have been periods of slowdown in the t economicc growth of In ndia during the t 1990s. 8

Scottts Garments Limited L The Indian economy iss also largely driven by thee performancee of the agricu ulture sector, which depen nds on the quality off rainfall durring the mon nsoon season and is thereefore difficultt to predict. In the past, economic slowdown ns have harm med manufactturing industtries includin ng the industrry to which we w belong. Any A future slowdown n in the India an economy co ould harm ou ur results of operations and d financial con ndition. 32. 3 Changes in i Indian Go overnment po olicies could adversely aff ffect economic conditions in India, an nd thereby adversely y impact our results r of operrations and fi financial cond dition ket price and liquidity l of th he equity shaares, may be affected a by In ndian Govern nment‘s policy y changes The mark in India. For F example, rising interesst rates, increaases in taxatio on or the creaation of new regulations r co ould have a detrimeental effect on n the Indian economy in g general and us u in particullar. The Indiaan Governmeent has in recent yeaars sought to o implement economic e reforms, and th he current Ind dian Governm ment has imp plemented policies and a undertaken initiativess that continu ue the econom mic liberalizaation policiess pursued by previous Indian Go overnments. However, H thee roles of the IIndian Goverrnment and th he State Goveernments in the t Indian economy as producerss, consumers and regulato ors have rema ained significcant and therre can be no assurance that liberalization policies will con ntinue in thee future. Any y significant change in su uch liberalizaation and deregulation policies could c adverssely affect bu usiness and economic con nditions in In ndia generally y and our results of operations an nd financial condition c in p particular. 33. 3 Global ecconomic, polittical and sociial conditions may harm our o ability to o do business,, increase its costs and negatively y affect the sttock price. External factors f such as a potential teerrorist attack ks, acts of warr or geopoliticcal and social turmoil in m many parts of the worrld could con nstrain our ab bility to do bu usiness, increaase its costs an nd negatively y affect our sttock price. These geo opolitical, social and econo omic condition ns could resu ult in increaseed volatility in n India and worldwide w financial markets m and economy, e and d such volatillity could con nstrain its abillity to do business, increasse its costs and negattively affect our o stock pricee. 34. 3 Natural calamities c cou uld have a neggative impactt on the India an economy and a cause the business to suffer. India has experienced natural calam mities such as a earthquakees, tsunami, floods f and drrought in thee past few years. Thee extent and severity s of th hese natural d disasters has an a impact on the Indian ecconomy. Any y negative impact of natural disassters on the In ndian econom my could adveersely affect tthe business and a the markeet price of our Equity y Shares. 35. 3 Any down ngrade of Ind dia’s sovereiggn debt ratin ng by an inteernational rating agency could c have a negative impact on n our results of o operations and financia al condition wngrade of In ndia’s credit rating r for Ind dian domesticc and internaational debt by b internation nal rating Any dow agencies may m adverselly impact our ability to raise additional financing an nd the interestt rates and co ommercial terms on which such additional fin nancing is av vailable. This could have an adverse effect e on our ability to nancing to fu und its growtth on favouraable terms orr at all and, as a result, could have a material obtain fin adverse efffect on our reesults of operrations and fin nancial condiition. 36. 3 The price of our Equity y Shares may y be highly vo olatile, or an active tradin ng market forr its equity sh hares may not develo op. The pricee of our Equiity Shares on n the Indian Stock Exchan nge may flucctuate as a reesult of severral factors including g: - Volatility V in In ndian and glob bal securities market; - Our O results of operations an nd performan nce; - Peerformance of o the competiitors; - Adverse A mediaa reports, if an ny, on SGL orr the Industry y; - Changes C in th he estimates of our perfo ormance or recommendat r tions by finaancial analystts on our C Company; - Siignificant dev velopment in India’s econo omic liberalization and de--regulation po olicies; and 9

Scottts Garments Limited L - Siignificant dev velopment in India’s Fiscall and environ nmental regulations. - General G markeet conditions; and - Domestic D and international economic, legal and regullatory factors unrelated to our performaance. There can n be no assurance that an active tradin ng market forr our equity sshares will deevelop or be sustained after this Issue or the price p at which h the Equity S Shares of our Company are initially trad ded will correespond to the pricess at which the Equity Sharees of our Com mpany will traade in the marrket subsequeent to this Issue. Prominen nt Notes 1.

Thee net worth off SGL as per its i audited reestated financcial statementt for seven mo onths period ended on 31/10/2012 is ` 24,323.38 2 lacss and as on 311/03/2012 is ` 22784.25 laccs.

2.

Boo ok value per equity e share of the Comp pany as per itts audited resstated financiial statement for seven mon nths period en nded on 31/110/2012 is `900.98 and as at a 31/03/20122 is ` 85.22/-

3.

Thee average costt of acquisitio on of the equitty Shares of ` 10 each by th he Promoter is i ` 1.46 per sh hare

4.

On 26/12/2012 our o Company y has, by way y of a Pre-IPO O Placement, allotted 17,399,130 Equity Shares of ` 10 0 each to Emeerging India Growth G Fund d CVCF V, forr an aggregatee consideratio on of `1999.999 lacs, at a prem mium of `1055.00 per Equitty Share

5.

Inveestors are advised to referr the paragraaph on “Basiss of Issue Pricce” on page 64 6 of this Red d Herring Prospectus beforre making an investment in n the Issue.

6.

Exccept as mentio oned in the seections titled “Capital “ Stru ucture” beginn ning on page 34 of this Red d Herring Prospectus, we have h not issueed any Equity y Shares in thee last twelve months. m

7.

Thee details of rellated party trransactions fo or seven montths period en nded on 31/100/2012 and fo or the last fivee financial yeaar is hereundeer:

Particu ulars

31 1st Octo ober 20012 115.00 1

31st March 2 2012

Guaran ntees Given n by key manag gerial person nnel Loans given to associa ate companies

(` In laccs) s March 31st 311st March 2009 2008

s March 31st 2011

31sstMarch 2010

198.00

198.00

198.00

144.00

144.00

040.00 480

48040.00

45030.00 4

220530.00

6760.00

4660.00

160.20 1

-

162.00

-

-

-

Investm ments madee in associa ates

676.00 6

3008.70

1.00

1.00

1.00

1.00

Sale of o investmentts in Associiates

-

2413.70

-

-

-

-

Sale off Garments

12 299.30

319.80

-

-

-

-

Receiv vable from associa ates

979.20 9

322.30

-

-

-

-

Remun neration to key manag gerial personn nel

8.

Pressently we do o not have bu usiness intereest in our gro oup companiees except for Inmark Retaail Private Lim mited to whom m our Compa any has madee sale of ready ymade garmeents aggregatiing to ` 1299.30 lacs as at 31/10/2012 an nd ` 319.80 laacs in F.Y.20111-12.

9.

Inveestors are freee to contact the t BRLM an nd Co-BRLM for any com mplaints, clariffication or infformation perttaining to thiss Issue. For co ontact detailss of the BRLM M and Co-BRL LM, please reffer to the coveer page of thiss Red Herring g Prospectus. 10

Scottts Garments Limited L 10. All information shall be mad de available b by the BRLM,, Co-BRLM and the Comp pany to the public p and inveestors at largee and no seleective or addittional inform mation would be available only o to a secttion of the inveestors in any manner whattsoever. 11. In addition a to th he BRLM and d Co-BRLM, tthe Company y shall be obliiged to updatte the Offer D Document and d keep the public informed d about any m material chang ges till listing g and trading g commences in respect of th he shares issu ued through this t issue. 12. For interest of promoter/dire p ectors, pleasee refer to the section titled d “Promoterss and its Background” beg ginning on pag ge no. 153 of this Red Herrring Prospecttus. gements wherreby the prom moter group, tthe directors of o the Compaany which 13. Theere are no finaancing arrang is a promoter of the issuer, th he directors off the issuers and a their relattives have fin nanced the pu urchase by any y other person n of securitiess of the issuerr other than in i the normall course of bu usiness of the financing entiity during thee period of six months im mmediately prreceding the date of filing g draft offer document d with h the Board. 14. Theere has been no n change in the t name of th he issuer com mpany during g the last threee years

11

Scotts Ga arments Limiited PART I SECTION III – INTRODU UCTION mation in this section is derrived from a combination c off various officcial and unoffiicial publicly available a The inform materials and a sources of information. It I has not been independentlyy verified by thhe Company, thhe Book Runniing Lead Manager or o their respecttive legal advisors, and no reppresentation iss made as to thee accuracy of this t information n, which may be incconsistent with h information available a or com mpiled from othher sources. SUMMARY Y OF THE IND DUSTRY Overview w of the Global Textile Ind dustry In the yeaar 2011, the gllobal trade in textile and cllothing indusstry was at US SD 706 billion n. Exports by Indian World textile and d clothing industry accou unted for USD D 15.0 billion n and USD 144.40 billion respectively. r exports off textiles and clothing grew by 17 per cent in 2011. The top ten exporters eacch registered 13 per cent grow wth or more. Bangladesh B r recorded the highest h increaase (27 per ceent) while thee lowest amo ong the top ten was recorded by b the United States with 13 1 per cent. Th he order for the t top ten ex xporters remains the same as in n 2010. China a was the lead ding exporter of textiles an nd clothing in n 2011 with a 32 per cent sh hare in world exp ports of textilles and 37 peer cent in clotthing. The Eu uropean Unio on and the United States are a the major marrkets for cloth hing, accountting for 45 perr cent and 21 per cent respectively of wo orld imports. (Source: WTO W – International Trade Statistics, 2012)). Overview w of Indian Textile Industry Indian tex xtile industry y contributes about 14 per cent to Indu ustrial Producction, 4 per ceent to the cou untry’s Gross Do omestic Produ uct (GDP), 177 per cent to o export earn nings and pro ovides direct employmentt to 35 million people p which h includes su ubstantial nu umber of SC/ /ST and wo omen. Textilee & Clothing g sales generated d USD 55 Billion in 2008-009 bifurcated as USD 33.4 billion b from domestic d marrket and US $ 21.60 billion fro om exports. Exports E of Tex xtiles & Cloth hing grew to US$ 22.41 billlion in 2009-110 and has to ouched US$ 26.822 billion in 2010-11. In the financial year i.e. 2011-12,, exports of teextiles and clo othing, as perr latest available data covering g April-Octob ber, 2011, hass grown by 288.94% over th he correspond ding period of 201011. During th he year 2010 0-11, Readym made Garmen nts account fo or almost 400% of the tottal textiles ex xports. Apparel and a cotton teextiles produ ucts together contribute nearly n 70% of the total teextiles exportts. The exports baasket comprise a wide ran nge of items including i reaadymade garm ments, cotton n textiles, han ndloom textiles, man-made m fib bre textiles, wool w and woo olen products, silk, jute an nd handicraftss including carpets. India’s teextiles produccts, including g handlooms and handicrrafts, are exp ported to mo ore than a hu undred countries.. However, th he USA and the EU, acco ount for abou ut two-thirdss of India’s teextiles exportts. The other major export desstinations are China, U.A.E E., Sri Lanka, Saudi S Arabiaa, Republic of Korea, Banglladesh, Turkey, Pakistan, P Braz zil, Hong Kon ng, Canada, Eg gypt etc. (Source: Annual A Reporrt 2011-12 of Ministry M of Teextile) In the posst-quota perio od, India has emerged as a major sourciing destinatio on for new bu uyers. As a measure m of growin ng interest in n the Indian textile and clothing secttor a numbeer of buyers have opened d their sourcing/ /liaison officee in India. Commercially, C , the buoyan nt retailers accross the worrld are lookiing for options of o increasing their sourcin ng from the Indian markeets. The Indiaan textiles ind dustry is extrremely varied, with the hand--spun and han nd-woven sector at one en nd of the specctrum, and th he capital inteensive, sophisticaated mill secttor at the oth her. The decen ntralized pow wer looms/ho osiery and kn nitting sectorrs form the largesst section of textiles secto or. The closee linkage of the Industry to agricultu ure and the ancient a 12

Scotts Ga arments Limiited cultures, and a traditions of the counttry make the Indian textilee sector uniqu ue in compariison with the textile industry of other coun ntries. This also a providess the industry y with the caapacity to prroduce a variety of products suitable to the different maarket segmen nts, both withiin and outsid de the country y. Global exxports of Ready Made Garrments (RMG G) •

•

• • •

g 2008-09 weere of the order of USD 10.38 billion,, which recorrded a Globaal exports of RMG during margiinal decrease to USD 10.06 billion duriing 2009-10. However, H exp ports of RMG G grew by 5.660% to US$ 10.63 1 Billion in n 2010-11. As peer latest availa able statisticss, exports of RMG R during AprilA Octobeer, 2011 was of o the order of o USD 7088.774 million as against USD 5512.15 millio on during thee same period d last year, ind dicating an in ncrease of oveer 28.60% in US$ U terms this year. EU was w the biggesst destination n for RMG ex xports, with over o USD 5.3 billion worth h of exports during d the yeear ending Ma arch, 2011, reecording a gro owth of over 1% 1 compared d to exports in n 2009-10. US was the second d biggest desttination for RMG, R with ex xports of USD D 2.85 billion for the year ending e March h,11, recordin ng a growth of o 7.29% over the last finan ncial year. UAE was w the third d biggest destiination with over o a billion dollar worth h of exports to o that group. (Sourcce: Annual Reeport 2011-122 of Ministry of o Textiles)

The majorr sub-sectors that comprisse the textiles sector includ de the - Organ nized Cotton/ / Man-Made Fibre Textiless Mill Industrry, - Man-m made Fibre/ Filament Yarrn Industry, - Wool and Woollen n Textiles Indu ustry, - Sericu ulture and Silk k Textiles Ind dustry, - Jute and a Jute Textiles Industry, and - Textilles Exports (Source: Annual A Report 2009-10, 2 Miniistry of Textilees) Indian Teextile Exportss The textille export bask ket consists of o wide rangee of items co ontaining cottton yarn and fabrics, man n-made yarn and fabrics, woo ol and silk fabrics, f madee-ups and vaariety of garm ments. Indiaa’s textile pro oducts, including g handlooms and a handicraffts, are exportted to more th han a hundreed countries. India’s tex xtiles and clo othing industrry is one of th he mainstays of the nation nal economy. It is also onee of the largest contributing secctors of Indiaa’s exports wo orldwide. Thee report of thee Working Grroup constitu uted by the Planning Commisssion on boostiing India’s maanufacturing exports durin ng 12th Five Year Y Plan (20012-17), envisagess India’s expo orts of Textiless and Clothin ng at US$ 32.335 billion by th he end of XIth h Five Year plan, p as against off US$ 55 billio on envisaged in the Reportt of Working Group on Textiles for the XIth Five Yeaar Plan and based d on historic growth rate of o 10% (CAG GR), a businesss as usual ap pproach, will result in exp ports of US$ 52 billion b by thee end of XI Plan. P An exp port target off US$ 65 billlion and creaation of 25 million m additionaal jobs has beeen proposed with a CAGR R of 15% duriing the XII Pllan. At curren nt prices the Indian textiles in ndustry is peg gged at US$ 555 billion, 64% % of which serrvices domesttic demand. The T textiles in ndustry accounts for f 14% of in ndustrial prod duction, whicch is 4% of GDP; employs 35 million people p and acccounts for nearly y 12% share off the country’’s total exportts basket. udget 2012-13 3 Highlights Union Bu •

Stand dard rate of Central C Excisse duty has been b increaseed from 10% to 12%. Exciise duty on Cotton C textilees covered un nder Tariff heading 5204 to o 5212 increassed from 4% to 6%. 13

Scotts Ga arments Limiited • • • • • • • • • • • •

Autom matic shuttlelless looms fullly exempted from basic cu ustoms duty of o 5%. Autom matic silk reeeling and pro ocessing mach hinery as weell as its partts exempted from f basic cu ustoms duty. Secon nd hand mach hinery to attraact basic duty y of 7.5%. Basic customs duty y on wool waaste and wool tops reduced d from 15% to o 5%. Basic customs duty y on Titanium m dioxide redu uced from 100% to 7.5%. Aram mid yarn and fabric used for f the manuffacture of bulllet proof hellmets exemptted fully from m basic custom ms duty. Finan ncial package of ` 3,884 crore c announcced for waiv ver of loans of o handloom weavers and d their coopeerative societiies. Two more m mega handloom h clu usters, one to cover Prakassam and Gun ntur districts in Andhra Prradesh and another for Go odda and neig ghbouring disstricts in Jharrkhand to be set s up. Threee Weaver’s Service Centrees one each in Mizoram, Nagaland and a Jharkhan nd to be set up for providing technica al support to poor p handloo om weavers. ` 500 crore pilot sccheme announ nced for prom motion and ap pplication of Geotextiles in n the North Eastern E Regio on. A pow werloom meg ga cluster to be b set up in Icchalkaranji in Maharashtraa with a budg get allocation of ` 70 crore.. Excisee duty of 10% % is applicab ble to branded readymadee garments with w abatemen nt of 55% fro om the Retaill Sales Price. Along A with in ncrease in du uty to 12% thee abatement enhanced e to 70%. 7 As a resu ult, the incideence of duty as a a percentag ge of the Retaail Sales price would come down from 4.5% 4 to 3.6%.

P for Indian Textille and Clothiing Industry Growth Prospects The Confeederation of Indian Textille Industry en nvisages the Indian Textille and Clothiing market to o reach USD 100 billion by yea ar 2015. Textile & Clothin ng sales generrated USD 555 Billion in 20008-09 bifurcaated as USD 33.4 billion from domestic d marrket and US $ 21.6 billion from f exports.

14

Scotts Ga arments Limiited BUSINES SS OVERVIE EW We are a Com W mpany with sttate of the artt facilities for manufacturin ng the hi-fash hion Ready Made M Garmen nts. We h have domain expertise in providing saampling and design and have h addition nal facilities such as embro oidery, p printing, dyeiing and wash hing. Presently y, we are larg gely engaged in manufactu uring and exp port of Ready y Made G Garments (RM MG). From a modesst beginning involving tak F king up job works, w SGL staarted explorin ng the markeet for direct ex xports, a has in cou and urse of time established e a status s for pro oduction of qu uality garmen nts and depen ndability in deelivery s schedules in the t export ma arket. Our op perations and facilities enable us to man nufacture readymade appaarel by s spanning variious aspects of o the appareel production chain, from managing the design to delivery d and quality q a assurance pro ocesses involv ved in produccing readymaade apparels.. SGL is one of o the compeetitive manufaacturer a and exporter of readymad de garments with moderrn manufactu uring facilitiees, fully back ked by facilitties for p product deveelopment, dessign studio and efficient sampling s infrrastructure to o provide qu uality servicess to its c customers. During F.Y. 20 011-12, we ex xported our readymade apparel amo ounting to ` 45,741.38 laccs. Our C Company man nufactured 18 80.80 lacs piecces for woven n and knitted garments in F.Y.2011-12. During Septem D mber 2012, Credit C Analyssis & Research Limited (C CARE) has asssigned CARE E BBB rating to our long term baank facilities amounting to t ` 229.70 crores c and CARE C A3+ to o our short term t bank faacilities a amounting to ` 227.40 crorres. The instru uments with CARE C BBB an nd A3+ rating g have moderrate degree off safety r regarding tim mely servicing g of financiall obligations. We have beeen accorded the status off Trading Ho ouse in a accordance w with the provisions of Forreign Trade Policy P 2009-14 by Office of o the Joint Director D General of F Foreign Trad de. We are also a a registeered memberr of Apparell Export Pro omotion Coun ncil (sponsorred by G Government o India, Miniistry of Textilles). of C Competitive S Strengths We are into th W he business off manufacturiing readymad de garments for f last two decades. d We believe b that we w have t following competitive strengths to maintain and the d enhance our position as a leading mu ulti- product readyt to-wear fashio on apparel bu usiness house. Our principal competitiv ve strengths arre hereunder:1.

Multiiple Product Capability: C W have deveeloped a rang We ge of product offerings in order o to addreess the varied d and expand ding requirem ments of our customers. Our O product offerings incclude woven,, knits, sweatts, jerseys and d woven trou users (cotton and denim) for both gen nders across all a ages. We believe b that our o broad ran nge of appareel products an nd hi fashion garment exp perience allow ws our custom mers to source most of theeir product caategories from m a single veendor and enaables us to ex xpand our bu usiness from existing custo omers, as weell as address a larger basee of potential new custom mers. We belieeve our busin ness model an nd product diiversification provides ourr customer One O Stop Solu ution for all apparel a requirrements.

2.

Strongg Managemeent Team: We W benefit fro om the leadership of our managemen nt team, whicch has extenssive experien nce in the ap pparel industrry. Our Prom moter has adequate experrience in the textile indusstry and we have h successfu ully implemen nted expansio on projects in n the past. Ou ur Key Manag gement Personnel are larg gely responsib ble for successsful executio on of our gro owth strategy y by expandin ng our manu ufacturing fa acilities, dev veloping new w customer base and strengtheniing our cusstomer relatio onships. In addition to ou ur senior man nagement teaam, we believ ve that our middle m manag gement team and skilled work w force com mprising of designers, d taillors, merchan ndisers and marketing m perrsonnel provide us with deepth needed to t manage ou ur growth. Our emphasis e on creating c and sharing valuee have not on nly retained but b attracted people p to be part p of the Company, whiich we believ ve to be an im mportant com mpetitive advaantage as we enter new markets m and expand our prroduct offerin ngs. 15

Scotts Ga arments Limiited 3.

Relattionship with h big sized pla ayers in interrnational marrket: Our custtomers includ de value retaiilers as well as a higher-end d fashion bran nd retailers, such s as Best Seller, Old Navy, N H& M Hennes & Mauritz, M Rhodie Suppliers, C & A, S. Olliver, Jules, No N Excess, Maayoral Moda,, Infinil S.A., etc. We supp ply our multi product offerrings to Bestssellers for their 5 sub-brand ds viz, Verom moda, Jack and Jones, Only y, EXIT and SELECTED. S We W focus on n maintaining g long-term relationships r with our cu ustomers. Wee have strong g relationship p with some of o our leading g customers, and have a decade d old bu usiness relatio on with Best Seller, S who is one of our larrgest customeers in terms of o revenues. We beelieve that ou ur ability to ad ddress the varried and expaanding requirrements of glo obal customerrs over long periods enab bles us to obtain o additio onal businesss from existiing customerrs as well as a new custom mers. We serv ve most of ou ur customers across a all streeams of our bu usiness modeel, which we believe b increaases their loya alty to us.

4.

We prroduce products at Compeetitive pricingg: Our autom mated designin ng and samplling facilities enable us to produce quallity products throughout the t year. We have h modern n scanning an nd quality assu urance equip pment, benefiitting our maanufacturing process sign nificantly in terms t of redu ucing wastag ge and enabling us to dem mand a premiium for our products. p We believe b that our o fair custom mer service policies p and consistently c high h quality products hav ve earned uss significant good will from our customers, which h has resulted d in repeat ord ders from maany of them.

5.

Stringgent quality ch heck: The Com mpany believees in providin ng the best possible qualitty to the customers. Theree are quality checks in pllace that prev vent any defective materiial from reacching the cusstomer. Qualiity control meeasures are in n place at eveery step in th he manufacturring process. The Compan ny also has a well-equippeed quality con ntrol departm ment.

6.

Desiggning Capabillities: We hav ve two dedicated and welll-equipped design d studios in Tirupur and in Bangaalore with Qualified, Q skillled and expeerienced emp ployees preparing design ns. There is also a an inform mation system m in place thaat keeps a daatabase of all the designs created c for fu uture referencce. The studio os are equip pped with laatest design software in ncluding CAD D/CAM. Ou ur designers travel extenssively to our target markeets to study th he latest tren nds in those countries. We encourage th hem to visit fashion f show ws to help theem in their sttudy of fashion. This pracctical exposurre helps the design team come out with w new deesigns and ideas based on the curreent trends and a fashion in the intern national mark ket. The new designs are then sent ou ut to the laborratory for vaarious testing of the garmeents before th he designs are released to the sampliing unit for the t further marketing m and d sales purpo oses. These design d studioss generate vaarious styles for garment business and d at the samee time, enables us to work k on designs supplied by the t customerrs. The design n studio takess feedback fro om the custom mers on thee samples allready sent and modifiees the design n according to the custo omer’s suggeestions.

7.

Samp pling Capabillities: Our Co ompany has capabilities to t produce garment g samp ples as per designs d developed by our design studios in Tirupurr and Bangalore. Our desiign and samp pling departm ment is well equipped e witth facilities lik ke sample dy yeing, samplee printing, washing w and processing p faccilities. We have h two garm ment samplin ng units, onee in Tirupur and one in Bangalore. These T units provide p samples to the cusstomer for seelection. Thesse finished gaarment samp ples are sent to t the custom mer for appro oval. Availabiility of the sam mpling unit helps h the com mpany in prov viding the customer with a wide varietty of choices at the minim mal possible cost c to the co ompany. Thee garment maaking processs starts only after a the samp ples are apprroved. Differeent processes of sampling are involved for productss going to diffferent markeet segments. Our above-m mentioned caapabilities giv ve us an adv vantage overr other garmeent manufacturers.

8.

Strateegic Location n Advantage: We have straategically loccated our opeerations. All our o woven gaarment facilitties are locateed at Karnataaka with majo or production n at Bangalorre and knitted garment faacilities are lo ocated in Tiru upur, Tamil Nadu N and Bangalore & Baagepalli in Kaarnataka. Wee believe location of our units u gives uss significant savings in production, p laabour and trransportation costs. Our knitted k 16

Scotts Ga arments Limiited operaations in Tam mil Nadu are within a 10-k kilometer rad dius of Tirupur, which is regarded as one of Asia’ss largest appa arel manufactturing clusterrs. Our locations provide us u convenien nt access to aiirports, ports and are also within w close proximity p of our o domestic suppliers. P Product Portffolio: Our product portfolio com O mprises of thee Woven garm ments and Kn nitted garmeents that inclu udes Shirts (C Cotton, D Denim) Tops,, Skirts, Trousser (Cotton, Denim), D Shorrts, Cargos, T-Shirts T (Basicc and Embroiidered), Sweaats and Jerseys E Export The major cusstomers of th T he Company are a located att Europe and USA. Our ex xports and neet sales have shown C CAGR of 7% and a 8% respeectively for lasst three years. Year

Exports* Net Saless* Exports as a percentage to t (` In Lacs) (` In Lacss) Net Sales (%) 2009-100 39,451.833 43,017.007 911.71 2010-111 48,207.388 49,527.773 977.33 2011-122 45,741.388 50,025.446 911.44 * *Includes Exp port Incentive received by the t company on account of o export saless B Business Straategy 1. Strengtheening Appare el designing and Productt Developmeent Process: We W operate in i a highly crreative and dynaamic fashion industry thaat requires keeeping up pace with eveer-changing market m trend ds. Our strategy is i to focus on n the develop pment of new w designs an nd samples for f our garm ments. Our in house studios arre equipped with w latest deesign softwarre including CAD/CAM thus t enabling g us to succeessfully convert our designs in nto samples in nto final prod ducts. We plaan to strength hen our capab bilities in dessigning by continu uously upgra ading our dessign studios both b in terms of human ressources and teechnology. We W plan to tap thee hi-end ready ymade garmeent segment which w will heelp us in maiintaining high her sales realiization for our fin nal products. 2. Strengtheening Producct Portfolio and enhanccing capacitiees to meet client deman nds: Presenttly our product portfolio p comp prises of Read dy Made Garm ments which includes the export of speecific garmentts. Our strategy iss to increase the t product portfolio p shalll include the addition a of diversified hig gh fashion garrments and cateriing the same to other largee sized playerrs that are speecifically into sale of these garments. We W shall also targeet enhancing the t capacities of our existin ng manufactu uring capacitiies to meet th he incremental client demand for f our produ ucts. 3. Integrated d Operationss: We presen ntly focus on n the manufaacturing of Ready Made Garments G fro om the sourced faabrics and ra aw materials. Our long terrm objective is i to integratee our operations and deveelop in house faccilities from yarn y dyeing to t garment manufacturing m g. The integraated operatio ons of our com mpany shall deriv ve the benefitts of economies of scale an nd increase thee quality conttrol on our fin nal product. 4. Controllin ng Operation nal Cost: We believe that to sustain thee competitiveeness of the in ndustry we have h to continuou usly focus on n controlling the cost incurred for vaarious operatiional activitiees. Our strattegy to control th he cost shall include i the controlling c raaw material cost c through negotiations with the sup ppliers, increasing g focus on quality q contro ol to reduce the wastage and identify ying the high h cost areas of the Company y. 5. Tap dom mestic markett and expand ding geograp phic reach: Our O major po ortion of expo ort income iss from European n nations. Tho ough we hav ve high expo osure in this region, we weren’t w vastly y affected fro om the global meeltdown. However, to in nsulate ourselves from an ny future eco onomic slow wdown, we plan p to increase our o presence in domestic market m and also a tap the other o regions across the globe. Our Com mpany 17

Scotts Ga arments Limiited will also continue exp ploring opporrtunities in vaarious countrries where it can supply value v added textile products to enhance itss geographic reach. This sh hall help us to o mitigate thee risk linked to t different markets m and widen n the growth prospects.

18

Scotts Ga arments Limiited SU UMMARY OF O FINANCIA AL DATA ANNEXU URE I RY STATEM MENT OF ASS SETS AND LIABILITIES, L , AS RESTAT TED SUMMAR

Particulaars Non-currrent assets Fixed asssets Tangiblee assets Intangib ble assets Capital work-inprogresss Non-currrent Investm ments Investm ments in Equity instrum ments Long terrm loans and advances Total no on-current assets Current assets Inventorries Trade Reeceivables Cash and d cash equivaleents Short-terrm loans and advances Other cu urrent assets Total current assets Non-currrent liabilitie es Long-terrm borrowing gs Deferred d tax liabilities (net) Other lon ng term liabilitiess Total no on-current liabilitiees Current liabilities Short terrm borrowing gs Trade paayables Other cu urrent liabilities

31st Octobeer, 2012

(` in i lacs) 311st Marrch, 20008

31stt March h, 20122

31sst Marcch, 20111

31st Marrch, 20110

31sst March, 20009

164033.71 10455.12

16,346.42 1,475.46

11,8990.56 2,2113.18

11,2442.26 2,9550.92

8,7777.11 3,6888.65

7,4441.88 3,6688.65

49755.40

2,453.48

1,6445.63

1 16.78

5 50.82

1 112.93

5,0699.64 -

5,018.84

2,6665.00

1,6665.00

1,6665.00

8 887.00

5988.73

581.23

6229.17

5002.65

4772.69

3 338.83

280922.61

25,8775.43

19,0443.54

16,3777.61

14,6554.27

12,4469.29

222688.66 68044.47

21,688.99 7,592.33

16,5776.29 7,9996.17

11,1448.51 7,8998.89

8,1334.25 8,4996.53

4,9947.80 7,6691.05

6200.66

552.76

7338.53

4884.32

6002.21

5 579.07

20277.21 25311.06 342522.05

2,048.68 2,917.94 34,800.70

2,4667.62 2,4220.48 30,1999.09

3,5111.07 1,8229.95 24,8772.74

1,7119.08 7997.90 19,7449.97

1,8817.21 8 846.83 15,8881.96

84144.27

7,326.63

5,3005.53

5,1443.58

4,5886.01

7,3306.11

12333.26

1,208.02

7775.17

8776.20

3888.01

97.47

2899.12

2244.99

2228.38

1774.94

1008.63

39.42

99366.65

8,759.64

6,3009.08

6,1994.72

5,0882.65

7,4443.00

191044.08 36455.96 37466.80

18,079.52 6,852.18 3,033.95

17,3335.64 6,7008.40 2,5225.85

11,8886.67 6,2335.85 2,3666.85

9,5229.61 5,2555.91 2,1998.05

6,9964.42 3,5591.72 1,1182.63

19

Scotts Ga arments Limiited

Particulaars Short-terrm provisionss Total current liabilitiies Net Worrth

31st Octobeer, 2012 15877.79 280844.63 243233.38

31stt March h, 20122 1,166.59 29,132.24 22,7844.25

31sst Marcch, 20111 9334.88 27,5004.77 15,4228.78

31st Marrch, 20110 1,5881.00 22,0770.37 12,9885.26

31sst March, 20009 1,0777.46 18,0661.03 11,2660.56

311st Marrch, 20008 1,7728.35 13,4467.12 7,4441.13

2,6733.83

2,673.83

2,6773.83

2,6773.83

2,6773.83

2,4473.83

2,4966.96 400.00 191122.59 243233.38

2,496.96 40.00 17,573.46 22,7844.25

2,4996.96 4 40.00 10,2117.99 15,4228.78

2,4996.96 4 40.00 7,7774.47 12,9885.26

2,4996.96 4 40.00 6,0449.77 11,2660.56

1,2296.96 40.00 3,6630.34 7,4441.13

Net worth represente ed by: Shareho olders Funds Share Caapital Equity sh hare capital Reservess & surplus Securitiees premium Amalgam mation reserv ve Profit an nd loss accoun nt Net worth

20

Scotts Ga arments Limiited ANNEXU URE II SUMMAR RY STATEM MENT OF PRO OFIT AND LOSSES, L AS RESTATED R

Particulaars Revenuee from operatiions Other income Total rev venue EXPENS SES Cost of raw r material and a componeents consumeed Changed d in inventoriies of finished goods and traded goods g Other ex xpenses Total exp penditure Earningss before interrest, tax, deprreciation and d amortizaation (EBITD DA) Depreciaation Finance charges Profit beefore tax Less: Tax x expense Current tax expense Deferred d tax (credit)/ / charge Total taxx expense Profit affter taxation

31sst Octob ber, 20112 329339.88 5993.43 335333.31

31st Marrch, 20112 50,0025.46 6,5587.83 56,6613.29

311st Marrch, 20111 49,5227.73 8447.14 50,3774.88

31sst Marcch, 20110 43,017.07 418.91 43,4355.98

31sst Marcch, 2009 36,3887.70 1,0555.86 37,4443.56

(` in i lacs) 311st Marrch, 20008 33,1113.23 1 162.72 33,2275.95

178446.07

29,0019.10

22,1112.77

22,142.10

20,2332.41

17,6651.62

3995.78 100227.39

(3,5338.98) 17,3372.02

5669.44 20,0222.64

(2,5177.85) 16,602.70

(2,1177.39) 13,3881.50

(7550.28) 11,1161.83

282669.23

42,8852.13

42,7004.85

36,226.95

31,4996.52

28,0063.17

52664.08 11558.90 1114.98 29990.20

13,7761.16 1,4442.12 2,0082.23 10,2236.81

7,6770.02 1,4552.06 1,4991.41 4,7226.55

7,209.03 1,239.81 1,6444.61 4,3244.61

5,9447.04 9990.34 1,2336.19 3,7220.51

5,2212.78 8 851.87 8 851.28 3,5509.63

9223.93

1,4400.00

1,3334.53

1,052.18

7008.09

1,0097.50

2 25.23 9449.15 20441.05

4 432.85 1,8832.85 8,4403.95

(101.03) 1,2333.50 3,4993.06

488.19 1,540.37 2,7844.24

2990.54 9998.63 2,7221.88

1 187.42 1,2284.92 2,2224.71

21

Scotts Ga arments Limiited ANNEXU URE III RY STATEM MENT OF CASH FLOWS AS A RESTATE ED SUMMAR (`` in lacs)

Particulaars A. Cash flow operating activities Net Proffit before prio or period ittem, tax and extraord dinary items Adjustm ment for: Depreciaation/amortissatio n Finance charges & loss on variation n on foreign exchangee rates Bad debtts written off Profit on n sale of fixed assets Loss on Sale S of investtment Dividend d income/cap pital gain Operatin ng profit before working g capital chang ges Adjustm ment for: Increase in inventoriees Increase / ( decrease ) in trade pay yables Decreasee / ( increase ) in trade recceivables (Increasee)/Decrease in loans & advances a Income taxes t paid ( net n of refund) Net cash h generated / (utilized d) from opera ating activities B. Cash flow from ng activities investin Purchasee of fixed asseets Purchasee of non-curreent investmeent Sale of non-current n investmeent Dividend d Received Capital Subsidy S Net cash h utilized

331st October, 2 2012

31st M March, 2012

331st M March, 2 2011

311st Maarch, 20010

2990.20

100,236.81

4,726.55

4,324.61

3,7220.51

3,,509.63

1158.90

1 1,442.12

1,4452.06

1,239.81

1,014.26

851.88

1114.98

1 1,643.91

1,4491.41

1,644.61

1,2336.20

851.28

-

0.42

-

-

-

-

15.26

( (1.55) (8669.43)

2.27 (20.02)

(5,,998.07)

( (49.80)

(449.80)

(660.00)

(1184.88)

5264.08

7 7,325.19

7,620.22

7,174.49

5,0339.99

5,,010.16

(579.66)

(5,,112.70)

(5,4427.78)

(3,0114.27)

(3,1886.44)

(1,3376.39)

(22798.01)

341.66

744.16

1,078.93

879.43

369.92

(787.87)

140.74

(6679.19)

(8005.08)

1228.12

(3,6664.72)

390.85

232.52

(8832.14)

(1,2665.63)

(1,0006.92)

25.00

(205.10)

(1,,028.12)

(1,4431.17)

(7440.44)

(7445.56)

(1,4444.26)

2860.03

1 1,899.29

(5.90)

2,428.00

1,108.62

(1,0080.29)

(33766.92)

(6,,785.09)

(3,7728.18)

(3,7330.71)

(2,7551.39)

(2,4437.45)

(50.80)

(4,,972.06)

-

28.36 (33789.36)

88,359.28 48.90 78.29 (3,,270.68)

49.80 (3,6678.38)

49.80 (3,6880.91)

91.43 60.00 (2,5999.96)

(5,4433.98) 24.88 (7,8846.55)

22

311st Marrch, 20009

31st Maarch, 20008

Scotts Ga arments Limiited

Particulaars investin ng activities C.Cash from f Financin ng activities Interest paid p Increase in share capiital Share prremium receiv ved ( Repaym ments) / procceeds of long term borrowin ngs Dividend d & dividend d distributtion tax Interest income i receiv ved ( Repaym ments) / procceeds of unsecu ured loans Net cash h generated frrom/ (utilised d in) financin ng activities Net Incrrease / ( decre ease) in cash and a cash equivaleents Cash and cash equivaleents at the beginnin ng of the year Cash and cash nd equivaleents at the en of the yeear

3 31st October, 2 2012

31st March, M 2012

3 31st March, M 2 2011

311st Maarch, 20010

311st Marrch, 20009

(11114.98) -

(1,,556.35)

(1,4491.41)

(1,6444.61)

(1,2336.20) 200.00 1,200.00

(8851.28) 1,,112.50 1,,297.00

2112.21

3 3,053.74

5,741.70

3,092.46

3,1550.69

5,,148.93

-

( (311.79)

(3311.79)

(3112.82)

(2889.43)

(1155.20) 159.70

(1,5110.65)

1,,510.70

-

31st Maarch, 20008

997.23

1 1,185.60

3,938.50

1,135.03

1,5114.41

8,,222.35

67.90

( (185.79)

2 254.22

(1117.88)

2 23.07

(7704.49)

552.76

738.54

4 484.32

602.21

579.13

1,,283.62

620.66

552.76

738.54

484.33

602.20

579.13

23

Scotts Ga arments Limiited T THE ISSUE Public Issuee aggregating g to ` [•] lacs: Which comp prises of fresh h issue of

1,05,06,9554 Equity Shaares of `10/- each e

Of which: Employee Reeservation Po ortion#

Up to 4,550,000 Equity Shares*

Net Issue to the Public

1,00,56,9554 Equity Shaares

Of which: A) QIB Portiion:# Of which 5% is available for f Allocation n to Mutual Funds [the unsubscribed portion, p if any y, in the Mutual Fund d reservation will be availaable to QIBs] Balance for all a QIBs includ ding Mutual Funds F B) Non- Insttitutional

C) Retail

Porrtion: #

Porrtion:#

Equity Sharees outstanding g prior to the Issue: Equity Sharees outstanding g post the Issue: Use of Proceeeds

•

25,14,2388* Equity Shares of ` 10/- each, constitu uting 25% of the Neet Issue. 1,25,712 Equity E Sharess of ` 10/- eacch

23,88,5266 Equity Sharees of `10/- eaach Not less than 40,22,7782* Equity Shares S of ` 10/1 each, constitutting 40% of th he Net Issue that will be available for allocaation to Non-Institutional Bidders. B Not less than 35,19,9934* Equity Shares S of ` 10/1 each constitutting 35% of th he Net Issue that will be available for allocaation to Retaill Individual Bidders. B 2,84,77,3880 Equity Shaares of `10/- each e 3,89,84,3334 Equity Shaares of ` 10/- each Please reefer to chapteer titled “Ob bjects of the Issue” I on page 44 of this Red Herring Prosspectus for aadditional informattion.

Notes: N *In the even nt of over-sub bscription, Allotment shalll be made on n a proportio onate basis, su ubject to valiid Bids being receiv ved at or abov ve the Issue Prrice.

•

**Allotmentt to each Reetail Individu ual Bidder sh hall not be less l than thee minimum Bid lot, sub bject to availability of Equity Sh hares in the Retail R Portion n. The remain ning availablee Equity Sharres, if any, in n Retail Portion shalll be allotted on o a proportio onate basis to o Retail Indiviidual Bidder.

•

#Subject to valid Bids being b received d at or abovee the Issue Price, P under-subscription, if any, in thee NonInstitutionall Portion and Retail Portio on would be allowed a to be met with spilll-over from other o categoriies or a combination n of categoriies at the disscretion of our o Company y, in consultaation with th he BRLMs an nd the Designated Stock Exchan nge. Howeverr, under-subsscription, if any, in the QIB Portion willl not be allow wed to be met with h spill-over fro om other cateegories or a co ombination off categories. Under-subscr U iption, if any,, in the Employee Reservation R Po ortion will bee added to thee Net Issue. In n case of und der-subscriptiion in the Nett Issue, spill-over to o the extent off under-subsccription shall be permitted d to the Emplo oyee Reservaation Portion subject s to the Net Isssue constitutting at least 255% of the fullly diluted posst-Issue paid up u capital of our o Company y.

•

Our Compaany has, by way w of a Pree-IPO Placem ment, allotted 17,39,130 Equity E Sharess to CVCFL, for an aggregate co onsideration of o `1999.99 laacs, at a premiium of `105.000 per Equity Share 24

Scotts Ga arments Limiited INCORPOR RATION

GENERA AL INFORMA ATION

Scotts Garmeents was form med on 01/122/1992 as parrtnership firm m under the In ndian Partnerrship Act, 19332. The partners of Scotts S Garmeents promoted a Private Limited L Com mpany under Companies Act, A 1956 as ‘Scotts Garments Prrivate Limited’ vide Certiificate of Incorporation dated d 01/03/22002 issued by b the Regisstrar of Companies, Bangalore, Karnataka K witth the main object o to acquire the busiiness of “Scotts Garmentss”. The Company waas subsequen ntly converted d into a publicc company an nd the name was w changed to ‘Scotts Garrments Limited’, and d received a Certificate off Change of Name N on 19/ /06/2007. Thee Corporate Identity I Num mber of the Company y is U18101KA A2002PLC0300185. ADDRESS OF O THE COM MPANY Registered & Corporate Office:

481-B, IV Phase, P Peenyaa Industrial Area, Peenya, Bangalore B – 560 5 058; Tel.: +91--080-411790011/41179002/441179003/408858585; Fax:+91-08028362452 / 41179007; Website: W www w.scottsgarments.com

Company Identification n Number PAN

U18101KA A2002PLC0301185 AAFCS97003C

ADDRESS OF O REGISTRA AR OF COMP PANIES Registrar of Companies, Bangalore, Karnataka K E-Wing, 2nd Floor, F Kendriya Sadana, Koramangala, K Bangalore – 560 5 034 BOARD OF DIRECTORS S: Our Board off Directors co omprises of th he following: Sr. No 1. 2. 3. 4. 5. 6. 7. 8.

Name of the director N d M Naseer Ahmed Mr. M Nuzhat Aisha Mrs. A Naseerr M A. Arumu Mr. ugham M B.S.Patil Mr. M M.M. Cho Mr. opra M Mr.Azeezulla a Baig M C.R.Mura Mr. ali M S. Thiruva Mr. adi

Designatio on Managing Director Directo or Directo or Directo or Directo or Directo or Directo or Nominee Diirector

Staatus Ex xecutive and Non-Indepen ndent Ex xecutive and Non-Indepen ndent N Non-Executive e and Indepen ndent N Non-Executive e and Indepen ndent N Non-Executive e and Indepen ndent N Non-Executive e and Indepen ndent N Non-Executive e and Indepen ndent N Non-Executive e and Indepen ndent

For further details d on the Board of Direectors of our Company, pllease refer to the t section tittled “Manageement” beginning on n page 139 of this Red Herrring Prospecttus COMPANY SECRETARY S Y AND COMP PLIANCE OFF FICER Mr. S. Gurusswamy Babu Company Seecretary & Co ompliance Offficer 481-B, IV Phaase, Peenya In ndustrial Areea, Peenya Bangalore – 560 5 058; Tel.: +91-0800-41179001/41 1179002/411779003/408585585; Fax: +91-080--41179007/28 8362452; E-mail: [email protected]

25

Scotts Ga arments Limiited LEGAL ADV VISORS TO THE T ISSUE DSK LEGA AL Advocates 1203, One Indiabulls I Ceentre, Tower 2, Floor 12 B 841, Senapati Bapat Marrg Elphinston ne Road, Mum mbai-400 013 Tel : +91-222-66588000, Fax : +91-222-66588001 E mail : dk kvasal@dskleg gal.com Contact Peerson : Mr. D..K.Vasal

STATU UTORY AUDIITORS Siddaiah & Ram, R Chartered Acccountants No.32/2, Firsst Floor, Lalbagh Main Roaad, Bangalore - 560 027 Tel: +91-80-222221590/222242540; Fax: +91-80-441145464 Email: [email protected] Firm Registrration No.: 0003860S

PEER R REVIEW AU UDITOR G Anan ntha & Co., Charterred Accountan nts Srinidhii, No.36 & 366/1, 1st Floor, Mallikarjuna Tem mple Street, Basavan nagudi, Bang galore - 560 004 Tel: +911-80-412042455 Email: ganatha.co@g g gmail.com Firm Reegistration No o.: 005160S

BANKERS S TO THE CO OMPANY CANARA BANK Prime Corp porate branch h, Shankarnaarayana Bldg. 25, M.G. Roaad ; Bangalore – 560 001 Tel: +91-800–25599105; Fax: +91-800-25599108; Email: parmeshwarkd@ @canbank.co.iin; Contact Peerson: Mr. Parrmeshwar

EXIM BANK Cen ntre One Bldg g., Floor 21, World W Trade Complex, C Cufffe Parade ; Mumbai M – 400 005 Tel:: +91-22–221772600; Fax:: +91-22-221833238; Emaail: eximoif@v vsnl.com; Con ntact Person: Mr. Pranesh

STATE BA ANK OF IND DIA Peenya Ind dustrial Estatee, B-96, 2nd Cross, Peenya, 1st Stage, Bangalore – 560 058 ; Tel: +91-800–25943260/2 25943263; Fax: +91-800-28394005; Email: [email protected] o.in; Contact Peerson: Mr. Bhandarkar NNING LEA AD MANAGE ER BOOK RUN TO THE IS SSUE

CO- BOOK B RUNN NING LEAD D MANAGER R TO THE T ISSUE

TE SERVICES LIMITED KEYNOTE CORPORAT The Ruby, 9th Floor, Senapati Baapat Marg, Dadar (w), Mumbai – 40 00028 Tel: +91–222– 30266000-3; Fax: +91–222– 30266088 E-mail : mb bd@keynotein ndia.net Website: www.keynotei w india.net Contact perrson: Mr. Girish Sharma SEBI Reg No: N INM 0000 003606

NARA BAN NK MERC CHANT BA ANKING CAN DIVIISION Himaalaya House, 407,4th Floorr, 79, Mata M Ramabai Ambedkar Marg, M Mumbaai - 400001 Tel. : +91–22-22677405/05/06 ; Fax : +91–22-226777404 E-maail : [email protected] Webssite: www.can narabank.com m Contact person: Mr. M Vasant Sap pkale SEBII Reg No: INM M 000002558

26

Scotts Ga arments Limiited REGISTRA AR TO THE ISSUE I Link Intim me India Pvt. Ltd. C-13, Pann nalal Silk Mills Compound, L.B.S. Marg g, Bhandup (W West), Mumb bai 400078 Tel : +91–222-25963838/2 25946970 Fax: + 91–222-25946969 E-mail: [email protected] Website: www.linkintim w me.co.in Contact Peerson: Mr. Sacchin Achar SEBI Regn n No.: INR000 0004058 Investors can c contact th he Compliancce Officer or the t Registrar in case of an ny pre-Issue or o post-Issue related r problems such s as non--receipt of leetters of alloccation, credit of allotted Equity E Sharees in the resp pective beneficiary y account or refund r orders, etc. BANKERS S TO THE ISS SUE AND ESC CROW COLL LECTION BANKS Axis Bank k Limited Universal Insurance I Buiilding, Sir P.M. Ro oad, Fort, Mumbai – 400 001 Tel: +91-222–40867299/4 40867371; Fax: +91-222-40867327; Email: rajeesh.khandelw [email protected]; Website: www.axisbank w k.com Contact Peerson: Mr.Rajeesh Khandelw wal SEBI Reg: INBI00000017

Canaara Bank* Capiital Market Seervices Branch h, 407, Himalaya Ho ouse, 79, Mataa Ramabai Am mbedkar Marrg, Mumbai – 400 0051 Tel: +91-22–226611618/226929773; Fax: +91-22-226644140; Emaail: [email protected] m; Web bsite: www.caanarabank.co om Conttact Person: Mr. M Arvind N. N Pawar SEBI Reg: INBI000000019 IDBI Bank Limiteed Unit No.2, N Corporaate Park, nearr Swastik Chaambers, Sion – Trombay Ro oad, Chembu ur Mum mbai – 400 0711 Tel: +91-22–669084 + 402; Fax: +91-22-66908424; Emaill: v.jayananth [email protected] n; Webssite: www.idb bibank.com Contaact Person: Mr. M V Jayanantthan SEBI Reg: INBI000000076

HDFC Ban nk Limited HDFC Ban nk Ltd, FIG – OPS O Departm ment Loadha, I Think T Techno o Campus, O-3 Level, Next to Kaanjurmarg Raiilway Station n, Kanjurmarrg (E), Mumbai – 400 042 Tel: +91-222–30752928; Fax: F +91-22-255799801; Email: [email protected]; Website: www.hdfcban w nk.com Contact Peerson: Mr. Ud day Dixit SEBI Reg: INBI0000006 63 B Limited d IndusInd Bank Cash Manaagement Services, Solitaire Co orporate Park k, No.1001, Building No.10, N Gr. Floo or, Guruhargo ovindji Marg,, Andheri (E E), Mumbai – 400 093 Tel: +91-222–67723901 to o 3917; Fax: +991-22-6772 39998; Email: sanjjay.vasarkar@ @indusind.com m Website: www.indusind w d.com Contact Peerson: Mr. San njay Vasarkarr SEBI Reg: INBI00000002

*Canara Baank registration n was valid tiill 15/11/2012. Canara Bankk has made appplication to SEBI S for renew wal and grant of peermanent registration vide lettter dated 04/008/2012.

27

Scotts Ga arments Limiited SYNDICAT TE MEMBER R E CAPITALS LIMITED KEYNOTE The Ruby, 9th Floor, Senapati Bapat B Marg, Dadar (w),, Mumbai – 400028 Tel: +91–22– 30266000/ /48; Fax: +91–222– 30266088 E-mail : kccl@keynoteind dia.net Website: www.keynote w ecapitals.com Contact peerson: Mr. An nkur Mestry SEBI Reg No: N BSE - INB B 010930556, NSE - INB 2330930539 TIFIED SYND DICATE BAN NKS SELF CERT The list of banks that have h been nottified by SEBII to act as SC CSBs for the ASBA A processs is provided on the website of SEBI at http:/ //www.sebi..gov.in/sebiw web/home/list/5/33/0/0/ /Recognised--Intermediariies. For details of the t Designateed Branches of o the SCSBs which w shall collect c Bid cu um Applicatio on Forms sub bmitted by ASBA Bidders, B pleasse refer to the above-mentiioned link. The list of o banks wheere syndicatee/sub syndiccate memberr can submit ASBA form ms is availab ble on http://ww ww.sebi.gov.in n/cms/sebi_d data/attachd docs/13502984477356.html STATEME ENT OF INTE ER SE ALLOCATION OF F RESPONSIB BILITY The follow wing table sets forth the distribution of o responsibiility and co-o ordination fo or various activities among Key ynote Corporrate Services Limited (Key ynote) (Book Running Leaad Manager to t the Issue/B BRLM) and Canarra Bank Mercchant Bankin ng Division (Canara ( Bank k) (Co-Book Running Leaad Manager to the Issue/Co-B BRLM). Sr. Activitty No. 1. Capitall Structuring g with the relative com mponents an nd formaliities such as type t of instruments, etc. 2. Condu ucting a due d diligence of thee Company y’s operatiions/manageement/busineess plans/ /legal, ettc. Draftin ng and design ning the Draftt Red Herring g Prospectus / Red Heerring Prospeectus / Prospectus. Ensurin ng compliancce with th he SEBI (ICDR R) Regulation ns 2009 and otther stipulateed requireements and co ompletion of prescribed fo ormalities witth the Stock Exchangess, RoC and SE EBI 3. Primarry co-ordinatiion with SEBII, RoC and Sto ock Exchangees up to bidding b and coordinating g interface with lawyers fo or agreem ments 4. Primarry co-ordinatiion of drafting g/proofing of o the design of o the Red R Herring g Prospectuss, bid form ms includin ng memorrandum conta aining salientt features of the t Prospectu us with th he printers. Primary coord dination of th he drafting an nd approv ving the statuttory advertiseement. 5.

Draftin ng and appro oving all pub blicity materrial other thaan statutory advertiseement as mentioned m i in (4) abov ve 28

Ressponsibility

Co-orrdinator

Keynote

Keeynote

B Keynotee & Canara Bank

Keeynote

Keynotee & Canara Bank B

Keeynote

Keynote

Keeynote

Keynote

Keeynote

Scotts Ga arments Limiited Sr. No.

Activitty

Ressponsibility

Co-orrdinator

Appoin nting the Reg gistrars, Appo ointing Bankeers to the Issue, Appoin nting other intermediaaries viz., printers an nd advertiising agency Marketting of the Isssue, which wiill cover inter alia: ƒ Form mulating marketing m sttrategies, prreparation of o pub blicity budget,, ƒ Finaalising media & public relaations strategy y, ƒ Finaalising centers for holding g conferencess for press an nd brok kers etc, ƒ Finaalising collecttion centers, ƒ Following-up on n distributio on of publiciity and Issu ue matterial includin ng form, prosspectus and deciding d on th he quan ntum of the Issue materiall, ƒ Prep paring all road show preseentations, ƒ App pointment of brokers b to thee issue, and ƒ App pointment of o underwriiters and entering e intto und derwriting agrreement. Coordiinating institu utional invesstor meetingss, coordinatin ng pricing g decisions an nd institutionaal allocation in i consultatio on with th he Company

Keynote

Keeynote

Keynote

Keeynote

Keynote

Keeynote

9.

Finalisiing the Prosp pectus and Ro oC filing

Keynote

Keeynote

10.

Co-ord dinating po ost biddin ng activitiees includin ng manag gement of Escrow E acco ounts, coord dinating witth registraar and dispatcch of refundss to Bidders, etc. e

Keynotee & Canara Bank B

Keeynote

11.

Follow w-up with th he bankers to t the issue to get quicck estimattes of collectio on and advisiing the issuerr about closurre of the issue, i based on o the correct figures.

Keynote

Canaara Bank

12.

The Po ost-Issue activ vities for the Issue will inv volve essentiaal follow up steps, wh hich include finalizing f basis of allotmen nt / weeeding out off multiple ap pplications, the listing of o instrum ments and disspatch of certtificates and dematerialize d ed deliverry of shares with w the various agencies connected c witth the wo ork such as th he Registrars to t the Issue and a Bankers to t the Issu ue and the ba ank handling refund r busineess.

Keynotee & Canara Bank B

Canaara Bank

includiing corporate advertisemen nt, brochure, etc. 6.

7.

8.

The BR RLM and Co--BRLM shall be b responsiblle for ensurin ng that th hese agencies fulfill their functions an nd enable it to t discharrge this resp ponsibility thrrough suitab ble agreements with th he Company. CREDIT RA ATING As this is an n Issue of Equ uity Shares, th here is no requ uirement of credit rating fo or this Issue.

29

Scotts Ga arments Limiited IPO GRAD DING Credit Anallysis and Reseearch Limited d (CARE) has been appointted for gradin ng of the issuee. CARE has assigned a a ‘CA ARE IPO Graade 3’ [Gradee Three] to th he proposed In nitial Public Offer O (IPO) off Scotts Garments Limited. L CARE E IPO Grade 3 indicates av verage fundaamentals. CAR RE assigns IP PO grades on a scale of Grade 5 to Grade 1, 1 with Grad de 5 indicatiing strong fu undamentals and Grade 1 indicating g poor fundamentaals. CARE’s IPO I grading assigned rep presents relattive assessmeent of the ‘fu undamentals’ of the issuer. The grading g takes into account expeerienced prom moter and management m teeam, compan ny’s long and d good operational track record d, established and long staanding relatio on with repu uted clients sp pread across global markets, staable income growth, g relativ vely stable maargins and strrong return on o networth. The grading g assigned iss constrained d by SGL’s cu ustomer and business con ncentration risk with 50-660% of revenue beiing derived from a single client and siignificant shaare of revenuee derived fro om Europe which is faced with extended economic dow wnturn, workiing capital in ntensive natu ure of operattion owing to o high inventory days, d project im mplementatio on risk on acccount of significant capex in i next one yeear. TRUSTEES S As this is an n Issue of Equ uity Shares, th he appointmeent of trusteess is not required. RING AGENC CY MONITOR No agency has h been appo ointed to mon nitor the utilizzation of fund ds. NG AGENCY Y APPRAISIN The Project has not been appraised by y any Bank orr Financial Insstitution. BOOK BUIILDING PRO OCESS The Book Bu uilding Proceess, with referrence to the Isssue, refers to o the process of collection of Bids on th he basis of the Red Herring H Prosp pectus within n the Price Band. The Issuee Price is finallised after thee Bid/Issue Closing C Date. The prrincipal parties involved in n the Book Bu uilding Process are: • The Com mpany; • The Book Running Lead L Managerr, in this casee being Keyn note Corporate Services Limited L and Canara C Bank Meerchant Bankiing Division • Syndicatte Members who w are interm mediaries reg gistered with SEBI or regisstered as brok kers with BSE E/NSE and eligiible to act as Underwriterrs. The Syndiicate Memberrs are appoin nted by the Book B Running g Lead Managerr; • Registrarr to the Issue;; • Escrow Collection C Ban nks and • Self Certified Syndica ate Banks The Issue iss being made through the 100% Book Building B Proceess where 25% % of the Issuee to the publiic shall be allocated d on a propo ortionate basis to eligiblee Qualified In nstitutional Buyers B (“QIBs”). 5% of th he QIB Portion shalll be availablee for allocatio on on a propo ortionate basiss to Mutual Funds F only. Th he remainderr of the QIB Portion n shall be ava ailable for alllocation on a proportionaate basis to all a other eligib ble QIBs, inccluding Mutual Fun nds, subject to o valid Bids being b received d at or above the Issue Priice. Further, not n less than 40% 4 of the Issue to the public sh hall be availab ble for allocaation on a pro oportionate baasis to Non-In nstitutional Bidders B and not lesss than 35% off the Issue to the public sh hall be availaable for allocaation on a pro oportionate basis b to Retail Indiv vidual Bidderss, subject to valid v Bids bein ng received at or above thee Issue Price. 30

Scotts Ga arments Limiited In accordan nce with the e SEBI Regu ulations, QIB Bs are not allowed a to withdraw w theeir Bid(s) aftter the Bid/Issue Closing C Date.. In addition n QIBs are no ow required to pay full 100% 1 of the Bid Amountt upon submission n of the Bid cum c Applicattion Form du uring the Bid//Issue Period d and allocatiion to QIBs will w be on a proporrtionate basiis. For furtherr details, see section “Term ms of the Issue” on page no. 231 of th his Red Herring Pro ospectus. Allocation to t QIBs will be b on proportiionate basis. The Compaany shall com mply with the SEBI Regulattions and any y other ancillaary directionss issued by SE EBI for this Issue. In this regard d, the Compan ny has appointed the Key ynote Corporaate Services Limited L and Canara C Bank Merch hant Banking Division as th he Book Runn ning Lead Maanager to man nage the Issuee. The processs of Book Bu uilding underr the SEBI Reegulations is subject to ch hange from tiime to time and the investors arre advised to make their own o judgmen nt about investment throu ugh this proceess prior to making m a Bid or app plication in th he Issue. Illustration n of Book Buiilding and Prrice Discoverry Process (In nvestors shouldd note that thiss example is soolely for illustrative purposes p and iss not specific too the Issue) Bidders can n bid at any prrice within th he price band.. For instance, assuming a price band off ` 40/- to `488/- per share, issuee size of 6,000 0 equity sharees and receiptt of nine bidss from bidderrs, details of which w are sho own in the table beelow, the illu ustrative book k would be as a below. A graphical rep presentation of o the consollidated demand an nd price wou uld be madee available at the biddin ng centres’ during the biidding period d. The illustrative book b as show wn below indiicates the dem mand for the shares of thee Company att various pricces and is collated frrom bids from m various inv vestors. Bid Qu uantity

Bid Price (`)

Cu umulative Qu uantity

Subscripttion

500 7 700 1,0000 4 400 500 2 200 2,7700 800 1,2200

48 47 46 45 44 43 42 41 40

500 1,200 2,200 2,600 3,100 3,300 6,000 6,800 8,000

8.33% 20.00% % 36.67% % 43.33% % 51.67% % 55.00% % 100.00% % 113.33% % 133.33% %

The price diiscovery is a function f of deemand at varrious prices. The T highest prrice at which the issuer is able to issue the deesired quantu um of shares is i the price att which the book b cuts off i.e. i ` 42/- in the above example. The issuer, in i consultatio on with the BR RLM and Co--BRLM will fiinalize the isssue price at orr below such cut-off price i.e. at or below ` 42/-. 4 All bid ds at or abovee this issue price p and cutt-off bids are valid bids and are considered for f allocation n in respectivee category. Steps to be taken by the e Bidders for Bidding 1. Check eligibility for making m a Bid (see section tiitled “Issue Procedure P - Who W Can Bid?”” on page no. 263 of this Red Herring Prosspectus); 2. Ensure th hat you have a active dem materialised acccount and th he dematerialiised account details are co orrectly mentioneed in the Bid cum Application Form; 3. Ensure that you havee mentioned your y PAN (ssee “Issue Pro ocedure – PA AN” on page no. 263 of th his Red a Herring Prospectus); and 31

Scotts Ga arments Limiited 4. Ensure that the Bid cum Application Form is i duly comp pleted as perr instructionss given in th his Red Herring Prospectus an nd in the Bid cum Applicaation Form; 5. Ensure the t correctnesss of your deemographic details d given in the Bid cum Application Form, with the details reecorded with your Deposittory Participaants 6. Bids by QIBs Q and Non n-Institutionaal Investors sh hall be submittted only thro ough the ASB BA process; an nd 7. ASBA Biidders will ha ave to submiit their Bids (physical ( form m) to the Dessignated Bran nches except for f the ASBA Biids in the Speecified Cities. In case of thee Specified Cities, C the ASB BA Bids may either be sub bmitted with thee Designated Branches orr with the Syndicate. S AS SBA Bidders should ensu ure that the ASBA Account has adequate credit balan nce at the tim me of submisssion of the Biid cum Application Form m to the SCSB to ensure e that th he Bid is not rejected. r Withdrawal of the Issue e The Compaany, in consu ultation with the BRLM an nd Co-BRLM M, reserves th he right not to o proceed with the issue after the t bidding and a if so, the reason thereo of shall be giv ven as a publlic notice with hin two dayss of the closure of the issue. Th he public no otice shall bee issued in the same neewspapers where w the pree-issue advertisemeent had appea ared. The sto ock exchangess where the sp pecified securities were prroposed to bee listed shall also bee informed prromptly. If th he Company withdraws th he Issue after the Bid/Issu ue Closing Daate and thereafter determines d th hat it will pro oceed with an n initial publiic offering off its Equity Sh hares, it shalll file a fresh draft red r herring prrospectus witth the SEBI. Bid/Issue Programme P Bidding Period/Issue Period d BID/ISSUE OPENS ON N BID/ISSUE CLOSES ON O

April 255, 2013 April 299, 2013

Bids and an ny revision in n Bids shall be accepted only between n 10.00 a.m. and 3.00 p.m m. (Indian Staandard Time) durin ng the Biddin ng Period as mentioned above a at the bidding centtres mentioneed on the Bid cum Application n Form. On th he Bid/Issuee Closing Datte, Bids (exclu uding the AS SBA Bidders)) shall be uplloaded until (i) 4.000 p.m. in casee of Bids by QIB Q Bidders, Non- Instituttional Bidders and (ii) unttil 5.00 p.m. or o such extended time as permiitted by the NSE N and thee BSE, in casee of Bids by Retail Indiv vidual Bidderrs. It is clarified thaat Bids not up ploaded in thee book, would be rejected. Bids by ASB BA Bidders sh hall be upload ded by the SCSB in the electronic system to be provided by y the NSE and d the BSE. In case of discrepancy d in n the data enttered in the electronic e boo ok vis-à-vis th he data contaiined in the ph hysical Bid form, fo or a particularr bidder, the details as perr physical app plication form m of that Bidd der may be taaken as the final data for the purrpose of allottment. In casee of discrepan ncy in the datta entered in the electronic book vis-à-vis thee data contain ned in the ph hysical or elecctronic Bid cu um Applicatiion Form sub bmitted throu ugh the ASBA proceess, for a particular ASBA A Bidder, the Registrar to the t Issue shalll ask for recttified data fro om the SCSB. Due to limiitation of tim me available fo or uploading g the Bids on the Bid/Issu ue Closing daate, the biddeers are advised to submit s their Bids B one day prior to the Bid/Issue B Clo osing Date an nd, in any casse, no later th han the times mentiioned above on the Bid/Issue Closing g Date. All tiimes are Indian Standard d Time. Biddeers are cautioned th hat in the eveent a large number of Bids are received on the Bid/Isssue Closing Date, as is typically experienced d in public offferings, somee Bids may not n get upload ded due to laack of sufficieent time. Succh Bids that cannot be uploaded will not be considered forr allocation un nder the Issu ue. If such Bid ds are not uploaded, 32

Scotts Ga arments Limiited the Issuer, BRLM B and Co o-BRLM and Syndicate meembers will not n be respon nsible. Bids will w be accepteed only on Businesss Days, i.e., Monday M to Frid day (excludin ng any public holidays). The Compaany reserves th he right to revise the Pricee Band during g the Bid/Issu ue Period in accordance a w the with SEBI Regulaations provid ded that the Cap C Price is leess than or eq qual to 20% off the Floor Prrice. The Floo or Price can be revissed up or dow wn to a maxim mum of 20% of o the Floor Prrice advertiseed at least onee day before the t Bid /Issue Open ning Date. In case of revision of the Price Band,, the Issue Peeriod will be extended forr three additiional working days after revisio on of the Pricce Band subjeect to the totaal Bid /Issue Period not exceeding e 10 working w day ys. Any revision in the Price Band B and thee revised Bid d/Issue, if applicable, a w be widely will y disseminatted by notification to the BSE an nd the NSE, by b issuing a press p release and a also by in ndicating the changes c on th he web sites of the BRLM B and Co o-BRLM and at the terminals of the Syn ndicate. Underwriting Agreemen nt After the deetermination of the Issue Price P but prio or to filing of the Prospectu us with Regisstrar of Comp panies, Bangalore, Karnataka K th he Company will w enter intto an Underw writing Agreeement with th he Underwritters for the Equity Shares S proposed to be issu ued through this t Issue. It is i proposed that t pursuantt to the termss of the Underwritin ng Agreemen nt, the BRLM shall be resp ponsible for bringing b in th he amount dev volved in thee event that the Syndicate Mem mbers do not fulfil their underwriting u g obligations. Pursuant to t the terms of the are several and Underwritin ng Agreemen nt, the obligattions of the Underwriters U a not joint, and are sub bject to certain cond ditions as specified in such h agreement. The Underw writers have indicated theiir intention to o underwrite the t following g number of Equity E Shares:: (This portion n has been inttentionally leftt blank and wiill be filled in before filing of o the Prospecttus with Regisstrar of Companies, Bangalore, B Karrnataka) Name and a Address of the Underrwriters [••] [••] Total

In ndicated Num mber of Equiity Shares to be Underwritten [ [•] [ [•] [ [•]

Amou unt Underwriitten (` in lacs) [•] [•] [•]

The above-m mentioned am mount is an in ndicative und derwriting an nd would be finalized f afterr pricing and actual allocation. The T above un nderwriting agreement a is dated [•]. In the opinion of the Board of Directors of the Company (based ( on a certificate c giv ven by the Underwriters) U ), the resourcces of all thee above men ntioned Underwriteers are sufficieent to enable them to disch harge their reespective und derwriting obligations in fu ull. All the above-m mentioned Un nderwriters arre registered with SEBI an nd are eligiblee to underwriite as per app plicable guideline. Allocation among a Underrwriters may y not necessarrily be in pro oportion to th heir underwriting committments. Notwithstan nding the abo ove table, thee BRLM and the Syndicatee Members shall be severally responsiible for ensuring paayment with respect r to Equ uity Shares alllocated to inv vestors procu ured by them.. In the event of any default, thee respective underwriter u in addition to other obliigations to be b defined in n the Underw writing Agreement,, will also be required to procure/sub bscribe to the extent of thee defaulted amount. a For further f details abou ut allocation please refer to “Other Reegulatory and d Statutory Disclosures” D o page 219 of this on Offer Docum ment.

33

Scotts Ga arments Limiited CAPITAL STRUCTUR RE The share capital of the Company C as on the date of o filing of thiis Red Herrin ng Prospectuss with SEBI iss as set forth below: Aggregatee Value at Nominal Priice. (Amount in n `)

Share Capital C

Aggreegate Value at Issue Price P (Amou unt in `)

A. Authorized Capitall: 4,40,000,000 Equity Shares S of Facee value of `10. each

44,00,000,000

44,00,000,000

B. Issued,, Subscribed and Paid Up Capital befo ore this Issue:: 2,84,77,3800 Equity Sharees of the Facee Value of `100 /- each

28,47,733,800

[•]

C. Presentt Issue in term ms of this Reed Herring Prrospectus:* 1,05,066,954 Equity Shares S of the Face F Value off `10 /- each

10,50,699,540

[•]

45,000,000

[•]

10,05,699,540

[•]

2,51,422,380 4,02,277,820

[•] [•] [•]

Of Wh hich Emplo oyee Reservattion Portion includes 4,500,000 Equity y Shares of (1) the Facce Value `10 // each D. Net Issu ue to public 1,00,566,954 Equity Share S of the Faace Value of `10 ` /- each Of whicch i) QIB B portion of 25 5,14,238 Equiity Shares ii) Non n Institutiona al Portion not less than 40,222,782 Equity y Shares (2) iii) Retaail Portion of not less than n 35,19,934 Eq quity Shares (2) E. Issued, Subscribed and a Paid-Up Capital after this Issue 3,89,84,3334 Equity Shares of the Faace Value of `10/` each Securities Premium Acccount Before this Issue After this t Issue

3,51,999,340 38,98,433,340

[•]

` Lacs 44323.05 [•]

(1)The

aggreegate of reserrvation for em mployees shall not exceed five per cen nt of the post issue capital of the Company. Further, F under subscriptio on, if any, in n the Reservaation for Elig gible Employeees, shall be added back to the Net N Issue and d will be conssidered for alllotment only on a proportiionate basis Subject to o valid Bids being b receiveed at or abov ve the Issue Price, P under-ssubscription, if any, in thee NonInstitutional Portion and d Retail Portio on would be allowed a to bee met with sp pill-over from m other catego ories or a combinatiion of catego ories at the discretion d of our Compan ny, in consulttation with th he BRLMs an nd the Designated Stock Exchan nge. Howeveer, under-subsscription, if any, a in the QIB Portion willl not be allow wed to be met with h spill-over fro om other cateegories or a co ombination off categories. Under-subscr U ription, if any,, in the Employee Reservation R Portion will bee added to thee Net Issue. In case of und der-subscriptiion in the Nett Issue, spill-over to o the extent off under-subsccription shall be permitted d to the Emplo oyee Reservaation Portion subject s to the Net Isssue constitutting at least 255% of the fullly diluted posst-Issue paid up u capital of our Company y. (2)

34

Scotts Ga arments Limiited •

Our Compaany has, by way w of a Pree-IPO Placem ment, allotted 17,39,130 Equity E Sharess to CVCFL, for an aggregate co onsideration of o `1999.99 laacs, at a premiium of `105.000 per Equity Share Details off increase in the t authorized d share capitaal, since incorrporation, aree as follows: Sr.No. 1.

De etails of increease in autho orized share capital c Datee of Resolutio on I Incorporation n ` 10.00 Lacss divided intto 1,00,000 Eq quity Shares of ` Meemorandum of o 1 10/each. A Association 2. I Increased to ` 100.00 Lacss divided into o 10,00,000 Eq quity Shares of ` 3 31/03/2003 1 10/each. 3. I Increased to `200.00 Lacs divided into o 20,00,000 Eq quity Shares of ` 0 03/10/2005 1 10/each. 4. I Increased to ` 2000.00 Laccs divided into 2,00,00,000 Equity Sharees of 2 27/03/2006 ` 10/- each. 5. I Increased to ` 4000.00 Laccs divided into 4,00,00,000 Equity Sharees of 0 01/09/2007 ` 10/- each. 6. I Increased to ` 4400.00 Laccs divided into 4,40,00,000 Equity Sharees of Pursu uant to Schem me of ` `10/each. am malgamation** *Increase in n authorized capital c pursu uant to Schem me of Amalgaamation betw ween Arora Faashions Limitted (Transferor)) and Scotts Garments G Lim mited (Transfferee) as approved by thee Honourablee High Court of Karnataka. For F details off the Scheme of o Amalgamaation please reefer page no. 132 of this RH HP Notes to cap pital structurre 1 Share capittal history of the company 1. y Equity Sharre capital history Date of Number Face Isssue Allotment of Equity Value (`) Price Shares (`) 01/03/02

10,000

10

100.00

31/03/03

9,90,000

10

100.00

04/10/05

1,000

10

333.00

28/03/06 1,20,12,000

10

N Nil

14/03/07

300

10

100.00

20/04/07

6,00,000

10

N..A.(1)

12/10/07

63,85,000

10

100.00

12/12/07

3,55,000

10

100.00

Consiideration R Reasons for allotment a Cumulative Eq C quity (cash h, bonus, (bonus, swap etc.) Share Capittal consid deration (no. of shares) other than cash) C Cash In nitial subscrip ption at the 1 10,000 time of incorrporation C Cash Allotment to o Promoter 10,000,000 and Promoteer Group C Cash A Allotment to Promoter P 10,001,000 Group Bonu us @ 12:1 A Allotment to Promoter P 1,30,113,000 and Promoteer Group C Cash A Allotment to Promoter P 1,30,113,300 Group and d Nonpromotters Scheeme of A Allotment to members m of 1,36,113,300 Amalg gamation Scotts Clothing g Pvt. Ltd. P Pursuant to ap pproval of schemee of amalgamaation* C Cash A Allotment to Promoter P & 1,99,998,300 Promoter Grroup and Non-Prom moters C Cash A Allotment to Promoter P 2,03,553,300 35

Scotts Ga arments Limiited Date of Number Face Isssue Allotment of Equity Value (`) Price Shares (`)

Consiideration (cash h, bonus, consid deration other than cash)

Reasons for allotment R a Cumulative Eq C quity (bonus, swap etc.) Share Capittal (no. of shares)

Group 12/12/07 15,000 10 200.00 C Cash A Allotment to Promoter P 2,03,668,300 Group and d NonPromoter 12/12/07 1,05,000 10 400.00 C Cash Allotment to t Non2,04,773,300 Promotters 12/12/07 2,89,000 10 500.00 C Cash Allotment to t Non2,07,662,300 Promotters 02/02/08 98,500 10 200.00 C Cash Allotment to t Non2,08,660,800 Promotters 10/03/08 71,000 10 200.00 C Cash Allotment to t Non2,09,331,800 Promotters 31/03/08 30,20,000 10 300.00 C Cash Allotment to t Non2,39,551,800 Promotters 31/03/08 75,000 10 500.00 C Cash Allotment to t Non2,40,226,800 Promotters 31/03/08 3000 10 600.00 C Cash Allotment to t Non2,40,229,800 Promoter 31/03/08 7,08,450 10 800.00 C Cash Allotment to t Non2,47,338,250 Promoter 31/03/09 20,00,000 10 700.00 C Cash Allotment to t Non2,67,338,250 Promoter 26/12/12 17,39,130 10 1115.00 C Cash A Allotment to Emerging E 2,84,777,380 India Growtth Fund C CVCF V undeer Pre IPO placem ment *Allotment pursuant to the t scheme off amalgamatiion between Scotts S Clothin ng Pvt. Ltd. (T Transferor) an nd Scotts Garm ments Limited d (Transfereee) as approveed by Hon’b ble High Cou urt of Karnattaka vide ord der dated 02/044/2007 with effect e from 011/04/2006. Fo or details of the t Scheme off Amalgamattion please reffer page no. 1311 of this RHP P. (1) Six Sharees of Scotts Garments G Lim mited of face value v of ` 10.000 each were allotted again nst one share of Scotts Cloth hing Private Limited L of facee value of ` 100.00 each ment pursuan nt to scheme of o amalgamattion are as follows: The details of the allotm Sr. No

N Name of the Allottees A

1 2 3 4

Mr. Naseer Ah M hmed M Nuzhat Aisha Mrs. A Naseer M Loganatha Mr. an M Palanisam Mr. my T Total

No. of Sh hares of the Company y Allotted 418500 1500 90000 90000 600000

36

Scotts Ga arments Limiited 2. Promoter Holding: History of Share S Capital held by the promoter: p Name of Date off Nature off the Consid dePromoterr Allotmen nt Issuee ration n /Transfe er (Allotmeent/ Transfeer) Initiall 01/03/2002 Subscriptiion to MOA A 31/03/2003 Allotmeent 04/10/2005

Transfeer

Numberr of Sharess

Face Value (`)

Issue/ % age of % age a of Transfer Pre P Post Price Issue Isssue (`) Capital Caapital

Cash

9,,000

10

10.00

0.03

0 0.02

Cash

8,91,,000

10

10.00

Cash

1,,000

10

10.00

3.13 Negli gible 37.97

22.29 N Negli gible 277.73

10 Nil Bonuss 1,08,12,,000 Otherr than Schemee of 20/04/2007 Amalgam mation cash 4,18,,500 10 N.A(1) 1.47 1 1.07 10 10.00 Cash 12/10/2007 Allotmeent 4,20,,000 1.47 1 1.08 10 10.00 Transfeer Cash 26/09/2008 3,,000 0.01 0 0.01 10 10.00 Transfeer* Cash 27/08/2010 90,,000 0.32 0 0.23 Totall 10 1,26,44,,500 44.40 322.43 (1) Six Sharees of Scotts Garments G Lim mited of face value v of ` 10.000 each were allotted again nst one share of Scotts Cloth hing Pvt Limitted of face vaalue of ` 100.000 each *Mr. Loganaathan transfeerred 90,000 equity e shares on 27/08/20010 to Mr. Naaseer Ahmed.. These sharees were allotted to Mr. Loganatthan pursuan nt to the Sch heme of Amaalgamation between b Scottts Clothing Private P Limited and d Scotts Garm ments Pvt. Ltd d. on 20/04/22007. The equ uity shares were w transferred at the facee value on request of o the transferror. Mr. Naseeer Ahmed

28/03/2006

Allotmeent

3. Promoterr contribution n locked-in for three years: The eligiblee shares for Lock-in L as peer Chapter IV V of ICDR Reegulations, 20009 for a periiod of 3 yearrs is as under: Name of Date off Nature off the Consid de- Numberr of Face Issue/ % age of % age a of Promoterr Allotmen nt Issuee ration n Sharess Value Transfer Pre P Post /Transfe er (Allotmeent/ (`) Price Issue Isssue Transfeer) (`) Capital Caapital 27/08/2010 26/09/2008 12/10/2007

Transfeer Transfeer Allotmeent

Cash Cash Cash Otherr Mr. Naseeer than Schemee of Ahmed 20/04/2007 Amalgam mation cash 28/03/2006 Allotmeent Bonuss TOTAL

90,,000 3,,000 4,20,,000

10 10 10

10.00 10.00 10.00

0.32 0.01 1.47

00.23 0 0.01 1 1.08

4,18,,500 68,65,,500 77,97,,000

10 10

N.A Nil

1.47 24.11 27.38

1 1.07 177.61 200.00

Specific wriitten consent has h been obtaained from th he Promoter fo or inclusion of o the Equity Shares for en nsuring lock-in of th hree years to the t extent of minimum 20% of post-Issu ue paid-up eq quity share caapital from th he date of allotmentt in the propo osed public isssue. Promoteers’ contributiion does not consist of any y private placcement made by sollicitation of su ubscription frrom unrelated d persons eith her directly orr through any y intermediarry. 37

Scotts Ga arments Limiited Shares held d by the perso on other than n the Promoter, prior to th his Issue, wh hich are subjeect to lock in as per Regulation 37 of SEBI (ICDR) ( Regullations 2009, may be tran nsferred to an ny other person holding shares which are lo ocked in, sub bject to contin nuation of locck –in in the hands h of tran nsferees for th he remaining period and compliaance of Securities and Exch hange Board of India (Sub bstantial Acqu uisition of Shaares and Takeeovers) Regulationss, 1997 as app plicable. Shares held d by Promoterr(s) which aree locked in ass per the releevant provisio ons of Regulaation 36 of th he SEBI Regulationss, may be tran nsferred to an nd amongst Prromoter/Prom moter group or to a new promoter p or persons p in control of o the Compan ny, subject to o continuation n of lock –in in the hands of transfereees for the rem maining period and compliance of Securities and Exchang ge Board of India (Substaantial Acquissition of sharees and Takeovers) Regulations, 1997, as app plicable. As per p Regulatio on 39 of SEB BI (ICDR) Reg gulations, 20009, the locked-in Eq quity Shares held by the Promoter(s) P can be pledgeed only with banks b or financial institutiions as collateral seecurity for loa ans granted by b such bankss or financial institutions, provided thee pledge of sh hares is one of the terms t of sancction of such loan. Provideed that if secu urities are loccked in as miinimum prom moters’ contribution n under Regu ulation 36 of the t SEBI Regulations, the same may bee pledged, on nly if, in addiition to fulfilling thee requiremen nts of this clau use, the loan has h been gran nted by such banks b or finan ncial institutio ons for the purposee of financing g one or more of the objectss of the issue.. Other than those t shares that t are lockeed in as promoter’s contribution for three yearrs, the entire pre-issue p share capital willl be locked in n for a period of one year from th he date of allo otment in thiss public issue. 4 4.

The shareeholding patttern of the Co ompany befo ore and after the t Issue is as follows: Pre-Issue

Category of Shareholder

(A) Shareholding of Promoter P and Pro omoter Group Ind dian Ind dividuals/ Hin ndu Undivided Fam mily Cen ntral Gov vernment/ Statee Gov vernment Bod dies Corporate Fin nancial Insttitutions/ Banks Any y Others (Sp pecify) Sub b Total (A)(1) Forreign Ind dividuals (NonRessident Ind dividuals/ Forreign Ind dividuals) Bod dies Corporate Insttitutions Any y Other (Sp pecify) Sub b Total (A)(2)

No. of Sharehol ders

Post-Issue

To otal Shareholdin ng ass a % of total No o. of Shares

Total No. of Shares

Total No. T o Shares of held in D Dematerial izzed Form

14

1,55,11,100

Nil

54.46

54.446

1,55,11,100

Nil

Nil

Nil

Nil

N Nil

1

48,31,250

Nil

16.97

Nil

Nil

Nil

Nil

Nil 2,03,42,350

15

Shares Pledged S or otherwise encumbered

Total Shaareholding as a % off total No. of Sh hares Total No. of o Shares

As a % of (A+B+C )

Numbe N r of s shares

As a % of Totall No. off Sharess

39.799

39.79

Nil

Niil

-

-

-

-

-

16.97

48,31,2250

12.399

12.39

Nil

Niil

Nil

N Nil

-

-

-

-

-

Nil

Nil

N Nil

-

-

-

-

-

Nil

71.43

71.443

2,03,42,3350

52.188

52.18

Nil

Niil

Nil

N Nil

Nil

Nil

Nil

Nil Nil

Nil Nil

Nil Nil

Nil

Nil

Nil

Nil

Nil

Nil

As a A % of (A A+B)

As a % of (A+B+C C)

As a % of (A+B)

-

-

Nil Nil Nil

Nil N N Nil N Nil

-

-

-

-

Nil

N Nil

-

-

38

Scotts Ga arments Limiited Pre-Issue

Category of Shareholder

Tottal Shaareholding of Pro omoter and Pro omoter Group (A) =(A)(1)+(A)(2) (B) Public Shaareholding Institutions Mu utual Funds/ UTI Fin nancial Insttitutions/ Banks Cen ntral Gov vernment/ Statee Gov vernment Ven nture Capital Fun nds Insu urance Com mpanies Forreign Insttitutional Inv vestors Forreign Venture Cap pital Investors Any y Others (Sp pecify) Sub b Total (B)(1) Non-Institutions Bod dy Corporate Ind dividuals: Ind dividuals – i. Ind dividual shaareholders holding nominal shaare capital up to ` 1 Lakh ii. Individual shaareholders holding nominal shaare capital in exccess of ` 1 Lakh Any y Other (Sp pecify) Non n-Resident Ind dians (OC CBs) Hin ndu Undivided Fam mily Dem mat – Clearing Member Sub b-Total (B)(2) Tottal Public Shaareholding

No. of Sharehol ders

15

Total No. of Shares

Total No. T o Shares of held in D Dematerial izzed Form

Post-Issue

To otal Shareholdin ng ass a % of total No o. of Shares As a A % of (A A+B)

As a % of (A+B+C C)

Total Shaareholding as a % off total No. of Sh hares Total No. of o Shares

Numbe N r of s shares

As a % of Totall No. off Sharess

52.18

Nil

Niil

Nil

Niil

Nil

Niil

Nil

71.43

71.443

Nil

Nil

Nil

Nil

N Nil

Nil

Nil

Nil

Nil

N Nil

Nil

Nil

Nil

Nil

N Nil

1

17,39,130

17,39,130

6.11

6.111

Nil

Nil

Nil

Nil

N Nil

Nil

Nil

Nil

Nil

N Nil

Nil

Nil

Nil

Nil

N Nil

Nil

Nil

Nil

Nil

N Nil

1

17,39,130

17,39,130

6.11

6.111

12

55,04,550

Nil

19.33

19.33

106

5,01,600

29,500

1.76

1.76

Nil

Niil

11

3,64,750

Nil

1.28

1.28

Nil

Niil

Nil

Nil

Nil

Nil

N Nil

Nil

Nil

Nil

Nil

N Nil

Nil

Nil

Nil

Nil

N Nil

1

25,000

Nil

0.09

0.09

Nil

Niil

Nil

Nil

Nil

Nil

N Nil

130

63,95,000

29,500

22.46

22.446

1,86,41,9984

47.822

47.82

131

81,35,030

17,68,630

28.57

28.57

1,86,41,9984

47.822

47.82

Nil

Niil

1,86,41,9984

52.188

As a % of (A+B+C )

2,03,42,350

39

2,03,42,3350

As a % of (A+B)

Shares Pledged S or otherwise encumbered

47.822

Scotts Ga arments Limiited Pre-Issue

Category of Shareholder

(B)= =(B)(1)+(B)(2) TO OTAL (A)+(B) Shaares held by Cusstodians and agaainst which Dep pository Recceipts have been issu ued (C) GR RAND TOTAL (A)+(B)+(C)

No. of Sharehol ders

Total No. of Shares

Total No. T o Shares of held in D Dematerial izzed Form

Post-Issue

To otal Shareholdin ng ass a % of total No o. of Shares As a A % of (A A+B)

As a % of (A+B+C C)

Shares Pledged S or otherwise encumbered

Total Shaareholding as a % off total No. of Sh hares Total No. of o Shares

As a % of (A+B)

As a % of (A+B+C )

Numbe N r of s shares

As a % of Totall No. off Sharess

Nil

Niil

Nil

Niil

146

2,84,77,380

17,68,630

1 100.00

100.00

3,89,84,3334

100.000

100.00

Nil

Nil

Nil

Nil

N Nil

-

-

-

2,84,77,380

17,68,630

1 100.00

100.00

3,89,84,3334

100.000

100.00

146

5 There are no 5. n transaction ns in the Com mpany’s Equitty Shares by the t Promoter & their relatiives or the dirrectors of the Com mpany during g a period of six s months prreceding the date d of filing of Draft Red Herring Prosspectus with SEBI except e the folllowing: Date of Transfer T 27/08/2010

Transfero or Mr. M Loganathaan

Transferee Mr. Naseer Ahmeed

No. of shares 9 90,000

Issue Prrice 10.000

6 Equity Sharres held by th 6. he top ten shaareholders: n shareholderrs as on the date d of filing this Red Herrring Prospecctus with ROC: 6a. Top ten Sr. No.

Name of the Shareholderr

1. 2. 3. 4. 5. 6. 7. 8.

Mr.. Naseer Ahm med Ped digree Constru uction Pvt. Lttd. B.R R.Machine Too ols Pvt. Ltd. Bom mbay Rayon Fashions F Ltd.. Can nbank Venturre Capital Fun nd Ltd. Mrss. Nuzhat Aissha Naseer Mr.. Awaiz Ahm med Master Faiz Ahm med (Held by y Mr. Naseer Ahmed A as Fatther and d natural guarrdian) Ash hwell Textiless Pvt. Ltd. Besst View Infrab build Private Limited L To otal

9. 10.

No. of Shares 1,26,44,500 48,31,250 30,05,500 20,00,000 17,39,130 7,64,500 6,43,500 6,43,500

% to Paid d up Capitaal (face value ` 10/-) 44.40 16.97 10.55 7.02 6.11 2.68 2.26

1,99,800 1,16,000 2,65,87,680

2.26 0.70 0.41 93.36

6b. Top ten n shareholderrs ten days prrior to filing this Red Herrring Prospecctus with ROC C: Sr. No. 1.

Name of the Shareholderr

No. of Shares

% to Paid d up Capitaal (face value ` 10/-) 1,26,44,500 44.40

Mr.. Naseer Ahm med 40

Scotts Ga arments Limiited Sr. No.

Name of the Shareholderr

2. 3. 4. 5. 6. 7. 8.

Ped digree Constru uction Pvt. Lttd. B.R R.Machine Too ols Pvt. Ltd. Bom mbay Rayon Fashions F Ltd.. Can nbank Venturre Capital Fun nd Ltd. Mrss. Nuzhat Aissha Naseer Mr.. Awaiz Ahm med Master Faiz Ahm med (Held by y Mr. Naseer Ahmed A as Fatther and d natural guarrdian) Ash hwell Textiless Pvt. Ltd. Besst View Infrab build Private Limited L To otal

9. 10.

No. of Shares 48,31,250 30,05,500 20,00,000 17,39,130 7,64,500 6,43,500 6,43,500

% to Paid d up Capitaal (face value ` 10/-) 16.97 10.55 7.02 6.11 2.68 2.26

1,99,800 1,16,000 2,65,87,680

2.26 0.70 0.41 93.36

n shareholderrs two years prior p to filing g this Red Heerring Prospectus with RO OC 6c. Top ten Sr. No. 1 2 3 4 5 6 7 8 9 10

Nam me of the Sha areholder

No. of Sharees

Mr.. Naseer Ahm med Ped digree Constru uction Pvt. Lttd. B.R R.Machine Too ols Pvt. Ltd. Bom mbay Rayon Fashions F Ltd. Mrss. Nuzhat Aissha Naseer Mr.. Awaiz Ahmed Masster Faiz Ahm med (Held by y Mr. Naseer Ahmed as Fath her and naturral guardian) Ash hwell Textiless Pvt. Ltd. Mr.. Mukhtar Ah hmed Mr.. Aslam Ahmed Ms.. Zareena Beg gum Ms.. Jabeen Sulta ana Ms.. Yasmeen Sultana Ms.. Nazneen Ish hrath Ms.. Thaseen Sulttana Ms.. Kasthuri Beg gum Ms.. Parvathi A. Mr.. Pranav Verm ma Total

1,226,44,500 4 48,31,250 3 30,05,500 2 20,00,000 7,64,500 6,43,500 6,43,500 2,80,700 1,00,100 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 2,557,23,550

% to Paid d up Caapital (faace value ` 100/-) 47.29 18.07 11.24 7.48 2.86 2.41 2.41 1.05 0.37 0.37 0.37 0.37 0.37 0.37 0.37 0.37 0.37 0.37 96.54

7 7.

Till date Company C hass not introducced any Employees Stock Option Schem mes/ Employ yees Stock Pu urchase Schemes.

8 8.

There is no n “buy back k” or “stand by” b arrangem ment for purch hase of Equitty Shares by SGL, S our Pro omoter, Directors,, BRLM and Co-BRLM C for the equity sh hares offered through t this Red R Herring Prospectus. P

9 9.

The Comp pany has not raised any brridge loan agaainst the procceeds of the isssue.

41

Scotts Ga arments Limiited 1 The comp 10. pany has 146 Shareholders S as on the datte of filing thiis Red Herring Prospectus with SEBI. 1 We have allotted 17,39 11. 9,130 equity shares s of `10/ /- at an issuee price of `1155/- per equity y share to Caanbank Venture Capital C Fund (CVCFL), through its Tru ustee and Inv vestment Man nager under Pre-IPO placcement prior to th he date of thee Red Herring g Prospectus. The price at which equity y shares weree allotted to CVCFL C may be lo ower than the Issue Price. The funds raised r by way of the Pre--IPO Placemeent shall be utilized u towards th he objects of the t Issue. Forr further detaiils, please seee “Objects of the t Issue” on page 44. 1 An over-ssubscription to the extent of 10% of the net issuee to public can 12. c be retaineed for purpo oses of rounding off to the nea arest multiplee of minimum m allotment lo ot. 1 There wou 13. uld be no further issue of capital c wheth her by way off issue of bonu us shares, preeferential allo otment, and rightts issue or in n any other manner m durin ng the period d commencin ng from subm mission of th he Red Herring Prospectus P wiith SEBI until the Equity Sh hares to be isssued pursuan nt to the Issuee have been lissted. 1 A total of 14. o 4,50,000 Equity E Sharess have been n reserved fo or allocation to the Eligiible Employeees on competitiv ve basis, sub bject to valid bids being received r at orr above the issue i price. Employees E caan also make Bids in the Net Issue I to Publiic and such Bids B shall not be treated ass multiple Bid ds. The aggreg gate of reservatio ons for employees shall nott exceed five per cent of th he post issue capital c of the Company. 1 Under-sub 15. bscription, if any, in the Reservation R fo or Eligible Em mployees shalll be added baack to the Nett issue. In case off under-subsccription in Non N Institution nal Portion and a Retail Portion, spill ov ver to the extent of under sub bscription sha all be permitteed from otherr categories. 1 We presen 16. ntly do not in ntend or prop pose to alter our capital structure s for a period of siix months fro om the Bid/Issuee Opening Da ate, by way off split or conssolidation of the denominaation of Equitty Shares or further f issue of Equity E Shares (including issue of securitties convertib ble into or excchangeable, directly d or ind directly for Equity y Shares) wheether preferen ntial or otherw wise. 1 SGL has not 17. n revalued its i assets since its incorporration. 1 SGL has not 18. n made any y public issue since its incorrporation. 1 We underrtake that at any given tim 19. me, there shaall be only on ne denominattion for the Equity E Shares of the Company y and that it shall s comply with such diisclosure and accounting norms n as speccified by SEB BI from time to tim me. 2 As on thee date of thiss Red Herring 20. g Prospectus, there are no o outstanding warrants, options o or rig ghts to convert debentures, d lo oans or other financial instruments into o the Equity Shares. The shares s locked d in by the Promo oter are not su ubject to any pledge. 2 No paym 21. ment, direct orr indirect, in the nature of o discount, commission c a allowance or otherwise sh hall be made eith her by the isssuer company y or the prom moter in any public p issue to t the person ns who receiv ve firm allotment in the publicc issue. 2 The Equitty Shares offered through this 22. t Issue willl be fully paid d up. 2 As on date of this RH 23. HP there are no equity sh hares held by y BRLM and Co-BRLM. However, H CVC CFL, a wholly ow wned subsidiiary of Canarra Bank is hollding 17,39,1330 equity shaares of `10/- through its Trustee T and Invesstment Manag ger.

42

Scotts Ga arments Limiited 224. The Issuee is being mad de through th he 100% Book k Building Prrocess wherein 25% of thee Net Issue sh hall be allocated on a proportiionate basis to o eligible Quaalified Institu utional Buyerss. Further, 5% % of the QIB Portion P shall be available a for allocation on n a proportion nate basis to Mutual Fun nds only and the remainin ng QIB portion sh hall be availa able for alloccation on a proportionate p e basis to all QIB Bidderss, including Mutual M Funds, su ubject to valid d Bids being reeceived at or above the Isssue Price. If th he aggregate demand by Mutual M Funds is less l than 5% of the QIB po ortion, the baalance Equity Shares availaable for allocation in the Mutual M Fund portion will be added a to the QIB portion and be availaable for allocaation proporttionately to th he QIB Bidders. Further, not less than 40% 4 of the Net N Issue sh hall be madee available for f allocation n on a proportionate basis to o Non-Instituttional Bidderrs and not less than 35% of the Net Isssue shall bee made available for allocation n on a proportionate basiss to Retail Individual Bidd ders, subject to valid Bidss being received at a or above th he Issue Price..

43

Scotts Ga arments Limiited OBJECTS OF O THE ISSU UE The Objectss of the Issue is i to raise reso ources to finaance: • Setting up u of unit for f Trouser manufacturin m ng at Doddab ballapur, Karrnataka and Knitting & Fabric Processin ng Unit at Kagal - Kolhapu ur, Maharashttra • Margin Money M for wo orking capitall of new unitss • General corporate c purrpose • Issue exp penses In addition,, our company y expects to receive r the ben nefits of listin ng of equity shares on the Stock S Exchan nge. The main object o clause of o our Memo orandum of Association A an nd objects inccidental to th he attainment of the main objectts enables uss to undertak ke the existin ng activities and a the activ vities for whicch funds aree being raised by uss through thiss Issue. The net proceeds of the Issue I after ded ducting the expenses for th he Issue are estimated e at ` [•] Lacs. Thee Fund requiremen nt is based on n the current business plan. In view off the competiitive and dyn namic nature of the industry in which we op perate, we maay have to rev vise our busin ness plan from m time to tim me and conseq quently the fund req quirement ma ay change. nt of Funds and a Means off Finance Requiremen nt of Funds Requiremen We intend to t utilize net issue proceed ds for financiing the abovee mentioned objects. o The d details of utiliization of Proceeds are as per thee table set forrth below: (`In Lacs) Sr. No Particullars Amount 1 S Setting up of o unit for Trouser manufacturing m g at Doddaaballapur, K Karnataka an nd Knitting and Fabric Processing at a Kagal – Kolhapur, K M Maharashtra 1.1 L Land & Site Development 1316.000 1.2 B Building and Civil C Works 7286.441 1.3 M Machineries an nd Equipmen nts 17204.115 1.4 M Miscellaneous s Fixed Assetss 2612.550 1.5 P Preliminary an nd pre Operattive Expensess 1289.998 1.6 P Provisions for Contingenciees 1168.773 2 M Margin Money y for Working g Capital 1116.880 3 Isssue Expensess [••] 4 G General Corpo orate Purposee [••] T TOTAL [••] Means of Fiinance Particulars Term Loan n for Doddaba allapur Projecct from Canarra Bank Term Loan n for Kagal Prroject from Caanara Bank Public Issu ue of equity sh hares 44

Amoun nt (`In laccs) 60000.00 90000.00

Grrand Total

15000.000 [•]

Scotts Ga arments Limiited Particulars

Amoun nt (`In laccs)

Internal Acccruals* Total Meaans of Finance e

Grrand Total [•] [•]

*The amoun nt other than IPO proceed ds and Term Loan L proceed ds required to owards the ‘O Objects of thee Issue’ shall be fun nded from in nternal accruals. Any fun nds deployed d from intern nal accruals over o and abo ove the required am mount shall bee adjusted witth the IPO proceeds and ploughed p back k in the Comp pany. Firm Arrang gement We undertaake that firm arrangementts of finance through t veriffiable means towards hun ndred percentt of the stated mean ns of financee excluding the t amount raised r throug gh proposed issue and existing e identtifiable internal accrruals have beeen made. Our Compaany has been n sanctioned term loans from f Canara Bank aggreg gating to `155000.00 lacs for f the project at Doddaballapurr and Kagal. The importaant terms and d conditions of o the sanction n for Doddab ballapur and Kagal K project are as follows: Nature of Loan L

Term Loan fo or Doddaballlapur

Term Loan n for Kagal un nder RTUFS

Date of Sanction Letter Amount Margin Rate of Interrest

22/09/2010

12/04/20133

`60.00 crores 41.18% 1. Base Ratee + 4% p.a. (i.e. 12% p.a.)

Purpose

2.

` 90.00 Cro ores 60.34% Base Rate +3.00% p.a. (i.e. pressently 13.25%, floaating) Towards part p funding g knitted prrocess fabric unit at KITTPL at Kagal, Kolhaapur

Tenor Repayment

Security Personal Gu uarantee

To part fund expan nsion project i.e. settin ng up of garm ment units to pieces of produce 30,000 trousers/ /day and 40,0000 kgs/day of Kn nitted fab brics* at Doddabaallapur

*Presentlly the Knittting Fabric unit has been shifted to Kagal, Kolhapurr, Maharashtrra Door to Doorr -11 years 3. In 95 monthly m instalments of ` 1.30 Cro ores each an nd the last instalmen nt being ` 1.50 1 Crores. Interest to t be paid as and when due. Initial repaym ment holiday y of 3 years including implementation n period.

Door to Do oor - 6 1/2 yearrs 1/2 6 years including i inittial moratoriu um of 1 ½ years. Repaymentt in 20 equal quarterly instalmentss of `4.50 crorres each.

Repaymentt to commen nce on complletion of 21 months from the t date of first disbursemeent Exclusive Ch harge on projeect assets. Exclusive Charge C on pro oject assets 1. 1 Mr. Naseeer Ahmed – net worth ` 1. Mr. Naaseer Ahmed d – net worth ` 45

Scotts Ga arments Limiited Nature of Loan L

Term Loan fo or Doddaballlapur 2. 2

Term Loan n for Kagal un nder RTUFS

6.43 Crorres. Mrs. Nuzzhat Aisha Naseer N – Net 2. Worth ` 1.06 1 Crores.

14.44 Crores. C Mrs. Nuzhat N Aish ha Naseer – Net Worth ` 0.50 Crores.

The other im mportant term ms and condittions for Sancction of loan for the Projectt are as underr : Doddaballaapur Project: 1. Auditor’ss certificate to t the effect that there are a no arrears in the pay yment of stattutory dues by b the company shall be subm mitted. 2. Company y to undertakee for the following: a. Not to divert d the ban nk borrowing gs/Working Capital C Funds b. Undertaaking any neew project/sccheme of mo odernization unless u such an a expenditu ure on expansion is covered d by compan ny’s net cash accruals after providing g for Dividen nds, etc., or for f long term m uses withoutt NOC from the bank. c. Invest by way of Share capitaal in or len nd or advan nce funds to o or place deposits d witth any associattes/allied/sisster/any otheer concerns. Normal N trade credit or secu urity depositss in usual cou urse of business or advancess to employeees are not cov vered under th his covenant. d. To enter into any bo orrowing arraangements eitther secured or o unsecured with any oth her banks/Fin nancial Institutiions/Compan ny 3. The decision on mergeer, amalgamaation, reconstrruction take over, o shifting g of premises,, shall be don ne only with priorr permission of the bank. An A undertakin ng to this effeect should be given. 4. The comp pany should submit the periodical p infformation like OCC, Stock k Statements cum MSOD, Book Debt Stateement, Financcial Statemen nts, Quarterly Operating Sttatements fro om time to tim me failing which the bank will charge additional interestt not exceedin ng 2% on the outstanding o liability. 5. Bank may y at its discrretion entrusst the job of periodical valuation v of securities ch harged, to a valuer approved d by the bank and such exp penses shall bee borne by th he borrower. 6. Copies of ITAO or stattement of retu urn/auditor’ss certificate reegarding subm mission of up pto date Tax returns r of compan ny/partner/g guarantor shaall be submittted. 7. If Firm/C Company is reconstituted, r continuation n of Credit faacilities will be b subject to obtention of banks specific peermission. 8. Assets (Cu urrent/Fixed) charged to the t bank shall be adequateely insured fo or all risks as per p norms. Our company O y had availed a term loan of o Rs.46.70 crrores for our Doddaballap pur project ou ut of a total saanction o Rs.60 crorees from Cana of ara Bank. Ou ur company had also mad de an applicaation to Statee Bank of Ind dia for s sanctioning off term loan fa acility for the Doddaballap pur project forr better terms and interest rates. State Bank B of India has sancctioned an am mount of Rs.555.40 crores term t loan for the said projject. The inteerest rate as per p the s sanction of Sttate Bank of India I is 12.40% p.a. as agaainst rate of in nterest of 13.775% p.a. sancctioned and availed a f from Canara Bank. B We pro opose to repaay the outstan nding term loaan of Canara Bank in order to save on in nterest c cost. The loan n sanctioned by State Ban nk of India is also eligible for benefits under u RTUFS S of Governm ment of India. In thee meantime we w have also o availed a short s term lo oan of Rs.19 crores from IndusInd Baank on 0 09/04/2013 to o repay portio on of term loaan availed fro om Canara Baank. The periiod of loan off IndusInd Baank is 1 y year and rate of interest is 11%. We are in the process of av W vailing the terrm loan sancttioned by Staate Bank of In ndia by complleting the neccessary d documentatio on. We propo ose to repay the outstand ding loan of Canara Bank k sanctioned for Doddabaallapur p project and av vail the new lo oan sanctioneed by State Baank of India as a mentioned above. Balan nce of Rs.4.600 crores r required to paart finance thee Doddaballaapur project would w be met through interrnal accruals. 46

Scotts Ga arments Limiited The details of term loan san T nctioned by State S Bank of India I are as under u Nature of Loan L

Term T Loan fo or Doddaballlapur Project from SBI

Date of Letter Amount

02/01/2013 0

Sanction

` 55.40 crores

Margin

33.53% 3 of the Project Cost

Rate of Interrest Purpose

Base B Rate (9.775%) + 2.65% p.a. (i.e. 12.400% p.a.) To T part fund expansion project p i.e. settting up of garment g uniits to produ uce 30,000 pieces of trousers/day t and 40,0000 kgs/day of o Knitted fabrics* f at Do oddaballapur

Tenor

78 7 months including mo oratorium peeriod of 6 months m In I 60 monthly instalmentss of ` 0.75 Crores C each and a 11 month hly instalmen nt of ` 0.85 Crores C and last l installmen nt of ` 1.05 crrores Exclusive E Chaarge on projecct assets Mr. M Naseer Ah hmed Mrs. M Nuzhat Aisha A Naseerr

Repayment

Security Personal Gu uarantee

ONS: TERMS & CONDITIO 1) To Submiit NOC from KIADB K and Canara C Bank fo f mortgaging g of leasehold d rights beforee disbursemeent 2) To Submiit closure letteer from Canarra Bank for th he existing terrm loan outstaandings 3) Company y's Statutory Auditor's cerrtificate to bee obtained fo or Company'ss investmentss in Doddabaallapur project beefore disburseement 4) All statuto ory approvalss including PCB Clearancee to be submittted before diisbursement of o the loan 5) Processing fee and upffront fee, besiides penal intterest as per previous p sancction terms ass applicable have h to be recoverred before dissbursement of o credit facilitties 6) Security Documentatio D n and formallities of EM crreation / exteension have to t be completted before dissbursal of the enh hanced / new w loan limits 7) Bank's ch harge on thee immovable properties should s be no oted with th he Sub-Registrar of Assu urances concerned d / CERSAI, before b disburrsement 8) Promoterss to bring in n the stipulatted margins upfront u / prroportionately y before disb bursal of limits. A certificatee to this effecct should be obtained fro om the Statuttory Auditorss of the unitt / Company y to be submitted d on record 9) Up-to-datte nil encum mbrance certiificates shou uld be obtain ned and sub bmitted for all the prop perties mortgaged to the Bank k, before disbu ursement and d thereafter ev very 12 month hs as per extaant instruction ns 47

Scotts Ga arments Limiited 10) Limits arre to be disbu ursed only afteer completion n of all formalities includin ng: A) Securiity Documenttation B) Mortg gage creation / Extension / Regn. Of E.M M C) Filing of o charge with h ROC / CER RSAI 11) Bank's ch harge on the assets of thee Company should s be reg gistered with the ROC concerned with hin the mandatorry period and d fresh search report should d be obtained d and placed on o record. 12) To subm mit list of mach hineries hypo othecated to th he Bank to oth her Banks / F.I.s F separatelly. 13) The unit to furnish an undertaking that any escaalation in projject cost shalll be borne by the borrowerr. Kagal Projeect: The followin ng permission ns / approvaals should be in i palce and produced p for verification : 1. 2.

Polllution controll Certificate frrom State Gov vernment / Pollution P Con ntrol Board. Con nsent from Diirectorate of Factories F for Operations O for Textiles Maanufaturing faacilities.

The comp pany will keeep the bank informed of the happenin ng of any ev vent likely to have a subsstantial adverse effect e on theirr operations, sales, profitss etc and the remedial steeps proposed to be taken by the company.. Non comp pliance of any y of the sancttion terms/ conditions c is liable to attraact penal inteerest @ 2% ov ver and above app plicable ROI The bank reserves the right to call up the loan upon the hap ppening of any of the under noted orr other events con nsidered likelly to jeopardiise the interesst of the bank.. 1. 2. 3. 4.

A instalmen Any nts remaining g unpaid on th he due date Th he company committing c a breach or default in thee performancce or observan any nce of the cov venants otther documen nts executed by b them or an ny other term ms and conditions relating to t the loan’ Execution or distress d being g enforced orr levied again nst the wholee or any part of the company`s prroperty Th he company ceasing c or thrreatening to cases c to carry on their busiiness

The securrity for this teerm loan is ex xtendable to working w capittal facilities enjoyed with our o bank (preesently aggregatin ng to Rs. 170 crore as regu ular facility) ass collateral seecurity Submissio on of monthly PIPR by th he LIE and ceertificate from m practising Chartered C Acccountant (C CA) for expenditu ure incurred on o the projectt for review off progress on the project by y the bank The comp pany should furnish f detailss regarding break b up of th he miscellaneo ous fixed asseets estimated d under the total project p cost The disbu ursement sha all be made based on the documentts including CA C certificate

purchasse orders/ quotations an nd othe supp porting

48

Scotts Ga arments Limiited The project margin is proposed p to be b met out off IPO proceed ds / internal accruals. Heence the proceeeds of IPO shall be pooled in n a no-lien acccount with us u or otherw wise our lien shall s be got marked m on th he IPO proceeds amount with h other banks to the extentt of equity mo oney required d for this projeect. Compan ny shall confirm and ensure com mpliance of this requiremeent without faail and shall notify n the Meerchant Bankeers and Managerss / Bankers to o the IPO issu ue in this regaard as may be required. TUF eligib bility to be go ot established d from TUF ceell as per new R-TUFS Penal inteerest of 2 % p.a. on the outtstanding liab bility shall be collected if th he audited fin nancial statem ment is not subm mitted before 31 3 st October of o every yearr or within a fortnight from m the date off audit of finaancials accounts of o the compan ny whicheverr is earlier O THE OBJE ECTS OF TH HE ISSUE DETAILS OF u of unit fo or Trouser manufacturing g at Doddabaallapur, Karn nataka and Knitting K and Fabric 1. Setting up Processin ng at Kagal – Kolhapur, K M Maharashtra Our compan ny proposed to set up Reaadymade Garrment units for exports at different locaations in Karnataka towards forr which we have h entered d into a tripartite MOU with w Governm ment of Karn nataka and Bo ombay Rayon Fash hions Limited d (BRFL). Thee trouser man nufacturing unit u at Doddaaballapur is one o of the loccations forming part of the said d tripartite MOU. M For thee details of MOU M please refer page no. n 133 of thee offer document. The T trouser manufacturing m g unit at Doddaballapur iss one of the lo ocations formiing part of triipartite MOU. We propose p to utiilize part of th he issue procceeds for settiing up manuffacturing unitt at Doddabaallapur. Presently, we w are in the advanced stage of com mpletion of setting s up off trouser man nufacturing unit u at Doddaballaapur and the same s is being g independenttly executed by b us. We had app pointed Gherzi Eastern Lim mited (GEL) a firm speciaalized as consultants, engin neers and arcchitects for designin ng and executtion of the Pro oject. Gherzi was founded d in 1960 and focuses f on th he dynamic neeeds of various ind dustries and provides com mprehensive consulting services. GEL L is an ISO 9001/2008 9 ceertified organization n for provid ding consultaancy servicess in Architeectural & En ngineering Designs and Project P Managemen nt and has successfully completed over o 1800 prrojects acrosss different sectors s like textile, industrial plants, commeercial complex xes, etc. Presently it has been pro oposed to set up u the knittin ng & fabric prrocessing unitt from Doddaaballapur to Kagal K – Kolhapur, Maharashtra. M A Techno Economic E Feaasibility Repo ort (TEFR) daated 09/07/20012 from Gheerzi for the executio on of the Kag gal Project haas been obtaiined. The add ditional beneefits that will be available to the company in n view of thee change in the t location of o the Knittin ng and Fabriic Processing unit is as detailed hereinunderr : The followin ng benefits will w be availab ble to the Com mpany by shifting the projeect to Kagal: • 10% Capital C Subsid dy and 5% Intterest Subsidy y from Ministtry of Textiless under RTUF FS. • Mahaarashtra State Governmentt to provide assistance in a manner thatt effective ratee of interest payable p will be b 2% after tak king into acco ount assistancce from all th he sources. Th he applicable interest rate will w be taken n as either 12.5% or Banks prime lendin ng rate or thee rate of interrest actually charged, c whiichever rate iss less. • Beneffits those are eligible for Sccheme for Inttegrated Texttile Park (SITP P) by Ministrry of Textiles (MoT) includ ding subsidy for developm ment of Park resulting sav vings in infrasstructure and d common faccilities, ETP etc. e

49

Scotts Ga arments Limiited 1.1 Land an nd Site Develo opment Trouser Manufacturing Unit U at Dodda aballapur, Ka arnataka We have seet up trouser manufacturin ng unit at D--3, D-4, A-3, A-10, A-11, S-43, S S-44 and d S-45 (P), Apparel A Park Industtrial Area, I Phase, Dodd daballapur, Karnataka K alllotted by Karrnataka Indu ustrial Areas Board (KIADB) wh hich is propo osed to be co ompletely fun nctional by December 20122. The allotteed land admeeasures 57,567 sq meters. . This la and was initiaally allotted on o lease-cum--sale basis forr period of 6 years y vide allo otment letter dated d 25/03/2010 0. Subsequen ntly, our Com mpany entereed into a leaase cum sale arrangemen nt with KIADB vid de agreementt dated 28/002/2011 with h revised peeriod of ten years (10 yeears). Durin ng the subsistence of the lease period p and allso therafter, that is durin ng the interreg gnum betweeen the expiry y of the lease period d and the exeecution of thee sale deed, the t lessee shaall pay to the lessor yearly y rent of ` 144,225/(Rupees Fou urteen thousand two hun ndred and tw wenty five only) and main ntenance charrges of ` 1,066,688/(Rupees On ne Lakh six th housand six hundred h and eighty eight only). o We hav ve incurred to otal cost of ` 693.00 lacs for acqu uisition of lan nd on lease cu um sale basis and for the siite developmeent. F Processsing Unit at Kagal – Kolh hapur, Maharrashtra Knitting & Fabric The location n of knitting & fabric proceessing unit haas been shifted to Kagal Industrial Textiile Technolog gy Park promoted by b Kagal Ind dustrial Textille Technolog gy Park Privaate Limited (KITTP). It is located at T-53/2, T Kagal-Hatkanangale Fivee Star Indl. Area, Kagal – Dist D Kolhapurr, Maharashtrra. KITTP has been b formed under the “S Scheme for Integrated Texttile Park” pro omoted by Go overnment off India, Ministry of Textiles. The total land alllotted to KITT TP at Kagal iss 2,00,000 sq meters m on leaase basis initiaally for a period of 5 years by Ma aharashtra In ndustrial Deveelopment Corrporation (MIIDC). Our Co ompany propo oses to acquire 40,0000 sq. Meter of land on leeave and licen nse basis from m KITTP. Forr the purposee of allotmentt of the said land we w have enteered into Shaare Subscripttion Agreemeent (SSA) daated 18/01/20012 with KIT TTP to subscribe to o 50,00,000 equity e sharess of face valu ue `10/- each h. KITTP haas vide letter dated 15/099/2012 indicated th he allocation of 40,000 sq meter m of land d to our Com mpany on adv vance paymen nt of `10.00 lacs. l In terms of thee SSA and thee letter dated 15/09/2012, the said land d shall be allo otted to our Company C on receipt r of `500.00 lacs towards the allotmentt of 50,00,0000 equity sharees of KITTPL L of the face value v of `10/ /- each and the Com mpany entering into a leav ve and licensee agreement by b paying an n amount of `100.00 ` lacs ass a non refundable deposit. Thee other terms and conditions shall be fin nalized at thee time of enteering into leav ve and license agreeement. Our company has madee advance pay yment of `100.00 lacs towaards the allocation of land d of 40,000 sq q meter and have beeen allocated the said land d vide letter dated d 01/10/22012 from KIT TTP. The totaal cost estimated for land and sitte developmeent is ` 623.00 lacs. gs and Civil Works W 1.2 Building We have commenced thee construction n of factory bu uilding, for a total built up p area of 34,203 sq.meter with w an estimated to otal cost of ` 3777.52 3 lacs fo or setting up trouser manu ufacturing un nit at Doddabaallapur, Karn nataka.

50

Scotts Ga arments Limiited The followin ng are detailss of buildings and civil works at Doddaballapur: Description

Type off Constructtion

Area (Sq q.Meter)

Rate per Sq. Meter (`)

Amou unt (`In Laacs)

Garments Section Production n Hall (Groun nd Floor) Production n Hall (First Floor) F Production n Hall (Second Floor) Garment Printing P Hall

R.C.C. R Co olumns, B Brick walls, Steel S Struss, Kotah h Stone e etc.

3750 3750 3750 3750

10800 10800 10800 10800

405.00 405.00 405.00 405.00

Washing Unit U Ground Floor First Floor Second Flo oor Third Floo or

R.C.C. R Columns, B Brick Walls, Steel S Struss, Kotah h Stone e etc.

3750 3750 3750 3750

10800 10800 10800 10800

405.00 405.00 405.00 405.00

R.C.C. Constrruction R R R.C.C. Constrruction R R.C.C. Constrruction R R.C.C. Constrruction R R.C.C. Constrruction

50 253 1500 2400

10800 10800 10800 10800

54.00 27.32 259.20 162.00 35.00 3 3777.52

Miscellaneeous Boiler Water Tan nk Security Ro oom Store Areaa Undergrou und Water Ta ank TOTAL

In terms of Techno Econ nomic Feasibiility Report of o Gherzi datted 09/07/20112 (TEFR) the total constrruction cost of Knittting & Fabricc processing unit u at Kagal, Kolhapur is estimated at ` 3509.02 lacss for a total bu uilt up area of 33,7000 sq. meter. The following are details of o buildings and a civil works to be execu uted at Kolhaapur as provided in n TEFR of Gheerzi: Description

Type Construction n

of

Main Production Hall – Knitting/Processing Yarn Storee R.C.C. Co olumns, Brick Walls, , Steel Knitting section – Production P Struss, Kotah h Stone Hall etc. Grey Fabrric Store Processing - Productio on Hall Finish Fab bric Store Utility Arrea Humidificcation for Knitting K & Flat Knittiing Mezzanin ne Floor in Knit Processing Section Ware Hou use Canteen

R.C.C. Construction n R.C.C. Construction n R.C.C. Construction n R.C.C. 51

Area (Sq q.Meter)

Rate per Sq. Meter (`)

Amount (` In Lacs))

2,5500 4,4400

10,000 10,000

250.00 440.00

2,5500 9,6600 2,5500

10,000 10,000 10,000

250.00 960.00 250.00

11000

10000

110.00

12000

10,000

120.00

30000

10,000

300.00

1,2200

8,000

96.00

Scotts Ga arments Limiited Description

Type Construction n

Utility bu uildings Boiler House

Miscellan neous Administrration Build ding with training centre Pump Ho ouse (includiing water treatmentt) Gate Hou use/Security General Store S Undergro ound Water Tank Civil Worrk for ETP Cycle Sttand/Car Bu us Stand Shed Septic Tan nk

of

Construction n R.C.C. Construction n R.C.C. Construction n

R.C.C. Construction n R.C.C. Construction n R.C.C. Construction n R.C.C. n Construction R.C.C. Construction n R.C.C. Construction n Shed

Area (Sq q.Meter)

Rate per Sq. Meter (`)

Amount (` In Lacs))

5000

8,000

40.00

5000

8,000

40.00

12000

10,000

120.00

2500

8,000

20.00

2500

8,000

20.00

3,0000

8,000

240.00

Forr 9,50,556 litrees

37.89 200.00 5.00

R.C.C. Construction n

10.00

TOTAL

3508.89

nd Machinery y 1.3 Plant an The break up of cost of o plant and machinery for f Trouser manufacturin m ng and for Knitting K and Fabric Processing is i given undeer: (Amount ` In lacs)) Sr. no Particulars Amount 1.3.1 Trouser Man nufacturing/G Garment Man nufacturing (IImported) 2,733.61 1.3.2 Knitting and d Fabric Proceessing (Imporrted) 12,967.85 1.3.3 Knitting and d Fabric Proceessing (Indigeenous) 1502.69 Total Plant and Machineery cost 17,204.15 Garment Man nufacturing Plant P and Macchinery 1.3.1 Detaileed break Up of Trouser/G Sr. No

1

Descrip ption

Manufacturing g of Trouser Class Feed offf the Arm

Manufactu urer/ Supplieer

Curreen cy**

Quanti ty

Juki Singap pore

US SD

50

52

Unit Price

2500

Amount (Quantity X Unit Price)

125000

(` in lacss) Amount in ` (includi ng Duty & CIF)

Scotts Ga arments Limiited Sr. No

Descrip ption

Manufactu urer/ Supplieer

Ind dustrial Sewing Maachine utton Holee Sewing Bu Maachine Co omputerised Button Stiitch Machine Feeed off the arm – 3 neeedle Chaiin Stitch Maachine Au utomatic Belt B loop Maachine 2 needle Automatic Po ocket Hemm ming chain stiitch Laaser Machine table & 3 Maannequin

PTE Ltd d (Invoice daated 31/03/20112)

utomatic Spra ay Robot Au dule Reecording Mod Baack Pocket Hemming Un nit ng Unit Beelt Loop Fusin m Feeed off the Arm

VI.BE.MA AC. S.P.A. (Proform ma Invoice daated 08/06/20112)

FG TEKST TIL KONFEKSIIYO N SAN VE TIC LTD, ST TI (Proform ma Invoice daated 05/06/20112) Singaporre Industriaal Product (P PTE) Ltd. (Proforrma Invoice daated 21/05/20112)

Deecorative Stitcch Beelt Loop Setterr Complete Set

FD DM Single Needle Diirect Drive Ma achine

Rongdee Internation nal Trading Co. C Ltd. (Proforrma Invoice daated 25/05/20112)

Curreen cy**

Quanti ty

US SD

50

US SD

Unit Price

Amount (Quantity X Unit Price)

Amount in ` (includi ng Duty & CIF) 72.19

4500

225000

129.94

30

3200

96000

55.44

Eurro

45

5500

247500

181.91

Eurro

15

15500

232500

170.89

Eurro

1

16500

16500

12.13

Eurro

1

290000

290000

213.15

Eurro

1

200000

200000

147.00

Eurro

1

20000

20000

14.70

Eurro

4

9700

38800

28.52

Eurro

5

3200

16000

11.76

Eurro

76

4700

357200

262.54

Eurro

11

10500

115500

84.89

Eurro

15

15600

234000

171.99

US SD

500 sets

421

210500

121.56

Su ub Total 2

Gaarment Laund dry Sto one & Enzym me washing Maachine umbler Dryer Machines Tu Hiigh Speed Eco o Dyeing &

1678.61 TGS DIS S TICARET A.S. A VEKILII (Invoice daated 27/03/20112) 53

Eurro

5

32500

162500

119.44

Eurro Eurro

1 1

6500 14300

6500 14300

4.78

Scotts Ga arments Limiited Sr. No

Descrip ption

Manufactu urer/ Supplieer

Washing Machiines Hiigh Speed Washing Maachines Hiigh Speed Eco o Dyeing & Washing Machiines

TGS DIS S TICARET A.S. A VEKILII (Invoice dated d 27/04/22012) TGS DIS S TICARET A.S. A VEKILII (Invoice dated d 19/03/22012)

one & Enzym me washing Sto Maachine Tu umbler Dryer Machines umbler Dryer Machines Tu ydro Extracto or Hy

Curreen cy**

Quanti ty

Eurro

2

Eurro

Unit Price

Amount (Quantity X Unit Price)

Amount in ` (includi ng Duty & CIF) 10.51

12675

25350

18.63

5

53950

269750

198.27

Eurro Eurro

2 1

19750 6500

39500 6500

29.03 4.78

Eurro

6

18525

111150

81.70

Eurro

1

19825

19825

14.57

ub Total Su Gaarment Printiing

3

481.70

g Machine Laaser Printing wiith Accessoriees

Laaser Printing g Machine wiith Accessoriees

Jenologia S.L. (Invoice daated 14/12/20111 & 13/01/20012) FG TEKST TIL KONFEKSIYON SAN VE TIC T LTD, ST TI (Invoice daated 04/01/20012)

Eu uro

4

95000

380000

279.30

Eu uro

4

100000

400000

294.00

UB TOTAL SU

573.30

GR RAND TOTA AL (1+2+3) * Currency Ratte: USD = `555, Euro = `70 1.3.2

2733.61

D Detailed break k Up of Knittting and Fabrric Processing g Plant and Machinery M

The details of the plant and a machinery y to be purch hased in termss of TEFR are as follows: Sr. No

1

Description

Kniitting Sing gle jersey 30/24 Diaa/GG Sing gle Jersey 34/28 Diaa/GG – Open width Inteerlock 30/24 Dia/GG D

Q Quantity

Cu urrency #

26

Euro

60,000

15,60,000

1092.00

23

Euro

70,000

16,10,000

1127.00

4

Euro

72,000

2,88,000

201.60

54

Un nit Price

Amount Amount ( (Quantity X Unit Price)

Amou unt (` In Laacs)

Scotts Ga arments Limiited Sr. No

Description

Fleeece 30/20 Dia a/GG Auttostripper 30/20 Diaa/GG Auttostripper 30/28 Diaa/GG Shim ma Seiki Cuff & Colllar Flat Knitting Measuring & Grey insp pection Subb Total (1) 2.

Fab bric Processin ng Rev versing Machine Pro ocessing – Tubular Rou ute Tub bular mercerize m Machine Dyeeing Machinees - Soft Flow w-750Kg - Soft Flow w-500Kg - Soft Flow w-250Kg - Soft Flow w-125Kg - Soft Flow w -50Kg Collor Dispen nser & Solu ution Maker Cutt Opening Ma achine Relax Dryer Macchines Pro ocessing – Open wid dth Route Cutt Opening Bleaaching Rangee Colld Pad Batch Rottary Printing Dyee and print Washer W Con ntinuous Tumble Dry yer Sten nter Drying Machine M Com mpacting Ma achine – Opeen width Disspensing and Eng graving Systtem for Dyeeing and Prin nting Subb Total (2)

3

Q Quantity

Cu urrency #

Un nit Price

6 9

Euro Euro

55,000 90,000

Amount Amount ( (Quantity X Unit Price) 3,30,000 8,10,000

Amou unt (` In Laacs)

8

Euro

90,000

7,20,000

504.00

15

Yen

38,00,000

5,70,00,000

313.50

9

Euro

10,000

90,000

63.00

231.00 567.00

4099.10

2

USD

25,000

50,000

27.50

1

Euro

4,00,000

4,00,000

280.00

5 5 6 4 6 1

Euro Euro Euro Euro Euro Euro

3,74,944 2,98,184 2,50,002 2,31,700 1,50,000 1,51,800

18,74,720 14,90,920 15,00,012 9,26,800 9,00,000 1,51,800

1312.30 1043.64 1050.01 648.76 630.00 106.26

1 2

CHF CHF

1,78,210 7,27,170

1,78,210 14,54,340

81.39 664.20

3 1 1 2 1 1

CHF Euro Euro Euro Euro Euro

1,78,210 27,51,220 4,93,040 4,80,000 3,25,450 7,00,000

5,34,630 27,51,220 4,93,040 4,80,000 3,25,450 7,00,000

244.17 1925.85 345.13 336.00 227.82 490.00

5 4

Euro Euro

11,25,480 7,03,840

56,27,400 28,15,360

3939.18 1970.75

1

Euro

3,50,000

3,50,000

245.00

1 15567.95

Oth her Equipmen nts 55

Scotts Ga arments Limiited Sr. No

Description

Lab boratory Com mputer Color Matching System m AH HIBA lab Equiipments Oth her Lab equip pments Subb Total (3)

Q Quantity

Cu urrency #

Un nit Price

Amount Amount ( (Quantity X Unit Price)

1

USD

46,000

46,000

25.30

1 Lot

USD USD

92,614 20,000

92,614 20,000

50.94 11.00 87.24

Tottal Cost of Machinery M (Sub Total 1 + Sub S Total 2 + Sub Total 3)

1 19754.29

Estiimated Disccount @ 40% % Imp port Duty @ 5.05% 5 on macchinery cost Edu ucation Cess on o Import Dutty @ 3% Totaal Landed Cost of Macchinery Tra ansport, Erecttion and oth her Expenses @ 4%

7901.72

Tottal Imported d and d Machinery

598.55 17.95 122,469.07 498.76

Plant

1 12967.85

#Currency Conversion C ra ate: a) USD= `55 b) Euro = `70 c) 1CHF F = `45.67 d) 1Yen 1 = `0.55 us Knitting an nd Fabric Pro ocessing Plan nt and Machinery 1.3.3 Detaileed break Up of Indigenou Sr. No

1. 2.

3

Amou unt (` In Laacs)

Description

Quaantity

Un nit price (` In lacs)

Amount (` In lacss)

Knitting Cone Rewin nding Machinee Processing Checking Machines M Total Add: Excise Duty @ 16% Add: Sales Tax T @ 4% Add: In nsurance, Local Transport @ 4% Add: Erection E and Commission ning@ 3% Total (1+2)

2

6.75

13.50

7

4.50

31.50 45.00 7.20 1.80 1.80 1.35 57.15

56

Scotts Ga arments Limiited Sr. No 4

Description

Quaantity

*Other Mach hineries inclu uding interlock machines, soft windling machine, m kn nitting machine, washing/so oaping umble dyer, hydro h machine, tu extractor with w panel board, b automatic dispensing d sy ystem color service, priinting s macchine, machines, shearing etc.

-

Un nit price (` In lacs) Lumpsum

Amount (` In lacss) 1445.54

Total (3+4)

1502.69

*Certain maachineries reequired for th he Knitting and Fabric processing p un nit had been n identified by b our company ass available wiith Britannia Industries Limited (BIL). BIL B had boug ght these macchineries from m State Bank of Ind dia through teender cum au uction notice dated 02/077/2011. We have h purchassed the entiree set of machineriess from them vide tax invoice dated 011/10/2011. These T machin neries were orriginally own ned by Cuthberts Textiles T Privatte Limited, Baangalore Other than the above, none n of the machineries used by us are second hand machin nes. The Pro omoter, Directors, Key K Manageriial Personnell and the Gro oup Companiies do not haave any intereest in the pro oposed acquisition of the equipm ment and macchineries. 1.4 Miscellaaneous Fixed Assets The Compaany requires electrical insstallation, ad dditional macchinery, equip pments, geneerators, trolleeys etc for functioning g of the unit at a Doddaballaapur and Kollhapur. The to otal cost estim mated for botth the units iss ` 2612.50 approx. Thee break up of the miscellan neous assets to o be purchaseed is given un nder 1.4.1 The deetail of miscellaneous fixed d assets requirred for Doddaaballapur Un nit is as underr: Sl. No

P Particulars

1 2

E Electrical pow wer 3000 Kva

3 4 5 6 7 8 9 10

Suppllier/Contracto or Quotaations Monarrch Electricals Vivekanand Electriical Industriees Pvt. Ltd. Powerrica Limited

Power Transfo P ormers 1500 Kva K 5 Kva 500 2 Kva 250 S Screw compreessors 40 Hp,E E-30,7.5-191 Cfm C A Dryer, ELR Air RD 450 A Receiver, 2000 Air 2 ltrs 7 Kg gs P filter set - PF 500 Pre

ELGI Ltd.

Goods elevato G ors 2 Ton capaacity with 4 Stops - Fire fighting sy ystems, As per Nation nal code, BO OQ prepared d by chief fire f officer, Kaarnataka - Fire pump room eq quipment 57

Equipmen nts

Orientt Comp pany

Quantity y 1 set

3 5 2 5 3 2 3 sets

Amountt (` in lacss) 10.00

24.70 1116.47 22.75 22.30 9.76 2.10 0.80

Elevato or 2

15.11 N.A.

94.97

Scotts Ga arments Limiited Sl. No

P Particulars

Suppllier/Contracto or Quotaations

Hydra ant system bo oth for Intern nal & Extern nal - Addreessable fire detection & Allarm system m - Fire Extinguishers - Signag ges - Fire NOC N - Sprink kler system IB BR - Boiler

Quantity y

Amountt (` in lacss)

-

11

-

5 TPH H 2 TPH H

-

Chimn ney to suit 100 - 12 TPH

12 100% steam co ondensate reecovery system m as p specifications per - Steam m accessories erection e charg ges - IBR Pipe line, IBR I Formaliities, NON--IBR Pipe lin ne & Insulatio on of pipe liine. - Waterr & Air line E Electrification & other officce equipmentss S SUB TOTAL

13

14

Total Solutions Incc.

Maxth herm Techo onologies Pv vt. Ltd. Calmaax Combustio on Inc Armsttrong Intern national Pv vt. Ltd.

25.80 13.26 46.71

Meeraa Engineers 75.00

4400.00 8 879.73

1.4.2 The deetail of miscellaneous fixed d assets requirred for Knittin ng & Fabric processing p un nit is as underr: Sr. No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

Descriptiion Electrical In nstallation (H HT & LT distriibution, Lightting etc.) Effluent Treeatment Plant Caustic Reccovery Plant – UNITOP Humidifica ation for Knittting Air Handlin ng Unit for Fllat Knitting Air Compreessor (500 CF FM X 2) with piping p D.G. Set Boiler (1W+ +1S)- 12 Ton Coal handliing Plant Chemical ta ank, Oil Storaage tank Steam pipin ng & Conden nsate Piping Thermopacck with piping g & insulation n Ventilation n for processin ng Water Supp ply with pipin ng Drainage piping Water Softeening Plant Fire Fightin ng Equipmentts Electronic Weighing W scales 58

Am mount (` In I lacs) 490.77 500.00 50.00 72.00 25.00 50.00 90.00 150.00 25.00 15.00 40.00 50.00 5.00 20.00 10.00 15.00 20.00 15.00

Scotts Ga arments Limiited Sr. No 19. 20. 21. 22. 23. 24.

Descriptiion

Am mount (` In I lacs) 10.00 15.00 20.00 15.00 15.00 15.00 1732.77

Workshop Equipment Fork Lift Furniture and a Fixtures Office Equiipments Computerss with softwarres Vehicles Total

minary and Pre-Operative P e Expenses 1.5 Prelim A) The details d of the preliminary and pre operative expensses to be incu urred on the trouser man nufacturing unit are a as under: Sr. No 1. 2.

Descrip ption Interest during d constru uction Deposits & Others Total

Amount ((` In lacs) 300.00 155.86 455.86

B) The details d of thee preliminary y and pre op perative expeenses to be incurred on the Knitting g & Fabric proceessing are as under: u Sr. No o

Descriiption

1.

Establish hment and Prroject Manageement Expensses

2.

Interest during constrruction on Ru upee Loan affter TUF beneefit for 9 Months Up Fron nt Fees for totaal term loan L/C cha arges for impo orted machinery Insurancce Start up Expenses Engineering/Consulttant Fees Documeentation Apprraisal Fee & Other O Depositts Total

3. 4. 5. 6. 7. 8.

Amount (` In lacs) 25.000 506.322 4.822 29.633 48.755 49.533 100.000 70.077 834.122

on for Contin ngency/Escalaation 1.6 Provisio The Compaany has madee a provision for contingen ncies of ~5% of the capitall expendituree to be deploy yed for Doddaballaapur and Kaga al Project. It includes i Land d and Buildin ng, Plant and Machinery, Miscellaneous M s Fixed Assets and Preliminary P and a Pre-operaative Expensees that amoun nts to `1168.733 lacs M requirrement for Working W Capiital for Trou user manufactturing/Garment Manufaccturing 2 Margin Money unit and for f Knitting and a Fabric Prrocessing Unit We have esttimated work king capital reequirement of ` 5389.75 laacs for Doddaaballapur unitt and ` 5013.87 lacs for Kolhapu ur Unit for th he first year. We W shall utillize an amoun nt of ` 502.044 lacs for trou user manufaccturing unit at Dod ddaballapur and a ` 614.76 lacs for knittting and fabrric processing g unit at Kolh hapur from the t net issue proceeeds towards the t margin money of work king capital an nd balance sh hall be funded d through Ban nks.

59

Scotts Ga arments Limiited Sl. No

Particulars

1

(A) Current C Asse ets

Existing Operatio ons (F.Y.20111-12)

Estimates forr first E fu ull year of completion of o new u unit at D Doddaballapu ur

(` in i lacs) Estiimates for first fulll year of com mpletion of new unit at Kagal

Inveentories Raw w materials

11,821.33

1 1,291.93

1,3366.59

Finisshed goods

4,190.99

2 2,315.25

9 947.28

Worrk in progress

5,676.66

1 1,800.75

1,8878.07

Receeivables

9,840.00

1 1,388.33

2,3376.91

31,528.98

6 6,796.26

6,5568.85

3,591.42

1 1,406.51

1,5554.99

3,591.42

1 1,406.51

1,5554.99

27,937.56

5 5,389.75

5,0013.86

27,937.56 -

44,887.71 502.04

4,3399.12 6 614.75 11116.79

Totaal Current Asssets (A) 2

(B) Current Liabilities L visions Prov Sund dry Creditorss

&

Totaal Current Lia abilities (B) 3

Worrking Capitall (A-B)

4

To be b Financed by b Bank k/Internal Acccruals Publlic Issue Totaal

ns for workin ng capital req quirements Assumption Sr. No 1. 2. 3. 4. 5.

Partiiculars

Exissting Operations

Inveentories Finisshed goods Worrk in progresss Receeivables Sund dry Creditorss

4.5 Months M 1.5 Months M 2.5 Months M 4.5 Months M 1.5 Months M

Doddaballaapur Unit (First Yeaar) 1 Month h 3.5 Week ks 3 Weekss 1 Month h 1 Month h

Kagal Unitt (First Year)) 1 Month 15 Days 1 Month 1 Month 1 Month

The Compaany has fund based working capital lim mit of ` 155000.00 lacs sancctioned from Canara Bank k and ` 4700.00 lacss sanctioned from State Bank of India for existin ng operationss. The Comp pany has preesently received san nction of ` 3000.00 3 lacs from f State Baank of India vide their leetter dated 022/01/2013 to owards working caapital requireement of Do oddaballapur Project. Thee Company shall approaach the bank kers at appropriatee time to avaiil the additional credit faccilities/credit facilities for working cap pital requirem ment of aforesaid Un nits. I Expense es Estimated Issue The Manag gement estima ates an expen nse or ` [●] Lacs L towardss issue expen nse. The expen nses of this Issue I include, am mong others, underwriting u and managem ment fees, sellling commission, printing g and distribu ution expenses, leegal fees, statu utory advertissement expen nses and listin ng fees. The estimated e Issu ue expenses are as follows:

60

Scotts Ga arments Limiited Sr. No.

Nature of Expenses

Amou unt*

1.

% to the t Totaal Expen nses [●]]

(` in La acs) % to the Issuee

Lead Mana agement Fee, Underwritin ng Commissio ons [●] [●] and Selling g Commission ns [●] [●]] [●] 2. SCSB Com mmission/pro ocessing fee to SCSBs for processing ASBA Bid d cum App plication Forms procured by members of syndiccate and no onsyndicate members** m [●] [●]] [●] 3. Commissio on to Non n-Syndicate Members on procuremen nt of eligiblee applicationss considered for purpose of allotment*** 4. Advertising g and Marketting Expensess [●] [●]] [●] 5. Printing an nd Stationery [●] [●]] [●] 6. Others (Reegistrar’s Feee, Legal Feee, Grading Fee, F [●] [●]] [●] Service Tax x, etc.) Total [●] [●]] [●] * Will be inccorporated after finalisatio on of Issue Priice **SCSBs woould be entitled d to a processsing fee of `100 per Bid-cum m-Application Form, for proocessing the Bid-cum B Applicatioon Forms proccured by the meembers of the Syndicate S and submitted s to SCSBs. ***Non-Synddicate Memberrs would be enttitled to a comm mission of `200 per valid bid cum applicatioon form procurred and consideredd for basis of allotment orporate Purp poses General Co The Compaany intends to set apart some funds for meeting g certain unp planned expeenditure whiich are necessary fo or conducting g the Businesss which are so ourced throug gh the head General G Corpo orate Purposees. Schedule off implementa ation

Sl No. 1 2 3 4 5 6

D Doddaballapu ur Activity y Land d# Site Development D t Consstruction of Building B Purcchase of Plant & Machinery ntifying and Purchase P of Iden Plan nt & Machinerry Purcchase of Misscellaneous Fixed d Assets

Commencem ment

Kolhapur

Com mpletion

Completed Completed August '22011 M March’ 2013

Commenceement

Com mpletion

Commen nced May’ 2013 June’ 2013 2

May '2013 JJune’ 2013 M March’ 2014

March '20012

M March’ 2013

-

-

-

-

Commen nced

M March’ 2014

March '20012

March’ 2013 M August ‘2013 ‘ February’ 2014 A April/May’ 2013 7 Triall Runs October '20012* April’ 2014 2 May ‘2014 8 Com mmercial Prod duction May’ 2013 June’ 20144 # Land att Doddaballa apur has alreaady been allo otted on Leasse cum sale basis b by KIAD DB whereas land l at Kolhapur shall been ta aken on lease from Kagal In ndustrial Textile Technology Park (P) Ltd. L

61

Scotts Ga arments Limiited *Our com mpany has alreeady started trial t runs on certain c machiineries that haave been insttalled at the siite and we expectt the commen ncement of commercial pro oduction by May M 2013. b up of th he proceeds to o be used Year wise break The year wiise break up of o funds to bee incurred on the Project un nder various heads is as fo ollows:

Particularss

Amo ount spent tilll 3 31/03/2013

(Amo ount ` in lacs)) Amou unt to be spent du uring the Total year 2013-14 2 Amount

Land & Sitte Developmeent Factory Bu uilding & otheer civil work Plant & Maachinery Miscellaneeous Fixed Asssets Preoperatiive Expenses

702.663

613.00

1,315.63

3,756.334 2,379.774 713.338 -

3,530.18 14,824.41 1,899.12 1,168.73

7,286.52 17,204.15 2,612.50 1,168.73

Contingen ncies Working Capital C Issue expenses General Co orporate Purp poses Total

451.775 79.996 8,083.880

838.16 1,116.80 [●] [●] [●]

1,289.91 1,116.80 [●] [●] [●]

Sources & deployment d of o Funds As per the Certificate C dated March 255, 2013 from Siddaiah S & Raam, Chartered d Accountantts the Compaany has upto deploy yed an amoun nt aggregatin ng ` 8083.80 lacs l as on Feb bruary 28, 20113 towards th he proposed project p at Doddabaallapur and Kagal. K Detailss of the sourcces and deplo oyment of fu unds as per th he certificate are as follows: (`In lacs) Amou unt

Particulaars DEPLOYM MENT OF FUN NDS Land and Siite Developm ment Building an nd Civil Work ks Machineriess and Equipm ments & Misceellaneous Fixeed Assets Preliminary y & Pre-opera ative Expensess Issue Expen nses Total SOURCES OF FUNDS Internal Acccruals* & Pre--IPO Equity Term Loan from Canara Bank Total

62

7002.63 3,7556.34 30993.12 4551.75 7 79.96 80883.80 3413.75 46770.05 80883.80

Scotts Ga arments Limiited *The amoun nt other than IPO proceed ds and Term Loan L proceed ds required to owards the ‘O Objects of thee Issue’ shall be fun nded from in nternal accruals. Any fun nds deployed d from intern nal accruals over o and abo ove the required am mount shall bee adjusted witth the IPO proceeds and ploughed p back k in the Comp pany. Interim Usee of Funds The manageement, in accordance with h the policies set up by thee Board, will have flexibiliity in deployiing the proceeds reeceived from m the Issue. Pending P utilizzation for th he purposes described ab bove, the Com mpany intends to temporarily t invest i the fu unds in high quality interrest or dividend bearing liquid instru uments including deposits d with banks for th he necessary duration. d Succh investmen nts would be in accordancce with any investm ment criteria approved a by the t Board of Directors D from m time to timee. Monitoring g of Utilizatio on of Funds The management of thee Company will w monitor the utilizatio on of funds raised through h this publicc issue. Pursuant to o Clause 49 off the Listing Agreement, A our Company shall on quarrterly basis disclose d to thee Audit Committee the Applicatiions of the prroceeds of thee Issue. On an n annual basiis, our Comp pany shall preepare a statement of funds utilized for purposses other than n stated in thiis Red Herrin ng Prospectuss and place it before the Audit Committee. C Su uch disclosures shall be made m only unttil such time that t all the prroceeds of thee Issue have been utilized u in fulll. The statemeent will be cerrtified by the Statutory Au uditors of our Company. Our Compaany shall be required to in nform the matterial deviatio ons in the utiilization of th he issue proceeeds to the Stock Exchanges E and shall also be b required to t simultaneo ously make the t material deviation/ adverse comments of o the Audit Committee C pu ublic through advertisemen nt in newspap per. Basic termss of the issue The Equity shares being offered are subject s to the provision of the Companies Act, 1956,, our Memoraandum and Articles of Associattion, the term ms of this offfer documentt and other teerms and con nditions as may m be incorporated in the Allotment advicee and other documents /certificates thaat may be exeecuted in resp pect of the issue. The T Equity sh hares shall also a be subjeccted to laws as applicablle, guideliness, notification ns and regulations relating to th he issue of caapital and listting and trad ding of securitties issued from time to tiime by SEBI, Goverrnment of Ind dia, RBI, ROC C and /or other authoritiees as in forcee on the date of issue and to the extent appliicable.

63

Scotts Ga arments Limiited BASIS OF ISSUE PRIC CE QUALITA ATIVE FACT TORS 1. 2. 3. 4. 5. 6. 7. 8.

Multiiple Product Capability C Strong g Managemen nt Team Relatiionship with big b sized play yers in Intern national Mark ket High quality produ ucts String gent Quality Norms N Desig gning Capabillities Samp pling Capabiliities Strateegic Location Advantage

CTORS QUANTIITATIVE FAC Information presented in this section is derived from f the restaated audited financial f stateements 1 1.

Earnings Per Share (EP PS) (on ` 10 // per share) Year End ded March 31, 2010 March 31, 2011 March 31, 2012 Weighteed Average EPS

EP PS (`) 10.41 13.06 31.43 21.80

Weight W 1 2 3 -

The EPS of o the Compan ny based on the t financials for seven mo onths period ended e Octobeer 31, 2012 is `6.62. ` 2 2.

Price/ Earrning (P/E) Ra atio On the ca ap price of ` 13 32/- per equitty share Particularss P/E baseed on pre-issu ue weighted average a EPS of o ` 21.80 P/E baseed on pre-issu ue EPS of FY 2011-12 of ` 31.43 3

6.06 4.20

On the flo oor price of ` 130/- per equiity share Particularss P/E baseed on pre-issu ue weighted average a EPS of o ` 21.80 P/E baseed on pre-issu ue EPS of FY 2011-12 of ` 31.43 3 3 3.

5.96 4.14

Return on n Net Worth (RONW) Year Ended March 311, 2010 March 311, 2011 March 311, 2012 Weighteed Average RONW R

RON NW (%) 2 21.44 2 22.64 36.88 2 29.56

Weight 1 2 3 -

The Return on Net Worth h of the Comp pany based on o seven montths period en nded October 31, 2012 is 8.339%. 4 4.

Minimum m Return on Increased I Neet Worth requ uired to maintain pre-issue EPS: [•] 64

Scotts Ga arments Limiited 5 5.

Net Assett Value (NAV V) per share Pre-Issuee as on March h 31, 2012 (`) Pre –Issu ue as on October 31, 2012 (`) ( Post Issu ue (`)

6 6.

85.22 900.98 [•]

Industry Average A P/E Nam me of the Com mpany P/E Multiple based on n price as on 11/04/2013 Highest Bom mbay Rayon Fashion F Limiteed 15.70 Lowest Man ndhana Indusstries Limited d 10.97 15.70* Industry Average A *Source for Industry Average: A : Ap pril 01 - Aprill 14, 2013, Cap pital Market Magazine, Textile T Produccts

7 7.

Comparisson with Peerr Group Nam me of the Co ompany

Equity (`` in Croress)

Face Valuee (Per equity y sharess)

Total RONW Book B PAT (` Income (%) V Value In from (`) Crorees) Operat ions as on 31/03/ 2012 (` In Crores) Audited Standalone S F Financials forr F.Y.2011-12

Mandhaana Industriees 33.12 10.000 980.14 Limited Bombay Rayo on 1334.60 10.000 2734.96 Fashion Limited K P R Mill Ltd. 37.68 10.000 1198.14 Gokaldaas Exports 17.19 5.000 1002.06 Limited Source: Audited A Fina ancial Statemeents filed on BSE B website Scotts Garmentts 2 26.73 10.000 500.25 Limited 8 8.

EPS (`)

P/E Multiple based on Price as on 11/04/2013

17.51

1226.02

73.10

22.07

10.97

8.78

2001.65

206.551

15.50

15.70

5.13 (58.29)

1556.11 6 66.25

31.223 (132.776)

7.96 (38.62)

15.03 N.A.

36.88

8 85.22

84.03

31.43

N.A.

The face value v of Equiity Shares of Scotts Garm ments Limited d is ` 10 and th he Issue Price is [•] time of o the Face Valu ue. The Issuee Price of ` [•] has been deetermined by y us in consulltation with the t BRLM and d Co-BRLM, on the basis of asssessment of market demaand from inv vestors throug gh the Book- Building Process and is ju ustified based on the above facctors. The facee value of thee Equity Shares is ` 10 each h. The Issue Price P is 13 tim mes the p band an nd 13.2 times the face valu ue at the high her end of thee Price face valuee at the lowerr end of the price Band. On the baasis of the abo ove parameterrs the Issue Prrice of ` [•] peer share is jusstified.

65

Scotts Ga arments Limiited S STATEMENT T OF TAX BE ENEFITS To The Board of o Directors SCOTTS GARMENTS G LTD L # 481-B, IVtth Phase, Peen nya Industriaal Area, Bangalore – 560 058. We, M/s Siddaiah S & Ram, R Chartereed Accountants are the Statutory S Au uditors of M/ /s Scotts Garrments Limited hav ving its regisstered office at a 481-B, IV Phase, Peeny ya Industrial Area, Bangaalore – 560 0558. We hereby certiify that undeer the currentt tax laws, thee following tax benefits in nter-alia, willl be available to the Company and a the memb bers of the Co ompany. How wever a memb ber is advised d to consider in his/her/itts own case the tax x implicationss of an investtment in the Equity E Sharess, particularly y in view of the t fact that certain c recently enaacted legislatiion may not have h direct leg gal precedentt or may havee a different in nterpretation on the benefits, wh hich an investtor can avail. As per the existing e proviisions of the Income I Tax Act A 1961 and other laws ass applicable fo or the time beeing in force, the fo ollowing tax benefits and d deductions are and willl, inter-alia be b available to t Scotts Garrments Limited and d its sharehold ders. We believe that there aree no special taax benefits available to the Company an nd its shareho olders. General taxx benefits ava ailable: pany under Act A A. Benefitts to the comp 1.

Dividen nds exempt under section 10(34) 1 and 100(35) of the IT Act. Dividen nd (whether interim i or fin nal) received by the company from its investment in n shares of another a domestiic company would w be exeempted in th he hands of th he company as per the prrovisions of section s 10(34) read with secttion 115-O of the IT Act. In n terms of section 10(35) off the IT Act, any a income reeceived from un nits of a Mutu ual Fund specified under section s 10(23D D) of the IT Act A is exempt from tax, sub bject to such inccome not arissing from the transfer of un nits in such Mutual M Fund.

2.

Compu utation of capiital gains Capital assets are to be categoriseed into short--term capital assets and lo ong-term capital assets based on the periiod of holding g. All capital assets exceptt shares held in i a company y or any otherr security listeed in a recognissed stock exchange in Indiia or units of Unit Trust off India (‘UTI’) or Mutual Fund F units sp pecified under section 10(23D D) of the IT Acct or zero cou upon bonds arre considered d to be long-teerm capital asssets, if they aree held for a period p exceed ding thirty-six x months. Shaares held in a company orr any other seecurity listed in n a recogniseed stock exch hange in India or UTI or Mutual Fun nd units speccified under section s 10(23D)) of the IT Acct or zero cou upon bonds arre considered d as long-term m capital asseets, if these arre held for a period exceedin ng twelve months. As per the t provision ns of section 10(38) 1 of the IT I Act, long teerm capital gain g arising to o the company y from transferr of a long teerm capital assset being an n equity sharee in a compaany listed on a recognized d stock exchang ge in India, sh hall be exemp pt from tax, iff such sale is entered into on or after October O 1, 20004, and the tran nsaction is cha argeable to Seecurities Tran nsaction Tax (‘‘STT’). As per the provision ns of section 112 of the IT I Act, long-tterm capital gains other than those co overed under section 10(38) of the IT Act are subject to o tax at a ratee of 20% (pluss applicable surcharge s and d cess). 66

Scotts Ga arments Limiited Howeveer, proviso to o section 112(1) specifies th hat if the long g-term capitaal gains other than those co overed under section s 10(38) of the IT Acct arising on transfer t of lissted securitiees or units or zero coupon n bond, calculatted at the ratee of 20% with h indexation benefit exceeeds the capitaal gains comp puted at the rate of 10% witthout indexattion benefit, then t such cap pital gains aree chargeable to t tax at the rate r of 10% without w indexation benefit (p plus applicablle surcharge and a education n cess). Howeveer, from Asssessment Yeaar 2007-2008, such long--term capital gains will be included while computting book pro ofits for the purpose of payment p of Minimum M Altternate Tax ((“MAT”) und der the provisio ons of section n 115JB of the IT Act. As per provisions off section 111A A of the IT Act, A short term m capital gain ns arising from m transfer of o short term cap pital asset, beeing an equity y share in a company or a unit of an eq quity oriented d mutual fund shall be taxab ble at the ratee of 15% (plus applicable surcharge s and d education cess), c if such sale is entereed into on or affter October 1, 1 2004 and thee transaction is chargeablee to STT. 3.

Securitiies Transactio on Tax In termss of STT, tran nsactions for purchase p and d sale of the securities in th he recognized d stock exchan nge by the sharreholder will be chargeablle to STT. As per the said provisions, any a delivery based b purchaase and sale of equity sharee in a comp pany through h the recogn nized stock exchange e is liable to seccurities transacttion tax @ 0.1% of the valu ue payable by both buyer and seller indiividually. The non n-delivery bassed sale transsactions are liaable to tax @ 0.025% of thee value payab ble by the selleer.

4.

Exempttion of capitall gains arising g from incom me tax As per the t provision ns of section 54EC 5 of the IT T Act and sub bject to the con nditions speccified therein capital gains arrising to a co ompany on transfer t of a long-term caapital asset other o than th hose covered under section 10(38) of the IT Act shall not n be chargeeable to tax to o the extent such capital gains are invessted in Nationaal Highway Authority A of India (NHAI) or Rural Elecctrification Corporation (R REC) notified bonds within six s months frrom the date of transfer. Iff only part off such capitall gain is invessted, the exem mption shall bee proportiona ately reduced.. The IT Act has h restricted d the maximu um investmen nt in such bon nds up to ` 5 million m per asssessee during any financiall year.

5. Where the long-term specified assset is transferrred or converted into moneey at any time within a period of three yeears from the date of its accquisition, thee amount of capital c gains exempted earrlier would become b chargeaable to tax as long term capital gainss in the yearr in which the t long-term m specified asset a is transferrred or converrted into mon ney. 6.

In accorrdance with and a subject to o the provisio ons of section n 32 of the Inccome tax Actt, the Compan ny will be allow wed to claim depreciation n on specified d tangible and d intangible assets a as per the rates speecified. Besides normal dep preciation, thee Company, in terms of section 32(1))(iia), shall be b entitled to o claim Additio onal depreciattion @ 20% of o actual cost on new plan nt and machiinery for the period of on ne year after acq quired on or after a 31st Maarch, 2005.

7.

In accorrdance with and a subject to o the provision ns of section 35D 3 of the Inccome tax Act,, the Compan ny will be entittled to amorttise, over a period p of fivee years, all ex xpenditure in n connection with the pro oposed public issue subject to t the overall limit specifieed in the said section.

8.

Under Section S 115 JA AA (1A) of th he Act, tax creedit shall be allowed a of an ny tax paid (M MAT) under Section S 115 JB of o the Act. Credit C eligiblee for carry fo orward is thee difference between b MAT T paid and the t tax 67

Scotts Ga arments Limiited computted as per thee normal pro ovisions of th he Act. Such MAT M credit shall s not be available a for set-off beyond 10 years succceeding the year in which the MAT becomes allowab ble. 9. Unabsorbed deprecia ation if any, fo or an Assessm ment Year (A AY) can be carrried forward d and set off against a any sou urce of incomee in subsequeent AYs, as peer section 32 of the Act, su ubject to the (2) ( of section 72 and sub-secttion (3) of secction 73 of thee Act. ard and Set offf of Businesss Loss Carry forwa 10. Businesss losses if any y, for any AY Y can be carrried forward and set off against a busineess profits for eight subsequ uent AYs. 11. Section 48 4 of the Act,, which presccribes the mod de of computtation of capittal gains, prov vides for ded duction of cost of acquisition n/improvemeent and expeenses incurred d in connectio on with the transfer t of a capital asset, frrom the sale consideration c n to arrive at the amount of o capital gain ns. Howeverr, in respect of o long term caapital gains, it i offers a ben nefit by perm mitting substiitution of cosst of acquisitiion / improv vement with thee indexed cosst of acquisitio on/improvem ment, which adjusts a the co ost of acquisittion / improv vement by a cosst inflation ind dex as prescriibed from tim me to time. 12. As per section s 71 rea ad with sectio on 74, Short-teerm capital lo oss arising du uring a year is i allowed to be setoff agaiinst short-term m as well as long-term l cap pital gains of the said yearr. Balance losss, if any, sho ould be carried forward and set-off againsst short-term as well as lon ng-term capitaal gains for su ubsequent 8 years. y 13. As per section s 71 rea ad with sectio on 74, Long-teerm capital lo oss arising du uring a year is i allowed to be setoff only y against lon ng-term capital gains. Balance loss, if any, should be carried forward f and set-off against subsequent year’s y long-terrm capital gains for subseq quent 8 years. B. Benefitts to the Resid dent shareholders of the company c und der the IT Actt 1. Dividend ds exempt un nder section 100(34) of the IT T Act Dividend d (whether in nterim or finall) received by y a resident sh hareholder from its investm ment in sharees of a domesticc company would w be exem mpt in the haands of the reesident shareeholder as per the provisio ons of section 10(34) read wiith section 1155-O of the IT Act. 2. Any inco ome of minor children (M Maximum two o children) clubbed with the total income of the parent p under seection 64(1A) of the Incom me Tax Act 19961, will be exempt e from tax to the ex xtent of ` 15000 per minor ch hild under secction 10(32) off the Income Tax T Act 1961.. 3. Computaation of capita al gains Capital assets a are to be b categorised into short-tterm capital assets a and lo ong-term capiital assets bassed on the perio od of holding. All capital assets [exceptt shares held in a company y or any otheer security lissted in a recogn nised stock ex xchange in In ndia or unitss of UTI or Mutual M Fund d units speciified under section s 10(23D) of the IT Actt and zero cou upon bonds] are considerred to be long g-term capitaal assets, if th hey are held for a period exceeeding thirty--six months. Shares S held in n a company or any other security listeed in a recogniseed stock exch hange in Indiaa or units of UTI U or Mutuaal Fund units specified und der section 100(23D) of the IT T Act and zerro coupon bo onds are conssidered as lon ng-term capittal assets, if th hese are held d for a period ex xceeding twelve months.

68

Scotts Ga arments Limiited As per the t provision ns of section 48 of the IT T Act, the am mount of capiital gain shalll be computted by deductin ng from the sa ale consideraation, the costt of acquisitio on and expen nses incurred in connection n with the transsfer of a cap pital asset. However, H in respect r of lo ong-term capiital gains ariising to a reesident shareholder, a benefitt is permitted d to substitute the cost of acquisition/ improvemen nt with the in ndexed cost of acquisition/ a improvement i t. The indexeed cost of acq quisition/ im mprovement, adjusts the cost c of acquisitio on/ improvem ment by a cosst inflation in ndex, as prescrribed from tim me to time. As per the t provision ns of section n 10(38) of th he IT Act, lo ong term cap pital gain ariising to a reesident shareholder from tran nsfer of a lon ng term capittal asset bein ng an equity share in a co ompany listed d on a recognized stock exch hange in Ind dia, shall be exempt e from tax, if such sale is entereed into on orr after October 1, 2004, and the t transaction n is chargeab ble to STT. As per the t provision ns of section 112 of the IT T Act, long-teerm capital gains g [other than t those co overed under seection 10(38) of o the IT Act] are subject to o tax at a ratee of 20% (pluss applicable su urcharge and d cess). Howeverr, proviso to section 112(1) specifies thaat if the long--term capital gains [other than those co overed under seection 10(38) of o the IT Actt] arising on transfer t of lissted securitiess or units or zero coupon bond, calculateed at the rate of 20% with h indexation benefit b exceeds the capitaal gains comp puted at the rate r of 10% with hout indexatiion benefit, th hen such capiital gains are chargeable to tax at the rate of 10% without w indexatio on benefit (plus applicablee surcharge an nd education cess). As per provisions p of section 111A A of the IT Acct, short term m capital gain ns arising from m transfer off short term cap pital asset, beiing an equity y share in a co ompany or a unit of an eq quity oriented d mutual fund d shall be taxablle @ 15% (plu us applicable surcharge an nd education n cess), if such h sale is enterred into on or after October 1, 2004 and th he transaction n is chargeablle to STT. 4. Exemptio on of capital gains g arising from income tax As per th he provisionss of section 544EC of the IT Act and subject to the con nditions speciified therein capital c gains ariising to a resiident shareho older on transsfer of a long g-term capitall asset other than t those co overed under seection 10(38) of the IT Acct shall not be b chargeablee to tax to th he extent such h capital gain ns are invested in certain no otified bonds within w six mo onths from th he date of tran nsfer. If only part p of such capital c gain is in nvested, the exemption shaall be proporttionately redu uced. Howeverr, if the resid dent sharehold der transfers or converts the notified bonds into mo oney (as stipu ulated therein) within a period of three years y from th he date of th heir acquisitio on, the amoun nt of capitall gains exempted earlier wou uld become ch hargeable in such year. Th he bonds speecified for thiss section are bonds issued on n or after Aprril 1, 2006 by NHAI and REC. R The IT Act A has restrictted the maxim mum investm ment in such bon nds up to ` 5 million m per asssessee during g any financiaal year. Further, as per the provisions of section 54F of o the IT Act and subject to conditionss specified th herein, long-term m capital gain ns other than n a capital gaains arising on o sale of resiident house and a those co overed under seection 10(38) of the IT Act arising to an individu ual or Hindu Undivided Family F (‘HUF’) on transfer of o shares of the company will be exem mpted from capital gains taax, if the net consideration n from such shaares are used for f either purrchase of residential housee property wiithin a period d of one year before b or two years y after th he date on which the tran nsfer took plaace, or for co onstruction of residential house property y within a perriod of three years y after thee date of tran nsfer. Howeverr, if the resid dent sharehollder transferss the residenttial house pro operty within n a period off three years fro om the date of their acqu uisition, the amount a of capital gains ex xempted earllier would beecome chargeab ble in such year.

69

Scotts Ga arments Limiited C. Benefits to the Non--resident sharreholders of the company y other than Foreign Insttitutional Inv vestors and Foreeign Venture Capital Inveestors 1. Dividend ds exempt un nder section 100(34) of the IT T Act Dividend d (whether in nterim or finall) received by y a non-resideent sharehold der from its in nvestment in shares of a dom mestic compa any would be b exempt in n the hands of the non-reesident shareeholder as per the provision ns of section 10(34) 1 read with w section 1115-O of the IT T Act. 2. Any inco ome of minor children (M Maximum two o children) clubbed with the total income of the parent p under Seection 64(1A) of the Incom me Tax Act 19961 will be exempt e from tax to the exttent of ` 1,5000 per minor ch hild per year in i accordancee with the pro ovisions of secction 10(32) of the Income Tax Act 1961. 3. Computtation of capittal gains Capital assets are to be categoriseed into short--term capital assets and lo ong-term capiital assets bassed on the perio od of holding.. All capital assets a [except shares held in n a company or any other security listeed in a recogniseed stock exch hange in Indiaa or units of UTI U or Mutuaal Fund units specified und der section 100(23D) of the IT Act and zero o coupon bon nds] are considered to be long-term l cap pital assets, iff they are held d for a period exceeding e thiirty-six montths. Shares held in a company c or any other security listed d in a recogniseed stock exch hange in Indiaa or units of UTI U or Mutuaal Fund units specified und der section 100(23D) of the IT T Act and zerro coupon bo onds are conssidered as lon ng-term capittal assets, if these t are held d for a period ex xceeding twelve months. As per the t provision ns of section 48 of the IT T Act, the am mount of capiital gain shalll be computted by deductin ng from the sale s the consiideration, thee cost of acqu uisition and expenses e incu urred in conn nection with the transfer of a capital asset. Under first proviso p to secttion 48 of thee IT Act, the taaxable capitall gains arising on o the transfeer of capital assets being shares or deebentures of an Indian co ompany need d to be computeed by convertting the cost of acquisition, expenditurre in connecttion with succh transfer an nd full value of the considera ation received d or accruing g as a result of o the transferr into the sam me foreign currrency in which h the shares were w originally y purchased. The resultantt gains thereaafter need to be b reconverteed into Indian cu urrency. The conversion needs n to be do one at the preescribed ratess prevailing on o dates stipu ulated. Hence, in n computing such gains, th he benefit of indexation i is not available to non-resideent sharehold ders. As per the t provision ns of section 10(38) 1 of the IT Act, long g term capitall gain arising g to a non-reesident shareholder from tran nsfer of a lon ng term capittal asset bein ng an equity share in a co ompany listed d on a recognized stock exch hange in Ind dia, shall be exempt e from tax, if such sale is entereed into on orr after October 1, 2004, and the t transaction n is chargeab ble to STT. As per the t provision ns of section 112 of the IT T Act, long-teerm capital gains g (other than t those co overed under seection 10(38) of o the IT Act) are subject to o tax at a ratee of 20% (pluss applicable su urcharge and d cess). Howeverr, proviso to section s 112(1)) specifies thaat if the long--term capital gains [other than those co overed second proviso p to secttion 48 and under u section 10(38) of the IT I Act] arisin ng on transferr of listed secu urities or units or zero coup pon bond, calcculated at thee rate of 20% % with indexaation benefit exceeds the capital c gains com mputed at the rate of 10% without ind dexation beneefit, then such h capital gain ns are chargeaable to tax at thee rate of 10% without w indeexation benefiit (plus appliccable surcharrge and educaation cess). As per provisions p of section 111A A of the IT Acc t, short term m capital gain ns arising from transfer off short term cap pital asset, beiing an equity y share in a co ompany or a unit of an eq quity oriented d mutual fund d shall be taxablle @ 15% (plu us applicable surcharge an nd education n cess), if such h sale is enterred into on or after October 1, 2004 and th he transaction n is chargeablle to STT. 70

Scotts Ga arments Limiited 4. Exemptio on of capital gain g from inccome-tax As per th he provisionss of section 544EC of the IT Act and subject to the con nditions speciified therein capital c gains ariising to a no on-resident sh hareholder on n transfer of a long-term capital assett (other than those covered under section n 10(38) of the IT Act) shall not be charrgeable to tax x to the extentt such capitall gains are invessted in certain notified bo onds within six s months from the date of transfer. Iff only part of such capital gain is invested, the exempttion shall be proportionate p ely reduced. Howeverr, if the non n-resident shareholder traansfers or co onverts the notified n bond ds into moneey (as stipulateed therein) wiithin a period d of three yearrs from the date of their accquisition, thee amount of capital c gains exeempted earlieer would beccome chargeaable in such year. y The bon nds specified for this sectio on are bonds isssued on or after a April 1, 2006 by NH HAI and REC. The IT Act has restriccted the max ximum investmeent in such bo onds up to ` 5 million per assessee a durin ng any financcial year. Further, as per the prrovisions of section s 54F of o the IT Act and subject to t conditionss specified th herein, long-term m capital gain ns (other than n a capital gaains arising on o sale of resident house and a those co overed under seection 10(38) of o the IT Act) arising to an n individual or o HUF on traansfer of sharres of the com mpany will be exempted e from capital gaiins tax, if thee net consideration from such shares are used for either purchasee of residentia al house prop perty (subjectt to prior app proval from Reserve R Bank k of India) wiithin a period off one year beffore or two yeears after the date on which the transfeer took place, or for constru uction of resideential house property withiin a period off three years after a the date of transfer. 5. Non-resiident taxation n Under seection 115-I of o the IT Act, the non-resid dent Indian shareholder s h an option to be govern has ned by the provisions of Cha apter XIIA of the t IT Act vizz. “Special Pro ovisions Relaating to Certaiin Incomes off NonResidentts” which are as follows: Under section 115E of the IT Acct, where sh hares in the company c aree acquired or subscribed to in convertib ble foreign exchange e by a non-resident Indian, caapital gains arising a to thee non-residen nt on transfer of o shares held d for a period d exceeding 12 1 months, will w [in cases not n covered under u section 10(38) of the IT T Act], be co oncessionally taxed at thee flat rate off 10% (plus applicable su urcharge and d cess) (withoutt indexation benefit b but with protection against foreign exchange fluctuation) Under provisions p of section 115F F of the IT Act, A long-term m capital gain ns [in cases not n covered under section 10(38) 1 of the IT I Act] arisin ng to a non-reesident Indian n from the traansfer of sharres of the com mpany subscribeed to in conv vertible foreig gn exchange will w be exemp pt from incom me tax, if the net n consideration is reinvesteed in specifiied assets within w six mo onths of the date of transfer. If onlly part of th he net consideration is so reeinvested, thee exemption will w be propo ortionately red duced. Howeever the amou unt so exempted will be chargeable to tax x subsequentlly, if the speccified assets are a transferred d or converteed into money within w three years from thee date of theirr acquisition. 6. In accord dance with th he provisions of Section 1155G of the Inco ome Tax Act 1961, Non Reesident Indian ns are not oblig ged to file a return of income undeer Section 139(1) of the Income Tax x Act 1961 if their only sou urce of incomee is income frrom investmeents or long term capital gains g earned on o transfer off such investmeents or both, provided tax has been ded ducted at sou urce from succh income as per the proviisions of Chaptter XVII-B of the t Income Taax Act 1961. 7. In accord dance with th he provisionss of Section 115H 1 of the In ncome Tax Act A 1961, wheen a Non Ressident Indian beecome assessable as a resid dent in India,, he may furn nish a declaraation in writin ng to the Asseessing Officer along a with hiss return of inccome for that year under Section S 139 off the Income Tax T Act 1961 to the 71

Scotts Ga arments Limiited effect thaat the provisiions of Chaptter XII-A shalll continue to apply to him m in relation to t such investtment income derived d from the specified assets for thaat year and su ubsequent asssessment yearrs until such assets a are converted into mo oney. 8. As per th he provisions of section 115 I of the I.T. Act, a Non-R Resident Indiaan may elect not n to be goveerned by the prrovisions of Chapter C XII-A A for any assessment yearr by furnishin ng his return of income fo or that year und der Section 13 39 of the Incom me Tax Act 1961, 1 declarin ng therein that the provisio ons of Chapteer XIIA shall not n apply to him h for that assessment a y year and accorrdingly his to otal income fo or that assesssment year willl be computed d in accordan nce with the other provisions of the Inco ome Tax Act 1961. 1 9. Tax Treaaty Benefits As per th he provisionss of Section 900(2) of the Income Tax Acct 1961, the prrovisions of the t Income Taax Act 1961 wou uld prevail ov ver the provissions of the taax treaty to th he extent they y are more ben neficial to thee NonResidentt. nstitutional Investors I (‘FII’) D. Benefits to Foreign In 1. Dividend ds exempt un nder section 100(34) of the Act A Dividend d (whether interim or fin nal) received d by a FII fro om its investment in shaares of a dom mestic company y would be exempt e in thee hands of th he FII as per the provisio ons of section n 10(34) read d with section 115-O of the Act. A 2. Long term m capital gain ns exempt un nder section 10(38) of the Act. A As per th he provisions of section 100(38) of the Acct, long term capital c gain arising a to the FII from transfer of a long teerm capital assset being an equity sharee in a compan ny listed on a recognized stock exchan nge in India, sh hall be exemptt from tax, if such s sale is en ntered into on n or after October 1, 2004, and the transsaction is chargeeable to STT. 3. Capital gains g As per the t provision ns of section 115AD of the Act, FIIs arre taxed on the t capital gains income at the following g rates: t Rate of tax N Nature of Inccome (%)* Long-teerm capital ga ains 10 Short-teerm capital ga ains 30 * Plus ap pplicable surccharge and ceess The beneefits of foreig gn currency flluctuation prrotection and indexation as a provided by b section 48 of the Act are not n available to t a FII. As per th he provisionss of section 100(38) of the Act, A long term m capital gain arising to FIII from transfeer of a long term m capital assset being an equity e share in a compan ny listed on a recognized stock exchan nge in India, sh hall be exemptt from tax, if such s sale is en ntered into on n or after October 1, 2004, and the transsaction is chargeeable to STT.

72

Scotts Ga arments Limiited As per provisions p of section s 111A of the Act, sh hort term capiital gains arissing from tran nsfer of shorrt term capital asset, a being an n equity sharre in a compaany or a unitt of an equity y oriented mu utual fund sh hall be taxable at a the rate of 15% 1 (plus app plicable surch harge and edu ucation cess), if such sale iss entered into o on or after Octtober 1, 2004a and is chargeaable to STT. 4. Tax Treaaty Benefits As per section s 90(2) of o the Act, th he provisionss of the Act would w prevaiil over the prrovisions of the tax treaty to the extent th hey are more beneficial b to the t FII. Thus,, an FII can op pt to be goveerned by prov visions of the Acct or the appliicable tax treaaty whicheverr is more beneficial. al Funds E. Benefits to the Mutua 1. Dividend ds exempt un nder section 100(34) of the Act A Dividend d (whether in nterim or fin nal) received by a Mutuaal Fund from m its investm ment in shares of a domesticc company would w be exem mpt in the haands of the Mutual M Fund as per the prrovisions of section s 10(34) read with sectio on 115-O of th he Act. 2. As per th he provisions of section 10(23D) of the Act A Any inco ome of Mutu ual Funds reg gistered undeer the Securitties and Exch hange Board of o India Act, 1992 (‘SEBI’) or o regulationss made there under, Mutu ual Funds set up u by public sector banks or public fin nancial institutio ons or Mutua al Funds auth horised by thee Reserve Ban nk of India, would w be ex xempt from in ncome tax, subjeect to the presscribed condiitions. F. Benefits to the Ventu ure Capital Co ompanies / Funds 1. Dividend ds exempt un nder section 100(34) of the Act A Dividend d (whether in nterim or finaal) received by b a Venture Capital Com mpany (‘VCC’)/ Venture Capital C Funds (‘V VCF’) from itts investment in shares of another a domeestic company y would be ex xempt in the hands of the VC CC/VCF as per the provisiions of section n 10(34) read with section 115-O of the Act. 2. In case of o a shareholder being a Venture Capital Compan ny/ Fund, as a per the provisions of Section S 10(23FB) of the Incom me Tax Act 19961, any incom me of Venturre Capital Com mpanies/ Funds registered with the SEBI,, would be ex xempt from In ncome Tax, su ubject to the conditions c speecified in the said subsectio on. W Tax Acct, 1957 G. Benefits under the Wealth Asset as defined und der section 2(eea) of the Weealth-tax Act,, 1957 does not n include sh hares in comp panies and hencce, shares are not liable to wealth w tax. H. Benefits under the Gift Tax Act As no Giift tax is levia able in respecct of gifts mad de on or afterr October 1, 1998, 1 but befo ore April 1, 20006.As per amended section n 56 (2) (vi) any a gift receiived in moneey, the aggreegate value of o which exceeeds ` 50,000/- is received without con nsideration, th he whole of the aggregaate value of such sum will w be chargeab ble to tax. As per newly inserted secction 56 (2) (vii) ( value off sum of mo oney / immo ovable property y/ movable prroperty receiv ved without consideration c n or for inadeq quate consideeration is in exceed e

73

Scotts Ga arments Limiited of ` 50,0000/- than th he whole of the t aggregatee value of succh sum will be b chargeablee to tax with effect from Dt: 01.10.2009. Notes 1.

2 & All the above benefits b are as a per the cu urrent tax law ws as amend ded by the Finance F Act, 2011 Finaance Bill, 201 12 and will bee available on nly to the solle/ first named holder in case the sharres are held d by joint holders.

2.

In respect r of no on-residents, the tax ratess and the con nsequent taxaation mention ned above sh hall be furtther subject to t any benefiits available under u the do ouble taxation n avoidance agreements, if any, betw ween India an nd the countrry in which th he non-residen nt has fiscal domicile. d

3.

In view v of the in ndividual natture of tax co onsequences, each investo or is advised to consult hiis/ her own n tax advisor with respect to specific tax x consequencces of his/ herr participation n in the schem me.

4.

Tax x implicationss of an investtment in the Equity E Sharess, particularly y in view of the t fact that certain c receently enacted d legislationss may not have direct legal preced dent or may y have a diifferent inteerpretation on n the benefits which an inv vestor can avaail.

5.

Ourr views expreessed herein are a based on the facts and d assumptionss indicated ab bove. No assu urance is given g that the revenue auth horities/courtts will concurr with the vieews expressed d herein. Ourr views are based on thee existing pro ovisions of law w and its inteerpretation, which w are sub bject to chang ge from time to time. Wee do not assum me responsibiility to updatee the views co onsequent to such changess.

Place: Bangalore B Date: 288th June 2012

For Sid ddaiah and Ram, R Charterred Accountaants Sd/Partneer Memb bership No.: 23731 2

74

Scotts Ga arments Limiited SECTIO ON III – ABO OUT THE ISS SUER COMPA ANY INDUST TRY OVERV VIEW The inform mation in this section is derrived from a combination off various official and unofficcial publicly avvailable materials and a sources of information. Itt has not been independently verified by thee Company, the Book Runnin ng Lead Manager or o their respecctive legal advisors, and no representation n is made as too the accuracyy of this inform mation, which mayy be inconsisten nt with information availablee or compiled frrom the other sources s w of the Global Textile Ind dustry Overview In the yeaar 2011, the gllobal trade in textile and cllothing indusstry was at US SD 706 billion n. Exports by Indian World textile and clothing in ndustry accou unted for USD D 15.0 billion n and USD 14.40 1 billion respectively. r exports off textiles and clothing grew by 17 per cent in 2011. The top ten exporters eacch registered 13 per cent grow wth or more. Bangladesh B r recorded the highest h increaase (27 per ceent) while thee lowest amo ong the top ten was recorded by b the United States with 13 1 per cent. Th he order for the t top ten ex xporters remains the same as in n 2010. China a was the lead ding exporter of textiles an nd clothing in n 2011 with a 32 per cent sh hare in world exp ports of textilles and 37 peer cent in clotthing. The Eu uropean Unio on and the United States are a the major marrkets for cloth hing, accountting for 45 perr cent and 21 per cent respectively of wo orld imports. (Source: WTO W – International Trade Statistics, 2012)). The globaal projectionss for Textile and Clothing g Trade as esstimated by WTO W and CIITI are repreesented below:

I Textile and Clothing Industry I by Coonfederation off Indian Textile Industry (CIITI) Source: Prresentation on Indian Overview w of Indian Textile Industry Indian tex xtile industry y contributes about 14 per cent to Indu ustrial Producction, 4 per ceent to the cou untry’s Gross Do omestic Produ uct (GDP), 177 per cent to o export earn nings and pro ovides direct employmentt to 35 million people p which h includes su ubstantial nu umber of SC/ /ST and wo omen. Textilee & Clothing g sales generated d USD 52 Billion in 2008-009 bifurcated as USD 33.4 billion b from domestic d marrket and US $ 21.60 billion fro om exports. Exports E of Tex xtiles & Cloth hing grew to US$ 22.41 billlion in 2009-110 and has to ouched US$ 26.822 billion in 2010-11. In the financial year i.e. 2011-12,, exports of teextiles and clo othing, as perr latest available data covering g April-Octob ber, 2011, hass grown by 288.94% over th he correspond ding period of 201011. 75

Scotts Ga arments Limiited During th he year 2010 0-11, Readym made Garmen nts account fo or almost 400% of the tottal textiles ex xports. Apparel and a cotton teextiles produ ucts together contribute nearly n 70% of the total teextiles exportts. The exports baasket comprise a wide ran nge of items including i reaadymade garm ments, cotton n textiles, han ndloom textiles, man-made m fib bre textiles, wool w and woo olen products, silk, jute an nd handicraftss including carpets. India’s teextiles produccts, including g handlooms and handicrrafts, are exp ported to mo ore than a hu undred countries.. However, th he USA and the EU, acco ount for abou ut two-thirdss of India’s teextiles exportts. The other major export desstinations are China, U.A.E E., Sri Lanka, Saudi S Arabiaa, Republic of Korea, Banglladesh, Turkey, Pakistan, P Braz zil, Hong Kon ng, Canada, Eg gypt etc. (Source: Presentation P by b Confederattion of Indian n Textile and Annual A Repo ort 2011-12 of Ministry of Textile) T In the posst-quota perio od, India has emerged as a major sourciing destinatio on for new bu uyers. As a measure m of growin ng interest in n the Indian textile and clothing secttor a numbeer of buyers have opened d their sourcing/ /liaison officee in India. Commercially, C , the buoyan nt retailers accross the worrld are lookiing for options of o increasing their sourcin ng from the Indian markeets. The Indiaan textiles ind dustry is extrremely varied, with the hand--spun and han nd-woven sector at one en nd of the specctrum, and th he capital inteensive, sophisticaated mill secttor at the oth her. The decen ntralized pow wer looms/ho osiery and kn nitting sectorrs form the largesst section of textiles secto or. The closee linkage of the Industry to agricultu ure and the ancient a cultures, and a traditions of the counttry make the Indian textilee sector uniqu ue in compariison with the textile industry of other coun ntries. This also a providess the industry y with the caapacity to prroduce a variety of products suitable to the different maarket segmen nts, both withiin and outsid de the country y. Global exxports of Ready Made Garrments (RMG G) •

•

• • •

g 2008-09 weere of the order of USD 10.38 billion,, which recorrded a Globaal exports of RMG during margiinal decrease to USD 10.06 billion duriing 2009-10. However, H exp ports of RMG G grew by 5.660% to US$ 10.63 1 Billion in n 2010-11. As peer latest availa able statisticss, exports of RMG R during AprilA Octobeer, 2011 was of o the order of o USD 7088.774 million as against USD 5512.15 millio on during thee same period d last year, ind dicating an in ncrease of oveer 28.60% in US$ U terms this year. EU was w the biggesst destination n for RMG ex xports, with over o USD 5.3 billion worth h of exports during d the yeear ending Ma arch, 2011, reecording a gro owth of over 1% 1 compared d to exports in n 2009-10. US was the second d biggest desttination for RMG, R with ex xports of USD D 2.85 billion for the year ending e March h,11, recordin ng a growth of o 7.29% over the last finan ncial year. UAE was w the third d biggest destiination with over o a billion dollar worth h of exports to o that group. (Sourcce: Annual Reeport 2011-122 of Ministry of o Textiles)

-

Major sub b-sectors thatt comprise the textiles secttor include th he Organized d Cotton/ Ma an-Made Fibrre Textiles Miill Industry, Man-mad de Fibre/ Filam ment Yarn In ndustry, Wool and d Woollen Tex xtiles Industry y, Sericulturre and Silk Teextiles Industrry, Jute and Jute J Textiles Industry, and Textiles Exports E A Report 2011-12, 2 Miniistry of Textilees) (Source: Annual Organised d Cotton/ Ma an-Made Fibrre Textiles In ndustry The Cotto on/ Man-mad de fibre textille industry is the largest organized o ind dustry in the country in teerms of employm ment (nearly 1 million wo orkers) and number n of units. u Besidess, there are a large num mber of 76

Scotts Ga arments Limiited subsidiary y industries dependent on o this secto or, such as th hose manufaacturing mach hinery, accesssories, stores, ancillaries, dyess & chemicalss. As on 30.111.2011, there were w 1946 cottton/manmad de fibre textille mills (non-SSI) in the counttry with an in nstalled capaacity of 43.13 million spin ndles, 5,20,0000 rotors and 52,000 looms. Th he capacity utilization in th he spinning seector of the orrganized textiile mill indusstry ranged beetween 80 to 90% while the cap pacity utilization in the weeaving sectorr of the organ nized textile mill m industry ranged r between 41 4 to 62%. de Staple Fibrre/ Filament Yarn Y Industry y Man-mad The Indiaan textile ind dustry consum mes a diversee range of fiibres and yarrn, but is preedominantly cotton based. Th he ratio of thee use of cotto on to manmaade fibres and d filament yaarns by the domestic d indu ustry is about 56::46. The prod duction of man-made m fib bre during 2010-11 amou unted to 12844.64 million kg. as compared d to 1268.04 million kgs during the previous yeear constitutiing an increease of 1.31% %. The percentag ge increase / decrease in productio on of polyesster staple fibre, f acrylicc staple fibrre and polypropy ylene staple fibre f during 2010-11 2 were 2.77%, (-) 12..74% and 11.228% respectiv vely as compaared to 2009-10. The T productio on of man-m made filamentt yarn during g 2010-11 am mounted to 15549.80 million n kg in compariso on to 1522.7 72 million kg g during thee previous yeear constitutting an increease of 1.78% %. The percentag ge increase / decrease d of ny ylon filamentt yarn, polyesster filament yarn y and poly ypropylene fillament yarn durin ng the period d were 10.25% %, 1.91% and (-) ( 11.16%. d Woollen Textiles Industrry Wool and Indian Wool W and Wo oollen Textilees Industry iss a rural bassed, export oriented o indu ustry in whiich the organized d sector, the decentralized d sector, and th he rural secto or complemen nt each otherr. The country y is the seventh laargest produccer of wool an nd contributees 1.8% to totaal world prod duction. Wool is the only natural n fibre in which w the coun ntry is deficien nt. There aree 958 woollen n units in the organized seector, majoritty of which are a in the smaall scale secto or. The industry has the poteential to gen nerate employ yment in farr-flung and diverse d regio ons and at present p provides employment in the organ nised wool sector to aboutt 12 lakh perssons, with an n additional 12 1 lakh persons associated a in the sheep reearing and faarming sectorr. Further, th here are 3.2 laakh weavers in the carpet secctor. Ludhiana a alone accou unts for 225-2440 units in the decentralizeed hosiery an nd shawl secto or. The installed capacity c of th he industry is about 6.04 laakh worsted spindles, s and 4.37 lakh non n-worsted sp pindles. Wool com mbing capacitty is around 30 million kg., k whereas, the syntheticc fibre combiing capacity is 3.57 million kg g. There are approximately y 7,228 powerrlooms in thiss industry. J Textiles Industry Jute and Jute Globally, India is the largest l produ ucer and secon nd largest ex xporter of jutee goods and this t sector su upports the livelih hood of abou ut 40 lakh farm families, and providees direct and indirect emp ployment to 4 lakh workers. There T are 83 Jute mills in the country. Of these 64 are a in West Bengal, B 3 each h in Bihar and d Uttar Pradesh, 7 in Andhra Pradesh, tw wo each in Ch hhattisgarh & Orissa and one each in Assam & Trripura. Ownershiip- wise divission is:- 6 miills are underr Governmen nt of India’s P.S.U., P 1 milll (Tripura) is under State Gov vernment, 2 mills m (Assam m & New Cen ntral) are in the co-operattive sector an nd 74 are priivately owned miills. In the jute growing staates, the sharee of jute crop is nearly 1.4 per p cent of th he total crop area. Jute, the golden g fibre, meets all thee standards fo or ‘safe’ pack kaging in view w of being a natural, reneewable, biodegrad dable and eco o-friendly pro oduct. Production of raw ju ute and mestaa has witnesseed a steady in ncrease since 19511-52. It was 13.2 1 lakh M.T T. in Jute yearr 1990-91 (July-June), whicch rose to 14..76 lakh M.T. in the Jute year 20082 09.

77

Scotts Ga arments Limiited Sericulturre and Silk Textiles T Indusstry India conttinues to be the t Second larrgest produceer of silk in th he World. Serriculture is an n important labourl intensive and agro-bassed cottage in ndustry, prov viding gainfull occupation to around 6.33 million perssons in rural and semi-urban areas in Indiia. Of these, a sizeable nu umber of workers belong to t the econom mically weaker seections of socciety. Among the four variieties of silk produced, p Mulberry accou unts for 85% (15610 MT), Eri 11.1% 1 (2038 MT), M Tasar 3.33% (603 MT) and a Muga 0.66% (119MT) of the total raw w silk producction in the countrry. Source: 2 of Ministry of Textiles Annual Report 2011-12 ww.texmin.n nic.in/sector/N Note_Woolleen_Sector_ww wt_skbabbar.p pdf http://ww http://ww ww.texmin.n nic.in/sector/sector_mmf_m mmfy.pdf ndian Textilee Industry Statisticall Details of In Item

Units

2003-04

2004-05

2005-06

20066-07

2007-08

2008-09

20009-10

2010-111

2011-12(Ass on Decc 2011) (P)

T Textile Mills (No on SSI) S Spinning Mills

No.

1564

1566

1570

16008

1597

1653

1 1673

17577

1759

Composite Mills C E Exclusive Weeaving M Mills (Non-SSI) S Spinning Mills (S SSI)

No. No.

223 206

223 202

210 204

2000 2044

176 179

177 184

1180 1 183

183 174

194 171

No.

1135

1161

1173

12336

1219

1247

1 1260

133333

1326

Lakh no. n

4.13

4.26

4.34

4.40

4.69

4.64

5 5.05

5.18

5.19

Million n no.

37.03

37.47

37.51

39.50

39.07

41.30

4 41.27

40.988

41.26

6.74 0.52

6.70 0.52

P Powerloom Unitss C Capacity Installeed Spindles S (SSI+Non S SSI) R Rotors (SSI+Non SSI) L Looms (Orgaanised S Sector) P Poowerloom H Handloom M made Fibress Man

Lakh no. n Lakh no. n

4.82 1.05

5.00 1.03

5.20 0.92

6.01 0.69

6.21 0.56

6.57 0.57

66.75 0 0.71

Lakh no. n Lakh no. n Million n Kg.

18.37 38.91 1101

19.03 38.91 1189

19.44 38.91 1191

19.90 38.91 16663.35

21.06 38.91 1659.22

22.05 38.91 1763.11

222.46 3 38.91 1 1763.11

22.911 38.911 1765.110

22.97 38.91 1765.10

M made Filament Man

Million n Kg.

1228

1337

1374

20553.43

2101.33

2143.22

2 2143.22

2192.775

2193.87

Worsted W S Spindles(woolen) ) N Non-worsted spindles(woolen))

and Thousa no. and Thousa no.

604

604

604

6044

604

604

6 604

604

604

437

437

437

4377

437

437

4 437

437

437

179.00

243.00

241.00

2800.00

315.00

290.00

3 305

325

356

953.00

1023.00

968.00

11339.47

1244.17

1067.33

1 1268

1285

819

48.50

44.60

44.90

45.20

45.20

45.20

4 45.20

45.20

45.20

15.74

16.50

17.31

18.447

18.32

18.37

1 19.69

20.41

20.41

P Production of Fib bres R Raw Cotton M Manmade Fibre R Raw wool R Raw Silk

Lakh h balees Millio on Kg.. Millio on Kg.. Millio on Kg..

78

Scotts Ga arments Limiited Item

Units

2003-04

2004-05

2005-06

20066-07

2007-08

2121.00

2272.00

2521.00

28223.59

2948.36

931.00

951.00

937.00

9899.70

1118.00

1109.00

1179.00

18040

20655

6068 18275

2008-09

20009-10

2010-111

2011-12(Ass on Decc 2011) (P)

2898.42

3 3,079

34900

2328.00

1054.86

1015.84

1 1,114

12233

832.00

13770.48

1509.34

1416.01

1 1,522.71

15499.80

959

23873

262238

27196

26898

2 28,914

317442

19558

6032

6298

68882

6888

6766

7 7,767

82788

5525

18691

19406

195545

21173

20534

2 23,652

225222

14329

P Production of Yaarn C Cotton Yarn O Other Spurn Yarn n Manmade M Y Yarn

Filaament

Millio on Kg.. Millio on Kg.. Millio on Kg..

F Fabric Production C Cotton B Blended 1100% Non c cotton(including k khadi, wool & silk)

Million n sq. mtrr. Million n sq. mtrr. n Million sq. mtrr.

* Figures up to October, 2009 # Figu ures up to No ovember, 20099 (Source: Min nistry of Textiiles) Indian Teextile Exportss The textille export bask ket consists of o wide rangee of items co ontaining cottton yarn and fabrics, man n-made yarn and fabrics, woo ol and silk fabrics, f madee-ups and vaariety of garm ments. Indiaa’s textile pro oducts, including g handlooms and a handicraffts, are exportted to more th han a hundreed countries. India’s tex xtiles and clo othing industrry is one of th he mainstays of the nation nal economy. It is also onee of the largest contributing secctors of Indiaa’s exports wo orldwide. Thee report of thee Working Grroup constitu uted by the Planning Commisssion on boostiing India’s maanufacturing exports durin ng 12th Five Year Y Plan (20012-17), envisagess India’s expo orts of Textiless and Clothin ng at US$ 32.335 billion by th he end of XIth h Five Year plan, p as against off US$ 55 billio on envisaged in the Reportt of Working Group on Textiles for the XIth Five Yeaar Plan and based d on historic growth rate of o 10% (CAG GR), a businesss as usual ap pproach, will result in exp ports of US$ 52 billion b by thee end of XI Plan. P An exp port target off US$ 65 billlion and creaation of 25 million m additionaal jobs has beeen proposed with a CAGR R of 15% duriing the XII Pllan. At curren nt prices the Indian textiles in ndustry is peg gged at US$ 555 billion, 64% % of which serrvices domesttic demand. The T textiles in ndustry accounts for f 14% of in ndustrial prod duction, whicch is 4% of GDP; employs 35 million people p and acccounts for nearly y 12% share off the country’’s total exportts basket. E Overall Exports The total textile exporrts during Ap pril,11 to Octtober,11 (P) were w valued at ` 78034.133 crore as agaainst ` 60594.53 crore c during the correspon nding period d of financial year 2010-11,, registering an a increase of o 28.78 percent in n rupee termss. In US dolllar terms, thee same was vaalued at US$117053.71 millio on as against US$ 13225.722 million duriing the correspon nding period of o previous fiinancial year registering an n increase of 28.94 2 percent in US$ termss. However,, the share of textiles in Ind dia’s total exp ports of all commodities haas declined to o 10.03 percen nt from 10.74 per cent during AprilA October, 2011 as agaainst April- October, O 2010.

79

Scotts Ga arments Limiited In the global market ex xports of cloth hing, India raanked as the sixth s largest exporter e as peer WTO data – 2010 (latest), trrailing Turkey y, Bangladesh h, Hong Kong g, EU-27 and China. In thee global exporrts of Textiless, India ranked ass the third larg gest exporter,, trailing EU-227 and Chinaa, as per WTO O data – 2010 (latest). ( Since Aug gust, 2008, th he major mark kets for Indiaa’s exports of T&C produccts viz. USA, EU and Japan n have witnessed d recessionary y conditions and financiaal crisis, and d textiles secttor was amongst the worrst hit. However these adverse economic co onditions app peared to hav ve abated som mewhat since 2010 with thee USA, the singlee largest imp porter of texttiles and clotthing items, observing a positive grow wth of 14.22% and 17.03% in n its import of o T&C from the world an nd India resp pectively duriing the calendar year 20100. This trend has continued du uring 2011 wh hen USA obseerved a positiive growth off 8.90% and 100.32% in its im mports of T&C from the world d and India reespectively. Almost A all maajor T&C expo orting countriies showed positive trend in th he US markett during the fiirst nine mon nth of calendaar year 2011. Ind dia’s Textile Exports E (Principal Commo odities) – 2010-11(P)

(Source: Annual A Report 2011-12, 2 Miniistry of Textilees; P - provision nal) A sector-w wise analysis of textile exp ports is given below: b (i)

Readymaade Garmentss: Readymadee Garments in nclude RMG of cotton inclluding accesssories, RMG of o Man Made Fibres, RMG of other textile material m whicch accounted for approxim mately 40% off the country’’s total textiles ex xports for F.Y Y.2010-11. Durring 2010-11 the t RMG exports in Indian n currency am mounted ` 48,,355.57 crores an increase of 1.57% over the t exports during d 2009-110 whereas in n USD it am mounted to 100627.99 million reegistering an growth g of 5.60% as compared to 2009-100.

(ii))

Cotton Textiles T inclu uding Handlo ooms: Cotton n Textiles inccludes raw cotton, c cotton n yarn, fabriccs and made-upss. During 201 10-11 the Cottton textiles ex xports in Indian currency amounted to o ` 38,038.19 crores, an increasse of 40.80% over the exp ports during 2009-10 wheereas in USD it amounted d to 8360.35 million m registering an growth of o 46.38% as compared c to 2009-10 2

80

Scotts Ga arments Limiited (iiii) Man-mad de Textiles: Man M Made Textiles T inclu udes Manmad de staple fibrres, manmad de yarns, fab brics & madeups.. During 2010-11 the Man n Made textiiles exports in i Indian currrency amoun nted to ` 21,,125.13 crores, an n increase of 12.47% over the exports during 2009--10 whereas in USD it am mounted to 4643.06 4 million reegistering an growth g of 16.93% as compared to 2009-10. (iv v) Silk Textiiles: Silk Texttiles includes RMG of silk,, Natural silk yarn, fabrics & madeups. During 2010-11 the silk textilees exports in Indian I curren ncy amounted d to ` 2708.022 crores, an deecrease of 3.955% over the exports e during 20009-10 wherea as in USD it amounted a to 595.19 millio on an decrease of 0.14% ass compared to o 200910. ( Wool & Woollen (v) W Texttiles: Woollen Textiles in ncludes RMG of wool, wo oollen yarn, fabrics f & madeups. During 20010-11 the wo oollen textiless exports in In ndian currenccy amounted d to ` 1955.31 crores, an deecrease of 12.09% over the exp ports during 2009-10 wherreas in USD it amounted to 429.75 milllion an decreease of 8.60% as compared c to 2009-10. 2 (Source: Annual A Report 2011-12, 2 Miniistry of Textilees) Governm ment Initiative es/Policies Post liberalization, the Indian goverrnment has reemoved man ny of the barriiers hindering g the textile sector’s s growth. To T fulfill thee potential of o the countrry’s apparel--export indusstry, the gov vernment needs to eliminate remaining reestrictions thaat perpetuate the lack of sccale and poorr operational and organizaational performan nce of locall manufacturrers and thaat discourag ge investmen nts, particulaarly foreign direct investmen nt. Some of the t importan nt initiatives taken by thee Governmen nt of India in n this sector are as follows: New Texttile Policy The Goveernment of Ind dia in Novem mber 2000 ann nounced the National N Texttile Policy – 20000 i.e. NTXP P–2000, thereby reeplacing the previous p Texttile Policy of 1985. 1 The maiin objective of o the NTXP–22000 is to enable the industry to t attain and sustain a prre-eminent glo obal standing g in the manu ufacture and export of clo othing, enable th he industry to t build worrld class statte-of-art man nufacturing capabilities c in conformity y with environm mental standarrds, for this purpose p enco ourage both Foreign F Directt Investment as well as reesearch and devellopment sector. The policcy also de-resserved the gaarments secto or from the Sm mall Scale In ndustry reservatio on list. The NTXP–2000 N to ook note of the new chaallenges and opportunities presented by the changing global enviironment, paarticularly thee initiation of the proceess of gradu ual phasing out of quantitatiive restriction ns on importss and the low wering of tarifff levels for an n integration of the world textile and clothiing markets. Vide the NTXP–2000 the Governm ment has con nveyed it’s co ommitment towards t prov viding a conducive environm ment to enablee the Indian teextile industry y to realise itss full potentiaal, achieve glo obal excellencce, and fulfil its obligation to different d sectio ons of the socciety. (Source: Ministry M of Textiles) ogy Upgradation Fund Sch heme (TUFS) Technolo TUFS is the t “flagship” ” Scheme of the Ministry of Textiles which w aims at making avaailable funds to the domestic textile industtry for techno ology upgrad dation of existting units as well w as to sett up new unitts with state-of-th he-art techno ology to enhaance their viiability and competitiven c ess in the domestic as well w as internatio onal markets. To meet the challenges c of the post quo ota regime, the industry is required to become b competitiv ve, cost effecttive and quallity oriented. With this bacckground, Go overnment of India has lau unched a Techno ology Upgrad dation Fund Scheme (TU UFS) for Tex xtiles and Jutte Industriess, with effectt from 01.04.19999 for a period d of 5 years, i.e., i up to 31..03.2004. Furtther the samee was continu ued in the Eleeventh Five Yearr plan (as men ntioned in th he budget speeech for the year y 2007-08).. The Benefitss under the scheme s are as folllows: - 5% interest reimburseement of the normal n intereest charged by y the lending agency on RT TL. 81

Scotts Ga arments Limiited Or - 5% exchaange fluctuattion (interest & repayment) from the basse rate on FCL L. Or - 15% cred dit linked cap pital subsidy for f SSI sector.. Or - 20% credit linked cap pital subsidy y for powerloom sector (A An option for ‘front ended d’ subsidy pro ovided w.e.f. 1st October, O 2005)). Or - 5% interest reimburseement plus 100% capital sub bsidy for speccified processsing machinerry. Restructu ured TUFS (R R-TUFS) was launched w.e.f. 28.04.20111. Under thee scheme, th here was an overall o subsidy cap c of ` 197 72 crores from the date of the Resollution, i.e., 28.04.2011 2 to 31.03.2012. Under Restructu ured TUFS, it was provided d UID to 19366 applications with total project p cost off ` 25030 crorre* and subsidy reequirement of o `256 crore for the 11th Five F Year Plaan (upto 31.033.2012), ` 2618 crore for th he 12th Five Year Plan (Financcial Year 2013 to 2017), ` 3552 crore for th he 13th Five Year Y Plan (Fin nancial Year 2018 2 to 2022). Acccording to a circular dateed 15.06.2012 issued by th he Office of th he Textile Co ommissioner, the RTUFS for the textile secctor will contiinue for 2012--13. (Source: Ministry M of Textiles) The table below presen nts the amoun nt sanctioned and disburseed in last decaade under thee TUFS:

A Reportt 2011-12, Min nistry of Textiiles Source: Annual Scheme for Integrated d Textiles Parrks (SITP) The ‘Scheeme for Integrrated Textile Parks P (SITP)’ was launcheed by merging g two schemees, namely, Apparel A Parks for Exports Scheeme (APES) and the Texttiles Centre In nfrastructure Developmen nt Scheme (T TCIDS). 82

Scotts Ga arments Limiited Primary objective o of th he SITP is to provide p the in ndustry with world-class w in nfrastructure facilities for setting environmenttal and up their textile t units. The scheme would facilittate textile un nits to meet international i social standards. SITP P would creaate new textiile parks of internationall standards at a potential growth g centres. This T scheme envisages e eng gaging of a paanel of professsional agenccies for projecct identificatio on and execution n. Each Integra ated Textile Park P (ITP) wo ould normally y have 50 uniits. The numb ber of entrepreneurs and the resultant r inv vestments in each ITP co ould vary from project to t project. However, H agg gregate investmen nt in land, fa actory buildin ngs and Plantt and Machin nery by the entrepreneurs e s in a Park sh hall be atleast tw wice the cost of o common in nfrastructure proposed p for the Park. Th he ITPs may also a be set up p in the Special Ecconomic Zonees (SEZs), in which w case th he special prov visions of SEZ Zs would be applicable a forr them. In case th hese are set up u outside SEZs, S proposaal may be pu ursued with the Ministry of Commercce and Industry to t declare thee ITP as SEZ, if i it is so desirred. (Source: Ministry of Textiles) T D Investm ment Policy Foreign Direct India hass a liberal an nd transparent policy in Foreign Dirrect Investmeent (FDI). Ind dia is a prom mising destinatio on for FDI in the t textile secctor. 100% FD DI is allowed in n the textile sector s under the t automaticc route. FDI in secctors to the ex xtent permitteed under auto omatic route does not requ uire any priorr approval eitther by the Goverrnment of In ndia or Reserv ve Bank of In ndia (RBI). The T investors are only req quired to notify the Regional Office conceerned of RBI within 30 days d of receiipt of inward d remittance.. The below graph representss the amount of FDI appro oved in Indian n Textile Secto or from 2005 to Oct 2011

(Source: Ministry M of Textiles) Union Bu udget 2012-13 3 Highlights • • • • • •

Stand dard rate of Central C Excisse duty has been b increaseed from 10% to 12%. Exciise duty on Cotton C textilees covered un nder Tariff heading 5204 to o 5212 increassed from 4% to 6%. Autom matic shuttlelless looms fullly exempted from basic cu ustoms duty of o 5%. Autom matic silk reeeling and pro ocessing mach hinery as weell as its partts exempted from f basic cu ustoms duty. Secon nd hand mach hinery to attraact basic duty y of 7.5%. Basic customs duty y on wool waaste and wool tops reduced d from 15% to o 5%. Basic customs duty y on Titanium m dioxide redu uced from 100% to 7.5%. 83

Scotts Ga arments Limiited • • • • • • •

Aram mid yarn and fabric used for f the manuffacture of bulllet proof hellmets exemptted fully from m basic custom ms duty. Finan ncial package of ` 3,884 crore c announcced for waiv ver of loans of o handloom weavers and d their coopeerative societiies. Two more m mega handloom h clu usters, one to cover Prakassam and Gun ntur districts in Andhra Prradesh and another for Go odda and neig ghbouring disstricts in Jharrkhand to be set s up. Threee Weaver’s Service Centrees one each in Mizoram, Nagaland and a Jharkhan nd to be set up for providing technica al support to poor p handloo om weavers. ` 500 crore pilot sccheme announ nced for prom motion and ap pplication of Geotextiles in n the North Eastern E Regio on. A pow werloom meg ga cluster to be b set up in Icchalkaranji in Maharashtraa with a budg get allocation of ` 70 crore.. Excisee duty of 10% % is applicab ble to branded readymadee garments with w abatemen nt of 55% fro om the Retaill Sales Price. Along A with in ncrease in du uty to 12% thee abatement enhanced e to 70%. 7 As a resu ult, the incideence of duty as a a percentag ge of the Retaail Sales price would come down from 4.5% 4 to 3.6%.

(Source: Thhe Cotton Texttiles Export Prromotion Coun ncil http://ww ww.texprocil.org/doc/HIGHLIGHTS% %20OF%20TH HE%20UNION N%20BUDGE ET%202012-133.pdf) P for Indian Textille and Clothiing Industry Growth Prospects The Confeederation of Indian Textille Industry en nvisages the Indian Textille and Clothiing market to o reach USD 100 billion by yea ar 2015. Textile & Clothin ng sales generrated USD 555 Billion in 20008-09 bifurcaated as USD 33.44 billion from m domestic market m and US U $ 21.6 billiion from exp ports. Nearly 40 per cent of the textiles prroduced in th he country aree exported. In ndian manufaccturers are alsso pro-activelly working to owards enhancing g their capacities to fulfill this t increased d demand. Ind dia’s textiles & clothing (T T&C) export in n 200607 were USD U 19.15 billlion. India’s T&C T exports in 2007-08 weere USD 22.40 billion show wing robust growth g of around d 16% in US dollar d terms co ompared to previous p year.. Projected d Market for Indian I Textile and Clothin ng products

Indian n T & C Indusstry envisagees to reach US S $ 100 Billion n by 2015 84

Scotts Ga arments Limiited Source: Prresentation on Indian I Textile and Clothing Industry I by Coonfederation off Indian Textile Industry (CIITI) ons for growth h are as follo ows: Some key points depictting the reaso Expansion n of Ready-to o-Wear Mark ket The mark ket for readym made segmen nt is rapidly expanding in n India especcially in men nswear sectio on. The preferencee of Indian consumers c haas also underrgone a majorr shift as theey just prefer to go out an nd buy rather thaan opting for stitching. s Rising Urrbanization Urbanizattion is a trend d that everyo one has to con ntend with. The T urban po opulation is set to increasee up to 42% by 20030 according g to census fiigures. This is i due to the fact that peo ople migrate to cities to lo ook for better job b opportunitiies and livin ng standards. Therefore, organized reetail is set to t witness a major expansion n to fulfil the needs n of grow wing populatiion. Demographic Structurre India is home h to 17% of the world d’s population n. Being one of the young gest countriess in the worlld, it is tipped to have one of the t largest wo ork forces for years to come. At 24 yearss, it has the lo owest median n age of populatio on in the worlld, with 50% of the populaation less than 25 years an nd 70% less th han 35 years of age. Also, as more m and mo ore women become part of o the workfo orce, the dem mand for wom men wear including accessoriees is set for ex xpansion. Growing prosperity India has the second largest workin ng population with appro ox 700 million n people betw ween 20-60 yeears of age. In ad ddition, corpo orate salaries have grown at 14% p.a. which w is fastest globally. Also, A the salarries for freshers have h gone up u by 2-3 tim mes over thee last decadee. These all factors f contriibute to incrreasing disposable incomes in the hands off individuals. With a consu umption ratee of around 344%, the appettite for high value branded products is everr increasing. Changing g Consumer Lifestyle L and d Preferences Indian co onsumer has become morre demanding g, as a resultt, there is a continuous c sh hift in the deemand pattern fro om basic neceessities to speending on thee lifestyle prod ducts and serrvice, largely because b of: ¾ Higheer Income lev vels ¾ Increaasing knowledge and awarreness levels ¾ Higheer adaptabilitty to technology ¾ Greatter participation of women n and children n in household decision maaking ¾ Increaasing demand d for better prroducts and service s experience

85

Scotts Ga arments Limiited BUSINESS OVERV VIEW We are a garment g manufacturing co ompany in In ndia with staate of the artt facilities forr manufacturring of quality hi faashion garmeents. We firm mly believe th hat we have built the dom main expertisse in designin ng and sampling off garment forr a period of about a two deecades that haas been a sign nificant contrributor in pro ocuring orders from m the internatiional market especially e Eu urope. Our maanufacturing facilities and additional faacilities such as em mbroidery, prrinting, dyein ng and wash hing have en nabled us to enhance ourr product po ortfolio catering to different d classs of customers in the intern national mark ket. From a mo odest beginniing involving g taking up job j works, SGL S started exploring e thee market for direct exports, and d has in coursse of time established a staatus for produ uction of quaality garmentss and depend dability in delivery y schedules in i the exporrt market. Our O operation ns and faciliities enable us u to manuffacture readymade apparel by sp panning vario ous aspects of o the apparel production chain, c from managing m the design to delivery and quality assurance a pro ocesses involved in produ ucing readym made apparelss. SGL is one of the competitivee manufactureer and exportter of readym made garmentts with moderrn manufactu uring facilitiess, fully backed by facilities f for product p development, desiign studio and d efficient sam mpling infrasstructure to provide p quality serv vices to its cusstomers. We have po ositioned ourrselves as a player p focusin ng largely to changing neeeds and trend ds of fashion in the readymade garment. We W export ourr quality pro oducts to sev veral international clientss across the Globe. During the year y ended March M 31, 20122, we have ex xported 91.44% of our totall sales of read dymade knitteed and woven appaarel to intern national clientts. It includess among otheers, Best Selleer – Denmark k, Old Navy – USA, C& A Buyin ng - German ny, H&M Hen nnes & Mauriitz - USA, Villa A/s – Denm mark, Rhodi Suppliers Lim mited UK, Mayoral Moda Infa anil S.A.U, Sp pain, The S Group G Inc– USA, U etc. Th hese exports have h been made m to countries such as Denm mark, USA, United King gdom, Spain n, Germany, China, Italy y, Sweden, Turkey, T Netherland,, U.A.E., Cana ada, Russia, Poland, P Hong g Kong, Japan n, etc. During the current fina ancial year we w have expo orted our prroducts to 699 internationaal customerss in 41 countries. Our O Company has added d new custom mers such Caarrefour (Fran nce), United Colors of Beenetton (Italy), VOI Jeans (Italy), The S Group p Inc., Prime Mark (UK), House H of Frasser (UK), GAP P (USA), Perrry Ellis (USA), Aberrcrombie & Fitch (USA ), GANT(USA G ),, Arcadia Gro oup (UK). The manufaacturing capacity of our Co ompany as on n 31/03/20122 is around 2117.08 lacs piecces per annum m both in woven an nd knit divisio ons. Our worrkforce as on 30/09/2012 3 iss 12,504 emplloyees. ny has a 2.1 M.W capacity y windmill at a Bellary, Kaarnataka and three windm mills in Tamill Nadu The compan with a totall capacity of 1.95 M.W. Th he company has entered into Wheelin ng and Bankiing agreemen nt with Gulbarga Electricity Sup pply Compan ny Limited an nd Tamilnadu u Electricity Board for thee sale of the power generated through t the wind mill. During D F.Y.22011-12, the total incomee from wind power geneeration amounted to ` 347.89 laccs. During September 2012, Credit Analy ysis & Researrch Limited (C CARE) has asssigned CARE E BBB rating to our long term bank b facilities amounting to ` 229.70 crores and CARE C A3+ to o our short term t bank faacilities amounting to ` 227.40 crores. c The in nstruments with w CARE BB BB and A3+ rating have moderate m deg gree of safety regarrding timely servicing of financial ob bligations. Wee have been accorded thee status of Trading T House in acccordance wiith the proviisions of Foreeign Trade Policy 2009-144 by Office of the Joint Director D General of Foreign Tra ade. We are also a regiistered memb ber of Appaarel Export Promotion P C Council (sponsored by Governmeent of India, Ministry M of Teextiles).

86

Scotts Ga arments Limiited Business Model M A brief snap pshot of our business b model is hereunder:

Designing an nd  Sample  Developmentt for  mers p potential custo

Approval from  customer and  Procurem ment of  Ordeer

Manufaacturing of  garmeent as per  customer  speciification

Dispatch tto the  Custom mers

Packaaging of  garments

Our designiing team concceives the diffferent style, pattern p and trrend followed d and acceptaable in internaational market and manufacturees the garmen nt samples. These T sampless are presenteed to the poteential custom mers by the marketing team to prrocure the order. The sam mples are mod dified based on o the custom mers’ specific design and cost req quirements. Our marketting team then sends the details d of the selected sam mples and otheer customer requirements r to our in-house manufacturing m g facilities for f feedback on the esttimated cost of producttion. The in n-house manufacturring facilities compete c for orders o based on cost estim mates and otheer factors, including qualitty, past performancce and turn-a around time. On receipt of the cost estimates e fro om our in-ho ouse manufaccturing facilities thee marketing team evaluattes the feasib bility of thesee cost estimaates and quottes the comp petitive estimate to the t customer. Once our samples s are approved an nd the price,, delivery sch hedule and other materiial componen nts are negotiated, the customerr releases a pu urchase orderr containing th he order detaails to our marrketing officee. The availab bility of samplling unit and design studiio helps the co ompany in prroviding diveerse productss to the potential an nd existing cu ustomers. Sam mpling unit produces p samp ple garmentss for approvall of customerrs. This not only giv ves the custom mer a wide variety v of cho oices but also o helps in keeeping the costt under contrrol and the turnaro ound time is short. In ord der to facilitaate our custo omers we haave set up an n exclusive display d showroom at Apparel Export E Promotion Council in Gurgaon. The marketing office regu ularly monito ors the progress of the orders. Once O the ordeer is executed d, based on th he terms of deelivery of thee order, the finished products aree delivered to o the customeer/buying hou uses on an FO OB basis. d developmen nt Design and We are com mmitted to dessign innovatiion in order to respond to current consumer prefereences and antticipate future fash hion trends. Further, ded dicated devellopment and d sampling centres c regullarly monito or new developmen nts and feed these t develop pments into our o marketing g and manufaacturing facilities. The Com mpany has in housee design team m strength of over o 50 perso ons who desig gn styles baseed on current fashion trend ds. Our Company has h also appo ointed professsional consu ultants at Lon ndon to prom mote businesss of our Com mpany. These team ms adapt the new design n and garmen nt developm ments to caterr to fashion trends, whille also reflecting th he price and quality requ uirements of the t target customer. Our design teams are supporrted by

87

Scotts Ga arments Limiited sophisticateed computeriz zed design sy ystems includ ding CAD/CA AM. We plan to strengthen n our capabilities in designing by b continuoussly upgrading g our design studios s both in n terms of hu uman resourcees and machiinery. F Present Manufacturing Facility We own app proximately 5196 5 sewing machines, m 15 computerized d embroidery y machines an nd a variety of o other sophisticateed equipmentt for our Wov ven garmenting facilities and a approxim mately 2682 seewing machin nes, 17 computerizeed embroideery machiness and a variety of otherr sophisticatted equipmen nt for our knitted k garmenting g facilities. Some of ourr key equipm ment supplierss include Jean nologia S L, FG F Texstil Ko onfeksiyon, TGS T Dis Ticarret A.S, Juki Singapore Pte Limitted, Melco Incc, Baruden Co orp Japan, To onello, Italy, Mayer M GmbH H, Germany, Brother B Internationaal, Singapore,, Typical Interrnational, Ch hina, Modsu Corporation C F FZE, UAE. We W work closelly with these supplliers to ensurre that equip pment and machinery m aree delivered on o time and meet our strringent performancce specificatio ons. The averaage working life l of our sew wing machines is approxim mately seven n years, which we believe is co omparable to o the industrry standard. Our in-hou use technician ns conduct routine r maintenancce and repair work, w with teechnical support provided by suppliers.. As on date,, we have 24 manufacturin m ng units/facto ory at Karnataaka and Tam mil Nadu inclu uding samplin ng unit at Karnatak ka and Tamil Nadu. N The deetails of the saame are as un nder: Sl. No

U Unit Nos.

Address K Karnataka

1. 2.

UNIT - I U U UNIT - II

3. 4. 5. 6. 7. 8. 9. 10.

UNIT – III U U UNIT - IV U UNIT -V U UNIT - VI U UNIT - VII U UNITV VIII U UNITIX U UNIT-X

11. 12.

UNIT-XI U U UNIT-XVI

13.

UNITU X XVII U UNITX XVIII

14.

481/A, 4 & B, IV V Phase, Peen nya Industriall Area, Bangaalore A) 292/B B, Patel Cheennapa Estaate, Andrahaalli Main Ro oad, Peenya 2nd Stage,,Bangalore B) Annex, 422&422A Patel Channaappa Indl Areea, Yeshwanth hpur, Bangalo ore 108/B, 1 3rd Staage 3rd Phasee, Peenya Indu ustrial Area, Bangalore B - 560 5 058 B-66 B 3rd Stagee Peenya Indll Area, Bangaalore 1028/1, 1 Irudayapuram, Patttepalli Road,, Robertson Pet, P K.G.F Plot P No. V 27,, III Stage, Peeenya Industriial Area, Peen nya 2nd Stagee, Bangalore 22, 2 Bangarpett Industrial Arrea, KGF Roaad, Bangarpett, Kolar Distriict. Plot P No. 1 & 2, Survey No. N 10, NH4 Near Bharath h Petrol Bun nk, Sathyamaangala Industrial Areea, Tumkur 5/1 5 Madanayakanahalli, Tumkur Road,, Bangalore 5F2, 5 1st Phasse, Peenya In ndl Area, Near N Ayyappaa Temple, Opp O Canara Bank, B Jalahalli Westt,S.M Road, Baangalore Plot P A 353 (a),, 8th Main, Peeenya II nd Sttage, Peenya Industrial I Areea, Bangaloree No.36/6, N Byraaweshwara Industrial I Arrea, Hegganahalli Village,, Andrahalli Main Road, R Vishwaaneedam Postt, Bangalore S.No. S 61 Narepally Villag ge Kasaba Ho obli, Bagepallly ( Taluk ), Chikkaballaapura, Karnataka K 7/1, 7 Gumman nahalli Road, Byadgi, Karn nataka Taamil Nadu

15. 16. 17.

Unit - I U U -III Unit U - IV Unit

No N 226/1, Pud dur Pirivu, Dharapuram D R Road, Tirupurr SF S No.295, I.G G Colony, San ndaimedu, Mu urugampalay yam Post Tiru upur 1/805, 1 Near Lakshmi Theater, T Dharapuram Ro oad, Palavan nchipalayam Post, 88

Scotts Ga arments Limiited Sl. No

U Unit Nos.

Address K Karnataka

18.

U Unit -V

19. 20. 21.

U - VI Unit

22. 23. 24.

Unit - IX U U Unit -X U - XI Unit

Unit -VII U U - VIII Unit

Tirupur T SF.No: S 137/11A - Dhanalakshmi Riice Mill Co ompound, Karaipudhur K (po), Arulpuram, A P Palladam Road d, Tirupur SF S No 368,No ochipalayam Road, R Lashmii Garden, Veeerapandi, Tiru upur 699/2 6 RM Bro others Ind.Complex, Kamaaraj Road, Tiru upur (Sampliing Unit) No.2/785-B, N Mahalakshm mi Nagar, Tirupur T Main n Road, Naaranapuram Post, Palladam P (tk),, Palladam SF S 536/5 Veerrapandi, Veerrapandi Villag ge, Tirupur SF S No.643, kolathupalayam m, Veerapand di Post, Tirupu ur SF S No 262, Naallur Village, Tirupur

ng Projects: Our ongoin Other than above, a we have commenceed setting up of manufactu uring units at following loccations 1.

ballapur & Kolhapur K Doddab The pro oject at Dodd daballapur an nd Kolhapur is proposed to be part funded f from the IPO procceeds. The complette details of th hese projects are appearing g under sectio on titled “Objjects of the Isssue” on Page no.44

2.

Kolar The Com mpany is also setting up manufacturin ng facility forr stitching of woven garm ments at Sy. No. N 30/1 & 32/11, Sangondahall S li in an area 38,000 Sq. Feeet and knitteed garments at Sy. No. 60, Sultan Thiippasandra admeassuring 35,000 Sq.Feet. In teerms of the application a an nd project rep port submitteed to Canara Bank vide letter daated 17/01/2 2011 the Comp pany proposees to install 12200 imported d sewing mach hines with a capacity c to producee 9600 pcs of woven garmeents per day and a 800 impo orted sewing machines m witth a capacity to t produce 8,000 pccs of knitted garments peer day. The addition in annual a capaccity will be 52,80,000 5 pcs from both Woven & Knitts Garrments. The Company C exp pects to comm mence the commercial pro oduction by April A 2013. The totaal cost of the project p has beeen estimated d at `7800.00 lacs.

Equipments Our main production equ uipment for the t manufactu uring of garm ments includess the followin ng: • • • • • • • • • • • • •

Laser Dry Proccessing Mach hines Feeed of Arm Machines M Back Pocket Decorative Machines Siingle Needle Lock Stitch Machine M Fllock Powder Machine C Color Mixing Machine M Exposing Table Prrinting Machine H Heater Machin ne H Hydro Extracto or Machine 100 Kgs V Vertical Dyein ng Machine 4330 Kgs W Weighing Scale Machine G Gerber Cutting g Machine 89

Scotts Ga arments Limiited • • • • • • • • • • • •

Cut & Fit Band C d Knife Machiine Sttraight Knife Cutting Mach hine 6" Sttraight Knife Cutting Mach hine 8" C Computerized d Quilting Maachine C Cuff Iron Mach hine W Water Machinee Fu using Machin ne N Needle Detecto or Machine M Multi Needle m/c m Sttraight Knife m/c Faab-panching m/c m Bartack m/c

Infrastructu ure Facilities Raw Materiial We require different kind of fabrics fo or manufactu uring of garm ments in concu urrence with our customerrs. The raw materiaals used for the t manufactu uring of diffeerent garmen nts are 100% cotton c yarn dyed d fabrics, cotton high twist yarn y dyed fab brics, Linen Fabric, F Cotton n organic dyeed & printed fabric, cotton n grey fabric, cotton organic greey fabric, cottton dyed fab brics and cottton printed fabrics. f The company c also o sources polyester chiffon prin nted fabrics, polyester p cottton burnout print, polyesster chiffon jaacquard printt, cotton lycrra grey fabric, cotto on lycra dyed fabric, cotton n lycra print fabric, polystter cotton lycrra dyed fabriic and denim fabric. The Compaany procuress raw materiial from diffeerent supplieers located domestically d a and internatiionally depending on the qualitty and price benefits. b We do d not have any a long term m contract wiith our supplliers of raw materiaal that restriccts our capab bility to tap the t economiccal and qualitty raw materrial from any y other supplier. Ho owever, stron ng relationshiips with our suppliers s have helped to av void disruption in supply of raw material forr our manufaccturing process. n and Fabricss for Financiaal Year 2011-112 are: Our Top Teen Suppliers of Raw Mateerials viz Yarn Sl.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

C Company Na ame

% of Purchases

Bombay Rayo B on Fashions Lttd. A Arthanari Loo om Centre (Teextile) Pvt Ltd d. R RSWM Ltd. A Arvind Ltd. A Arthanari Clothing Pvt Ltd d. A New Vission(BOMBAY) R Raymond Uco o Denim Privaate Ltd K K.G. Denim Ltd M Mahalakshmi Textiles A A-Tex (India) Pvt.ltd.

Total 11.96 5.27 3.31 3.04 2.42 2.25 2.06 2.02 1.78 1.48

90

Scotts Ga arments Limiited Our Top Teen Customerss for Financiaal Year 2011-112 are: Sl. No.

B Buyer

Counttry

1. 2. 3. 4.

Best Seller A/s B B Bombay Rayon Fashions Liimited O Navy Old R Rhodi Supplieers Ltd

5. 6. 7. 8. 9. 10.

Best Seller A/s B B Seller Best K Kaufland Warrenhandel GM MBH+Co M Mayoral Moda a Infanil S.A.U U B Seller Fasshion Group(T Best Tianjin) H H&M Hennes & Mauritz Logistik

Denm mark India USA United d Kingd dom Norway Canad da Germaany Spain Chinaa Germaany

% to total rev venue 62.60 7.79 4.44 3.80 2.11 1.59 1.45 1.24 0.84 0.80

f supplies for f Financial Year 2011-122 are: Our Top Teen Creditors for Sl.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

C Company Na ame

% of Total Creditors for Supplies 7.46 3.04 2.84 2.84 2.40 2.22 1.81 1.74 1.56 1.50

A New Vision n (Bombay) V VSM Weaves India Limited d K G Denim Lttd. S S M Fine Yarrns C Color Chemicals S Sarvana Sp Sri pinning Mills A Tex India Pv vt. Ltd. S Sulochana Cottton Spinning g Mills A Arthanari Loo om Centre Jaayavishnu Sp pintex Pvt. Ltd d.

Utilities The existing g utilities for the t various divisions of ou ur Company are a tabulated below: Sl. No 1

Add dress

481/ /A, & B, IV Phase, Peenya P Indu ustrial Area, Bangalore B - 5660 058

Power Saanctioned K 750 KVA 250 KVA K

2

A) 2292/B, Patel Chennapa Estate, E A Andrahalli Main M Road, Peenya P 2 Stage, Ba 2nd angalore - 560 091 B) Annexe, A 422 2 & 422A Patel Indl. Area, C Channappa

Water Requiremen nt on daily basis 100000 Lts. / per day 700000 Lts. / per day

H Bescom 85 HP

40 HP H Bescom 10 HP H Bescom 91

Compresssed Air

DG G Set

40 HP * 2

500 KV VA * 3

15 HP

250 KV VA * 2

2 HP 4000 Lts Per day

250 KV VA

/ 1 HP

Scotts Ga arments Limiited Sl. No

3 4 5

Add dress

Yeshwanthpu Y ur, Bangaloree -560 0 022 108/ /B, 3rd Stage 3rd Phase, Peenya P Indu ustrial Area, Bangalore B - 5660 058 B-666 3rd Stage Peenya P Indl Area, Bang galore - 560 05 58. 10288/1, Irudaya apuram, Patttepalli Road d, Robertson Pet, K.G.F

Power Saanctioned

Water Requiremen nt on daily basis

Compresssed Air

1500 Lts Per day 1500 Lts Per day 1500 Lts Per day

/

2 HP

100 KV VA

/

1 HP 2 HP 1 HP 2 HP

100 KV VA

5000 Lts. / Per day

10 HP

500 KV VA

4000 Lts. / Per day 5000 Lts. / Per day

7.50 HP 1 HP 1 HP * 2 10 HP

250 KV VA

6000 Lts. / Per day 2000 Lts / Per day

50 HP

500 KV VA

15 HP

250 KV VA

24000 Lts / Per day 1000 Lts / Per day 24000 Lts / Per day

15 HP

200 KV VA

10 HP

125 KV VA

10 HP

125 KV VA

H 55 HP

24000 Lts / Per day

10 HP

110KV VA

H 50 HP

1000 Lts / 3 days once

NIL

35 KVA A

H 370 HP

24000 Lts / Per day

10 HP 25 HP * 2

H 150 HP

12000 Lts / Two day ys once

15 HP

VA 200KV 100KV VA 125KV VA 125KV VA 200KV VA

H Bescom 67 HP 60 HP H Bescom

/

DG G Set

125 KV VA

65 HP H Bescom 6

7 8.

9 10

11 12 13

14

15

16

17

Plot No. V 27, III Stage, Peenya P Indu ustrial Area, Peenya 2nd Stage, Bang galore - 560 05 58. 22, Bangarpet B Ind dustrial Areaa, KGF Road d, Bangarpet, Kolar Districct Plot No. 1 & 2, Su urvey No. 100, NH4 Bunk, Nearr Bharath Petrol Sath hyamangala Industrial Area, Tum mkur 5/1 Madanayak kanahalli, Tu umkur Road d, Bangalore - 562 123. 5F2, 1st Phase, Peenya P Indl. Area, Jalah halli West, S M Road, Bangalore - 5600 058. S.F. No. 226/1 - Dharapuram D Road, Pudh hur Pirivu, Tiirupur - 641 608 6 SF No.262, N Nallurr Village, Tiru upur S.F No. 295 5, IG Co olony., Sund damedu, Murugampalayam (po),, Vidhalayam m stop, Tiru upur – 6416687 D No. N 1/805 - Near Lak kshana theatre., Palavan nchipalayam (po)., Dharrapuram Road., Tirup pur – 6416608 SF.N No: 137/1A - Dhanalakshm D mi Rice Mill Compound, Karaipudhurr (po), Road, Arullpuram, Palladam P Tirupur-5 SF. No-368 – No ochipalayam road, Laksshmi garden,, Veerapandii (po), Tirupur No.22/785-B, Ma ahalakshmi Nagar, N Tirupur Main Ro oad, Naranap puram Postt, Palladam (ttk), Palladam m – 641 664

350 KVA K ( HT) 250 KVA K (HT) 200 KVA K (HT)

500 KVA K H 96 HP 65*2 HP H 150 HP 120 HP H H 60 HP

92

380 KV VA

Scotts Ga arments Limiited Sl. No 18 19

20

21

22

23

24

Add dress

SF. No. 536/5, Veerapand di(po), Tirupur – 641 605 5 (Sam mple Unit), No.699/2-R..M & Bross., Industrial Complex, Kaamaraj Road d., Tirupur – 641 6 604. S.FN No.643, Neear Veeraapandi Telep phone Exch hange, Kulaathupalayam,, Veerapandi (p.o), Tirupur – 641 605 5. Plot A – 353 (a),, 8th Main, Peenya P Indu ustrial Area, Peenya 2nd Stage, B’lorre – 560 058 No.336/6, Byraweeshwara Indu ustrial Areaa, Heggan nahalli V Village, Road, And drahalli Main Vish hwaneedam Post, P Bangalorre S.No o. 61 Narepa ally Village Kasaba K Hob bli, Bagepallly ( Talu uk ), Chik kkaballapura,, Karnataka 7/1, Gummanah halli Road, By yadgi, Karn nataka

Power Saanctioned 950K KVA P 65HP

Water Requiremen nt on daily basis 200000 Lts / per day 1000 Lts / Week

Compresssed Air

DG G Set

171 HP

1860 KVA K

7.5 HP

62.5 KV VA

HP 165H

12000 Lts / Four day ys once

15HP

250KV VA

150 KVA K (HT)

3000 Lts. / per day

5 HP

125 KV VA

50 HP H

3000 Ltrs peer day

5 HP

40 KVA A

K 180 KVA

10,000 Ltrrs per day

10HP

125 KV VA

150 KVA K

10,000 Ltrrs per day

10HP

125 KV VA

We have arraangement witth various go W overnmental bodies b depen nding on the location of our o facilities for f the s supply of pow wer. P Products We specializee in tailor made products for W f men, wom men and kidss and manufaacture these ready r to wearr garments d depending on n the specifica ations of our customers. These T productts are sold to our customeers who in turrn sell it to t end users.. The differen the nt products manufactured by b our Comp pany include the t following. Woven Garmeents W • Shirts (Co otton, Denim) • Tops • Skirts • Trouser (C Cotton, Denim m) • Shorts • Cargos ments Knitted Garm • T-Shirts (B Basic and Em mbroidered) • Sweats • Jerseys Woven Garm ments We have speecialized oursselves into manufacturing m g of woven gaarments especcially shirts for f our esteem m clientele. The garmentts manufactu ured by us asssist in comm manding a preemium on ou ur product. We W manufactu ure woven 93

Scotts Ga arments Limiited garments forr men, womeen and kids that t include shirts, s cargoss, trousers, deenims, skirts, shorts etc. Our O woven products hav ve earned uss revenue of `35074 lacs for the F.Y.22011-12 as co ompared to `28,998 ` lacs llacs in the F.Y.2010-11. ments Knitted Garm We manufaccture knitted garments g thaat include t-sh hirts, sweats and a jerseys. Our O knitted products havee earned us revenue of `114951 lacs forr the F.Y.2011-12 as compared to `20,5299 lacs in the F.Y.2010-11. F Competitorss The garmentt manufacturiing industry, globally and d in India, is highly h fragm mented, with a large number of small and medium m sized manuffacturers having a local prresence in Weestern Europee, China and India. Our co ompetitors in our manu ufacturing op perations in India includ de, among others, o Mandh hana Industrries Limited, Gokaldas Exports Limited, House of o Pearl Fash hion Limited, KPR Mills Limited, L Indu us Fila and Mudra M Lifestylle Limited. Further we also a face comp petition from regional play yers located in n China, Bang gladesh and Vietnam. V We believe that t our manu ufacturing faccilities, desig gning and sam mpling capabilities and div versification in product mix i.e. caterring to Woveen and Knit segment s diffeerentiates us from our com mpetitors. We W intend to continue c to leverage ourr scalable and d cost efficien nt production n and operatiional capabiliities, focus on n providing innovative designs to ou ur customers and maintain n strong relatiionships with h our customeers. Marketing an nd Distribution Marketing in nvolves man naging relationships with h our existin ng customerss and meetiing the need ds of new customers. Our O Marketing and Merchandizing team m interacts faace-to-face wiith our custom mers and plaay a critical role in showccasing our deesigns and products, manaaging the disttribution of ou ur products and a providing g customer specific soluttions to existing and poten ntial customerrs. Competitivee Strengths We are into the business of manufactu uring readym made garmentts for last two decades. We W believe thaat we have the following g competitivee strengths to o maintain an nd enhance ou ur position as a leading multim producct ready-towear fashion n apparel busiiness: Our priincipal compeetitive strengtths are hereun nder:1. Multiple Product P Capa ability: We have h developeed a range off product offeerings in ordeer to address the varied and expan nding requireements of ou ur customers. Our producct offerings in nclude woven n, knits, sweaats, jerseys and woveen trousers (ccotton and deenim) for both h genders acrross all ages. We believe that t our broaad range of apparel products p and hi fashion garment g experrience allowss our custom mers to sourcee most of theeir product categoriess from a sing gle vendor an nd enables uss to expand our o business from existing g customers, as well as address a larger base of o potential new n customerrs. We believee our businesss model and product diveersification provides our o customerr One Stop So olution for all apparel requirements. 2. Strong Management M Team: T We ben nefit from th he leadership of our manaagement team m, which hass extensive experiencce in the appa arel industry. Our Promoteer has adequaate experiencee in the textilee industry an nd we have successfullly implemen nted expansiion projects in the past.. Our Key Management M Personnel are a largely responsib ble for successsful execution of our growth g strateegy by expan nding our manufacturing m g facilities, developin ng new custo omer base an nd strengthening our cusstomer relatiionships. In addition to our senior managem ment team, we w believe thaat our middlle managemeent team and d skilled worrk force com mprising of designers, tailors, merrchandisers and a marketin ng personnel provide us with depth needed n to manage m our growth. 94

Scotts Ga arments Limiited Our emph hasis on crea ating and shaaring value have h not only y retained bu ut attracted people p to be part p of the Company y, which we believe b to be an a importantt competitive advantage ass we enter neew markets an nd expand our produ uct offerings. 3. Relationsship with big sized playerss in internatiional market:: Our custom mers include value v retailerss as well as higher-en nd fashion bra and retailers, such as Best Seller, S Old Navy, H& M Hennes H & Mau uritz, Rhodiee Suppliers, C & A, S.. Oliver, Jules, No Excess,, Mayoral Mo oda, Infinil S.A., S The S Grroup Inc., etcc. We supply y our multi product offerings o to Bestsellers fo or their 5 su ub-brands vizz, Veromodaa, Jack and Jones, J Only, EXIT and SELECTE ED. We focu us on maintaining long--term relationships with our custom mers. We haave strong relationsh hip with som me of our lead ding customeers, and have a decade old d business reelation with Best B Seller, who is on ne of our largeest customer in i terms of revenues. We believ ve that our ab bility to addrress the varied d and expand ding requirem ments of glob bal customerss over long periods en nables us to obtain o additio onal businesss from existin ng customers as well as neew customerss. We serve most of ou ur customers across all streeams of our business b model, which we believe increaases their loy yalty to us. 4. We produ uce products at competitiive price: Ou ur automated d designing and a sampling g facilities en nable us to produce quality q produ ucts througho out the year. We have modern scannin ng and quality y assurance equipment, e benefittin ng our manufa acturing process significan ntly in terms of o reducing wastage w and enabling e us to o demand a premium for our prod ducts. We bellieve that ourr fair custom mer service po olicies and co onsistently hiigh quality products have earned us significan nt good will from f our custtomers, which h has resulted d in repeat orrders from many of them. 5. Stringent quality check k: The Company believes in providing g the best posssible quality to the custom mers. There are qualitty checks in place p that prevent any deefective materrial from reaching the cusstomer. Quallity control measures are in place at every steep in the man nufacturing process. p The Company alsso has a welll-equipped quality co ontrol departm ment. 6. Designingg Capabilitiees: We have two dedicaated and well-equipped design studiios in Tirupur and in Bangaloree with Qualifiied, skilled an nd experienceed employeess preparing designs. d Theree is also an in nformation system in n place that keeeps a databaase of all the designs d createed for future reference. Th he studios aree equipped with latesst design softtware includiing CAD/CA AM. Our designers travel extensively to o our target markets m to study thee latest trendss in those countries. We encourage e th hem to visit fashion f shows to help theem in their study of fashion. f This practical p expo osure helps th he design team m come out with w new desiigns and ideaas based on the curren nt trends and fashion in th he internation nal market. Th he new design ns are then seent out to the laboratory for variou us testing off the garmen nts before thee designs aree released to o the samplin ng unit for the t further marketing g and sales purposes. p Theese design stu udios generatte various sty yles for garment business and at the same timee, enables us to work on designs d suppllied by the cu ustomers. Thee design stud dio takes feed dback from the custom mers on the sa amples alread dy sent and modifies m the design d accordiing to the cusstomer’s sugg gestions. 7. Samplingg Capabilitiess: Our Compaany has capab bilities to pro oduce garmen nt samples ass per designs developed by our deesign studios in Tirupur an nd Bangaloree. Our design and samplin ng departmen nt is well equiipped with facilities like sample dyeing, sam mple printing,, washing an nd processing facilities. We W have two o garment sampling units, one in i Tirupur an nd one in Bangalore. Th hese units provide samplees to the cusstomer for selection. These finisheed garment samples are seent to the cusstomer for ap pproval. Avaiilability of thee sampling unit helpss the compan ny in providin ng the custom mer with a wide variety of choices at th he minimal po ossible cost to the com mpany. The garment g makiing process starts only after the samplees are approv ved. Differentt processes of samplin ng are involv ved for produ ucts going to different marrket segmentts. Our abovee-mentioned capabilities c give us an n advantage over o other garrment manufaacturers. 8. Strategic Location Adv vantage: We have strategiically located our operatio ons. All our woven w garmen nt facilities are locateed in Karnata aka with majjor productio on at Bangalo ore and knittted garment facilities are located in 95

Scotts Ga arments Limiited Tirupur, Tamil T Nadu and Bangalo ore & Bagepaalli in Karnataka. We bellieve location n of our unitts gives us significan nt savings in production, p labour and traansportation costs. Our kn nitted operatiions in Tamill Nadu are within a 10-kilometer radius of Tirrupur, which h is regarded d as one of Asia’s A largest apparel man nufacturing clusters. Our O locationss provide us convenient c acccess to airpo orts, ports an nd are also wiithin close prroximity of our domeestic supplierss. Export Our major cu ustomers are located l at Eurrope and USA A. Given belo ow are export figures for th he last three years. y Year

Exports (` In Lacs)*

Reveenue From Exports as a a percentag ge Op perations to Neet Sales (%) (` In I Lacs)* 2009-110 39,451.83 433,017.07 9 91.71 2010-111 48,207.38 499,527.73 9 97.33 2011-112 45,741.38 500,025.46 9 91.44 *Includes Export Incen ntive received d by the comp pany on accou unt of export sales s gations Export Oblig Our export obligation o for the year endeed 31/10/20112 stood at ` 15580.30 1 lacs Client In last three years we ha ave received repeated ord ders from ren nowned interrnational clien nts like Best Seller, Gander Mou untain, S.Oliv ver, C&A, Vila A/s, H&M M Hennes & Mauritz, Rh hodi Supplierss Limited, Mayoral M Moda, Kauflland etc. Du uring the currrent year ou ur Company has added new customeers such Carrrefour (France), Uniited Colors off Benetton (Itaaly), VOI Jean ns (Italy), Thee S Group Inc., Prime Mark k (UK), River Island (UK), Housee of Fraser (U UK), GAP (U USA), Perry Ellis E (USA), Abercrombie A & Fitch (US SA ), GANT(U USA ), Arcadia Gro oup (UK). Business Strrategy 1 1.

Strengtheening Appare el designing and Productt Developmeent Process: We W operate in n a highly crreative and dynamic fashion f indusstry that requ uires keeping up pace with h ever-changiing market trends. Our strrategy is to focus on the t developm ment of new designs d and samples s for our o garments.. Our in housse studios aree equipped with latesst design softtware includiing CAD/CA AM thus enab bling us to su uccessfully co onvert our deesigns into upgrading samples into i final products. We pllan to strengtthen our capaabilities in deesigning by continuously c our desig gn studios botth in terms of o human reso ources and teechnology. We W plan to tap p the hi-end readymade r garment segment s whicch will help us in maintain ning higher saales realization n for our finaal products.

2 2.

Strengtheening Producct Portfolio and a enhancin ng capacities to meet clieent demands:: Presently ou ur product portfolio comprises c of Ready Madee Garments which w includees the export of specific gaarments. Our strategy is to increasse the producct portfolio sh hall include th he addition of o diversified high fashion n garments an nd catering the same to other larg ge sized play yers that are specifically into sale of th hese garmentts. We shall also target enhancing g the capacitiies of our exiisting manufaacturing capaacities to meeet the incremeental client demand d for our produ ucts.

3 3.

Integrated d Operationss: We presenttly focus on th he manufactu uring of Read dy Made Garm ments from th he sourced fabrics an nd raw materiials. Our long g term objectiv ve is to integrrate our operaations and deevelop in housse facilities

96

Scotts Ga arments Limiited from yarn n dyeing to garment man nufacturing. The integratted operation ns of our com mpany shall derive the benefits of economies of o scale and in ncrease the qu uality controll on our final product. 4 4.

Controllin ng Operation nal Cost: Wee believe that to sustain the t competitiiveness of th he industry we w have to continuou usly focus on n controlling the t cost incurrred for vario ous operation nal activities. Our strategy y to control the cost shall s include the controlling raw mateerial cost thro ough negotiaations with th he suppliers, increasing focus on quality q contro ol to reduce th he wastage an nd identifying g the high cosst areas of thee Company.

5 5.

Tap domeestic market and a expandin ng geographiic reach: Our major portion n of export in ncome is from m European nations. Though T we ha ave high expo osure in this region, we weren’t w vastly y affected from m the global meltdown. m However,, to insulate ourselves fro om any futurre economic slowdown, we w plan to in ncrease our presence p in domestic market and also a tap the other o regions across the globe. g Our Co ompany will also a continuee exploring opportuniities in variou us countries where w it can supply s value added textilee products to enhance its geographic g reach. Thiis shall help us u to mitigate the risk linkeed to differen nt markets and d widen the growth g prospeects.

C Capacity Our Company O y normally operates o in eitther one shiftt or two shiftts depending g on the orderrs in hand. The T present c capacity of ou ur company fo or all the unitts is stated bellow: E Existing Instaalled Capacity y

(Piecees Per annum m)

Particularrs

Installed d Capacity Capacity y Utilization Capacity y Utilization (%) Installed d Capacity Capacity y Utilization Capacity y Utilization (%)

20110 Knitteed Garments 1,15,000,000 1,13,577,955 98.776 Woveen Garments 96,63,,000 58,65,,936 60.771

Financial Year Y 2011

2012

1,15,00,0000 1,01,83,1955 88.55

11,17,36,000 81,70,625 69.62

96,63,000 80,45,851 83.26

99,72,000 99,09,002 99.37

P Proposed Cap pacity Utilisa ation (Pieces Per annu um) Particularrs

Installed d Capacity Capacity y Utilization Capacity y Utilization (%) ( Installed d Capacity Capacity y Utilization Capacity y Utilization (%) (

20133 (E) Knittted Garments 1,71,992,000 1,46,000,000 84..92 Wov ven Garmentss 1,20,661,000 1,12,112,500 92..96

E – Estimatted

97

Financial Year 2014

2015

1,99,92,0000 170400000 85.23

1,99,92,0000 17280000 86.43

1,48,66,0000 1,36,44,0000 91.78

1,48,66,0000 1,38,78,0000 93.35

Scotts Ga arments Limiited P Proposed Pro oject - Capacitty Utilisation n ¾

daballapur Dodd

Particulaars Installed d Capacity* Capacity y Utilization Capacity y Utilization (%) ( *300 operating days ¾

First year 90,000,000 63,000,000 70..00

Second year y 90,00,0000 72,00,0000 80.00

(No. of pieces/Annum) Third Yearr 90,00,000 76,50,000 85.00

Second year y 1,40,00,0000 98,00,0000 70.00

(Kgs/Annum) Third Yearr 1,40,00,000 1,19,00,000 85.00

Kagall

Particulaars Installed d Capacity# Capacity y Utilization Capacity y Utilization (%) ( #350 operrating days

First year 1,40,000,000 84,000,000 60..00

I Intellectual P Property Righ hts: We had madee an applicatio W on dated 26/11/2007 for registration r off our erstwhille logo underr the class 18, 22, 23, 2 25 and 26 of the Trade Marks Act 1999. The Reg 24, gistrar of Trad de Marks, Ch hennai has issued an orderr dated 1 19/12/2008 o objecting the application on o the relative grounds off refusal undeer section 11 of the Tradee Mark A 1999 because similar trademark iss already on the record off the registraar for the sam Act, me/ similar goods/ g s services. The application a was w abandoneed for lack of prosecution p u under section n 132 of the Trrade Mark actt, 1999. .

S Subsequently, , we have fileed a new appllication dated d June 08, 20122 for registrattion of our neew logo P Properties O Owned Propeerty:

T details of the immovab The ble propertiess which are reegistered in th he name of th he Company are a given belo ow: Sl. No

Type of T Arraangement

Vend dor

Purpose

1

Deed of o Sale dated Novem mber 18, 2004.

The K Karnataka Areas Industrial Developmeent Board rep presented by Shri N. Nagaraja Naik (“Ven ndor”).

Faactory

2

Deed of o Sale dated May 9,, 2002.

The K Karnataka Areas Industrial Developmeent Board rep presented by Shri N. Nagaraja

Faactory

98

Location n of Properrty Plot No. 4881-A of Peenya, 4th Phase, Industrial Area, situated in Sy. No. 88 of Nallakadarranahal li Village Plot No. 4881-B of Peenya, 4th Phase, Industrial Area, situated in Sy. No. 46 of

Area Sq q.mt

Original un nits

41466 sq.m mt

4146 sq.mt

18744 Sq.m mt

1874 Sq.mt

Scotts Ga arments Limiited Sl. No

Type of T Arraangement

Vend dor

Purpose

Naik (“Ven ndor”).

Location n of Properrty

Area Sq q.mt

Original un nits

Nallakadarranahal li V Village, Yeshwanth hpur Hobli

3

Deed of o Sale dated April 28, 2 2007.

Smt. Mun niyamma (“Vendor”)).

Faactory

Sy. No. 127 1 of Nallakadarranahal li V Village, Yeshwanth hpur Hobli, Ban ngalore North Taluka

15334.35 Sq.m mt buillding and d land meaasuri ng 10122.77 sq.m mt

g 10 guntha land and10890 sq.ft build ding

4

Deed of o Sale dated May 26, 2 2008 and Registrration No. BBE/33919/2008.

Mindwest (India) Industries Limited (“Vendor”)).

O Office

10th Floor in the Building known k as Mittal Towers T C- Wing and a all other intern nal and external fittings f at Flat No o. 210, Block No. III CF, Backbay Reclamation n Scheme, Naariman Point, Mum mbai

105..65 sq.m mt

1136 sq.ft

5

Deed of o Sale dated Decem mber 2, 2005.

Karnataka State Financial Corporatio on represented d by Gen. Assistant Manager Shri. D. Basavaih (“Vendor”)).

Faactory

New No. 1028/1, 1 of CTS No o. 1568 (part) situaated at Pattepalli Road, Robertsonp pet, K.G.F. Ban ngarpet Taluka,

874..1 sq.m mt

9200 sq.ft

6

Deed of o Sale dated Decem mber 2, 2005.

Smt. Sonal S. Arora and Smt. Namitha R. Arora (“Vendors””)

Faactory

JointII Sub Registration n District) Tripur Taluk, Veerapandii Village G. S. No. 536/5 meaasuring Acre 1.62.

65622.81 sq.m mt

A 1.62 Acre

7

Sale Deed D dated Decem mber 2, 1994

Kumarasw wami and Gounder Jaganathan n (“Vendors””)

Faactory

1) Sub b District, Pallladam Taluk, Ganapathipaalyam Village S. F. F No. Hec. 218/1A,

11,8832 sq.m mt app prox

A 2.92 Acre

99

Scotts Ga arments Limiited Sl. No

Type of T Arraangement

Vend dor

Purpose

Location n of Properrty

Area Sq q.mt

Original un nits

2.46.0 (Ac.6.008) 2) S.F. No. 218/1B. Hec. 0.10.5. Ac. 0.25 3) Total extent of Ac. 2.92 with w a well in thee south eastern corrner of S. F. 218/1A A 8

Sale Deed D dated Decem mber 4, 2003

Sarjan Reallities Pvt. Ltd. (“Vend dors”)

W Wind Farm

Palladam Taluk, Edayarpalaayam Village in S. F. No. 321/ (Part) admeasurin ng Acres 0.98.

162004 sq.m mt

4 Acrre

2) Pallladam Taluk, Edayarpalaayam Village in S. F. No. 322/ (Part) admeasurin ng Acres 1.02. 3) Pallladam Taluk, Edayarpalaayam Village in S. F. No. 316/ (Part) admeasurin ng Acres 2.00. 9

Sale Deed D dated March h 7, 2007

Tiripur Arora Textile Process Private Limited (“Vendor”))

Faactory

Tiruppur Taluk, Veerapand di Village, S. F. No. 535, Ac. 10.76 1 – in this a specific s extent of Ac. 1.56 As per Re-survey the propertty is in 535/3 S.F.No. Hec. 0.61 Patta No. 6334

63199.74 Sq.m mt

A 1.56 Acre

10

Sale Deed D dated July 1, 1991

Sri S. Subraamaniam (“Vendor”))

Company G Guest house

Tirpur Tirupur

445..33 sq.m mt of

4788.75sq.ft land and

100

Taluk,

Scotts Ga arments Limiited Sl. No

Type of T Arraangement

Vend dor

Purpose

Location n of Properrty

Area Sq q.mt

Municipal Town, Old Ward No. N 10, New Ward d No. 17, Rayapu uram S. F. No. 765

land d, R.C C.C. buillding meaasuri ng 217.5 Sq. mt and d 114..75 Sq. mt. m

Original un nits 217.5 sq.mt

11

Sale Deed D dated Januarry 12, 2009

Shubh Reality (South) Private Limited (“V Vendor”)

W Wind Farm

In Tiru unelveli Registrtion District, Radhapuram Sub- Regisstration District, Radhapuram Taluk, Radhapuram Village, SF No. 594/ /20 SF No. 594/ /24 SF No. 594/ /25 SF No. 594/ /26 SF No. 594/ /27 SF No. 594/ /28 SF No. 594/ /29 SF No. 594/ /30 SF No. 594/ /31 SF No. 594/ /32 SF No. 594/ /37 SF No. 594/ /38 SF No. 594/ /39 SF No. 594/ /40 SF No. 594/ /41 SF No. 594/ /42 SF No. 594/ /43

81022.23 sq.m mt

2 acree

12

Sale Deed D dated Septem mber 15, 2008

Mr. Subram maniam (“Vendor””)

Presently V Vacant laand

In T Tirupur Registration n Nallur District, Sub Regisstration District, Tirupur T Taluk, Veerapandii Village,

164888.04 sq.m mt

A 4.07 Acre

101

Scotts Ga arments Limiited Sl. No

Type of T Arraangement

Vend dor

Purpose

Location n of Properrty

Area Sq q.mt

Original un nits

S. F. No. 536/1 Punjai Ac. 3.09. 3 in this an exttent of Hec. Punjai Boundariess :Admeasuring on punjai hec.. 0.39.5 (Punjai Acc. 0.98) of agricultural land Pattaa No. 1230, Pattaa pass book No. 3008528 13

Sale Deed D dated May 122, 2010

Mr. K.V.Jay yaram (“Vendor””)

Presently V Vacant Land

Sy. No. 60 admeasurin ng – dully con nverted vie AL LN-SRat 255/2009-10 Sultan Tippasandrra Village K Kasaba Kolar Hobli, Kolar Taluka, District.

32411.12 Sq.m mt

untha 32 Gu

14

Sale Deed D dated Augusst 22, 2005

Sushil S Arora A & Rajesh S Arrora

Faactory

Sy. No 536/6, Veerapandii Villagee, Nallur, N Sub Registeratio on, Tirupur Disstrict

69699.93

1.72 acres a

15

Sale Deed D dated Novem mber 8, 2010

Abdulla Kh han

Faactory

Sy No.30/1, and 32/1, Sangondan nahally Village, Chikkaballaapur Road, Kolarr

92511.67 sq mt m

1 accre 22 gunth has 32 and gunth has respeectivel y

16

Sale Deed D dated Januarry 24, 2012

Abdulla Kh han

Faactory

Sy No.32/22, and 30/2 Sangondan nahally Village, Chikkaballaapur Road, Kolarr

15199.27 sq.m mt

unthas 15 gu

17

Sale Deed D Dated Januarry 29, 2010

Neolux India Limited & Bank of Baroda

Faactory

Plot no. E--2 and E-3, MIDC Tarapur

15,6600 sq. metters

15,6000 sq. meterrs

102

Scotts Ga arments Limiited Sl. No

Type of T Arraangement

Vend dor

Area

Location n of Properrty

Purpose

Sq q.mt

Original un nits

Industrial Area, Salwad Taluka, T Thane, Dist Maharashtrra p Leased properties Area

Licens or/ Lessor

License L e/ Lessee

P Property/Prem mises

KAIDB Allotment letter dated d August 28, (“Less 2007 No. or”). HO/PO/A LLT17512/72588 /07-08 and March 25, 2010 No. KIADBHO/ALLO T17512/16466 4/09-10 issued by KIADB

Scotts S Garme G nts n Private P Limited L (“Lesse ( e”). e

nd in Plot No. N D-3, Lan D-44, A-3, A-100, A-11, S-443, S-44 & S-445 (P) at Park Ap pparel Ind dustrial Arrea, I Phase, Do oddaballapuraa

Type of Arrangemee nt

Oriigi nall Un nits 577567 sq meter s

Sq.m mt

Rent/Seecurity Depo osit

Peeriod of Agreeme nt

575677

The C Company paid has consideraation of `619.08 lacs l for allotmentt of land

100 Years

The yearrly rent is payable `14,225/The C Company shall alsso pay yearly maintenan nce of `1.06 lacs

Lease cum m sale agreement dated February 28, 2011 Leave and d License Agreement dated July y 10, 2007.

Appar el Export Promo tion Counci l (“Lice nsor”).

Scotts S Garme G nts n Private P Limited L (“Licen ( see”). s

wroom Preemises/Show beaaring No. 312-313 loccated on 3rd Floor F in thee ‘Apparel Ho ouse’ at Secctor-44, Instittutional Areea, Gu urgaon, Haaryana.

5433.37 s sq.ft

50.533

Fixed License Fees: ` 33,96,120/ /Monthly maintenan nce of ` 8,151/Interest Free Security Deposit

103

100 years

Scotts Ga arments Limiited Type of Arrangemee nt

Licens or/ Lessor

License L e/ Lessee

Area P Property/Prem mises

Oriigi nall Un nits

Sq.m mt

Rent/Seecurity Depo osit

Peeriod of Agreeme nt

of ` 1,00,0000/Lease Agreement dated December 19, 2007.

Lease Agreement dated January 12,, 2008.

Karnat aka Indust rial Area Develo pment Board (“Less or”).

M/s. M Scotts S Garment G s Limited. L (“Lessee ( ”). ”

Karnat aka Coir Compl ex Private Limite d (“Less or”).

Scotts S Garment G s Limited L (“Lessee ( ”). ”

o land Alll that piece of kno own as Plot No. 22 in Sy No. 141 and a 120 parrt in the Ban ngarpet Ind dustrial Area Taluka District Ban ngarpet, Ko olar

44033 sq. m mtrs

40333

The Lesssee has paid the Lessor the sum m of ` 1,36,032/-the towards allotmentt consideraation.

100 year leaase cu um sale arrangem en nt

The Lesssee shall pay to the Lessor a sum of ` 1008/the towards yearly reent and maintenan nce of ` charges 1495/Plo ot No. 1 & 2 in Surrvey No. 10, Satthyamangala Ind dustrial Area, Satthyamangala Hobli, Taluka, Kasaba District Tumkur cov vered by A C Street.

277000 sq q.ft. su uper b built up

25111

The leasse rent payable by the Lessee for f the Property shall be at ` 6/- per p sq.ft. per mon nth and the rentall shall be increased by 10% ever threee years.

5 Years Y We are in W the prrocess of ren newing the same.

10 month hs rent is as payable free interest security deposit by the Lesssee. Lease Agreement dated December 1, 2008. And Addendum m Agreement dated August 13,, 2012

M/s. Kastur i Indust rial Estate (“Less or”).

Scotts S Garme G nts n Limited L (“Lesse ( e”). e

ound Floor,, First Gro Second Flo oor and Flo oor, situated at No. 5/11, Maadanayakanah halli, Road, Tumkar Ban ngalore-5621223 about meeasuring 75,000 sq.ft. of buildup b areea with 5000 KVA pow wer and

104

75,,000 sq q.ft.

69755

The montthly rent payable by the Lessee to the Lessor sh hall be ` 4,14,000/-exclusive of service taax from January 01, 0 2012 to March 2012. From Ap pril 01, 2012 to December

3 years efffective fro om Jan nuary 011, 2012

Scotts Ga arments Limiited Type of Arrangemee nt

Licens or/ Lessor

License L e/ Lessee

Area P Property/Prem mises

Oriigi nall Un nits

Sq.m mt

Rent/Seecurity Depo osit

Peeriod of Agreeme nt

31, 2014 will be `4,91,000 per month exclusive e of service tax The rent shall be enhanced d by 15% every 3 years annually. The security deposit payable by the Lessee be ` shall 46,28,000/ /-, which shall be interest frree. Lease Agreement dated September 18, 2009.

Mrs. G. H. Nirmal a (“Less or”).

M/s. M Scotts S Garme G nts n Ltd. (“Lesse ( e”). e

#5F F2, 1st Phase, Peenya Area, Ind dustrial West, Jalaahgalli S.M M.Road, Ban ngalore5600058,

199200 sq q.ft.

1785.66

The Lesssee shall pay the monthly m of ` rent 1,50,000/-- subject to deducction on TDS.

5 Years Y

The rent will be enhanced d by 10% on existiing rent after 3 yeaars. The Lesssee shall pay a su um of ` 15,00,000/ /as security deposit. d Lease Agreement dated Junee l 1, 2011

Mr. Saud Nazir, Propri etor J.K. Engine ering Service s (“Less

Mr. M Naseer N Ahmed A , Managi M ng n Directo D r, r Scotts Garme G nts n Pvt. Ltd. L (“Lesse (

o. B-108, Peenya No Ind dustrial Estatte, IIIrd staage, Bangaloree

105

5266.22 sq q.mt

526.222

The lesseee shall pay ` 30,000/every mo onth and the tenan ncy shall begin fro om the first of every month of the English calendar c terminatin ng with the last day of every mon nth.

5 Years Y

Scotts Ga arments Limiited Type of Arrangemee nt

Licens or/ Lessor

License L e/ Lessee

or”).

e”). e

Area P Property/Prem mises

Oriigi nall Un nits

Sq.m mt

Rent/Seecurity Depo osit

Peeriod of Agreeme nt

The Lesssee has paid a su um of ` as 520,500 security deposit. d Lease Agreement dated Aprill 1, 2005.

Mr. Arif Butt, Herita ge Garme nts (“Less or”).

Mr. M Naseer N Ahmed A , Managi M ng n Directo D r, r Scotts Garme G nts n Pvt. Ltd. L (“Lesse ( e”). e

o. B-66, Peenya No Ind dustrial Estatte, IIIrd staage, Bangaloree

4611.49 sq q.mt

461.499

The lesseee shall pay ` 4,750/every mo onth and the tenan ncy shall begin fro om the first of every month of the English calendar c terminatin ng with the last day of every mon nth.

200 Years

Lease Agreement dated October 24,, 2007 and d letter off extension dated February, 13, 2013

Agro Chem Indust ries (“Less or”).

Scotts S Garme G nts n Limited L (“Lesse ( e”). e

Plo ot No. V-27, Peenya Ind dustrial Estatte, IInd staage, Ban ngalore5600058,

1 1496 sq qm

14966

The leasse rent payable by the Lessee for f the Property shall be at ` 3,25,000/per mon nth and the rentall shall be increased by 5% ever threee years.

Ex xtensio n valid till Occtober 233, 2013

10 month hs rent is as payable free interest security deposit by the Lesssee. Lease Agreement dated February 13, 2006. Addendum m to the Leasee Deed dated d January 01,, 2012

Mr. Suresh (“Less or”).

Mr. M Naseer N Ahmed A , Managi M ng n Directo D r, r Scotts Garme G nts n Pvt. Ltd. L (“Lesse (

haneshumari No. N 535 Kh (Olld No. 422), situated s at Patel Chann nappa’s Ind Estate, dustrial Heegganahalli, Yesshwanthpuraa Hobli, North Ban ngalore Talluka, Ban ngalore (M Measuring East to Weest 68.00 feet and No orth to South 36.00). 3

106

22448 s sq.ft

227.666

The Lesssee shall pay the rent r of ` every 40,000/month. The Lesssee has paid the Lessor L a of sum `4,00,000/ /as free interest security deposit. d

5 Years Y

Scotts Ga arments Limiited Type of Arrangemee nt

Licens or/ Lessor

License L e/ Lessee

Area P Property/Prem mises

Oriigi nall Un nits

Sq.m mt

Rent/Seecurity Depo osit

177.077

The Lesssee shall pay the rent r of ` every 10,000 month.

Peeriod of Agreeme nt

e”). e Lease Agreement dated February 13, 2006

Mr. Sriniva s (“Less or”).

o. 422/A, situ uated at No Pattel Chann nappa’s Estate, Ind dustrial Heegganahalli, Yesshwanthpuraa Hobli, North Ban ngalore Talluka, Bangalo ore

Smt. Venkat alaksh mamm a (“Less or”).

M/s. M Scotts S Garme G nts n (“Lesse ( e”). e

o. 78/2, bearing b No No. Kh haneshumari 1088/292-B, situ uated at Pattel Chann nappa’s Estate, Ind dustrial Heegganahalli, Yesshwanthpuraa Hobli, North Ban ngalore Talluka, Bangalo ore

44680 s sq.ft

Smt. Jayala kshma mma (“Less or”).

M/s. M Scotts S Garme G nts n (“Lesse ( e”). e

Pro operty in surv vey No. 78/ /2, b bearing Kh haneshumari No. N 538 (Olld No-425) situated s at Patel Chann nappa’s Ind Estate, dustrial Heegganahalli, Yesshwanthpuraa Hobli, North Ban ngalore Talluka, Bangalo ore

44680 s sq.ft

435.244

The Lesssee shall pay the rent of `30,000/- every month. The Lesssee has paid the Lessor L a of sum `3,00,000/ /as free interest security deposit. d

5 Years Y

Mr.

M/s. M

No o.A-353a situated at

8599.57

859.577

The Lesssee shall

3 years y

Addendum m to the Leasee Deed dated d January 01,, 2012

Lease Agreement dated Aprill 1, 2000. Addendum m to the Leasee Deed dated d January 01,, 2012.

Lease Agreement dated Aprill 1, 2000 Addendum m to the Leasee Deed dated d January 01,, 2012 Lease Deed d

11904 s sq.ft

5 years y

Mr. M Naseer N Ahmed A , Managi M ng n Directo D r, r Scotts Garme G nts n Pvt. Ltd. L (“Lesse ( e”). e

The Lesssee shall increase the rent amount 10% on agreed reent (i.e. ` 11,424/-) once in 2 years. The Lesssee shall pay the Lesser L a of ` sum 2,00,000/-as free interest deposit.

107

435.244

The Lesssee shall pay the rent of `30,000/- every month.

5 years y

The Lesssee has paid the Lessor L a of sum `3,00,000/ /as free interest security deposit. d

Scotts Ga arments Limiited Type of Arrangemee nt

Licens or/ Lessor

License L e/ Lessee

dated September 20, 2010

Amina ppa Gouda Sanga na Gouda Patil (“Less or”)

Scotts S Garme G nts n Limited L . (“Lesse ( e”) e

Lease deed d dated November 24, 2011

Lease deed d dated November 26, 2011

Lease cum m Rent Agreement dated November 16, 2011

Shri B. Yoges h

Scotts S Garme G nts n Limited L

Shri V. Venkat a Shiva Reddy

Scotts S Garme G nts n Limited L

M/s. Pragat hi Agrote ch Indust

Scotts S Garme G nts n Limited L

Area P Property/Prem mises dustrial Estate, Ind Peeenya 2nd Sttage of Peeenya Ind dustrial Esttate Area witthin the of lim mits Naallakadernahaalli Villlage, Yesshwanthpuraa Hobli, Ban ngalore North h Taluk Facctory Shed sttanding theereon

Oriigi nall Un nits sq q.mt laand com mpr issing of an ind dust rial facctor y shed adm mes urring 4911.37 sq q.mt

Lan nd and building b hav ving ground d floor, firsst floor and second at floo or situated No o.36/6, Bhy yraveshwara Ind dustrial Area, Heegganahalli Village, V Main An ndhrahalli Road, Vishwan needam Posst, Bangaloree – 560 0911

199500 sq q. ft

Lan nd and building b hav ving ground d floor situ uated at S. no. 61, Naarepally V Village, Hobli, Kasaba Bag gepally ( (Taluk), Ch hikkaballapura – 562 1077

12,,000 s sq.ft

Ind dustrial shed situ uated at D-427, 10th Maain Road, 2ndd Stage, Peeenya Ind dustrial Areea, Bangaloree – 560 0588

10,,400 s ft sq

108

Sq.m mt

Rent/Seecurity Depo osit

sq.m mt land d comprri sing of o an n industtr iaal shed d admes uring g 491.377 sq.m mt

pay the Lessor the sum m of ` 7,50,000/-per month in ncluding the rent for the leased premises p and the plant p and machineriies.

1813.500 sq m

` 9,50,0000/- as free interest deposit

Peeriod of Agreeme nt

The Lesssee has paid a su um of ` 75,00,000/ /as security deposit is which repayablee any without interest on the terminatio on of the lease. y 5 years

` 95,000 as rent per month h

11166

` 6,00,0000/- as free interest deposit

y 5 years

` 40,000 as rent per month h

` 8,00,0000/- as free interest deposit ` 90,000 as rent per month h

100 months

Scotts Ga arments Limiited Licens or/ Lessor

Area

License L e/ Lessee

P Property/Prem mises

Karnat aka Renew able Energy Develo pment Limite d

Scotts S Garme G nts n Limited L

Lan nd bearing Serial No o-77, Sin ndigere Villlage, Bellary y Taluk, Belllary District

State Indust ries Promo tion Corpor ation of Tamiln adu Limite d (“Less or”).

M/s. M Scotts S Garme G nts n Private P Limited L (“Lesse ( e”). e

M/s. Scotts S Garme G nts n Limited L

Lease Deed d dated May y 07, 2008

Mr. M.Kar uppus amy and Mr. K. Krishn asamy( “Lesso r”).

Lease Agreement dated August 13,,

Smt. Prema Rani (“Less

M/s. M Scotts S Garme G nts n

Type of Arrangemee nt

Oriigi nall Un nits

Sq.m mt

Rent/Seecurity Depo osit

Peeriod of Agreeme nt

ries Addendum m dated Junee 11, 2012 Sub Leased d deed dated d September 17, 2010

Lease Agreement dated May y 12, 2006.

Letter forr Extension of Rentt Agreement dated May y 23, 2012.

` 6,14,0000/- as free interest deposit

2 accres

pto Up M March 299, 2040

` 55,000 as rent per month h

o. R-4 in the SIPCOT S No Ind dustrial G Growth Cen ntre, Peru undurai witthin the lim mits of Ing gur, Taluk ka of SubPerrundurai Reg gistration Disstrict of Perrundurai

5.599 acrre

22645.77 5

The Lesssee shall pay ` 14,98,120/towards refundablle plot deposit, ` 29,73,880/towards developm ment charges an nd

Th he Prroperty sh hall be alllotted forr the lon ng leaase of 999 years.

` 100/- towards Lease rent r as being advance 100% pay yment in full. The building reented is faccing towardss Scotts Ltd., Clo othing (P) S.F F.No.226/1Road, Dh harapuram Privu, Pudhur Tirrupur-641608..

20,,000 s ft sq

In T Tirupur Reg gistration District, D Sub Naallur Reg gistration Disstrict, at

11,,701 .499 sq. ft

109

18600

The leasse rent be ` shall per 80,000/month.

1 year fro om M May 23, 20012.

The Lesssee has paid ` 5,00,000/as advancce to the Lessor, which w is refundablle. 1088.233

The leasse rent be ` shall per 90,000/month.

Th he lease peeriod is ag greed wiith

Scotts Ga arments Limiited Area

Type of Arrangemee nt

Licens or/ Lessor

License L e/ Lessee

P Property/Prem mises

2011.

or”).

Limited L (“Lesse ( e”). e

Taluka, Tirrupur Veerapandy Villlage in S.F F. 295.

Oriigi nall Un nits

Sq.m mt

Rent/Seecurity Depo osit

A reffundable sum of ` 13.50 lakh is paid as advance by the Lessee to the Lessor.

Peeriod of Agreeme nt efffect fro om Au ugust 133, 2011, to March 311, 2013. We are in W the prrocess of ren newing the same

Rental Agreement dated March 23,, 2011

Mr. M.Nit hyann adhan (“Less or”).

M/s. M Scotts S Garme G nts n Limited L (“Lesse ( e”). e

oimbatore D District, Co Taluka, Tirrupur Pallavanchipalay yam Villlage, Near Lakshna L Theatre, Doorr No.1/8805.

31,,846 s sq.ft

2961.677

The montthly rent for thee said property shall be ` 56,700/ /- with effect from m March 23 2011 and the free interest advance shall be ` 15,00,0000/-

3 years y

Letter forr Extension of Rentt Agreement dated May y 14, 2012.

Mr. S.Venk atesh (“Less or”).

M/s. M Scotts S Garme G nts n Limited L (“Lesse ( e”). e

oimbatore D District, Co Taluka, Tirrupur No ochipalayam Road, Lak kshmi Gardeen, S.F. No o.- 368, Veerrapandi (po o), Tirupur.

122000 sq q. ft.

111.66

The montthly rent for thee said property shall be ` 10,0000/- and the interrest free advance shall be ` 4,20,0000/-

he Th du uration of rent is forr 1 year an nd the ag greeme nt can be ex xtended by y the mu utual co onsent of the paarties

Mrs. S. Balam ani (“Less or”).

M/s. M Scotts S Garme G nts n Limited L (“Lesse ( e”). e

oimbatore D District, Co Taluka, Tirrupur No ochipalayam Road, Lak kshmi Gardeen S.F. 368, No o.Veerapandi(po), Tirrupur.

7,,068 sq q. ft.

657.322

The montthly rent for thee said property shall be ` 9,000/- and the free interest advance shall be ` 4,00,0000/-

year 1 nd the an ag greeme nt can be ex xtended by y the mu utual co onsent of the

Rental Agreement dated Aprill 1, 2009. Letter forr Extension of Rentt Agreement dated May y 14, 2012.

110

Scotts Ga arments Limiited Type of Arrangemee nt

Licens or/ Lessor

License L e/ Lessee

Area P Property/Prem mises

Oriigi nall Un nits

Sq.m mt

Rent/Seecurity Depo osit

Rental Agreement dated Aprill 1, 2009. Letter forr Extension of Rentt Agreement dated May y 14, 2012.

paarties.

Ms. V. Nandh ini (“Less or”).

oimbatore D District, Co Taluka, Tirrupur No ochipalayam Road, Lak kshmi Gardeen S.F. 368, No o.Veerapandi(po), Tirrupur.

Mr. K. Subbiy an (“Less or”).

M/s. M Scotts S Garme G nts n Limited L represe r nted n by Mr. M Sayed S Safiulla S (“Lesse ( e”). e

oimbatore D District, Co Taluka, Tirrupur No ochipalayam Road, Lak kshmi Gardeen S.F. 368, No o.Veerapandi(po), Tirrupur.

10,0080 sq. ft

Mr. S. Laksh mi (“Less or”).

M/s. M Scotts S Garme G nts n Limited L Unit U 1 represe r nted n by Mr. M K.Loga K nathan n and a Mr. R. R Palanis P amy a (“Lesse ( e”). e

oimbatore D District, Co Taluka, Tirrupur No ochipalayam Road, Lak kshmi Gardeen S.F. 368, No o.Veerapandi(po), Tirrupur.

12,,524 sq q. ft.

Rental Agreement dated January 10,, 2009. Letter forr Extension of Rentt Agreement dated May y 14, 2012. Rental Agreement dated January 10,, 2009 Rental Agreement dated

6,,820 sq q. ft.

M/s. M Scotts S Garme G nts n Limited L represe r nted n by Mr. M Sayed S Safiulla S (“Lesse ( e”). e

Rental Agreement dated Aprill 1, 2009. Letter forr Extension of Rentt Agreement dated May y 14, 2012.

Peeriod of Agreeme nt

634.266

The montthly rent for thee said property shall be ` 10,0000/- and the interrest free advance shall be ` 4,20,0000/-

year 1 an nd the ag greeme nt can be ex xtended by y the mu utual co onsent of the paarties.

937.44

The montthly rent for thee said property shall be `10,000/- and the free interest advance shall be `4,00,000/ /-

year 1 an nd the ag greeme nt can be ex xtended by y the mu utual co onsent of the paarties.

1164.733

The montthly rent for thee said property shall be `10,000/- and the free interest advance shall be `4,00,000/ /-

year 1 nd the an ag greeme nt can be ex xtended by y the mu utual co onsent of the paarties.

Go odown and Building B meeasuring area--

111

Scotts Ga arments Limiited Type of Arrangemee nt

Area

Licens or/ Lessor

License L e/ Lessee

P Property/Prem mises

Smt. S.Sure kha (“Less or”)

M/s. M Scotts S Garme G nts n Limited L (“Lesse ( e”). e

oimbatore D District, Co Taluka, Tirrupur No ochipalayam Road, Lak kshmi Gardeen S.F. 368, No o.Veerapandi(po), Tirrupur.

Sq.m mt

Rent/Seecurity Depo osit

Peeriod of Agreeme nt

33321 s ft sq

308.855 sq m

The montthly rent for thee said property shall be `10,000/- and the free interest advance shall be `3,00,000/ /-

year 1 nd the an ag greeme nt can be ex xtended by y the mu utual co onsent of the paarties.

Oriigi nall Un nits

December 4, 2007. Letter forr Extension of Rentt Agreement dated May y 14, 2012. Rental Agreement dated September 01, 2009 Rental Agreement dated August 10,, 2012

Go odown and Building B meeasuring area

Mr. R. Kandh asamy (“Less or”).

M/s. M Scotts S Garme G nts n Limited L (“Lesse ( e”). e

Building at No. 699/2Bros., R.M M. & Ind dustrial Co omplex, Road, Kamaraj Tirrupur- 6416044.

72000.0 0 sq q ft.

669.600

The montthly rent for thee said property shall be `10,000/- and the free interest advance shall be `1,00,000/ /-

he Th du uration of rent is forr 2 yeears and the ag greeme nt can be ex xtended by y the mu utual co onsent of the paarties.

Smt. S.Push palath a (“Less or”).

M/s. M Scotts S Garme G nts n Limited L (“Lesse ( e”). e

Second Floor The meeasuring 15,0000 sq.ft. in the three storey RC CC building bearing b D.N No. 643/11, In S.F F.No. 643/1A A, Hec 0.90, 0.36, Ac Veerapandi V Village, Tirrupur Taluk ka, of Naallur Sub-D District, Tirrupur Regisstration Disstrict.

0 0.90 aacre

3646.000 sq m

The Lesssee shall pay a monthly m rent of `8,500/for the first year.

Th he lease is for the peeriod of 1 year co ommenc ing from Au ugust 1, 20012.

Rental Agreement dated November 2, 2009.

Letter forr Extension of Rentt Agreement dated August 01,, 2012 Lease Agreement dated Junee 24, 2009.

For the second and third year, the rent shall be increased by 5 % on the monthly m rent i.e. `88,925/-. The Lesssee has paid to th he Lessor refundablle

112

Scotts Ga arments Limiited Type of Arrangemee nt

Licens or/ Lessor

License L e/ Lessee

Area P Property/Prem mises

Oriigi nall Un nits

Sq.m mt

Rent/Seecurity Depo osit

Peeriod of Agreeme nt

deposit of ` 5,00,000/-without in nterest. Letter forr Extension of Rentt Agreement dated August 01,, 2012

Smt. Kanch ana Devi (“Less or”).

M/s. M Scotts S Garme G nts n Limited L (“Lesse ( e”). e

Lease Agreement dated Junee 24, 2009.

Letter forr Extension of Rentt Agreement dated August 01,, 2012

0 0.90 aacre

3646.000 sq m

The Lesssee shall pay a monthly m rent of ` 8,500/for the first year. For the second and third year, the rent shall be increased by 5 % on the monthly m rent i.e. ` 8,925/-.

he lease Th is for the peeriod of 1 year co ommenc ing from Au ugust 1, 20012.

The Lesssee has paid to th he Lessor refundablle of ` deposit 5,00,000/-without in nterest. Mr. S. Param eswara n (“Less or”).

M/s. M Scotts S Garme G nts n Limited L (“Lesse ( e”). e

Lease Agreement dated Junee 24, 2009.

Rental Agreement dated March 24,,

The Ground Floor meeasuring 15,0000 sq.ft. in the three storey RC CC building bearing b D.N No. 643/1, In S.F. No o. 643/1A, Hec 0.36, Ac 0.90, Veerrapandi Villlage, T Tirupur Talluka, of Nallu ur SubDisstrict, T Tirupur Reg gistration Disstrict.

The First Floor meeasuring 15,0000 sq.ft. in the three storey RC CC building bearing b D.N No. 643/1, In S.F. No o. 643/1A, Hec 0.36, Ac 0.90, Veerrapandi Villlage, T Tirupur Talluka, of Nallu ur SubDisstrict, T Tirupur Reg gistration Disstrict.

0 0.90 Acre A

3646.00

The Lesssee shall pay a monthly m rent of `8,500/for the first year. For the second and third year, the rent shall be increased by 5 % on the monthly m rent i.e. `88,925/-.

he lease Th is for the peeriod of 1 year co ommenc ing from Au ugust 1, 20012.

The Lesssee has paid to th he Lessor refundablle of deposit `5,00,000/ /without in nterest. Mr. P. Mallik a (“Less

M/s. M Scotts S Garment G s

Lan nd and Building B meeasuring abou ut 2600 sq.ft. situated at a Door No o. 4, Jawahar Nagar, 113

22600 s ft sq

241.800

The montthly rent for thee said property shall be `16,775/- and the

Th he du uration of rent is forr 3

Scotts Ga arments Limiited Area

Type of Arrangemee nt

Licens or/ Lessor

License L e/ Lessee

2011

or”).

Limited L ndamedu, Sun represen r Ind duvampalayaam ted t by (PO O), Tirupur. Mr. M Sayed S Safiulla S (“Lessee ( ”). ”

Rental Agreement dated March 23,, 2011.

Mr. K. Laksh mi (“Less or”).

M/s. M Scotts S Garme G nts n Limited L represe r nted n by Mr. M K. Logana L than t (“Lesse ( e”). e

nd and terraced t Lan Building measuring 17000 sq.ft. situated at Firrst Floor No o. 355, 3566, Dharaapuram Road, Tirupur.

11700 s ft sq

Letter forr Extension of Rentt Agreement dated August 01,, 2012

Mr. T. Santha lingam (“Less or”).

M/s. M Scotts S Garme G nts n Limited L represe r nted n by Mr. M Sayed S Safiulla S (“Lesse ( e”). e

oor No. D 7, 7 DSK Do Near Naagar, Valampuri Vin nayagar Lov vil, 60 Feet Road, Tirrupur.

22616 sq q.ft.

243.299

The montthly rent for thee said property shall be `8,500/- and the free interest advance shall be `30,000/-

Th he du uration of rent is forr 1 year fro om Au ugust 011, 2012 an nd the ag greeme nt can be ex xtended by y the mu utual co onsent of the paarties.

P. Muthu kumar aswam y

Scotts S Garme G nts n Limited L (“Tena (

Go odown at, Dh hanalakshamii Rice Mills Com mpound, Karaipudhur(po o), Aru ulpuram, paalladam

1accre and d 50 cen nts

6077.544 approx x

Monthly Rent of `20,000/ and an Interest free advance of `4,00,000/ /

3 Years. Th he ag greeme nt can be ex xtended

Rental Agreement dated February 15, 2010. Rental Agreement date March h 24, 2011

P Property/Prem mises

114

Oriigi nall Un nits

Sq.m mt

158.100

Rent/Seecurity Depo osit

Peeriod of Agreeme nt

interest free advance shall be `50,000/-

yeears till Jan nuary 20014 and the ag greeme nt can be ex xtended by y the mu utual co onsent of the paarties.

The montthly rent for thee said property shall be `8,250/-

3 years y

The interrest free advance shall be `50,000/-

Scotts Ga arments Limiited Area

Licens or/ Lessor

License L e/ Lessee

(“Own er”)

nt”) n

Road, Tirpur-5

Rental Agreement dated March 24,, 2011

Ansuy a Devi (“own er”)

Scotts S Garme G nts n Limited L (“Tena ( nt”) n

Go odown at Dh hanalakshamii Rice Mills Com mpound, Karaipudhur(po o), Aru ulpuram, paalladam Road, Tirpur-5

1aacre and d 50 ceents

6077.544 approx x

Monthly Rent of `10,000/ and an Interest free advance of `1,30,000

3 years. Th he ag greeme nt can be ex xtended by y the mu utual co onsent of the Ow wners an nd Teenant

Lease Deed d dated July y 10, 2010

Mr. M. Shanm ugasu ndara m (Party No. 1 or Owner )

Scotts S Garme G nts n Limited L (Party ( No. N 2 or o Tenant) T

The building reented is t towards faccing Naaranapuram Village, V Pallladam Main n Road, (po), Pallladam 4366/2A, Doorr No. 2/7785 C, 2/785 B-1

3 3334 sq qm

33344

Rent of `1,20,000/ /from (Effective July 2010 to June 2011) of Rent `1,30,000/ /from (Effective July 2011 to June 2012)

Th he term of the leaase deeed is forr 3 yeears fro om July 100, 2010.

Type of Arrangemee nt

P Property/Prem mises

Oriigi nall Un nits

Sq.m mt

Rent/Seecurity Depo osit

Peeriod of Agreeme nt by y the mu utual co onsent of the Ow wners an nd Teenant

of Rent `1,40,000/ /from (Effective July 2012 to June 2013) A sum m `18,00,0000/ refundablle interest Advance. Lease Agreement dated July y 03, 2009

P.Moo rthi (“Less or”)

Arora Fashion F s Limited L

Lan nd bearing S.F. S No 2622, Nallur Village, V Taluk, Tirrupur District Co oimbatore 115

2 2.00 accres

8104.577

of as free

The Lesssee shall pay the rent of `22,000/- every month for f the

Leease of the land sh hall be forr the

Scotts Ga arments Limiited Type of Arrangemee nt

Licens or/ Lessor

License L e/ Lessee (“Lesse ( e”) e

Area P Property/Prem mises

Oriigi nall Un nits

Sq.m mt

measuring 2 acres. a adm

Rent/Seecurity Depo osit

Peeriod of Agreeme nt

first yearr. From 2nd year onwards o the rent shall be increased by 5% every yeaar.

peeriod of 6 years till July 033, 2015.

Security Deposit: `7,50,000 Lease agreement dated September 03, 2012

B.D.P. Appar els Pvt. Ltd. (Lesso r)

Scotts Garme nts Limited L (Lessee )

Facctory at Sy No.7/1, N Gu ummanahalli Road, Byaadgi

87997.5 0 meter s

8797.500 meterrs

The Lesssee shall pay facto ory rent of Rs.1,255,000 per month + Taxes from commenccement upto date 30/09/2013 and subsequen ntly Rs.1,50,0000/- per + month applicablee taxes till 30/09/ /2015

Peeriod of Leease fro om 011/10/20 122 to 300/09/20 155

The Lesssee shall pay also Rs.1,50,0000 per + month applicablee taxes towards machineriies taken on rent r Security Deposit Rs.30,00,0000/-

Manufactturing Processs Our manu ufacturing fa acilities receiv ve orders dirrectly from our o customerss. On receiptt of the prod duction order, a production p pllan is adopted d to coordinaate the manuffacturing pro ocess and to ensure e adhereence to delivery schedules. s Wee place orders for our raw w material req quirements, which w comprisse of finished d fabric (made of natural fiberss, such as cottton,), accessorries and trimss, such as fastteners, button ns, labels, and d other consumab bles. We purcchase the finisshed fabric an nd other raw materials m from m a variety of suppliers, so ome of which aree designated by b our custom mers. On receeipt of the fab bric and raw materials, ou ur quality assu urance team cond ducts a pre-p production in nspection. Following the approval a of the t quality assurance a team m, our manufactu uring facility y commences production, which invollves cutting, sewing, finisshing, washin ng and 116

Scotts Ga arments Limiited ironing. Each E stage of production is i monitored by our qualitty assurance team to ensu ure conformitty with our strict quality, cost and delivery y requirementts. Cutting off the fabric reequires a high h level of preecision. To ensuree minimum wastage, w auto omated cuttin ng tools are used u for patteern grading and marker making. m We have also installed d computerizeed design systems in som me of our man nufacturing facilities f to im mprove lead times and producctivity. Qualiity initiativess in the cuttin ng room inclu ude pre-cut fabric f checkin ng and 100% pan nel ticketing and checking. The stitching g process takees place in an n assembly lin ne, which com mprises of differen nt stitching machines, m each h for a specifiic purpose. Our O manufactu uring facilitiees are also equ uipped with emb broidery mach hines for the high-end app parel orders. We also hav ve in house printing p and dyeing d facilities for f both woveen and knitted d garments. We W perform a range of finisshing processses on our garrments using speecialized equ uipment inclluding threaad checking, ironing, steeam pressing, collar preessing, accessoriees attachmentt and folding prior to pack kaging and deelivery to custtomers.

117

Scotts Ga arments Limiited Steps Inv volved in Garrment Manuffacturing PROCESS FL LOW CHART T FABRIC RECEIVED

FAB BRIC ION N

INSPE ECT

CUTTING ARTMENT DEPA

4 Po oint System

FABRIC LAY YED. MARKED AND M D CUT

QUALITY INSP PECTION OF O SPR READING an nd CUTT TING (AQL 2.5)

SEW WING DEPAR RTMENT

NU UMBERING AN ND SORTING

CUTTIN NG LOADED INTO PART SECTIONS S

CO OLLAR PREPA ARATION

INS SPECT 1 100% CO OLLARS

FRONTS and ACKS BA PREPA ARATION

S SLEEVES PRE EPARATION

INSPE ECT 100% FRONTS AND B BACKS

INSP PECT 10 00% SLEEVES

BUTTON MARKING AND A ATTACHING

PA ARTS ASSE EMBLY

RAND DOM QUA ALITY AUD DIT (AQL L 2.5)

IN-LINE QU UALITY AUD DIT FOR ALL S. O OPERATION (AQL 2.5)

AL LTERATION N C CONTROL / R RANDOM QUA ALITY AUDIIT

100% % INSPE ECT 100% GAR RMENTS

IRONING G PAC CKING

FINAL QUA ALITY AUDIT T (AQL 2.5 / AQL 4.0) 118

FINISHING G DEPARTMEN D NT

Scotts Ga arments Limiited P Procurement of fabric We procure fabric based on W o the order, design and type of garm ment to be maanufactured. We have a teeam of s skilled professsionals who makes this assessment before b purch hasing the raw material from f the sup ppliers. P Presently, we source majority of the fab bric required d from fabric weaving plan nts located in n and around d Tamil N Nadu and Maaharashtra and remaining fabric f is impo orted from Ind donesia and China. P Pattern Makin ng and Gradiing We utilize patttern making software for creating the patterns W p accorrding to the various v sizes as a per order details. d T These pattern ns and the marrker plan are sent to the cu utting departm ment for cuttiing the fabric. F Fabric Laying g and Cutting g The fabric pro T ocured from the t source of supply s by thee merchandiser is sent to th he factory Maanager for stittching. T fabric is first inspected The d for any fabriic defects on the t inspection n table. The faabric rolls aree then spread on the c cutting table manually orr by the auto omatic spreaading machin ne. The patteerns cut on the t pattern making m m machine are then t placed on o the spread d fabric layerss according to o the marker plan. The fabric layers arre then c according to the markeer plan with th cut he straight kn nife cutting machine. m The band b knife is used for cuttiing the s smaller parts. The cut fabriic is then bun ndled accordin ng to the sizess and sent forr stitching. S Sewing In the sewing g section thee machines are a set accord ding to the machine m layo out and operration bulletin n. The b bundles of th he fabrics from m cutting secction are fed in the stitch hing lines for sewing wheere each mach hine is h handled by a sewing opera ator. The fabrric is stitched as initial assembly and th hen the final assembly. a Theere are in n-line checkeers and line su upervisors in the stitching department. The completeely stitched faabric is then sent s for t thread cutting g and end-linee checking an nd finally sentt in the finish hing departmeent. F Finishing In the finishin ng departmen nt, garments from f the sewiing are presseed by the steaam irons and d then these arre sent f the final ch for hecking. In th he finishing department d th he other tasks such as inserrting Hang Taag, Price labeels, and H Hangers inserrtion are carriied out. Then n the garmentts are packed d in the polyth hene bags an nd are packed d in the c cartons accord ding to the sets of sizes. I Inspection The final insp T pection and qu uality audits are a carried ou ut in the finish hing section. In I the final in nspection is done by f final checkerss and Quality y Audit is do one by the Qu uality Contro oller (Q.C.). The T rejected pieces p are theen sent b back to the stiitching for altteration. P Packing The garmentss are to be packed T p accord ding to the ratio r of the given g sizes. The T garmentss are packed in the p polythene bag gs and are paccked in the caartons accordiing to the setss of sizes.

119

Scotts Ga arments Limiited Qu uality Certificcation Wee have obtained certain quality certificates, detailed hereunder: h Certificate

Certificatte No.

Registrration No o.

Isssue Date of C Certificate

Issuing body b

Descrip ption

Control Union U Certificattions

ompliance forr Cerrtificate of Co Org ganic Exch hange 1000 Stan ndard (OE 100) Version 1.33

Control Union U Certificattions

Orgaanic Textilee “Global Stan ndard – GOT TS” standardss for the processing of fibress from m certified organicc agriiculture versiion 3.0 March h 20111

Validity of V C Certificate Teextile CU808682O OE1 C Certification 00-01.2013 3 – Organic Ex xchange 100 Sttandard (OE 1000)

CU 8008682

Teextile C Certification

CU 8008682

CU808682G G OTS-01.201 13

Global G O Organic Teextile Sttandard (G GOTS-IN)

300/01/2013

288/12/2013

022/02/2013

288/12/2013

uality Control Process (QC C): Qu Wee have separaate quality con ntrol departm ment with uniiform procedure across alll our factory units u to achieeve the sup perior quality y of product. The QC prrocess ensurees that the reequired qualiity is achieveed at each sttage of maanufacturing from fabric inspection to o finished gaarments. The procedure on o quality ch heck can be briefly exp plained below w: bric & Trims Inspection: Fab The fabrics receeived are cheecked by usin ng the fabric checking machine or Table. Any defeccts in the fab bric are imm mediately dissplayed undeer standard prrocedure as “Acceptable” and a “Not Accceptable”. In case the fabrric rolls / bales b gets rejeected due to defects, d shadee variation orr shrinkage variation v moree than alloweed limits it is stored in the t specified rack marked as “Rejected Items”. ‘Go oods Inspectiion Note’ is raised r for the passed item ms. The fabric is then stored with the prroper Identifiication Tag g containing P.O No., date of receipt, Delivery No ote No., Quantity Receiveed, Type of Fabric F and Su upplier dettails. The Trims item ms are checked d for quantity y whether it is as per thee order, visuaal check for sh hade, colour,, Type, Sty yle etc as per the specifica ation sheet. Th he ‘Trim Carrd’ is made on n sets which is approved by Marketin ng Staff and d the same is issued to useer section. If there t are variiations with specification, s appropriate action a will bee taken imm mediately.

120

Scotts Ga arments Limiited Qu uality Control in Sewing Line: L There is In-Linee checking of all the operattions by Rand dom Samplin ng method and d additional care c is taken for the crittical operations. There are two charts done namely “Attribute “ Co ontrol Charts”” for visual deefects and “Vaariable Co ontrol Charts”” for measurrements. Theese charts arre closely mo onitored at regular r interv vals and neccessary corrrection action n is taken imm mediately. Qu uality Checkss on Garmentts: Alll the Garmentts are checked d for the visu ual defects relaated to stitchiing, fabric, triims etc. The rejected r garmeent are recctified immed diately or atta ached with Fo ollow up Card d that details,, the nature of o defect and the remedial action to be b taken. Reccord is mainta ained for the percentage of o garments seent for alteration / rectificcation and sim milarly theere is separatee record for th he percentagee of garment that t underweent spot washing. The measuremeent check is do one on at leasst 10% of the garments to ensure e that itt is as per the measuremen nt chart giv ven by the buyer. Garmeent sent for alteration/rec a ctification is tracked by a follow–up card and reccord is maaintained for the t alteration n percentage. Gaarment packin ng is done in n accordance with the paccking standarrd duly signeed by the merchandiser / buyer rep presentatives.. Presentation n inspection iss conducted before b the garrments are pu ut into poly bags. b Price Tag gs, Bar Co ode tags, and other such ta ags is stored in i separate piigeon hole sh helf / box witth dividers to o avoid mix up. u The firsst garment paacked is appro oved by facto ory manager. Ma anpower Ou ur employee strength s as on n 30/09/2012 was 12,504. The T departmeent wise stren ngth of our company is as under: u

Sr. No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Sr. No 1. 2. 3. 4. 5. 6. 7.

BANGA ALORE UNIT TS Particullars dministration n & Human Resource Ad ance Acccounts & fina IT ogistics Lo Meerchandising Deesign Production uality Control Qu Saampling ne operator & tailor Sewing machin IED D Otthers To otal

No. of emplloyees 80 27 12 21 39 26 4620 215 285 3774 18 427 9544

TIRUP PUR UNITS Particullars Ad dministration n & Human Resource Acccounts & Fin nance IT Lo ogistics Meerchandising Deesign Production

No. of emplloyees 29 26 6 5 44 10 1957 121

Scotts Ga arments Limiited Sr. No 8. 9. 10. 11. 12.

TIRUP PUR UNITS Particullars

No. of emplloyees 92 10 580 15 186 2960

Qu uality Control Saampling Sewing machin ne operator & tailor IED D Otthers To otal

We propose to W t add the fo ollowing staff after expanssion and shalll take the neecessary stepss for recruitm ment of a additional maanpower. Sr. no 1. 2. 3.

Catego ory

No. of emplloyees 3,352 179 26 3,557

Laabour Faactory Superv visor and Tech hnical Staff Ad dministrativee Staff Totall

ms & retentio on strategy Recruitmentt strategy, traiining program We have a professional p seet-up and a competent c hu uman resourcees division. We W have a policy to felicitaate our workers for their t dedicatiion and comm mitment towaards the work k. We constan ntly attempt to t devise emp ployeefriendly policcies to retain key managem ment personn nel and motivaate our workfforce. SWOT Analysis Sttrengths • Talent po ool and desig gn capabilitiess • Availability of relatiively inexpen nsive and sk killed work forrce • Repeat orders o from th he customers on regular baasis • Total sollutions to Cu ustomers both h woven and knits garmentss Op pportunities • Thrust by b the govern nment to prom mote textile sector s as it is one o of the larg gest employm ment generato or for the econo omy. • Potentiall to add capaccity in the exiisting facility. • Increased d disposablee income in n the hand ds of consumeer

• • • •

Weakness Deependency on n economic grrowth Laack of presencce in entire tex xtile value ch hain Laack of Domesttic presence Laabour intensiv ve industry

Threats • Ind dustry is prrone to chan nge in goverrnment po olicies, any material m chang ges in the dutty may ad dversely impaact our financiials. • Th he raw mateerial prices are a prone to o price flu uctuations wh hich may adv versely impaact our profitability and d financials. • Co ompetition from f large as well as small org ganized secto or.

NCE INSURAN The comp pany has ad dequately insu ured its plan nt and mach hinery at thee various locations againsst fire, burglary etc. e

122

Scotts Ga arments Limiited REGULATIO ONS AND POLICIES P The follow wing description n is a summarry of the relevaant regulation ns and policies as prescribed by the centrall / state governmen nts that are app plicable to our Company in India. I The information detailed in this chappter has been obtained from publiications availaable in the pubblic domain. The T regulationss set out below w are not exhaaustive, and are only intended too provide geneeral information to the investtors and are neeither designedd nor intended to be a substitute for professionaal legal advice. The Comp panies Act, 1956 The Act deals d with la aws relating to companiees and certain n other associations. It was w enacted by the parliamen nt in 1956. The Companiees Act primaarily regulatees the formattion, financin ng, functionin ng and winding up of companies. The Act A prescribees regulatory mechanism regarding all a relevant aspects a including g organization nal, financial and managerrial aspects of o companies. Regulation of o the financiial and managem ment aspects constitutes c th he main focu us of the Act. In the funcctioning of th he corporate sector, although freedom of companies iss important, protection off the investo ors and shareeholders, on whose ortant. The Companies C Acct plays the balancing rolee between theese two funds they flourish, is equally impo competing g factors, nam mely, manageement autonom my and invesstor protection n. Regulatio on of Foreign n Investment in India Foreign in nvestment in India is prim marily governeed by the prov visions of thee Foreign Exch hange Manag gement Act, 1999 (“FEMA”) and a the rules and regulatiions promulg gated there un nder. The RB BI, in exercisee of its powers under FEMA, has notified the Foreign Exchange E Maanagement (T Transfer or Isssue of Securitty by a Person Reesident Outsside India) Regulations, R 2 2000 (“FEMA A Regulationss”) which prrohibit, restrict and regulate, transfer or issue of secu urities, to a person resid dent outside India. Pursu uant to the FEMA Regulatio ons, no prior consent c or approval is requ uired from th he RBI for foreeign direct in nvestment und der the “automatiic route” with hin the speciffied sectoral caps c prescribeed for various industrial sectors. In resp pect of all industtries not speccified under the automattic route, and d in respect of o investmen nts in excess of the specified sectoral limitts under the automatic ro oute, approvaal for such inv vestment maay be required d from the FIPB and/or the RBI. Further,, FIIs may purchase sharres and convertible deben ntures of an Indian company under the portfolio inv vestment sch heme throug gh registered d brokers on n recognized stock exchangess in India. Regulation R 1 (4) of Schedule II of thee FEMA Regu ulations prov vides that th he total holding by b each FII or SEBI appro oved sub-acco ount of an FII shall not exceed e 10% of o the total paid-up equity cap pital of an Ind dian compan ny or 10% of the t paid-up value v of each series of con nvertible debeentures issued by y an Indian co ompany and the total holdings of all FIIs F and sub accounts of FIIs F added to ogether shall not exceed 24% % of the paid d-up equity capital or paid-up p valuee of each seeries of conv vertible debenturees. However, this limit of 24% may be increased up p to the statuttory ceiling as applicable, by the Indian co ompany conceerned passing g a resolution by its boarrd of directorrs followed by b the passin ng of a special ressolution to th he same effectt by its shareh holders. Environm ment (Protectiion) Act, 19866 The Envirronment (Protection) Act, 1986 1 was enaacted as a gen neral legislatio on to safeguaard the enviro onment from all sources s of polllution by enabling coordiination of thee activities of the various regulatory r ag gencies concerned d, to enable creation c of an a authority with w powers for environm mental protecction, regulattion of dischargee of environm mental pollutaants etc. The purpose of the t Act is to act as an “um mbrella” legislation designed to provide a frame work for f Central go overnment co o-ordination of o the activitiees of various central c and state authorities established un nder previouss laws, such as a Water Act & Air Act. Itt includes water, air and land and the interr-relationships which existt among wateer, air and lan nd, and humaan beings and d other living creaatures, plantss, micro-organ nisms and pro operty.

123

Scotts Ga arments Limiited Consent for f operation n of the plantt under the Air A (Prevention and Conttrol of Pollutiion) Act 19811 (“Air Act”) Prevention an nd Control of o Pollution) Act A 1981 has been enacted d to provide for the preveention, The Air (P control an nd abatementt of air pollution. The stattute was enaccted with a view v to proteect the enviro onment and surro oundings from any adverrse effects off the pollutaants that may y emanate frrom any facttory or manufactu uring operatiion or activity y. It lays dow wn the limits with regard to t emissions and pollutan nts that are a direcct result of an ny operation or o activity. Peeriodic checkss on the facto ories are mand dated in the form of yearly app provals and consents c from m the correspo onding Pollution Control Boards B in the state. f operation n of the plan nt under the Water (Prev vention and Control C of Pollution) P Actt, 1974 Consent for (“Water Act”) A The Wateer Act was en nacted in 19744 in order to provide p for th he prevention n and controll of water po ollution by factoriies and manu ufacturing ind dustries and for f maintainiing or restorin ng the wholeesomeness of water. In respectt to an Industrial Undertaaking it appliees to the (i) Occupier O (thee owner and management m t of the undertakiing) (ii) Outleet (iii) Pollutio on and (iv) Trrade effluentss. The Act req quires that app provals be ob btained from the correspondin c g Pollution Control C Boards in the state. Water (Prrevention and d Control of Pollution) P Ceess Act, 1977 The Wateer Cess Act is a legislation providing fo or the levy an nd collection of o a cess on lo ocal authoritiies and industriess based on th he consumptiion of water by such locaal authoritiess and industrries so as to enable implemen ntation of the Water Act by y the regulato ory agencies concerned. c Trade Maarks Act, 1999 9 The Indiaan law on trad demarks is en nshrined in th he Trade Marrks Act, 1999. Under the ex xisting legislaation, a trademark k is a mark ussed in relation n to goods so o as to indicatte a connectio on in the courrse of trade beetween the goodss and some peerson having the right as proprietor p to use u the mark.. A ‘mark’ maay consist of a word or inventeed word, sign nature, devicce, letter, num meral, brand, heading, lab bel, name wriitten in a parrticular style and so forth. Thee trademark once o applied for, f is advertiised in the traademarks jou urnal, oppositiions, if any are in nvited and affter satisfactorry adjudicatio ons of the sam me, a certificate of registration is issueed. The right to use the mark can c be exercissed either by the registered d proprietor or o a registereed user. The present p term of reegistration of a trademark is ten years, which may be b renewed fo or similar periods on paym ment of prescribed d renewal feee. Copyrigh ht Act, 1957 The Copy yright Act, 195 57 came into effect from Jaanuary 1958. Copyright C is an exclusive right. The staatutory definition n of Copyrigh ht is the exclu usive right to o do or autho orizes others to do certain n acts in relattion to Literary, dramatic or musical wo orks, Artistic work Cinem matograph fillm; and Sou und recording g. The purpose of o recognizing g & protecting the copyrig ght of an auth hor is to statutorily protectt his work & inspire i him to exercise his creeative facultiees. Copyright is granted fo or a specific period p of timee. Whether an n act is an infring gement or not would depeend on the faact whether copyright c is subsisting s in the work or not. In case the copyright c has expired, the work falls in n the public domain & any y act of reprod duction of thee work by any peerson other th han then the author would not amount to t infringemeent. Income-taax Act, 1961 The Incom me Tax Act, 1961 deals witth the taxation of individu uals, corporatees, partnershiip firms and others. As per thee provisions of o this Act thee rates at whiich they are reequired to pay tax is calcullated on the income i declared by b them or assessed a by th he authoritiess, after availing the deducctions and co oncessions acccorded under thee Act. The ma aintenance off Books of Acccounts and relevant r supp porting docum ments and reegisters are mandatory under the t Act. Filing g of returns off Income is co ompulsory forr all assesses.. 124

Scotts Ga arments Limiited Service Tax T Chapter V of the Finan nce Act 1994 (as amended d), and Chaptter V-A of thee Finance Act 2003 requires that where pro ovision of ceertain listed services, s who ole taxable seervices exceed ds ` 400,000, a service tax with respect to o the same mu ust be paid. Every E person n who is liablee to pay serv vice tax must register himsself for the same Central Sales Tax Act (CST) n object of thiis act is to fo ormulate prin nciples for determining (a)) when a salee or purchasee takes The main place in th he course of trrade or comm merce (b) Wheen a sale or pu urchase takess place outsid de a State (c) When W a sale or pu urchase takes place in th he course of imports into o or export frrom India, to o provide forr levy, collection n and distribu ution of taxes on sales of go oods in the co ourse of tradee or commercce, to declare certain c goods to be b of special importance trade or comm merce and speecify the restrrictions and conditions c to which State lawss imposing taxes on sale or purchase of such goods of speciall importance (called as deeclared goods) sh hall be subjeect. CST Act imposes thee tax on inteer state saless and states the principlees and restriction ns as per the powers p conferrred by Constitution. Electricity y Act, 2003 The Electrricity Act, 20 003 has been recently intro oduced with a view to rattionalize electricity tariff, and to bring abo out transpareent policies in the sectorr. The Act provides p for private secttor participattion in generation n, transmissio on and distriibution of eleectricity, and provides forr the corporattization of th he state electricity y boards. The related Electrricity Regulattory Commisssions Act, 19998 has been enacted e with a view to confer on o these statu utory Commisssions the ressponsibility off regulating th his sector. Value Ad dded Tax (“VA AT”) VAT is a system s of mu ulti-point levy y on each of th he purchases in the supply y chain with the t facility of set-off input tax on sales wherreby tax is paaid at the stag ge of purchasee of goods by a trader and on purchase of raw materials by a manufaccturer. VAT is i based on th he value addittion of goods, and the relaated VAT liab bility of the dealerr is calculated by deductiing input tax x credit for taax collected on o the sales during a parrticular period. VAT V is a conssumption tax applicable to all commerrcial activitiees involving the t productio on and distributio on of goods and a the proviisions of serv vices, and eacch state that has h introduceed VAT has itts own VAT Act,, under which h, persons liaable to pay VAT V must reg gister and obtain a registrration numbeer from Sales Tax Officer of thee respective State. S Approvalls from Local Authorities Setting up p of a Factorry or Manufaacturing/Hou using unit en ntails the requ uisite Plannin ng approvalss to be obtained from the relevant Local Panchayat(ss) outside th he city limits and approp priate Metrop politan Developm ment Authority within thee city limits. Consents fro om the state Pollution Co ontrol Board((s), the relevant state s Electriciity Board(s), the State Ex xcise Authoriities, Sales Taax, are requiired to be ob btained before com mmencing thee building of a factory or the start of maanufacturing operations. Industrial (Development and Regu ulation) Act, 1955 1 The Industrial (Develo opment and Regulation) Act, A 1951 hass been liberaalized under the t New Ind dustrial Policy dated July 24, 1991, 1 and all industrial un ndertakings are a exempt frrom licensing g except for certain c industriess such as disstillation and d brewing off alcoholic drinks, d cigars and cigaretttes of tobaccco and manufactu ured tobacco o substitutes, all types of electronic aeerospace and d defence equ uipment, ind dustrial explosivess including detonating fuses, safety y fuses, gun n powder, niitrocellulose and matchees and hazardous chemicals and a those resserved for the small scalee sector. An industrial i und dertaking, wh hich is 125

Scotts Ga arments Limiited exempt frrom licensing g, is required d to file an In ndustrial Enttrepreneurs Memorandum M m (“IEM”) wiith the Secretariaat for Industtrial Assistan nce, Departm ment of Indu ustrial Policy y and Prom motion, Minisstry of Commercce and Industrry, Governmeent of India, and a no furtheer approvals are a required. Foreign Trade T (Develo opment and Regulation) R A 1992 Act, This statu ute seeks to in ncrease foreig gn trade by reegulating the imports and d exports to an nd from India. This legislation n read with th he Indian Forreign Trade Policy P providees that no exp port or imporrt can be mad de by a person orr company without w an importer i exp porter code number n unless such persson or comp pany is specificallly exempt. An n application n for an importer exporter code numbeer has to be made m to the offfice of the Joint Director D Gen neral of Foreig gn Trade, Miinistry of Com mmerce. An importer-exp porter code number n allotted to o an applicantt is valid for all a its branchees, divisions, units u and facttories. The Facto ories Act, 1948 8 The Facto ories Act, 1948 is a social legislation l wh hich has been n enacted to regulate r the occupational o safety, health an nd welfare off workers at work placess. This legislaation is being enforced by b the Goverrnment through officers o appoiinted under th he Act i.e. Insspectors of Faactories, Depu uty Chief Insspectors of Faactories who worrk under thee control of the t Chief In nspector of Factories F and overall con ntrol of the Labour L Commissiioner. The am mbit of operattion of this Act A includes th he approval of o Factory Bu uilding Plans before constructiion/extension n, investigation of complaaints with regard to healtth, safety, weelfare and working w conditions of the work kers employed d in a factory,, the maintenaance of registters and the su ubmission of yearly and half-y yearly returnss. Payment of Wages Actt, 1936 (“Wag ges Act”) mployed in th he factories an nd to personss employed in n industrial orr other Wages Acct applies to the persons em establishm ments where the monthly wages payab ble to such peersons is less than ` 10,0000/-. The Act confers c on the person(s) respo onsible for pay yment of wag ges certain ob bligations witth respect to the maintenaance of registers and a the displlay in such faactory/establiishment, of th he abstracts of o this Act and d Rules madee there under. The Miniimum Wages Act, 1948 (“M Minimum Waages Act”) Minimum m Wages Act was w enacted to t provide forr minimum wages w in certaiin employmeents. Under th his Act, and to the Central and the State Governm ments are the authorities a to o stipulate thee scheduled employment e fix minim mum wages. The T Act contaains list of Agricultural A an nd Non Agriicultural emp ployment wheere the prescribed d minimum rate r of wagess is to be paid d to the work kers. The min nimum wagess are calculateed and fixed baseed on the basiic requiremen nt of food, clo othing, housin ng required by y an average Indian adult. Employeees (Providentt Fund and Miscellaneous M s Provisions) Act, 1952 The Act is applicablee to factoriess employing more than 20 2 employeess and may also a apply to o such establishm ments and in ndustrial und dertakings as notified by the Governm ment from tim me to time. All A the establishm ments under the t Act are reequired to be registered wiith the Provid dent Fund Co ommissionerss of the State. Also, in accorda ance with the provisions of o the Act thee employers are a required to t contribute to the Employeees’ Providentt Fund the prescribed p peercentage of the basic wages, w dearneess allowancees and remaining g allowance (if ( any) payab ble to the emp ployees. The employee sh hall also be reequired to maake the equal con ntribution to the t fund. As per the prov vision of the Act, employeers are to con ntribute 12% of the basic wag ges, dearnesss allowances and remainin ng allowancees (if any) paayable for thee time being to the

126

Scotts Ga arments Limiited employeees. A monthly y return in Form 12 A is reequired to be submitted to the commisssioner in addiition to the maintenance of reg gisters by the employers. A 1972 Payment of Gratuity Act, A terminaal lump sum benefit b paid to t a worker when w he or shee leaves emplloyment afterr having work ked for the emplo oyer for a prescribed minim mum numberr of years is reeferred to as “gratuity”. “ Th he provisionss of the Act are applicable a to o all the facctories. The Act providees that withiin 30 days of opening of the establishm ment, it has to notify the controlling c au uthority in Form A and th hereafter whenever there is any change in n the name, ad ddress or chaange in the naature of the business of thee establishmeent a notice in n Form B has to be b filed with the authority. The Employeer is also requ uired to displlay an abstracct of the Act and a the rules mad de there-undeer in Form U to be affixed at the or near the main en ntrance. Furth her, every em mployer has to obttain insurance for his liabiility towards gratuity pay yment to be made m under Payment P of Grratuity Act 1972, with Life Insu urance Corpo oration or any y other approved insurance fund. Payment of Bonus Actt, 1965 ment of Bonuss Act, 1965 iss applicable to t every estab blishment em mploying 20 or o more emplloyees. The Paym The said Act providess for payment of the minimum bonus to the emplo oyees specifieed under the Act. It further reequires the maintenance off certain book ks and registeers such as th he register sho owing compu utation of the allo ocable surplu us; the register showing the t set on & set off of the allocable su urplus and register r showing the details of o the amoun nt of Bonus due to the employees. Further it allso require for f the submissio on of Annual Return in thee prescribed form (FORM D) D to be subm mitted by the employer witthin 30 days of paayment of thee bonus to thee Inspector ap ppointed under the Act. Contract Labour L (Regu ulation and Abolition) A Acct, 1970 The purpose of Contra act Labour (R Regulation an nd Abolition) Act 1970, is to t regulate th he employmeent and protect th he interests of the work kers who aree hired on th he basis of individual contracts c in certain c establishm ments. In thee event that any a activity is outsourced d, and is carrried out by labourers hirred on contractuaal basis, then n compliance with the Co ontract Labou ur (Regulation n and Abolittion) Act, inccluding registratio on will be neccessary and the principal employer e willl be held liab ble in the eveent of default by the contractorr to make req quisite payments towards provident p fun nd etc. Employm ment (Standin ng Orders) Acct, 1950 The Indu ustrial Emplo oyment (stand ding orders) Act requiress employers in industriall establishmeents to formally define condiitions of em mployment un nder them. It I applies to every indusstrial establisshment wherein 100 1 (reduced to 50 by the Central C Goveernment in resspect of the establishment e ts for which itt is the Appropriate Governm ment) or moree workmen are a employed d. The Act calls for the submission s o such of conditions of work to the t relevant authorities a forr their approv val. muneration Act”) A and Equ ual Remuneraation Rules, 1976 1 The Equaal Remunerattion Act, 19766 (“Equal Rem The Constitution of India provides for equal pay y for equal work w for both men and wo omen. To givee effect to this provision, p thee Equal Rem muneration Act, A 1976 was implementted. The Actt provides th hat no discrimination shall be b shown on the basis of sex for performing similar work ks and that equal remuneraation shall be paid to both men m and wom men when thee same work is i being donee.

127

Scotts Ga arments Limiited Employeees State Insurrance Act, 19448 All the establishmentss to which the t Employeees State Insu urance (ESI) Act applies are required d to be registered d under the Act with thee Employees State Insuraance Corporaation. The Act applies to o those establishm ments where 20 2 or more peersons are em mployed. The Act A requires all a the employ yees of the faactories and estab blishments to which the Acct applies to be b insured in the manner provided p und der the Act. Fu urther, employer and employees both arre required to make con ntribution to o the fund. The return of the contributiion made is reequired to be filed with thee ESI departm ment. The Mateernity Benefitt Act, 1961 (“M Maternity Acct”) The purpo ose of Matern nity Act 1961 is to regulatte the employ yment of preg gnant women n and to ensu ure that they get paid p leave fo or a specified d period durring and afterr their pregn nancy. It prov vides, inter-aalia for payment of maternity benefits, meedical bonus and enacts prohibition p on n dismissal, reduction r of wages paid to prregnant womeen etc. Registratiions under th he applicablee Shops & Co ommercial Esttablishmentss Acts of the respective r States in which our Company has h an establiished place of business/ office o (“Shopss Act”) The Shop ps Act provid des for the reegulation of conditions c off work in sho ops, commerccial establish hments, restaurants, theatres an nd other estaablishments. The T Act is en nforced by thee Chief Inspeector of Shops (CIS) and vario ous inspectorss under the su upervision an nd control of Deputy/Asssistant Labourr Commission ners of the concerrned District, who in turn functions und der the superrvision of Lab bour Commisssioner.

128

Scotts Ga arments Limiited HISTOR RY AND OTH HER CORPO ORATE MATT TERS We were formed f on 01 1/12/1992 un nder Indian Paartnership Acct, 1932 as a Scotts Garmen nts, with Mr. Naseer N Ahmed, Mrs. M Refath Jehan Begum and Mr. Saiffulla Sayed as a the partnerrs. In January y, 2002 Mr. Saifulla S Sayed ressigned from the partnersh hip firm and d the other paartners contin nued the parrtnership firm m. The partners of o the firm deecided that fo or furtherancee of business the constituttion should be b a Private Limited L Company y and accordin ngly incorporrated Scotts Garments G Pvtt. Ltd. On 01/ /03/2002 with h the main ob bject to acquire th he business of o partnershiip firm and continue thee partnership p business of manufactureer and exporter. A takeover agreement was w executed between Sco otts Garmentts and Scottss Garments Private P Limited on o 01/03/20 002 pursuantt to which the t partnership deed was w dissolved d with effectt from 05/04/2002. Subsequeently, we com mmenced ourr business acttivity with th he manufactu uring and exp port of Ready Maade Garmentss. With a view v to conssolidate busin ness, Scotts Clothing Priivate Limited d, a compan ny incorporatted on 12/04/2004, in the bu usiness of manufacture of knitted garm ments, was am malgamated with w our com mpany, with effecct from 01/0 04/2006. Our Company was w converted d to a limiteed company on 19/06/20007. To further strrengthen the business, Arrora Fashions Ltd, a company incorporrated on 01/001/1991, into Ready Made Garments havin ng manufactu uring facilitiees at Tirupurr, became a wholly w owneed subsidiary y as on 01/02/2008 and subseequently was amalgamated d with SGL pursuant p to th he approval of o Honourablee High Court of Karnataka K vid de its order daated 6th Febru uary, 2010. Major eveents in the History of the Company: Year Y 19992 19994 2002 2004 2004 2004 2006

20007

2008

2009 2010

E Event Scotts S Garmen nts incorporaated as a parrtnership firm m on 1st Deceember, 1992, with Naseer N Ahmed, Refath Jehaan Begum and Saifulla Say yed as partnerrs. Commenceme C ent of businesss in partnersship concern. In ncorporation of Scotts Garrments Privatte Limited forr continuing the t business of o the partnership p firrm. Allotment A of the t land at 4881 A, Peenya, by KIADB. In ncorporation of Scotts Clothing Privatte Limited in n April 2004, to commencce the manufacturing m g facility for knitted k garmeents at Tirupu ur. Acquired A 99.880% stake in Pedigree P Construction Priv vate Limited by b virtue of which w itt became subssidiary of thee Company. - Commenced C c commercial o operations fro om the new facility f constrructed on plo ot 481 A, A Peenya, Baangalore. - Application A m made to Hon’ble High Cou urt for the meerger of Scottts Clothing Prrivate Limited L with Scotts Garmeents Private Limited. L - Cessation C of Pedigree P Consstruction Priv vate Limited as a subsidiary - Sanction of the t Hon’ble High H Court of o Karnataka approving a th he merger of Scotts S Clothing Priv vate Limited with Scotts Garments G Priv vate Limited. - Conversion of the compaany to a limiteed company. - Acquisition of Arora Fasshions Ltd, a Company having h its registered officce at Mumbai and d into manufaacturing of kn nitted Ready Made M Garmen nts. - Filing of scheeme of amalg gamation at Hon’ble H High Court of Bom mbay and Hon n’ble High Court of o Karnataka, Bangalore - Sanction by y Hon’ble High H Court of Bombay y approving the schemee of amalgamatio on between Arora A Fashionss Ltd with Sco otts Garmentts Ltd. - Sanction by y Hon’ble High Courtt of Karnattaka approv ving schemee of amalgamatio on between Arora A Fashionss Ltd with Sco otts Garmentts Ltd. 129

Scotts Ga arments Limiited Year Y 2010 2011

2012

E Event - Signed a triipartite MOU U between Our O Compan ny, Bombay Rayon Fash hions Limited and the Governm ment of Karnataka. - Hon’ble Tam mil Nadu Hig gh Court ord der leading to t temporary y suspension of a printing & dy yeing unit at Tirupur - Commencem ment of constrruction of facttory unit at Doddaballapur D r - Recommenceement of the printing p & dy yeing unit wh hich was susp pended - Expansion off production facilities f at Ko olar by setting up new uniits - Entered into o Share Sub bscription Agreement A w with Kagal Industrial Teextile Technology Park P (P) Ltd for allotmen nt of land for setting up kn nitting and faabric processing unit at Kagal in n Kolhapur, Maharashtra M ufacturing unit at Bagepallly, Karnataka - Setting up off additional garment manu ns ‘BBB’ ratin ng to long teerm bank faccilities amoun nting to ` 2229.70 - CARE assign crores and ‘A A3+’ rating to o short term bank facilities amounting to o ` 227.40 cro ores. - Canara Bank k Venture Caapital Fund in n its status an nd as Trusteee and Investm ment Manager off Emerging In ndia Growth Fund investted ` 20 crorees under Pre-IPO placement

ompany: Main Objeects of the Co 1.

2.

3.

4.

5.

To acquire the existing partnerrship business of “SCOTT TS GARMENT TS”, a partneership firm caarrying on thee business off manufacturee and export of Ready Maade Garmentts, with its go oodwill, all ru unning contraacts, licenses, permits, all its i assets and liabilities. To caarry on the business b of manufacturers,, importers an nd exporters,, wholesale and a retail deaalers of and in i mens, wo omens and childrens c clotthing and wearing w appaarel of every y kind, naturre and descriiption includiing shirts, bu ush-shirts, pyjjama suits, veests, underweears, suits , fo oundation garrments for lad dies dresses, brasseries, b maternity beltss, knee caps, coats, c panties,, nighties and d so on. To caarry on the bu usiness of maanufacturers, importers an nd exporters,, wholesale and a retail deaalers of and in n hosiery goo ods of every kind, nature and descripttion for men,, women and d children including vests,, underwear, socks, stockin ngs, sweaterss, laces and so s on and of all a or anythin ng which is used u in hosierry goods. To caarry on all or any of the business b of deealers and manufacturers m of all kinds of carpets, durries, d mats, rugs, namda as, blankets, shawls, tweeeds, linens, fllannels and all a other articcles of wooleen and worstted materials and of all artiicles similar to t the foregoin ng or any of them t or conneected therewiith. To caarry on the bu usiness of maanufacturers, importers an nd exporters,, wholesale and a retail deaalers of leatheer goods of ev very kind.

Changes in i Registered d Office of th he Company There hass been no chan nge in the reg gistered officee of our Comp pany. Changes in i the Memo orandum of Association A Date off shareholderrs’ a approval 31/03/03 03/10/05 27/03/06

T Type of chan nge/ Reasons for change Increasee in the autho orized share capital to `1000 lakhs conssisting of 1,0000,000 equity shares s of `10 each. e Increasee in the autho orized share capital to `2000 lakhs conssisting of 2,0000,000 equity shares s of `10 each. e Increasee in the autho orized share capital to `20000 lakhs consiisting of 20,0000,000 equity shares s of `10 each. e 130

Scotts Ga arments Limiited Date off shareholderrs’ a approval 18/05/07 01/09/07 19/06/2007 Sccheme of Amaalgamation

T Type of chan nge/ Reasons for change Adoptio on of new seet of Articless of Associatiion for conveersion to a Public P Limited d Company. Increasee in the autthorized shaare capital to o ` 4000 lak khs consistin ng of 40,000,0000 equity shaares of `10 eacch. Converssion into Publlic Limited Increasee in the autthorized shaare capital to o ` 4400 lak khs consistin ng of 4,40,00,0000 equity sh hares of `10 each pursuan nt to schemee of amalgam mation between n Scotts Garm ments Ltd. and d Arora Fash hions Ltd. app proved by Ho on’ble High Co ourt of Bombaay and Hon’b ble High Courrt of Karnatak ka at Bangalo ore

Details off Scheme of Amalgamatio A on 1.) Amallgamation of M/s. Scotts Clothing C Priv vate Limited with w the Com mpany pany filed a Company C Pettition No. 1300 of 2006 and d M/s. Scotts Clothing Priv vate Limited filed a The Comp Company y Petition No. 131 of 2006 in the High Court of Karrnataka underr sections 3911 to 394 of th he Act.. The fair value v for thee exchange raatio under th he scheme was arrived att based on th he valuation report prepared by M/s. Sidd diah & Ram, Chartered Accountants. A B Based on the valuation thee swap ratio of o “Six Equity Sh hares of `10/-- each fully paaid up of Scottts Garments Private Limitted for every one equity sh hare of the face value of `100/ /- each fully paid p up held in i Scotts Clotthing Private Limited” wass fixed. The Scheme S of Amalg gamation was sanctioned by b the High Court C of Karn nataka whereeunder the bu usiness of thee M/s. Scotts Clo othing Privatte Limited was w transferreed to the Co ompany with h effect from April 1, 20006 and according gly, 6,00,000 equity e shares of `10/- each h of Scotts Garments G Priv vate Limited were w allotted d to the members of the Scotts Clothing Priv vate Limited against the paid p up sharee capital of `1,00,00,000/- of o `100 each per equity e share. The amalgam mation of Scottts clothing Prrivate Limited d with Scotts Garments Lttd., has led to incrreased produ uction facilitiees, improved turnover and d overall redu uction in the operating o cosst apart from tax benefits. b Features of o the Schemee of Arrangem ment Under thee Scheme the Undertaking of the Transfferor Compan ny is transferrred to the Traansferee Comp pany. Undertaking under thee scheme is deefined to meaan and includ de all the assetts of the Tran nsferor Compaany on April 1, 2006 2 (“Appoin nted Date”) and a all secureed and unseccured debts (w whether in Rupees R or in foreign f currency), all liabilitiees, duties an nd obligation ns of the Traansferor Com mpany along g with any charge, c encumbraance, lien and d security theereon as on the t Appointed Date and without w preju udiced to the above general cllause underta aking of the Transferor Company C shaall include alll preliminary y and pre-opeerative expenses, assets, invesstments, claim ms, powers, authorities, allotments, a ap pprovals, con ntracts, enacttments, arrangem ments, rights, titles, interessts, benefits, advantages, a l lease-hold rig ghts and otheer intangible rights, hire-purch hase contracts and assets, lending l contrracts, benefit of o any securitty arrangemeents, reversion ns The Salien nt features of the Scheme are a as followss: (i) The Scheme S is operative from th he appointed date i.e. Apriil 1, 2006. (ii) The S Scheme shalll come into o effect from m the effectiive date i.e.. the last of dates on which sanctiions/approva als or orders etc have beeen obtained and a the date on which all necessary ceertified copiess of the orderr under sectio on 391 and 3944 are duly fileed with ROC Karnataka, Bangalore. (iii) The undertaking u of o the Transfeeror Company y shall witho out any furtheer act, instrum ment or deed d stand transfferred to and d/or vested in or deemed d to have beeen and stand d transferred to or vested in the 131

Scotts Ga arments Limiited Transsferred Comp pany as a goin ng concern so o as to becomee as and from m the Appointted Date, the estate, rightss, titles and in nterests and authorities a of the Transfereee Company pursuant p to th he provisionss of the sectio on 394 and oth her applicablee provisions of o the Act. The transffer and/or veesting shall be b subject to the t existing ch harges, hypotthecation and d mortgages, if any, over or in n respect of all a the aforessaid assets orr any part th hereof of the Transferor Company. C Pro ovided however, that any reeference on any security y documents or arrangem ments to wh hich the Tran nsferor Company y is a party to t the assets offered or agreed a to be offered as security s to fiinancial serviices or obligation ns shall be co onstrued as reference r only y to the asseets pertaining g to the assetts of the Tran nsferor Company y as are vested d in the Transsferee Compaany. 2.) Amallgamation of M/s. Arora Fashions Limiited with the Company Petition before b High Court C of Bom mbay Arora Fasshions Limiteed (AFL) hav ving its regisstered office at a #214, Regaal Industrial Estate, A.D. Marg, Sewree, Mumbai M – 40 00 015, was incorporated d on 01/01/11991 as privaate limited co ompany und der the Companiees Act, 1956 and a subsequeently convertted to a limitted company on 10/04/19997. The Com mpany acquired 100% stake in n AFL on 01/02/2008 thrrough a nego otiated deal with w the prom moters of AFL L for a total conssideration of `5411.00 ` lacs.. Subsequenttly, the Comp pany filed a Company C App plication No. 942 of 2009 in th he High Courtt of Bombay under u section ns 391 to 394 of o the Act. Th he Scheme of Amalgamatio on was sanctioned d by the High h Court of Bo ombay and High H Court of Karnataka by y order dated d December 188, 2009 and Febru uary 6, 2010 respectively. r The said ord der stated thaat the shares of o M/s. Arorra Fashions Limited L stood can ncelled and th hat no sharess of the Company shall bee allotted to the sharehold ders of M/s. Arora Fashions Limited L sincee the Compan ny is a 100% holding h comp pany of the M/s. M Arora Fasshions Limiteed. The effective date d of amalg gamation is 02/02/2008 ass per the scheeme of amalg gamation sancctioned. As per p the scheme th he differencee between th he net identiffiable assets of Arora Fasshions Limiteed and the cost c of investmen nt on takeoveer has been accounted as Goodwill G in the t books of accounts of SGL S in termss of the Accountin ng Standard no. 14 of “A Accounting fo or Amalgamaation” issued d by The Insstitute of Chaartered Accountants of India. As per the accounting staandard, Good dwill amountt shall be amo ortized and written w off over a period of five f years. The T amalgam mation of Aro ora Fashionss Limited witth Scotts Garrments Limited leed to increaseed number off manufacturiing units of SGL S at Tirupu ur thereby leaading to increease in turnover of o the Compa any alongwith h reduction in n operating co ost. Features of o the Schemee of Arrangem ment Under thee Scheme the Undertaking of the Transfferor Compan ny is transferrred to the Traansferee Comp pany. Undertaking under thee scheme is defined to meaan and includ de all the asseets of the Tran nsferor Comp pany as on Appoiinted Date i..e. 02/02/20008 (as defineed in the Sch heme of Arraangement) an nd all secureed and unsecured d debts (wheether in Rupeees or in foreiign currency)), all liabilitiees, duties and d obligations of the Transfero or Company along a with an ny charge, enccumbrance, liien and securrity thereon as a on the App pointed Date and without prejjudiced to th he above geneeral clause un ndertaking of the Transfeeror Company y shall include all a preliminarry and pre-o operative exp penses, assets, investmen nts, claims, powers, p authorities, allotments, approvals, contracts, en nactments, arrrangements, rights, titles,, interests, beenefits, advan ntages, lease-hold d rights and other o intangib ble rights, hirre-purchase co ontracts and assets, lendin ng contracts, benefit b of any seccurity arrangeements, reverrsions.

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Scotts Ga arments Limiited The salien nt features of the scheme are as follows;; 1. 2.

3. 4.

5.

6.

7.

8.

The Scheme S is operative from th he Effective Date D (as definee in the Schem me); The Undertaking U of o the Transfferor Compan ny shall, with hout any furtther act, instrrument or deeed, be and shall stand tra ansferred to and/ a or vesteed in or deem med to have been b and stan nd transferred d to or vested d in the Tran nsferee Comp pany as a goiing concern so s as to beco ome as and frrom the App pointed Date, the estate, rig ghts, titles and interests an nd authoritiess of the Transfferee Compan ny to the prov visions of Secction 394 and other applicaable provision ns of the Act; The trransfer and/or vesting ass aforesaid sh hall be subjecct to the existting charges, hypothecatio on and mortg gages, if any, over or in resspect of all thee aforesaid asssets; The assets a of mov vable nature will w be transfferred by thee Transferor Company, C an nd shall becom me the propeerty of the Transferee T C Company in pursuance of o the provissions of Section 394 and d other appliccable provisio ons of the said d Act; With effect from th he Appointed d Date, and su ubject to the provisions p of this t scheme all a the Employ yees of the Trransferor Com mpany shall also a be and shall stand traansferred with hout any furtther act, instrrument or deed of the Tra ansferee Com mpany, pursu uant to the prrovisions of Section 394 of o the Act, so o as to becom me as and from m the Appoin nted Date, thee employees of o the Transfeeree Company y and furtherr that it shall not n be necesssary to obtain consent of an ny third party y or other perrson in order to give effect to this provision; Subjecct to all thee provisions of this Scheeme, all conttracts, deeds,, bonds, agreeements and d other instru uments of wh hatsoever nature to which h the Transferror Company y is a party or o to the beneefits of which h the Transferror Company y may be eligiible and whicch are subsistiing or having g effect immed diately beforee the effectiv ve Date, shalll be in full force and efffect against or in favourr of the Tran nsferee Comp pany as the case may bee and may be b enforced as a fully and effectively ass if, instead of the Transsferor Company, the Transsferee Company had been a party or ben neficiary therreto; Upon n coming into o effect of thiis scheme alll suits, claimss, actions and d proceeding gs by or again nst the Transsferor Compa any pending/ /or arising on n or before the t Effective date shall bee continued and a be enforcced by or aga ainst the Tran nsferee Company as if the same had beeen pending and/or arising g by or again nst the Transfeeree Company y; The entire e equity share capitall of Arora Faashions Limiited is held by b Scotts Garrments Limitted, on mergeer of Arora Fashions F Limiited into Scottts Garments, all these shaares shall stan nd cancelled and a no allotm ment of sharess shall be mad de against shaares held in Arora A Fashion ns Limited;

The Transsferor Compa any shall be dissolved d witthout winding g up on an orrder made by y the High Co ourt of Bangaloree and the Hig gh Court at Bo ombay under Section 394 of o the Compan nies Act. ny Subsidiarries of the Isssuer Compan We have no n subsidiary y Company, as a on date. greements Other Ag We have entered into contracts/ag greements/M MoU in the orrdinary coursse of the bussiness carried d on or intended to be carried d on by SGL. We have also o entered into o Share Subsccription Agreeement (SSA)) dated 18/01/2012 with Kag gal Industriall Technology y Textile Parrk Pvt. Ltd. (KITTP) for allotment of o land pursuant to investmeent in KITTP P. Except theese arrangem ments we hav ve not enterred into any y other agreemen nt/contract./M MoU: ompany, BRF FL and Government of Karrnataka MOU bettween our Co The Goveernment of Karnataka K haad organized d a Global In nvestors Meeet on 3rd and d 4th June, 2010 2 in Bangaloree for attractin ng investmentts into the Staate. The Comp pany and BRF FL had made a joint propo osal for 133

Scotts Ga arments Limiited setting up p textile unitts to Karnataaka Udyog Mitra M (KUM), a governmeent undertakiing incorporaated to facilitate investment i an nd assist inveestors in the state. s The Company and BRFL B had ideentified 12 loccations at Dodd daballapur (ttwo location ns), Kolar, KGF K Apparrel Park, Gowribidanur,, Chikkaballlapura, Chitradurrga, Shimoga, Modhol, Sid ddlaghatta an nd Srinivasap pura for settin ng up textile units in Karn nataka. nd The prop posal was ap pproved at the t 22 Statte High Leveel Clearance Committee (SHLCC) heeld on 24/05/2010.A tripartitte Memorand dum of Undeerstanding waas executed between b our Company, Bo ombay Rayon Fashions Limiteed and Goverrnment of Kaarnataka at Global G Investo ors Meet on 3rd/4th of Junee, 2010. The Comp pany shall uttilize part of the t net issue proceeds tow wards the pro oposed projecct at Doddabaallapur which is also one of the t locations forming parrt of the tripaartite MOU. The Compaany and BRFL L have mutually agreed on seetting up ind dependent pro ojects at five and seven lo ocations respectively of th he said twelve loccations as app proved by th he Governmen nt and there shall s be no in nvestment by SGL in the units u to be set up p by BRFL. Th he project location at Dod ddaballapur forms part of o MOU and the other loccations where Co ompany has proposed p to seet up units aree Hassan, Kollar, KGF App parel Park and d Sidlaghatta.. The detaills of the MOU U are as under: 1. A Mo oU was signed during thiss meet betweeen our Comp pany & Bomb bay Rayon Fashions Limiteed and the Government off Karnataka to o achieve the following ob bjectives: a) Our O Company y & Bombay Rayon R Fashio ons Limited to t setup Read dymade Garm ments for exp ports at K Kolar, KGF, Doddaballapu D ura, Gowribid danur, Chikk kaballapura, Chitradurga,, Shimoga with w an in nvestment of ` 682.67 Crorres generating g employmen nt to about 50,,000; b) Th he Govt. of Karnataka K to provide p the reequisite suppo ort for implem mentation of the t above pro oject. 2. The sccope of the MoU M will be ass follows: I.

Our Compa any & Bombaay Rayon Fash hions Limited d a)) will endea avour to comm mence operatiions as per th he implementtation and inv vestment plan n of the company; b)) agrees to provide p emplo oyment to loccal people as per p the Karnaataka Industrial Policy 20009-14; c)) agrees to promote p locall vendors for procurementt of componeents and raw materials wh herever possible

II.

Governmen nt of Karnatak ka a) will en ndeavour to provide to Our O Compan ny & Bombaay Rayon Fasshions Limiteed the required infrastructture facilities such as lan nd, water and power on completion of the formaliities; b) will en ndeavour to provide p on priority p the necessary n cleearances and d approvals to t Our Compa any & Bombay y Rayon Fash hions Limited d in accordan nce with the applicable a rulles and regulatiions; c) will asssist Our Company C & Bombay Rayon R Fashions Limited d in gettin ng the approvals/clearancees, if needed, from the Cen ntral Governm ment or its ageencies. d) Both pa arties will inteeract periodiccally to review w the progresss and pendin ng issues duriing the implem mentation of th he project.

B/HO/Secy/11831/2010-111 dated 11/100/2010, KIAD DB had notifiied the Subsequently, vide lettter no. IADB l of Doddaballapu D ur (two locatio ons), Hassan, Kolar, details of the land avaiilable for allottment at the locations KGF App parel Park, Gowribidanur G r, Chikkaballaapura, Chitraadurga, Shim moga, Modholl, Siddlaghattta and Srinivasap pura.

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Scotts Ga arments Limiited The exact locations of the t site at thee above mentiioned places except e for Do oddaballapur and Kolar haave not been speccified in the MOU. M The sitee location for Doddaballap pur is D-3, D-44, A-3, A-10, A-11, A S-43, S-44 and S-45 (P), Apparel A Park k Industrial Area, A Phase I and for Kolaar is Sy.no 600, 30/1, 32/1,, 21, 22 & 71 Sultan Thippansaandra Villagee, Kasaba Hob bli. bscription Ag greement witth Kagal Indu ustrial Textilees Technolog gy Park (P) Lttd. Share Sub Our Com mpany (Subscrriber) has entered into a Sh hare Subscrip ption Agreem ment (SSA) wiith Kagal Ind dustrial Textiles Technology T Park P (P) Ltd. (KITTP) vid de agreementt dated 18/001/2012. KIT TTP is a Com mpany engaged in i developmeent and impleementation of o the Textile Park with In nfrastructure and a Adminisstrative Facilities. The Textile Park is aim med at provid ding the Plott or Plot along with Work Shed and d other Infrastruccture and Adm ministrative Facilities F thereein for setting g up textile manufacturing m g units on leav ve and license baasis to entitiess engaged in activities a relatting to textile manufacturin ng etc. nt Terms and Conditions of o the SSA Importan • •

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• •

•

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KITTP P shall allot 50,00,000 5 Equiity Shares of the t face valuee of `10/-at a price mutuaally agreed beetween KITTP P and our Company Pursu uant to the isssuance of Sharres to the Sub bscriber, KITT TP shall allot to the Subscrriber the Plot or Plot along g with Work Shed S in the Textile T Park upon u the term ms and condittions containeed in the Leav ve and License Agreemen nt to be enttered into beetween the Subscriber S an nd the Company, whereein the Subsccriber shall ha ave license to o use of the Plot P or Plot along a with Work W Shed and d the Infrastrructure and Administrativ A ve Facilities in n the Textile Park P and shalll be bound to pay all Fees as a may be lev vied by the Co ompany from m time to timee in relation th hereto KITTP P shall develop the Projecct and enter into i a Leave and License Agreement with w the Subsscriber. The Company C reseerves the abso olute right to impose such h conditions as a may be neccessary from time t to time for f use of thee Plot or the Work W Shed without w prejud dice to and affecting the business b interrests of the Su ubscriber KITTP P shall be freee to raise fin nance for dev veloping the Plot or Plot along with Work W Shed and a for providing Infrastru ucture and Ad dministrativee Facilities. Subsccriber shall bee entitled to use u the Plot or o Plot along with w Work Sh hed together with Infrastrructure and Administrativ A ve Facilities demised pursu uant to the Leeave and Liceense Agreem ment for the pu urpose of settting up of weeaving and maaster weaving g units or texttile related acctivity Subsccriber shall sta art commerciial production n in the unit within w 6 mon nths of demise of the Plot or o Plot along g with Work Shed S on a leaave and licen nse basis or within w such tiime as may be b permitted by the Comp pany at its solle discretion in i writing. In n case of delay y in commenccing commercial productio on, the Subsccriber shall be b liable for cancellation c o the allotm of ment of the Plot and/or Work W Shed an nd the Comp pany shall ha ave the rightt to allot/traansfer the shaares allotted to the Subsccriber to any y other Person, who is agrreeable to abide by the teerms and conditions of thiis agreement and the Leav ve and License Agreemen nt Subsccriber as a sha areholder in KITTP K and ass a licensee off the Plot or Plot P along witth Work Shed d in the Textille Park hereby y undertakess to pay to thee credit of thee Trust and Retention R Acco ount opened by the KITTP P the Fees as detailed in Leeave and Liceense Agreemeent, which com mprises the following charrges in propo ortion to the area a occupied d in the Textilee Park viz - fixed monthly m infraastructure chaarges apportio oned on the basis b of demissed premises - variab ble monthly ch harges such as a consumptio on of utilities such as water, power, etc. - other variable v expenses Upon n termination n of the Leav ve and Licensse Agreemen nt on accountt of a breach h committed by the Subsccriber or upon n expiry of thee Leave and License L Agreeement as set forth f therein:

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Scotts Ga arments Limiited

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(a) possession of the demised premises including the Plot P or Plot along a with Work W Shed sh hall be taaken over by KITTP; K and (b) th he Subscriberr shall transffer its Sharess in KITTP to o any Person n identified by b KITTP for such co onsideration as a may be deccided at the sole and absollute discretion n of the Comp pany. The Subscriber S may, with the prior approval of KITTP P, terminate this Agreem ment and vacaate the demissed premises including thee Plot or Plot and the Work k Shed, which h shall have been b given on n, leave and liicense basis. KITTP K may grant g such app proval subjecct to such term ms and condiitions, as may y deem appro opriate. As a part p of such approval, a KIT TTP may requ uire the Subsccriber to transsfer the Sharees held by it to t any Person n at such consideration as may m be decideed by KITTP at its sole discretion.

um Sharehollders Agreem ment (SSA) dated d 19/12/20012 between Canbank Venture V Share Subscription cu F Limited d (CVCFL) an nd Scotts Garments Limitted (the Com mpany) and Mr. M Naseer Ahmed A Capital Fund (the Prom moter of Scottts Garments Limited) L Canbank Venture Cap pital Fund Lim mited (CVCF FL), our Company and thee Promoter of o our Compaany i.e. Mr. Naseeer Ahmed have h entered into Share Subscription S cum Shareh holders Agreeement (SSA) dated 19/12/2012 in relation n to the Pre-IP PO Placementt. In terms of this agreemeent our Comp pany has issueed and 1 equity shares off face value `10/` each at a an issue price of `115/ /- per equity y share allotted 17,39,130 including g premium of `105/- per eq quity share ag ggregating to `19,99,99,9500/-. Some of the t importantt terms of the agreement are reeproduced beelow: 1.

2.

3.

4.

5.

6.

During the Teerm of this Agreement, D A th he Company undertakes to t use the Su ubscription Amount A so olely for the purposes p app proved by CV VCFL in writting, includin ng inter alia to owards meetiing the co osts of the Pro oject. It is herreby clarified d that the Com mpany has rep presented to CVCFL that it i shall no ot utilize the Subscription n Amount forr any other purpose. p The Company furrther undertaakes to uttilize the subsscription amo ount exclusiveely towards im mplementatio on of the Projject. Th he Company y and the Promoter underttake that the Company sh hall bring abo out an IPO th hrough lissting of its Sh hares at stock k exchanges in India with hin 3 months from the datte of Acceptaance of Letter of Intentt i.e. on or beffore 08.03.20113. Th he IPO shall be for issue of o at least 1,055,06,954 (Onee Crore five lakh l six thoussand Nine hu undred an nd fifty four)) Equity Shares of Rs. 10 each, which shall be fully y paid up. Out of the said d issue un nder the IPO O, 4,50,000 (Fo our Lakh Fifty y Thousand) Equity Sharees of `10/ eacch shall be reserved fo or Employeess of the Com mpany. Prior to such IPO O, the Compaany shall hav ve issued 17,,39,130 (S Seventeen Lak kh Thirty Nin ne Thousand One Hundreed and Thirty y) Equity Shaares of `10/- each e to C CVCFL in term ms of this Agrreement, as a Pre-IPO placcement. Th he issue of Equity E Shares shall be for an a ‘Issue Pricce’ (in the IPO O) which is not n less than `140/(R Rupees One Hundred An nd Forty only y). In this reegard, the low wer end of the t Price Ban nd (for su ubscription off Shares in th he IPO) that sh hall be disclo osed in the Reed Herring Prrospectus fileed with SE EBI, the stock k exchanges and a RoC shalll be not less than t `140/- (R Rupees One Hundred H And d Forty on nly) per equitty share of faace value Rs.110/- each Th he Company y must pass and a furnish a certified tru ue copy to CV VCFL of all th he necessary Board an nd members resolutions (at AGM/ EG GM), as requ uired under Applicable Law, L approving the isssue and allottment of the CVCFL C Sharees to CVCFL, on the termss specified in this Agreemeent, by w of a specia way al resolution of o the membeers of the Com mpany at a geeneral meeting. Th he nominee of CVCFL must have been b appointted as the Director D (non n-rotational) of the C Company, firstt at a board meeting m (as ad dditional direector) and therreafter at a members m meetting (as reegular director) and a riight must bee given to CVCFL C to no ominate any y other perso on, for ap ppointment as a Director in place of the said s nomineee. This right must m be subsissting at all tim mes up to o the time CV VCFL is shareh holder in the Company.

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Scotts Ga arments Limiited Furth her, the Articlee VII of Part 1 of the SSA titled t as “Con nditions Subseequent” has specified s cond ditions to be fulfilled relating to point 2 and 3 and d other condittions as stateed in the referrence article. In the event any one or all a of the Con nditions Subssequent are not n duly comp plied with, to o the satisfaction of CVCF FL within the time period as specified, the t provision ns of Part-2 off the SSA shalll forthwith become b effectiive and the rights r specifieed there undeer shall duly accrue to thee CVCFL Shaares. Howeveer, It is hereb by clarified th hat in the event that the Conditions Sub bsequent are duly complied with in teerms of Articlle VII (Part-1)), the provisio ons of this Paart-2 of this Agreement A sh hall not be effeective and sh hall not apply y. In terrms of clause 1.3.1 of Article I of Paart-2 of SSA A, in the even nt “Conditio ons Subsequeent” as mentiioned in Articcle VII (Part 1) 1 of SSA aree not fulfilled by the Comp pany and / or o the Promotter, the Promoter undertak kes that he sh hall ensure thaat CVCFL derrives an Interrnal Rate of Return R of 25% on the Subsccription Amount, on and from the datte of investm ment and upto o the date of sale of the CVCFL C Sharees by CVCFL. In this regard d, the provisiions of Articlee VIII (Part-22) (‘EXIT’ pro ovisions) shalll apply to giv ve effect to thee above right.. The other im mportant term ms of Part 2 of the SSA are as a under: •

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•

•

Iff any securitiees (equity and d equity link ked) except sh hares issued under u an ESO OP, are propo osed to bee issued in any subsequ uent financin ng (‘Dilution n Shares’) to o any other Person (‘Inttended Purchaser’) (in ncluding an existing e sharehholder), then the Company y shall first offer, by a written w no otice giving details d of the offer (‘Dilutiion Notice’) and a the Diluttion Shares to o CVCFL (‘Riight of Fiirst Offer’) In n the event th he Dilution Shares S are pro oposed to bee issued to th he Intended Purchaser P at a price w which is less than t or equall to the rate at a which the CVCFL C Sharees are acquireed by CVCFL L, then C CVCFL will reeceive full dilu ution protectiion at no addiitional cost su uch that addittional shares will w be isssued to CVC CFL to: (i) equ uate the costt basis of CVCFL’s holdin ng in the Com mpany to thee lower prrice per securrity (equity orr equity linkeed) instrumen nt issued in an ny subsequen nt round of fu unding; an nd (ii) ensuree that CVCFL continues to hold the sam me percentagee of the issued d and paid up p share caapital in the Company, on o a fully dilluted / conv verted basis. The said rig ghts of full dilution d prrotection sha all be available to CVCF FL with resp pect to furth her issue of shares by way w of ad djustments fo or stock-splitss, dividends and stock re-classification ns and the lik ke, at no add ditional co ost. In n the event th he Dilution Sh hares are prop posed to be isssued to the In ntended Purcchaser on term ms that arre better than n the terms atttached to thee CVCFL Shaares, then the CVCFL Sharres shall be deemed d to o have such better rights, as a are offered to the Intend ded Purchaserr. Th he Board sha all comprise of o not more than t 12 (Twelve) Directorss. Out of the said Directorrs, one D Director shall be the nomin nee Director appointed by y CVCFL (‘C CVCFL Nomin nee Director’)) (Non R Rotational) and d the other Directors shall be appointed d by the mem mbers of the Co ompany. Th he Promoter and the Com mpany, hereby y, agree and co onfirm that th hey shall prov vide a compleete exit (‘Exit’) to CVC CFL from thee Company, on or beforee June 2016 such that CV VCFL derivess: i) an an nnualized IR RR of at leastt 25% on its Subscription n Amount fro om the date of Subscripttion of C CVCFL Sharess; or ii) the bo ook value of the shares off the Compan ny; whicheverr is higher, th hrough an ny of the follo owing options: - IPO/ Offer for f Sale (not being b the failled IPO undeer part-1): Th he Promoter and the Com mpany shall make m an IPO and seek a liisting of the equity e sharess of the C Company on any a of the reccognized Stocck Exchanges,, on or beforee March, 20166. The cost of IPO or O Offer for Sale shall s be bornee entirely by the t Company y. - Buy Back Off Shares By The T Company y Or Purchase Of Shares By B The Prom moter In n the event th he Company fails f to condu uct an IPO, ass aforesaid, fo or any reason whatsoever, before th he end of the financial yeaar 2015-16, theen within Jun ne 30, 2016, th he Company (subject ( to thee same beeing permissiible under Ap pplicable Law w) shall buy back b the CVC CFL Shares fro om CVCFL an nd / or th he Promoter shall s purchasee the CVCFL Shares (eitheer by himself and / or thro ough his nom minees), 137

Scotts Ga arments Limiited att such a pricee as would enable e CVCFL L to derive: i) i an IRR of not n less than n 25% (Twentty Five Percent) per an nnum, on thee Subscription n Amount fro om the date of o subscription n of CVCFL Shares; S orr ii) the book k value of the Share as on such date; wh hichever is hiigher. The Co ompany and/ /or the Prromoter may provide an Exit E to CVCFL L in the abovee manner eith her jointly or severally. s - Purchase of shares by thiird party In n the event that t all the above a option ns of Exit do not fructify within Junee 30, 2016 th hen the C Company and the Promoteer shall within n the next 2 (Two) ( monthss, arrange forr the CVCFL Shares to o be bought frrom CVCFL by any strateegic investor/ /s, at such salle price as wo ould enable CVCFL C to o derive: i) an n IRR of 25% per annum, on the Subsccription Amo ount; or ii) thee book value of the saaid shares ass on such daate; whichever is higher. The said saale to any th hird party sh hall be co ompleted within two montths from Junee 30, 2016. ement to Sharre Subscriptio on cum Shareeholders Agrreement dated d 19/12/2012 Supplemeentary Agree CVCFL, our o Company y and the pro omoter of ourr Company in n continuation n to the Sharre Subscriptio on cum Sharehold ders Agreemeent (SSA) datted 19/12/20012 have enteered into a supplementar s ry agreementt dated 21/02/2013. In terms of o the supplem mentary agreeement the low wer end of th he price band for the purpo oses of IPO shall not be less th han Rs.130/- per p equity shaare. Financial Partners There are no financial partnership p a agreements en ntered into by y the Compan ny. Strategic Partners There are no strategic partnership p a agreements en ntered into by y the Compan ny.

138

Scotts Ga arments Limiited MANA AGEMENT Name, Agee, Qualificatio on, Residentiial Address, Desig gnation, Occcupation, DIN N No.

Mr. Naseerr Ahmed S/o: Late C.K.M Hyder Designation n: Managing g Director (Ex xecutive and Non- In ndependent) Age: 53 Yeaars Qualificatio on: B.Com Residentiall Address: 391, 2nd maiin, 2nd Cross, 2nd Stage, R.M.V.Exten nsion, Bangallore 560 094 Occupation n: Industrialisst DIN No.: 000027095

Date of o Appointm ment / Re-appointtment, Term m

Other Direectorships heeld

1. 2. 3. 4. 5. 6. 19/06/22010 (5 Yearrs) Re-appoin ntment

7. 8. 9. 10. 11. 12. 13. 14.

Mrs. Nuzhaat Aisha Nase eer W/o: Mr. Naseer Ahmed d Designation n: Director (E Executive an nd NonIndependen nt)Age: 35 Years Qualificatio on: B.Com Residentiall Address: 391, 2nd maiin, 2nd Cross, 2nd Stage, R.M.V.Exten nsion, Bangallore 560 094 Occupation n: Industrialisst DIN No.: 000245176 Mr. A. Arum mugham S/o: Mr. D.A Arunachalam m Designation n: Director (N Non - Executiv ve and Independen nt) Age: 69 Yeaars Qualificatio on: B.Com, A.C.A A Residentiall Address: 121, Udani Layout, Camb bridge Road Ulsoor, Ban ngalore 560 00 08 Occupation n: Professiona al DIN No.: 000350163

19/06/22010 (5 Yearrs) Re-appoin ntment

1. 2. 3. 4.

1. 2. 29/09/22012 Liable to reetire by rotatio on Re-appoin ntment

3. 4. 5. 6. 7. 8.

139

Inmark Retaiil Private Lim mited Bombay Ray yon Fashions Limited L (Joint Vice Chairman) C GFI Infrastru ucture Develo opment Private Limited Scotts Fashio onciti India Liimited Scotts Infrasttructure & Developmen nt Private Lim mited Scotts Metalss & Mines Priivate Limited Scotts Plantaations Private Limited Coppers Coiin Realty Priv vate Limited Scotts Apparrels Private Liimited Scotts Fashio ons Private Liimited Scotts Wearss Private Limiited Scotts Knits Private P Limitted Pedigree Con nstruction Priivate Limited Amanath Co o-Operative Bank B Ltd (Honorary Post as Preesident of Bank) Scotts Fashio onciti India Liimited Scotts Fashio ons Private Liimited Scotts Apparrels Private Liimited Scotts Metalss and Mines Private P Limited

Chemicarb Private P Limiteed CKM Investm ments Privatee Limited Pedigree Con nstruction Priivate Limited Scotts Apparrels Private Liimited Scotts Infrasttructure & Developmen nt Private Lim mited Tamarind Prroperties Priv vate Limited Aru & Dev (P Partnership) Inmark Retaiil Private Lim mited

Scotts Ga arments Limiited Name, Agee, Qualificatio on, Residentiial Address, Desig gnation, Occcupation, DIN N No.

Mr. B.S.Pattil S/o: Late Saangangowda Patil P Designation n: Director (N Non-Executive and Independen nt) Age: 68 Yeaars Qualificatio on: Indian n Adminiistrative Service (Rettired) Residentiall Address: 149, 5th Crosss, 10th Main, R.M.V.Exten nsion, Bangalore 560 5 080 Occupation n: Professiona al DIN No.: 000061959

Mr. M.M. Chopra C S/o: Late Sh hanti Sarup Chopra Designation n: Director (Non ( Executiive and Independen nt) Age: 79 Yeaars Qualificatio on: M.A., B.L L, M.B.A. Residentiall Address: E69, Vasantt Marg, Vasan nt Vihar New Delhi 110 057 Occupation n: Professiona al DIN No.: 000036367 Mr. Azeezu ulla Baig S/o: Mr. Daastragirbaig Mirza M Designation n: Director (N Non- Executiive and Independen nt) Age: 64 Yeaars Qualificatio on: Indian n Adminiistrative Service (Rettired) Residentiall Address:

Date of o Appointm ment / Re-appointtment, Term m

30/09/22011 Liable to reetire by rotatio on Re-appoin ntment

30/09/22011 Liable to reetire by rotatio on Re-appoin ntment

30/09/22011 Liable to reetire by rotatio on Re-appoin ntment

140

Other Direectorships heeld

9. Scotts Wearss Private Limiited 10. Scotts Knits Private P Limitted 11. Beauty Base Products (Ind dia) Private Limited. 12. STI India Lim mited 13. Coppers Coiin Reality Priv vate Limited 1. Shetron Limiited 2. United Breweeries (Holdin ngs) Limited 3. UB Internatio onal Trading Limited 4. Suprajit Engiineering Limiited 5. Mangalore Chemicals C and d Fertilisers Lim mited 6. AMR India Limited L 7. Surana Indusstries Limited d 8. B R S Precisio on Manufactu uring Private Limitted 9. Surana Green n Power Limiited 10. Surana Green n Energy Lim mited 11. WEIR India Private P Limiteed 12. Internationall Power Conv vertions Limited 13. Trinethra Eneergy Converttions Limited 14. Prassana Pow wer Limited 1. 2. 3.

Indian Acryliics Limited Steel Strips Wheels W Limiteed Steel Strips Limited L

1.

NGEF (Hublii) Limited

Scotts Ga arments Limiited Name, Agee, Qualificatio on, Residentiial Address, Desig gnation, Occcupation, DIN N No.

319, B-2, Neethravathi Blo ock, Nationall Games Village, Korramangala, Ba angalore 560 047 Occupation n: Professiona al DIN No.: 000532908 Mr. C.R.Mu urali S/o: Mr. C.S S.Ranganatha a Rao Designation n: Director (N Non- Executiive and Independen nt) Age: 54 Yeaars Qualificatio on: B.Com, A.C.A A Residentiall Address: 561, “Srin nidhi”, Wa ater Tank Road, Katriguppaa, Banushan nkri, 3rd Stage, Bangalore 560 5 085 Occupation n: Professiona al DIN No.: 000533104 Mr. S. Thiru uvadi S/o: Mr. Sen nthilarumuga am Designation n: Nomineee Director (NonExecutive and a Independent) Age: 56 Yeaars Qualificatio on: MBA (Ba anking and Finance) F & CAIIB Residentiall Address: A3, 313 Sneeha Apts, God davari Block National Gaames Village, Koramangalla Bangalore – 560047, Karn nataka Occupation n: Service DIN No.: 033431263

Date of o Appointm ment / Re-appointtment, Term m

Other Direectorships heeld

1. 2. 29/09/22012 Liable to reetire by rotatio on Re-appoin ntment

3. 4. 5. 6. 7. 1. 2. 3.

08/12/22012

4. 5.

Murlaidharan n & Manogarran – Chartered Accountants A Sai Ganesh Properties P Pvtt. Ltd. SM Holding and Finance Private Limitted Vatsalya Serv vices and Solutions Pvtt. Ltd. Silk Tele Netw works Pvt. Lttd. SM Dyechem m Limited Chiteri Biotecch Private Limited Canbank Ven nture Capital Fund Limited d GNRC Limiteed Vinyas Innov vative Technologiess P Limited Ravi Technofforge Private Limited Colour Roof (India) Limiteed

There is no arrangement a or o understanding with maajor sharehold ders, customeers, supplierss or others pu ursuant to which any y of the abovee mentioned Directors D werre selected ass a Director off our Compan ny except for Mr. S. Thiruvadi wh ho has been appointed a pursuant to Lettter of Intent dated d 08/12/22012 and Shaare Subscriptio on and Shareholderss Agreement dated 19/12/ /2012. Details of Current C and Past Directo orship in listed companiies that havee been suspended from Stock Exchanges None of the directors of the t company have been diirectors in any other listed d company(ies) which hav ve been suspended frrom the stock k exchanges. C and Past Directtorship in liisted companies that haave been deelisted from Stock Details of Current Exchanges None of the directors of the t company have been diirectors in any other listed d company(ies) which hav ve been delisted from m the stock ex xchanges.

141

Scotts Ga arments Limiited As on date of o filing of thee Offer Docu ument there iss no service agreement a en ntered into by y the Directorrs with the Company y providing for benefits up pon terminatiion of employ yment. on and shareh holding of Directors D in th he Company Remuneratio Particula ars

Mr. Naseer Ahmed

Remuneration R n paid d during F.Y.20111-12 (` in lacs)) 180.00

Mrs. Nuzhaat Aisha Naseeer

N of Sharess held No.

1,255,54,500

18.00

7 7,64,500

Mr. A.Arum mugham

Nil

100

Mr. B.S. Pattil

Nil

Nil

Mr. M.M Ch hopra

Nil

Nil

Mr. Azeezu ulla Baig

Nil

Nil

Mr. C.R. Mu urali

Nil

Nil

Mr. S.Thiru uvadi

N.A.

Nil

FILE OF THE E DIRECTOR RS OF SGL BRIEF PROF A brief profille of the Boarrd Members iss given below w: Executive Diirectors Mr. Naseer Ahmed aged d 53 years is the Managin ng Director off our compan ny. He is the son of Late C.K.M Hyder. He holds h a bachellor degree in commerce. After A completiing his studiees, he entered d into active politics p and held varrious position ns in the Con ngress party.. He is preseently a Memb ber of the Kaarnataka Legiislative Council for Kolar and Chikkaballapu C ur district. He H was also a former minister m of staate for small scale industries off Karnataka from f Octoberr 1990 to Nov vember 1992.. He has oveer 20 years of o experience in the textile industtry. He proviides strategic direction in selection s of teechnology an nd machineriees in setting up u new manufacturin ng facilities, improvemen nt of producttion processees and new ventures, v and d in the proccess of backward inttegration. Mrs. Nuzhatt Aisha Nasee er aged 35 yeears, is Executtive and Non Independentt Director in our o company.. She is wife of Mr. Naseer N Ahmed. She holds a Bachelor’s degree d in Com mmerce. She aids the in ho ouse design teeam in developing new n designs in line with the latest treends in the faashion industtry. Her inpu uts have help ped the Company in n presenting these t designss for approvaals and obtain ning fresh orrders from bu uyers, both ex xisting and prospecttive. Non-Executiive Directors Mr. A. Arum mugham ageed 69 years is i an Indepeendent Directtor in our Co ompany. He holds a deg gree in Commerce and a qualified as a Memberr of the Instittute of Charteered Accounttants of India in 1967 and has 43 years of stan nding in thee profession, and has vast experiencee in the indu ustrial field. He completted his articleship with w M/s Brah hmahayya an nd Company,, a leading firrm of Charterred Accountaants in South h India, and after qu ualifying as a Chartered Accountant, worked witth the firm for f a year. He H then joineed the Governmentt of Mysore, Steel Plant at Bhadravaati, Karnatak ka, as the firrst chartered accountant of the Company. He H is the sen nior partner of M/s. Aru u & Dev, an established accountancy firm of Chaartered Accountants with over 36 years of stan nding. 142

Scotts Ga arments Limiited Mr. Babugou uda Sangang gouda Patil aged a 68 yearss, is an Indep pendent Direcctor on our Board. B He is a 1966 batch of the Indian Admiinistrative Serrvices, and reetired as the Chief C Secretary, Governm ment of Karnattaka in January, 20044. He held veery importantt assignmentss during his seervice and is generally reg garded as onee of the most dynamic officers of the t State Gov vernment. He has wide ran nging experien nce from head ding State Fin nancial Institutions to t industrial development. d C aged 79 7 Years is an Independentt Director in our o Company y. He holds a bachelors deg gree in Mr. M. M. Chopra science from m Punjab Univ versity, Bacheelors Degree in Law from Delhi University, Post Grraduate Diplo oma in Business Ad dministration from Jamnaalal Bajaj Institute of Management Sttudies, Mumb bai Universitty and Master’s Degree from Delhi D Universsity specializiing in Econo omics and Sociology. Hee has an agg gregate experience of over 50 years in diverse fields includiing Naval serrvice of 34 years corporatee board directtorship of 16 years of various well w known companies c lik ke Bombay Dyeing, D Indian Acrylics Steel S Strip Wheels, W Bombay Reall Estate Development Corp poration. Mr. Azeezullla Baig aged d 64 years, iss an Independ dent Directorr in our Com mpany. He ho olds Master of o Arts Degree in So ociology. He started his career c as a jo ournalist of Daily D Salar in n 1960 and iss alumni of Central C Muslim Asso ociation High h School. He jo oined Karnattaka Administrative Servicce (KAS) in th he Year 1977 and a on basis of meriit he was indu ucted into Indian Administrative Serviices (IAS) in the t Year 19900. During his tenure with KAS an nd IAS he hass held different positions in i the govern nment organizzations like Jo oint Commissioner, Commercial Taxes (Inveestigation), Managing M Diirector, Karn nataka State Small Indusstries Develo opment Corporation,, (KSSIDC), Bangalore, B D Deputy Secrettary, Commeerce and Industries Depaartment, Karn nataka, Director – To ourism of Karrnataka, etc. He H retired from m Governmeent Service in 2007. Mr. C.R.Murrali, aged 54 years is an Independent I Director in our o Company y. He is a Ch hartered Acco ountant with over 255 years of corre practice. He H has been a part of thee team of con nsultants whiich has succeessfully managed sev veral businesss restructurin ng exercises co overing mergers, de-mergeers, public isssues, hiving off etc. Mr. S. Thiru uvadi, aged 56 5 years is Nominee N Direector of CVC CFL in our Company. C Hee is an Engin neering Graduate wiith additional qualifications of MBA (Banking ( and d Finance) an nd Certified Associate A of Indian Institute of Bankers. B Mr. S. S Thiruvadi brings b with hiim an experieence of over 30 3 years in ban nking and exp posure in Corporatee Credit, Projject Finance, Loan Syndiccation, SME Portfolio, P Exp port/Import Credit C and General G Banking. NG POWERS S OF DIRECT TORS BORROWIN The Compan ny has passed d an ordinary resolution att its Annual General G Meetiing held on 30/09/2011 in n terms of the provissions of sectiion 293(1)(d) of the Comp panies Act 19956, whereby y it has autho orized the Bo oard of Directors to borrow mon ney up to ` 755,000.00 Lacss (Rupees Sev venty Five Th housand Lacss) for its shorrt term capital and lo ong term capiital requirements from finaancial instituttions. RELATIONS SHIPS BETW WEEN DIREC CTORS Nam me of the Dire ector Mr. Naseeer Ahmed Mrs.Nuzzhat Aisha Na aseer

R Relationship between Dirrectors Husband of Mrrs. Nuzhat Aiisha Naseer H W of Mr. Naaseer Ahmed Wife

QUALIFICA ATION SHAR RES REQUIR RED TO BE HELD H BY OU UR DIRECTO ORS Our directorss are not requ uired to hold any a qualificattion shares.

143

Scotts Ga arments Limiited INTEREST OF O PROMOT TER, DIRECT TORS All Directorss of the Comp pany may be deemed to bee interested to o the extent of o fees, if any,, payable to th hem for attending meetings m of th he Board or a Committeee thereof as well w as to th he extent of other remun neration, reimbursemeent of expensses payable to t them undeer the Articlees of Associattion of the Company. Thee whole time directorrs will be inteerested to thee extent of rem muneration paid p to them for services rendered r by them t as officers or em mployees of the Company y. All the direcctors of the Company C may y also be deem med to be intterested to the extent of equity shares, s if any y, already heeld by them or their relattives in the Company C or by the corporate en ntity to which h they repressent on the Board of the Company, C orr that may bee subscribed for and allotted to th hem, out of the present Issue in term ms of this Offfer Documen nt and also to t the extent of any dividend pay yable to them m and other diistributions in n respect of th he said equity y shares. ATION TO MANAGING M DIRECTOR R / WHOLE TIIME DIRECT TORS COMPENSA Details of appointment an nd fixing of reemuneration of o Managing Director / Whole W Time Diirectors: Mr. Naseer Ahmed, A Mana aging Directorr As per the Reesolution passsed at the meeeting of the Board B of Direectors held on n 03/06/2010,, Mr. Naseer Ahmed, A is re-appointted as Managiing Director of o the Compaany for a perio od of 5 years with effect fro om 18/06/20010 for a consolidated d remuneratio on of `25,000,000/- per month m (inclu usive of perq quisites, allo owances as may m be applicable ass per Compan ny’s rules). R n Minimum Remuneration In the event of loss or ina adequate proffits in any finaancial year du uring the currrency of his tenure t as Man naging Director, thee remuneration payable shall be gov verned by Seection II of Part P II of Scchedule XIII of the Companies Act, A 1956 or an ny statutory modifications m s thereof. Mrs. Nuzhatt Aisha Naseeer, Director As per the Resolution passsed at the meeeting of the Board B of Direectors held on n 03/06/20100, Mrs. Nuzhaat Aisha Naseer, is ree-appointed as a Whole Tim me Director of o the Company for a peeriod of 5 yeaars with effeect from 19/06/2010 for f a consolid dated remuneeration of `3,000,000/- per month (inclu usive of perqu uisites, allowaances as may be appliicable as per Company’s C ru ules). R n Minimum Remuneration In the event of loss or ina adequate proffits in any finaancial year du uring the currrency of his tenure t as Man naging Director, thee remuneration payable shall be gov verned by Seection II of Part P II of Scchedule XIII of the Companies Act, A 1956 or an ny statutory modifications m s thereof. No remuneraation is paid to t any of the independent i directors exceept sitting feees. I THE BOA ARD OF DIRE ECTORS DU URING THE LAST L THREE YEARS CHANGES IN There has been following change in thee Board of Dirrectors of the Company in n last three yeaars. Sr. No 1. 2. 3.

Name of Diirectors Mr. S.A. Hu ussain Mr. Prashan nt Agarwal Mr. Aman Agarwal A

Datte of Change 27/ /09/2010 19/ /04/2011 19/ /04/2011 144

Reaason Ressignation Ressignation Ressignation

Scotts Ga arments Limiited Sr. No 4.

Name of Diirectors Mr. S. Thiru uvadi

Datte of Change 08/ /12/2012

Reaason Appointment ass Nominee Dirrector of CVC CFL

Compliancee with Corpo orate Governaance Requireements: The provisio ons of the Lissting Agreem ment to be enttered into witth the Stock Exchange(s) E w be applicaable to will our Company immediately upon the listing of ou ur Equity Sharres with the Stock S Exchan nges. Our Com mpany has complieed with the co orporate goveernance code in accordancee with Clausee 49 to the exttent applicablle. Our Company undertakes u to take all neceessary steps to t continue to o comply with h all the requ uirements of Clause 49 of the Lissting Agreem ment to be enteered into with h the Stock Ex xchanges. In terms of the Clause 49 4 of the Listting Agreement, our Com mpany has allready constittuted the folllowing committees. Audit Comm mittee The Audit Committee was w re-constituted at thee Board meeting held on n 4th January y, 2008. The Audit Committee comprises of the following g members Name of o Director Nr. A. Arumugham A Mr. C.R R. Murali Mr. Azeeezulla Baig

Status in Co ommittee Chairm man Memb ber Memb ber

Naturee of Directorsship In ndependent In ndependent In ndependent

The role of o the Committee has been defined to in nclude the folllowing activities: (a) Overseeeing the Com mpany’s financcial reporting g process and d the disclosu ure of its finan ncial informaation to ensure that t the finan ncial statemen nts are correctt, sufficient an nd credible. (b) Recomm mending to the t Board, th he appointmeent, re-appoin ntment and if required, the t replacem ment or removaal of the statuttory auditor and a fixation of o audit fee. (c) Approv val of paymen nt to statutory y auditors for any other serrvices rendereed by the stattutory auditorrs. (d) Reviewing with the managemen nt the annual financial staatements befo ore submissio on to the Boaard for approvaal, with particcular referencce to: -

Matteers required to be includ ded in the Diirector’s Resp ponsibility Sttatement to be b included in the Board d’s report in teerms of clause (2AA) of section 217 of th he Companiees Act, 1956. Chang ges, if any, in n accounting policies p and practices p and reasons r for th he same. Majorr accounting entries e involv ving estimatess based on thee exercise of judgment by management m t. Signifficant adjustm ments made in n the financiaal statements arising a out off audit finding gs. Comp pliance with listing and oth her legal requ uirements relaating to financcial statemen nts. Disclo osure of any related r party transactions. Qualiifications in th he draft auditt report.

(e) Reviewing, with thee managemen nt, the statement of uses/ application of o funds raiseed through an n issue (public issue, rights issue, i prefereential issue, ettc.), the statem ment of fundss utilized for purposes p otheer than those sttated in the offer o documeent/ prospectus/ notice and a the report submitted by the monitoring

145

Scotts Ga arments Limiited agency monitoring the utilizatio on of proceed ds of a publlic or rights issue, and making m appro opriate recomm mendations to o the Board to take up stepss in this matteer. (f) Reviewing, with the managemen nt, performancce of statutorry and internaal auditors, and a adequacy y of the internall control systeems. (g) Reviewing the adequ uacy of intern nal audit fun nction, if any, including th he structure of o the internal audit departm ment, staffing g and senioritty of the officcial heading the t departmeent, reporting g structure coverage and freq quency of inteernal audit. (h) Discusssion with interrnal auditors any significaant findings an nd follow up there on. (i) Reviewing the findin ngs of any intternal investig gations by thee internal aud ditors into maatters where there t is suspected fraud or irrregularity orr a failure of internal i contrrol systems off a material nature and rep porting the mattter to the boa ard. (j) Discusssion with statutory auditorrs before the audit commeences, about the t nature an nd scope of au udit as well as post-audit discussion to asscertain any area a of concerrn. (k) To look k into the rea asons for subsstantial defau ults in the paayment to thee depositors, debenture holders, shareho olders (in casee of non paym ment of declarred dividendss) and credito ors. (l) To revieew the functio oning of the Whistle W Bloweer mechanism m, in case the same is existiing. (m) Carryin ng out any oth her function as a is mentioneed in the term ms of referencee of the Auditt Committee. Remuneratiion Committeee The Remun neration Comm mittee was co onstituted on 4th January, 2008 2 and com mprises the folllowing direcctors of the Board. Name off Director Mr. A. Arumugham A Mr. C.R. Murali Mr. Azeeezulla Baig

Nature of o Directorshiip Independent Independent Independent

The termss of reference of the Remun neration Com mmittee are ass follows: (a)

The Remuneration R n Committee recommends to the boarrd the compeensation term ms of the exeecutive directtors.

(b)

Framiing and impllementing on behalf of thee Board and on o behalf of the t sharehold ders, a credib ble and transp parent policy y on remunerration of execcutive directo ors including ESOP, Pensiion Rights an nd any comp pensation paym ment.

(c)

Consiidering appro oving and reccommending g to the Board d the changess in designation and increease in salary y of the execu utive directorss.

(d)

Ensurring the remu uneration poliicy is good en nough to attraact, retain and d motivate dirrectors.

146

Scotts Ga arments Limiited (e)

Bring ging about objjectivity in deeeming the reemuneration package p whille striking a balance b betweeen the intereest of our Com mpany and th he shareholders.

Shareholderrs’/ Investor Grievances G Co ommittee The Shareholders and In nvestors Grieevances Comm mittee was co onstituted at the Board meeting m held on o 10th May, 2010. The T Committtee consists off the following Directors. Name of Director Mr. Naseeer Ahmed Mr. A. Arrumugham Mr. Azeezzulla Baig

Status in Committtee Chairman Member Member

Nature of Diirectorship Non-Ind dependent Indep pendent Indep pendent

The scope and a function of o this commiittee is to consider and rev view sharehollders’/ investtors’ grievancces and complaints and ensure that all shareeholders’/ in nvestors’ grieevances and corresponden c nce are attend ded to expeditioussly and satiisfactorily unless constrrained by in ncomplete documentatio d on and/ or legal impedimentts.

147

Scottss Garments Limitted ORGANISATION CHA ART

148

Scotts Ga arments Limiited K KEY MANAG GERIAL PERS SONNEL T Key Manaagerial Person The nnel of SGL other o than thee Directors aree as follows: Sr.. No o.

1.

Nam me, Designattion and Ag ge Mr.Poornaa Srinivasan n Consultantt (39 years)

2.

Mr.Harikriishnan B President OperationssTirupur (44 years)

3.

Mr. Ronald d Morris PresidentBangalore operationss (41 years)

Qualification

Present rresponsibil ities

Date of appoin tment

Previous Employment and Total E Experience

Area of responsibiilit y in previo ous company

Dip D in Textile T Technolog T y MBA M – Marketing M and a Finance F Certified C Lean L Consultan C t (TBM – USA) U Sc., .S Diploma D in n Productio P n Technolog T y Diploma D in n Apparel Machine M Engineeri E ng n

Strategy S a and o organisatio n planning M Marketing P Product d developme n nt and s sourcing

01/07/ 2011

Gokaldas Export COO (Knits Division)

Over all in of charge knits ord der booking marketing activities

Overall in O c charge of T Tirupur a activities

06/05/ 2011

Eastman Exports Global Clothing Private Limited (24 years)

B.A. B

Overall in O c charge of W Woven p production

02/05/ 2012

Gokaldas Exports 18 years

Compeensati on paaid during g last finan ncial yearr ` 27,00,,000

(18 Years)

149

Heading all operations involving from prod duct developmeent, salesman sampling, proto sampling, production n feasibility analysis, production n upto p pick and paack logistics. Handled all business of various internation nal buyers nts requiremen Overall in charge for operations of the compan ny

18,64,,258

14,85,,170

Scotts Ga arments Limiited Sr.. No o.

4.

5.

6.

Nam me, Designattion and Ag ge Mr.Madhiv vanan C. General Manager M (51 years) Mr. Shailendra Kumar Nig gam General Manager M (38 years) Ms. S R Sriidevi Head (30 years)

Qualification

B.Com B

B.Tech B (T Textile Chemistry C )

Present rresponsibil ities

Date of appoin tment

Previous Employment and Total E Experience

Area of responsibiilit y in previo ous company

Overall in O c charge of K Knitts P Production P Projects

26/11/ 2009

Sh hahi Exports Pvt. Ltd. (18 years)

29/09/ 2011

Mangal M Teextile Lttd.

Overall incharge of knits production n In charge for developmeent of n new Projects

B.Sc B Costume C Designing D & Fashion

D Design

01/03/ 2010

Mr. Ampar Pramod (Vice Presiident) (32 years)

Diploma D in n Fashion Design D and a Technolog T y (U.K.)

Denim D – M Marketing a and p product d developme n nt

01/09/ 2009

8.

Mr.M.Thiaagarajan

F Finance

02/03/ 2005

9.

General Manager M (51 years) Mr.Manoj Francis

B.Com, B A.C.A A

Human H R Resource

24/11/ 2009

10.

Manager (37 years) Mr.Rajan V Mani

B.A., B L.L.B., L M.B.A M M.Com M C.A.I.I.B C

Banking B O Operations

01/01/ 2010

B.E. B

P Production

01/05/ 2005

11.

General Manager M (38 years) 12.

13.

Mr.Mukesh Kumar General Manager M (36 years) Mr.S.Guru uswamy Babu

15 Years I Duo Design Studio

13,98,,000

Designing activities

13,13,,325

Designing,, order procuring and marketing activities

11,96,,000

Overall incharge of Finance and a Accounts HRD a and compliancee related activities Overall incharge of banking activities Production n

11,70,,000

Overall in charge of n production activities Overall incharge of secretarial

7,50,0000

8 years

7.

M General Manager (60 years) Mr.Jayapraakash H.V.

Pvt.

Compeensati on paaid during g last finan ncial yearr ` 16,25,,000

FD F in NIFT N Calcutta C

P Production

19/06/ 2009

M.Com M I..C.W.AA. C.S. C

Secretarial S W Work

01/08/ 2007

150

Principle Partner at Laundary Service D Design Inc., (13 years) Fabritex Export (P) Ltd., (28 years) FFI (12 years)

Stalin Garments, Tirupur (30 years) C CIGFIL LTD., I.T T.C.Apparels Division(14 years) Arrora Fahions Ltd., (13 years) Alpha Systems P Private Ltd.,

9,10,0000

8,45,0000

8,45,0000

6,89,0000

Scotts Ga arments Limiited Sr.. No o.

14.

Nam me, Designattion and Ag ge

Qualification

Company Secretary (52 years) Mr.Naveed d Pasha Manager (43 years)

15.

16.

Mr. Syeed Tahir A

Abu

Manager Merchandiising (43 years) Mr.Saud Nazir N

Present rresponsibil ities

Date of appoin tment

Diploma D in n Textile Engineeri E ng n

Sourcing of S F Fabric

10/08/ 2000

M.Sc., M

Marketing M a activities

03/01/ 2011

B.E. B

Administra A t tion

01/04/ 1999

Previous Employment and Total E Experience

Area of responsibiilit y in previo ous company

Compeensati on paaid during g last finan ncial yearr `

(28 years)

activities

Gokaldas Exports Private Limited (20 years) Eastman Exports (15 years)

Fabric sourcing activities

6,50,0000

Merchandiisi ng activitiees

6,30,0000

Overall in charge of Administraati on activitiees

5,72,0000

-

STC Limited S U.S.A. (30 years)

General Manager M (51 years)

The above peersons are on the rolls of th he company as a permanentt employees. There T is no sp pecific tenure of any of our key managerial m perrsonnel. NUMBER R OF SHARE ES HELD BY THE T KEY MA ANAGERIAL L PERSONN NEL Particu ulars

No. of Shares held

Mr.M.Th hiagarajan

10,0000

Mr.Saud d Nazir

10,0000

Mr. Nav ved Pasha

3,0000

Total

23,0000

CHANGE ES IN THE KEY K MANAG GERIAL PER RSONNEL OF F THE COM MPANY DURIING LAST THREE T YEARS Name Mr. S. Jagadish Mr. Sayeed Saffiula Mr. Subaair Kunju Mr.Rajeeev Das Kalath hil Mr. G. Rafiq R Mrs. Sap pna Shivdas Mr. Sanjay Sadashiv Mahesh M Mr. G. Rafiq R Mrs. Sap pna Shivdas Mr. Sanjay Sadashiv Mahesh M Mr. Poorrna Srinivasan n Mr. Hariikrishnan B

Date of Change 288/11/09 311/07/10 311/03/10 311/05/10 033/05/10 199/05/10 011/01/99 311/03/12 100/01/11 177/05/11 011/07/11 066/05/11 151

Reason Resignation R R Resignation R Resignation R Resignation Ap ppointment Ap ppointment Ap ppointment R Resignation R Resignation R Resignation Ap ppointment Ap ppointment

Scotts Ga arments Limiited Name Mr. Ronaald Moris Mr. Shaiilendra Kuma ar Nigam Mr. Amp par Pramod Ms. S.R. Sridevi Mr. Sayeed Abu Tahir A.

Date of Change 022/05/12 299/09/11 011/09/09 011/10/10 033/01/11

Reason Ap ppointment Ap ppointment Ap ppointment Ap ppointment Ap ppointment

BONUS OR O PROFIT SHARING S PLAN FOR TH HE KEY MAN NAGERIAL PERSONNEL P L Presently,, the Key Ma anagerial Perssonnel receiv ve annual Ex--Gratia as On ne month of Gross G salary. Other than this there t is no bo onus or profit sharing policcy exists in th he Company. RELATIO ONSHIP AMONGST THE E KEY MANA AGERIAL PE ERSONNEL None of th he Key Mana agerial Person nnel are relateed to each oth her. ARRANG GEMENTS AND A UNDER RSTANDING G WITH MAJO OR SHAREH HOLDERS None of our key managerial m personnel hav ve been app pointed purssuant to an ny arrangemeent or understan nding with ou ur major shareeholders, custtomers, suppliers or otherss. T KEY MAN NAGERIAL PERSONNEL P L LOANS TO The Comp pany has not given any lo oan to its Key Managerial Personnel P in the last finan ncial year. Preesently, there is no outstan nding loan reeceivable from m any Key Maanagerial Perssonnel. YEE STOCK OPTION O SCH HEMES EMPLOY Till date Company C hass not introducced any Employees Stock Option Schem mes/ Employ yees Stock Pu urchase Schemes. ST OF KEY MANAGERIA M AL PERSONN NEL INTERES The prem mises at B 108 8, Peenya Ind dustrial Estatee, IIIrd stage has been tak ken on rent frrom Mr.Saud d Nazir who is a Key K Managerrial Employeee in the comp pany. Presenttly, a rent of ` 30,000 per month m is bein ng paid by our co ompany to Mr.Saud M Nazzir for using g the said prremises. Apart from thiss none of th he Key Manageriial Personnel have any intterest in the Company C oth her than to th he extent of th he remuneration of benefits to o which they are entitled as a per their teerms of appoiintment, reim mbursement of expenses in ncurred by them during d the ordinary coursee of business and to the ex xtent of Equitty Shares held d by them, if any in our Comp pany. No amount or benefit has been paiid or given within w the two o preceding years y or inten nded to be giiven to any of thee directors or key managerrial personneel except the normal n remun neration for services s rendeered as directors, officers or em mployees. NT OR BENEFIT (NON-SA ALARY RELA ATED) TO OFFICERS O OF F THE COMP PANY PAYMEN Except as stated in thiss Offer Docu ument, no amo ount or beneffit has been paid p or given or is intended d to be paid or given g during the preceding g two years to any of its officers exceept for the no ormal remuneeration paid to Diirectors, officeers or employ yees since thee incorporatio on of the Com mpany.

152

Scotts Ga arments Limiited PROM MOTER AND D ITS BACKG GROUND Ou ur Promoter

Detaails of Promo oter being ind dividual

med Mrr. Naseer Ahm Mr. Naseer N Ahmed d aged 53 yeaars is the Man naging Directtor of our com mpany. He is the son of Latte C.K.M Hyd der. He holdss a bachelor degree d in comm merce. After completing his h studies, hee entered into o active politiccs and held various v positio ons in the Co ongress party y. He is presen ntly a Membeer of the Karn nataka Legisllative Counciil, for Kolar and Chikkab ballapur distrrict. He was also a formeer minister of state for smaall scale indusstries of Karn nataka from October O 1990 to t Novemberr 1992. He haas over 20 yeears of experrience in the textile industry. He prov vides strategiic direction in i selection of technolog gy and machiineries in settting up new w manufactu uring facilitiess, improvem ment of produ uction processses and new w ventures, an nd in the prrocess of backward integrration. Identiification Detaails Voterr ID Number Drivin ng License Number N

BTF0946954 B 5560/2000

The Perman nent Account Number, Bank Account Number N and Passport Num mber of the Promoter P hav ve been submitted to o BSE and NS SE.

153

Scotts Ga arments Limiited PROMOT TER GROUP P The following natural perssons (being the immediaate relatives of our Prom moter and Promoter’s), P HUFs, parrtnerships, co ompanies and d other entitiees shall form part p of our Promoter Group: Name of thee Natural Persons (Immed diate Relaative of our Promoter) P Mrs. Nuzhatt Aisha Naseeer Mr. Awaiz Ahmed A Mr. Fiaz Ahm med Master Zuiizz Ahmed; Master Tanissh Ahmed. Ms. Abeer Faathima Mr. Mukhtarr Ahmed Mr. Aslam Ahmed A Mrs. Zareenaa Begum Mrs. Jabeen Begum B Mrs. Thasinee Sultana Mrs. Naznin ne Begum

Relationsh hip with Mr. Naseerr Ahmed Wiffe Son n Son n Son n Son n Daugh hter Broth her Broth her Sisteer Sisteer Sisteer Sisteer

Name of thee Natural Persons (Immed diate Relative of our Promo oter’s Spousee) Mr. Mohamm med Saleem Ahmed A Khan Mrs. Sultanaa Khadija Ms. Abeer Faathima Mr. Awaiz Ahmed A Master. Faiz Ahmed Master Zuiizz Ahmed Master Tanissh Ahmed

Relationsh hip with Mrs. Nuzhat Aisha M A Naseer Broth her Sisteer Daugh hter Son n Son n Son n Son n

ur Group Com mpanies Ou he following are a the group p companies as a defined un nder Schedulle VIII of the SEBI (ICDR R) Regulationss Th Sr. No o. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Name off the compan ny Scotts Fa ashionciti Ind dia Limited Scotts Pllantations Priivate Limited Scotts Metals M and Miines Private Limited L Scotts In nfrastructure and a Developm ment Private Limited GFI Infrastructure Deevelopment Private P Limiteed Copperss Coin Realty Private Limitted Pedigreee Constructio on Private Lim mited Scotts Apparels A Privaate Limited Scotts Fa ashions Privaate Limited Scotts Wears W Private Limited Scotts Knits Private Limited L Inmark Retail R Privatee Limited

None of thee above mentiioned companies have made any capittal issue duriing last three years nor aree they classiffied as Sick Industrial I Co ompany with hin the mean ning of the Sick S Industriaal Companiess (Special Pro ovisions) Act, 1985. 154

Scotts Ga arments Limiited The details of our Group p companies are as provid ded below: 1 Scotts Fashiionciti India Limited (SFIIL) 1. SFIL was incorporated on 24/11/22006 as a pu i ublic limited company an nd received certificate off commencem ment of busin ness dated 055/06/2007 fro om Registrarr of Companiies, Bangalore, Karnataka. The CIN of the Company y is U45202K KA2006PLC041044. The maain object of th he company is i to establish h and build textile park for location of manufactture processiing of textilee items, reseearch centres, laboratoriess, testing cen ntres and alliied activities. Currently the t Company y is not carrrying on any y business acttivity. The registered officce is situated at 481-B, IV Phase, P Peeny ya Industrial Area, A Peenya, Bangalore - 560 058. Mr. Naseer Ahmeed and Mr. Prrashant Agarw wal are the promoters of th he Company. Board of Directors D

1) Mr. Naseer N Ahmed d 2) Mrs. N Nuzhat Aishaa Naseer 3) Mr. Prrashant Agarw wal

The Shareho olding pattern n of SFIL as on o 31/07/20122 is as follows: Sr. No 1 2 3 4 5 6 7

Caategory

No. of shaares held of ` 10/-- each 10,000 10,000 10,000 10,000 10,000 10,000 10,000 70,000

Mrr. Naseer Ahm med Mrrs. Nuzhat Aiisha Naseer Mrr. Prashant Agarwal A Mrr. Aman Agarrwal Bo ombay Rayon n Fashions Lim mited Scotts Garmentts Limited Scotts Plantatio on Private Lim mited Grrand Total

Brief Auditted Financialss Partiiculars Equity Shaare Capital at `10/- each Reserves & Surplus Total Incom me Profit Afteer Tax Earnings Per P Share (` Net Asset Value V Per Sha are (`)

2009-10 7.000 N Nil N Nil (0.53) N.A A. 6.553

2010-111 7.00 Nil Nil (00.47) N N.A. 6.42

% of total share capital 14.229 14.229 14.229 14.229 14.229 14.229 14.229 100.000 (` in n Lacs) 20111-12 7.00 (2.56) Nil (0.05) N.A. 6.34

2 Scotts Planttations Privatte Limited (S 2. SPPL) SPPL was in ncorporated on o 28/12/20005 with Regisstrar of Comp panies, Bangaalore, Karnataka. The CIN N of the Com mpany is U01 1132KA2005P PTC038071. The T main objject of the company is to t acquire by y purchase orr otherwise and carry on the t business of estate own ners, cultivatiion, planters, growers and d allied activiities. The registered officee is situated at a 481-B, IV Phase, P Peenyaa Industrial Area, A Peenya, Bangalore - 560 058. Mr. Naseer Ahmeed and Mr. Prrashant Agarw wal are the promoters of th he Company. D Board of Directors

1) Mr. Naseer N Ahmed d 2) Mr. Prrashant Agarw wal

155

Scotts Ga arments Limiited The Shareho olding pattern n of SPPL as on o 31/07/20112 is as follow ws: Sr. No 1 2 3 4

Caategory

No. of shaares held of ` 100//- each 99,500 99,500 500 500 2,00,000

Bo ombay Rayon n Clothing Lim mited Peedigree Consttructions Private Limited Mrr. Naseer Ahm med Mrr. Prashant Agarwal A Grrand Total

Brief Auditted Financialss Partiiculars Equity Shaare Capital at `100/- each Share App plication Money Reserves & Surplus Total Incom me Profit Afteer Tax Earnings Per P Share (`) Net Asset Value V Per Sha are (`)

2009-10 200.000 328.330 (371.33) 148.771 (93.774) N.A A. (85.66)

2010-111 2000.00 3228.30 (4344.40) 1559.50 (633.07) N N.A. (1177.82)

% of total share capital 49.775 49.775 0.225 0.225 100.000

(` in Lacs) L 20111-12 200.00 328.30 ( (376.28) 218.71 58.12 29.06 (88.14)

3 Scotts Metaals and Miness Private Lim 3. mited (SMMP PL) SMMPL waas incorporated on 10/06/ /2005 with Registrar R of Companies, C B Bangalore, Kaarnataka. Thee CIN of the Company C is U51420KA20 U 05PTC0365255. The main object o of the company c is to o carry out orr engage in business b and/ /or manufactture in India and elsewheere, various varieties v of Irron and Steell including Sponge S Iron, Cast Iron, Wrought W Iron and Mild Steeel and allied d activities. The T registered d office is situ uated at 481-B B, IV Phase, Peenya P Indusstrial Area, Baangalore, Karrnataka, Indiaa, 560058. Mr. Naseer Ahm med is the pro omoter of the Company. D Board of Directors

1) 2) 3) 4)

Mr. Naseer Ah M hmed M Nuzhat Aisha Mrs. A Naseer M Ziaulla Shaarief Mr. D Sayed Anw Dr. war

olding pattern n of SMMPL as on 31/07/ 2012 is as folllows: The Shareho Sr. No 1 2 3 4

Caategory

No. of shaares held of ` 100//- each 250 250 250 250 1,000

Mrr. Naseer Ahm med Mrrs. Nuzhat Aiisha Naseer Mrr. Ziaulla Sha arief Drr. Sayed Anw war Grrand Total

Brief Auditted Financialss Partiiculars Equity Shaare Capital at `100/- each Share App plication Money Reserves & Surplus

2009-10 1.000 59.000 N Nil 156

2010-111 1.00 5 59.00 Nil

% of total share capital 2 25 2 25 2 25 2 25 100.000

(` in Lacs) L 20111-12 1.00 59.00 (2.69)

Scotts Ga arments Limiited Partiiculars Total Incom me Profit Afteer Tax Earnings Per P Share (`) Net Asset Value V Per Sha are (`)

2009-10 N Nil (0.41) N.A A. (146.774)

2010-111 Nil (00.11) N N.A. (1577.88)

20111-12 Nil (0.11) N.A. ( (169.11)

4 Scotts Infraastructure and 4. d Developmeent Private Liimited (SIDP PL) SIDPL was incorporated d on 09/02/20007 with Regiistrar of Com mpanies, Bangalore, Karnattaka. The CIN N of the Comp pany is U4520 02KA2007PTC C041738. Thee main object of the compaany is to carry y out businesss of Infrastruccture. The reg gistered officce is situated at 481-B, IV Phase, P Peeny ya Industrial Area, A Peenya, Bangalore - 58. Mr. Naseer Ahmed is the t promoterr of the Comp pany. D Board of Directors

1) M Mr. Naseer Ah hmed 2) Mr. M A. Arumug gham

The Shareho olding pattern n of SIDPL ass on 31/07/20012 is as follow ws: Sr. No 1 2

Caategory

No. of shaares held of ` 10/-- each 9,900 100 10,000

Mrr. Naseer Ahm med Mrr. A.Arumugh ham Grrand Total

Brief Auditted Financialss Partiiculars Equity Shaare Capital at `10/- each Share App plication Money Reserves & Surplus Total Incom me Profit Afteer Tax Earnings Per P Share (`) Net Asset Value V Per Sha are (`)

2009-10 1.000 679.996 N Nil N Nil (0.18) N.A A. 1.338

2010-111 1.00 6885.66 Nil Nil (00.25) N.A 0.04

% of total share capital 99.000 1.000 100.000

(`in Lacs) L 20111-12 1.00 686.41 (1.14) Nil (0.14) N.A (1.37)

5 GFI Infrastrructure Deve 5. elopment Priv vate Limited (GIPL) GIPL was in ncorporated on o 31/12/20008 with Regisstrar of Comp panies, Bangaalore, Karnataka. The CIN N of the Com mpany is U1 1320KA2008P PTC048765. The T main obj bject of the company c is to carry outt Infrastructu ure activities. The registereed office is situated at 481-B, IV Phasee, Peenya Ind dustrial Area, Bangalore, Karnataka, K In ndia, 560058. Mr. M Naseer Ahmed A and Mr. M Prashant Agarwal A are the t promoterss of the Comp pany. D Board of Directors

1) M Mr. Naseer Ah hmed 2) Mr. M Prashant Agarwal A

157

Scotts Ga arments Limiited The Shareho olding pattern n of GIPL as on o 31/07/20112 is as follow ws: Sr. No 1 2

Caategory

No. of shaares held of ` 10/-- each 5,000 5,000 10,000

Mrr. Naseer Ahm med Mrr. Prashant Agarwal A Grrand Total

Brief Auditted Financialss Partiiculars Equity Shaare Capital at `10/- each Reserves & Surplus Total Incom me Profit Afteer Tax Earnings Per P Share (`) Net Asset Value V Per Sha are (`)

2009-10 1.000 N Nil N Nil (0.05) N.A A. (9.19)

2010-111 1.00 Nil Nil (00.27) N N.A. (111.90)

% of total share capital 50.000 50.000 100.000

(` in Lacs) L 20111-12 1.00 (2.25) Nil (0.06) N.A. (12.46)

6 Coppers Co 6. oin Realty Priivate Limited d (CCRPL) CCRPL wass incorporateed on 06/10/2009 with Reegistrar of Co ompanies, Baangalore, Karn nataka. The CIN C of the Compan ny is U45201K KA2009PTC0051106. The company is en ngaged in thee realty busin ness. The regiistered office is situ uated at 481-B B, IV Phase, Peenya Industtrial Area, Ban ngalore, Karn nataka, India, 560058. Mr. Naseer N Ahmed and d Mr. Prashan nt Agarwal aree the promoteers of the Com mpany. D Board of Directors

1) M Mr. Naseer Ah hmed 2) Mr. M A. Arumug gham 3) Mr. M Awaiz Ahm med

The Shareho olding pattern n of CCRPL as a on 16/07/22012 is as follo ows: Sr. No 1 2 3 4

Caategory

No. of shaares held of ` 100//- each 500 250 250 76,500 77,500

Mrr. Naseer Ahm med Mrr. Janardhan Agarwal A Mrr. Prashant Agarwal A B R Machine To ools Pvt. Ltd. Grrand Total

Brief Auditted Financialss Partiiculars Equity Shaare Capital at `100/- each Share App plication Money Reserves & Surplus Total Incom me Profit Afteer Tax Earnings Per P Share (`) Net Asset Value V Per Sha are (`)

2009-10 1.000 2123.775 N Nil N Nil (0.33) N.A A. 66.889

158

% of total share capital 0.665 0.332 0.332 98.771 100.000

(`` in Lacs) 2010-111 20111-12 1.00 77.50 10223.75 1 1486.75 Nil 114.06 Nil Nil (00.26) (0.15) N N.A. N.A. 4 40.54 247.18

Scotts Ga arments Limiited The paid up equity sha are capital of the compan ny has increassed from ` 1.00 1 lacs to ` 77.50 lacs during F.Y.2011-12 7 Pedigree Co 7. onstruction Private P Limiteed (PCPL) PCPL was incorporated i on 04/02/19885 with Regisstrar of Comp panies, Bangaalore, Karnataaka. The CIN N of the Company iss U45201KA1985PTC0066774. The subscrribers to the Memorandum M m were Mr.Diinyar Rustom m Mody and Mrs. Faarida Dinyar Mody. The main object of the Comp pany is to carrry on the bu usiness of bu uilding, erecting and d constructing g structures, houses, h shedss and other fixtures on lan nds or buildin ngs and to purrchase, take on leasse or otherwisse acquire or exchange e or transfer t any land, building gs of any tenu ure whatsoeveer. The registered office o is situateed at No. 481/B, IV Phase,, Peenya Indu ustrial Area, Bangalore, B Kaarnataka. PCPL is on ne of the ma ajor sharehold der of the Company C and d it presently y holds 48,311,250 equity shares representing g 18.07% equity share capiital. PCPL waas subsidiary of our Comp pany during F.Y.2004 F to 2006 and later it was hived off from m our Compaany. In F.Y.20007-08, PCPL made m an inveestment in our Company. The transacctions relating g to investment in equity shares s betweeen PCPL, ourr Company and a the prom moter of our compan ny were peru used by SEBI & the matteer is being reeferred by SE EBI to the Min nistry of Corrporate Affairs (MC CA) as it was an a unlisted co ompany. D Board of Directors

1) M Mr. A. Arumug gham 2) Mr. M M. Thiagarrajan 3) Mr. M Naseer Ah hmed

The Shareho olding pattern n of PCPL as on 31/07/20112 is as follow ws: Sr. No 1 2 3 4 5

Caategory Mrrs. Gomathi Rajam R Mrr. Naseer Ahm med Mrr. A. Arumug gham Mrr.Wajid Khan n Mrr.Dastagir Sab b Grrand Total

No. of shares held of ` 100//- each 900 98 2 398000 500000 899000

% of total share capitaal 0.10 0.01 neg gligible 44.27 55.62 100.00

Brief Auditted Financialss Partiiculars Equity Shaare Capital at `100/- each Reserves & Surplus Total Incom me Profit Afteer Tax Earnings Per P Share (`) Net Asset Value V Per Sha are ( `)

2009-10 1.000 2534.773 89.009 34.330 3430.003 2,53,5773

2010-111 1.00 25447.66 7 70.17 1 12.93 12993.17 2,544,866

(`in Lacs) L 20111-12 899.00 3 3885.05 73.64 12.84 1.43 532.15

8 Scotts Appaarels Pvt. Lim 8. mited (SAPL) SAPL was incorporated i on 04/03/2005 with Regisstrar of Comp panies, Bangaalore, Karnataaka. The CIN N of the Company is i U18101KA A2005PTC0357757. The main object of the compan ny is business of manufaacturer, importers and a exporterss, wholesale and a retail deaalers. The reg gistered officee is situated at a 481/B, IV Phase, 159

Scotts Ga arments Limiited Peenya Indll Area, Peeny ya, Bangalore - 560 058. Th he present pro omoters of SA APL are Mr. Naseer N Ahmeed and Mrs. Nuzhaat Aisha Naseeer. Board of Directors D

1) 2) 3) 4)

Mr. Naseer N Ahmed d Mrs. Nuzhat N Aishaa Naseer Mr. A. A Arumugham m Mr. Aman A Agarwaal

The Shareho olding pattern n as on 31/077/2012 is as fo ollows: Sr. No 1 2

Caategory

No. of shaares held of ` 100/- each 500 500 1000

Mrr. Naseer Ahm med Mss. Nuzhat Aissha Naseer Grrand Total

% of totaal sh hare capital 50.000 50.000 100.000

Brief Auditted Financialss

(` in Lacs)

Particularss Equity Shaare Capital at `100/- each Reserves & Surplus Total Incom me Profit Afteer Tax Earnings Per P Share (`) Net Asset Value V Per Sha are (`)

2009-10 1.000 N Nil N Nil (0.17) N..A (172.225)

2010-11

2011-112

1.00 Nil Nil (00.15) N.A (1888.05)

1.00 (3.09) Nil (0.22) N.A ( (209.84)

9 Scotts Fashiions Private Limited 9. L (SFP PL) SFPL was in ncorporated on o 01/03/20002 with Regisstrar of Comp panies, Bangaalore, Karnataaka. The CIN N of the Company is i U18101KA A2002PTC0301184. The main object of the compan ny is business of manufaacturer, importers and a exporterss, wholesale and a retail deaalers. The reg gistered officee is situated at a 481/B, IV Phase, Peenya Indll Area, Peeny ya, Bangalore - 560 058. Thee present prom moter of SFPL L is Mr. Naseeer Ahmed. D Board of Directors

1) Mr. Naseer N Ahmed d 2) Ms. N Nuzhat Aisha Naseer 3) Mr. Th hiagarajan

The Shareho olding pattern n as on 31/077/2012 is as fo ollows: Sr. No 1 2

Caategory

No. of shaares held of ` 10/- each 9900 100 10,000

Mrr. Naseer Ahm med Mrr. A. Arumug gham Grrand Total

Brief Auditted Financialss Particularss Equity Shaare Capital at `10/- each Share App plication Money

2009-10 1.000 1104.667 160

2010-111 1.00 11004.67

% of totaal sh hare capital 99.000 1.000 100.000 (` in Lacs) 20111-12 1.00 1 1104.67

Scotts Ga arments Limiited Particularss Reserves & Surplus Total Incom me Profit Afteer Tax

2009-10 N Nil N Nil (0.31)

2010-111 Nil Nil (00.15)

20111-12 (1.71) Nil (0.27)

N.A A. (2.770)

N N.A. (33.81)

N.A. (7.14)

Earnings Per P Share (`) Net Asset Value V Per Sha are (`) 1 Scotts Weears Private Limited 10. L

SWPL was incorporated i on 23/07/20008 with Registrar of Comp panies, Bangaalore, Karnataaka. The CIN N of the Company is i U18101KA A2008PTC0472262. The main object of the compan ny is business of manufaacturer, importers and a exporterss, wholesale and a retail deaalers. The reg gistered officee is situated at a 481/B, IV Phase, Peenya Indll Area, Peeny ya, Bangalore - 560 058. D Board of Directors

1) Mr. Naseer N Ahmeed 2) Mr. A A. Arumughaam 3) Mr. Thiagarajan T

The Shareho olding pattern n as on 31/077/2012 is as fo ollows: Sr. No 1 2

Caategory Mrr. Arumugha am Mrr. Thiagarajan n

No. of shaares held of ` 100/- each 500 500

% of totaal sh hare capital 50.000 50.000

1000

100.000

Grrand Total Brief Auditted Financialss Particularss Equity Shaare Capital at `100/- each Reserves & Surplus Total Incom me Profit Afteer Tax Earnings Per P Share (`) Net Asset Value V Per Sha are (`)

2009-10

2010-11 1.000 N Nil N Nil (0.25) N NA 37.556

1.00 Nil Nil (00.18) NA 2 23.00

(` in Lacs) L 2011-112 1.00 (0.88) Nil (0.19) NA 12.25

1 Scotts Kn 11. nits Private Liimited SKPL was incorporated on 24/10/20008 with Regisstrar of Comp panies, Bangaalore, Karnataaka. The CIN N of the Company is i U18101KA A2008PTC0481104. The main object of the compan ny is business of manufaacturer, importers and a exporterss, wholesale and a retail deaalers. The reg gistered officee is situated at a F-3, Padmaavathy Homes, 7th Main M Road, Puttenahalli, P J Nagar, VII Phase, Bang J.P. galore – 5600778. D Board of Directors

1) Mr. Naseer N Ahmed d 2) Mr. A Arumugham 3) Mr. Th hiagarajan

161

Scotts Ga arments Limiited The Shareho olding pattern n as on 16/077/2012 is as fo ollows: Sr. No 1 2

Caategory Mrr. A. Arumug gham Mrr. Thiagarajan n

No. of shaares held of ` 100/- each 500 500

% of totaal sh hare capital 50.000 50.000

1000

100.000

Grrand Total Brief Auditted Financialss Particularss Equity Shaare Capital at ` 100/- each Reserves & Surplus Total Incom me Profit Afteer Tax Earnings Per P Share (`) Net Asset Value V Per Sha are (`)

2009-10

2010-11 1.000 N Nil N Nil (0.26) N NA 24.002

1.00 Nil Nil (00.20) NA 1 10.36

(` in Lacs) L 2011-112 1.00 (1.12) Nil (0.37) NA (12.28)

12. Inmark Rettail Private Liimited (IRPL L) IRPL wass originally in ncorporated on o 23/07/20088 in the namee of Scotts Drresses Privatee Ltd with Reegistrar of Compaanies, Bangalo ore, Karnatak ka. The name of the company was chang ged to Inmark k Retail Privaate Ltd. and a freesh certificatte of incorpo oration was issued on 19/10/2011. 1 The CIN off the Company is U18101KA A2008PTC047 7261. The com mpany is in th he business of o sale of read dymade garm ments under various v brands su uch as Amari,, Urban Nom mad, Alibi, Slu ub and Ticklees through itss retail outletts in Bangalorre. The registered d office is situated at 481/B B, IV Phase, Peenya P Indl Area, Peenya, Bangalore B - 5660 058. -. D Board of Directors

Mr. Naseer N Ahmed d Mr. Arumugham A Mr. Th hiagarajan

The Shareho olding pattern n as on 16/077/2012 is as fo ollows: Sr. No 1 2 3 4 5 6 7

Caategory

No. of shaares held of ` 100/- each 2,70,000 2,00,000 1,00,000 40,500 12,500 12,500 500 6,36,000

Scotts Garmentts Ltd. Mo onsoon Real Estate E Pvt. Lttd. MA AF Knits Mrr. Naseer Ahm med Mrr. Munnavar Jaliwala Mrr. Faizal Jaliw wala Mrr. Arumugha am Grrand Total

Brief Auditted Financialss Particularss Equity Shaare Capital at ` 100/- each

2009-10

2010-11 1.000

162

1.00

% of totaal sh hare capital 42.445 31.445 15.772 6.337 1.997 1.997 0.007 100.000

(` in Lacs) 2011-112 636.00

Scotts Ga arments Limiited Particularss Reserves & Surplus Total Incom me Profit Afteer Tax Earnings Per P Share (`) Net Asset Value V Per Sha are (`)

2009-10

2010-11 Nil N N Nil (0.25) N NA 26.991

Nil Nil (77.16) NA (6855.07)

2011-112 307.84 219.85 (89.39) NA 148.40

ursuits Common Pu Except for the sale of Ready R Made Garments to o one of our group comp panies i.e. Inm mark Retail Private P Limited we do not have any a common pursuits with h any of our group g companies Further, thee Company ha as agreed to seek s sharehollders approvaal through po ostal ballot ro oute and/or general g meeting forr the period of o 5 years in regard r to everry transaction n with related d party(ies) wherein w the amount a exceeds ` 10.00 crores an nd every tran nsaction with h related party y wherein thee aggregate amount a to on ne such entity durin ng the period of one financcial year exceeeds ` 20.00 crores excludiing the appro ovals relating to any personal gu uarantee giveen by the Prromoter(s)/Prromoter Grou up. The prom moter(s) of the t Company y shall refrain from m voting in resspect of such resolutions as a mentioned above. omoter Group Companiess Defunct Pro There are no o defunct Pro omoter Group p companies. nterest among gst group com mpanies Business in Presently, we w do not hav ve any businesss interest in our group companies P Interest of Promoter Our promotters may be deemed d to bee interested to o the extent of o the remuneeration for th he services ren ndered and the reim mbursement of expenses, if any, payab ble to them under u the artiicles. The Pro omoter may also a be deemed to be b interested to the extent of the sharees, if any, helld by them or by the relattives or by firrms or companies of o which any of them is a partner and a director/member respecctively. For fu urther details please refer Related d Party Transsaction appeaaring on page no 197 of this Offer Docum ment. Except as mentioned m abo ove the promo oter do not haave any intereest in the busiiness of the co ompany. he Issuer Com mpany Payment orr benefit to Prromoter of th Other than the salary and a remunerration of thee Promoter Directors, D div vidend, if an ny declared by b the Company on o shares held d by them, theere are no pay yment or beneefit to promotter of the Com mpany. Company/firm from wh hich the prom moter have dissassociated th hemselves du uring precediing three yearrs Our promoter has not disassociated d himself with h any of our group g compaanies/firm du uring the preceding three years except for CK KM Investmen nts Limited Related Parrty Transactio ons as per Au udited Financcial Statemen nts The details of related parrty transaction ns please refeer to page no. 197 of this Reed Herring Prrospectus.

163

Scotts Ga arments Limiited CURRENCY Y OF PRESENTATION In this RHP P, all referencees to ` or “Ru upees” “`” arre to the legal currency of India and alll references to o “U.S. Dollars”, an nd “US$” are to the legal cu urrency of thee United Statees. Any percen ntage amoun nts, as set fo orth in “Risk k Factors”, “Business”, “ “ “Managemen t’s Discussio on and Analysis of Financial Con ndition and Results R of Opeerations” etc. in the RHP, unless u otherw wise indicated d, have been calculated on the basis of our financial stattements prep pared in acco ordance with Restated Fin nancial Statements prepared p as per p Indian GA AAP. For the conv venience of th he Shareholdeers, as far as possible p the reporting r unitt has been maaintained as Rupees R in Lacs (Rup pees in Hund dred Thousands).

164

Scotts Ga arments Limiited DIVID DEND POLIC CY The Board of Directors of the comp pany may, att its discretio on, recommeend dividend d to be paid to the members of o the company. The faactors that may m be conssidered by the t Board before b makin ng any recommend dations for th he dividend in ncludes but not n limited to o profits/earnings during g the financiaal year, liquidity of the company y, need for reeserving resou urces for futu ure growth, applicable a tax xes including tax on dividend, ass well as exem mptions undeer tax laws av vailable to varrious categoriies of investorrs from time to t time etc. Dividend will w be declareed and appro oved at the Annual A Generral Meeting of o the shareho olders based on the recommend dation by the Board. The Board B may alsso from time to t time pay to o the members interim div vidend if it considers justified by y the profits generated g by the t company. We have deeclared divideend for the lasst 3 consecutive years and the details off the same aree as under: Financial Year 2011-12 2010-11 20009-10

Divideend paid 100% 100% 100%

165

Scotts Ga arments Limiited PART II SECTION IV: FIN NANCIAL ST TATEMENT TS AUDIT TORS’ REPO ORT (A As required by y Part II of Scchedule II to the Companiees Act, 1956) To, The Board d of Directorss, Scotts Garrments Ltd 481-B, IVtth Phase, Peen nya Industriaal Area, Bangaloree – 560 058. 1.

We haave examined d the attached d financial infformation of SCOTTS GA ARMENTS LTD as approv ved by the Bo oard of Direcctors of the Company prep pared in term ms of the requ uirements of Paragraph P B, Part II of Sch hedule II of the t Companiees Act, 1956 (the ( Act) and d the Securitiees and Exchaange Board off India (Issuee of Capital and Disclosuree Requiremen nts) Regulatio ons, 2009, as amended (SE EBI Regulatio on) and termss of our enga agement agreeed with you u in accordan nce with ourr letter dated d 10th July, 2010 2 in conneection with th he proposed Equity E offerin ng. The preparation p an nd presentatio on of these fin nancial inform mation is the responsibility y of the Com mpany’s manaagement.

2.

We haave, in terms of Securities and Exchang ge Board of In ndia (ICDR) Regulations, R 2 2009 re- auditted the Balan nce Sheet of M/s M SCOTTS GARMENTS G LTD as at 31st October 20112, 31st March h, 2012 & 31st March 2010 the t Statementt of Profit and d Loss and thee Cash Flow Statement S of the Company y for the year ended on thaat date, which h have been audited a by M/s M Siddaiah & Ram, Charttered Accoun ntants, Bangallore. In our op pinion and to o the best of our o informatiion and accorrding to the explanation e giiven to us, an nd also as perr the reliancee placed on th he reports forr the financiaal year ending g on 31st Marrch 2011, 31st March 2009, and 31st Ma arch 2008 sub bmitted by the t Statutory y Auditors, M/s M Siddaiah h & Ram, th he said accou unts give the information required by the t Companiies Act, 1956,, in the mann ner so requireed and give a true and fairr view in confformity with the accountin ng principle generally g acceepted in Indiaa.

3.

We have h examineed the attached ‘Summary y Statement of Assets an nd Liabilities’’ as restated of the Comp pany as at 31sts October, 20012, 31st March h, 2012, 31st March, M 2011, 31 3 st March, 20010, 31st March h, 2009 and 31 3 st March, 2008 ( Annexu ure I) and th he attached ‘ Summary Statement of Profit P and Lo oss’ as restatted ( Annexurre II) and the attached ‘Sum mmary Statem ment of Cash Flow’ as restaated ( Annexu ure III) for th he period end ded 31st Octob ber, 2012, for the financial years ended on 31st Marcch, 2012, 31st March, M 2011, 31st March, 2010, 2 31st Marrch, 2009 & 311st March, 20008 together reeferred to as ‘Restated ‘ Sum mmary Statem ments’. Thesse Summary Statements S haave been extraacted from the re-audited financial f stateements for th he period end ded 31st Octo ober, 2012, March M 31, 20122 and 31st Maarch 2010 an nd audited fin nancial st statem ments for the period ended d 31 March, 2011, 31St Maarch, 2009 & 31 3 st March, 20008. The re-au udit for the peeriod ended 31st October, 2012 financiial year ended 31st March h, 2012 and 311st March 20110 was condu ucted by us an nd audit for the t financial year y ended March M 31st Maarch, 2011, 31sts March, 20099 & 31st March h, 2008 was conducted c by the statutory y auditors, M/s, M Siddaiah & Ram, Charrtered Accoun ntants. The financial inforrmation inclu uded for the financial yeaar ended Maarch 31, 2011,, March 31, 2009 2 & March h 31, 2008 arre based on reports subm mitted by theem and havee been relied upon by uss while expreessing our opiinion and rep porting on varrious restated d financial infformation and d annexures thereof t expreessly stated in n the following g paragraphss.

4.

Based d on the abov ve, we report that in our op pinion and acccording to th he informatio on and explan nations given n to us, we ha ave found thee same to be correct and the same hav ve been accorrdingly used in the standalone financia al information n. 166

Scotts Ga arments Limiited 5.

Based d on above an nd also as perr the reliance placed on thee reports submitted by thee previous au uditors, Siddaaiah & Ram, Chartered C Acccountants for the respectiv ve periods and d year we statte that: i) Thee ‘Summary Statements’ S h have to be reaad in conjuncction with thee Significant Accounting Polices P and Notes N to Acccounts given in Annexure IV as welll as with thee Audit repo ort on the fin nancial statem ments ii) Th he profits hav ve been arriv ved at after charging alll expenses in ncluding dep preciation and d after makin ng such adju ustment and regroupings r as in our op pinion are app propriate in the year/perriod to which h they relate. iii) Th he accounts as a given in th he enclosed statements do d not requiree any restateement except to the extentt of merger effect has been n given in resstated summaary statementts for the year ended 31st March, M 2008 & 31st March h, 2009 as th he effective date d of amalg gamation of Arora A Fashio ons Ltd with Scotts Garm ments Ltd is 2nd February, 2008 as per the order off Hon’ble hig gh court of Karnataka K daated 6th Febru uary, 2010, sin nce: 1.. There havee been no ad djustments fo or the chang ges in accoun nting policess retrospectiv vely in reespective fina ancial years. 2.. There have been b no material adjustmeents in the respective finan ncial years to which w they reelate. 3.. There are no n extra ordinary items th hat need to be b disclosed separately in n the accoun nts and qu ualification reequiring adju ustments.

6.

Otherr Financial Infformation We have also exam mined the folllowing otherr financial infformation sett out in Anneexures prepared by the management m and a approved by the Boaard of Directtors relating to the Comp pany for the period ended d 31st Octoberr, 2012, 31st March, M 2012, 31 3 st March, 20011, 31st March, 2010, 31st March, 20099 & 31st March h, 2008. a)

Annexurre IV - Signifiicant Accountting Policies & Notes on reestated financcial statementts.

b)

Annexurre V- Statemeent of Share caapital

c)

Annexurre VI- Statement of Reserv ves & Surplus.

d)

Annexurre VII(a)- Stattement of Lon ng term borro owings

e)

Annexurre VII(b)- Stattement of Sho ort term borro owings

f)

Annexurre VII( c)- Dettails of terms and conditions of Secured d loans.

g)

Annexurre VIII- Statem ment of Tang gible assets & Intangible asssets

h)

Annexurre IX- Statemeent of Trade receivables

i)

Annexurre X- Statemeent of Long terrm loans & ad dvances

j)

Annexurre XI- Statemeent of Short teerm loans & advances a

k)

Annexurre XII - Statem ment of Investtments.

l)

Annexurre XIII- Statem ment of Inven ntories.

m))

Annexurre XIV- Statem ment of Cash & Cash Equivalent.

n)

Annexurre XV- Statem ment of Other Current Asseets.

o)

Annexurre XVI- Statem ment of Tradee payables.

p)

Annexurre XVII- Stateement of Otheer Current Liabilities 167

Scotts Ga arments Limiited q)

Annexurre XVIII- Stateement of Oth her long term liabilities.

r)

Annexurre XIX- Statem ment of Short Term Provisions.

s)

Annexurre XX - Statem ment of Otherr Income.

t)

Annexurre XXI - Statem ment of Otheer expenses.

u)

Annexurre XXII - Stateement of Tax Shelter

v)

Annexurre XXIII - Stattement of Div vidend Paid

w))

Annexurre XXIV – Staatement of Key y Accounting g Ratios

x)

Annexurre XXV - Stateement of Cap pitalization

y)

Annexurre XXVI - Staatement of Related Party Trransaction

z)

Annexurre XXVII - Staatement of Co ontingent Liab bilities.

7.

In ou ur opinion, th he ‘Financiall Information n as per Re-aaudited/Aud dited Financiial Statementts’ and ‘Other Financial In nformation’ mentioned m abo ove read with h Significant Accounting A Policies and Notes N to Accou unts appearin ng in Annexu ure IV & the audit report for the perio od ended 31stt October, 20112, 31st March h 2012, 31st March M 2011, 311st March, 20110, 31st March h 2009 & 31st March, M 2008 have h been preepared in acccordance with h Part II of sch hedule II of th he Act, and th he SEBI Regullations.

8.

This report r should d, in any waay, neither bee construed as a a re-issuan nce nor re-daating of any of the previo ous audit rep ports by us nor n should thiis be construed as a new opinion on any a of the Fin nancial Statem ments referred d to herein. This report is inteended solely y for your in nformation an nd for inclussion in the Offer O Docum ment in conneection with th he proposed IPO of the Company and iss not to be ussed, referred to t or distributed for any other purpose without our prior written n consent. For G Anantha A & Co o., Charterred Accountan nts Sd d/N. Raam ma Prasad Name of o the Auditorr Partner Membership No.: 200 0/029621 Firm Reegistration No o: 005160S

Place: Bangalore Date: 10/01/2013

168

Scotts Ga arments Limiited ANNEXU URE I RY STATEM MENT OF ASS SETS AND LIABILITIES, L , AS RESTAT TED SUMMAR

Particulaars Non-currrent assets Fixed asssets Tangiblee assets Intangib ble assets Capital work-inprogresss Non-currrent Investm ments Investm ments in Equity instrum ments Long terrm loans and advances Total no on-current assets Current assets Inventorries Trade Reeceivables Cash and d cash equivaleents Short-terrm loans and advances Other cu urrent assets Total current assets Non-currrent liabilitie es Long-terrm borrowing gs Deferred d tax liabilities (net) Other lon ng term liabilitiess Total no on-current liabilitiees Current liabilities Short terrm borrowing gs Trade paayables Other cu urrent liabilities Short-terrm provisionss Total current liabilitiies Net Worrth

31st Octobeer, 2012

(` in i lacs) 311st Marrch, 20008

31stt March h, 20122

31sst Marcch, 20111

31st Marrch, 20110

31sst March, 20009

16,4033.71 1,0455.12

16,346.42 1,475.46

11,8990.56 2,2113.18

11,2442.26 2,9550.92

8,7777.11 3,6888.65

7,4441.88 3,6688.65

4,9755.40

2,453.48

1,6445.63

1 16.78

5 50.82

1 112.93

5,0699.64 -

5,018.84

2,6665.00

1,6665.00

1,6665.00

8 887.00

5988.73

581.23

6229.17

5002.65

4772.69

3 338.83

28,0922.61

25,8775.43

19,0443.54

16,3777.61

14,6554.27

12,4469.29

22,2688.66 6,8044.47

21,688.99 7,592.33

16,5776.29 7,9996.17

11,1448.51 7,8998.89

8,1334.25 8,4996.53

4,9947.80 7,6691.05

6200.66

552.76

7338.53

4884.32

6002.21

5 579.07

20277.21 2,5311.06 34,2522.05

2,048.68 2,917.94 34,800.70

2,4667.62 2,4220.48 30,1999.09

3,5111.07 1,8229.95 24,8772.74

1,7119.08 7997.90 19,7449.97

1,8817.21 8 846.83 15,8881.96

8,4144.27

7,326.63

5,3005.53

5,1443.58

4,5886.01

7,3306.11

1,2333.26

1,208.02

7775.17

8776.20

3888.01

97.47

2899.12

2244.99

2228.38

1774.94

1008.63

39.42

9,9366.65

8,759.64

6,3009.08

6,1994.72

5,0882.65

7,4443.00

19,1044.08 36455.96 37466.80 15877.79 28,0844.63 24,3233.38

18,079.52 6,852.18 3,033.95 1,166.59 29,132.24 22,7844.25

17,3335.64 6,7008.40 2,5225.85 9334.88 27,5004.77 15,4228.78

11,8886.67 6,2335.85 2,3666.85 1,5881.00 22,0770.37 12,9885.26

9,5229.61 5,2555.91 2,1998.05 1,0777.46 18,0661.03 11,2660.56

6,9964.42 3,5591.72 1,1182.63 1,7728.35 13,4467.12 7,4441.13

169

Scotts Ga arments Limiited

Particulaars

31st Octobeer, 2012

31stt March h, 20122

31sst Marcch, 20111

31st Marrch, 20110

31sst March, 20009

311st Marrch, 20008

Net worth represente ed by: Shareho olders Funds Share Caapital Equity sh hare capital Reservess & surplus Securitiees premium Amalgam mation reserv ve Profit an nd loss accoun nt Net worth

2,6733.83

2,673.83

2,6773.83

2,6773.83

2,6773.83

2,4473.83

2,4966.96 400.00 19,1122.59 24,3233.38

2,496.96 40.00 17,573.46 22,7844.25

2,4996.96 4 40.00 10,2117.99 15,4228.78

2,4996.96 4 40.00 7,7774.47 12,9885.26

2,4996.96 4 40.00 6,0449.77 11,2660.56

1,2296.96 40.00 3,6630.34 7,4441.13

ANNEXU URE II SUMMAR RY STATEM MENT OF PRO OFIT AND LOSSES, L AS RESTATED R

Particulaars Revenuee from operatiions Other income Total rev venue EXPENS SES Cost of raw r material and a componeents consumeed Changed d in inventoriies of finished goods and traded goods g Other ex xpenses Total exp penditure Earningss before interrest, tax, deprreciation and d amortizaation (EBITD DA) Depreciaation Finance charges Profit beefore tax Less: Tax x expense Current tax expense Deferred d tax (credit)/ / charge Total taxx expense Profit affter taxation

31sst Octob ber, 20112 32,939.87 5993.43 33,533.31

31st Marrch, 20112 50,0025.46 6,5587.83 56,6613.29

311st Marrch, 20111 49,5227.73 8447.14 50,3774.88

31sst Marcch, 20110 43,017.07 418.91 43,4355.98

31sst Marcch, 2009 36,3887.70 1,0555.86 37,4443.56

(` in i lacs) 311st Marrch, 20008 33,1113.23 1 162.72 33,2275.95

17,8446.06

29,0019.10

22,1112.77

22,142.10

20,2332.41

17,6651.62

3995.77 10,0227.38

(3,5338.98) 17,3372.02

5669.44 20,0222.64

(2,5177.85) 16,602.70

(2,1177.39) 13,3881.50

(7550.28) 11,1161.83

282669.23

42,8852.13

42,7004.85

36,226.95

31,4996.52

28,0063.17

5,2664.08 11558.90 1,114.98 2,9990.20

13,7761.16 1,4442.12 2,0082.23 10,2236.81

7,6770.02 1,4552.06 1,4991.41 4,7226.55

7,209.03 1,239.81 1,6444.61 4,3244.61

5,9447.04 9990.34 1,2336.19 3,7220.51

5,2212.78 8 851.87 8 851.28 3,5509.63

9223.93

1,4400.00

1,3334.53

1,052.18

7008.09

1,0097.50

2 25.23 9449.15 20441.05

4 432.85 1,8832.85 8,4403.95

(101.03) 1,2333.50 3,4993.06

488.19 1,540.37 2,7844.24

2990.54 9998.63 2,7221.88

1 187.42 1,2284.92 2,2224.71

170

Scotts Ga arments Limiited ANNEXU URE III RY STATEM MENT OF CASH FLOWS AS A RESTATE ED SUMMAR (`` in lacs)

Particulaars A. Cash flow operating activities Net Proffit before prio or period ittem, tax and extraord dinary items Adjustm ment for: Depreciaation/amortissatio n Finance charges & loss on variattion on foreig gn exchangee rates Bad debtts written off Profit on n sale of fixed assets Loss on Sale S of investmeent Dividend d income/cap pital gain Operatin ng profit before working g capital chang ges Adjustm ment for: Increase in inventoriees Increase / ( decrease ) in trade pay yables Decreasee / ( increase ) in trade recceivables (Increasee)/Decrease in loans & advances a Income taxes t paid ( net n of refund) Net cash h generated / (utilized d) from opera ating activities B. Cash flow from ng activities investin Purchasee of fixed asseets Purchasee of non-curreent investmeent Sale of non-current n investmeent Dividend d Received Capital Subsidy S

31st M March, 2012

31st M March, 2011

331st M March, 2 2010

311st Maarch, 20009

2990.20

1 10,236.81

4 4,726.55

4,3324.61

3,7720.51

3,,509.63

1158.90

1,442.12

1 1,452.06

1,2239.81

1,0014.26

851.88

1114.98

1,643.91

1 1,491.41

1,6644.61

1,2236.20

851.28

-

0.42

-

-

-

-

15.26

(1.55)

2.27

-

-

-

(8669.43)

(20.02)

( (5,998.07)

(49.80)

( (49.80)

(660.00)

(1184.88)

7,325.19

7 7,620.22

7,1174.49

5,0039.99

5,,010.16

( (5,112.70) (5,,427.78) (3,0014.27)

(3,1886.44)

(1,3376.39)

31st October, O 2012

5264.08 (579.66)

3 31st Maarch, 20008

(2798.01)

341.66

744.16

1,0078.93

8 879.43

369.92

787.87

140.74

( (679.19)

(8805.08)

1 128.12

(3,6664.72)

390.85

232.52

( (832.14) (1,2265.63)

(1,0006.92)

25.00

(7740.44)

(7445.56)

(1,4444.26)

2,4428.00

1,1108.62

(1,0080.29)

( (6,785.09) (3,,728.18) (3,7730.71)

(2,7551.39)

(2,4437.45)

91.43 60.00 -

(5,4433.98) 24.88 -

(205.10) 2860.03

(3766.92)

( (1,028.12) (1,,431.17) 1,899.29

(5.90)

(50.80)

( (4,972.06)

-

28.36

8,359.28 48.90 78.29

49.80 -

171

49.80 -

Scotts Ga arments Limiited

Particulaars Net cash h utilized investin ng activities C. Cash from Financiing activities Interest paid p Increase in share capiital Share prremium receiv ved ( Repaym ments) / proceedss of long term m borrowin ngs Dividend d & dividend d distributtion tax Interest income i receiv ved ( Repaym ments) / proceedss of unsecured loans Net cash h generated frrom/ (utilised d in) financin ng activities Net Incrrease / ( decre ease) in cash and a cash equivaleents Cash and cash equivaleents at the beginnin ng of the year Cash and cash nd equivaleents at the en of the yeear

31st October, O 2012

31st March, M 2012

31st March, M 2011

3 31st March, M 2 2010

311st Maarch, 20009

3 31st Maarch, 20008

(33,789.36)

( (3,270.68) (3,,678.38) (3,6680.91)

(2,5999.96)

(7,8846.55)

(11,114.98) -

((1,556.35) (1,,491.41) (1,6644.61) -

(1,2336.20) 2 200.00 1,2200.00

(8851.28) 1,,112.50 1,,297.00

2112.21

3,053.74

5 5,741.70

3,0092.46

3,1150.69

5,,148.93

-

(311.79) -

((311.79) -

(3312.82) -

(2889.43) -

(1155.20) 159.70

-

-

-

-

(1,5110.65)

1,,510.70

997.23

1,185.60

3 3,938.50

1,1135.03

1,5514.41

8,,222.35

67.90

(185.79)

254.22

(1117.88)

23.07

(7704.49)

552.76

738.54

484.32

6 602.21

5 579.13

1,,283.62

620.66

552.76

738.54

4 484.33

6 602.20

579.13

172

Scotts Ga arments Limiited Ann nexure IV I.

NT OF SIGN NIFICANT AC CCOUNTING G POLICIES AND PRACT TICES STATEMEN

¾

Basis of Prep paration of Fin nancial Statem ments: The Financia al Statementss are prepareed under the historical co ost concept and accrual basis b of accounting in i accordancee with the Geenerally Accep pted Accountting Policy (G GAAP) in Ind dia and complies wiith the accoun nting standarrds prescribeed under Com mpanies Act, 1956, to the extent applicable.

¾

Use of Estim mates: The prepara ation of the financial f stattements is in n conformity with the acccounting stan ndards generally acccepted in In ndia requires estimates an nd assumptio ons to be made m that affeect the reported am mounts of asseets and liabilities on the date d of the fin nancial statem ments and reeported amount of revenue r and expenses during the repo orting period d. Difference between the actual results and estimates e are recognised r in n the period in n which the reesults are kno own or materrialise.

¾

Fixed Assetss: Tangible asssets are stated d at their orig ginal cost pluss all costs direectly attributaable to bringiing the asset to its working w condiition for its in ntended use. Intangible asssets are recog gnized; (i) when it is probable that the future economic benefits b that are a attributab ble to the asseets will flow to the t Company y; and (ii) cost of th he asset is meeasured reliab bly. Intangible asssets are meassured initially y at cost.

¾

Depreciation n/Amortisatio on: Depreciation n has been provided follo owing Writteen Down Value (WDV) method, m at thee rates prescribed in n the Schedu ule XIV of thee Companiess Act, 1956. Depreciation D in respect off assets acquired during the yearr has been prrovided pro-rrata from the date such asssets are acqu uired / put to use. The goodwilll is amortised d over the perriod of five yeears

¾

Impairment of Assets: An asset is trreated as imp paired when the carrying cost of assets exceeds e its reccoverable vallue. An impairment loss is chargeed off to the Statement S of Profit P and Losss in the year in which an asset a is identified ass impaired. The T impairm ment loss reco ognized in prior p year acccounting perriod is reversed if th here has been n a change in the t estimate of o recoverablee amount.

¾

Inventories: Inventories are valued at a lower of cost c or net realizable r vallue. The costt is determin ned on weighted average cost. Ob bsolete, defecctive and unseerviceable sto ocks are duly provided forr. 173

Scotts Ga arments Limiited ¾

Investments: Long Term investments are stated at cost. Provisiion for dimin nution in the value of long term investment is i made only if i such declin ne other than temporary t Current inveestments are stated s at loweer of cost, quo oted/fair valu ue. Computed d category wise.

¾

Revenue Reccognition: Domestic an nd Export salees are accoun nted on dispaatch of goods to customer.. Sales are reccorded net after trad de discount, wherever w app plicable.

¾

Foreign Currrency Transacctions: (i) Foreign Currency Trransactions are a accounted d, on initial recognition, r b applying to the by foreign currency c amo ount the exchaange rate prev vailing at the date of the trransaction. (ii) Foreign currency monetary items as at the Ballance sheet daate are reportted at the excchange rate prev vailing as on that t date. (iii) Foreign currency non n - monetary y items are reported r at th he exchange rate at the date d of transactiion. The exchang ge difference arising on th he settlement of monetary items or on reporting r mo onetary items at rates different fro om those at which w they weere initially reecorded, recog gnized as inco ome or expense in th he period in which w they arrise except excchange difference arising on o reporting of o long - term foreig gn currency monetary m item ms, in so far they t relate to o the acquisitiion of a depreeciable capital asset in which casee it is added to t or deducted from carryiing amount of the asset.

¾

Employee Beenefits: i)

Short - teerm employee benefits: Undiscounted amoun nt of short-teerm employeee benefits are a recognized in the perriod in which th he employee has h rendered service. The costt of short – terrm accumulaating compenssated absencees that are vested, measureed and recogniz zed on actuariial basis. The expected cost off bonus paym ments are meeasured and recognized r w when Compan ny has present obligation o to make such paayments as a result of emp ployee renderred service.

ii) Post – em mployment beenefits: Post-emp ployment ben nefits under defined d contrribution schem me such as Provident P Fun nd and Employeees State Insu urance, recogn nized during g the period in n which emp ployee has ren ndered service on o actual liabiility basis. Post-emp ployment benefits under defined ben nefit scheme (unfunded) such s as gratu uity, is accounteed as per actu uarial valuatio on. ¾

Borrowing Costs: C Borrowing costs c that are attributable to the acquissition or consstruction of qualifying q asssets are capitalized as a part of the costs of such h assets till su uch time as th he asset is reaady for its inttended use. A qualiifying asset iss an asset thaat necessarily y requires a substantial s peeriod of time for its intended usee. All other borrowing b co osts are recog gnized as an expense in th he period in which they are incu urred. 174

Scotts Ga arments Limiited ¾

Earning Per Share: Basic earning g per share iss calculated by b dividing th he net profit or o loss for thee period attrib butable to equity share holders by b the weightted average number n of eq quity shares outstanding o d during the period. Diluted earn ning per sharee is calculated d and presenteed when therre are potentiaal equity sharres. When the weeighted averaage number of o equity sharees changed in n the current period p as a reesult of bonus issue or share splitt or reverse sh hare split, thee calculation of basic and diluted earniing per share is pressented for all the t periods presented.

¾

Provision forr Income Tax: Provision fo or current tax x is made on n the basis off taxable inco ome for the current acco ounting period calcu ulated in accordance with the provision ns of Income Tax Act, 19611. Deferred taax as a result of tim ming differencces between accounting in ncome and taxable incom me for the period is accounted using u tax rates that have been b enacted or substantiaally enacted as a on balancee sheet date. Deferred tax x asset is reco ognized and carried c forwaard only to th he extent that there is reassonable certainty tha at sufficient fu uture taxable income will be available against which such deferrred tax assets can bee realized.

¾

Provisions, Contingent C Liiabilities and Contingent Assets: A A provision involving su ubstantial degree of estim mation in meaasurement arre recognised d when there is a prresent obligattion as a resu ult of past ev vents and it is probable th hat there willl be an outflow of reesources. Contingent liabilities l are not recogniseed but are dissclosed when the possibilitty of any outfflow in settlement iss remote. Contingent assets a are neitther recogniseed nor disclossed in the finaancial statements.

¾

Segment Rep porting: The Company is mainly y engaged in n the businesss of manufaacture of reaadymade garrments. Considering g the nature of business an nd financial reeporting, the Company haas only one seegment viz, garmentts as a reportaable segment..

In thee opinion of the and to best b of their knowledge and belief th he value of realization r off Loan, Advaances, Currentt Assets in thee ordinary co ourse of busin ness will not be b less than th he amount at which they are a stated in the t Balance Sh heet. Disclo osure under Micro, M Small and a Medium Enterprises Development D Act, 2006: Theree are no micro o and small scale businesss enterprises, to whom thee company ow wes dues, which are outstaanding for more m than 45 days as at 311st October, 2012. 2 This infformation to be disclosed under Micro o, Small and Medium M Enteerprises Devellopment Act, 2006, has beeen determined to the exten nt such partiees have been identified i on the basis of th he informatio on available with w the comp pany.

175

Scotts Ga arments Limiited The fiinancial statements for thee period endeed 31st Octobeer 2012, and year ended 31st March 20012 are prepaared under reevised schedu ule VI as welll as Guidancce Note issueed by the Insstitute of Chaartered Accou untants of Ind dia. Accordin ngly the previious year figu ures have also o been reclasssified to conform to the yeear’s classifica ation The fiinancials statement for thee year ended 31st March 2011, 2 2010, 20009 & 2008 haad been prepaared as per th he then appliccable pre revised schedule VI to the com mpanies Act 1956. 1 II.

TES TO REST TATED FINA ANCIAL STA ATEMENT – Annexure A IV NOT dard-15 “Emp ployee Benefiits” 1. Dissclosure purssuant to Accounting Stand e Gratuity G Schem me & Compeensated Abseences are deffined benefit plans. The present p The employees’ obligaation is deterrmined based d on actuariaal valuation using Projectted Unit Creedit Method, which recognizes each peeriod of servicce as giving rise r to additio onal unit of em mployee beneefit entitlemeent and measu ures each unit separately to build up th he final obligaation. ` in lacs

Sl. No

1)

2)

3)

Particularrs

Assumptiion: Discount Rate R Salary escaalation Present Value n Obligation

31.100.2012 Gratuit Compe y nsated absence s

2011-122 Gratuit Compe y nssated ab bsenc ess

2010-11 Grattuit Comp pen y sated absencces

20009-10 Gratuitt Compe y nsated absenc es

8.50% 5.00%

8.50% 5.00%

8.50% 5.00%

8.50% 5.00%

8..50% 5..00%

8.550% 5.000%

8.00% % 5.00% %

8.00% 5.00%

157.48

146.18

159.20

2 209.10

1 174.9

1991.9

108.66

77.4

11.15 81.06 (26.62) 1.47

5.06 54.70 (105.61) 4.32

13.6 70.2 (136.6) 49.3

11.5 87.6 ( (171.4) 5.7

12.9 74.8 (228.3) (6.0)

1 11.1 1001.3 1006.3 2 23.5

8.22 71.22 12.55 (0.700)

3.9 150.4 55.8 15.8

289.12

113.44

225.0

154.9

2 228.4

2221.5

174.99

191.9

Nil

Nil

Nil

Nil

Nil

Nil

Niil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Niil

Nil

26.62 26.62 Nil

105.61 105.61 Nil

136.6 136.6 Nil

171.4 171.4 Nil

28.3 28.3 Nil

1006.3 1006.3 Nil

12.44 12.44 Niil

55.7 55.7 Nil

Nil

Nil

Nil

Nil

Nil

Nil

Niil

Nil

of o

Present value of o obligation ns as at a beginning g of year Interest co ost Service cost Benefits seettled Actuarial (Gain) / Losss on obligattion Present value of o obligation n as at end of o year n Fair Value of plan assets Fair value of plan assetts at beginning of year Expected return on n plan assetss Contributiion Benefits paaid Actuarial (gain) / losss on obligattions Fair Value of plan n

176

Scotts Ga arments Limiited

4)

5)

he end of year assets at th Funded sttatus The amo ounts to be recognized in the balance sh heet Present value of o obligation ns as at the end of yeaar Fair value of plan assetts as at the en nd of the yearr Funded sttatus d Expenses recognized in statem ment of Profiit and loss Current seervice cost Interest co ost Expected return on n plan assetss Net actuaarial (gain) / loss recog gnized in the year Expenses recognized in n statement of profit and d loss.

289.12

113.43

225.0

154.9

2 228.4

2221.5

174.99

191.9

289.12

113.43

225.0

154.9

2 228.4

2221.5

174.99

191.9

Nil

Nil

Nil

Nil

Nil

Nil

Niil

Nil

289.12

113.43

225.0

154.9

2 228.4

2221.5

174.99

191.9

81.06 11.16. Nil

54.70 5.06 Nil

70.2 1.36 Nil

87.6 1.15 Nil

74.8 1.29 Nil

1001.3 1 1.11 Nil

71.22 0.822 Niil

150.4 0.39 Nil

(1.47)

4.31

49.3

5.8

(6.0)

2 23.5

6.000

15.9

78.30

51.76

138.0

138.2

81.7

1335.9

78.88

170.3

Note: Pro ovision for Grratuity & com mpensated ab bsence for thee financial yeears 2007-08, 2008-09 2 was made m based on estimaated liability,, actuarial valluation was taken t from fin nancial year 2009-10. o Imports callculated on C.I.F C basis: 2.Value of ` in lacs Particulars 4. 5. 6.

Raaw materials ( Faabric) Co omponents and spare parts Caapital Goods

311st October, 2012 1249.844

31st March, 2012 969.3

31st March, 2011 1420.7

31st March, M 2010 543.4

3 st 31 March, 2 2009 826.9

311st Maarch, 20008 1 1564.9

1010.733

692.4

1280.4

601.2

570.2

20.6

964.200

711.3

604.8

1062.3

493.1

481.7

3. Earning gs in Foreign n Currency: Particu ulars Earnin ngs: Exportt of goods ( F.O.B. basis)

31st October, 2012 28136.54

31st March, 2012 42584.8

177

331st M March,2 0 011 4 40367.7

s 31st Maarch, 20110

344302.8

31st Marcch,20 09

` in lacs 31st March,200 8

410038.4

286227.2

Scotts Ga arments Limiited 4. Expend diture in Fore eign Currency y on account of: Expenses:

S 31ST 20112

Foreig gn travelling Professional fee Otherss

Octoberr, 31.10 59.70 -

31st March 2012 20.8 3.4 -

31st March 2011 27.3 Nil -

331st M March 2 2010 16.3 Nil -

31stt Maarch 20009 20.4 3.3 -

` in lacs 31st Marcch 20088 23.5 13.7 11.2

o merger of subsidiaries. s 5. Effect of a) Sccotts Garmen nts Ltd had a subsidiary by b name Scottts Clothing (P P) Ltd. This subsidiary s com mpany w merged with was w Scotts Garments G Priv vate Ltd videe order of Ho on’ble High Court C of Karrnataka dated 02nd April, 2007; hen nce the figurees for the year ending 31.003.2006 are no ot comparablle with 311.03.2007 as th he effective date d of amalgaamation was 01.04.2006. 0 Th he scheme has h been acco ounted for under u the ‘Po ooling of Inteerest method d’ as prescrib bed by A Accounting Sta andard 14 on n – “Accountin ng for Amalg gamation” issu ued by the In nstitute of Chaartered A Accountants of o India. In Co onsideration of the above,, 600000 equity shares of Rs. R 10/- each h of the co ompany weree issued to thee shareholderrs of the SCPL L in the ratio of o six fully paaid up equity shares off Rs. 10/- eacch of the Com mpany for eveery one fully paid up equ uity share of Rs. R 100 each held h in SC CPL. In term ms thereof, th he difference between thee consideratio ons, being th he shares issu ued to sh hareholder off SCPL pursu uant to amallgamation, an nd book valu ue of equity shares acqu uired is trreated as capital reserve. The T balance outstanding o i general reserves of SCP in PL is transferrred to geeneral reservee of the comp pany. b) Sccotts Garmen nts Ltd acquirred M/s Arorra Fashions Ltd L on a 100% % takeover fro om 01.02.20088 and it beecame a who olly owned su ubsidiary and d this was meerged with Sccotts Garmentts Ltd vide orrder of H Hon’ble High Court of Karn nataka dated 06th February y, 2010; hencee the figures of o 31.03.2007 are a not co omparable with w 31.03.20008 as the efffective date of amalgamaation was 022.02.2008. Pu urchase m method of acco ounting is followed to refleect the amalg gamation. Th he scheme provided p thaat the authorrized share capital of trransferee com mpany (SGL)) shall au utomatically stand increassed without any a further acct, instrumen nt or deed and d consequentt up on th he amalgama ation, the authorized a sh hare capital of the tran nsferee com mpany will be b Rs. 444,00,00,000/- (Rupees Forty Four Crorres) comprisin ng of 4,40,000,000/- (Four Crores Forty y Lacs) eq quity shares of Rs. 10/- each. e Since th he entire shaares of Aroraa Fashions Lttd was held by the co ompany, on merger of Arrora Fashionss Limited intto Scotts Garrments Limiteed, all these shares n. The caancelled and no allotmen nt of shares or o cash is paaid as consid deration for amalgamatio a difference betw ween net iden ntifiable asseets of Arora Fashions F Ltd and the costt of shares off Arora Faashions Ltd is Rs. 36,88,,64,657 and it i is accountted as Goodw will. Goodwill amount will w be am mortised overr a period of five f years. n 6. Capacitty Utilisation Particulaars Actual Production P Woven/Denim Knitts Turnoveer

Units

Pieces Pieces

October 2012 37.36 89.99

2012

99.10 81.70

178

2011

80.50 101.80

20010

558.70 1 113.60

20099

444.90 1003.70

No’s in lacs 20088

36.10 45.40

Scotts Ga arments Limiited Particulaars

Units

Woven/Denim Knitts Stock off Finished Go oods Woven/Denim Knitts 7.

Pieces Pieces

October 2012 37.71 81.55

Pieces Pieces

2012

4.68 7.39

2011

20010

20099

20088

95.80 81.30

82.50 99.70

556.10 1 111.90

444.10 1001.60

35.90 42.20

5.00 9.70

2.30 9.30

4.40 7.20

1.90 5 5.50

1.220 3.550

Deferred Tax Assset / (Liabilitty)

Particculars of Timiing Differen nce between Book Profitt and Tex Pro ofit Depreciaation allow wance (WDV difference) Provision n for Gratuity y Provision n for Leave L Encashm ment Provision n for Bonus Expenses disalloweed in the earlieer year u/s 40a(ia) 4 – but allowed in thee year of payment of tax TOTAL ( NET)

` in lacs As at 31st Marrch, 20008 (661.00)

As at a 31st Octo ober, 20012 (10045.82)

As at a 31st Maarch, 20012 (10074.00)

As at a 31st Maarch, 20011 (9882.00)

As att 31st Marrch, 2010 (10226.20)

As att 31st Marrch, 20009 (4994.20)

((93.82) ( (36.81)

(12.6) ( (44.80)

74.10 71.80

558.10 6 63.80

36.90 26.30

3.10 8.10

( (56.78)

(76.6)

60.90

228.20 --

39.80 0.30

Nil

--

--

--

(12233.25)

(12208.00)

(7775.20)

--

(8776.20)

(3990.90)

(449.70)

URE- V ANNEXU MENT OF SHA ARE CAPITA AL STATEM

Particulaars Authorissed shares Equity sh hares of Rs. 10 each (Nu umbers) Equity sh hares of Rs. 10 each (Rs.) Issued, subscribed s and fully y paid up Equity sh hares of Rs. 10 each (Nu umbers) Equity sh hares of Rs. 10 each (Rs.) Capital account a

31st October, 2012

31st Marcch, 20122

311st Marrch, 20111

3 31st Maarch, 2010

31st March, M 2009

((`in Lacs) 31st March, 2008

4,40,00,0000

4,40,000,000

4,40,000,000

4,400,00,000

4,000,00,000

4,00,00,000

4,4000.00

4,4000.00

4,4400.00

4 4,400.00

4,000.00

4,000.00

2,67,38,2250

2,67,388,250

2,67,338,250

2,677,38,250

2,667,38,250

2,47,38,250

2,6733.83

2,6773.83

2,6673.83

2 2,673.83

2,673.83

2,473.83

2,6733.83

2,6773.83

2,6673.83

2 2,673.83

2,673.83

2,473.83

Notes on n adjustmentts for Restateed Financial Statements forms f integraal part of th his Statementt of share capital. 179

Scotts Ga arments Limiited Reconciliation of the shares outstaanding at the beginning an nd at the end of o the reporting period

Particulaars At the beeginning of th he period Issue of Equity E Share Outstanding at the en nd of the peeriod

31st Octob ber, 20112

311st Marrch, 20112

311st March, 20011

311st Maarch, 20010

3 31st Maarch, 20009

3 31st Maarch, 2008

2,67,38,250

2,67,338,250

2,67,338,250

2,67,338,250

2,47,38,250

1,30,,13,250

-

-

-

-

20,000,000

1,17,,25,000

2,67,38,250

2,67,338,250

2,67,338,250

2,67,338,250

2,67,38,250

2,47,,38,250

Particulaars Equity shares s allotted d as fully paiid bonus shares s by cap pitalization of o securitiees premium and reservees and surp plus

Particulaars Numberr of shares Naseer Ahmed A Pedigreee Construction n Private Limited L B.R. Macchine Tools Private Limited L Bombay Rayon Fashio ons Limited % holdin ng in class Naseer Ahmed A Pedigreee Construction n Private Limited L B.R. Macchine Tools Private Limited L Bombay Rayon Fashio ons Limited

31st Octobeer, 2012

31st March h, 2012

31st March, 2011

31st March, 2010

31st March, M 2009

3 31st March, M 2 2008

NIL L

311st Octo ober, 20012

3 31st Maarch, 20012

31st March, 2010

31st March, 2009

31st March, 2008

1,26,444,500 48,331,250

1,26,,44,500 48,,31,250

1,226,44,500 4 48,31,250

11,26,44,500 48,31,250

1,26,44,500 48,31,250

1,26,44,500 48,31,250

30,005,500

30,,05,500

3 30,05,500

30,05,500

30,05,500

30,05,500

20,000,000

20,,00,000

2 20,00,000

20,00,000

20,00,000

-

447.29% 1 18.07%

447.29% 1 18.07%

47.29% 18.07%

47.29% 18.07%

47.29% 18.07%

60.74% 22.50%

1 11.24%

1 11.24%

11.24%

11.24%

11.24%

13.05%

0 07.48%

0 07.48%

07.48%

07.48%

07.48%

-

31stt March, 2011

The comp pany has only y one class off equity sharees having a par p value of Rs. R 10 per sh hare. Each hollder of equity shares is entitleed to one votte per share. The compan ny declares dividends d in Indian rupeees. The dividend proposed by the Board off Directors is subject to thee approval off the sharehollders in the en nsuing Annual General G Meeting. In the eveent of liquidaation of the Company, C the holders of eq quity shares will w be entitled to o receive rem maining assetts of the Com mpany, after distribution of o all prefereential amountts. The distributio on will be in proportion to the number of equity shares held by the shareholders.

180

Scotts Ga arments Limiited ANNEXU URE- VI STATEM MENT OF RE ESERVES AN ND SURPLUS S

Particu ulars

3 31st Octtober, 2 2012

3 31st March, M 2 2012

Securitties premium m account

3 31st Maarch, 20011

311st Marrch, 2010

(` in Lacs) 311st Marrch, 20008

311st Marrch, 20009

-

-

-

-

-

Openin ng balance Add: Prremium on isssue of equitty shares Less: Amount A Utilized toward ds issue of fullly paid bo onus shares

2 2,496.96

2,,496.96

2,4496.96

2,4996.96

1,2296.96

-

-

-

-

-

1,2200.00

1,2996.96

-

-

-

-

-

-

7.

2 2,496.96

2,,496.96

2,4496.96

2,4996.96

2,4496.96

1,2996.96

-

-

-

-

-

-

-

-

-

-

Clo osing balance e

Amalgaamation Rese erve Openin ng balance

40.00

40.00

40.00

4 40.00

40.00

4 40.00

8.

Clo osing balance e

40.00

40.00

40.00

4 40.00

40.00

4 40.00

-

-

-

-

-

9.

Surrplus/ (deficit) in pro ofit and loss acccount

-

-

-

-

-

177,573.46

10,,217.99

7,7774.47

6,0449.77

4,111.82

1,4005.63

1 1,539.12

7,,355.46

2,4443.52

1,7224.71

1,9937.95

2,2224.71

-

-

-

-

-

-

199,112.58

17,,573.46

10,2217.99

7,7774.47

6,0049.77

3,6330.34

Openin ng balance Add: Prrofit for the year y

Closing g balance

Notes on o adjustmen nts for Restatted Financiall Statements (Annexure IV) forms integral part of this Statem ment of reserves and surplu us.

181

Scotts Ga arments Limiited ANNEXU URE VII(a) MENT OF LON NG TERM BO ORROWING GS STATEM

Particulars Secured Lon ng Term Borrowings * Term loan frrom bank Canara Bank k State Bank off India Exim Bank Federal Bank k Total

31stt Octob ber, 20122

31stt March h, 20122

31st March h, 2011

31stt March h, 20100

(` in lacs) 31st Maarch, 20008

31sst March, 20009

7,2883.58 4223.16 6669.18 84005.92

5,638.54 508.16 1,173.64 7,320.34

2,432..90 652..39 2,196..47 5,281..76

1,2255.45 7255.61 3,119.19 19.57 5,089.83

1,3311.57 6 615.34 2,5588.04 40.24 4,5555.19

2,,115.01 3,,500.00 122.40 5,,737.42

7.32 1.03 8.35

3.59 2.70 6.29

20..03 3..73 23..76

46.26 7.48 533.74

4.32 26.51 30.82

9.65 48.39 58.04

-

-

-

-

-

1,,510.65

Vehicle Loan n Axis Bank HDFC Bank ICICI Bank Total Unsecured Loan from BRFL

Total 8,414.27 7,326.63 5,305..53 5,143.58 4,5586.01 7,,306.11 * Note: The T statement of long term t borrow wings doesn’t include lo oans maturin ng within on ne year aggregating to Rs.3077 7.43 lacs. The details of the same are ap ppearing in Annexure A VIII(c) URE VII(b) ANNEXU MENT OF SHO ORT TERM BORROWIN B NGS STATEM

Particulaars Secured From banks Working g capital loan Unsecurred from Others Total

31st October, 2012

31st Marcch, 2012

31sst Marcch, 20111

31st Marrch, 20110

311st Marrch, 20009

(` in lacs) 31st Maarch, 20008

18,904.08

18,0799.52

17,3335.64

11,8886.67

9,5529.61

6,,964.42

200.00 19,104.08

18,0799.52

17,3335.64

11,8886.67

9,5529.61

6,,964.42

182

Scotts Ga arments Limiited AN NNEXURE TO T VII (c) DETAILS OF TERMS AN D ND CONDITIIONS OF SE ECURED LO OANS OUTST TANDING AS A AT 31ST OCTOBER, 20012 Sr. Nature of Nam me of Current NonSecurity Interrest % Rep payment No o Secured Loan L Fina ancial maturities Current p.a Sch hedule Insttitution / not maturitiess Banks included in n long term m borrowings LIBO 1 Working nara Bank Nill 14061.822 Paripassu OR + Rep payable on Can Capital faacility charge with SBI 3.50% % Dem mand on stock ks & receivablees LIBO 2 Working Nill 4842.266 Paripassu OR + Rep payble on Statee Bank of Capital faacility Indiia charge with 3.50% % Dem mand Canara Bank on stock ks & receivablees Su ub Total Nill 18904.088 3 Long Term Exim m Bank 875.000 480.433 First Pari Passu 16 Quarterly Working Charge on 12.40 EM MI Payable Capital Lo Factory Laand & oan from m January, Building at a 481 20110 - A & 4811 - B , Indl. Peenya Area, Plaant & Machinery y and Furniture & Fixtures. 4 Term Loaan Can nara Bank NIL L Nill First Pari Passu 20 Quarterly Charge on 14.75 Insttallments Factory Laand & pay yable from Building at a 481 Jun ne, 2007 - A & 4811 - B , Indl. Peenya Area, Plaant & Machinery y and Furniture & Fixtures. 5 Term Loaan Can nara Bank 240.000 203.200 First Pari Passu 14.75 60 EMI Charge on pay yable from Factory Laand & August, 2009 Building at a 481 - A & 4811 - B , Peenya Indl. Area, Plaant & Machinery y and Furniture & Fixtures. 6 FCLR Term Can nara Bank 200.000 543.744 First Pari Passu 6 months m 20 Quarterly 183

Scotts Ga arments Limiited Sr. No o

Nature of Secured Loan L

Nam me of Fina ancial Insttitution / Banks

Current maturities not included in n long term m borrowings

NonCurrent maturitiess

Loan

7

Term Loaan

Can nara Bank

516.00

4154.044

8

Term Loaan

Can nara Bank

864.000

2382.588

9

Term Loaan

Exim m Bank

147.622

218.766

184

Security

Charge on Factory Laand & Building at a 481 - A & 4811 - B , Indl. Peenya Area, Plaant & Machinery y and Furniture & Fixtures. Exclusive charge on project assets: Land 14.133 acres at Plot No o. D-3, D-4, A-3, A-10, A-11, S-433, S-44 AND S S-45(P), Plant & Machinery y and other Misc. fixed asssets at Doddabalapur being instaalled Exclusive Charge on Project assets: a Land att Sy. Nos. 60, 30/1 & total 32/1 admeasuring 137214 square s feet, Building nt & and Plan Machinery y at being Kolar installed First Pari Passu Charge on Factory Laand & Building at a 481 - A & 4811 - B , Indl. Peenya Area, Plaant & Machinery y and Furniture &

Interrest % p.a

Rep payment Sch hedule

LIIBOR + 7.50%

pay yments pay yable from Aprril 2011

14.25

28 Quarterly pay yments pay yable from Sep ptember 20112

14.25

24 Quarterly Pay yments pay yable from Jun ne 2013

12.20

23 Quarterly Insttallments pay yable from March, 2011

Scotts Ga arments Limiited Sr. No o

Nature of Secured Loan L

Nam me of Fina ancial Insttitution / Banks

Current maturities not included in n long term m borrowings

NonCurrent maturitiess

Security

Interrest % p.a

Rep payment Sch hedule

Fixtures. 10

11

12

13

14

Term Loaan

Term Loaan

Vehicle Loan

Vehicle Loan

Vehicle Loan

Statee Bank of Indiia

180.000

Statee Bank of Indiia

48.000

62.777

Sub b Total

3070.622

8405.911

Axiss Bank

2.200

Nill

Axiss Bank

360.399

3.600

2.444

HDF FC Bank

1.000

5.900

Sub b Total

6.800

8.344

Exclusive charge on specific Pllant & Machinery y Exclusive charge on specific Pllant & Machinery y Respectivee vehicle Toyota Fortuner Respectivee Vehicle Chevrolet Cruze

13.90

13.85

7.85 -

8.75 –

Respectivee – vehicle Hyundai I20 I

4.69

74 Monthly EM MI Payable from m Sep ptember 20009 36 Monthly EM MI Payable from m June 20111 35 Monthly EM MI Payable from m April, 20110 48 Monthly EM MI payable from m Deccember 20110 60 Monthly EM MI Payable from m Nov vember 20110

URE VIII ANNEXU MENT OF TAN NGIBLE & IN NTANGIBLE E ASSETS STATEM

Particulaars TANGIIBILE ASSET TS LAND Gross Bllock Less Acccumulated Depreciaation Net Blocck LAND & BUILDINGS Gross Bllock Less Accum mulated

31st O October, 2012

31st M March, 2 2011

1 1,202.78

1,,165.63

7 732.77

6 670.90

173.14

1,202.78

11,202.78

1,,165.63

7732.77

6670.90

173.14

952.04 322.46

952.04 284.10

932.36 211.61

8 823.04 1133.74

3372.92 115.20

324.91 98.62

1,202.78 -

185

331st Maarch, 2010

311st Maarch, 20009

(`` In lacs) 31st Maarch, 20008

31st M March, 2012

Scotts Ga arments Limiited

Particulaars Depreciaation Net Blocck LEASE HOLD LAND DWIND MILL M Gross Bllock Less Acccumulated Depreciaation Net Blocck SHOW ROOM Gross Bllock Less Acccumulated Depreciaation Net Blocck PROJEC CT AT TARA APUR Gross Bllock Less Acccumulated Depreciaation Net Blocck OFFICE E BUILDING G Gross Bllock Less Acccumulated Depreciaation Net Blocck FACTO ORY BUILDIN NGS Gross Bllock Less Acccumulated Depreciaation Net Blocck PLANT T & MACHIN NERY Gross Bllock Less Acccumulated Depreciaation Net Blocck ELECTR RICAL INSTAL LLATION Gross Bllock Less Acccumulated Depreciaation Net Blocck FURNIT TURE & FIXT TURES Gross Bllock Less Acccumulated Depreciaation Net Blocck FURNIT TURE & FIXT TURES 100% Gross Bllock

31st October, O 2012

31st March, M 2012

31st March, M 2 2011

3 31st Maarch, 2010

311st Maarch, 20009

31st Maarch, 20008

629.58

667.94

720.75

6 689.30

2 257.72

226.29

71.03

71.03

71.03

25.20

25.20

25.20

71.03

71.03

71.03

25.20

25.20

25.20

33.96

33.96

33.96

33.96

33.96

33.96

19.40

13.35 20.61

11.06 22.90

8.52 25.44

5.69 28.27

2.55 31.41

623.42

623.42

623.42

6 615.83

-

-

-

-

-

-

-

-

623.42

623.42

623.42

6 615.83

-

-

280.74

280.74

280.74

2 280.74

2 203.04

193.08

215.89

58.33 222.41

46.63 234.11

34.30 2246.44

25.04 178.00

15.77 177.31

5,424.45

5 5,345.17

2,,199.19

2,1134.97

1,9970.97

1,,558.17

4,274.91

887.49 44,457.68

711.83 1,,487.36

5 547.50 1,5587.47

3 386.33 1,5584.64

249.35 1,,308.82

1 14,067.91

133,003.25

10,,428.05

9,4463.01

7,4450.08

6,,669.87

8,134.83

55,237.92 7 7,765.33

4,,368.53 6,,059.52

3,4475.62 5,9987.39

2,7705.45 4,7744.63

2,,080.48 4,,589.39

590.32

585.53

547.38

4 491.23

4 411.23

373.57

294.85

269.33 316.20

223.24 324.14

1175.32 3 315.91

134.66 2 276.57

91.10 282.47

1053.11

1 1,042.67

1,,021.88

8 863.45

7 774.72

344.75

475.46

521.86 520.81

409.41 612.47

2293.72 5 569.73

180.87 5 593.85

109.50 235.25

37.59

37.53

37.53

37.53

37.53

33.84

-

14.56

64.85

1,149.54

5933.08

295.47

577.65

186

Scotts Ga arments Limiited

Particulaars Less Acccumulated Depreciaation Net Blocck OFFICE E EQUIPMEN NTS Gross Bllock Less Acccumulated Depreciaation Net Blocck DATA PROCESSIN P NG EQUIPM MENTS Gross Bllock Less Acccumulated Depreciaation Net Blocck VEHICL LES Gross Bllock Less Acccumulated Depreciaation Net Blocck CIVIL WORK W ON LEASED D BUILDING G Gross Bllock Less Acccumulated Depreciaation Net Blocck MOBIL LE HANDSET TS Gross Bllock Less Acccumulated Depreciaation Net Blocck EFFLUE ENT TREATM MENT PLANT Gross Bllock Less Acccumulated Depreciaation Net Blocck

31st October, O 2012

31st March, M 2012

37.59

31st March, M 2 2011

3 31st Maarch, 2010

311st Maarch, 20009

31st Maarch, 20008

-

37.53 -

37.53 -

37.53 -

35.94 1.59

33.54 0.30

267.43

260.38

238.06

1 199.54

175.05

123.29

120.28 140.10

93.27 144.79

73.72 1125.82

56.12 118.93

42.26 81.03

426.16

406.40

2 279.02

2 247.90

220.47

330.94 95.22

272.06 134.34

2219.91 59.11

191.85 56.05

164.81 55.66

434.43

419.01

3 382.41

3 323.41

307.66

292.53 141.90

249.40 169.61

2200.08 1 182.33

166.32 157.09

114.28 193.38

20.61

20.61

19.46

4.03

4.03

17.77 2.84

13.65 6.96

11.91 7.55

2.23 1.80

1.78 2.25

6.90

5.41

4.71

4.36

2.13

-

6.23 0.67

5.10 0.31

4.43 0.28

2.92 1.44

2.13 -

185.31

148.10

148.10

92.56

89.80

60.68

58.74 126.57

50.62 97.48

34.88 113.22

20.87 71.69

9.37 80.43

0.70 59.98

Total Neet Block

1 16403.72

166,346.42

11,,890.56

11,2242.26

8,7777.11

7,,441.88

Intangib ble Assets Goodwiill Amortizzed Balance

1,475.46 430.34 1045.12

22,213.18 737.72 1 1,475.46

2,,950.92 737.74 2,,213.18

3,6688.65 7 737.73 2,9950.92

3,6688.65 3,6688.65

3,,688.65

Capital Work-in-prog W gress

4975.40

2 2,453.48

1,,645.63

16.78

50.82

112.93

135.46 131.97 438.51 356.11 82.40 433.83 314.11 119.72 20.61 19.71 0.90 7.88 7.88

187

Scotts Ga arments Limiited ANNEXU URE IX MENT OF TRA ADE RECEIV VABLES STATEM

Particularss Debt outtstanding for a period exceedin ng six monthss (Unsecurred considereed good)

31st October, 2012

31st March, 2012

31st March, 2011

31st March, 2010

(`` in lacs) 31st March, 2008

31st March, 2009

Considerred good

-

-

-

-

-

-

Considerred doubtful Debt outtstanding for a period less than n six months (Unsecurred considereed good)

-

-

-

-

-

-

-

-

-

-

-

-

5,825.31

7,270.03

7,996.17

7,898.89

8,496.53

7,691.05

979.16

322.3

-

-

-

-

6,804.47

7,592.33

7,996.17

7,898.89

8,496.53

7,691.05

Other deebts Debts du ue from Grou up company y Inmark Retail R Privatee Limited Total

188

Scotts Ga arments Limiited ANNEXU URE X MENT OF LON NG TERM LO OANS AND ADVANCES S STATEM

Particulaars

31st O October, 2012

Unsecured considered d good Security deposits Total

31st M March, 2012

598.73 598.73

31st M March, 2 2011

581.23 581.23

331st Maarch, 2010

629.17 629.17

311st Marrch, 20009

5502.65 5 502.65

(` in lacs) l 31sst Marcch, 20088

4772.69 4772.69

3388.83 3388.83

URE XI ANNEXU STATEM MENT OF SHO ORT TERM LOANS L AND D ADVANCE ES

Particulaars (Unsecurred Considered good unless otherwise o statted ) a) Advan nce recoverab ble in cash or kind or value v to be received Considerred Good Advancee Taxes Paid Advancee to Promoterr group company y: Copperss coin realty private p limited d Total

31st October, 2012

31st March, 2012

31st March, 2011

31st March, 2010

31st March, 2009

(` in lacs) 31st March, 2008

2,027.211

2,048.68 -

2,305.62 -

2,770.63 740.44

1,164.25 554.83

471.56 1,345.65

-

-

162.00

-

-

-

2,027.211

2,048.68

2,467.62

3,511.07

1,719.08

1,817.21

31st March, 2010

31st March, 2009

(` in lacs) 31st March, 2008

URE XII ANNEXU MENT OF INV VESTMENTS S STATEM

Particulaars QUOTED in equity shares s fully paid up Bombay Rayon Fashio ons Limited shares off Rs.10each UN QUO OTED in equ uity shares Inmark Retail R Privatee Limited shares off Rs100 each Bombay Rayon Cloth hing Limited Scotts Faashionciti Ind dia limited Benchmaark Derivativ ve Investmentt Fund

31st October, 2012

31st March, 2012

31st March, 2011

2,393.64

2,342.84

664.000

664.00

664.00

800.00

675.00 2,000.00 1.00

675.00 2,000.00 1.00

2,000.000 1.000

1,000.00 1.00

1,000.00 1.00

1.00

-

-

-

-

-

20.00

189

Scotts Ga arments Limiited

Particulaars ICICI Pru udential Fixeed Maturity Plan Standard d Charted FM MP YLY Seriess 9 Total

31st October, 2012

31st March, 2012

31st March, 2011

31st March, 2010

31st March, 2009

31st March, 2008

-

-

-

-

-

30.00

5,069.64

5,018.84

2,665.000

1,665.00

1,665.00

36.00 887.00

31st October, 2012 12,796.77 4,956.19

31st March, 2012 11,821.33 5,676.66

31st March, 2011 10,247.622 3,509.43

31st March, 2010 4,250.41 3,424.19

31st March, 2009 3,754.00 2,937.63

(` in lacs) 31st March, 2008 2,679.70 1,482.18

4,190.99 21,688.99

2,819.25 16,576.300

3,473.91 11,148.51

1,442.62 8,134.25

785.92 4,947.80

ANNEXU URE XIII MENT OF INV VENTORIES STATEM

Particulaars Raw maaterials-(valueed at cost) Work-in n-progress - (v valued at cost) Finished d goods (valueed at lower off cost or net n realisable value) v Total

4,514.97 22,268.66

URE XIV ANNEXU MENT OF CAS SH AND CA ASH EQUIVA ALENTS STATEM

Particularrs Cash on hand h Balances with banks (i) In currrent accountss (ii) In dep posit accountss (held ass margin mon ney) Total

(` in lacs) 31st March, 2008 22.87

31st October, 2012 38.977

31st March, 2012 29.27

31st March, 2011 33.83

31st March, 2010 32.62

31st March, 2009 24.57

56.788

63.90

223.86

136.69

349.50

134.92

524.911 620.666

459.59 552.76

480.84 738.53

315.01 484.32

228.14 602.21

421.28 579.07

URE- XV ANNEXU MENT OF OTH HER CURRE ENT ASSETS S STATEM

Particulaars Balance with w governm ment authoritiies Export In ncentive receiivable Vat & Su ubsidy receiva able Total

31st October, 2012 1,973.944 557.122 2,531.066

31st March, 2012 2,247.76 670.17 2,917.94

190

31st March, 2011 1,984.67 435.81 2,420.48

31st March, 2010 1,402.92 427.03 1,829.95

31st March, 2009 529.40 268.50 797.90

(` in lacs) 31st March, 2008 732.81 114.02 846.83

Scotts Ga arments Limiited ANNEXU URE - XVI MENT OF TRA ADE PAYABLES STATEM 31st October, 2012

Particularrs Trade pay yables (a) Due to o Micro & Sm mall Enterprisees (b) Due to o other Credittors

3645.966

31st March, 2012

31st March, 2011

6,852.18

31st March, 2010

31st March, 2009

6,235.85

5,255.91

6,708.40

(`` in lacs) 31st March, 2008

3,591.72

Total 3645.966 6,852.18 6,708.40 6,235.85 5,255.91 3,591.72 Note: Traade payable does d not inclu ude any amo ount payable to promoter((s)/ promoter group and director d of the compaany. URE- XVII ANNEXU MENT OF OTH HER CURRE ENT LIABILITIES STATEM 31st October, Particulaars 2012 Statutory y remittancess 328.699 Over draawn bank balance 340.688 Current maturities of long term deebt 3,077.433 Total 3,746.800

31st March, 2012 168.36 473.27 2,392.32 3,033.95

31st March, 2011 191.48 230.83 2,103.54 2,525.85

(`` in lacs) 31st March, 2008 131.21 281.66 769.76 1,182.63

31st March, 2010 172.75 221.33 1,972.77 2,366.85

31st March, 2009 191.31 211.80 1,794.94 2,198.05

31st March, 2010 174.94 174.94

(`` in lacs) 31st 31st March, March, 2009 2008 108.63 39.42 108.63 39.42

URE- XVIII ANNEXU MENT OF OTH HER LONG TERM T LIABIILITIES STATEM 31st

October, 2012 289.122 289.122

Particulaars Gratuity y Payable Total

31st March, 2012 224.99 224.99

31st March, 2011 228.38 228.38

URE- XIX ANNEXU MENT OF SHO ORT TERM PROVISION P NS STATEM

Particulaars Provision n for compenssated absencees Provision n for bonus Provision n for tax Provision n for proposeed equity dividend

31st Octobeer, 2012

31stt March h, 20122

31sst Marcch, 20111

311st Marrch, 2010

331st March, 2 2009

(`` in lacs) 31st M March, 2 2008

1133.44 1766.25 1,2544.73

1544.96 2366.11 4644.77

2221.50 1887.62 2113.97

1191.92 2 200.00 8 877.29

77.45 100.00 587.19

51.11 1 1,387.82

-

2677.38

2667.38

2 267.38

267.38

247.38

191

Scotts Ga arments Limiited

Particulaars Provision n for tax on proposed d dividend Total

31st Octobeer, 2012 433.37 1,5877.79

31stt March h, 20122

31sst Marcch, 20111

311st Marrch, 2010

3 31st March, 2 2009 45.44 11,077.46

31st March, M 2 2008

433.37 1,1666.59

4 44.41 9334.88

44.41 1,5581.00

42.04 11,728.35

31st Octobeer, 2012 566.38 1844.53

31stt March h, 20122 2033.08 488.90 -

31sst Marcch, 20111 2006.31 4 49.80 9 95.50

311st Marrch, 2010 1 183.60 49.80 17.41

2211.35 1311.17 5933.43

5,9499.16 3477.91 388.78 6,5877.83

3553.26 1442.27 8447.14

1167.34 0.76 4 418.91

869.43 12.47 10.49 1 1,055.86

5.04 1.83 162.72

31st M March, 2 2010 8 8,254.27 1 1,010.72 256.03 328.67 1 1,798.55 2 2,218.69 288.37 493.87 97.10 717.96 31.90 60.76 178.82 125.29 155.95 82.01 46.75 168.07 11.94 56.99

31st M March, 2 2009 6 6,241.74 1,010.80 178.71 415.35 1,836.19 1,227.69 335.27 255.67 35.88 870.70 20.25 18.59 169.14 106.06 199.44 49.67 37.63 112.18 15.96 51.82

(` in lacs) 31st M March, 2 2008 4 4,744.42 776.52 115.16 368.39 1 1,370.72 1 1,468.29 290.20 370.38 55.39 635.35 33.52 65.06 125.86 85.64 248.41 46.57 16.70 63.90 20.93 81.24

URE XX ANNEXU MENT OF OTH HER INCOM ME STATEM

Particulaars Interest Income I Dividend d received Foreign exchange e gain n Profit on n sale of Investmeents Income from f Windmiill Miscellan neous incomee Total

(` in lacs) l 331st 31st March, M March, 2 2009 2 2008 79.43 48.87 60.00 50.00 24.04 56.98

ANNEXU URE XXI MENT OF OTH HER EXPENS SES STATEM

Particulaars Employeee cost Power an nd fuel & watter Rent inclluding lease rentals r Repairs and a maintena ance Dyeing & processing charges Labour charges c Embroid dery charges Printing charges Transporrtation chargees Freight and a forwardin ng Insurancce Rates an nd taxes Travellin ng and convey yance Printing and stationerry Postage & Courier charges Businesss promotion Documeentation charg ges Security charges Donation ns and contrib butions Legal an nd professiona al

31st O October, 2012 6000.00 822.93 226.44 240.12 435.98 865.20 48.27 144.93 111.33 337.70 32.15 50.92 151.80 44.54 58.33 11.24 2.06 201.37 9.25 79.62

31st M March, 2012 9,971.23 1,163.50 392.21 448.93 1,412.22 1,755.98 240.74 107.15 155.94 725.05 14.42 77.29 239.54 55.99 55.36 20.53 30.57 277.91 4.95 93.32 192

31st M March, 2011 100,376.43 1 1,279.14 370.82 349.22 1 1,673.42 3 3,259.69 525.02 210.20 159.12 883.20 28.56 63.51 201.24 101.48 81.21 24.29 55.63 214.93 2.31 49.43

Scotts Ga arments Limiited

Particulaars Paymentts to auditors Telephon ne charges Subscrip ption, Books & periodicals Advertissement expen nses General expenses Total

31st October, O 2012 2.71 30.91

31st March, M 2012 4.90 52.05

31st March, M 2011 3.87 46.25

31st March, M 2 2010 3.31 44.03

31st March, M 2 2009 7.61 78.33

31st March, M 2 2008 3.76 40.94

2.07 6079 56.73 1 10,027.39

2.79 3.57 65.89 17,372.02

7.02 2.95 53.70 200,022.64

4.46 4.23 163.96 166,602.70

1.74 4.43 100.67 133,381.50

13.96 2.38 118.16 111,161.83

ANNEXU URE XXII MENT OF TAX X SHELTER STATEM

Sr. No A B

C D

E

(`` in lacs) 31st

Particculars Restatted profit befo ore tax Tax raate(including surcharge and ed ducation cesss) here on(includ ding Tax th surchaarge and educaation cess) Adjusstments : Permaanent Differe ences Disalllowance u/s 36(1)(a) 3 FBT debited d to P&L L account Donattion disalloweed Dividend exempted Adjusstments on prrofit /loss on salle of assets Donattion under secction 80G me taxable und der other Incom headss Deducction under section 80JJAA A minary expensses shown Prelim separaately Total Timin ng difference e Differrence between n book depreeciation and tax t depreeciation as perr Return of Incom me uity, Leave provission for Gratu encash hment and Bo onus underr section 43B Disalllowance u/s 40(a) 4 (ia)

October, 2012 2,990.220

31st March,, 2012 10,236.881

31st March, 2011 4,726.555

31st March, 2010 4,324.661

31st March, 2009 3,720.511

31st March, 2008 3,509.633

32.44%

33.222%

33.22% %

33.99% %

33.99% %

33.99% %

970.002

3,400.667

1,570.16

1,469.993

1,264.600

1,192.911

-

2.000 (48.990)

17.887 (49.800)

11.994 (49.800)

0.633 15.955 (60.000)

4.444 10.622 12.177 (50.000)

-

(5,949.16) -

-

15.226 0.225

(864.366) -

1.666 (0.055)

(7.61)

(20.022)

-

-

-

-

(200.000)

(700.000)

(698.077)

(577.900)

(412.355)

(86.922)

(200.000)

(6,696.006)

(730.000)

(600.255)

(1,327.744)

(128.100)

57.991

111.998

(472.299)

(660.199)

(327.577)

(129.377)

-

-

405.332 -

332.444 -

169.966 0.400

184.344 10.333

193

Scotts Ga arments Limiited

Sr. No

F G

H

I J

31st October, 2012

Particculars wance u/s 40 (a)(ia) ( on Allow payment Allow wable expensees u/s 35D wable expensees u/s Allow 35DD Disalllowance of amalg gamation expeenses u/s 35DD uity paid durin ng the Gratu year Earneed leave salary y paid Bonuss paid Total Net ad djustments (D D+E) xpenses or (sa avings) Tax ex thereo on (F*B) Tax liaability (C+G) STCG G LTCG G Tax liiability Intereest u/s 234A, 234B and 234C of o the Incomee Tax Act, A 1961 Total tax liability

31st March,, 2012 -

31st March, 2011

-

-

31st March, 2010

(0.988)

31st March, 2009

31st March, 2008

-

(9.155) -

(1.900)

-

-

-

(0.644)

-

-

-

-

-

3.222

-

-

57.991 (142.099)

111.998 (6,584.008)

(24.022) (119.177) (240.577) (451.711) (1,181.711)

(12.166) (55.777) (393.100) (993.355)

(23.344) (80.522) (107.122) (377.344) (1,705.088)

(4.588) (13.099) (33.922) 11.811 (116.299)

(46.099) 923.993 923.993

(2,187.223) 1,184.229 228.226 1,412.555

(392.566) 1,177.660 1,197.669

(337.644) 1,132.229 1,132.229

(579.566) 685.044 1.200 686.244

(39.533) 1,153.388 3.233 0.411 1,157.022

923.993

1,412.555

17.999 1,215.668

1,132.229

686.244

9.911 1,166.933

Note: 1. The stattement of tax x shelter and adjustment a haave been prep pared as per the t summary y statement off profit and losses, as restated, of th he Company 2. Adjusttment on acco ount of restattement are considered in th he tax shelterr based on retturn of Incom me filed for respectivee years and la atest tax assesssment status positions 3. The perrmanent / tim ming differencce also consid ders the incom me - tax return ns filed by thee company URE XXIII ANNEXU ULE OF DIVID DEND PAID D SCHEDU

Particulaars Equity sh hare capital (F Face value peer share-Rss.10) Dividend d on equity sh hares (Final) Rate of dividend d in (% %) Amountt Corporate dividend ta ax

(`` in lacs)

31st October, 2012

31st March, 2012

31st March, 2011

31st March, 2010

31st March, 2009

31st March, 2008

2673.83

2673.83

2673.83

2673.83

2673.83

2473.83

NIL -

10.00% 267.38 43.37

10.00% 267.38 44.40

10.00% 267.38 44.40

10.00% 267.38 45.44

10.00% 247.38 42.04

194

Scotts Ga arments Limiited ANNEXU URE XXIV MENT OF KEY Y ACCOUNT TING RATIO OS STATEM

Sr. No

A

B C

D E

F

G

Partticulars Earn nings per sha are (In Rs.)) ax as Nett profit after ta resttated attributa able to equity share holders h ge no. Weiighted averag equ uity shares outsstanding duriing the yearr Basic EPS (A/B) Retu urn on Networth (%) (D/E E) ax as Nett profit after ta resttated attributa able to equity share holders h Nettworth e per Nett Asset Value equ uity share (F/G G)(Rs.) Totaal Assets less total liab bilities ge no. Weiighted averag equ uity shares outtstanding during the year.

31st October, 2012

(` in lacs)

31st March, 2012

31st March, 2011

31st March, 2010

31st March, 2009

2,041.05

8,403.95

3,493.06

2,784.23

2,721.83

2,224.70

26,735,250 6.62

26,735,250 31.43

226,735,250 13.06

226,735,250 10.41

224,904,917 10.93

116,845,165 13.21

8.39

36.88

22.64

21.44

24.17

29.90

2041.05 24,323.38

8,403.95 22,784.25

3,493.06 15,428.78

2,784.23 12,985.26

2,721.83 11,260.56

2,224.70 7,441.12

90.98

85.22

57.71

48.56

42.11

30.08

24,323.38

22,784.25

15,428.78

12,985.26

11,260.56

7,441.12

2 26,735,250

26,735,250

2 26,735,250

2 26,735,250

2 24,904,917

1 16,845,165

URE-XXV ANNEXU nt of Capitaliz zation Statemen Sl. No

A B C D E F G H

31st March, 2008

Particularss

Pre issue as at 31st Octobeer, 2012

Debt Short Term m Debt Long Term m Debt * Total Deb bt Sharehold ders’ funds Share capiital Reserves and a surplus Total sharreholders fun nd Long term m Debt/Equity y(B/F) Total Debtt/Equity (C/F)

195

(` in laacs) Post issu ue **

19104.08 114991.69 30595.77

----

26733.83 21649.55 24323.38 0.447 1.225

------

Scotts Ga arments Limiited Note: 1) * Amount repa ayable within n 1year from 1st November 2012 is includ ded in long teerm debt. 2) ***The correspo onding post issue figuress are not deteerminable at this stage, pending p com mpletion of bo ookbu uilding proceess and hencee have not beeen furnished. URE XXVI ANNEXU MENT OF REL LATED PART TY TRANSA ACTION STATEM d parties A. Related Name of relaated parties & description of o relationshiip st st 31 Octoberr, 2012 31 March 2012 31st March h 2011

31stt March 2010

31st March 2009

31st March M 2008

Key Management Personn nel 1.Mr.Naseer 1.Mrr.Naseer Ahmed, Ahm med, Managing Man naging Director Direector 2.Mrs.Nuzh hat 2.Mrrs.Nuzhat Aisha N Naseer Aish ha Naseeer Director Direector

Mr.Naseer 1.M Ahmed, Maanaging Dirrector 2.M Mrs.Nuzhat Aissha Naseer Dirrector

1.Mr.Naseeer Ahmed, Managing Director 2.Mrs.Nuzhat Aisha Naseer N Director

1.Mr.Naseer Ahmeed Manaaging Direcctor 2.Mrss.Nuzhat Aishaa Naseer Direcctor

1.Mr.Naseeer Ahmed, Managing g Director 2.Mrs.Nuzhat Naseer Aisha Director

Associates/E Enterprises ov ver which directors and /o or their relativ ves have significant influen nce 1.Sccotts Scottts 1.Scotts 1. Scotts 1. 1.Scotts Fashionciti India Fash hionciti Indiaa Plantation ns Pvt Plaantations Pvt Plantationss Pvt Limited Lim mited Ltd Ltd d Ltd 2. Scotts 2. Scotts 2. Scottts 2. Scotts 2. S Scotts Plantations Plan ntations Fashionciiti India Fasshionciti Fashioncitii Private Lim mited Priv vate Limited Limited Ind dia Limited India Limitted 3. Scotts Metals M 3. Scotts S Metals 3. Scotts Metals Mines Mines and and Mines and Private Liimited Private Lim mited Priv vate Limited Scotts 4. Scottts 4. Scotts 4. Infrastructu Infra Infrastruccture ure astructure and and and Developmeent Developm Dev velopment ment Private Lim mited Priv vate Limited Private Liimited GFI 5. GF GFI 5. FI 5. Infrastructu Infra Infrastruccture ure astructure Private Lim mited Priv vate Limited Private Liimited 6. Copperss Coin 6. Coppers C Coin n 6. Copperrs Coin Realty P Private Reallty Privatee Realty Private Limited Limited Lim mited 7.Inmark Retail 7.Inm mark Retaiil Private Lim mited Priv vate Limited 8. Scotts Ap pparels 8. Sccotts Apparels Private Lim mited Priv vate Limited 9. Scotts Faashions 9. Sccotts Fashion ns Private Lim mited Priv vate Limited 10. Scotts Wears 10. Scotts Wears Private Lim Priv mited vate Limited 196

1.Scottts Plantations Pvt Ltd Scotts 2. Fashiionciti India Limited 3. Sco otts Metals Mines and Privaate Limited Scotts 4. Infrasstructure and Devellopment Privaate Limited

Scotts Ga arments Limiited 11. Scotts Knits Private Lim mited 12.PedigreeeConst ruction P Private Limited

11. Scotts Knitts vate Limited Priv 12.P PedigreeConstt ruction Privatee Lim mited

d Party Transsactions B. Related Partiiculars

31st October, 2012

Remuneratiion to key managerial personnel

1155.00

Guarantees Given by key managerial personnel Loans given n to associate companies

480400.00

48040.000

48040.000

45030.000

20530.000

4660.000

1600.20

-

-

162.000

-

-

Investmentss made in associates

6766.00

3008.770

1 1.0

1.0

1.0

1.00

Sale of inv vestments in Associates

-

2413.770

-

-

-

-

12999.30

319.880

-

-

-

-

9799.20

322.330

-

-

-

-

Sale of Garm ments Receivable associates

from

31st March h 2011 198.000

31stMarcch 2010

31stMarch 2009

198.000

198.000

(` in lacs) l 31st March 2008 144.000

31st March h 2012 198.000

URE-XXVII ANNEXU NGENT LIABILITY NOT PROVIDED P F FOR IN RESPECT OF: CONTIN Paarticulars Corporate guarantee given g by compan ny for term loan granted by y bankers Letter of credit issued d by bankers Liability on accountt of export obliigation Liability on n account of sales tax Estimated amount of capital com mmitment

s 31st Octob ber, 20112

31stt Marcch 20122

31st March h 2011

31st March h 2010

31st March 2009

(` in lacs) 31st March 2008

-

150.000

300.000

300.000

7283.25

5171.05

2213.40

2031.660

2038.550

1942.800

1600.60

443.00

155800.30 -

13320.20 -

9958.440 -

12107.553 -

6647.70 -

5495.90

Nil

Nil

1875.00

2106.000

Nil

197

Nil

8.40

Scotts Ga arments Limiited MANAG GEMENT’S DISCUSSION D N AND ANALYSIS Maanagement’s Discussion and a Analysiss of Financiall Condition and a Results of o Operation ns as Reflecteed in thee Audited Fin nancial Statem ments a.

Overview of o our Busine ess: Scotts Garrments Limiteed (SGL) has grown g up con nsiderably du uring last few years in spitee of the recesssionary trends in the economy y during last year. From a modest beg ginning invollving taking up job works, SGL started ex xploring the market for direct exporrts, and has in course off time establlished a stattus for productio on of quality garments g and d dependabilitty in delivery y schedules in n the export market. m Our Com mpany has state of the art facilities f for manufacturin m ng the hi-fash hion Ready Made M Garmen nts. We have dom main expertise in provid ding samplin ng and design and hav ve additionall facilities su uch as embroidery, printing, dyeing and washing. Prresently, we are largely engaged e in manufacturin m ng and export of Ready Made Garments (R RMG). Our operaations and faccilities enablee us to manuffacture readym made appareel by spanning g various asp pects of the apparrel productio on chain, from m managing the design to t delivery and a quality assurance a pro ocesses involved in producing g readymade apparels. SG GL is one of th he competitiv ve manufactu urer and expo orter of readymad de garments with modern manufactturing facilitiies, fully baacked by faccilities for product p developm ment, design studio and efficient sam mpling infrasstructure to provide quaality services to its customerss. In future, we w will contin nue to explore new marketss domestically y and intend to cater intern national markets more m strongly..

b. Capacity Exxpansion Our Compaany normally y operates in n either one shift or two shifts depen nding on thee orders in hand. h Presently we w have installed capacity of 99,72,000 pieces/annu um for manuffacturing of Woven W Garm ments and 1,17,36,,000 pieces/an nnum for Kniitted Garmen nts respectivelly. We proposse to install ad dditional capacity of 40,000 kg g for Knitting & Processing g and 30,000 pieces p for and d Trouser Mak king. c.

nt Subsequen nt to Last Finaancial Period d Significant Developmen The Directo ors confirm th hat there havee been no eveents or circum mstances sincce the date off the last financial statements as disclosed d in the RH HP which materially m or adversely afffect or is lik kely to affect the manufacturing or profita ability of our company, orr the value off our assets, or our ability y to pay liabilities within next twelve month hs.

d. Factors thatt may affect Results R of Op perations Except as ottherwise stateed in this Offfer Documentt, the Risk Factors given in n this Offer Document D and d the following im mportant facttors could cau use actual results to differr materially from f the expeectations incllude, among otheers: • General economic e and d business co onditions; As a comp pany operatin ng in India, we w are affected d by the general economic conditions in n the country.. The was Indian ecconomy has grown stead dily over the past several years. Thiss improved performance p propelled d by the grow wth in industrrial activity and robust serrvices sector. The overall economic gro owth will therefore impact the results of its operationss. The growth h prospects off the businesss of the Comp pany and its ab bility to implement the straategies will bee influenced by b macroecon nomic growth h. 198

Scotts Ga arments Limiited • Our abilitty to successffully implem ment its strategy and its gro owth and exp pansion plans; Our grow wth plans are considerablee and would put significan nt demands on o our manag gement team m and other reso ources. Any delay d in impleementation of o its strategy and its grow wth and expan nsion plans could impact thee Company’ss roll out schedules and cau use cost and time t over run ns. • Factors afffecting industrial activity y; Any such h changes in the t industrial policies relaating to textille industry, tariffs, t excise duties etc which w may affecct the activitiees of the Textile industry ettc. may affectt our results of o operation. • Increasing competition n in the indu ustry; The garm ment manufactturing industtry, globally and a in India, is highly frag gmented, witth a large num mber of small and a medium sized s manufaacturers havin ng a local preesence in Wesstern Europe, China and In ndia. Our princcipal competiitors in our manufacturing m g operations in i India inclu ude, among others, o Mandh hana Industriess Limited, Go okaldas Expo orts Limited, House of Pearl P Fashion Limited, KP PR Mills Lim mited, Indus Filaa and Mudra Lifestyle Lim mited. Furtherr we also facee competition n from regionaal players loccated in China, Bangladesh and a Vietnam. • Cyclical or o seasonal fluctuations in n the operatin ng results; Cyclical or o seasonal fluctuations f i the operatting results of in o the Comp pany may afffect the endu uring financial performance p at large. • Changes in i laws and regulations r th hat apply to the t industry; There are some laws and a regulation ns applicable to the industtry in which we operate, which w we hav ve to comply/ follow. f In casse of a failuree to comply with w these law ws and regulattions or to ob btain or renew w the necessary y permits and approvals ou ur business may m be affected d. • Changes in i fiscal, econ nomic or poliitical conditio ons in India; External factors f such as a potential teerrorist attack ks, acts of warr or geopoliticcal and sociall turmoil in many m parts of th he world coulld constrain our o ability to do business, increase the costs c and neg gatively affectt our financial performance. p • Changes in i the foreign n exchange co ontrol regulaations, interesst rates and taax laws in Ind dia. Since, more than 90% of o the turnoveer of the comp pany is exporrted to differeent countries any change in n the foreign ex xchange contrrol regulation n, mainly interrest rates and d tax laws perrtaining to Ind dia may affecct the liquidity of o cash in the market which in turn may y affect the pu urchasing pow wer of the eco onomy. e.

Outlook The comp pany is comm mitted to put continuous efforts e for pro oviding qualitty products with w research h and innovation using bestt practices, adopting a agg gressive saless and marketting strategiees, investmen nt in people deevelopment an nd expansion n of manufactturing capacitty. The company is confident of continu uous good perfformance of growth g by ussing better teechnologies an nd consistentt efforts. Fun ndamental gro owth drivers off the Indian economy e conttinue to exist. The overall scenario for economy is showing s reco overy trends an nd we believee it will help p our industry to grow att a faster ratee, and we at Scotts Garm ments Limited reemain optimiistic about ou ur future.

199

Scotts Ga arments Limiited Overview w of our resullts of operatio ons The follow wing discussiion of the finaancial conditiion and resullts of operatio ons for the fin nancial year ending e March, 311 2012, 2011, 2010, 2009 reespectively in ncluding the notes thereto o and the rep ports thereon which appear in this offer doccument. The Audited Financial Statements are a prepared in i accordancee with the Ind dian Accountiing Standardss.

Particularrs

31st March, 2012

Revenue from f Operatio ons Other Inco ome Total Inco ome Total Expenses Total exp penses as a % of Reven nue from operation ns Depreciattion Depreciattion as % of Revenu ue from operation ns Finance Cost C Finance Cost as % of Revenu ue from operation ns Profit / (loss) before Ta ax Profit / (lloss) before Tax T as a % of Revenue from operrations Profit / (lloss) After Ta ax and extra ordinary items Profit /(lo oss) after tax as % of Reven nue from operation ns

31st Marcch, 2011

31st Maarch, 20100

(` in i lacs) 31st March, M 20009

50025.466 6587.833

495277.73 8477.14

43,0117.07 4118.91

36,3387.70 10055.86

56613.299 42852.133

503744.88 427044.85

434335.98 362226.95

374443.56 314496.52

85.666 1442.122

866.22 14522.06

8 84.22 1,2339.81

86.56 9990.34

2.888 2082.233

2 2.93 1491.41

2.88 1,6444.61 3.82

2.72 1,2236.19 3.40

4.166 10236.811

3.01 4726.55

4,3224.61

3,7720.51

20.466

9 9.54

1 10.05

10.22

8403.955

3493.06

2,7884.24

2,7721.88

16.800

7 7.05

6.47

7.48

o F.Y 2011-122 Vs. F.Y 20100-11 Financial Peerformance of me: Total Incom During the year under review, r the reevenue from operations o w ` 50025.466 lacs as comp was pared to ` 499527.73 lacs in FY 11. The reveenue from operation o for the FY 12 was w largely constant c duee to the temp porary suspension of the printiing and dyeiing unit of th he company at Tirupur. The said un nit was closed d for 5 months durring the FY 12 2. During the year under review the com mpany had sold s certain in nvestments in n equity sharees and earned d a net gain of ` 59449.17 lacs wh hich has contributed to the substantial in ncrease in thee other incom me from ` 847.14 lacs in FY11 to ` 6587.83 lacs in FY12. nditure: Total Expen The total ex xpenditure as a percentagee of total incom me remained largely consttant in FY12. The breakup p of the major itemss of expenses is i as under :

200

Scotts Ga arments Limiited During thee year under review r due to o the temporrary closure of o the dyeing and printing g unit, the com mpany was purchasing finished knits fabrics instead of pu urchasing yarn n and converrsion of the saame. This hass led to an increase in the cost of raw materiall consumed as a percentag ge of sales by ~14%. ~ Further, theere was decreease in emplo oyee cost in FY F 12 as com mpared to FY 11. This wass mainly due to the temporary shut s down of the dyeing an nd printing unit u at Tirupu ur from February 2011 to August A 2011. d Financial ch harges Interest and During the FY12, there was w an overaall increase in n the bank len nding rates which w has pusshed up the in nterest and financiaal charges in the t company. Further durring the samee period due to t the currenccy fluctuation n, there was a non availability a off packing credit in foreign n currency (PC CFC) limits and a the comp pany had to avail a of the rupee paacking credit limits (PC). This T has also added to the increase in th he interest cosst of the comp pany. Depreciatio on: Although there has beeen an increasee in the grosss block of fixeed assets from m ` 18578.75 lacs l in FY11 to ` 244474.71 lacs in n FY 12 the depreciation d a amount has sh hown a marg ginal decreasee. This is duee to the fact that th he additions in fixed asseets with regaard to the Doddaballapu D r project hav ve been capiitalised towards thee end of the fin nancial year. Profit after Tax: Profit affter tax for F.Y Y 12 was arou und 16.80% off the revenuee from operatiions as compaared to around 7.055% in FY11. The T said increase was maiinly due to th he capital gains on the salee of investmeents by the compan ny. Long Term Borrowings : The net incrrease in the lo ong term borrrowings of thee company fro om ` 7409.07 lacs in FY 11 to ` 9718.95 9 lacs in n FY12 was due d to availm ment of term loan from Can nara Bank forr the new pro oject at Doddaballaapur and Kola ar. Fixed Assetts: There has been an addiition in the fix xed assets of the company y during the FY12 F to the tune of ` 5895.96 lacss. This is maiinly due to th he addition in n Building and plant and machinery m forr the new pro oject at Doddaballaapur. Apart frrom the addittion in fixed assets a there is also capital work w in progrress to the tun ne of ` 2453.48 lacss as at the end d of FY 12. o F.Y 2010-111 Vs. F.Y 20099-10 Financial Peerformance of me: Total Incom During the year under review, r the reevenue from operations o w ` 49527.733 lacs as comp was pared to ` 433017.07 lacs in FY 100. The growth h in operation ns by around 15% was duee to increase in n additional capacity. c The other in ncome of the company c incrreased from ` 418.91 lacs in i FY10 to ` 847.14 8 lacs in FY F 11 on acco ount of exchange flu uctuation, inccrease in inco ome from win nd power gen neration and also refund of o income tax x to the extent of `1221.04 lacs. Total Expen nditure: The total t expendiiture as a perccentage of tottal income haas remained constant. c Thee break up of the major items of expenses e is ass under : Raw Materiial Cost and Manufacturin M ng and other expenses: Th here was a deecrease of ~7% % in the cost of raw material as a percentage of revenue frrom operations due to a ch hange in prod duct mix from m manufacturring of more of wo oven garmen nts and less of o knitted gaarments. Thiss change also o contributed d to the increease in manufacturring and otherr expenses du uring the period under rev view. The emp ployee cost in ncreased in F.Y Y.11 as compared to t F.Y.10 duee to increase in the salaries and wagees and otherr related benefits on acco ount of increase in the t number of o employees in i the compan ny.

201

Scotts Ga arments Limiited Interest and d Financial charges: Durin ng FY 11 the Company haad repaid som me of its term m loan but theere has been an inccrease in the working capital loan avaiiled. There was w a reduction in the geeneral bank leending rates during g this period. These factorrs have led to o a decrease to o the extent of o `153.20 lacss in the intereest cost for the FY111. Depreciatio on: There has been an incrrease in the depreciation d p provided by the t company as compared d to the previous yeear to the exteent of ` 212.255 lacs due to certain c additio on in fixed assets. Profit after Tax: Profit affter tax for F.Y Y 11 was around 7.05% off the revenue from operatiions as compaared to around 6.477% in FY10 du ue to increase in other inco ome . Long Term Borrowings: The outstand ding balance of secured lo oans has increeased from ` 7116.35 7 lacs in n FY10 to ` 7409.077 lacs i.e. a net n increase of o ` 292.72 laacs. This incrrease is main nly due to availment of lo oan for Doddaballaapur Project an nd towards addition a of fix xed assets in the t existing op perations. Fixed Assetts: There hass been an addition in the fixed assets of the compaany during th he FY11 for general g expansion /modernizati / ion at the exiisting units and a also purcchase of land at Peenya in ndustrial estaate and Doddaballaapur. o F.Y 2009-100 Vs. F.Y 20088-09 Financial Peerformance of me: Total Incom During the year under review, the revenue from m operationss for F.Y 20009-10 is increeased by ~188 % as compared to t F.Y 2008-09 9 on account of efficiency y in execution n of more exp port orders by b establishin ng new factory unitts in Bangalorre and Tirupu ur. The other in ncome of the company haas decreased from f ` 1055.886 lacs in FY009 to ` 418.911 lacs in FY100. This has been du ue to the fact that t during FY Y09 there had d been a profiit of sale of asssets / investm ments to the tune t of ` 870.98 laccs. The otheer income off FY10 includ des ` 167.34 lacs by way y of income from wind power generation through t the wind w mill bellonging to Arrora Fashionss Ltd. which has been amaalgamated with w the company. Total Expen nditure: The total expend diture for F.Y Y 2009-10 waas 84.22% of the revenue from operatiions as compared to o 86.56 % in the t F.Y 2008-009. The break k up of the maajor items of expenses e is ass under: Raw Material Cost and Manufacturiing and other expenses: There has beeen a decreasee in the cost of raw material as a percentage to revenue from f operatio ons due to eco onomies of sccale. There has h been an in ncrease in the manu ufacturing and d other expen nses from ` 71139.73 lacs in FY09 to ` 83448.43 lacs in FY10 F due to in ncrease in the produ uction levels of the compaany. And the employee cosst has increassed from `62441.73 lacs in FY09 F to ` 8254.26 laacs in FY10 du ue to increase in the salarries and wagees and other related beneffits and also due to increase in the t number of o employees in i the compan ny from 9755 in FY09 to 111702 in FY10. Interest and d Financial ch harges: The interest i and fiinancial charg ges have increeased from `11236.19 lacs in n FY09 to `1644.61 lacs in FY10 0 due to the increase i in working w capitaal loan and term t loan du uring the yearr. The company haad availed freesh term loan n to the extentt of ` 2350 laccs to fund the expansion program p and setting up of the 2.11 M.W capaciity windmill. Depreciatio on: There has been an incrrease in the depreciation d p provided by the t company as compared d to the previous yeear to the exteent of ` 249.466 lacs due to addition a in fix xed assets.

202

Scotts Ga arments Limiited Profit after Tax: Profit after a tax for F..Y 10 was aro ound 6.47% off the revenue from operatiions as compaared to around 7.488% in FY09. Th his was due to t increase in finance charg ges and other operating ex xpenses. Long Term Borrowing: The outstand ding balance of o secured loans has increeased from `66380.95 lacs in n FY09 to ` 7116.355 lacs in FY10 0. This increaase is due to the t increase in working caapital loan an nd term loan during d the year. The T company y had availed d fresh term loan to the extent e of ` 2350 2 lacs to fund f the exp pansion program an nd setting up of o the 2.1 M.W W capacity wiindmill. Fixed Assetts: There has been an addiition in the fix xed assets of the company y during the FY10. F This haas been mainly on account a of insstallation of 2.1 2 M.W capaacity Windmiill at Bellary. This windm mill has comm menced operations on o 30th March h, 2010. The company c hass also purchassed land at Taarapur and co onstructed bu uilding on the said land. l The oth her addition in i fixed assetss is on accoun nt of general expansion e /m modernization n at the existing uniits. nificant item ms of incomee and expend diture is giv ven An analysis of reasonss for the chaanges in sign hereunder: nt events or trransactions 1. Unusuall or infrequen There have h been no events, other than as desscribed in thiis Offer Docu ument, which h may be callled “unusuaal” or “infrequ uent”. t materiallly affected or are likeely to affectt income fro om 2. Significaant economiic changes that continuiing operation ns Any slow wdown in th he growth of Indian econo omy or futurre volatility in i global com mmodity prices, could afffect the busin ness, including the future financial f perfformance, shaareholders’ fu unds and ability to implem ment strategy y and the pricce of the Equitty Shares. t or Unccertainties th hat have had or are expectted to have a material adv verse impact on 3. Known trends sales, rev venue or inco ome from con ntinuing operrations There arre no known trends or un ncertainties th hat may have material adv verse impact on the incom me, costs and d profits of th he company frrom continuin ng operationss. c in relationship between b cossts and reven nues, in casee of events such as futu ure 4. Future changes increase in labour or material costts or prices th hat will causee a material ch hange are kn nown Increase in the cost of o the produccts in which the t Company y deals, will affect a the pro ofitability of the t company y. Further, th he company is i not able to o pass on the increase in prices p of the product to tthe customerrs in full. Thiss can be offset through cosst reduction. d sales volum me, 5. The exteent to which material incrreases in net sales or reveenue are duee to increased introducction of new products p or services or inccreased sales prices The increease / decrea ase in turnoveer is only on account a of increase in saless prices and volume. h major indu ustry segmentt in which th he Company operated o 6. Total turrnover of each Indian teextile industrry contributees about 14 per p cent to Industrial I Pro oduction, 4 per p cent to the t country’ss Gross Dom mestic Produ uct (GDP), 177 per cent to t export earrnings and provides p direect employm ment to 35 milllion people which w includees substantiall number of SC/ST S and wo omen. Textilee & Clothing g sales genera ated USD 52 Billion in 20008-09 bifurccated as USD D 33.4 billion from domesstic 203

Scotts Ga arments Limiited market and a US $ 21.60 0 billion from m exports. Neaarly 40 per ceent of the texttiles produced d in the counttry is exportted. y announced d new producct 7. Status off any publicly We havee not publicly announced any a new prod ducts. t business is Seasonal 8. The exteent to which the Our busiiness is not seeasonal and no n major cycliccal trends aree observed in this industry y. ons 9. Competiitive conditio We face competition from both un norganized and a other org ganized playeers, leading to difficulties in improvin ng market sha are which cou uld exacerbatee by cheap im mports. Our prin ncipal comp petitors in ou ur manufactturing operattions in Ind dia include, among otheers, Mandhan na Industriess Limited, Gok kaldas Exportts Limited, House H of Pearll Fashion Lim mited, KPR Miills Limited, Indus Fila and a Mudra Lifestyle L Limiited. Further we also facee competition n from region nal players located in Chiina, Bangladeesh and Vietn nam. nt 10. Cautionaary Statemen Statemen nts in this report r on Management Discussion D and Analysis describing the company y’s objectivee, expectation ns or predictiions may be forward loo oking statemeents within the t meaning of applicable security la aw and regu ulations. Thesse statementss are based on certain assumption an nd expectatiion of future events. Actual results cou uld however differ d materiaally from those expressed or implied.

204

Scotts Ga arments Limiited SEC CTION V - LEGAL L AND REGULATO ORY INFORM MATION UTSTANDIN NG LITIGATION, MATER RIAL DEVEL LOPMENTS AND OTHER R DISCLOSU URES OU I. CONTINGEN C NT LIABILIT TIES NOT PR ROVIDED FO OR: T contingen The nt liabilities not provided for f as on 31st October, O 20122 are as follow ws: Particularss

Amoun nt (` in laccs) 2 2213.40 155580.30 1 1875.00 199668.70

Letter of Credits C issued d by banker of o the Compan ny Liability on o account of export obligaation Estimated d Amount of Capital C Comm mitment Total

DING LITIGA ATIONS INV VOLVING SC COTTS GAR RMENTS LIM MITED: II. OUTSTAND The Issuerr Company ceertifies that ex xcept as stateed herein therre are no: •

Pen nding litigatio ons against the company.

•

Outtstanding litig gations, defau ults etc pertaiining to matteer likely to afffect operation ns and finances of the company inccluding proseccution under the Companiies Act 1956 (1 ( of 1956).

•

Succh cases of pen nding litigatio ons, defaults etc in respectt of Companiees/firms/ven ntures with which w the promoter weere associated d in the past but b are no lon nger associated d, and their names n continu ue to be associated a witth particular litigation.

•

Discciplinary actiion/ investig gation has beeen taken by y Securities and a Exchangee Board of India I (SEB BI)/ Stock Ex xchanges agaainst the Com mpany, its dirrectors, prom moter and theeir other busiiness ven ntures (irrespeective of the fact f whether or not they faall under thee purview of section s 370(1B B) of the Companies Act A 1956.

•

Casses against thee Company or o its Promoteer of economic offences in which w penaltties were imposed on promoter. p

•

Pen nding litigatio on, disputes, defaults, non n-payment of statutory dues, d proceed dings initiated d for offeences (includiing past cases and irrespeective of wheether specified d in paragrap ph (i) of part 1 of Sch hedule XIII of the Companiies Act, 1956) against the promoter p and their businesss ventures.

•

Pen nding litigatio ons, defaults, non paymen nt of Statutory y dues, proceeedings initiaated for econo omic offeences/civil offfences, any disciplinary d a action taken by b the Board /Stock Exchanges against the Com mpany/Prom moter and theeir business ventures/Dir v ectors other than those mentioned m in n this Offeer Documentt and that no litigations haave arisen an nd the Compaany and its Directors D takee full resp ponsibility of the informatiion mentioneed in the Offerr Document.

pany Cases filed agaiinst the comp (a) Civil Cases - NIL (b) Criminal Caases - NIL c und der labour law ws: Nil (c) Cases filed against the company d Service Tax Act: Nil (d) Pending Littigation Under Central Exxcise Act And (e) Pending dissputes underr Income Tax Act 205

Scotts Ga arments Limiited (f) Pending dissputes underr the sales taxx act t Company y Cases filed by the ( Civil Cases - NIL (a) ( Criminal Cases – Nil (b) I OUTSTANDING LITIIGATIONS INVOLVING III. I G DIRECTOR RS OF COMP PANY There aree no outstand ding litigation ns, disputes, non-paymen nt of statutorry dues, overrdues to ban nks / financial institutions, i defaults d again nst banks / fin nancial institu utions, defaullts in dues tow wards instrum ment holders liike debenture holders, fix xed deposits,, and arrearss on cumulattive preferen nce shares isssued, defaults in i creation of full securitty as per term ms of issue, other liabilitties, proceedings initiated d for economic / civil / any y other offencces (including g past cases where w penaltiies may or may m not have been b awarded and irrespecttive of whetheer they are sp pecified undeer paragraph (i) of Part I of Schedule XIIII of the Comp panies Act, 1956) against th he promoter and a director of o the Compan ny except the following: Legal pro oceedings by or against thee directors off Scotts Garm ments Limited d dings of civil nature (a) Proceed (i) By the Directors - NIL (ii) Again nst the Directtors - NIL dings of criminal nature (b) Proceed (i) By the Directors - NIL (ii) Again nst the Directtors - NIL I IV. OUTSTA ANDING LIT TIGATIONS INVOLVING G PROMOTE ER AND GRO OUP COMPA ANIES There aree no outstand ding litigatio on, disputes, non-paymen nt of statutory y dues, overrdues to banks / financial institutions, i defaults d again nst banks / fin nancial institu utions, defaullts in dues tow wards instrum ment holders liike debenture holders, fix xed deposits,, and arrearss on cumulattive preferen nce shares isssued, defaults in i creation of full securitty as per term ms of issue, other liabilitties, proceedings initiated d for economic / civil / any y other offencces (including g past cases where w penaltiies may or may m not have been b awarded and irrespecttive of whetheer they are sp pecified undeer paragraph (i) of Part I of Schedule XIIII of the Comp panies Act, 1956) against th he promoter group g compan nies. oceedings by//against the promoter/grou p up entities Legal pro ( Proceedin (a) ngs of civil na ature group entitiess: Nil (i) By the promoter/g (ii) Again nst the promo oter/group en ntities: Nil ( Proceedin (b) ngs of a crimiinal nature (i) By the promoter/ grroup entities:: Nil (ii) Again nst the promo oter/ group en ntities: Nil ( Cases und (c) der Income ta ax Act againsst the promotter/ group enttities: Nil 206

Scotts Ga arments Limiited MA ATERIAL DE EVELOPMEN NTS There have been n no significa ant developm ment since thee last audited Balance Sheeet as of 31st October, O 2012 till the datte of Red Herrring Prospecttus other than n the followin ng: •

• •

We have av vailed a shortt term loan frrom IndusInd d Bank Limiteed vide their sanction s letter dated 09/044/2013 for an amo ount of ` 1900 0.00 Lacs and ad hoc loan from f Canara Bank B vide com mmon hypothecation agreeement dated 14/003/2013 for an n amount of ` 1500.00 lacss We have repaid a loan aggregating to `1234.00 lacs l availed frrom Canara Bank B towards the Dodabaallapur Project. The Comp pany has also received san nction for term m loan and working w capital loan aggrregating to `88540.00 lacs from State S Bank of India I towards the Dodabaallapur Project

No o circumstancces have arisen n since the daate of last finaancial statemeent until the date d of filing of this Red Herring H Pro ospectus with h SEBI, which h materially an nd adversely affect or is lik kely to affect the operation ns or profitab bility of ourr Company, or o value of itss assets, or its ability to pay y its liability within w next tw welve monthss. There is no subssequent devellopment afterr the date of the t Auditor's Report, whicch will have a material imp pact on thee reserves, pro ofits, earningss per share an nd book valuee of the Equitty Shares of ou ur Company..

207

Scotts Ga arments Limiited GOVERNME G ENT/STATUT TORY AND BUSINESS B A APPROVALS On n the basis of the indicativ ve list of apprrovals below, we are perm mitted to carry y on businesss activities an nd no furrther major approvals a fro om any Goveernment auth horities or reg gulatory auth hority or any y other entity y are req quired by us to undertakee the Issue or o continue th hese businesss activities. Itt must be un nderstood thaat, in graanting these licenses, l Goveernment of In ndia and/ or Reserve Ban nk of India do oes not take any a responsib bility forr Company’s financial soundness or forr the correctn ness of any off the statemen nts made or opinion o expreessed in this t behalf. Wee require variious approva als to carry on n its businesss in India. Wee have receiv ved the follow wing Governm ment app provals/licen nses/permissiions: a other Stattutory Compliances: Inccorporation and 1. Certificate off Incorporatio on dated 01/03/2002, issu ued by the Reegistrar of Co ompanies (“R ROC”), Bangaalore, Karnataka, In ndia. 2. Certificate pu ursuant to ch hange of namee vide the Freesh Certificatee of Incorporaation dated 199/06/2007 isssued by the ROC C, Karnataka, Bangalore, India, I conseq quent upon Change C of Name N on conv version to Pu ublic limited Company. Lab bour Registraation & Apprrovals: 1. Employee’s Provident P Fu und code no: KN/23114 issued from the t Office of the Regionall Provident Fund F Commission ner vide letteer no. KN/P PF/ENP III BDXX B dated d 1 0/11/19997 (Granted to the erstw while partnership concern c and the t number reemains the saame). 2. Employee Sttate Insurancee code no. 53/ /2061/1 issued by the Reg gional Director Employee’’s State Insurrance Corporation vide letter no. n KAR. INSP PN. 53/F 23.13.1.92 (BA) 53-12061-19 dated d 02/05/ /1994 (Granteed to the erstwhilee partnership concern and the number remains r the saame). o. P00100561 issued i to the company as per the sectio on 6A (1) of th he Karnatakaa Tax 3. Registration certificate no on Profession ns, Trades, Ca allings and Em mployment Act, A 1976. Taxx Registration: 1.

The Perman nent Account Number (PA AN) AAFCS97703C issued by b the Director of Income-T Tax.

2.

The Tax Acccount Numbeer (TAN) BLR RS11395G issu ued by the Dirrector of Inco ome-Tax.

3.

The Tax Ideentification Number N (TIN N) for Bangalo ore (Karnatak ka) Units: 296660017109 an nd Tirupur (T Tamil Nadu) Units: 3366224001 1 issued by th he Director of Income-Tax.

4.

o Registratio on under secttion 69 of thee Finance Acct, 1994 (32 of 1994) read with Servicee Tax Certificate of Rules 19944 issued by the Centraal Excise Deepartment Su uperintenden nt, Registratiion, Service Tax Commission nerate, Banga alore.

208

Scotts Ga arments Limiited 5.

Central Exccise Registratiion Certificatte dated Junee 06, 2011 beaaring Registrration No.AA AFCS9703CXM M001 issued undeer rule 9 of the t Central Excise E Rules, 2002 to Scottts Garments Limited as a manufactureer of excisable go oods at Scotts Garments Limited, No o.481/B, 4th Phase, P Peeny ya Industrial Area, Bangaalore Urban, Karn nataka. This certificate c shaall remain valid till Scotts Garments G Lim mited carries on o the activity y for which it hass been issued or surrenders it or till it iss revoked or suspended. s

6.

Central Exccise Registratiion Certificatte dated May y 05, 2011 bearing Registrration No.AA AFCS9703CEM M002 issued undeer rule 9 of thee Central Exccise Rules, 20002 to Scotts Garments G Limiited operating g as a powerlloom weaver/ haand processorr dealer of yaarns and fabrics/ manufaccturer or read dymade garm ments at Rassaappa Gounder Gaarden, S. F. No.262, N Kangeeyam Main Ro oad, Nallur Village, V Tirupu ur Tamil Nad du. This certifficate shall remain n valid till Scotts S Garmen nts Limited carries c on thee activity forr which it haas been issueed or surrenders it i or till it is reevoked or susspended.

7.

Certificate of o Registration n as a dealer under u Centraal Sales Tax Act, A 1956 and Central C Sales Tax (Registraation and Turnov ver) Rules, 195 56 as per rule 5(1) issued by b the Comm mercial Tax offficer, Bazaar circle, c Tirupur.

8.

Certificate of o Registratio on as dealer under u Karnataaka Value Ad dded Tax Actt, 2003 issued d by the Assisstant Commission ner of Commercial Taxes, Bangalore, B Kaarnataka.

9.

o Registratio on as a dealler under Tamil Nadu Value V Added Tax Act, 20006 issued by y the Certificate of Assistant Co ommissioner of Commerciial Taxes, Tiru upur, Tamil Nadu. N

Environmental Licenses/Approvals/Conssents: S Sr. No N 1 1.

Issuin ng Authority

Natu ure of Registtration

Issuing Date

V Validity Datee

nal Officer, Region Karnattaka State Pollutiion Control Board, Regional Office Peenya

Consent fo or Operation of the Plant under Seection 21 of o the Air (Preventio on and Control C of Pollution) Act 19811 for the premises at No. B-1088, III Stage, Peenya Industrial Estate, Bangaloree- 560058 Consent for f existing discharge d of sewage effluents e under section 25/26 of the Water (prevention and Control Pollution n) Act- 1974 for the prremises at No. N B-108, III Stage, Peeenya Industtrial Estate, Bangaloree- 560058 Consent for f existing discharge d of sewage effluents e under section 25/26 of the Water (prevention and Control Pollution n) Act- 1974 for the prremises at No. N B-66, III Stage, Peeenya Industtrial Estate, Bangaloree- 560058

May 28, 2005

Deecember 31, 20014

May 28, 2005

Deecember 31, 20014

May 28, 2005

Deecember 31, 20014

2 2.

nal Officer, Region Karnattaka State Pollutiion Control Board, Regional Office Peenya

3 3.

nal Officer, Region Karnattaka State Pollutiion Control Board, Regional Office Peenya

209

Scotts Ga arments Limiited S Sr. No N 4 4.

Issuin ng Authority

Natu ure of Registtration

Issuing Date

V Validity Datee

nal Officer, Region Karnattaka State Pollutiion Control Board, Regional Office Peenya

Consent fo or Operation of the Plant Under Seection 21 of o the Air (Preventio on and Control C of Pollution) Act 19811 for the premises at No. B-666, III Stage, Peenya Industrial Estate, Bangaloree- 560058 Consent for f dischargee of Sewage and Tradee Effluents un nder Section 25/26 of the Water (Prevention and Contrrol of Pollutio on) Act 1974 for the premises p at No. N 1028/1, Patte Pallii Road, IV Udayapuram, U Robertson n Pet, KGF F, Bagarpet Taluk, Kollar District. Consent fo or Operation of the Plant Under Seection 21 of o the Air (Preventio on and Control C of Pollution) Act 19811 for the premises at a No. 1028/11, Patte Palli Road, IV Udayapuram m, Robertson Pet, KGF,, Bagarpet Taluk, T Kolar District. Consent for f Existing discharge d of sewage under u section n25 of the Water (Prrevention and d Control of Pollution) Act 1974 forr the unit at S.F. No. 226/1, Tiru upur Town, Tirupur Coimbatore Taluk, District. Consent for f Existing operation o of the plant under Sectio on 21 of the Air (Prev vention and Control of Pollution) Act, 1981 for the unit at S.F. No. 226/1, Tirup ppur Town, Tiruppur Coimbatore Taluk, District. Consent for f Existing discharge d of sewage under u section n 25 of the Water (Prrevention and d Control of Pollution) Act 1974 forr the unit at S.F. No. 295, 2 Veerapaandi Village, Coimbatore Tirupur Taluk, District. Consent for f Existing operation o of the plant under Sectio on 21 of the Air (Prev vention and Control of Pollution) Act, 1981 for the unit at S.F. No. 295, 2 Veerapaandi Village,

May 28, 2005

Deecember 31, 20014

October 3, 3 2007

Deecember 31, 20016

October 3, 3 2007

Deecember 31, 20016

October 166, 2007

Deecember 31, 20013

October 166, 2007

Deecember 31, 20013

5 5.

onmental Enviro Officerr, Karnataka State Pollution Contro ol Board, Kolar

6 6.

onmental Enviro Officerr, Karnataka State Pollution Contro ol Board, Kolar

7 7.

Districct Enviro onmental Engineeer, Tamil Nadu Pollution Contro ol Board, Tirupp pur.

8 8.

Districct Enviro onmental Engineeer, Tamil Nadu Pollution Contro ol Board, Tirupp pur.

9 9.

Districct Enviro onmental Engineeer, Tamil Nadu Pollution Contro ol Board, Tirupu ur.

1 10.

Districct Enviro onmental Engineeer, Tamil Nadu Pollution Contro ol Board,

210

A Applied for Renewal

A Applied for Renewal

Scotts Ga arments Limiited S Sr. No N

Issuin ng Authority Tirupp pur.

1 11.

onmental Enviro Officerr, Karnataka State Pollution Contro ol Board, Region nal OfficeTumku ur

1 12.

Districct Enviro onmental Engineeer, Tamil Nadu Pollution Contro ol Board, Tirupp pur.

1 13.

Districct Enviro onmental Engineeer, Tamil Nadu Pollution Contro ol Board, Tirupp pur.

1 14.

Senior Enviro onmental Officerr, Karnataka State Pollution Contro ol Board, Bangallore

1 15.

onmental Enviro Officerr, Karnataka State Pollution Contro ol Board, Bangallore

1 16.

Senior Enviro onmental Officerr, Karnataka

Natu ure of Registtration Tiruppur Taluk, Coimbatore District. Consent for discharge of effluents under thee Water (Prev vention and Control off Pollution) Act A 1974 and the Air Emissionss under (Preventio on and Control C of Pollution) Act 19811 for the premises at Plot No o. 1 and 2, Sathyaman ngala Indusstrial Area, Tumkur. Consent for f Existing discharge d of sewage under u section n 25 of the Water (Prrevention and d Control of Pollution) Act 1974 forr the unit at S.F. No. 505, 5 Veerapaandi Village, Coimbatore Tirupur Taluk, District. Consent for f Existing operation o of the plant under Sectio on 21 of the Air (Prev vention and Control of Pollution) Act, 1981 for the unit at S.F. No. 505, 5 Veerapaandi Village, Coimbatore Tirupur Taluk, District. Consent for discharge of effluents under thee Water (Prev vention and Control off Pollution) Act A 1974 and the Air Emissionss under (Preventio on and Control C of Pollution) Act 19811 for the premises at No. 22, 2 KIADB Industrial Area, K. G. G F. Road, Bangarpett Taluk- 5633114, Kolar District.

Issuing Date

V Validity Datee

A Applied for Renewal

April 02,, 2012

Deecember 31, 20013

April 02,, 2012

Deecember 31, 20013

Septemb ber 14, 20100

Deecember 31, 20019

Consent fo or discharge of Sewage and Trade Effluents un nder Section 25/26 of th he Water (Preevention and Control off Pollution) Act A 1974 for the premisses at at No o. B-1028/1, Patte Palli Road, IV Udayapuram, U Robertson Pet KGF, Bangarpet Taluk, Kolaar dist.

October 033, 2007

Deecember 31, 20016

Consent for discharge of effluents under thee Water (Prev vention and Control off Pollution) Act A 1974 and

October 1, 1 2012

September 300, S 2014

211

Scotts Ga arments Limiited S Sr. No N

Issuin ng Authority

Natu ure of Registtration

State Pollution Contro ol Board, Bangallore

Emissionss under the Air (Preventio on and Control C of Pollution) Act 19811 for the premises at 481/ A&B B, IV Phase, Peenya Ind dustrial Areaa, Bangalore Consent fo or Operation of the Plant under Seection 21 of o the Air (Preventio on and Control C of Pollution) Act 19811 for the premises at No. 2992/D, Patel Chennapp pa Industriial Estate, Hegganah halli, II Stag ge, Peenya, Bangaloree Consent for f dischargee of Sewage and Tradee Effluents un nder Section 25/26 of the Water (Prevention and Contrrol of Pollutio on) Act 1974 for the prremises at at No. 292/D, Patel Chen nnappa Industrial Estate, Hegganah halli, II Stag ge, Peenya, Bangaloree Consent for discharge of effluents under thee Water (Prev vention and Control off Pollution) Act A 1974 and the Air Emissionss under (Preventio on and Control C of Pollution) Act 19811 for the premises at No. V-27, III Stag, 7th main, Peeenya Industtrial Estate, Bangaloree Consent for discharge of effluents under thee Water (Prev vention and Control off Pollution) Act A 1974 and Emissionss under the Air (Preventio on and Control C of Pollution) Act 19811 for the premises at No. 5F22, 1st Phase, Peenya In ndustrial Area, Jalahalli west, S.M. Road, Beng galuru North Taluk, Ben ngaluru Consent for discharge of effluents under thee Water (Prev vention and Control off Pollution) Act A 1974 and the Air Emissionss under (Preventio on and Control C of Pollution) Act 19811 for the premises at a No. 353a,, 8th main, II Stage, Peeenya Industtrial Estate, Bangaloree

1 17.

nal Officer, Region Bangallore North II, Karrnataka State Pollutiion Control Board

1 18.

nal Officer, Region Bangallore North II, Karrnataka State Pollutiion Control Board

1 19.

Senior Enviro onmental Officerr, Karnataka State Pollution Contro ol Board, Bangallore

2 20.

2 21.

onmental Enviro officer,, North Bangallore

onmental Enviro Officerr, Karnataka State Pollution Contro ol Board

212

Issuing Date

V Validity Datee

January 222, 2008

Deecember 31, 20017

January 222, 2008

Deecember 31, 20017

A Applied for Renewal

A Applied for Renewal

A Applied for Renewal

Scotts Ga arments Limiited S Sr. No N 2 22.

Issuin ng Authority

Natu ure of Registtration

Issuing Date

V Validity Datee

Districct Enviro onmental Engineeer, Tamil nadu Pollution Contro ol Board

Consent under u section n 25 of the Water (Preevention and d Control of Pollution) Act, 1974 at S.F> no Karaipudur 268/1D, 368/3B, village, tiru upur taluk, tirrupur dist.

Septemb ber 30, 20111

September 300, S 2013

2 23.

Districct Enviro onmental Engineeer, Tamil nadu Pollution Contro ol Board

Consent un nder section 21 2 of the Air (Prevention n and C Control of Pollution) Act, 1981 at S.F> no 2/785B, Naranapuram m village,, Palladam taluk, t tirupur dist

2 24.

Districct Enviro onmental Engineeer, Tamil nadu Pollution Contro ol Board

Consent under u section n 25 of the Water (Preevention and d Control of Pollution) Act, 1974 at S.F> no 2/785B, Naranapuram m village,, Palladam taluk, t tirupur dist

A Applied for reenewal

2 25.

Member Secretary, Tamil nadu Pollutiion Control Board

Consent under u section n 25 of the Water (Preevention and d Control of Pollution) Act, 1974 at S.F> no 536/5 (ptt.), veerapan ndi village, tiruppur taaluk, tiruppurr dist.

A Applied for reenewal

2 26.

Member Secretary, Tamil nadu Pollutiion Control Board

Consent un nder section 21 2 of the Air (Prevention n and C Control of Pollution) Act, 1981 at S.F> no 536/5 (ptt.), veerapan ndi village, tiruppur taaluk, tiruppurr dist

A Applied for reenewal

2 27.

onmental Enviro Officerr, Karnataka State Pollution Contro ol Board

Consent fo or establishm ment of new factory in the name of M/s. Scotts Garments Limited (Un nit-13) at Sy. No. 30/1, Chikkaballaapura Road, Near Raillway Crossiing, Kolar563101

onmental Enviro Officerr, Karnataka State Pollution Contro ol Board

Consent fo or establishm ment of new factory in the name of M/s. Scotts Garments Limited (Un nit-14) at Sy. No. 60, Sultan Thiippasandara, Antharagan nge Road,Neear stadium, Kolar.

onmental Enviro Officerr, Karnataka State Pollution

Consent fo or establishm ment of new industry for carrying g out knit

2 28.

2 29.

213

Ap pplied for ren newal

A Applied for reenewal

A Applied for reenewal

March 177, 2012

vaalid for a period of 5 years from the date of issuee

Scotts Ga arments Limiited S Sr. No N

Issuin ng Authority

Natu ure of Registtration

Issuing Date

V Validity Datee

Contro ol Board

processing g and trouser at Plot No. A-3,10 & 11, 1 D- 3&4, S-43,44 S & 45, Apparel Park, P Ist Phaase, KIADB INDl. A Area, Dodd daballapura, Bangalore North N Taluk

Districct Enviro onmental Engineeer, Tamil nadu Pollution Contro ol Board,

Consent under u section n 25 of the Water (Preevention and d Control of Pollution) Act, 1974 at S.F. no 643, veerapandii village, tiru uppur taluk, tiruppur diist.

Districct Enviro onmental Engineeer, Tamil nadu Pollution Contro ol Board,

Consent un nder section 21 2 of the Air (Prevention n and C Control of Pollution) Act, 1981 at S.F> S no 643, veerapandii village, tiru uppur taluk, tiruppur diist

3 32.

Districct Enviro onmental Engineeer, Tamil nadu Pollution Contro ol Board

Consent under u section n 25 of the Water (Preevention and d Control of Pollution) Act, 1974 at S.F. no 262, nallur village, tirup ppur taluk, tiruppur

July 28, 2011

Deecember 31, 20013

3 33.

Districct Enviro onmental Engineeer, Tamil nadu Pollution Contro ol Board,

Consent un nder section 21 2 of the Air (Prevention n and C Control of Pollution) Act, 1981 at S.F> S no 262, nallur village, tirup ppur taluk, tiruppur diist.

July 19, 2012

Deecember 31, 20013

3 34.

onmental Enviro Regional Office, Office, Karnataka Pollutiion Control Board

Consent fo or discharge of effluents under the Water (Prev vention and Control of Pollution) Act A 1974 and the Air Emissions under (Prevention n and C Control of Pollution) Act A 1981 for the t premises at 7/1, Gummanah halli Road, Byadgi, Kaarnataka

3 30.

3 31.

A Applied for reenewal

A Applied for reenewal

January 011, 2013

Deccember 31, 2022

Ap pprovals for Business B & Fa actory: 1.

Certificate of o Importer-E Exporter Codee (IEC) numb ber: 07930090114 issued by the Foreign Trade T Develo opment Officer, Offiice of Joint Director Generral of Foreign n Trade, Minisstry of Comm merce and Ind dustry, Goverrnment of India.

214

Scotts Ga arments Limiited 2.

Certificate of o Registratio on as Trading g House in acccordance witth the provisions of the Fo oreign Trade Policy, 2009-2014 issued i by the Joint Direcctor General of Foreign Trade, Minisstry of Com mmerce & Ind dustry, Governmen nt of India on 12/03/2012. The certificatte is valid till 31/03/2014.

3.

Registration n Cum Mem mbership Certtificate of Ap pparel Exportt Promotion Council issu ued by the Deputy D Director, Ap pparel Exportt Promotion Council. C

4.

License und der Factories Act 1948 including Registrration Numb ber: MYB-169661, issued by the Chief Insspector of Factoriess, Karnataka State, India for f unit at 4222, Patel Chaannappa Indu ustrial Estate,, Peenya, 2nd stage, Bangalore-991. The licensee was valid upto 31/12/20012. The Com mpany has made application for renewall.

5.

License und der Factories Act 1948 inclluding Registtration Numb ber: MYB-84551, issued by the Chief Insspector th of Factoriess, Karnataka State, India for unit at 481/B, 4 4 Phaase, Peenya Industrial I Arrea, Bangalorre. The license was valid upto 31 1/12/2012. Th he Company has made app plication for renewal. r

6.

License und der Factories Act A 1948 inclu uding Registrration Numbeer: MYK-405, issued by thee Chief Inspeector of Factories, Karnataka K State, India for unit u at Irudayasuru, Robeertson Pet, K..G.F. The liceense was valid d upto 31/12/20122. The Company has made application for f renewal.

7.

License und der Factories Act 1948 including Registrration Numb ber: MYB-164002, issued by the Chief Insspector th of Factories, Karnataka State, S India fo or unit at U-277, 7 main, Peenya Industtrial Area, Ban ngalore. The license l was valid upto 31/12/20 012. The Com mpany has made application n for renewall.

8.

License und der Factories Act A 1948 inclu uding Registrration Numbeer: MYK-430, issued by thee Chief Inspeector of Factories, Karnataka K Sta ate, India for unit at Plot No. N 22, KIAD DB, K.G.F. Ro oad, Bangarp pet. The licensse was valid upto 31/12/2012. 3 The T Company y has made ap pplication forr renewal.

9.

der Factories Act A 1948 inclu uding Registrration Number: MYB-630, issued by thee Chief Inspeector of License und Factories, Karnataka K State, India for unit at Plot No. N 1, NH No. N 4, Sathyam mangala Indu ustrial Area, Behind B Bharath Pettrol Bunk, Tumkur. The liccense was vallid upto 31/112/2012. The Company haas made application for renewal.

der Factories Act 1948 including Registrration Numb ber: MYB-172118, issued by the Chief Insspector 10. License und of Factoriess, Karnataka State, India for units at 5/1, Madanaayakanahalli, Tumkur Road, Bangalorre. The license was valid upto 31 1/12/2012. Th he Company has made app plication for renewal. r der Factories Act 1948 including Registrration Numb ber: MYB-177338, issued by the Chief Insspector 11. License und of Factoriess, Karnataka State, S India for unit at SF-2, 1st Phase, Peenya Indu ustrial Area, Jalahalli J Wesst, S.M. Road, Bangaalore. The liceense was valiid upto 31/122/2012. The Company C has made applicaation for reneewal. der Factories Act 1948 including Registrration Numb ber: MYB-122113, issued by the Chief Insspector 12. License und of Factoriess, Karnataka State, S India for f unit at 481/B, 4th Phasse, Peenya In ndustrial Areaa, Patel Chen nnappa nd Industrial Area, A Andrah halli, B-91 Maain Road, Peeenya 2 stagee. The licensee is valid uptto 31/12/20112. The Company has h made appllication for reenewal. 215

Scotts Ga arments Limiited

13. License und der Factories Act 1948 including Registrration Numb ber: MYB-182112, issued by the Chief Insspector of Factoriess, Karnataka State, India for unit at A-353/(9), A 8thh Main, 2nd Stage, S Peenyaa Industrial Estate, Bangalore. The T license is valid upto 311/12/2012. Th he Company has made ap pplication for renewal. r der Factories Act 1948 including Registrration Numb ber: MYB-122222, issued by the Chief Insspector 14. License und of Factoriess, Karnataka State, India for unit at B-108, B 3rd Stag ge, Peenya In ndustrial Estaate, Bangalorre. The license was valid upto 31 1/12/2012. Th he Company has made app plication for renewal. r b Deputy Ch hief Inspectorr of Factories, Tirupur to factory f 15. Licence beaaring registrattion no. CB 11406 issued by at S.F. No. 226/1 Dhara ampuram Ro oad, Pudhur Pirivu, Tirup pur – 641 6008. The said license is vaalid till 31/12/20133 1 issued by b Deputy Ch hief Inspectorr of Factoriess, Tirupur to factory f 16. Licence beaaring registrattion No. CB 12365 at S.F. No. 295 2 – Muruga ampalayam road, r Sundam medu, Tirupur. The said license was vaalid till 31/122/2012. The Compaany has made application for f renewal. 1 issued by b Deputy Ch hief Inspectorr of Factoriess, Tirupur to factory f 17. Licence beaaring registrattion No. CB 12364 at D. No. 1/ / 805 – Laksh hana Theatre near, n Dharam mpuram Road d, Palavanchip palayam, Tiru upur – 641 6008. The said license is valid till 31 1/12/2013. 1 issued by b Deputy Ch hief Inspectorr of Factoriess, Tirupur to factory f 18. Licence beaaring registrattion No. CB 13511 at S. F. No. 368 3 – Nochipalayam Road d, Lakshmi Gaarden, Veerap pandi Post, Tiirupur on Jun ne 12, 2007. Th he said license was valid till 31/1 12/2012. The Company haas made appliication for ren newal. 1 issued by b Deputy Ch hief Inspectorr of Factoriess, Tirupur to factory f 19. Licence beaaring registrattion No. CB 15951 at S. F. No. 699/2 – R. M & Bros., m Industrial I com mplex, Kamaaraj Road, Tiru upur. The saiid license was valid till 31/12/22012. The Com mpany has maade applicatio on for renewaal. 1 issued by b Deputy Ch hief Inspectorr of Factoriess, Tirupur to factory f 20. Licence beaaring registrattion No. CB 14372 at S. F. No. 2/ 785 – B Mahalakshmi M N Nagar, Tirupu ur main Road d, Naranpuram m, Palladam.. The said license is /12/2013. valid till 31/ 1 issued by b Deputy Ch hief Inspectorr of Factoriess, Tirupur to factory f 21. Licence beaaring registrattion No. CB 15817 at S. F. No. 643, Kulathu upalayam, Near veerapand di, telephone exchange, e veeerapandi (po)), Tirupur. Th he said 12/2012. The Company haas made appliication for ren newal. license was valid till 31/1 1 issued by b Deputy Ch hief Inspectorr of Factoriess, Tirupur to factory f 22. Licence beaaring registrattion No. CB 16396 at S. F. No. 262, Kangeya am road, Kullathu Thotam m, Vijayapuram m (po), Tirup pur – 641 608. The said license is valid till 31/ /12/2013. y Deputy Chieef Inspector of o Factories, Tirupur T to facctory at 23. Licence bearing registrattion No. CB 7717 issued by S. F. No. 5336/5, Veerapandi (po), Tirupur. The said license was w valid till 31/12/2012. The Compan ny has made appliccation for ren newal. 216

Scotts Ga arments Limiited

24. Licence beaaring registra ation No. No.: MYB-195443 to run Facctory at 36/66, Byraveshwaara Industriaal area, Hegganahallli Main road,, Bangalore. The T said licen nse is valid tilll 31/12/2014 25. License beaaring registra ation No. No.: MYB-141998 to run Facctory at B-66,, Peenya Ind dustrial Estatee, IIIrd stage, Bang galore-58. Thee said licensee was valid till t 31/12/2012. The Com mpany has made applicatiion for renewal. her Certificattes Oth 1.

Gold Certifficate of Co ompliance aw warded to Scotts S Garmeents Limited by Directorr of Compliiance Administrattion – Worldw wide Respon nsible Accrediited Productiion, having faacility at SF-22,1st Phase Peeenya Industrial Area, A Jalahalli, West, S. M. M Road, Baangalore, Karrnataka, Indiia -560015 beearing Certifficate No.12450 fo or period from m January 17, 2012 to Januaary 17, 2013 for f production n processes. The T Company y has made an application for renewal. r

2.

Renewed Certificate C forr the Social Accountabilit A ty System, SA A 8000:2008 having Certiificate No.: SA-385, S issued by th he Director off Certification n Division RIN NA Services S.p.A. S This ceertificate is isssued for desig gn and manufacturre of woven readymade r gaarments for operating o uniit at 481-B, IV V Phase, Peen nya Industriall Area, Bangalore. The T expiry da ate of certificaate is 26/09/22014

3.

ganic Textile Standard (GO OTS) Textile Certification n including Certificate C No o.: CU808682G GOTSGlobal Org 01.2013 and d Registration No.: CU 808682, 8 issueed by the Managing M Dirrector, Certifiier, Control Union Certification n. The certificcate is valid till 28/12/20133

4.

Certificate of o Compliancce for Organiic Exchange 100 Standard d (OE 100) veersion 1.3 beaaring certificaate no. CU808682O OE100-01.2013 3 and Registraation No.: CU U 808682, issu ued by Manaaging Director, Certifier, Control C Union Certiification. The certificate is valid v till 28/112/2013

5.

Scotts Garm ments has reeceived Certiificate of Co onformity issued by FLO O-CERT Gmb bh Certification for Developmen nt certifying the t compliancce of Fairtrad de standard fo or the followin ng -

Generic FAIRT G TRADE Tradee Standards FL LO-CERT Public Complian nce criteria lisst for Trade Certification C FL LO-CERT Tra ade Certification Policies FA AIRTRADE Standards S for Seed Cotton for Small Pro oducers Organ nizations

This certificcate is issued for f functions such as CMT T, Dyeing, Waashing, Printiing, Embroideery. The prod duction site applicaable for this certificate iss 481- A&B, Peenya Indu ustrial Area, Peenya, Ban ngalore and 536/5, Veerapandii Post, Tirupu ur. It is valid upto u 05/05/20013. Ap pprovals for Doddaballapu D ur project* Wee have receiveed the followiing statutory approvals 1 Karnatakaa State Pollution Control Board, Bang 1. galore for con nsent for discharge of efffluents underr the Water (Prrevention and d Control of Pollution) Act A 1974 and Emissions under the Airr (Prevention and Control off Pollution) Act A 1981 for esstablishment of unit vide their letter datted 17/03/20012.

217

Scotts Ga arments Limiited 2 2. 3 3. 4 4.

Registratiion as a dealler under Ceentral Sales Tax T Act, 19566 and Centraal Sales Tax (Registration ( and Turnover)) Rules, 1956 as per rule 5((1) Registratiion as dealer under section n 22 of Karnaataka Value Added A Tax Acct, 2003, Form m VAT 7 Rulee 9(1) of the Rulles Temporarry Connection n of 1000 KVA A from Bangaalore Electriciity Supply Co ompany Limiited received.. The Company y is in processs of complying g with other requirements r s.

Oth her than abov ve the followiing are the staatutory licensse and approv vals for which h application has h been mad de: 1 Chief Insp 1. pector of Facttories, Karnattaka State, No o.3, 1st Crosss Road, Gandhinagar, Bang galore – 560 009 0 for license un nder Factoriess Act 1948 and d its rules; 2 Departmeent of Ecology 2. y and Environ nment; Karnaataka Ap pprovals for Kagal K Projectt* Wee shall make requisite applications forr the Kagal project p after the land is allotted a to ou ur Company. The req quired licensees and approv vals for comm mencement of Project is as under: u 1 Approvall from Mahara 1. ashtra Pollutiion Control Board 2 License un 2. nder Factoriees Act 3 License un 3. nder Shops an nd Establishm ment Act 4 Other Com 4. mmercial regiistrations und der the indireect tax authoriities. *Ou ur Company shall apply fo or any other licenses l and approvals a as required r for commenceme c ent of operatio ons.

218

Scotts Ga arments Limiited OTH HER REGULA ATORY AND D STATUTOR RY DISCLOS SURES A) AUTHORIT TY FOR THE E PRESENT ISSUE I Our Board has, pursuan nt to resolutio on passed att its meeting held on 10/05/2010, auth horised the Issue I subject to th he approval by b the shareh holders of thee Company under Section 81(1A) of thee Companies Act. The shareho olders of ourr Company have h authoriseed the Issue by b a special resolution paassed pursuan nt to Section 81(11A) of the Companies Acct, at an Extrra Ordinary General G Meeting held on n 10/06/2010 and 19/12/20122. B) PROHIBITION BY SEBI, RBI OR GO OVERNMEN NT AUTHOR RITIES The Compaany, its Prom moter, its Direectors or any of the Comp pany’s associiates or group p companies and companies with w which th he Directors of o the Company are associaated as Directtors or Promo oter, are curreently not prohibitted from acceessing or opeerating in the capital mark ket under any y order or dirrection passed by SEBI. The Promotter, his relativ ves (as per Act), A the Com mpany, group p companies, associate com mpanies havee not detained as wilful defaullters by RBI / Governmentt authorities. None of thee Directors of the Company are associiated with an ny entities wh hich are engaaged in securrities market relatted business and a are registtered with SE EBI. C) Eligibility for f the Issue The Compaany is eligiblle for the Isssue as per reegulation 26(11) of the (Isssue of Capitaal and Disclo osure Requiremen nts) Regulatio ons, 2009 as ex xplained und der: •

Scotts Garments G Lim mited has a neet tangible asssets of at least ` 3 crores in each of thee preceding three t full yearrs (of 12 mon nths each), of which w not mo ore than 50% is held in monetary assets;;

•

Scotts Garments G Lim mited has a prre-Issue net worth w of at least ` 1 crore in each of thee three preceding full yearrs (of 12 mon nths each);

•

Scotts Garments G hass a minimum m average prre-tax operatting profit off ` 15 crores,, calculated on o a restated d basis during g the three mo ost profitable years out of the t immediattely preceding g five years;

•

The pro oposed Issue size would not exceed five f times th he pre-Issue net n worth ass per the aud dited accountts for the yearr ended March h 31, 2012;

•

Scotts Garments G Lim mited has not changed c its name n during the t last one yeear. Particulaars

Pre Tax Operating O Pro ofits Net Worrth (1) Net Tang gible Assets (2) ( Monetarry Assets(3) Monetarry Assets as a % of Net Tang gible Assets

(In ` lacs) Fo or the Financiial Year Endeed March 31 2011 2010 2009 2008

7 Months ended 31st O October 2012 2933.82 2 24323.38 2 23278.26 620.66

4035.67 2 22784.25 2 21308.79 552.76

4470.44 15428.78 13215.60 738.53

4091.22 12985.26 10034.34 484.32

3581.08 11260.56 7571.91 602.21

3410.76 7441.13 3752.48 579.07

2.67%

2.59%

5.59%

4.83%

7.95%

15.43%

2012

219

Scotts Ga arments Limiited Note: (1) Net worth w has been n defined as thhe aggregate off equity share capital and reserves, r excluding miscellan neous expendditures, if any. (2) Net taangible assets means m the sum m of all net asssets of the Com mpany excludin ng intangible assets a as defined in Accou unting Standarrd 26 issued byy Institute of Chartered Ch Accou untants of Indiia. (3) Monettary assets com mprise of cash and a bank balan nces, public depposit account with w the Govern nment. The Company satisfies s all thee eligibility crriteria, laid do own in regulaation 26(1) off the SEBI (Isssue of Capitall and Dissclosure Requ uirements) Regulation. R H However, the Company is doing a “vo oluntary book k-building isssue” wh herein the Com mpany propo oses to 25% off the Issue to QIBs Q The promoter, the t company, directors of Scotts S Garmeents Limited are a not detain ned as willful defaulters by y the RB BI/ GOI autho orities and th here are no vio olations of seecurities laws committed by b them in thee past or pen nding agaainst them oth her than those disclosed in n this Offer Document. No o penalty hass been impossed by SEBI and other reegulatory bod dies against the t company,, its directorss, its pro omoter and co ompanies pro omoted their directors. d Sco otts Garmentss Limited und dertakes that the number of o allottees in n the Issue shaall be at least 1,000. Otherw wise, thee entire appliccation money y shall be refu unded forthwiith. In case off delay, if any, in refund, th he Company shall pay y interest on the t applicatio on money at the t rate of 15% % per annum for the period d of delay. D) DISCLAIM MER CLAUSE E (SEBI) B DISTINC CTLY UNDER RSTOOD TH HAT SUBMIS SSION OF OFFER O DOCU UMENT TO THE T "IT IS TO BE SECURITIE ES AND EX XCHANGE BOARD B OF INDIA (SE EBI) SHOUL LD NOT IN ANY WAY Y BE DEEMED OR O CONSTR RUED THAT T THE SAM ME HAS BEEN CLEARED D OR APPRO OVED BY SEBI. S SEBI DOES S NOT TAKE ANY RESP PONSIBILIT TY EITHER FOR F THE FIN NANCIAL SOUNDNESS S S OF ANY SCHE EME OR THE E PROJECT FOR WHICH H THE ISSUE E IS PROPO OSED TO BE MADE OR FOR F THE CORR RECTNESS OF O THE STA ATEMENTS MADE OR OPINIONS O E EXPRESSED IN THE OF FFER DOCUMEN NT. THE BO OOK RUNN NING LEAD D MANAGER R, KEYNOT TE CORPOR RATE SERVIICES LIMITED AND CO-B BOOK RUN NNING LEA AD MANAG GER, CANAR RA BANK – MERCHA ANT AT THE DISCLOSURE D ES MADE IN I THE OF FFER BANKING DIVISION HAS CERTIFIED THA DOCUMEN NT ARE GEN NERALLY AD DEQUATE AND A ARE IN N CONFORM MITY WITH SEBI (ISSUE E OF CAPITAL AND A DISCLOSURE REQ QUIREMENT TS) REGULA ATIONS, 20099 IN FORCE FOR THE TIME T BEING. TH HIS REQUIR REMENT IS S TO FACILITATE INV VESTORS TO T TAKE AN A INFORM MED DECISION N FOR MAKIN NG INVESTMENT IN TH HE PROPOSED ISSUE. LD ALSO BE CLEARLY Y UNDERST TOOD THAT T WHILE THE T ISSUER R COMPANY Y IS IT SHOUL PRIMARIL LY RESPONS SIBLE FOR THE T CORRE ECTNESS, AD DEQUACY AND A DISCL LOSURE OF ALL RELEVANT T INFORMA ATION IN THE OFFE ER DOCUM MENT, THE BOOK RU UNNING LE EAD MANAGER R IS EXPEC CTED TO EX XERCISE DU UE DILIGEN NCE TO EN NSURE THA AT THE ISSU UER DISCHARG GES ITS RE ESPONSIBILITY ADEQU UATELY IN THIS BEHA ALF AND TOWARDS THIS T PURPOSE, THE BOO OK RUNNIN NG LEAD MANAGER,, KEYNOTE E CORPORA ATE SERVIICES LIMITED AND A CANAR RA BANK MERCHANT M BANKING DIVISION D H HAS FURNISHED TO SEB BI A DUE DILIG GENCE CER RTIFICATE DATED D 28/099/2010 IN AC CCORDANC CE WITH SEB BI (MERCHA ANT BANKERS)) REGULATIION, 1992, WHICH W READ DS AS FOLLO OWS: (1)

H EXAM MINED VA ARIOUS DO OCUMENTS INCLUDIN NG THOSE RELATING TO WE HAVE LITIG GATION LIKE COMMERCIAL DIISPUTES, PA ATENT DIS SPUTES, DIISPUTES WITH W COLL LABORATOR RS, ETC. AND A OTHE ER MATER RIAL IN CONNECTIO C ON WITH THE T 220

Scotts Ga arments Limiited FINA ALISATION OF O THE DRA AFT RED HE ERRING PRO OSPECTUS PERTAINING P G TO THE SAID S ISSUE; (2)

ON THE T BASIS OF O SUCH EXA AMINATION N AND THE E DISCUSSIO ONS WITH THE T ISSUER,, ITS DIRE ECTORS AN ND OTHER R OFFICER RS, OTHER R AGENCIE ES, AND INDEPENDE ENT VERIIFICATION OF O THE STA ATEMENTS CONCERNIN C NG THE OBJJECTS OF TH HE ISSUE, PR RICE JUSTIFICATION AND THE CONTENT TS OF THE DOCUMEN NTS AND OTHER O PAP PERS NISHED BY THE T ISSUER R, WE CONF FIRM THAT: FURN (A) (B)

(C)

THE DRAF FT RED HERRING PR ROSPECTUS S FILED WITH W THE BOARD IS IN CONFORM MITY WITH THE T DOCUM MENTS, MAT TERIALS AN ND PAPERS RELEVANT T TO THE ISSUE;; ALL THE LEGAL REQUIREMEN NTS RELATIING TO TH HE ISSUE AS A ALSO THE T ONS GUID DELINES, IN NSTRUCTIONS, ETC. FRAMED/ISS F SUED BY THE T REGULATIO BOARD, THE T CENT TRAL GOV VERNMENT AND AN NY OTHER R COMPETE ENT AUTHORIT TY IN THIS BEHALF B HAV VE BEEN DU ULY COMPLIIED WITH; AND A THE DISCL LOSURES MA ADE IN THE E DRAFT RE ED HERRING G PROSPECT TUS ARE TR RUE, FAIR AND ADEQUATE E TO ENABL LE THE INVE ESTORS TO MAKE A WE ELL INFORM MED DECISION AS TO TH HE INVEST TMENT IN THE PROP POSED ISSU UE AND SU UCH RES ARE IN I ACCOR RDANCE WITH THE REQUIREME R ENTS OF THE T DISCLOSUR COMPANIE ES ACT, 19556, THE SE ECURITIES AND A EXCH HANGE BOA ARD OF IN NDIA (ISSUE OF CAPITAL C AN ND DISCLOSURE REQU UIREMENTS)) REGULATIIONS, 2009 AND A OTHER APP PLICABLE LEGAL REQU UIREMENTS.

(3)

C TH HAT BESIDE ES OURSELV VES, ALL TH HE INTERM MEDIARIES NAMED N IN THE T WE CONFIRM DRAF FT RED HER RRING PRO OSPECTUS ARE A REGIST TERED WITH H THE BOA ARD AND TH HAT TILL DATE SUCH H REGISTRA ATION IS VA ALID.

(4)

WE HAVE H SATIS SFIED OURSE ELVES ABOUT THE CAP PABILITY OF THE UNDE ERWRITERS S TO FULF FIL THEIR UN NDERWRITIING COMM MITMENTS.

(5)

WE CERTIFY C THA AT WRITTE EN CONSENT T FROM PROMOTERS HAS H BEEN OBTAINED O F FOR INCL LUSION OF F THEIR SPECIFIED D SECURIT TIES AS PART P OF PROMOTE ERS’ CONT TRIBUTION N SUBJECT TO T LOCK-IN N AND THE SPECIFIED S S SECURITIES PROPOSED D TO FORM M PART OF F PROMOTE ERS’ CONTR RIBUTION SUBJECT S TO O LOCK-IN SHALL S NOT T BE DISP POSED / SO OLD / TRA ANSFERRED BY THE PROMOTER P RS DURING G THE PER RIOD STAR RTING FROM M THE DAT TE OF FILING G THE DRAF FT RED HER RRING PROSPECTUS WITH W THE BOARD TIL LL THE DATE OF COMM MENCEMENT T OF LOCK--IN PERIOD D AS STATED D IN D RED D HERRING PROSPECTU P US. THE DRAFT

(6)

WE CERTIFY C TH HAT REGULA ATION 33 OF O THE SECU URITIES AN ND EXCHAN NGE BOARD D OF INDIA (ISSUE OF O CAPITAL L AND DISC CLOSURE REQUIREMEN R NTS) REGU ULATIONS, 2009, 2 CH RELATE ES TO SPECIFIED SEC CURITIES IN NELIGIBLE FOR COM MPUTATION OF WHIC PROM MOTERS CO ONTRIBUTIO ON, HAS BE EEN DULY COMPLIED C WITH AND D APPROPRIATE DISC CLOSURES AS A TO COMPLIANCE WITH W THE SA AID REGULATION HAV VE BEEN MA ADE IN TH HE DRAFT RED R HERRIN NG PROSPEC CTUS.

(7)

WE UNDERTAKE U E THAT SUB B-REGULATIION (4) OF REGULATION R N 32 AND CLAUSE (C) AND A (D) OF O SUB-REGULATION (22) OF REGU ULATION 8 OF O THE SEC CURITIES AN ND EXCHAN NGE BOAR RD OF IN NDIA (ISSU UE OF CA APITAL AN ND DISCL LOSURE RE EQUIREMEN NTS) REGU ULATIONS, 2009 SHALL L BE COMPLIIED WITH. WE W CONFIRM THAT AR RRANGEMEN NTS HAVE BEEN MADE M TO ENSURE E TH HAT PROM MOTERS’ CO ONTRIBUTIO ON SHALL BE EIVED AT LE EAST ONE DAY D BEFORE THE OPEN NING OF TH HE ISSUE. WE W UNDERTA AKE RECE THAT T AUDITOR RS’ CERTIFIC CATE TO TH HIS EFFECT SHALL BE DULY D SUBM MITTED TO THE T 221

Scotts Ga arments Limiited BOAR RD. WE FU URTHER CO ONFIRM TH HAT ARRAN NGEMENTS S HAVE BE EEN MADE TO ENSU URE THAT PROMOTE ERS’ CONTR RIBUTION SHALL BE E KEPT IN AN ESCR ROW ACCO OUNT WITH H A SCHED DULED COM MMERCIAL BANK B AND D SHALL BE RELEASED D TO THE ISSUER I ALO ONG WITH THE T PROCEE EDS OF THE E PUBLIC ISS SUE. – NOT APPLICABLE A E (8)

WE CERTIFY C THA AT THE PRO OPOSED ACT TIVITIES OF F THE ISSUE ER FOR WHICH THE FUN NDS ARE BEING RAIS SED IN THE E PRESENT ISSUE FALL WITHIN TH HE ‘MAIN OB BJECTS’ LIST TED T OBJECT T CLAUSE OF THE MEMORAND M DUM OF ASSOCIATIO A ON OR OTH HER IN THE CHAR RTER OF TH HE ISSUER AND THAT T THE ACTIV VITIES WHIICH HAVE BEEN B CARR RIED OUT UNTIL NOW N ARE VALID IN N TERMS OF O THE OBJECT O CL LAUSE OF ITS MEM MORANDUM M OF ASSOCIIATION.

(9)

WE CONFIRM C THAT T NECE ESSARY ARRANGEMEN NTS HAVE BEEN MAD DE TO ENSU URE THAT T THE MON NEYS RECEIIVED PURSU UANT TO THE T ISSUE ARE A KEPT IN N A SEPAR RATE BANK K ACCOUNT T AS PER TH HE PROVISIIONS OF SU UB-SECTION (3) OF SECT TION 73 OF THE T COM MPANIES AC CT, 1956 AND D THAT SUC CH MONEY YS SHALL BE E RELEASED D BY THE SAID S BANK K ONLY AF FTER PERMIISSION IS OBTAINED O FROM ALL THE STOC CK EXCHANGES MENTIONED IN N THE PROS SPECTUS. WE W FURTHER R CONFIRM M THAT TH HE AGREEMENT ENTE ERED INTO O BETWEEN N THE BA ANKERS TO T THE IS SSUE AND THE ISSU UER SPEC CIFICALLY CONTAINS C T THIS CONDIITION.

(10)

WE CERTIFY C THA AT SINCE THE T PROPOS SED ISSUE SIZE S IS MOR RE THAN `110 CRORES, THE T PROV VISION REL LATING TO O OPTION TO T THE IN NVESTORS TO T GET TH HE SHARES S IN PHYS SICAL MOD DE IS NOT APPLICABLE A IN TERMS OF SECTION N 68B OF TH HE COMPAN NIES ACT, 1956.

(11)

WE CERTIFY THAT T ALL THE APPL LICABLE DISCLOSURE D ES MANDA ATED IN THE T URITIES AND D EXCHANG GE BOARD OF O INDIA (IISSUE OF CA APITAL AND D DISCLOSU URE SECU REQU UIREMENTS S) REGULA ATIONS, 20009 HAVE BEEN MA ADE IN ADDITION A TO DISC CLOSURES WHICH, W IN OUR VIEW W, ARE FAIR R AND ADE EQUATE TO O ENABLE THE T INVE ESTOR TO MAKE M A WEL LL INFORME ED DECISIO ON.

(12)

WE CERTIFY C THAT THE FOL LLOWING DISCLOSUR D RES HAVE BE EEN MADE IN THE DR RAFT RED HERRING PROSPECTUS P S/ DRAFT PR ROSPECTUS S/ DRAFT LE ETTER OF OF FFER:

(A)

AN N UNDERTA AKING FROM M THE ISSUER THAT AT T ANY GIVE EN TIME, TH HERE SHALL L BE ON NLY ONE DE ENOMINATIION FOR TH HE EQUITY SHARES S OF THE T ISSUER R AND

(B)

AN N UNDERTA AKING FRO OM THE IS SSUER THA AT IT SHAL LL COMPLY Y WITH SU UCH DIS SCLOSURE AND A ACCOUNTING NO ORMS SPEC CIFIED BY TH HE BOARD FROM F TIME E TO TIM ME.

(13)

WE UNDERTAK KE TO COMPLY C W WITH THE REGULAT TIONS PER RTAINING TO NT IN TERM MS OF THE SECURITIES S AND EXCH HANGE BOARD OF IN NDIA ADVERTISEMEN UE OF CAPIITAL AND DISCLOSUR D RE REQUIRE EMENTS) RE EGULATION NS, 2009 WH HILE (ISSU MAK KING THE IS SSUE.

(14)

WE ENCLOSE E A NOTE EXPL LAINING HO OW THE PRO OCESS OF DUE D DILIGENCE HAS BEEN EXER RCISED BY US U IN VIEW OF THE NAT TURE OF CU URRENT BUSINESS BAC CKGROUND D OR THE ISSUER, SIT TUATION AT A WHICH THE PROPO OSED BUSIINESS STAN NDS, THE RISK R TORS, PROM MOTERS EXP PERIENCE ,E ETC. FACT

(15)

WE ENCLOSE E A CHECKLIST C T CONFIRMIING REGULA ATION-WISE COMPLIA ANCE WITH THE T APPL LICABLE PR ROVISIONS OF THE SE ECURITIES AND EXCH HANGE BOA ARD OF IN NDIA (ISSU UE OF CA APITAL AN ND DISCLO OSURE REQ QUIREMENT TS) REGUL LATIONS, 2009, 2 222

Scotts Ga arments Limiited CONT TAINING DETAILS D SUC CH AS THE REGULATIION NUMBE ER, ITS TEXT T, THE STATUS OF COMPLIANC C CE, PAGE NU UMBER OF THE T DRAFT T RED HERR RING PROSP PECTUS WH HERE THE REGULATIO R ON HAS BEE EN COMPLIE ED WITH AN ND OUR COM MMENTS, IF F ANY. Pricee Information n of Past Issues handled by b BRLM & Co-BRLM C 1. Sr No

P Price informattion of past isssues handled d by Keynote Corporate Seervices Limiteed Issue Name

Isssue Siize `(Cr. ( )

Issue price`

Listin g date

Openin g price on listing date

Closin g price on listing date

`

`

% Changge in Pricce on listingg date (Closin ng) vs. Issue Price

Benchmar k index on listing date (Closing)

Closing price as on 10th calenda r day from listing day

Bencchmar k ind dex as on 10 1 th caleendar dayss from listiing day (Clo osing)

` 1.

2.

3.

4.

5.

Prakash Steelage Limited

Bedmutha Industries Limited

Gravita India Limited

Servalaksh mi Paper Limited

Veto Switchgea rs and Cables Limited

688.75

911.80

455.00

600.00

255.00

110.00

102.00

125.00

29.00

50.00

Closing price as on 20th calenda r day from listing day

Benchmar k index as on 20th calendar days from listing day (Closing)

`

Closing C p price as o 30th on c calenda r day f from l listing d day

Benchm mar k indexx as on 30th calenda ar days from listing day (Closin ng)

`

118.55 (BSE)

187.95 (BSE)

70.86% % (BSE)

18,179.64 (SENSEX)

181.80 (BSE)

18,221.43 (SEN NSEX)

156.40 (BSE)

19,208.33 (SENSEX)

1145.60 ( (BSE)

19,861.001 (SENSE EX)

122.00 (NSE)

185.00 (NSE)

68.18% % (NSE)

5462.35 (NIFTY)

182.10 (NSE)

54799.40 (NIF FTY)

156.65 (NSE)

5760.00 (NIFTY)

1145.65 ( (NSE)

5959.555 (NIFTY Y)

14 4/10 /2010

114.40 (BSE)

180.80 (BSE)

77.25% % (BSE)

20,497.64 (SENSEX)

204.20 (BSE)*

20,303.12 (SEN NSEX)

176.05 (BSE)

20,345.69 (SENSEX)

1116.95 ( (BSE)

20,156.889 (SENSE EX)

16 6/11 /2010

113.50 (NSE) 218.75 (BSE)

179.15 (NSE) 210.40 (BSE)

75.64% % (NSE) 68.32% % (BSE)

6177.35 (NIFTY) 19865.14 (SENSEX)

203.00 (NSE)* 257.65 (BSE)

61055.80 (NIF FTY) 19,318.16 (SEN NSEX)

174.95 (NSE) 255.70 (BSE)*

6119.00 (NIFTY) 19,981.31 (SENSEX)

1116.15 ( (NSE) 2 235.40 ( (BSE)

6071.655 (NIFTY Y) 19,647.777 (SENSE EX)

12 2/05 /2011

201.10 (NSE) 30.00 (BSE)

209.70 (NSE) 19.00 (BSE)

67.76% % (NSE) %) (34.48% (BSE)

5988.70 (NIFTY) 18,335.79 (SENSEX)

257.45 (NSE) 11.75 (BSE)*

57999.75 (NIF FTY) 17,993.33 NSEX) (SEN

256.10 (NSE)* 11.05 (BSE)

5992.25 (NIFTY) 18,503.28 (SENSEX)

2235.40 ( (NSE) 1 10.19 ( (BSE)

5892.300 (NIFTY Y) 18,268.554 (SENSE EX)

29.00 (NSE) 58.00

19.05 (NSE) 50.45

%) (34.31% (NSE) 0.9%

5,486.15 (NIFTY) 19,229.26 (BSE)

11.80 (NSE)* 50.25*

5,386.55 (NIF FTY) 19,2555.09* (BSE E)

11.10 (NSE) 50.15

5,560.15 (NIFTY) 19580.81 (BSE)

110.20 ( (NSE) 5 50.50

5,485.800 (NIFTY Y) 19663.664 (BSE)

25 5/08 /2010

13 3/12 /2012

(SME Platform – NSE EMERGE)

5851.50 (NSE)

*Being non tradiing day, price da ata is considered for next trading g day.

223

58555.75* (NSE E)

5950.85 (NSE)

5951.300 (NIFTY Y)

Scotts Ga arments Limiited 2 2.

Summary y statement off price inform mation of past issues handleed by Keynotte Corporate Services S Limiited

Financial Total Total F Y Year no. off Funds IPOs Raised (`. Cr.)

2010-11 2011- 12 2012-13

11. 2 2.

3 1 1

Nos. of IPOs trad ding at Nos. of o IPOs tradin ng at Nos. of IPOs tradingg at Nos. of disccount on listing date d premium on listing datee discount as on 30th calen ndar premium day from m listing day calendar day Ov ver Less Over Between L Less Between Leess Betwee Over Over 25-50% 25-50% 50% % n 25- than 50% than th han 50% 50% 25% 50% 2 25% 255% 205.55 Nil N Nil Nil 3 Nil Nil Nil Nil N Nil 1 60.00 Nil N 1 Nil Nil Nil Nil 1 Nil N Nil Nil 25.00 Nil N Nil Nil Nil Nil 1 N.A. N.A. N N.A. N.A.

IPOs trading at IP as on 30tth d day from listingg Betwe B e 25en 5 50% 1 Nil N.A.

Price information of pa ast issues han ndled by Canaara Bank – Niil* Summary y statement off price inform mation of past issues handleed by Canaraa Bank – Nil *Canara Ban nk has not handled h any Initial I Public Offer of equ uity shares in last three fin nancial years and hence there is no data av vailable. d by BRLMs Track record of past isssues handled For details regarding the track reecord of the BRLMs to the t Offer as specified in Circular refference CIR/MIR RSD/1/2012 dated d January y 10, 2012 issu ued by the SE EBI, please reffer to the web bsites of the BRLMs B at Keynotte Corporate Services S Limiited - http://w www.keynoteeindia.net/traack_record.httml. Canara Baank has not handled h any In nitial Public Offer O of equity y shares in last three finan ncial years. NG OF THE OFFER DOC CUMENT DO OES NOT, HOWEVER, H ABSOLVE OUR O COMPA ANY THE FILIN FROM ANY Y LIABILITIIES UNDER SECTION 63 OR SECTIION 68 OF THE T COMPA ANIES ACT, 1956 OR FROM THE REQUIIREMENT OF O OBTAINING SUCH STATUTORY S Y OR OTHER R CLEARAN NCES AS MAY BE REQUIR RED FOR THE T PURPO OSE OF THE E PROPOSE ED ISSUE. SEBI S FURTH HER S THE RIGH HT TO TAKE E UP, AT AN NY POINT OF F TIME, WIT TH THE LEA AD MERCHA ANT RESERVES BANKER ANY A IRREGU ULARITIES OR O LAPSES IN I OFFER DO OCUMENT."" The promotter / director of Scotts Garrments Limited, Mr. Naseeer Ahmed, Mrs. M Nuzhat Aisha A Naseer,, Mr. A Arumugaam, Mr. B. S. S Patil, Mr. M. M. Chop pra, Mr. Azeeezulla Baig,, Mr. C.R. Murali M and Mr. M S. Thiruvadi confirm c that no n informatio on/material likely l to havee a bearing on o the decisio on of investors in respect of th he shares offeered in terms of this Red Herring H Prosp pectus has beeen suppressed withheld an nd / or incorporaated in the manner m that would amountt to mis-statem ment/misreprresentation an nd in the event of its transpirin ng at any poiint in time tilll allotment/reefund, as the case may be, that any information/matterial has been suppressed/ /withheld an nd/ or am mounts to a mis-statem ment/ misrep presentation, the promoters/directors und dertake to refund the entire applicatio on monies to all subscribeers within 7 days thereafter without w prejud dice to the pro ovisions of seection 63 of th he companies act.

E) DISCLAIM MER STATEM MENT FROM M THE COMP PANY AND THE T BRLM AND A Co-BRL LM The Compaany, the Direectors, the BR RLM and Co o-BRLM acceept no respon nsibility for statements made m otherwise th han in this RH HP or in the advertisemen nts or any oth her material issued i by or at instance of the above menttioned entitiees and anyon ne dependin ng on any otther source of o informatio on, including g our website, ww ww.scottsgarm ments.com, would w be doin ng so at his or her own risk k. The BRLM M and Co-BRL LM accept no o responsibillity, save to the limited d extent as provided in n the Agreement entered into o among Keynote Corpo orate servicess Limited an nd us dated 24/09/2010 and between Caanara Bank and a us dated d 25/09/20100 and the Un nderwriting Agreement A to o be entered into among the Underwriters U s and us. 224

Less than 25% 1 Nil 1

Scotts Ga arments Limiited All informaation shall bee made availaable by us an nd BRLM and d Co-BRLM to t the publicc and investo ors at large and no n selective orr additional information i w would be avaailable for a section s of thee investors in n any manner whaatsoever inclu uding at road d show presen ntations, in research or salees reports or at a bidding cen ntres etc. Neitherr we nor the Syndicate S is liable l to the Bidders B for any a failure in downloading the Bids du ue to faults in any y software/ha ardware systeem or otherw wise. F) DISCLAIM MER WITH RE ESPECT TO JURISDICTIION This Issue iss being madee in India to persons p resideent in India {iincluding Ind dian nationalss resident in India I who are maajors, HUFs, companies, c co orporate bodiies and societties registered d under the applicable a law ws in India and authorised a to o invest in sh hares, Indian n Mutual Fun nds registered d with SEBI,, Indian finan ncial institutions,, commercial banks, regio onal rural ban nks, co-operaative banks (ssubject to RB BI permission n), or trusts underr the applicab ble trust law and a who are authorised a un nder their con nstitution to hold h and inveest in shares, perm mitted insura ance companiies and pensiion funds}. This T RHP doees not, howev ver, constitutte an invitation to o subscribe to o Equity Sharres offered heereby in any other o jurisdicction to any person p to who om it is unlawful to make an offer o or invitation in such jurisdiction. Any A person in nto whose posssession this RHP R comes is req quired to info orm him or heerself about an nd to observee, any such reestrictions. An ny dispute ariising out of this Isssue will be subject s to the jurisdiction j o appropriatee court(s) in Karnataka, of K Ban ngalore only.. No action has h been or will w be taken to t permit a pu ublic offering g in any jurisd diction wheree action woulld be required forr that purposee, except thatt this RHP hass been filed with w SEBI for observations.. Accordingly y, the Equity Sharres, representeed thereby may m not be offered or sold, directly or in ndirectly, and d this Red Herrring Prospectus may not be distributed, d in n any jurisdicction, except in accordancce with the leegal requirem ments applicable in n such jurisdiction. Neitheer the delivery y of this Red Herring Prosspectus nor an ny sale hereunder shall, underr any circumsstances, creatte any implication that theere has been no change in n our affairs from f the date herreof or that th he information n contained herein h is correect as of any tiime subsequeent to this datte. MER CLAUSE E OF THE STOCK EXCHA ANGES G) DISCLAIM ombay Stock Exchange Lim mited (BSE): Disclaimer Clause of Bo “Bombay Stock S Exchang ge Limited (“the ( Exchang ge”) has given vide its letter l no. DC CS/IPO/RK/IPOIP/1349/2010-11 dated 21/12/2010 2 p permission to the Compan ny to use the Exchange’s name n in this Offer O Document as a one of the stock s exchang ges on which this Compan ny’s securitiess are proposed d to be listed.. The Exchange has scrutinized d this Offer Document D for its limited in nternal purposse of deciding g on the mattter of granting thee aforesaid peermission to this t Company y. The Exchan nge does not in i any manneer: i.

Warraant, certify or o endorse th he correctnesss or completeeness of any of the conteents of this Offer O Docum ment; or ii. Warraant that this Company’s C seecurities will be b listed or will w continue to be listed on n the Exchang ge; or iii. Take any responsibility for thee financial orr other soundness of thiss Company, its i promoterss, its manaagement or an ny scheme or project p of thiss Company; and it shou uld not for an ny reason be deemed or construed that this Offer Document D haas been cleareed or approved by b the Exchan nge. Every perrson who dessires to apply y for or otherw wise acquiress any securities of this Compaany may do so o pursuant to o independen nt inquiry, inv vestigation an nd analysis an nd shall not have h any claim against a the Ex xchange whattsoever by reaason of any loss l which may be suffered by such peerson consequent to or in conn nection with such subscrip ption/acquisiition whetherr by reason of o anything sttated or omitted to t be stated heerein or for an ny other reason whatsoeveer”.

225

Scotts Ga arments Limiited Disclaimer Clause of the e NSE As required d, a copy of this Offer Document D hass been submiitted to Natio onal Stock Exchange E of India I Limited (heereinafter refeerred to as NSE). N NSE haas given videe its letter reff.: NSE/LIST T/155676-Y dated d 11/01/20111 permission to the Issueer to use thee Exchange’s name in this Offer Docum ment as one of o the stock exchan nges on whicch this Issuer’’s securities are a proposed to be listed. The T Exchang ge has scrutin nised this draft offer o documen nt for its lim mited internal purpose off deciding on o the matteer of granting g the aforesaid peermission to this t Issuer. It is to be distin nctly understtood that the aforesaid perrmission giveen by NSE should d not in any y way be deeemed or construed that the t Offer Do ocument has been cleared d or approved by b NSE; no or does it in any mann ner warrant,, certify or endorse thee correctnesss or completeness of any of th he contents of o this offer do ocument; norr does it warrrant that this Issuer’s securrities will be listeed or will continue to be listed on thee Exchange; nor n does it take any resp ponsibility forr the financial or other soundn ness of this Isssuer, its prom moters, its maanagement orr any schemee or project off this Issuer. Every perso on who desires to apply for or otherrwise acquiree any securitties of this Isssuer may do d so pursuant to o independen nt inquiry, in nvestigation and a analysis and shall no ot have any claim c againstt the Exchange whatsoever w by y reason of any loss wh hich may be suffered by y such perso on consequen nt to or in conneection with such subscrip ption/acquisiition whetherr by reason off anything staated or omitteed to be stated heerein or any other reason whatsoever. w h Ltd. (CARE)) IPO Gradin ng Agency Disclaimer Clause of Crredit Analysiss & Research This Issue has h been grad ded by Creditt Analysis & Research Ltd d. (CARE) and has been asssigned the “CARE “ IPO Grade 3” indicating g Average Fu undamentals, through its letter dated 01/03/2013. 0 The IPO grad ding is assigned on n a five pointt scale from 1 to 5 with an a “IPO Grad de 5” indicatiing strong fun ndamentals and a an “IPO Gradee 1” indicating g poor fundam mentals. Disclaimer clause: CARE E’s IPO Grad ding is a one time assessmeent and the an nalysis drawss heavily from m the information n provided by y the issuer ass well as info ormation obtaained from so ources believeed by CARE to t be accurate and d reliable. Ho owever, CARE E, does not guarantee the accuracy, adeequacy or com mpleteness off any information n and is not reesponsible fo or any errors or omissions or for the results obtained from the use of such inform mation. CARE E’s IPO gradin ng does not taake cognizancce of the price of the securrity and it is not n a recommend dation to buy,, sell or hold shares/securrities. It is alsso not a com mment on the offer price orr the listed price of the scrip. It does not imply i that CA ARE perform ms an audit fu unction or fo orensic exercisse to detect fraud d. It is also no ot a forecast of the futuree market perfo ormance and d the earningss prospects of the issuer; also it does not in ndicate complliance/violatiion of variouss statutory req quirements. CARE C shall no ot be liable for an ny losses incurrred by userss from any usee of the IPO grading. g H) FILING A copy of this RHP ha as been filed d with SEBI at a Mumbai. A copy of th he Red Herrin ng Prospectuss, along with the documen nts required to be filed und der Section 600B of the Compan nies Act, will be delivered for registratiion to the RO OC and a copy y of the Prosp pectus requireed to be filed un nder Section 60 of the Co ompanies Acct would be delivered fo or registration n with the ROC, R Bangalore, 'E' Wing, 2nd Floor, Kendrriya Sadana, Koramangala K , Bangalore-5560034, Karnaataka. I)

LISTING Application ns will be made to NSE an nd BSE for peermission to deal in and for f an officiall quotation of the Equity Sharres of the Co ompany. BSE E shall be thee Designated d Stock Exchaange with which w the basis of allocation will w be finaliseed. 226

Scotts Ga arments Limiited If the permiission to deall in and for an n official quo otation of the Equity Sharees is not gran nted by any of o the Stock Exchaanges mentio oned above, the Compan ny shall forth hwith repay,, without intterest, all mo onies received fro om the applicants in pursu uance of this RHP. R If such money m is not repaid withiin eight days after the Compan ny becomes liable to repay y then the Co ompany, and d every Directtor of the Com mpany who is i an officer in deefault shall, on and from expiry e of eigh ht days, be liab ble to repay the t money, with w interest at a the rate of 15% per annum on application n money, as prrescribed und der Section 733 of the Comp panies Act. Our Compaany shall en nsure that alll steps for th he completio on of the neccessary form malities for lissting and commeencement of trading at bo oth the Stock k Exchanges mentioned m ab bove are taken within tw welve working day ys of the Bid/ /Issue Closin ng Date. J)

Impersonattion Attention off the Applica ants is specificcally drawn to the provisio ons of sub-section (1) of Seection 68 A of o the Companies Act, which iss reproduced below: "Any persson who: a) makees in a fictittious name, an applicatio on to a com mpany for accquiring or subscribing for, any shares s thereiin, Or b) otherw wise induces a company y to allot, orr register an ny transfer of o shares, therein to him m, or any other o person n in a fictitious name, shall be pun nishable with h imprisonm ment for a term t which h may exten nd to five yeears."

K) CONSENTS Consents in n writing of the Directorrs, the Comp pany Secretarry and Comp pliance Officcer, the Statu utory Auditor & Peer P Review Auditor, A the Legal L Adviso or, Bankers to o the Compan ny, Bankers to o the Issue, BR RLM and Co-BRL LM, Syndicatee Member, th he Escrow Colllection Bank kers, IPO Grad ding Agency and the Regiistrar to the Issue to act in theiir respective capacities, c haave been obtaained and willl be filed alon ng with a cop py of the RHP wiith the ROC as required under u Section ns 60 and 60B B of the Com mpanies Act and such conssents have not been withdrawn n up to the tim me of deliverry of the Prosp pectus for reg gistration with h the ROC. M/s G. Anaantha & Co., Peer Review w Auditor hav ve given theirr consent to the t inclusion of their repo ort as appearing hereinafter h in n the form an nd context in which appeaars in this RH HP and M/s Siddaiah & Ram, R Statutory Auditors of thee Company have h given theeir consent to the inclusion n of the tax beenefits accruin ng to the Compan ny and to th he members of o the Compaany and such h consents an nd the reporrts have not been b withdrawn up to the tim me of signing this t RHP. PINION OBT TAINED, IF ANY A L) EXPERT OP Except as sttated in “Aud ditor Report”,, “Statement of o Tax Benefiits”, “IPO Graading” and “T Techno Econo omic Feasibility Report R issued d by Gherzi Eastern Limiited as part of o objects of issue”, the Company C hass not obtained an ny expert opin nion. M)) EXPENSES OF THE ISS SUE The Manag gement estima ates an expen nse or ` [●] Lacs L towardss issue expen nse. The expen nses of this Issue I include, am mong others, underwriting u and managem ment fees, sellling commission, printing g and distribu ution expenses, leegal fees, statu utory advertissement expen nses and listin ng fees. The estimated e Issu ue expenses are as follows: (` in Lacs))

227

Scotts Ga arments Limiited Sr. No.

Nature of Expenses

Amou unt*

% to the Total Expen nses [●]]

% to the Issue [●]

[●]] Lead Mana agement Fee, Underwritin ng Commissio ons and Selling g Commission ns [●]] [●]] [●] 2. SCSB Com mmission/pro ocessing fee to SCSBs for processing ASBA Bid d cum App plication Forrms procured by memberrs of syndiccate and nonsyndicate members** m [●]] [●]] [●] 3. Commissio on to Non n-Syndicate Members on procuremen nt of eligiblee applicationss considered for purpose of allotment*** [●]] [●]] [●] 4. Advertising g and Marketting Expensess [●]] [●]] [●] 5. Printing an nd Stationery [●]] [●] [●]] 6. Others (Reegistrar’s Feee, Legal Feee, Grading Fee, F Service Tax x, etc.) Total Estim mated Issue Expenses E [●]] [●]] [●] * Willl be incorpora ated after finaalisation of Isssue Price **SCS SBs would be entitled e to a prrocessing fee off `10/- per Biid-cum-Appliccation Form, foor processing the t Bidcu um Application n Forms procured by the mem mbers of the Syyndicate and su ubmitted to SC CSBs. ***Non n-Syndicate Members M wouldd be entitled to t a commissioon of `20/- per p valid bid cum c applicatioon form prrocured and coonsidered for baasis of allotmen nt 1.

N) DETAILS OF O FEE PAYA ABLE Book Runn ning Lead Ma anager and Co o-Book Runn ning Lead Maanager to the Issue The total feees payable to the Book Run nning Lead Manager M and Co-Book Run nning Lead Manager M will be b as per the Mem morandum off Understandiing signed wiith the Lead Manager(s), M a copy of which is availablle for inspection at a the Registtered Office of o the Comp pany. The Leead Manager((s) will be reeimbursed fo or all relevant outt-of-pocket ex xpenses such as cost of trav vel, stationery y, postage and d communicaation expensees. Fees Payablle to the Regiistrar to the Issue The fees pay yable by our Company to the Registrarr to the Issue Link Intime Private P Limitted for processsing of applicatio on, data entry, printing off CAN/ refun nd order, preeparation of refund r data on o magnetic tape, t printing of bulk mailing g register wiill be as per the Memoraandum of Un nderstanding g signed with h the Company dated d 25/09/2 2010. The Registrrar to the Issu ue will be reiimbursed for all out-of-po ocket expensees including cost c of station nery, postage, staamp duty and d communicaation expensess. Adequate funds f will bee provided by y the Compan ny to the Registraar to the Issu ue to enable th hem to send refund orderrs or Allotmeent advice by y registered post/ p speed post/ / under certifiicate of postin ng. RITING COM MMISSION, BROKERAG GE AND SELL LING COMM MISSION O) UNDERWR The underw writing comm mission and the selling co ommission forr the Issue are as set out in the Syndicate Agreement amongst th he Company y, the BRLM M and Co-B BRLM and the t Syndicatte Member. The underwritin ng commissio on shall be paiid as set out in i the Syndicaate Agreemen nt based on th he Issue pricee and the amount underwritten n in the mann ner mentioned d on page no.. 33 of this RH HP.

228

Scotts Ga arments Limiited P) PREVIOUS S PUBLIC OR R RIGHTS IS SSUE We have no ot made any public p or righ hts issue of sh hares either in n India or abrroad since inccorporation of o the Company. S ISSUE OF SHARES S OTH HERWISE TH HAN FOR CA ASH Q) PREVIOUS Except as disclosed d in the chapter “Capital Structure” beg ginning on page p 34 of this t Red Herrring Prospectus, our Compan ny has not issu ued any Equitty Shares for consideration n otherwise th han for cash. R) COMMISSION AND BROKERAGE E ON PREVIO OUS ISSUES S Since this is i the initial public offer of the Company, no sum m has been paid or has been payablle as commission n or brokeragee for subscrib bing to or proccuring or agrreeing to proccure subscripttion for any of o the Equity Sharres since incep ption of the Company. C S) CAPITAL ISSUE I DURIN NG THE LAS ST THREE YEARS Y Neither we nor our group companies have made any a capital isssue during thee last three yeears. T) PROMISE VIS-A-VIS V PERFORMAN P NCE This is a firsst issue of ourr Company an nd none of ou ur group com mpanies are lissted on any sttock exchang ges in India. U) OUTSTAN NDING DEBE ENTURES OR O BONDS AND REDE EEMABLE PR REFERENCE E SHARES AND A OTHER INSTRUMENT TS Our Compaany has no outstanding debentures or bonds or redeemable preference shares s and other o instrumentss issued as on n the date of th his RHP. V) STOCK MA ARKET DAT TA This being an initial pu ublic offering g of our Com mpany, the Equity E Sharess are not listted on any stock s exchange. W)) INVESTOR R GRIEVANC CES AND RE EDRESSAL SYSTEM S Our compan ny has appointed the Registrar to the Issue, I to hand dle the investtor grievancess in co-ordinaation with the Compliance C Officer O of thee Company. All grievancces relating to the preseent issue may y be addressed to the Registra ar with a copy y to the Comp pliance Officeer, giving fulll details such as name, add dress of the appliccant, numberr of equity shaares applied for, f amount paid p on appliccation and ban nk and branch h. All grievancces relating to o the ASBA process p may be b addressed to the Registtrar to the Issue with a cop py to the relevantt SCSB and th he Syndicate Member M with h whom the Biid cum Appliication Form was w submitteed by the ASBA Bidder, B giving g full details such s as namee, address of the applicantt, application number, num mber of Equity Shares S applied d for, amoun nt paid on ap pplication an nd the Design nated Branch or the collecction centre of th he SCSB wheere the Bid cu um Application Form waas submitted by the ASBA A Bidders orr the address of the t center of the Syndicatee where the Bid B cum App plication Form m was submittted by the ASBA A Bidder. The Compaany would monitor the wo ork of the reg gistrar to ensu ure that the investor i griev vances are seettled expeditioussly and satisfa actorily. 229

Scotts Ga arments Limiited The Registrrar to the isssue, namely y, Link Intim me Private Liimited, will handle inveestor’s grievaances pertaining to t the issue. A fortnightly status repo ort of the com mplaints receeived and reedressed by them t would be fo orwarded to the t company.. The Compan ny would alsso be co-ordin nating with th he registrar to o the issue in atteending to thee grievances to t the investo or. The Comp pany assures that the Boarrd of Directors in respect of th he complaintss, if any, to bee received shaall adhere to the t following schedules:

Sr. No. 1. 2. 3.

Nature of complaint c Non-receip pt of refund Non Receiipt of Share Certificate/D Demat Credit Any other complaint in n relation to Public Issue

Tim me Table With hin 7 days of receipt of com mplaint subjeect to prod duction of sattisfactory evid dence With hin 7 days of receipt of com mplaint subjeect to prod duction of sattisfactory evid dence With hin 7 days off receipt of co omplaint with h all relev vant details

Redressals of investors’’ grievance are a given top p priority by y the Compaany. The Com mmittee overrsees redressal off complaints of shareholders/investors and otherr important investor i relaated matters. The Company has h adequate arrangements a s for redressal of investor complaints c ass follows: Share transsfer/ demateerialisation/ rematerialisaation are haandled by well w equippeed profession nally managed Registrar R and Transfer Ag gent, appointted by the Company C in terms of SEB BI’s direction n for appointmen nt of Commo on Agency fo or physical as a well as deemat shares. The Registraars are constaantly monitored and a supported by qualified d and experieenced personn nel of the Com mpany. We have ap ppointed Mr. S. Guruswam my Babu, Com mpany Secrettary as the Co ompliance Offficer and he may be contacted d in case of an ny pre-issue or o post-issue problems. p He can be contaccted at the folllowing addreess: Mr. S. Guru uswamy Babu u Company Secretary S & Co ompliance Offficer Scotts Garm ments Limited d 481-B, Peeny ya Industrial Area, Peenya IV Phase, P Bangalore – 560 058; Tel.: +91-0880-40858585/4 41179001/411179002/411799003; Fax : +91-0880-41179007/2 28362452 E-mail: cs@scottsgarmen nts.com X) CHANGES S IN AUDITO ORS There has been no chang ge in the audittor of the Com mpany since past p three yeaars Y) CAPITALIZ ZATION OF RESERVES OR O PROFITS S DURING LAST L 5 YEAR RS Our compan ny has issued d 1,20,12,000 Equity E Sharess in the ratio of 12 equity shares s for eveery 1 equity share s held (12:1), on 28/03/200 06 by capitalizing share prremium accou unt and reserv ves or profits. Z) REVALUAT TION OF AS SSETS DURIN NG THE LAS ST 5 YEARS The compan ny has not rev valued its assets during thee last 5 years..

230

Scotts Ga arments Limiited SECTIION VI - OFF FERING INF FORMATION N A) TERM MS OF THE ISSUE The Equ uity Shares being offereed are subjject to the provisions of the Com mpanies Act, our Memoran ndum and Arrticles of Asso ociation, the terms of this Red Herring g Prospectus, the Prospectus, the Bid-cum-A Application Form, the Revision R Form m, the CAN N and other terms and conditions c as may be incorp porated in th he Allotment advices and d other docu uments/certifiicates that may m be execu uted in respect off the Issue. Th he Equity Shaares shall also o be subject to o laws as app plicable, guid delines, notificcations and regu ulations relating to the isssue of capiital and listiing and trad ding of secu urities issued d from time to time t by SEB BI, Governmen nt of India, th he Stock Exch hanges, the Reeserve Bank of o India, ROC C and/ or other authorities, a as in force on th he date of thee Issue and to the extent ap pplicable. NG OF EQUIT TY SHARES RANKIN The Equity Shares being b offered d shall be subject to the provisio ons of the Companies C A our Act, Memoran ndum and Articles A of Association A an nd shall rank k pari passu in all respectts with the existing Equity Sh hares includin ng rights in respect r of div vidend. The Allottees A willl be entitled to dividend or any other corp porate benefitts, if any, decllared by the Company C afteer the date of allotment. O PAYMENT T OF DIVIDE END MODE OF We shall pay p dividend d to our shareh holders as per the provisio ons of the Com mpanies Act, 1956. ALUE AND IS SSUE PRICE E FACE VA The face value v of the Equity E Shares is ` 10/- each h and the Floo or Price is ` 1330/- and the Cap Price is ` 132/per Equity y Share. At any a given poiint of time th here shall be only o one den nomination fo or the Equity Shares subject to the applicablle laws. UITY SHARE EHOLDERS RIGHTS OF THE EQU Subject to o applicable la aws, the equitty shareholdeers shall have the following g rights: ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾

Right to receive div vidend, if decclared; Right to attend gen neral meeting gs and exercisse voting pow wers, unless prrohibited by law; l Right to vote on a poll p either in person or by proxy; Right to receive an nnual reports and notices to o members; Right to receive offfers for rightss shares and be b allotted bon nus shares, iff announced; Right to receive su urplus on liqu uidation; Right of free transfferability; and d Such other rights, as may bee available to o a shareholder of a listted public co ompany und der the Comp panies Act, 19 956 and the Memorandum M and Articles of Associatio on of the Com mpany.

T LOT MARKET In terms of Section 68B of the Companies Act, A 1956, thee Equity Shaares of the Company sh hall be allotted only o in dem materialized fo orm. In term ms of existing SEBI Regulations, the trading in the Equity Shares of the Compan ny shall only be in dem materialized form f for all investors. Since S trading of our Equity Sh hares will be in demateriaalized mode, the tradable lot is one eq quity share. Allotment A of Equity Shares thrrough this Isssue will be do one only in ellectronic form m in multipless of one Equitty Share subjeect to a minimum m Allotment of 100 Equity Shares. S

231

Scotts Ga arments Limiited NOMINA ATION FACIILITY TO INV VESTOR In accord dance with Section S 109A of the Com mpanies Act, the sole or first Bidder,, along with h other joint Bidd der(s), may no ominate any one o person in n whom, in th he event of deeath of the so ole Bidder or in i case of joint Biidders, death of all the Bid dders, as the case c may be, the Equity Sh hares Allotted, if any, shaall vest. A person,, being a no ominee, entitlled to the Equity E Sharees by reason n of the deaath of the original o holder(s), shall in accordance with w Section 109A of thee Companiess Act, be en ntitled to thee same advantagees to which he h or she wo ould be entitlled if he or she s were the registered ho older of the Equity Share(s). Where the nominee n is a minor, thee holder(s) may m make a nomination to appoint, in the prescribed d manner, an ny person to become entiitled to Equity Share(s) in n the event of o his or herr death during th he minority. A nominatio on shall stan nd rescinded upon a salee/transfer/allienation of Equity Share(s) by b the person n nominating g. A buyer wiill be entitled d to make a fresh f nominaation in the manner m prescribed d. A fresh no omination caan be made only o on the prescribed fo orm availablee on request at the registered d office of the Company orr at the registrrar and transffer agent of th he Company. In accordaance with Secction 109B off the Compan nies Act, any person who becomes b a no ominee by virrtue of the provissions of Secttion 109A off the Compaanies Act, sh hall upon thee production n of such ev vidence as may be b required by y our Board, elect e either: ¾ ¾

To reg gister himselff or herself as the holder off the Equity Shares; S or To maake such tran nsfer of the Eq quity Shares, as a the deceaseed holder cou uld have mad de.

Further, our o Board ma ay at any tim me give noticee requiring an ny nominee to t choose eith her to be regiistered himself orr herself or to o transfer the Equity E Sharess, and if the notice n is not co omplied with h, within a period of 90 days, our o Board may m thereafteer withhold payment off all dividen nds, bonusess or other monies m payable in i respect of the Equity Shares, S until th he requiremeents of the nottice have been n complied with. w Since the allotment of Equity Shares in the Issu ue will be maade only in dematerialize d ed form, theree is no need to make m a separrate nominattion with us. Nomination ns registered with the resspective depo ository participan nt of the app plicant would d prevail. If the t investorss require chan nging the no omination, th hey are requested d to inform theeir respectivee depository participant. p UM SUBSCRIIPTION MINIMU If we do not receive the t minimum m subscription of 90% of the offer thrrough offer document d inccluding devolvem ment of the Underwriters U if any, with hin 60 days from f the Bid/ Issue Clossing Date, wee shall forthwith refund the entire subscrription amou unt received. If there is a delay beyon nd 8 days affter we become liable to pay th he amount, we w shall pay in nterest as per Section 73 of the Companiies Act. ARRANG GEMENTS FO OR DISPOSA AL OF ODD LOTS Our Company`s sharess will be trad ded in demateerialised form m only and heence the mark ketable lot wo ould be one (1) eq quity share. Therefore T the possibility of odd lots wou uld not arise. CTIONS ON TRANSFER OF SHARES S RESTRIC Except for lock-in of the t pre-Issue Equity Sharees and Promoter’s minim mum contributtion in the Isssue as detailed in n “Capital Strructure” on page. p 37, and except e as pro ovided in the Articles, there are no restrrictions on transfeers of Equity Shares. S Theree are no restriictions on tran nsmission of shares/ debeentures and on o their consolidation/ splittin ng except as provided p in th he Articles. Please P see “M Main Provision ns of the Artiicles of Associatio on” on page 279. 2

232

Scotts Ga arments Limiited B. ISSU UE STRUCTU URE Public Issue of 1,05,06,954 Equity Sh hares of face value v `10/- each e for cash by b the compaany issued at a price of ` [●] per p Equity Sh hare, aggregatting ` [●] Lacs (hereinafteer referred to o as the “Issu ue”). Up to 4,,50,000 Equity Sh hares will be reserved r in th he Issue for su ubscription by y Employees at a the Issue Prrice and a Neet Issue of 1,00,56,954 Equity Shares S of ` 100/- each. Thee Issue would d constitute 26.95% 2 of the post Issue paid-up capital of the Compan ny and the Neet Issue will constitute 25.80% of the post p Issue paiid up capital of the Company y. The Issue iss being made through the 100% 1 Book Bu uilding Process. Particulaars

Employeess QIBs Non-Insttitutional Reservation n Bid dders Portion Number of Upto 4,50,000 eq quity 25,14,2238 Equitty Not than less Equity Equity S Shares sha ares Shares will b 40,22,782 be shall be allotted d to QIBs. Shares for available allocation.. Percentaage of Upto 4.28% off the 25% off the Net Issu ue Not less th han 40% of Size Issu Issue ue size. (of wh hich 5% shaall the Net Issue or availablee for be reserved fo or Issue l less the Mutuaal allocation n Fundss) allocation to QIBs Mutuaal Fund ds and Retaill Portion particip pating in th he 5% reeservation in i the QIB Portion wiill also be b eligible fo or allocation in th he remain ning QIIB Portion n. Th he unsubsscribed portion n, if any, in i the Mutual M Fun nd reservaation will be b availab ble to QIBs. Proporrtionate Basis of Proportionatte Proporrtionate (aa) allocation n if 1,25,7112 Equitty respectiv ve Shares shall b be category y is availab ble fo or a oversubsscribed allocation on proporrtionate basiis to Mu utual Funds; and (b) 23,88,5226 Equity y Shares shaall be allotted on a proporrtionate basiis to all QIBs, includiing Mutuaal Funds receivin ng allocation as per (aa) above.

233

Retail Indiv vidual Bidderrs Not N less than Equity 3 35,19,934 S Shares shaall be for a available a allocation. N less than Not n 35% of t Net Issue or Issue the less the alloccation to NonQ QIBs and I Institutional P Portion.

Firm Allotmeent upto minimum bid b lot size# and ballance on Proportio onate

Scotts Ga arments Limiited Particulaars

Employeess Reservation n Portion 100 0 Equity Sh hares and d in multiplees of 100 0 Equity Share S thereafter.

Minimum m Bid

Maximum Bid

Mode Allotmen nt Trading Lot

Not exceeding the sizee of the Issue I to sub bject as reg gulations app plicable to the Bid dder **

QIBs

Non-Insttitutional Bid dders

Retail Indiv vidual Bidderrs

o Such number of Equity y Shares thaat the Bid B Amoun nt exceed ds `200,0000 and in n multiples of o 100 Equity E Sharees thereaffter.

Such nu umber of Equity Shares S that the Bid Amount exceeds ` 2,00,000 and in multiples m of 100 Equiity Shares thereafter..

1100 Equity Shares a and in multtiples of 1 100 Equity Share t thereafter.

Not exceeding e th he size of the Issu ue subjectt t to regulattions a as applicaable to th he Bidderr

Not exceeeding the size of the Issue to subject regulation ns as applicablee to the Bidder

Such S numb ber of E Equity Sharres per R Retail Individual B Bidder so as to e ensure that the Bid A Amount do oes not e exceed `200,000.

of Com mpulsorily in Compu ulsorily i Compulso in orily in C Compulsorily y in dem materialized form. f demateerialized form m. dematerialized form. dematerialize d ed form. One Equity Shaare

One Equity E Share

Who can n Apply Elig gible Emplo oyees Public financiaal * of the t Company y instituttions specifieed in Secttion 4A of th he Compaanies Act, FIIIs (and theiir subacccounts registeered witth SEBI, other than a sub-acccount whicch is a foreig gn corporate or foreig gn individ dual), schedu uled commeercial bankss, mutual fund ds registeered witth SEBI, multilateraal and bilateraal develo opment financiial instituttions, FVCIIs registeered with SEB BI (subjecct to receipt of o approp priate approv vals by th he FVCI from th he approp priate regulattory authorrity), venturre 234

One Equitty Share

O One Equity Share S

Resident Indian individualls, HUFs (in the name of Karta), companies, c bodies, corporate NRIs, Eligible scientific institutions i societies and a trusts, and any FII subaccount registered with SEBII, which is a foreign corporate or foreign individual and Eligib ble QFIs

IIndividuals ( (including H HUFs in t the name of karta) a applying forr Equity S Shares such that the B Bid Amoun nt per R Retail Individual B Bidder doees not e exceed `2000,000 in v value.

Scotts Ga arments Limiited Particulaars

Employeess Reservation n Portion

QIBs

Non-Insttitutional Bid dders

Retail Indiv vidual Bidderrs

Full Bid Amount applicablee shall be in an blocked account with the SCSBs at the t time of submission of Bidcum-Appllication Form.

Full Bid Amount F a applicable at the time o submission of n of Bid c cum - App plication F Form.

ASBA is mandatory m

ASBA is optio A onal and be B Bids could through s submitted A ASBA or non-- ASBA

capitall fund ds registeered with th he SEBI, state s industriaal develo opment corporations, insuran nce compaanies registeered with th he Insuran nce Regulaatory an nd Develo opment Authorrity, provid dent fund ds (subjecct t to applicaable law) witth a min nimum corpu us of ` 250 million n, pension funds witth a min nimum corpu us of ` 2550 million, th he Nation nal Investmen nt Fund set up by b resoluttion F. No o. 2/3/20005-DD-II dated November 233, 2005 of Go oI publish hed in th he Gazette of India an nd insuran nce funds seet up and d managed by b the Arrmy, Navy or o Air Force F of th he Union of India Terms Paymentt

Bidding Mechaniism

of Fulll Bid Am mount sha all be payablle at of the time sub bmission of Bidcum m-Application n Forrm.

Full Bid Amoun nt shall be b blocked in i an account with th he SCSBs at the time of o submisssion of Bid dcum-A Application Form.

BA is optiional ASBA is mandatory y ASB and d Bids could d be sub bmitted thro ough ASB BA or non- ASBA A

Subject to o valid Bids being receiv ved at or ab bove the Issu ue Price, under-subscripttion, if any, in n NII and Retail category wo ould be allow wed to be met with spill ov ver inter-se fro om any of thee other catego ories, 235

Scotts Ga arments Limiited at the solee discretion of o the Compan ny, the BRLM M, the Co-BRLM and sub bject to applicable provissions of the SE EBI Regulatio ons. t availability of o Shares in the Retail Categoory # Subject to *In case thhe Bid-cum-Ap pplication Form m is submittedd in joint nam mes, the investoors should enssure that the demat d account is also held in th he same joint names and in i the same sequence in which w they apppear in the Bidcum-Appliication Form. **If the agggregate deman nd in this cateegory is less thhan or equal too 4,50,000 Equ uity Shares at or above the Issue Price, full allocation shalll be made to thhe Eligible Em mployees to the extent of theirr demand. Provvided that the value v of allotmen nt to any emp ployee in pursuance of this reservation, shhall not exceedd ` 2,00,000/--. The aggregaate of reservation ns for employeees shall not excceed five per cent of the post issue i capital off the Company If the agg gregate deman nd by Mutuall Funds is lesss than 1,25,7112 Equity Shaares, the balan nce Equity Sh hares available for allocation n in the Mutu ual Fund resservation willl first be add ded to the QIB Portion an nd be allocated proportionateely to the QIB B Bidders in proportion p to their Bids. wal of this Isssue Withdraw The Comp pany, in conssultation with h the BRLM and the Co-BR RLM, reservess the right no ot to proceed with the issue after a the bidd ding and if so o, the reason thereof t shall be b given as a public noticee within two days of the clossure of the isssue. The publlic notice shalll be issued in n the same neewspapers wh here the pre-iissue advertisem ment had app peared. The stock s exchanges where th he specified securities werre proposed to t be listed shall also be info ormed promp ptly. If the Co ompany withd draws the Isssue after the Bid/Issue B Clo osing Date and thereafter deetermines thatt it will proceeed with an in nitial public offering o of itss Equity Shares, it shall file a fresh draft red r herring prrospectus witth the SEBI. Bidding/IIssue Program mme BID/ISS SUE OPENS ON O BID/ISS SUE CLOSES ON

THURSDAY, APRIL 25, 20013 T MONDAY, APRIL A 29, 20113

An indicaative timetablee in respect of this issue is set out below w: Event Bid/Issuee Closing Datee Finalisatio on of basis of allotment wiith Stock Exch hanges Initiation of refunds Credit off Equity sh hares to inv vestor`s dem mat accounts instruction Credit of Equity E sharess to investor`ss demat accou unts Commenccement of trad ding *Working g days are all days d except Sundays S and Bank B Holiday ys

Indicativee Date April 29, 2013 May 09, 2013 2 May 09, 2013 2 May 10, 2013 2 May 13, 2013 2 May 14, 2013 2

The abovee timetable is indicative an nd does not co onstitute any obligation on n the Compan ny or the BRL LMs. The Comp pany and BR RLMs shall en nsure that all steps for the completion of o the necessaary formalitiees for the listing g and the com mmencementt of trading of o the Equity y Shares on th he Stock Excchanges are taaken within 122 Working Days of the Bid/ B Issue Cllosing Date, the t timetablee may chang ge due to varrious factors, su uch as extenssion of the Bid/ Issue Periiod by the Co ompany, reviision of the Price P Band orr any delays in receiving thee final listing and a trading approval a from m the Stock Ex xchanges. Th he commencem ment of trading g of the Equ uity Shares will w be entirrely at the discretion d of the Stock Exchanges an nd in accordancce with the ap pplicable lawss. 236

Scotts Ga arments Limiited Except in relation to th he revision of o Bids by thee Retail Indiv vidual Bidders, Bids and any a revision in i Bids will be accepted only between b 10.00 a.m. and 5.000 p.m. (Indiaan Standard Time) T during g the Bidding Period as mentio oned above at the Bidding centers or with the Syndiccate Memberss at the Speciffied Centers and a the Designateed Branches of o SCSBs as mentioned m in the Bid cum Application Form. F On thee Bid Closing g Date, Bids and revision of bids b excludin ng ASBA Bidss shall be acccepted only between b 10.000 a.m. and 3.000 p.m. (Indian Standard S Tim me) and uploaded until (i) 4.00 p.m. in case of Bids B by QIB Bidders and d NonInstitution nal Bidders; and a (ii) 5.00 p.m. p which may m be extend ded up to such h time as permitted by thee Stock Exchangees in case of Bids B by Retail Individual Bidders B and Eligible E Emplo oyees. It is claarified that Biids not uploaded in the book,, would be reejected. Bids by ASBA Bidders shall be b uploaded by the SCSB in the electronicc system to bee provided by y the NSE and d the BSE. Reetail Individu ual Bidders may m either witthdraw or revise their Bid at any a time prio or to the finaalisation of Allotment. A QIB B Bidders and Non-Institu utional Bidders may m revise theeir Bids upwaards (in term ms of quantity of Equity Sh hares or the Bid B Amount) during d the Bid/Isssue Period. Such upward d revision(s) must m be mad de using the Revision R Form m. QIB Biddeers and Non-Institutional Bidd ders are not permitted to lo ower the size of their Bid(ss) (in terms off quantity of Equity Shares or the Bid Amount) at any sttage. In case off discrepancy y in the dataa entered in the t electronicc book vis-à--vis the data contained in n the physical Bid form, fo or a particulaar bidder, th he details as per the Bid file received d from the Stock S Exchangees of that Bid dder may bee taken as th he final data for the purp pose of allottment. In casse of discrepan ncy in the datta entered in n the electron nic book vis-àà-vis the dataa contained in n the physicaal or electronicc Bid cum Application A Fo orm submitteed through the t ASBA prrocess, for a particular ASBA A Bidder, th he details as per p the Bid fille received frrom the Stock k Exchanges of o that Bidderr may be takeen as the final data d for the pu urpose of allo otment. Due to lim mitation of time t availablee for uploadiing the Bids on the Bid Closing C Datee, the Bidderss are advised to o submit theiir Bids one Working W Day prior to the Bid B Closing Date D and, in any a case, no later than 1.00 p.m. (Indian Standard Tim me) on the Bid d Closing Datte. Bidders arre cautioned that t in the eveent a large num mber of Bids are received on the Bid Closing C Date, as is typicallly experienceed in IPOs, which w may lead to some Bidss not being up ploaded due to t lack of suffficient time to o upload, such h Bids that caannot be upload ded will not be considered for allocaation in the Issue. I If such h Bids are not n uploaded,, the Company y and the Syn ndicate shall not n be respon nsible. Bids will w be accepteed only betw ween Monday y and Friday (ex xcluding any public holidaay). Neither our o Company y nor any member of the Syndicate S is liiable for any failure in uploa ading the Bids due to failu ure in any softtware/hardw ware system orr otherwise. On the Biid Closing Da ate, extension n of time willl be granted by b the Stock Exchanges on nly for uploaading the Bids received by Reetail Individu ual Bidders an nd Eligible Em mployees, afteer taking into o account the total number of o Bids receiv ved up to the closure of timings for accceptance of Bid-cum B App plication Form ms as stated herrein and repo orted by the BRLM, B Co-BR RLM to the Sttock Exchang ges within hallf an hour of such closure. Our Company reservees the right to o revise the Prrice Band durring the Bidd ding Period in n accordance with ICDR Reg gulations. Th he Cap Price shall be lesss than or equ ual to 120% of the Floor Price. Subjecct to compliancce with the im mmediately preceding senttence, the Flo oor Price can move m up or down d to the ex xtent of 20% of the floor pricce originally disclosed d in th he RHP and the Cap Price will be reviseed accordinglly. nd, the Issuee Period will be extended for three additional work king In case off revision in the Price Ban days afterr revision of Price P Band su ubject to the Bidding Periiod/Issue Perriod not exceeeding 10 work king days. Any y revision in the Price Band and the reevised Biddiing Period/Isssue Period, iff applicable, will be widely y disseminated by notificcation to the BSE and the NSE, by issu uing a press release, and also by indicating the chan nge on the weeb sites of thee Book Runn ners at the term minals of thee Syndicate. 237

Scotts Ga arments Limiited C) ISSU UE PROCEDU URE This section applies to o all Bidders. Please note that t QIB Bidd ders and Non n Institutionaal Bidders hav ve to participatte in the Issuee through thee ASBA proceess. Retail Ind dividual Biddeers can particcipate in the Issue I through the ASBA pro ocess as well as the non ASBA A process.. ASBA Biddeers should no ote that the ASBA A process in nvolves application proceedures that are a different from the pro ocedure applicable to Bid dders other than n the ASBA Bidders. Bidd ders applying g through th he ASBA proccess should carefully c read d the provision ns applicable to such appliications beforre making th heir applicatio on through th he ASBA pro ocess. Please notte that all thee Bidders are required r to make m paymen nt of the full Bid B Amount along a with thee Bid cum Appllication Form m. Pursuant to Securities and Exchang ge Board of In ndia circular no. CIR/CFD D/14/2012 dated d 04/10/22012, the investtors can subm mit applicatio on forms in public issuess using the stock broker network n of Stock S Exchangees, who may not be syndiicate memberrs in an issue. This mech hanism can be used to submit ASBA as well w as Non-A ASBA applicaations. The deetails of the lo ocations are available a on th he website off BSE and NSE i.e. i www.bseiindia.com and d www.nsein ndia.com t Securities and a Exchange Board of Indiaa (Issue of Cappital and Discloosure Further, pllease note thatt pursuant to the Requiremeents) (Fourth Amendment) A R Regulations, 20012, certain asspects, such as withdrawal an nd revision of Bids, manner off allocation to Retail Individdual Bidders an nd announcem ment of Price Band, B have beeen modified. Please P note that such s modificatiions have come into effect froom October 122, 2012 and all Bidders are advised a to readd this section carrefully before paarticipating in n the Issue. Bidders arre advised to make their in ndependent invvestigations and a ensure thaat their Bids do not exceedd the investment limits or maaximum numbber of Equity Shares S that caan be held by them under appplicable law or as n this Prospecttus. specified in UILDING PR ROCEDURE BOOK BU The Issuee is being mad de through th he 100% Book k Building Prrocess wherein 25% of the Net Issue wiill be allocated on a proporttionate basis to t Qualified Institutional I B Buyers (“QIB Bs”), out of which w 5% shaall be available for allocation n on a proporrtionate basis to Mutual Fu unds only. Th he remainder shall be availlable for allocattion on a pro oportionate baasis to all QIB Bs, including g Mutual Funds, subject to o valid Bids being b received from f them att or above th he Issue Pricee. Further, no ot less than 40% 4 of the Net N Issue shaall be available for allocation n on a proporrtionate basiss to Non-Insttitutional Bidders and nott less than 35% of the Net Issue shall bee available fo or allocation on a proportionate basis to Retail Ind dividual Bidd ders, subject to valid Bids beeing received at or above the Issue Pricee. Further up to 4,50,000 Eq quity Shares shall be availab ble for allocattion on a prop portionate baasis to Employ yees, subject to t valid Bids being receiveed at or above the t Issue Price. Under-sub bscription, if any, in any category, c exceept in the QIB B Portion, wo ould be alloweed to be met with spill over from any oth her category or o combinatio on of categoriies at the disccretion of our Company an nd in consultatiion with the BRLMs B and th he Designated d Stock Exchaange. Bidders are a required to submit th heir Bids thro ough the meembers of thee Syndicate or o non syndicate members (nationwide broker netwo ork of Stock Exchanges). E A ASBA investorrs intending to t subscribe to o the issue shall submit a complete c Bid d cum Appliccation form to the design nated branch h of the SCS SB or syndicate member at specified s citiees or non syn ndicate mem mbers (nationw wide broker network of Stock S Exchangees). We, in con nsultation witth the BRLM and the Co-B BRLM reservee the right to reject r any QIB B Bid procured by any or alll members of the Syndicatte provided th he rejection iss at the time of receipt of such Bids and the reason fo or rejection of the Bid is communicated to the Bidderr at the time of rejection of o the

238

Scotts Ga arments Limiited Bid. In th he cases of Non-Institution nal Bidders, Retail R Individ dual Bidders and Bidders in the Employee Reservatio on Portion, th he Company will w have a rig ght to reject th he Bids only on technical grounds. g e that Allotm ment of Equitty Shares to all a successfu ul Bidders wiill be only in n the Investors should note demateriaalised form. The T Bid cum m Application n Forms whicch do not haave the detaills of the Bidd ders’ depositorry accounts shall be treateed as incomp plete and rejeected. Bidderrs will not haave the optio on of being Alllotted Equity y Shares in ph hysical form.. The Equity Shares on Allotment A shaall be traded only on the dematerialised segment of the t Stock Excchanges. Bidders are a required to ensure th hat the PAN (of the solee/ first Biddeer) provided d in the Bid cum Applicatio on Form is exactly the same as thee PAN of th he person(s) in whose naame the releevant beneficiarry account is held. h M APPLICAT TION FORM BID CUM ular CIR/CFD D/DIL/4/2011 dated Septem mber 27, 20111, Bid cum Application A Fo orms Pursuant to SEBI circu have been n standardized and it hass been decid ded that hencceforth there would only be a single form f for ASBA A and non-A ASBA Bidderrs. It has alsso been deciided that thee Bid cum Application A F Form (accompaanied with ab bridged prosp pectus) would d be printed in i a booklet form f of A4 siize paper. Bidders (o other than AS SBA Bidders)) shall submitt the bid thro ough the Syndicate. The Bidders B shall have h the option n to make a maximum m of three Bids in n the Bid-cum m-Application n Form and such s options shall not be con nsidered as multiple m Bids.. ASBA Biddeers shall subm mit Bid cum Application A F Form to the SCSB S authorisin ng blocking of o funds that are a available in i the bank account except for the ASBA Bids subm mitted in the Speecified Cities through t the Syndicate. S In the t case of Sp pecified Citiess, the ASBA Bids B may eitheer be submitted d with the Designated D Brranches or with w the Synd dicate. Bid cu um applicatio on forms willl be available for download and printin ng, from web bsites of the Stock Exchan nges which provide p electrronic interface for f ASBA faciility i.e. Bomb bay Stock Excchange (BSE) and a Nationall Stock Exchan nge (NSE). ng through th he Syndicatee should ensu ure that the Bid B cum App plication Forrm is ASBA Bidders biddin d to the Synd dicate only in n the Specifieed Cities. AS SBA Bidders should also note that thee Bid submitted cum Application Form ms submitted d to the Syndicate in the Specified S Citiies will not be b accepted iff the here the ASBA A Account, ass specified in n the Bid cum m Application n Form, is maaintained hass not SCSB wh named at least one bra anch at that location l for th he Syndicatee to deposit Bid B cum Appllication Form ms (A list of su uch branchess is availablle at http://w www.sebi.gov v.in/pmd/scsb-asba.html). ASBA Bid dders bidding directly d throu ugh the SCSB Bs should enssure that the Bid cum App plication Form m is submitteed to a Designaated Branch of o a SCSB wh here the ASBA A Account iss maintained.. Upon filin ng of the Pro ospectus with h the RoC, thee Bid-cum-Ap pplication Fo orm shall be considered c ass the Applicatio on Form. Upo on completin ng and submitting the Bid--cum-Applicaation Form to o a member of o the Syndicatee, Non Syndicate memberrs or the SCS SB, the Biddeer or the ASB BA Bidder is deemed to have h authorized our Compa any to make the necessarry changes in n the Red Heerring Prospectus as woulld be required for f filing the Prospectus with w the RoC and as woulld be required d by the RoC C after such fiiling, without prior p or subseq quent notice of o such chang ges to the Bid dder or the AS SBA Bidder. The presccribed colour of the Bid cum m Application n Form for vaarious categorries is as follo ows: Cattegory Residentt Indians, QIB Bs, Eligible NRIs N applying g on a non-reepatriation basis (AS SBA and non ASBA) Eligible NRIs and FIIIs applying on a repatriaation basis (A ASBA and 239

Colour of Biid cum Appliication Form White Blue

Scotts Ga arments Limiited Cattegory

Colour of Biid cum Appliication Form

Non ASB BA) Eligible Employees applying a in the Employeee Reservatio on Portion (ASBA and a non ASBA A)

Pink

ASBA Bid dders shall su ubmit an Bid d cum Appliccation Form either e in physical or electrronic form to o the SCSB auth horizing bloccking the fun nds that are av vailable in th he bank accou unt specified in the ASBA A Bid cum Appllication Form m used by ASB BA Bidders except for the ASBA bids submitted in specified s citiees. In the case of o Specified Cities, the ASB BA Bids may be b submitted with the mem mbers of the Syndicate. S Kiindly note that Bid cum App plication Form ms submitted d by ASBA Bidders B to meembers of thee Syndicate at the Syndicatee ASBA Biddiing Locationss will not be accepted a if th he SCSB with h which the ASBA A Accoun nt, as specified in the Bid cu um Applicatiion Form, is maintained has h not nameed at least on ne branch at that location for f the memb bers of the Syndicate S to deposit d the Bid B cum App plication Form m (A list of such branches is available at http://ww ww.sebi.gov.in/pmd/scsb b-asba.html). The Bidderrs shall havee the option to make a maxim mum of threee Bids in the ASBA A Bid-cum m-Applicatio on Form and such s options shall not be con nsidered as multiple m Bids. Upon the allo ocation of Eq quity Shares, dispatch d of th he CAN and filing f of the Prrospectus witth the RoC, the ASBA Bid B cum App plication Form m shall be considered c ass the Applicatio on Form. B Who can Bid? •

Persons eligible to invest underr all applicablee laws, rules, regulations and a guidelinees;

•

Indian n Nationals, resident r in In ndia, who aree competent to t contract un nder Indian Contract C Act, 1872 as am mended and Minors, haviing valid dem mat account, as per dem mographic dettails provided d by Depositaries. ;

•

Hindu u Undivided Families or HUFs, H in the individual i naame of the Kaarta. The Bidd der should speecify that th he Bid is beeing made in n the name of the HUF F in the Bid d cum Appllication Form m as follow ws: “Name of Sole or First bidder: XYZ X Hindu Undivided U Faamily applyin ng through XYZ, X wheree XYZ is the name of the Karta”. Bids by HUFs wo ould be consiidered at parr with those from f indiviiduals;

•

Comp panies, corpo orate bodies and societiees registered under the applicable a law ws in India and autho orized to invest in the equitty shares;

•

Mutu ual Funds regiistered with SEBI; S

•

Eligib ble NRIs on a repatriation basis or on a non-repatriaation basis, su ubject to appllicable laws. NRIs N other than Eligiblee NRIs are nott eligible to paarticipate in this t issue;

•

Indian n Financial In nstitutions, co ommercial baanks, regionall rural banks, co-operativee banks (subjeect to RBI an nd the SEBI Regulations R an nd regulation ns, as applicab ble);

•

FIIs and sub-accou unts registered d with SEBI, other than a sub-account s w which is a forreign corporaate or a foreeign individua al;

•

Ventu ure Capital Fu unds registereed with SEBI;;

•

Foreig gn Venture Capital C Investo ors registered d with SEBI,

•

Multiilateral and Biilateral develo opment finan ncial institutio ons

•

AIFs registered r with h SEBI;

•

Eligible QFIs 240

Scotts Ga arments Limiited •

State Industrial I Deevelopment Corporations; C

•

Trustss/ societies registered r un nder the Socieeties Registraation Act, 18660, as amended, or underr any other law relating to trusts/ so ocieties and who w are autho orized under their constitu ution to hold d and investt in equity sha ares;

•

Scienttific and/or in ndustrial reseearch organizzations authorrized to invesst in equity sh hares;

•

Insuraance Compan nies registered d with Insuraance Regulato ory and Devellopment Auth hority, India;

•

Provident Funds with minimu um corpus of o ` 2500.00 lacs l and wh ho are authorrized under their constiitution to hold d and invest in i equity sharres;

•

Pensio on Funds wiith a minimu um corpus of o ` 2500.00 lacs and wh ho are authorrized under their constiitution to hold d and invest in i equity sharres; and

•

Natio onal Investmeent Fund set up u by resoluttion no. F. No o. 2/3/2005-D DDII dated November N 23, 2005 of Government of India I publish hed in the Gazzette of India;; and

•

Eligib ble Employeess (as defined in the section n “Definitionss and Abbreviiations” begin nning on pagee i of the Reed Herring Prrospectus.)

•

Limited Liability Partnerships P r registered und der the Limiteed Liability Partnership P Acct, 2008

•

Insuraance funds seet up and man naged by the army, navy or o air force of the Union of India

•

Insuraance funds seet up and man naged by Dep partment of Posts, India;

As per thee existing reg gulations, OCB Bs cannot parrticipate in thiis Issue. M, Co-BRLM M and Syndicaate Member Participattion by associates of BRLM The BRLM M, the Co-BR RLM and Synd dicate Member shall not be b allowed to o subscribe to o this Issue in n any manner except e toward ds fulfilling their underwrriting obligattions. Howev ver, associatess and affiliatees of the BRLM M, the Co-BRL LM and Synd dicate Membeer may subscrribe for Equitty Shares in th he Issue, eith her in the QIB Portion and Non-Institution nal Portion where w the allottment is on a proportionatee basis. E Emplloyees Bids by Eligible Reservatio on to Eligiblee employees has h been prov vided in this issue, i as per Regulation R 422 of the SEBI (ICDR) ( Regulatio ons, 2009. Elig gible Employeee shall mean n a permanen nt and full-tim me employee working w in In ndia or abroad, off the issuer or o of the holding company y or subsidiarry company or o of that matterial associatte(s) of the issuerr whose fina ancial statem ments are con nsolidated with the issueer’s financial statements as per Accountin ng Standard 21, 2 or a directtor of the issu uer, whether whole w time or part time an nd does not in nclude promoterss and an imm mediate relattive of the promoter p (i.e.,, any spousee of that persson, or any parent, p brother, siister or child of that person n or of the spouse);] Bids undeer Employee Reservation R P Portion by Eligible Employ yees shall be: • Made in i the prescrib bed Bid-cum--Application Form or Reviision Form. • Eligible Employees,, as defined above, a should d mention theeir Employee Number at the t relevant place p in the Bid-cum-App B plication Form m.

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Scotts Ga arments Limiited • The so ole/First Bid dder should be Eligible Employees as defined above. a In caase the Bid-ccumAppliccation Form is i submitted in i joint namees, it should be b ensured th hat the Depo ository Accou unt is also heeld in the sam me joint nam mes and in thee same sequeence in which h they appearr in the Bid-ccumAppliccation Form. • Only Eligible E Emplloyees would d be eligible to t apply in th his Issue und der the Emplloyee Reservaation Portion n. • Eligible Employees will have to bid like any other Bidderr. Only those bids, which are a received at or above the Issue Pricce, would be considered c fo or allocation under u this cateegory. • Eligible Employees who apply or o bid for secu urities of or fo or a value of not n more than n ` 200,000 in n any of the bidding options can applly at the Cut--Off Price. Th his facility is not availablee to other Elig gible Emplo oyees whose minimum m Bid d Amount exceeds ` 200,0000. • Bid/A Application by y Eligible Emp ployees can also a be made in i the Net Isssue portion an nd such Bids shall not be treated as mu ultiple bids. • If the aggregate a dem mand in this category c is lesss than or equ ual to 4,50,0000 Equity Sharres at or abovee the Issue Price, P full allo ocation shall be made to the Eligible Employees to the extent of their dem mand. Provid ded that the value v of allo otment to any y employee in i pursuancee of this reserrvation, shalll not exceed d ` 2,00,000/-.. • Any un nder-subscrip ption in the Equity E Shares under the Em mployee Reseervation Portiion will be ad dded back to o the Net Issu ue. • If the aggregate a dem mand in this category is greater g than 4,50,000 4 Equitty Shares at or o above the Issue I Price, the t allocation n shall be maade on a prop portionate bassis. Provided that the valu ue of allotmen nt to any em mployee in pu ursuance of th his reservation n, shall not ex xceed ` 2,00,000/-. M Fundss Bids by Mutual An eligiblle Bid by a Mutual M Fund shall s first be considered fo or allocation proportionately in the Mu utual Funds Po ortion. In the event that th he demand is greater than n 1,25,712 Equ uity Shares, allocation a shaall be made to Mutual Fund ds proportionately, to th he extent of the t Mutual Fund F Portion n. The remaiining demand by b Mutual Fu unds shall, ass part of the aggregate deemand by QIIBs, be availaable for allocaation proportionately out off the remaind der of the QIIB Portion, affter excluding g the allocatio on in the Mu utual Funds Porrtion. und, a separaate Bid can be b made in reespect of each scheme of the mutual fund f In case off a mutual fu registered d with SEBI and a such Bidss in respect of more than one o scheme of o the mutuall fund will no ot be treated ass multiple Bid ds provided that the Bids clearly c indicaate the schem me concerned for f which thee Bid has been made. m As per the current regulaations, the folloowing restrictions are applicaable for investm ments by mutu ual funds: No mutuaal fund schem me shall invesst more than 10% of its neet asset value in the equity y shares or eq quity related in nstruments off any single company c pro ovided that th he limit of 100% shall not be applicablee for investmen nts in index funds f or secto or or industry y specific fun nds. No mutu ual fund und der all its scheemes should ow wn more than n 10% of any company’s c paaid-up capitall carrying votting rights. ve informatio on is given for f the beneffit of the Bid dders. Our Company C and d the BRLM & CoThe abov BRLM aree not liable for f any amendments or modification m o changes in or n applicable laws or regulaations, which maay happen affter the date of this Red Herring Pro ospectus. Bid dders are adv vised to makee their

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Scotts Ga arments Limiited independ dent investiga ations and ensure e that th he number of o Equity Shares bid for do not exceed the applicablle limits unde er laws or reg gulations. E NRIs Bids by Eligible Bid cum Application A Forms F have been b made av vailable for Eligible E NRIs at the registtered office off the Company y and with meembers of thee Syndicate an nd the Registrrar to the Issu ue. Eligible NRI N applicants should notee that only su uch Bids as arre accompaniied by paymeent in free forreign exchange shall be considered for Allotment. A Th he Eligible NR RIs who intend to make payment p thro ough Non-Resid dent Ordinarry (NRO) acccounts shall use u the Bid cum c Applicattion Form meeant for Resiident Indians. Bids by FIIs F As per the current regulaations, the folloowing restrictions are applicaable for investm ments by FIIs: The issue of Equity Sh hares to a sin ngle FII shoulld not exceed d 10% of the post-Issue p paaid- up capitaal. In respect off an FII investting in the Eq quity Shares on o behalf of itts sub-accoun nts, the investm ment on behaalf of each sub--account shalll not exceed 10% 1 of our to otal issued caapital of the Company C or 5% of the total issued caapital, in casee such sub-acccount is a foreign f corpo orate or an individual. i Th he aggregate limit for FII inv vestment is 24 4% of the cap pital of the co ompany. This aggregate lim mit of 24% caan be increaseed to the sectorral cap/statuttory ceiling, through t a ressolution by its Board of Directors, D follo owed by a sp pecial resolution n to that effectt. Subject to o compliance with all app plicable Indiaan laws, ruless, regulationss, guidelines and approvaals in terms of Regulation R 15 5A(1) of the Securities Ex xchange Board d of India (F Foreign Institu utional Invesstors) Regulatio ons 1995, as amended, an a FII or itts sub-accou unt may isssue, deal orr hold, offsshore derivativee instrumen nts such as a Participatory Notes, equity-linked e d notes or any other sim milar instrumen nts against un nderlying seccurities listed or proposed to be listed in i any stock exchange e in India I only in favour of tho ose entities which w are reg gulated by any a relevant regulatory authorities a in n the countries of their in ncorporation or establishm ment subjectt to compliaance of “kn now your cliient” requiremeents. An FII or o sub-accoun nt shall also ensure that no n further do ownstream isssue or transfeer of any instru ument referred to hereinab bove is made to t any person n other than a regulated en ntity. S Registere ed Venture Capital C Fundss (VCF) And Foreign Ven nture Capital Investors (FV VCI) Bids by Sebi and Alterrnative Investtment Funds (AIF) As per th he current reegulations, th he following restrictions are a applicablle for Sebi reegistered ven nture capital fun nds and foreiign venture caapital investo ors and Altern native Investm ment Funds: The SEBII (Venture Capital) C Regu ulations, 19996 and the SEBI S (Foreig gn Venture Capital C Inveestor) Regulatio ons, 2000 presscribe investm ment restrictio ons on venturre capital fun nds and foreig gn venture caapital investors registered wiith SEBI. According gly, the holdiing by any in ndividual ven nture capital fund f registerred with SEBII in one comp pany should no ot exceed 25% of the corrpus of the venture v capitaal fund (VCF F); a Foreign n Venture Caapital Investor can c invest itss entire fund ds committed d for investm ments into Ind dia in one co ompany. Furrther, Venture Capital C Fundss and Foreign n Venture Cap pital Investorrs can invest only o up to 33.33% of the fu unds available for investmen nt by way of subscription s t an initial public to p offer. Category I and II AIFss cannot invesst more than 25% of the co orpus in one investee com mpany. A category 243

Scotts Ga arments Limiited III AIF caannot invest more than 100% of the corrpus in one investee i com mpany. A ven nture capital fund f under thee category I AIFs, A as defin ned in the SEB BI AIF Regullations, can in nvest only up p to 33.33% of the corpus by b way of subscription s to an initiaal public offering of a venture capiital undertak king. Additionaally, the VCF Fs which have not re-regisstered as an AIF under th he SEBI AIF Regulations shall continue to t be regulateed by the VCF F Regulationss. E QFIs Bids by Eligible Pursuant to a circular dated d January y 13, 2012, thee RBI has perm mitted Eligiblle QFIs to inv vest in equity shares of Indian companies on o a repatriation basis su ubject to certaain terms and d conditions. Eligible QFIs have been perm mitted to inveest in equity shares of Ind dian companiees which are offered to th he public in In ndia in accordancce with the SE EBI Regulatio ons. The indiv vidual and ag ggregate invesstment limits for Eligible QFIs Q in an Indian n company arre 5% and 100% of the paiid up capitall of the Indiaan company, respectively. These limits are in addition to t the investm ment limits prescribed p un nder the portffolio investm ment scheme for f FIIs and NRIs. However, in n cases of tho ose sectors wh hich have com mposite foreig gn investmen nt caps, Eligib ble QFI investmen nt limits are required to bee considered within w such co omposite foreeign investmeent cap. QFIs shalll be included under the No on-Institution nal Bidders caategory. Furth her, the SEBI in its circularr dated January 13, 2012 has sp pecified, amon ngst other thiings, eligible transactions for f Eligible QFIs Q (which in ncludes investmen nt in equity shares in publlic issues to be b listed on reecognised sto ock exchangess and sale of equity shares helld by Eligiblee QFIs in theirr demat accou unt through SEBI S registereed brokers), manner m of opeeration of demat accounts by Eligible QFIss, transaction processes an nd investmen nt restrictions.. SEBI has sp pecified that transsactions by Eligible E QFIs shall be treaated at par with w those made m by Indiaan non-institu utional investors in various resspects includiing, margins,, voting rightss and public issues. i Eligible QFIs Q shall opeen a single no on interest bearing Rupee account with h an AD categ gory-I bank in n India for routin ng the paymeent for transaactions relatin ng to purchasse of equity shares (inclu uding investm ment in equity shaares in publicc issues) subjeect to the cond ditions as may y be prescribeed by the RBII from time to o time. Eligible QFIs Q who wish h to participate in the Offer are required d to submit th he Bid cum Application A Fo orm for the Offer. Eligible QFIss are advised to use the Bid d cum Appliccation Form meant m for Non n-Residents (b blue in colour). Eligible E QFIs are a required to participate in the Offer through the ASBA A process. Eligible QFIs Q are not peermitted to isssue off-shoree derivative in nstruments orr participatory y notes. Bids by liimited liabiliity partnershiips In case off Bids made by limited liaability partneerships registtered under the t LLP Act, a certified copy of certificatee of registratio on issued un nder the LLP Act, must bee attached to the Bid cum m Application Form. Failing this, our Company reserve th he right to rejject any Bid without w assign ning any reasson thereof. nsurance com mpanies Bids by in In case off Bids made by b insurance companies registered r witth the IRDA, a certified co opy of certificate of registratio on issued by IRDA I must be attached to the Bid cum Application Form. F Failing g this, our Com mpany reserve th he right to rejeect any Bid without w assign ning any reaso on thereof. The expossure norms fo or insurers, prescribed und der the Insuraance Regulato ory and Deveelopment Autthority (Investmeent) Regulatio ons, 2000, as amended, a are broadly set forth f below: (a) eq quity shares of a company y: the least of o 10% of the investee com mpany’s subsscribed capitaal (face vaalue) or 10% of the respecctive fund in case of life in nsurer or 10% % of investmeent assets in case c of geeneral insurerr or reinsurerr;

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Scotts Ga arments Limiited (b) th he entire grou up of the inveestee compan ny: the least of o 10% of the respective fu und in case of o a life in nsurer or 10% % of investmen nt assets in caase of a general insurer or reinsurer r (25% % in case of ULIPs); U an nd (c) th he industry seector in which h the investeee company op perates: 10% of the insureer’s total invesstment ex xposure to the industry secctor (25% in case c of ULIPs)). Bids by provident p fun nds/pension funds f In case of Bids made by y provident funds/pensio f on funds, subjject to applicaable laws, witth minimum corpus c of Rs. 2500 million, a ceertified copy of certificatee from a charttered accountant certifyin ng the corpus of the providentt fund/pensiion fund mu ust be attacheed to the Biid cum Appllication Form m. Failing thiis, our Company y reserve the right r to reject any Bid, with hout assignin ng any reason thereof. ve informatio on is given fo or the benefitt of the Bidd ders. The Com mpany and th he Book Run nners The abov are not liiable for any y amendmen nts or modifiication or ch hanges in applicable law ws or regulatiions, which maay occur afte er the date off this Red Herring H Prosp pectus. Biddeers are adviseed to make their t independ dent investiga ations and en nsure that th he number off Equity Sharres Bid for do d not exceed d the applicablle limits unde er laws or reg gulations. m and Minim mum Bid Size Maximum a) For Reetail Individu ual Bidders: The T Bid mustt be for a min nimum of 1000 Equity Sharres and in mu ultiples of 100 Equity Sharees thereafter, so as to ensure that thee Bid Price paayable by thee Bidder doees not exceed d `200,000. In n case of reviision of Bids, the Retail In ndividual Bidd ders have to ensure that the t Bid Price does d not exceeed ` 200,0000. In case the Bid Price is over ` 200,0000 due to rev vision of the Bid or revisio on of the Pricee Band or on n exercise of Cut-off C option n, the Bid wo ould be consid dered for allo ocation under the Non-Insttitutional Bid dders portion.. The Cut-offf option is an n option given n only to thee Retail Individ dual Bidderss indicating their agreem ment to Bid and purchaase at the final Issue Prrice as determ mined at the end of the Book Buildin ng Process. The T Retail Individual I B Bidders may either withdrraw or revise their Bid at any a time prio or to the finallisation of alllotment. b) For Otther Bidders (Non-Institu utional Bidders and QIBs Portion): Thee Bid must bee for a minim mum of such number n of Eq quity Shares such that thee Bid Amoun nt exceeds `2200,000 and in i multiples of 100 Equity y Shares thereeafter. A Bid cannot be sub bmitted for more m than thee Issue. Howeever, the max ximum Bid by y a QIB investtor should no ot exceed the investment liimits prescrib bed for them by applicablee laws. Under the existing g SEBI Regulaations, a QIB B Bidder and d Non-Institu utional Biddeer cannot witthdraw B or low wer the size of their bid d(s) (in termss of quantity y of Equity Shares or th he Bid their Bid(s) Amoun nt) at any sta age. QIBs and d Non-Institu utional Biddeers are mandatorily requiired to submiit their Bid th hrough ASBA A process. No on-Institution nal Bidders and QIBs are not alloweed to Bid at cut-off c price. In casee the Bid Amo ount reduces to Rs. 200,0000 or less due to a revision n of the Price Band, B Bids by y NonInstitutional Bidderrs who are eligible e for allocation in the t Retail Po ortion would d be considerred for allocattion under thee Retail Portio on. c) For Bidders in the Employee Reservation R P Portion: The Bid B must be for a minimu um of 100 Eq quity Shares and in multiiples of 100 Equity Shares thereafter. Elligible Emplo oyees, whose Bid B Amount does not excceed `200,000 0, including due d to any reevision in thee Price Band, may Bid at the Cut-off Price. P Eligible Employees whose Bid Amount A exceeeds `200,000/ /- have to bid d through ASB BA only and may not Bid d at Cut-off Price. P A singlle applicant applying a und der the Emplo oyee Reservaation portion may make an a application n for a numb ber of specifieed securities which w does not n exceeds th he reservation n i.e; 4,50,0000 equity sharres. Howeverr, allocation sh hall be made on a proporttionate basis provided p thaat the

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Scotts Ga arments Limiited value of allotment to any emplloyee in purssuance of thee employee reeservation, sh hall not exceeed ` 2,00,0000. d to ensure that t any sing gle Bid from them t does no ot exceed thee investment limits Bidderrs are advised or maxximum numb ber of Equity y Shares that can be held by b them und der applicablee law or regu ulation or as sp pecified in th his Red Herriing Prospectu us. mation for the e Bidders: Inform (a) Our Company C in consultation c w with the BRL LM and Co- BRLM B shall declare d the Biid/Issue Opeening Date and Bid/Issu ue Closing Daate in the Red d Herring Pro ospectus to bee registered with w the RoC C and also publish p the sa ame in two (22) national neewspaper onee (1) each in English and Hindi H newsp paper and one o regional newspaper n w with wide circculation. We shall announ nce the price band b at leastt five workiing days befo ore the openiing of the bid d, by way of an a announcement in all th he newspapeers in which h the pre-issu ue advertisem ment was releaased by our Company C or the t BRLM an nd Co-BRLM.. The price band announ ncement shalll contain relev vant financiall ratios compu uted for both h upper and lo ower end of o the price ba and and also a statement drawing d the atttention of the investors to o the section titled t “basiss of issue pricce” in the offeer document. The Syndicatte and the SC CSBs shall acccept Bids from m the Biddeers during th he Bid/Offer Period. Thee Price Band, along with h the relevan nt financial ratios calcullated at the Floor F Price an nd at the Caap Price, shall be pre-filled d in the Bid cum Applicaation Formss available at the websites of the Stock Exchanges. E (b) Bidding by QIBs will w close onee Working Daay prior to th he Bid Closing g Date, proviided that Bidding shall be b kept open for a minimu um of three Working W Days for all catego ories of Biddeers. (c) Our Company C willl file the Red Herring Prosspectus with the t RoC beforre the Bid/Isssue Opening Date in com mpliance with h the SEBI (IC CDR) Regulatiions 2009 and d the Compan nies Act, 1956 (d) The members m of the Syndicatee will circulatte copies of the t Bid-cum-A Application Form F to poteential investtors, and at the t request off the potentiaal investor’s, copies of thee Red Herring g Prospectus. The SCSBss shall ensuree that the abriidged prospecctus is made available a on their t websitess. (e) Any Bidders B (who o is eligible to t invest in the Equity Shares) S who would w like to o obtain the Red Herrin ng Prospectu us and/ or thee Bid cum Ap pplication Forrm can obtain n the same fro om the Registtered Officee or from any member of th he Syndicate or the SCSBs. (f) Eligib ble investors who are interested in su ubscribing fo or the Equity y Shares shou uld approach h the BRLM M, Co-BRLM or Syndicate Member or their authorized agent(s) to register th heir Bids. Bid dders who wish to use the ASBA process p shoulld approach the Designatted Branches of the SCSB Bs to registter their Bids or o the Syndiccate in Specified Cities to reegister their Bids. B (g) ASBA A Bidders sha all correctly mention m the bank b account number in th he ASBA Bid cum Applicaation Form and ensure that t funds eq qual to the Bid d Amount aree available in n the bank acccount maintaained with the t SCSB befo ore submittin ng the ASBA Bid cum App plication Form m to the respeective Design nated Brancch or the Syndicate in Speecified Cities to register th heir Bids. ASB BA Bidders bidding b throu ugh a Syndiicate Memberr should ensu ure that the Bid B cum App plication Form m is submitteed to a Syndicate Memb ber only in th he Specified Cities. C ASBA Bidders B shoulld also ensuree that the Bid d cum Applicaation Formss submitted to t the Syndicate Memberss in the Speciffied Cities wiill not be acceepted if the SCSB S wheree the ASBA Account, as specified in the Bid cum m Application Form, is maaintained hass not named at least on ne branch at that t location for the mem mbers of the Syndicate S to deposit Bid cum Appliication Formss (A list of su uch branches is available at a http://ww ww.sebi.gov.in n/pmd/scsbaasba. html) (h) If thee ASBA Acco ount holder iss different frrom the ASBA A Bidder, thee ASBA Bid cum Applicaation Form should be sig gned by the account a holder as provided d in the ASBA A Bid cum Ap pplication Form m. 246

Scotts Ga arments Limiited (i) The Bids B should be submitteed on the prescribed p Biid-cum-Appliication Form m only. Bid-ccumAppliication Formss should beaar the stamp of the memb ber of the Sy yndicate. Bid--cum-Applicaation Formss which do not n bear the stamp s of a member m of th he Syndicate will w be rejectted. Further, such brokeer or SCSB branch b shall affix its stam mp, date and d time on thee Bid cum Application A F Form ackno owledging thee upload of th he Bid in the electronic biidding system m of the Stock k Exchanges. Bids by AS SBA Bidders shall s be accep pted by the Designated D Braanches of thee SCSBs in acccordance with h the SEBI (ICDR) Regulations and any a circulars issued i by SEB BI in this regaard. Bidders applying a thro ough the ASBA A process also have an n option to su ubmit the ASB BA Bid cum Application A F Form in electrronic form. (j) The Syndicate S and d the Designated Branchess of the SCSBss shall acceptt Bids from th he Bidders du uring the Biid/Issue Perio od in accordaance with the terms of the Syndicate S Ag greement. The appliicants may note n that in case the DP ID I and Clien nt ID and PA AN mentioned d in the Bid cum Applicatiion Form and d entered in nto the electrronic bidding g system of the Stock Exchanges E by y the Syndicatee do not ma atch with th he DP ID an nd Client ID D and PAN available in n the Settlem ment Depositorry database, the t applicatio on is liable to o be rejected.. Method and a Process of o Bidding (a) Our Company C in consultation with the BR RLM and Co-B BRLM will decide d the Price Band and d the minim mum Bid lot size s for the Issue. The mem mbers of Synd dicate and thee SCSBs shalll accept Bids from f the Biidders during g the Bid/Issu ue Period. (b) The Bid/Issue B Perriod shall bee for a minim mum of threee Working Days D and shaall not exceed 10 Work king Days. In case of revision in Price Baand, the Bid/ / Issue Period d may be exteended, if requ uired, by miinimum of thrree Working Days, subjectt to the total Bid/Issue B Perriod not exceeeding 10 Worrking Days.. Any revisio on in the Priice Band and d the revised d Bid/ Issue Period, if ap pplicable, willl be publisshed in two national n newsspapers (one each in Engliish and Hindii) and one reg gional newsp paper with wide w circulatiion and also by b indicating the change on o the websitees of the BRLM M, Co-BRLM M and at thee terminals of the Syndicatee. (c) Durin ng the Bid/Isssue Period, Bidders, B otheer than QIBs,, who are intterested in su ubscribing forr the Equity y Shares sho ould approacch the Syndiccate (includin ng at specifiied cities) or their authorrised agentts or SCSBs to o register theeir Bids. The Syndicate S shaall accept Bid ds from all no on ASBA Bid dders and at a specified cittites from AS SBA Bidders and a have the right to vet the t Bids durin ng the Bid/ Issue I Period d in accordan nce with the terms of the Red Herring g Prospectus. Bidders who o wish to usee the ASBA A process shou uld approach h the Designaated Branchess of the SCSBss or the Syndiicate (for the Bids to be submitted in the Specified d Cities) to reg gister their Bid ds. (d) Each Bid cum App plication Form m will give th he Bidder the choice c to Bid for up to three optional prices (for details d refer to o the paragrap ph entitled ― “Bids at Diffferent Price Levels” L below w) within the Price P Band and specify the demand (i.e., the num mber of Equity y Shares Bid for) in each option. The price p and demand d optio ons submitted d by the Bidd der in the Bid d cum Appliccation Form will w be treateed as option nal demandss from the Biidder and wiill not be cum mulated. Aftter determinaation of the Issue I Price, the maximum m number off Equity Sharees Bid for by a Bidder at or o above the Issue Price wiill be consid dered for allo ocation/Allottment and thee rest of the Bid(s), B irrespeective of the Bid B Amount, will becom me automatica ally invalid. (e) The Bidder B cannott Bid on anoth her Bid cum Application A F Form after Bid ds on one Bid d cum Applicaation Form have been su ubmitted to any a member of the Syndicate or the SCSBs. Submission of a seccond Bid cu um Applicatio on Form to eiither the same or to anotheer member off the Syndicatte or SCBS wiill be treateed as multiplee Bids and is liable to be rejected r eitherr before enterring the Bid into i the electrronic biddin ng system, orr at any pointt of time prio or to the alloccation or Allo otment of Equ uity Shares in n this

247

Scotts Ga arments Limiited Issue.. However, th he Bidder can revise the Bid d through thee Revision Form, the proceedure for whiich is detailled under the paragraph en ntitled ― “Bu uild up of the Book and Rev vision of Bidss”. (f) The Syndicate/the S e SCSBs will enter e each Bid d option into the electronicc bidding sysstem as a sepaarate Bid an nd generate a Transaction Registration Slip, (‘TRS’), for each pricee and demand d option and give the saame to the Bidder. Therrefore, a Bidder can receeive up to th hree TRSs fo or each Bid cum Appliication Form. (g) Along g with the Bid B cum App plication Form m, all Biddeers (other thaan ASBA Bid dders) will make m paym ment in the ma anner describ bed in ― “Esccrow Mechan nism - Terms of payment and a payment into the Esscrow Accoun nts” on page 260. 2 (h) Upon n receipt of thee Bid cum Ap pplication Forrm from ASBA A Bidder, wh hether submittted in physiccal or electronic mode, th he Designated d Branch of the t SCSB shalll verify if su ufficient fundss equal to thee Bid Amou unt are availa able in the AS SBA Account,, as mentioneed in the ASB BA Bid cum Application A Form, prior to uploading g such Bids wiith the Stock Exchanges. E (i) If suffficient funds are not availlable in the ASBA A Accoun nt, the Design nated Branch of the SCSB shall reject such Bids an nd shall not up pload such Biids with the Stock S Exchang ges. (j) If suffficient funds are available in the ASBA A Account, thee SCSB shall block b an amo ount equivalent to the Biid Amount mentioned m in the t ASBA Bid d cum Appliccation Form and a will enteer each Bid op ption into th he electronic bidding system as a separate Bid and generate a TR RS for each price p and dem mand option n. The TRS sh hall be furnish hed to the ASBA Bidder on n request. (k) The Bid B Amount shall s remain blocked b in thee aforesaid ASBA A Accoun nt until finalissation of the Basis B of Alllotment and consequent c trransfer of thee Bid Amoun nt against the Allotted Equ uity Shares to o the Publicc Issue Accou unt, or until withdrawal/f w failure of thee Issue or unttil withdrawaal/rejection of the Bid cu um Applicatio on Form, as th he case may be. b Once the Basis B of Allotm ment is finalized, the Registrar to thee Issue shall send s an appro opriate requeest to the Con ntrolling Bran nch of the SCS SB for unbloccking the reelevant ASBA A Accounts an nd for transfeerring the am mount allocab ble to the succcessful Biddeers to the Pu ublic Issue Account. A In caase of withdrrawal/failuree of the Issue,, the blocked d amount shaall be unblo ocked on receiipt of such infformation fro om the Registrar to the Issu ue. (l) Pursu uant to SEBI Circular C No. CIR/CFD/14/ C /2012 dated October O 04, 20012 all investo ors can subm mit their appliccation form through t natio onwide brokeer network off Stock Exchaanges (i.e. aro ound four hu undred (400) broker centrees to be coverred by Januarry 01, 2013). The T details off locations inccluding namee of the brokeer, contact dettails such as name of the contact perso on, postal add dress, telepho one number, e-mail addreess of the brok ker, etc. wherre the applicaation forms sh hall be collecteed will be dissclosed by thee Stock Exchaanges on theirr websites. -

-

Application fo A orms can be downloaded d from the Sto ock Exchangees websites/b broker termin nals, so th hat any investtor or stock brroker can dow wnload/printt the forms diirectly. Eligible investtor may submit the appllication indiccating the mode m of paym ment to any of the reegistered brok ker of the Sto ock Exchangee having its office o in any of o the broker centre of thee Stock Exchange A accepted ap All pplications sh hall be stamp ped and thereb by acknowled dged by the broker b at the time t of reeceipt and will be uploaded on the Stock Exchange platform p Brroker shall be b responsiblee for uploadiing the bid on the Stock Exchange E plaatform, bankiing the ch heque/submiitting the ASB BA form to SC CSB, etc. and liable for any y failure in thiis regard In n case of non n-ASBA appliication, brokeer to deposit the cheque, prepare p electtronic schedu ule and seend it to Bank ker to the Issu ue. All Bankeers to the Issu ue (“BTI”), wh hich have braanch/es in a broker ceentre, shall en nsure that at least one of its i branches in i the broker centre accep pts cheques. Brokers B sh hall deposit the t cheque in n any of the bank branch h of the colleccting bank in n the broker centre. Brrokers shall also update the electroniic schedule (containing ( ap pplication deetails includin ng the 248

Scotts Ga arments Limiited

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ap pplication am mount) as dow wnloaded from Stock Exch hange platforrm and send it i to local braanch of th he collecting bank. b Brokers shall retain all physical applications initially and send it to Reegistrar to o Issue (“RTA A” or ”Registrrar”) after 6 months m In n case of AS SBA applicattion, broker to forward a schedule along a with application a fo orm to reespective ASB BA Branch. Broker B shall forward a scchedule (conttaining appliccation numbeer and am mount) along g with appliication formss to the bran nch named fo or ASBA of the respectiv ve self ceertified syndicate banks (SCSBs) for blo ocking of fund d

e Levels and Revision R of Bids B Bids at Different Price 1.

Thee Bidder can bid at any price p within the Price Ban nd. The Bidd der has to bid d for the dessired num mber of Equitty Shares at a specific pricee. Retail Indiv vidual Bidders applying fo or a maximum m Bid in any a of the bid dding options not exceediing ` 200,000 and Bidderss in the Emplloyee Reservaation Portion may bid d at Cut-Off Price. P Howeveer, bidding at Cut-Off Price is prohibitted for QIB, NonN Insttitutional Bid dders or Bidd ders in the Employee E Reeservation Po ortion biddin ng in excess of ` 200,,000 and such h bids shall bee rejected.

2.

Retaail Individua al Bidders and d Bidders in Employee Reservation R Po ortion who bid b at the Cutt-Off Pricce agree that they shall pu urchase the Equity E Sharess at any pricee within the Price P Band. Retail R Individual Biddeers and Bidd ders in Emplo oyee Reservattion Portion bidding b at Cut-Off Price shall dep posit the Bid Price based on o the higher end of the Price Band in i the Escrow w Account. In n the event the Bid Price P is higheer than the subscription s amount payaable by the Retail Indiviidual Bidders Bidders in Employeee Reservation n Portion who o Bid at Cut off o Price (i.e., the total num mber of Equity E Shares allocated in the Issue mulltiplied by the Issue Price)), the Retail In ndividual Bid dders and d Bidders in Employee E Resservation porttion who Bid d at Cut off Prrice, shall receeive the refun nd of the excess amo ounts from the t Escrow Account. In ncase of ASB BA Bidders (excluding NonN Insttitutional Bid dders and QIB B Bidders) bidding at Cutt-off Price, the ASBA Bidd ders shall insttruct the SCSBs to blocck an amountt based on thee Cap Price.

3.

Thee Retail indiv vidual biddeer may eitheer withdraw or revise th heir bids unttil finalization of allo otment whereeas Qualified d Institutionaal Bidders an nd Non Instittutional Bidd ders shall neither with hdraw nor low wer the size of o their bids at a any stage.

4.

In case c of an up pward revisio on in the Pricce Band anno ounced as abo ove, Retail In ndividual Bid dders and d Bidders in the t Employeee Reservation n portion wh ho had Bid att Cut-off Pricce could eitheer (i) reviise their Bid or o (ii) make ad dditional pay yment based on o the higher end of the Reevised Price Band B (succh that the to otal amount i.e., original Bid Price pllus additionaal payment does d not exceeed ` 200,,000 for Retail Individual Bidders, if th he Bidder waants to contiinue to Bid at a Cut-off Prrice), with h the memb bers of the Syndicate S to whom the orriginal Bid was submitted. In case the total amo ount (i.e., original Bid Priice plus addittional paymeent) exceeds ` 200,000 for Retail Indiviidual Bidders the Bid will be considered for allo ocation underr the Non- In nstitutional Po ortion in term ms of thiss Red Herrin ng Prospectuss. If, howeveer, the Bidder does not either e revise the Bid or make m add ditional paym ment and the Issue Price iss higher than n the higher end e of the Prrice Band prio or to reviision, the num mber of Equity Shares Biid for shall be b adjusted downwards fo or the purposse of Allo otment, such that no add ditional paym ment would be required d from the Bidder B and such Bidder is deemeed to have approved a such h revised Bid at Cut-off Price.

5.

In case c of a dow wnward revisiion in the Pricce Band, anno ounced as ab bove, Retail In ndividual Bid dders and d Bidders in th he Employee Reservation portion p who have h Bid at Cut-off C Price could c either reevise theiir Bid or the excess amou unt paid at th he time of bid dding would be refunded from the Esccrow Acccount.

249

Scotts Ga arments Limiited 6.

In the t event of any a revision in the Price Band, wheth her upwards or downward ds, the minim mum app plication size shall remain n 100 Equity Shares irresp pective of wh hether the Bid B Price pay yable on such minimu um applicatio on is not in th he range of ` 10,000 1 to ` 15,,000.

7.

Rev vision option n is also avaailable to ASBA investor.. For details,, please refer section “A ASBA Process” in this Red R Herring Prospectus. P

8.

Thee bidder who has registereed his or her interest i in thee Equity Sharres at a particcular price lev vel is freee to revise hiss or her Bid within w the Pricce Band using g the printed Revision R Form m, which is a part of th he Bid cum Application A F Form. Howeveer, for any revision(s) in th he Bid, the Biidder(s) will have h to use u the servicces of the sam me member off the Syndicate through whom w he or sh he had placed d the orig ginal Bid.

9.

Rev visions can bee made in both h the desired number of Equity E Shares and the Bid price p by using g the Rev vision Form. The T Bidder must m also men ntion the detaails of all the options in hiis or her Bid cum App plication Form m or earlier Revision R Form m. For examp ple, if a Biddeer has Bid forr three option ns in the Bid cum App plication Form m and he is ch hanging only one of the op ptions in the Revision R Form m, he musst complete all a the detailss of the other two options that are not being revised d, in the Reviision Form m. The memb bers of the Sy yndicate will not n accept inccomplete or in naccurate Rev vision Forms.

10. Thee QIB and No on Institutionaal Bidder can n increase the bid size duriing the Bidding/ Issue Perriod. How wever, for an ny revision(s)) in the Bid, the Bidders will have to use the serv vices of the same s mem mber of the Sy yndicate thro ough whom he h or she had place p the orig ginal Bid. 11. Bidders are adviised to retain copies of the blank Revision Form and the revised Bid B must be made m only y in such Rev vision Form orr copies thereeof. 12. Any y revision of the Bid shall be accompan nied by paym ment in the forrm of chequee or demand draft d for the incremen ntal amount, if i any, to be paid p on accou unt of the up pward revisio on of the Bid. The exceess amount, if any, resultting from do ownward reviision of the Bid B would bee returned to o the Bidder at the tim me of refund in i accordancee with the terrms of this Reed Herring Prrospectus. In case of th he QIB Biddeers, the memb bers of the Sy yndicate shalll collect the payment p in th he form of cheeque or demand d draftt or electronicc transfer of funds f throug gh RTGS for the t incrementtal amount in n the QIB B Margin Amount, if any, to t be paid on account of th he upward reevision of the Bid at the tim me of onee or more reviisions by the QIB Q Bidders. 13. Wh hen a Bidder revises r his orr her Bid, he or she shall surrender s thee earlier TRS and get a rev vised TRS S from the meembers of thee Syndicate. It I is the respo onsibility of the Bidder to o request forr and obtaain the revise ed TRS, whicch will act as proof of reviision of the original o bid. n of Bids Electronicc Registration (a) The Syndicate S and the SCSBs will w register the Bids using the t on-line facilities of the Stock Exchan nges. (b) The Syndicate S and d the SCSBs will w undertakee modification n of selected fields f in the Bid B details alreeady uploaaded within one o Working Day D from the Bid/Issue Cllosing Date. (c) Theree will be at lea ast one on-lin ne connectivitty facility in each e city, wheere a stock ex xchange is loccated in Ind dia and wheree Bids are bein ng accepted. (d) The BRLM B Co-BRL LM, our Com mpany and th he Registrar arre not respon nsible for any y acts, mistakees or errorss or omission n and commisssions in relattion to, (i) thee Bids acceptted by the Sy yndicate Mem mbers and the t SCSBs, (iii) the Bids uploaded u by the Syndicatte Members and the SCS SBs, (iii) the Bids accep pted but not uploaded u by the Syndicatee Members an nd the SCSBss or (iv) with h respect to ASBA A Bids, Bids accepteed and uploaaded withoutt blocking fun nds in the ASBA A Accoun nts. However, the Syndiicate and/or the t SCSBs shaall be responssible for any error e in the Biid details uploaded by them. It 250

Scotts Ga arments Limiited shall be presumed d that for Bid ds uploaded by b the SCSBss, the Bid Am mount has beeen blocked in n the relevaant ASBA Acccount. (e) In casse of apparent data entry error e by either the memberrs of the Synd dicate or the SCSBs S in enteering the Bid B cum App plication Forrm number in i their resp pective sched dules other things t remaiining unchaanged, the Bid d cum Appliccation Form may m be considered as valid and such exceptions maay be record ded in minutees of the meetting submitteed to Stock Ex xchange(s). (f) The Stock S Exchang ges will offerr an electroniic facility for registering Bids B for the Isssue. This faccility will be b available with w the Syndiicate and theirr authorised agents a and th he SCSBs duriing the Bid/ Issue I Period d. The Syndiccate Memberss and the Dessignated Bran nches of the SCSBs S can alsso set up facillities for offf-line electron nic registratio on of Bids sub bject to the co ondition that they will sub bsequently up pload the offf-line data fille into the on--line facilitiess for Book Building on a reegular basis. On O the Bid/ Issue I Closin ng Date, the Syndicate S and d the Designaated Branchess of the SCSBss shall upload d the Bids till such time as a may be perrmitted by thee Stock Exchaanges. This in nformation wiill be availablle with the BR RLM, Co-BR RLM on a reg gular basis. (g) Based d on the aggreegate demand d and price fo or Bids registtered on the electronic e faciilities of the Stock S Exchaanges, a grap phical repressentation of consolidated d demand an nd price as available on n the websiites of the Stock S Exchan nges would be b made avaailable at thee Bidding ceentres during g the Bid/IIssue Period. (h) At thee time of reg gistering each h Bid other th han ASBA Bids, the Syndiicate shall en nter the follow wing detaills of the Biddeers in the on-lline system: •

Name of thee Bidder: Bidd ders should ensure e that th he name giveen in the Bid cum Applicaation Form is exacctly the same as the name in i which the Depositary Account A is helld. In case thee Bid cum Applica ation Form is submitted in n joint names,, Bidders shou uld ensure th hat the Deposiitory Account is also a held in the t same join nt names and d are in the same s sequen nce in which they appear in thee Bid cum Ap pplication Forrm.

•

Investor Cattegory – Ind dividual, Corrporate, QIBss, Eligible NRI, N FVCI, FIII & sub-account registered with w SEBI (otheer than a sub-aaccount which is a foreign coorporate or forreign individuaal) or Mutual Fund d, etc.

•

Numbers of Equity Sharees Bid for.

•

Price Per Equ uity Share (prrice option)

•

Bid Amountt.

•

Bid cum App plication Form m number.

•

DP ID and cllient identificcation numberr of the benefficiary accoun nt of the Biddeer.

•

PAN

•

Cheque Num mber

With respect to AS SBA Bids, at th he time of reg gistering each h Bid, the Dessignated Bran nches of the SC CSBs shall enter e the follo owing inform mation pertain ning to the Bid dder into the online system m: •

Name of the Bidder(s);

•

Bid cum App plication Form m Number;

•

PAN (of Firsst Bidder, in case c of more than one Bidd der);

•

Investor Category and Su ub-Category:

251

Scotts Ga arments Limiited Retail (No sub cateegory)

• • •

Non- Insstitutional Individu ual corporaate other

•

Employee/shareholder (iif reservation));

•

DP ID and cllient identificcation numberr;

•

Beneficiary account a numb ber of Equity Shares Bid fo or;

•

Quantity;

•

Price Per Equ uity Share (prrice option)

•

Bid Amountt and

•

Bank accoun nt number;

• • • • • • •

QIB Mutual Funds F Financiall Institutions Insurancce companies Foreign Institutional I Investorss other than corporatee and individ dual sub-acco ounts

(i) A sysstem generateed TRS will be b given to the t Bidder ass a proof of the t registratio on of each off the biddin ng options. It I is the Bid dder‘s respon nsibility to ob btain the TR RS from the Syndicate orr the Desig gnated Branch hes of the SCS SBs. The regisstration of thee Bid by the member m of thee Syndicate or the Desig gnated Brancches of the SCSBs doees not guaraantee that the t Equity Shares shalll be allocaated/Allotted d either by thee Syndicate orr our Compan ny. (j) Such TRS T will be non-negotiabl n e and by itsellf will not creaate any obligaation of any kind. k (k) In casse of QIB Bid dders, only th he BRLM, Co o-BRLM, SCS SBs and theirr Affiliate Syn ndicate Mem mbers (only in specified cities) c have th he right to acccept the Bid or o reject it. Ho owever, such h rejection shaall be madee at the time of o receiving th he Bid and on nly after assig gning a reason for such rejjection in wriiting. In casse of Non-Insstitutional Bid dders, Retail Individual I Bidders and Eligible Employees, Bids wiill be rejecteed on techniccal grounds liisted on page 263. The Mem mbers of the Syndicate maay also reject Bids if all the t informatiion required is not provid ded and the Bid B cum Application Form m is incompleete in any reespect. The SC CSBs shall haave no right to o reject Bids, except e on tech hnical ground ds. (l) The permission p giv ven by the Sttock Exchang ges to use theeir network and software of the online IPO system m should nott in any way be deemed or o construed to mean thatt the compliaance with varrious statuttory and otheer requiremeents by our Company C and d/or the BRL LM, Co-BRLM M are cleareed or appro oved by the Stock Exchaanges; nor do oes it in any y manner waarrant, certify y or endorsee the correcctness or com mpleteness of any of the compliance witth the statutorry and other requirementss nor does it i take any reesponsibility for the financcial or other soundness off our Compan ny, the Prom moter, the management m or o any schem me or project of our Comp pany; nor do oes it in any manner warrant, certify y or endorsee the correctn ness or comp pleteness of any of the contents c of this t Red Herrring Prosp pectus; nor do oes it warrantt that the Equ uity Shares will w be listed or o will contin nue to be listed on the Sttock Exchangees. (m) Only Bids that are uploaded on n the online IP PO system of the t Stock Excchanges shall be considered d for allocaation/ Allotm ment. Memberrs of the Synd dicate and the SCSBs will be b given up to o one day afteer the Bid/IIssue Closing g Date to verify the inform mation uploaaded in the online o IPO sy ystem during g the Bid/IIssue Period after a which th he date will be b sent to thee Registrar forr reconciliatio on and Allotm ment of Equ uity Shares. In n case of any discrepancy of data betweeen the BSE or o the NSE and the Membeers of the Syndicate S or the Designaated Branchees of the SC CSBs, the deecision of ou ur Company y, in 252

Scotts Ga arments Limiited consu ultation with the t BRLM, Co o-BRLM and the Registrarr, based on th he physical reccords of Bid Cum C Appliication Formss shall be finaal and bindin ng on all conccerned. If the Syndicate Members M findss any discreepancy in thee DP name, DP D Id and the Client Id, the Syndicate Members M willl correct the same s and seend the data to t the Registrrar for reconciliation and Allotment A of Equity E Sharess. Build up of the book and a revision of Bids: (a) Bids received r from m various Bid dders through h the Syndicaate, Non-Syn ndicate and th he SCSBs shaall be electronically uplo oaded to the Stock S Exchang ges‘ mainfram me on a regulaar basis. (b) The Book B gets buillt up at variou us price levels. This inform mation will bee available wiith the BRLM M and Co-BR RLM on a reg gular basis at the t end of thee Bid/Issue Period. P (c) The Retail R individu ual bidder may either with hdraw or rev vise their bidss until finalizaation of allotm ment whereeas Qualified d Institutionall Bidders and d Non Institu utional Biddeers shall neith her withdraw w nor lowerr the size of th heir bids at an ny stage. How wever, the QIIB and Non in nstitutional Bidders B are freee to increaase the size off bids. (d) The Bidder B who has h registered d his or her in nterest in the Equity Sharees at a particu ular price lev vel is free to o revise his orr her Bid with hin the Price Band B using th he printed Revision Form, which is a paart of the Biid cum Application Form. (e) Revisions can be made m in both the desired number n of Eq quity Shares and the Bid Amount A by using u the Revision R Form m. Apart from m mentioning g the revised options in th he Revision Form, F the Bidder must also mention n the details of o all the opttions in his or her Bid cum m Application n Form or eaarlier Revision Form. Fo or example, if a Bidder hass Bid for threee options in the t Bid cum Application A F Form and such s Bidder is i changing only o one of the t options in n the Revisio on Form, he must still filll the detaills of the otherr two optionss that are not being revised d, in the Reviision Form. The T Syndicatee and the Designated Bra anches of the SCSBs will no ot accept inco omplete or inaaccurate Reviision Forms. (f) The Bidder B can ma ake this revission any num mber of times during the Biid/Issue Periiod. Howeverr, for any revision(s) r in the Bid, the Bidders will have to usee the services of the sam me member off the Syndiicate, Non-Sy yndicate or th he SCSB thro ough whom such Bidder had placed the original Bid. Biddeers are adviseed to retain co opies of the blank b Revisio on Form and the revised Bid B must be made m only in i such Revisiion Form or copies c thereoff. (g) In casse of an upwa ard revision in i the Price Band B announcced as above, Retail Indiviidual Bidderss and Eligib ble Employees who had Bid B at Cut-off Price could either (i) reviise their Bid or (ii) shall make m additiional paymen nt based on the cap of th he revised Prrice Band (su uch that the total t amountt i.e., origin nal Bid Amou unt plus add ditional paym ment does no ot exceed ` 200,000 if the Bidder wan nts to contin nue to Bid at Cut-off Price), with the Sy yndicate or Non Syndicate to whom thee original Bid d was subm mitted. In casee the total am mount (i.e., orriginal Bid Am mount plus additional a pay yment) exceeeds ` 200,0000, the Bid wiill be considerred for allocaation under th he Non-Institu utional Portio on in terms off this Red Herring H Prosp pectus. If, how wever, the Biidder does no ot either reviise the Bid orr make additiional paym ment and the Issue Price is higher h than th he cap of the Price Band prior p to revisio on, the numb ber of Equity y Shares Bid d for shall bee adjusted do ownwards fo or the purposse of allocatiion, such thaat no additiional paymen nt would be required r from m the Bidder and a the Biddeer is deemed to t have appro oved such revised r Bid att Cut-off Pricee. (h) In casse of a down nward revision in the Pricee Band, anno ounced as abo ove, Retail In ndividual Bid dders and Eligible E Emplloyees who have h Bid at Cut-off C Price could either revise their Bid B or the ex xcess amou unt paid at thee time of bidd ding would bee refunded fro om the Escrow w Account. (i) Our Company, C in consultation with the BRL LM and Co-BR RLM, shall deecide the min nimum numb ber of Equity y Shares for each Bid to ensure e that th he minimum application value v is with hin the range of ` 10,0000 to ` 15,000. 253

Scotts Ga arments Limiited (j) Any revision r of thee Bid shall bee accompanied d by paymen nt in the form of cheque or demand drafft for the in ncremental am mount, if any y, to be paid d on accountt of the upwaard revision of the Bid. With W respecct to the ASBA Bids, if rev vision of the Bids B results in n an incremen ntal amount, the t relevant SCSB S shall block b the add ditional Bid Amount. A In caase of Bids, otther than ASB BA Bids, the Syndicate S or Non Syndiicate shall co ollect the payment in the form of cheq que or deman nd draft if an ny, to be paid d on accou unt of the upw ward revision of the Bid at the time of one or more reevisions by th he QIB Bidderrs. In such cases, c the Syn ndicate or No on Syndicate will revise th he earlier Bid ds details witth the revised d Bid and provide p the ch heque or dem mand draft nu umber of the new paymen nt instrumentt in the electrronic book. The Registra ar will reconccile the Bid data d and consider the revissed Bid data for preparing g the Basis of Allotment. (k) When n a Bidder rev vises his or heer Bid, he or she s shall surreender the earllier TRS and may m get a rev vised TRS frrom the Synd dicate or the SCSB, S as applicable. It is th he responsibillity of the Bid dder to requesst for and obtain o the reviised TRS, whiich will act ass proof of his or her having g revised the previous Bid. Price Disccovery and Allocation A 1.

After the Bid/Issu ue Closing Daate, the BRLM M and the Co-BRLM shall analyze a the demand d generrated at varrious price lev vels and discu uss pricing strrategy with th he Company.

2.

Our Company C in consultation n with the BRLM B and Co o-BRLM, shalll finalize thee Issue Pricee, the numb ber of Equity y Shares to be allotted in eaach investor category. c

3.

The allocation a to QIBs will bee 25% of the Net Issue and a the availlability for alllocation to NonN Institu utional and Retail Indiviidual Bidders will not leess than 40% % and 35% of o the Net Issue I respecctively. The allocation a in retail r category shall be on n firm allotmeent basis subject to availab bility of equ uity shares an nd, would bee on proportionate basis to o QIB and Non-Institution N nal Bidder, in n the with mann ner specified in the SEBI Regulations R a and this Red d Herring Pro ospectus, in consultation c Desig gnated Stock Exchange, E sub bject to valid Bids being reeceived at or above a the Issu ue Price.

4.

Under subscription n, if any, in any a category, except in thee QIB Portion n, would be allowed a to bee met with spill-over fro om any otheer category or o combination of catego ories at the discretion d of our Comp pany in consu ultation with the t BRLMs an nd the Design nated Stock Ex xchange.

5.

Allocaation to Non n-Residents, including Eligible E NRI’ss, FIIs and FVCIs registtered with SEBI, S apply ying on repattriation basis will be subjeect to applicaable law, rulees, regulation ns, guidelines and appro ovals.

6.

Only Bids that aree uploaded on o the online system of th he Stock Exch hanges shall be b considered d for allocaation/Allotmeent. The mem mbers of the Syndicate, S Non Syndicate and a the SCSBs shall capturre all data relevant r for the purposes of finalizing the Basis of Allotment A wh hile uploadin ng Bid data in n the electronic Bidding systems of th he Stock Exch hanges. In ord der that the data d so capturred is accuratee the memb bers of the Sy yndicate, Non n Syndicate an nd the SCSBs will be given n up to one Working W Day after the Biid Closing Da ate to modify y/ verify certaain selected fiields uploadeed in the online system du uring the Biidding Period d after which the data willl be sent to th he Registrar for f reconciliattion with the data availaable with the NSDL and CD DSL. In case no corressponding reccord is availaable with th he Depositoriies, which matches m the three t param meters, namelly, DP ID, Clieent ID and PA AN, then such h Bids are liab ble to be rejeccted. The BRLM B and Co o-BRLM, in co onsultation with w us, shall notify the meembers of thee Syndicate of o the Issue Price and alllocations to their respecttive Bidders, where the fu ull Bid Amou unt has not been b colleccted from the Bidders. The Allotment A deta ails shall be put p on the web bsite of the Registrar R to thee Issue.

7.

8.

254

Scotts Ga arments Limiited Signing of o the Underw writing Agreeement and th he RoC Filing g (a) Our Company, C thee BRLM, Co-B BRLM and th he Syndicate Members shaall enter into an Underwrriting Agreeement on or im mmediately after a the finaliisation of the Issue Price. (b) After signing the Underwriting g Agreementt, our Compaany will upd date and file the updated Red Herrin ng Prospectu us with the RoC R in accorrdance with the applicablle law, which h then would be termeed as the ‘Prrospectus‘. The T Prospectu us will contaain details of o the Issue Price, Issue size, underrwriting arran ngements and d will be com mplete in all material m respeccts. Pre-Issue Advertiseme ent Subject to o Section 66 of the Comp panies Act, our o Company y shall, afterr registering the Red Herrring Prospectu us with the RoC, R publish h a pre-Issuee advertisem ment, in the form f prescrib bed by the SEBI S Regulatio ons, in one English E langu uage nationall daily newsp paper, one Hindi H languag ge national daily d newspapeer and one reg gional languaage daily new wspaper, each with wide cirrculation. Advertiseement regarding Issue Price and Prosp pectus Our Com mpany will issue a statutory y advertisem ment after the filing of the Prospectus P w with the RoC. This advertisem ment, in addiition to the in nformation th hat has to be set s out in the statutory adv vertisement, shall indicate th he Issue Pricee. Any materrial updates between b the date d of the Reed Herring Prrospectus and d the date of Prrospectus willl be included in such statutory advertiseement. Issuance of Confirmattion of Allotm ment Note (“C CAN”) (a) Upon n approval of the Basis of Allotment A by the Designated Stock Exch hange, the Reegistrar shall send to thee Syndicate a list of the Bid dders who haave been Allo otted Equity Shares S in the Issue.. Howeever, Biddeers should no ote that our Company C shalll ensure thatt (i) the Allotm ment of the Equity E Sharess and (ii) th he instructionss by the Com mpany for the demat creditt of the Equitty Shares, to all a Bidders in n this Issue shall be donee on the samee date. (b) The Registrar R will then dispatch h a CAN to th he Bidders who w have been n Allotted Equity Shares in n the Issue.. (c) The Isssuance of CA AN shall be deemed d a valiid, binding an nd irrevocable contract forr the Allotment of Equity y Shares to su uch Bidder. Unblockiing of ASBA Account Once the Basis of Allottment is approved by the Designated D Sttock Exchang ge, the Registrrar to the Issu ue shall provide th he following details to the Controlling Branches B of each e SCSB, alo ong with insttructions to unblock the relevaant bank acco ounts and traansfer the req quisite money y to the Publlic Issue Acco ount designatted for this purpose, within the timelines specified in the ASBA faacility: (i) the number of Equity E Sharess to be a each valid v ASBA Bid, B (ii) the am mount to be transferred t fro om the relevaant bank acco ount to Allotted against the Publicc Issue Accou unt, for each valid v ASBA Bid, B (iii) the date d by which h funds referreed to in abov ve shall be transfeerred to the Public Issue Account, an nd (iv) detailss of rejected ASBA Bids, if any, along g with reasons fo or rejection an nd details of withdrawn w and/or unsuccessful ASBA A Bids, if any,, to enable SC CSBs to unblock the t respectivee bank accou unts. On the basis of instrructions from m the Registraar to the Issu ue, the SCSBs shaall transfer th he requisite am mount against each successsful ASBA Bidder to the Public Issue Account A and shall unblock the excess amou unt, if any, in n the ASBA Account. A In caase of withdrrawal/failure of the Issue, thee blocked am mount shall bee unblocked on receipt off such inform mation from the t Registrar to the Issue.

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Scotts Ga arments Limiited Designateed Date and Allotment A off Equity Shares (a) Our Company C willl ensure thatt (i) the Allottment of Equ uity Shares; an nd (ii) credit to the successful Biddeer‘s depositorry account will w be compleeted within 12 1 Working Days D of the Bid/Issue B Clo osing Date. (b) In acccordance with h the SEBI Reegulations, Eq quity Shares will w be issued d and Allotmeent shall be made m only in i the demateerialised form m to the Allotteees. (c) Allotttees will havee the option to o re-materialiise the Equity y Shares so Alllotted as perr the provision ns of the Co ompanies Actt and the Dep positories Actt. Investors are advised to instruct th heir Deposito ory Participan nt to accept the Equity Sh hares that maay be allocated// Allotted to them t pursuan nt to this Issu ue. GENERA AL INSTRUCTIONS Do’s: a) Check k if you are elligible to applly; b) Ensurre that you ha ave Bid within n the Price Baand; c)

Read all the instrucctions carefullly and compllete the Bid cu um Applicatiion Form;

d) Ensurre that the deetails about th he Depository y Participant and the ben neficiary accou unt are correct as Allotm ment of Equitty Shares willl be in the dem materialised form f only; e) Ensurre that the Biids are subm mitted at the bidding centtres only on forms f bearin ng the stamp of a memb ber of the Syn ndicate or witth respect to ASBA Bidderrs, ensure thaat your Bid iss submitted either to Syn ndicate (only in specified citites) c or at a Designated Branch B of the SCSB where the ASBA Bidder or thee person who ose bank acco ount will be utilised by th he Bidder forr bidding hass a bank acco ount. Furth her, such syn ndicate or SC CSB branch shall s affix itss stamp, datte and time on the Bid cum Appliication Form acknowledgiing the uploaad of Bid in the electronicc bidding sysstem of the Stock S Exchaange. Where applications are submitted to a Non Syndicate S meember the app plications maay or may not n bear stam mp of a membeer of the Synd dicate. f)

With respect to ASBA A Bids en nsure that thee Bid cum Application A Fo orm is signed d by the account holdeer in case the applicant is not the accou unt holder. En nsure that yo ou have menttioned the correct bank account num mber in the AS SBA Bid cum Application A F Form;

g) QIBs and Non – In nstitutional bidders should d submit their bids through h ASBA proceess only; h) Ensurre that you request for and d receive a TR RS for all yourr Bid options; i)

ASBA A Bidders sho ould ensure that t you havee funds equall to the Bid Amount A in yo our bank account mainttained with the SCSB beefore submittting the Bid cum Application Form to the respecctive Desig gnated Branch h of the SCSB or syndicate in the specified cities;

j)

Ensurre that the fulll Bid Amoun nt is paid for th he Bids subm mitted to the Syndicate S and d funds equivaalent to thee Bid Amountt are blocked in i case of any y Bids submittted though th he SCSBs.

k) Instru uct your respeective banks to t not releasee the funds blocked in the bank accountt under the ASBA A proceess; l)

Subm mit revised Biids to the sam me member of o the Syndiccate or Non Syndicate th hrough whom m the origin nal Bid was pllaced and obttain a revised d TRS;

m) Excep pt for Bids su ubmitted on behalf of th he Central Government G o the State Government or G and officiaals appointed d by a court, all a Bidders sho ould mention n their PAN alllotted under the IT Act;

256

Scotts Ga arments Limiited n) Ensurre that the Deemographic Details D (as deefined herein below) are updated, u true and correct in i all respeccts; o) Ensurre that the nam me(s) given in n the Bid cum m Application n Form is exacctly the same as the name((s) in which h the beneficciary accoun nt is held wiith the Depo ository Particcipant. In caase the Bid cum Appliication Form is submitted d in joint nam mes, ensure that the benefficiary account is also helld in same joint names and such nam mes are in th he same sequ uence in whicch they appeaar in the Bid cum Appliication Form. Don’ts: a) Do no ot Bid for low wer than the minimum m Bid size; b) Do no ot Bid/revise Bid Amount to less than th he Floor Pricee or higher th han the Cap Price; P c)

Do no ot withdraw or lower thee size of yourr Bids at any stage (both in terms of number n of Eq quity Sharees Bid for and Bid Amount), in case you u are a Non In nstitutional Bidder or a QIB B Bidder

d) Do no ot Bid on ano other Bid cum m Application n Form after you y have sub bmitted a Bid to the Syndiicate, Non Syndicate S or the t SCSBs, as applicable; e) Do no ot pay the Bid d Amount in cash, c by moneey order or by y postal orderr or by stock invest; i f)

Do no ot send Bid cum Applicaation Forms by b post; instead submit the t same to a member off the Syndiicate, Non Syn ndicate or thee SCSBs only;;

g) Do no ot Bid at Cut-o off Price (for QIB Bidders and a Non-Insttitutional Bidd ders, for Bid Amount A in ex xcess of ` 2000,000); h) Do no ot Bid for a Biid Amount ex xceeding ` 2000,000 (for Bid ds by Retail In ndividual Bid dders and Elig gible Emplo oyees bidding g under the Employee E Porrtion); i)

Do no ot fill up the Bid cum App plication Form m such that the t Equity Sh hares Bid for exceeds the Issue I Size and/ a or investment limit or maximum m number of Equity Sharees that can be b held underr the appliccable laws or regulations or o maximum amount a perm missible underr the applicab ble regulation ns;

j)

Do no ot submit the GIR numberr instead of th he PAN as thee Bid is liablee to be rejected on this ground; and

k) Do no ot submit Bids on plain pap per or on inco omplete or illegible Bid cum Applicatio on Forms, or on o Bid cum application a Fo orms in a colo our prescribed d for another category of Bidder; B l) Do no ot submit the Bids withoutt the full Bid Amount. A m) Do no ot Bid if you are a not compeetent to contraact under thee Indian Contrract Act, 18722 n) Do no ot submit AS SBA Bids to a Syndicate Member M in thee Specified Cities C unless the t SCSB wheere the ASBA A Account is maintained, as a specified in i the Bid cum m Applicatio on Form, has named at-leaast one brancch in the releevant Specifieed City, for the t Syndicatee Members to t deposit Bid cum Application Formss (A list of such branches is i available att http://www.sebi.gov.in/pm md/scsb-asba.h html). eting the Bid cum Applicaation Form Instructionss for Comple Bids must be: b a) Madee only in the prescribed p Bid d cum Appliccation Form or Revision Fo orm, as appliccable. b) Comp pleted in fulll, in BLOCK K LETTERS in ENGLISH and in acco ordance with h the instructtions contaiined herein, in the Bid cu um Applicatio on Form or in i the Revisio on Form. Incomplete Bid cum Appliication Form ms or Revisio on Forms aree liable to be b rejected. Bidders B shou uld note thatt the 257

Scotts Ga arments Limiited Syndiicate and / or o the SCSBss, as approprriate, will nott be liable fo or errors in data d entry du ue to incom mplete or illeg gible Bid cum Application Forms or Rev vision Forms. c)

Inform mation provid ded by the Bidders B will be b uploaded in i the online IPO system by the Syndiicate, Non - Syndicate and a the SCSBs, as the casee may be, and d the electron nic data will be used to make m allocaation/ Allotm ment. The Bidd ders should en nsure that thee details are correct c and leg gible.

d) For Retail R Individu ual Bidders, th he Bid must be b for a minim mum of 100 Equity E Sharess and in multiples of 1000 thereafter su ubject to a maaximum Bid Amount A of ` 200,000. 2 e) In casse of Eligible Employees, Bids B and reviision of Bids must m be for a minimum of o 100 Equity Shares and in n multiples of o 100 Equity Shares S thereaafter, so as to ensure that the t Bid Amou unt does not exceed e Rs. 2000,000. In casee the Bid Amo ount is over Rs. R 200,000, due to, among g other things, revision of the t Bid or rev vision of the Price P Band orr on exercise of bidding att Cut-off Pricee, the Bid is liable l to be reejected. Eligib ble Employeees bidding in the Employeee Reservatio on Portion haave the optio on to bid at Cut-off C Price indicating th heir agreemen nt to Bid and purchase p at the Issue Pricee. Eligible Em mployees bidd ding in the Em mployee Reseervation Portiion at the Cu ut-Off Price haave to ensuree payment at the t Cap Pricee at the time of o making a Bid. B f)

For Non-Institutio N onal Bidders and QIB Bidders, Bids must m be for a minimum off such numbeer of Equity y Shares thatt the Bid Am mount exceed ds or equal to o ` 200,000 an nd in multip ples of 100 Eq quity Sharees thereafter. Bids B cannot be b made for more m than th he Issue size. Bidders are advised a to en nsure that a single Bid frrom them sho ould not exceeed the investm ment limits or o maximum number n of Eq quity Sharees that can be held by them m under the ap pplicable laws or regulatio ons.

g) In casse of joint bid dding, the Bid d cum Appliccation Form should be sub bmitted with single name or o in joint names n (not more m than threee, and in the same order as a their Depossitory Particip pant details). h) Thum mb impression ns and signattures other th han in the lan nguages speciified in the Eiighth Schedu ule to the Co onstitution off India must be b attested by y a Magistratte or a Notary y Public or a Special Execu utive Magisstrate under official o seal. AN, Deposito ory Account and a Bank Acccount Detailss Bidder’s PA Bidders sho ould note tha at on the bassis of PAN off the Bidderss, DP ID and d beneficiary account num mber provided by y them in the e Bid cum Application Fo orm, the Reg gistrar will ob btain from th he Depository y the demograph hic details in ncluding add dress, Bidderrs bank acco ount details, MICR code and occupaation (hereinafterr referred to as “Demog graphic Detaiils”). These bank b accoun nt details wo ould be used d for giving refunds (includin ng through physical p refun nd warrants,, direct creditt, NECS, NEF FT and RTGS S) or g of ASBA Account. A Hencce, Bidders are a advised to o immediately update their bank acco ount unblocking details as ap ppearing on the records of o the Deposiitory Participant. Please note n that failu ure to do so co ould result in delays in despa atch/ credit off refunds to Bidders B or un nblocking of ASBA Accou unt at the Bid dders sole risk an nd neither th he BRLM, Co-BRLM C or the Registraar or the Escrrow Collectiion Banks orr the SCSBs nor our Company shall have any responsiibility and un ndertake any y liability for the same. Heence, ould carefully y fill in their Depository Account A detaails in the Bid d cum Appliccation Form. Bidders sho ANDATORY Y FOR ALL L THE BID DDERS TO GET THE EIR EQUITY Y SHARES IN IT IS MA DEMATER RIALISED FO ORM. ALL BIDDERS B SH HOULD MEN NTION THEIIR DP ID, CLIENT C ID AND A PAN IN TH HE BID CUM M APPLICAT TION FORM M. INVESTO ORS MUST ENSURE E TH HAT THE DP P ID, CLIENT ID D AND PAN GIVEN G IN THE BID CUM M APPLICAT TION FORM IS EXACTLY Y THE SAME E AS THE DP ID D, CLIENT ID D AND PAN AVAILABLE A E IN THE DEPOSITORY DATABASE. D . These Dem mographic Deetails would be b used for all a correspon ndence with the t Bidders in ncluding maailing of the Refun nd Orders/C CANs/Allotm ment Advice and a printing g of Bank parrticulars on th he refund ord ders. 258

Scotts Ga arments Limiited The Demog graphic Detaills given by Bidders B in thee Bid cum Ap pplication Forrm would no ot be used forr any other purpo ose by the Reg gistrar to the Issue. I By signing the Bid cum m Applicatio on Form, thee Bidder wou uld have deeemed to hav ve authorized d the Depositoriees to provide, upon request, to the Reg gistrar to the Issue, I the req quired Demog graphic Detaiils as available on n its records. B not re eceiving refu unds through electronic traansfer of fun nds, delivery of refund ord ders/ In case of Bidders allocation advice/ a CAN Ns may get delayed d if th he same, once sent to thee address ob btained from m the Depositoriees, are return ned undeliveered. In such an event, th he address an nd other detaails given by y the Bidder in the t Bid cum Application n Form would be used only o to ensurre dispatch of o refund ord ders. Please notee that any such delay shaall be at the Bidders B sole risk and neiither the Ban nk, the Regisstrar, Escrow Colllection Bank k(s) nor the BRLM, B Co-BR RLM shall bee liable to co ompensate th he Bidder forr any losses causeed to the Bid dder due to an ny such delay y or pay any interest for such s delay. In n case of Bid dders receiving reefunds throu ugh electronic modes, Bid dders may no ote that refun nds may get delayed if Bank B particulars obtained from m the Depository Particip pant are incorrrect. In case no corresponding c g record is av vailable with the t Depositorries that matcches three parrameters, nam mely, names of th he Bidders (in ncluding the order o of namees of joint hollders), the Deepository Partticipant’s identity (DP ID) and d the beneficia ary’s identity,, then such Biids are liable to be rejected d. Our Compaany in their ab bsolute discreetion, reservee the right to permit the ho older of the power p of atto orney to request th he Registrar that t for the pu urpose of printing particu ulars on the reefund order and a mailing of o the refund ordeer/CANs/alllocation advicce/ refunds through electronic transfeer of funds, the t Demograaphic Details giveen on the Bid cum App plication Form m should bee used (and not those ob btained from m the Depository of the Bidderr). In such caases, the Registrar shall usse Demograph hic Details ass given in thee Bid cum Appliccation Form in nstead of thosse obtained frrom the depossitories. d an nd other disttributions, iff any, will be b payable in i Indian Ru upees only at the Refunds, dividends prevailing exchange e rate and net of o bank charrges and/or commission. In I case of Biidders who remit money thro ough Indian n Rupee draffts purchased d abroad, su uch paymentts in Indian Rupees willl be converted into i US Dolla ars or any otther freely co onvertible currrency as maay be permittted by the RB BI at the rate of exchange e pre evailing at thee time of rem mittance and will w be dispaatched by reg gistered post or if the Bidderss so desire, will w be credited to their NRE N accountss, details of which w should d be furnisheed in the space provided p for this purposse in the Bid d cum Appliication Form m. Our Comp pany will no ot be responsiblee for loss, if any, a incurred by the Biddeer on accountt of conversio on of foreign currency. Bids under Power of Atttorney In case of Bids made pursuant p to a power of attorney or by limited companies, corporate c bodies, registered societies, a cerrtified copy of o the power of o attorney orr the relevant resolution orr authority, as the case may bee, along with a certified co opy of the Memorandum and a Articles of o Association n and/or bye laws must be along with the Bid B cum Appllication Form m. Failing this,, we reserve the t right to acccept or rejectt any Bid in whole or in part, in n either case, without assig gning any reaason thereforee. In case of Biids made purrsuant to a Po ower of Attorrney by FIIs, a certified cop py of the Pow wer of Attorneey or the relevantt resolution or authority as the casee may be, allong with a certified cop py of their SEBI registration certificate must m be lodged d along with the Bid cum Application Form. F In casee of Bids mad de by Mutual Fun nds, venture capital fund ds registered with SEBI and a FVCIs, a certified co opy of their SEBI registration certificate must m be lodg ged along with w the Bid cum Appliccation Form. Failing this,, the Company reeserves the right to accept or reject any Bid in wholee or in part, in n either case, without w assig gning any reason therefore. t 259

Scotts Ga arments Limiited In case of the Bids made m by insu urance comp panies registeered with th he Insurance Regulatory and Developmen nt Authority,, a certified copy of certificate of reg gistration issu ued by Insurrance Regulaatory and Develo opment Auth hority must bee lodged alon ng with the Bid B cum Application Form m. Failing thiss, we reserve the right r to accep pt or reject an ny Bid in wholle or in part, in i either case,, without assiigning any reason therefore. In case of th he Bids madee by providen nt funds with minimum co orpus of ` 2500 million (sub bject to appliccable law) and peension fundss with minim mum corpus of ` 250 miillion, a certiified copy off certificate from f a chartered d accountant certifying the corpus of o the provid dent fund/peension fund must be lod dged along with the Bid cum m Application n Form. Failin ng this, we resserve the righ ht to accept orr reject any Bid in whole or in part, in eitheer case, withou ut assigning any a reason th herefore. We, in ou ur absolute discretion, d reserve the riight to relax x the abovee condition of simultan neous submission of the power of attorney along with th he Bid cum Application A Fo orm, subject to t such termss and conditions that t we and th he BRLM and d Co-BRLM may m deem fit. T INSTRUCTIIONS PAYMENT B otherr than ASBA Bidders Escrow Mecchanism for Bidders Our Compaany and the Syndicate sh hall open Esccrow Accoun nt(s) with on ne or more Escrow E Collecction Bank(s) in whose w favour the Bidders shall s make ou ut the cheque or demand draft d in respecct of his or herr Bid and/or reviision of the Bid. B Chequess or demand drafts receiv ved for the fu ull Bid Amou unt from Bid dders would be deeposited in th he Escrow Acccount. The Escrow w Collection Banks B will actt in terms of the t Red Herriing Prospectu us and the Esscrow Agreem ment. The Escrow w Collection Banks B for and d on behalf of o the Bidders shall mainttain the moniies in the Esccrow Account un ntil the Design nated Date. The T Escrow Collection C Banks shall nott exercise any y lien whatso oever over the monies m deposited therein and a shall holld the moniees therein in trust for the Bidders. On n the Designated Date, the Esccrow Collection Banks shaall transfer thee funds repreesented by alllocation of Eq quity Shares (otheer than ASBA A funds with the SCSBs) frrom the Escro ow Account, as a per the terrms of the Esccrow Agreement,, into the Isssue Account held for thee benefit of the Bidders who are enttitled to refu unds. Payments of o refund to the t Bidders sh hall also be made m from th he Refund Acccount as perr the terms of the Escrow Agrreement and the t Red Herriing Prospectu us. The Bidderss should notee that the escrow mechanissm is not presscribed by SEBI and has beeen establisheed as an arrangem ment between n our Compaany, the Synd dicate, the Esccrow Collection Banks and d the Registraar to facilitate colllections from m the Bidders.. ders Payment mechanism forr ASBA Bidd The ASBA Bidders shalll specify the bank accoun nt number in the Bid cum m Application Form. The SCSB S shall block an amount equivalent to o the Bid Am mount in thee bank accou unt specified d in the Bid cum Application n Form and ea ach ASBA Bidder or the account a holdeer shall be deeemed to hav ve agreed to block b such amou unt. The SCS SB shall keep the Bid Amount A in the t relevant bank account blocked until u withdrawall/ rejection of the ASBA Bid B or receip pt of instructiions from thee Registrar to o unblock thee Bid Amount. In n the event of withdrawal or o rejection of o the Bid cum m Application n Form or forr unsuccessfull Bid cum Appliccation Forms, the Registrarr shall give in nstructions to the SCSB to unblock u the application mo oney in the relevant bank acco ount and it shall be acted d by SCSB witthin one day of receipt off such instrucction. The Bid Am mount shall reemain blocked d in the ASBA A Account un ntil finalisatio on of the Basiis of Allotment in 260

Scotts Ga arments Limiited the Issue an nd consequen nt transfer of the Bid Amo ount to the Public P Issue Account, A or until u withdraw wal/ failure of th he Issue or unttil rejection off the ASBA Bid, as the casee may be. nto Escrow Acccount for Bid dders other th han ASBA Biidders Payment in Each Bidder shall draw a cheque orr demand draaft or remit the t funds eleectronically th hrough the RTGS R mechanism for the Bid Amount A payab ble on the Bid d as per the fo ollowing term ms: 1.

All Biidders would d be required to pay the fu ull Bid Amou unt at the tim me of the subm mission of thee Bid cum Application A Form. F

2.

The Bidders B shalll, with the submission s o the Bid cum of c Application Form, draw d a paym ment instru ument for thee Bid Amount in favour of the Escro ow Account and submit the same to o the Syndiicate. If the payment p is not n made fav vouring the Escrow Acco ount along with w the Bid cum Appliication Form, the Bid of thee Bidder shall be rejected.

3.

The payment p instru uments for paayment into the t Escrow Acccount should d be drawn in n favour of: (a) In n case of Resid dent Retail: ES SCROW ACC COUNT – SGL L-R (b) In case of Non-Resident Retaail: ESCROW W ACCOUNT – SGL – NR (c) In case of Eligib ble Employeess: ― ESCROW W ACCOUNT T – SGL – ELIG GIBLE EMPL LOYEES - R

4.

In casse of Bids by NRIs applyin ng on repatriaation basis, th he payments must be mad de through In ndian Rupeee drafts purcchased abroad d or cheques or bank draffts, for the am mount payab ble on applicaation remittted through normal bank king channelss or out of fu unds held in Non-Residen nt External (N NRE) Accou unts or Foreig gn Currency Non-Residen nt (FCNR) Acccounts, main ntained with banks authorrised to deaal in foreign exchange e in In ndia, along with w documen ntary evidencce in support of the remittaance. Paym ment will not be accepted d out of Non n-Resident Ordinary O (NR RO) Account of Non-Resiident Biddeer bidding on a repatriation n basis. Paym ment by draftss should be acccompanied by b bank certifficate confirrming that thee draft has beeen issued by debiting to NRE N Account or FCNR Acccount.

5.

In casse of Bids by y NRIs applyiing on non-reepatriation basis, the paym ments must be b made thro ough Indian n Rupee Dra afts purchaseed abroad orr cheques or bank drafts, for the am mount payablee on appliccation remittted through normal bank king channells or out of funds held in Non-Resiident Extern nal (NRE) Acccounts or Foreign Curreency Non-Ressident (FCNR R) Accounts, maintained with bankss authorised to t deal in foreeign exchange in India, alo ong with documentary eviidence in sup pport of thee remittance or out of a Non-Residen nt Ordinary (NRO) ( Accou unt of a Non n-Resident Bidder biddin ng on a non-rrepatriation basis. b Paymen nt by drafts sh hould be acco ompanied by a bank certifficate confirrming that thee draft has beeen issued by debiting an NRE N or FCNR R or NRO Acccount.

6.

In casse of Bids by FIIs, the pay yment should be made outt of funds helld in a Speciaal Rupee Account along g with docum mentary evid dence in supp port of the remittance. r P Payment by drafts should d be accom mpanied by a bank certificcate confirmin ng that the drraft has been issued by deebiting the Sp pecial Rupeee Account.

7.

The monies m deposited in the Esscrow Accoun nt will be helld for the ben nefit of the Bidders (other than ASBA A Bidders) till the Designatted Date.

8.

On th he Designated d Date, the Escrow E Colleection Banks shall transfeer the funds from the Esccrow Accou unt as per thee terms of the Escrow Agreeement into th he Public Issu ue Account with w the Bankeers to the Isssue. 261

Scotts Ga arments Limiited 9.

On th he Designated d Date and no o later than teen (10) Work king Days from m the Bid/Isssue Closing Date, D the Escrow Collecction Bank sh hall also refun nd all amoun nts payable to unsuccessfful Bidders (o other than ASBA Biddeers) and also o the excess amount paid on biddin ng, if any, affter adjusting g for allocaation/Allotmeent to such Biidders.

10. Paym ments should be made by y cheque, or a demand draft d drawn on o any bank (including a cooperaative bank), which w is situaated at, and is i a member of or sub-meember of the bankers‘ cleaaring housee located at the centre where the Bid B cum Ap pplication Fo orm is subm mitted. Outstaation chequ ues/bank dra afts drawn on n banks not participating p i the clearing in g process willl not be acceepted and applications a accompanied a by such cheq ques or bank drafts are liab ble to be rejeccted. Cash/ stock s investt/money ordeers/postal orrders will not be accepted. n of Bid cum Application Form Submission All Bid cum m Application n Forms or Revision R Form ms duly comp pleted and acccompanied by b account payee p cheques or drafts shall be b submitted to t the Syndiccate at the tim me of submisssion of the Bid d. With respeect to the ASBA Bidders, B the ASBA A Bid cum m Application n Form or the ASBA Revisiion Form shall be submitteed to the Designaated Branchess of the SCSBss. No separatee receipts sha all be issued for the mon ney payable on o the submiission of Bid cum Applicaation Form or Reevision Form. However, th he collection centre c of the Syndicate will w acknowled dge the receip pt of the Bid cum Applicatio on Forms orr Revision Forms F by staamping and returning to o the Bidderr the acknowledg gement slip. This T acknowledgement slip p will serve as a the duplicaate of the Bid cum Applicaation Form for thee records of th he Bidder. NS OTHER INSTRUCTION Joint Bids in the case of Individuals Bids may be b made in siingle or jointt names (not more than three). t In the case of jointt Bids, all reffund payments will w be made out o in favourr of the Biddeer whose nam me appears firrst in the Bid cum Applicaation Form or Rev vision Form. All communiication will bee addressed to t the First Bid dder and willl be dispatcheed to his or her ad ddress as per the Demograaphic Details received from m the Deposittory. Multiple Biids A Bidder sh hould submit only one Bid d (and not mo ore than one). In this regarrd, all Bids will w be checked d for common PA AN as per Dep pository reco ords and all su uch bids will be treated as multiple Bids and are liab ble to be rejected. Two or moree Bids will bee deemed to be b multiple Bids B if the solee or first Bidd der is one and d the same. In casse of a Mutua al Fund, a sep parate Bid may y be made in respect of each scheme off the Mutual Fund F and such Bids B in respecct of over on ne scheme of the Mutual Fund will no ot be treated as multiple Bids provided th hat the Bids clearly c indicaate the schem me concerned for which th he Bid has beeen made. Elig gible Employees can Bid in th he Employeee Reservation Portion and the Net Offeer and such Bids shall no ot be considered as multiple Bids. B Our Compaany reserves the t right to reject, in its ab bsolute discreetion, all or any a multiple Bids in any or o all categories. In I this regard d, the proced dures to be fo ollowed by th he Registrar to t the Issue to t detect mulltiple applicationss are given beelow:

262

Scotts Ga arments Limiited 1.

All Biids will be ch hecked for co ommon PAN and will be accumulated a and taken to o a separate process p file which w will serrve as a multtiple master document. d Fo or Bidders otther than Mu utual Funds and a FII sub-accounts, Bidss bearing the same s PAN wiill be treated as multiple Bids B and will be b rejected.

2.

In thiis master, a check will be carried outt for the sam me PAN num mbers. In cases where thee PAN numb bers are differrent, the samee will be deletted from this master.

3.

The applications a will w be electrronically mattched for Deepository Parrticipant’s Ideentity (DP ID D) and (Clien nt ID) numb bers. If appliications bear the same numbers, n theese will be treated t as multiple m appliccations.

Our Company, in conssultation with h the BRLM and a Co-BRLM M reserves thee right to rejeect, in their ab bsolute discretion n, all or any multiple m Bids in i any or all categories. c mber or PAN N Permanent Account Num Pursuant to o the circularr MRD/DoP/ /Circ-05/20077 dated Apriil 27, 2007, SE EBI has man ndated Permaanent Account Nu umber (PAN N) to be the sole identifiication numb ber for all participants trransacting in n the securities market, m irrespeective of the amount of th he transaction n with effect from July 2, 2007. Each of the Bidders, sho ould mention n his/her PAN N allotted un nder the IT Act. A Applicatiions without this informaation will be con nsidered inco omplete and are liable to o be rejected.. It is to be specifically s no oted that Bid dders should not submit s the GIIR number in nstead of the PAN, P as the Bid B is liable to be rejected on o this ground d. However, th he exemption n for the Centrral or State Government G an nd the officiaals appointed by the courtss and for investorrs residing in the State of Sikkim S is subject to the Dep pository Partiicipants‘ veriffying the veraacity of such claim ms of the investors by colllecting sufficient documen ntary evidencee in support of o their claim ms. At the time of ascertaining the validity of o these Bids, the Registraar will check under the Depository reccords for the apprropriate descrription under the PAN field i.e. either Sikkim categorry or exempt category. t Reject Bidss Our Right to In case of QIB Q Bidders, our Compan ny in consultation with the t BRLM an nd CO-BRLM M may reject Bids provided th hat the reason ns for rejectin ng the same shall s be prov vided to such Bidders in writing. w In casse of Non-Institu utional Bidderrs and Retail Individual Bidders, our Company, C BR RLM and Co-B BRLM has a right r to reject Bids baseed on tech hnical grou unds. Conseequent refu unds shall be made by RTGS/NEF FT/NECS/Dirrect Credit/cheque or pay y order or draaft and will be b sent to the Bidder‘s add dress at the Biddeer‘s risk. With h respect to ASBA A Bids, th he Designated d Branches of the SCSBs sh hall have the right r to reject ASBA Bids if at the time of blocking b the Bid B Amount in i the Bidder‘‘s bank accou unt, the respecctive Designated Branch of th he SCSB asceertains that sufficient s fun nds are not available a in th he Bidder‘s bank b account maaintained witth the SCSB. Subsequent to the accep ptance of the ASBA Bid by b the SCSB,, our Company would w have a right to rejectt the ASBA Biids only on teechnical groun nds. S FOR TECH HNICAL REJE ECTIONS GROUNDS Bidders are advised to no ote that Bids are a liable to be b rejected intter alia on the following tecchnical groun nds: •

•

Am mount paid do oes not tally with w the amo ount payable for the higheest value of Equity E Sharess Bid for. With respectt to ASBA Bid ds, the amoun nts mentioned d in the Bid cu um Application Form doess not tally y with the am mount payablee for the value of the Equitty Shares Bid for; In case c of partn nership firms, Equity Shaares may be registered r in n the names of o the indiviidual parttners and no firm as such shall s be entitlled to apply; 263

Scotts Ga arments Limiited • •

• • • • • • • • • • • • • • • • • • • •

•

•

• • • • • •

Bid by persons not n competentt to contract under u Indian contract Act,, 1872 as amended, except bids by Minors M havin ng valid demaat account as per p demograp phic details provided p by Depositaries. D PAN N not mentio oned in the Bid cum App plication Forrm except forr Bids by or on behalf off the Cen ntral or State Government G and the officiials appointed d by the courrts and by inv vestors residin ng in the State of Sikkiim provided such claims have h been verrified by the Depository D Paarticipants, DP D ID and d Client ID no ot mentioned in the Bidcum m Application n Form; GIR R number furn nished instead d of PAN; Bids for lower nu umber of Equ uity Shares thaan specified for f that catego ory of investo ors; Bids at a price less than the Flloor Price; Bids at a price more m than the Cap C Price; Bids submitted by b Retail Ind dividual Biddeers, wherein the Bid Amo ount exceeds Rs. 200,000 upon u reviision of Bids; Bids by persons, other than Elligible Emplo oyees, in the Employee E Resservation Porttion; Sign nature of Firsst/sole Bidderr missing; Sub bmission of more m than five Bid cum App plication Form ms per ASBA Account; App plication by banks b not thrrough separatte account in own name with w any otheer SEBI registtered SCS SB/s (SEBI Ciircular No. CIR/CFD/DIL C L/1/2013) Bids at Cut-off Price P by Non-IInstitutional and a QIB Bidd ders; Bids by QIBs and d Non-Institu utional Bidderrs not submittted through ASBA; A Bids for more tha an ` 2,00,000 applying thro ough Non AS SBA process Bids for number of Equity Shaares which arre not in multtiples of 100; Multiple Bids as defined in th he Red Herrin ng Prospectuss; In case c of Bids under u powerr of attorney or by limited d companies, corporate, trrust etc., releevant doccuments are not n submitted; Bids accompanieed by Stock in nvest/money order/postall order/cash; Sign nature of solee and/or jointt Bidders misssing; Bid cum Appliccation Formss does not have h the stam mp of the BR RLM, Co-BRL LM or Syndicate Mem mbers or the SCSB; Bid cum Applica ation Forms does d not have Bidder‘s dep pository accou unt details; Bid cum Applica ation Forms are a not deliveered by the Biidders within n the time prescribed as per the Bid cum Application Forms, Bid/Issue Opening Date D advertiseement and the t Red Herrring Prospectus and as a per the insttructions in th he Red Herrin ng Prospectus and the Bid d cum Applicaation Form ms; In case c no corressponding reco ord is availab ble with the Depositories D t that matches three parameeters nam mely, names of the Biddeers (including g the order of o names of joint j holders), the Depositary Partticipant‘s iden ntity (DP ID) and the beneeficiary‘s acco ount number; Witth respect to ASBA Bids,, inadequate funds in thee bank accou unt to block the Bid Am mount speccified in the ASBA A Bid cu um Applicatio on Form at th he time of blocking such Bid Amount in n the ban nk account; Bids for amountss greater than n the maximu um permissiblle amounts prrescribed by the t regulation ns; Bids where clea ar funds are not availablee in Escrow Accounts as per final cerrtificate from m the Escrrow Collectio on Banks; Bids by QIBs nott submitted th hrough the BR RLM and the Co-BRLM orr in case of AS SBA Bids for QIBs Q not intimated to the BRLM an nd the Co-BRL LM; Bids by OCBs; Bids by persons in the Uniteed States exclluding qualifiied institutional buyers ass defined in Rule 144A A of the Secu urities Act or other o than in reliance of Reegulation S un nder the Secu urities Act; Bids by any persson outside In ndia if not in compliance c w applicablle foreign and with d Indian Lawss;

264

Scotts Ga arments Limiited •

•

Bids not uploadeed on the term minals of thee Stock Exchaanges; and Bid ds by personss prohibited from f buy ying, selling or o dealing in n the shares directly or in ndirectly by SEBI or any other regulaatory auth hority. In case c of Bid cum Applicatio on Forms subm mitted to the members of the t Syndicatee, if the SCSB whose nam me has been included i in the Bid cum Application A F Form does no ot have a braanch at the reelevant Syn ndicate ASBA

C ID AND A PAN ME ENTIONED IN I THE BID CUM APPLIICATION FO ORM IN CASE THE DP ID, CLIENT ERED INTO THE ELECT TRONIC BID DDING SYST TEM OF TH HE STOCK EX XCHANGES S OR AND ENTE THE SYND DICATE/THE E SCSBs DO O NOT MA ATCH WITH H THE DP ID, I CLIENT T ID AND PAN P AVAILABL LE IN THE RECORDS WIITH THE DE EPOSITARIES, THE APPL LICATION IS LIABLE TO O BE REJECTED D. m Application n Forms subm mitted by non-ASBA Bidders, the Bassis of Allotmeent will be based For Bid cum on the Regiistrar’s valida ation of the electronic e Bid d details with h the Deposittory records, and a the comp plete reconciliation of the fina al certificatess received fro om the Escrow w Collection Banks with the t electronicc Bid DIL/3/2010 dated d April 22, 2010 an nd SEBI circcular details in terms of SEBI circularr CIR/CFD/D DIL/1/2011 da ated April 29,, 2011. The Registrar R will undertake technical rejections based d on CIR/CFD/D the electron nic Bid deta ails and the Depository database. In n case of an ny discrepan ncy between n the electronic Bid B data and d the Deposiitory records,, our Compaany in consu ultation with the BRLMs,, the Registrar and the Designated Stock k Exchange, reserves thee right to proceed as perr the Deposiitory d as rejected. records or trreat such Bid B submitted to the SCS SBs, in termss of the SEBII circular CIR R/CFD/DIL/3//2010 dated April A For ASBA Bids 22, 2010, th he Registrar will reconcille the compiiled data recceived from the Stock Exxchanges and d all SCSBs, and d match such h data with the t Deposito ory database for correctness of DP ID D, Client ID and PAN. In casses where an ny DP ID, Cliient ID and PAN P mention ned in the Biid file does not n match thee one available in n the Deposittory databasee, our Compaany reserves the right to proceed p as peer the Deposiitory records for such ASBA Bids or treaat such ASBA A Bids as rejjected. The Registrar R willl reject multtiple ASBA Bids based on com mmon PAN. B submittted to the meembers of thee Syndicate at a the Syndicate ASBA Biidding Locatiions, For ASBA Bids the Basis off Allotment will w be based d on the Regiistrar’s validaation of the electronic e Bid d details with h the Depository records, and d the compleete reconciliaation of the final f certificaates received from the SC CSBs with the eleectronic bid details in terrms of the SE EBI circular CIR/CFD/DIL C L/1/2011 dateed April 29, 2011. 2 The Registrrar will unde ertake techniical rejectionss based on th he electronic Bid data and the Deposiitory records. In case of any discrepancy between thee electronic Bid B data and d the Depository records,, our Company, in i consultatio on with the Designated D S Stock Exchang ge, the BRLM Ms and the Registrar, R reseerves the right to proceed as per p the Depossitory recordss or treat such h ASBA Bid as a rejected. m with NSDL L or CDSL Equity Sharres in Demateerialized Form As per the provisions off Section 60B of the Comp panies Act, th he Allotment of Equity Sh hares in this Issue I shall be only in a demateerialized form m (i.e., not in the form of physical p certifficates but the fungible an nd be represented d by the statem ment issued th hrough the ellectronic mod de). In this conttext, two agreeements havee been signed d among the Company, th he respective Depositories and the Registraar to the Issuee: a) Agreem ment dated 29/ /11/2010 witth NSDL, the Company an nd the Registrrar to the Issue; b) Agreem ment dated 06/ /12/2010 witth CDSL, the Company and the Registraar to the Issuee. The ISIN nu umber allotted d to the Comp pany is INE6888L01011 265

Scotts Ga arments Limiited All bidderss can seek Alllotment only y in dematerrialized modee. Bids from any Bidder without releevant details of hiis or her depo ository accoun nt are liable to o be rejected. a) A biddeer applying for f Equity Sh hares must have h at least one o beneficiaary account with w either off the Deposittory Participa ant of either NSDL N or CDSL L prior to maaking the Bid. b) The Bid dder must necessarily n filll in the dettails (includin ng the Benefficiary Accou unt Number and Deposittory Participant’s identifiication numb ber) appearin ng in the Bid-cum-Appl B lication Form m or Revision n Form. c)

Allotmeent to a succeessful Bidder will be creditted in electronic form direectly to the beeneficiary account (with th he Depository y Participant) of the Bidderr.

d) Names in the Bid-cu um-Applicatio on Form or Revision R Form m should be identical i to th hose appearin ng in the acco ount details in n the Depository. In case of joint holdeers, the namees should neccessarily be in n the same seequence as theey appear in the t account details d in the Depository. D e) If incom mplete or inco orrect details are given und der the headiing ‘Bidders Depository D A Account Detaills’ in the Bid--cum-Applica ation Form orr Revision Forrm, it is liablee to be rejected d. f)

The Bid dder is respon nsible for the correctness of o his or her Demographic D c details given n in the Bid-ccumApplicaation Form viss-à-vis those with w his or heer Depository y Participant.

g) Equity Shares in ellectronic form m can be traded only on o the stock exchanges having h electrronic connecttivity with NS SDL or CDSL L. All the Stocck Exchangess where our Equity E Sharess are proposeed to be listed d have electro onic connectiv vity with NSD DL and CDSL L. h) The traading of the Equity Sharees of the Company woulld be in dem materialized form f only fo or all investorrs in the demat segment off the respectiv ve Stock Exch hanges. Communicaations All future communicatiions in conn nection with Bids made in i this Issue should be addressed a to o the Registrar qu uoting the fu ull name of th he sole or Firrst Bidder, Biid cum Appliication Form number, Bid dders Depository Account Details, number of Equity Shares applied for, date of Bid B form, nam me and addreess of the memberr of the Synd dicate or the Designated Branch B of thee SCSBs wherre the Bid waas submitted and cheque or draft d number and issuing bank b thereof or with respect to ASBA Bids, bank acccount number in which the amount equiva alent to the Bid Amount was w blocked. n contact the e Compliance Officer or the Registraar in case off any pre-Isssue or post-IIssue Bidders can related prob blems such as a non-receip pt of letters off Allotment, credit of Alllotted shares in the respecctive beneficiary y accounts, reffund orders etc. e In case of o ASBA Bidss submitted to t the Design nated Branchees of the SCSBs, the Bidders can c contact th he Designated Branches of o the SCSBs.. PAYMENT T OF REFUND D Within 10 Working W Dayss of the Bid Closing C Date, the t Registrar to the Issue will w dispatch the refund orrders for all amou unts payable to unsuccesssful Bidders (other ( than ASBA A Bidderss) and also an ny excess am mount paid on Bidding, after ad djusting for alllocation/ Alllotment to Bid dders Bidders oth her than ASBA Bidders must m note thatt on the basis of the nam mes of the Bid dders, Deposiitory Participant‘s name, DP ID, beneficiaary account number n proviided by them m in the Bid cum Applicaation Form, the Registrar R willl obtain, from m the Deposittories, the Bidders‘ bank account detaails, including g the nine digit Magnetic M Ink k Character Recognition R ( (“MICR”) cod de as appearring on a cheeque leaf. Heence, Bidders are advised to im mmediately update u their bank b accountt details as ap ppearing on the t records of the Depository Participant. Please P note th hat failure to do so could result r in delay ys in despatch of refund order o 266

Scotts Ga arments Limiited or refunds through t electtronic transferr of funds, ass applicable, and a any such h delay shall be b at the Bidd ders‘ sole risk an nd neither ou ur Company, the Registrar, Escrow Co ollection Bank k(s), Bankers to the Issue, the BRLM and Co-BRLM sh hall be liable to t compensatee the Bidderss for any lossees caused to the t Bidder du ue to any such deelay or liable to t pay any intterest for such h delay. Mode of makking refunds forr Bidders otherr than ASBA Bidders B The payment of refund,, if any, for Bidders B other than ASBA A Bidders wo ould be done through varrious modes in th he following order o of preference: 1.

NECS S – Payment of refund wo ould be done through NEC CS for applicaants having an a account at any of the ceentres where such facility y is available. . This modee of payment of refunds would w be sub bject to availaability of com mplete bank account a details including the nine-digiit MICR codee as appearin ng on a chequ ue leaf from the t Depositorry. The paym ment of refund d through NE ECS is mandaatory for app plicants havin ng a bank acccount at any y of the sixty y eight (68) centres notiffied by SEBI,, except wheere the appliccant is otherw wise disclosed d as eligible to o receive refunds through direct credit or o RTGS.

2.

Direcct Credit - Ap pplicants having bank acco ounts with th he Refund Baanker, shall be eligible to receive r fundss through direect credit. Chaarges, if any, levied by thee Refund Bank ker for the saame would bee borne by thee Company.

3.

RTGS S - Applicantss having a baank account att any of the ab bove-mention ned 68 centerss and whose refund r amou unt exceeds ` Two Lacs, haave the option n to receive reefund through h RTGS. Such h eligible app plicants who indicate i theirr preference to o receive refu und through RTGS are req quired to prov vide the IFSC C Code in thee Bid-cum-Ap pplication form m. In the even nt the same iss not provided, refund shaall be made th hrough NECS S. Charges, iff any, levied by the refun nd banks for the same wo ould be bornee by the Com mpany. Charg ges, if any, lev vied by the ap pplicants’ ban nk receiving the credit wou uld be borne by b the applicaant.

4.

NEFT T - Payment of o refund shalll be undertak ken through NEFT N wherev ver the applicants’ bank haas been assign ned the IFSC, which can be b linked to a MICR, if any, a availablee to that partiicular bank branch. b IFSC will w be obtain ned from the website w of RB BI as on a datee immediately y prior to thee date of paym ment of refund, duly mapp ped with MIC CR numbers. Wherever th he applicants have registeered their nin ne digit MICR R number and d their bank account num mber while op pening and op perating the demat accou unt, the same will be duly mapped witth the IFSC of o that particu ular bank braanch and the payment of refund r will be b made to th he applicants through t this method. The process flow w in respect off refunds by way w of NEFT T is at an evollving stage hence h use of NEFT N is subjeect to operatio onal feasibilitty, cost and process p efficieency. In the ev vent that NEF FT is not operrationally feasible, the pay yment of refun nds would bee made through any one off the other mo odes as discu ussed in the seections.

5.

Refun nd Orders - For F all other applicants, a inccluding those who have no ot updated th heir bank partticulars with the t MICR code, the refun nd orders willl be dispatch hed through Speed S Post/ Registered Post P for refund orders. Succh refunds will w be made by cheques, pay orders or o demand drafts d drawn on the Escrow Collection Banks and payable p at par at places where w Bids aree received. Baank charges, if any, for caashing such ch heques, pay orders o or dem mand drafts at other centress will be payaable by the Bid dders.

Mode of makking refunds forr ASBA Bidders In case of ASBA A Bidders,, the Registraar shall instrucct the relevan nt SCSB to unblock the fun nds in the releevant ASBA Acco ount to the ex xtent of the Bid B Amount specified in the ASBA Biid cum Appliication Forms for withdrawn,, rejected or unsuccessful u o partially su or uccessful ASB BA Bids withiin ten (10) wo orking days of o the Bid/Issue Closing C Date.

267

Scotts Ga arments Limiited DISPOSAL L OF APPLIC CATIONS AND A APPLIC CATION MONEYS AND INTERES ST IN CASE E OF DELAY With respecct to Bidders other than AS SBA Bidders,, our Compan ny shall ensure dispatch of o Allotment advice, a refund ordeers (except forr Bidders who receive refu unds through h electronic traansfer of fund ds) and give benefit b to the beneeficiary accou unt with Deepository Parrticipants and d submit thee documentss pertaining to the Allotment to o the Stock Ex xchanges afteer the Allotmeent of Equity Shares. In case of Bidders who receive r refund ds through NECS, N NEFT, direct d credit or o RTGS, the refund instru uctions will be giveen to the clea aring system within Nine (9) Working Days from the t Bid Closin ng Date. A su uitable communicaation shall be sent to the Bidders B receiv ving refunds through thiss mode withiin ten (10) Working W Days of the Bid Closing Date, giving details of thee bank where refunds shalll be credited along with amount a and expecteed date of elecctronic credit of refund. Our Compaany shall use best efforts to t ensure thaat all steps fo or completion n of the necesssary formalitties for listing and commenceme c ent of trading g at all the Sto ock Exchanges where the Equity E Sharess are proposed d to be listed, are taaken within tw welve (12) Wo orking Days of o the Bid Clo osing Date. In accordan nce with the Companies C Acct, the requireements of thee Stock Exchaanges and thee ICDR Regullations, our Compan ny further un ndertakes thatt: •

Allotm ment of Equitty Shares shalll be made on nly in demateerialised form m, including th he credit of Allotted A Equity y Shares to th he beneficiary y accounts of the Deposito ory Participan nts, within nin ne Working Days D of the Biid Closing Da ate;

•

With respect to Biidders other than t ASBA Bidders, B dispaatch of refun nd orders or in i a case wheere the refund or portion n thereof is made m in electtronic manneer, the refun nd instruction ns are given to the clearin ng system wiithin ten (10) Working Day ys of the Bid Closing C Date would be en nsured. With respect r to thee ASBA Bidders’ instructio ons for unblo ocking of the ASBA Biddeer’s bank acco ount shall bee made within n ten days fro om the Bid Cllosing Date; and a

•

Our Company C sh hall pay interrest at 15% p.a. for any delay beyon nd the 15 daays time perriod as mentiioned above, if Allotment is not made and a refund orrders are not dispatched or o if, in a case where the reefund or portion thereof is made in electronic e manner, the reffund instructiions have no ot been given n to the clearin ng system in the disclosed d manner and d/or demat credits c are no ot made to inv vestors within n eight days from the daay the Comp pany becomes liable to reepay (i.e. 15 Days after th he Bid Closin ng Date or thee date of refu usal by the Sto ock Exchange(s), whicheveer is earlier). If I such money y is not repaid d within eigh ht days from the day the Company beecomes liablee to repay it, the Compan ny and every y officer in deefault shall, on o and from expiry of eig ght days, be liable to repaay the money y with intereest as prescrib bed under app plicable law.

n case of dela ay in dispatch h of Allotmen nt Letters or Refund R Ordeers/instructio on to SCSB by y the Interest in Registrar to the Issue Allotmentt of Equity Sh hares in the Isssue, includin ng the credit of o Allotted Eq quity Shares to the beneficciary accounts of the Depository Particiipants, shall be made nott later than ten t Working Days of thee Bid Closing Date. D Our Co ompany furth her agrees th hat it shall pay p interest at a the rate of o 15% p.a. iff the allotment letters or refund orders have not beeen dispatched d to the Bidd ders or if, in a case wheree the refund orr portion therreof is made in i electronic manner, m the refund r instru uctions have not n been giveen in the disclo osed manner within w eight days d from thee day the Com mpany becom mes liable to reepay (i.e. 15 Days D after the Bid B Closing Date D or the daate of refusall by the Stock k Exchange(s)), whichever is earlier). If such 268

Scotts Ga arments Limiited money is not repaid within eight days from the t day the Company beecomes liablee to repay it,, the Company y and every officer o in defaault shall, on n and from expiry of eigh ht days, be liable to repay y the money wiith interest ass prescribed under u Section 73 of the Com mpanies Act. Refunds will w be madee by cheques,, pay-orders or demand drafts d drawn n on a bank appointed a by y our Company y as a Refund d Bank and paayable at par at places wh here Bids are received. r Ban nk charges, if any, for encash hing such cheeques, pay ord ders or deman nd drafts at other o centres will w be payable by the Bidd ders. NATION IMPERSON o the applica ants is specifiically drawn to the provisions of sub--section (1) of o Section 68 A of Attention of the Compan nies Act, whiich is reprodu uced below: “Any person n who: (a) makes in i a fictitiouss name, an ap pplication to a company for f acquiring or subscribin ng for, any sh hares therein, or person in n a fictitious name, n shall be b punishablee with imprissonment for a term which may t five years.” ” extend to (b) otherwiise induces a company to allot, or regiister any tran nsfer of sharess, therein to him, h or any other o person in i a fictitious name, shall be punishab ble with imprrisonment forr a term whicch may exten nd to five yea ars.” A NT BASIS OF ALLOTMEN A. For Retaiil Individuall Bidders ¾

Bidss received fro om the Retaiil Individual Bidders at or o above the Issue Price shall be grou uped togeether to deterrmine the tottal demand under u this cattegory. The Allotment A to all the successful Retaail Individuall Bidders will be made at th he Issue Pricee.

¾

The Issue size leess Allotmen nt to Non-In nstitutional and a QIB Bid dders shall be availablee for Allo otment to Rettail Individuaal Bidders who w have bid in the Issue at a price th hat is equal to t or greaater than the Issue I Price.

¾

If th he aggregate demand d in this category is less than or equal e to 35,199,934 Equity Shares S at or ab bove the Issue Price, fu ull Allotmentt shall be mad de to the Retaail Individual Bidders to the t extent of their valid d Bids.

¾

In th he event, the Bids received d from Retaill Individual Bidders B exceeeds 35,19,934 Equity Shares, then the maximum m nu umber of Retaail Individuall Bidders who o can be alloccated/Allotted d the minimu um Bid Lot will be computed c by y dividing the total number n of Equity Shaares available for alloccation/Allotm ment to Retaail Individuaal Bidders by the minim mum Bid Lo ot (“Maximum m RII Allo ottees”). Thee allocation/A Allotment to o Retail Indiividual Biddeers will then n be made in the follo owing manneer: - In n the event th he number of Retail Individ dual Bidders who w have sub bmitted valid d Bids in the Offer O is eq qual to or lesss than Maxiimum RII Alllottees, (i) Reetail Individu ual Bidders shall s be alloccated / A Allotted the minimum m Bid Lot; and (ii) the balance Equity E Sharess, if any, rem maining in thee Retail Portion shall be b allocated/ Allotted on a proportionaate basis to th he Retail Indiv vidual Bidderrs who haave received allocation/A Allotment as per p (i) above for less than n the Equity Shares S Bid by y them (i.e. who have Bid for more than the min nimum Bid Lo ot). In th he event the number n of Reetail Individuaal Bidders wh ho have subm mitted valid Bids B in the Offfer is morre than Maxim mum RII Allo ottees, the Reetail Individual Bidders (in n that categorry) who will then be allocated/ a Alllotted minimu um Bid Lot sh hall be determ mined on draw w of lots basis. For the method of baasis of Allotm ment, refer illu ustration belo ow.

¾

269

Scotts Ga arments Limiited Illustratio on Explaining g Procedure of o Allotment for Retail Biidder (1) Total no. n of specifieed securities on o offer@ Rs. 600 6 per sharee: 1 crore speccified securitiees. (2) Specifiied securities on offer for retail r individu ual investors’ category: 35 lakh specified d securities. (3) The issue is over-subscribed d 2.5 times whereas th he retail ind dividual inveestors’ categ gory is oversubsccribed 4 timess. (4) Issuer decides to fiix the minimum applicatiion / bid sizee as 20 speciffied securitiess (falling with hin the range of Rs. R 10,000 - 15,000). 1 Appllication can be b made for a minimum of o 20 specifieed securities and in multiples thereof. (5) Assum me that a tottal of one lak kh retail ind dividual inveestors have applied a in th he issue, in varying v number of o bid lots i.e. between b 1 – 16 1 bid lots, baased on the maximum m appllication size of o upto Rs. 2,000,000. (6) Out of the one lak kh investors, there are five retail indiv vidual investo ors A, B, C, D and E who o have applied ass follows: A has h applied for f 320 specifiied securitiess. B has applieed for 220 specified securiities. C has applieed for 120 specified securiities. D has ap pplied for 60 specified seccurities and E has applied d for 20 specified securities. As per alllotment proceedure, the allo otment to retaail individuall investors shaall not be lesss than the min nimum bid lot, su ubject to avaiilability of sh hares, and thee remaining available a sharres, if any, sh hall be allotteed on a proportionate basis.

1

Name N of nvestor In A

Tottal Number of o Spe ecified secu urities app plied for 320 0

2

B

220 0

3

C

120 0

4

D

60

5

E

20

Sr. No.

Totaal number of specified seccurities eligib ble to be allottted 20 specified s securities (i.e. the minimu um bid lot) + 38 specified securitiees [{35,00,000 - (1,00,000 * 20)} 2 / {140,000,000 (1,000,000 * 20)}] * 300 3 (i.e. 320-220) 20 sp pecified securrities (i.e. the minimum m bid d lot) + 25 specified securitiees [{35,00,000 - (1,00,000 * 20) 2 / {140,,00,000 - (1,000,000 * 20)}] * 200 2 (i.e. 220-220) 20 sp pecified securrities (i.e. the minimum m bid d lot) + 13 specified securitiees [{35,00,000 - (1,00,000 * 20)} 2 / {(1400,00,000 - (1,000,000 * 20)}] * 100 (i.e. 120-220) 20 sp pecified securrities (i.e. the minimum m bid d lot) + 5 specified securitiees [{(35,00,0000 - 1,00,000 * 20)} 2 / {(1400,00,000 - (1,000,000 * 20)}] * 40 (i.e. 60-20)) 20 sp pecified securrities (i.e. the minimum m bid d lot)

B. n of specifieed securities on o offer @ Rs. 600 per sharee: 1 crore speccified securitiies. (1) Total no. (2) Specifiied securities on offer for retail r individu ual investors’ category: 35 lakh specified d securities. (3) The isssue is over su ubscribed 7 tim mes whereas the retail ind dividual invesstors’ category y is over subsscribed 9.37 timess. (4) Issuer decides to fiix the minimu um applicatio on / bid sizee as 20 specified securitiess (falling with hin the range of Rs. R 10,000 - 15,000). 1 Appllication can be b made for a minimum of o 20 specifieed securities and in multiples thereof. (5) Assum me that a totall of two lakh retail r individual investors have applied d in the issue,, in varying number n of bid lotss i.e. between n 1 – 16 bid lo ots, based on the maximum m application n size of upto o Rs.2,00,000, as per the table shown s below.

270

Scotts Ga arments Limiited (6) As peer allotment procedure, p th he allotment to retail ind dividual invesstors shall no ot be less th han the minimum m bid lot, subjeect to availability of sharess. (7) Since the t total num mber of sharees on offer to retail individ dual investorrs is 35,00,0000 and the min nimum bid lot is 20 shares, th he maximum m no. of inveestors who caan be allotted d this minim mum bid lot will w be 1,75,000. In I other word ds, 1,75,000 reetail applican nts will get th he minimum bid b lot and th he remaining 25,000 retail applicants will no ot get allotmeent. The detaills of allotmen nt shall be as follows: f No. of Lots

No. of Shares at each lot

A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

B 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 T Total

No. of Retail R Investo ors applyin ng at each lot l C 10,0000 10,0000 10,0000 10,0000 20,0000 20,0000 15,0000 20,0000 10,0000 15,0000 10,0000 10,0000 10,0000 5,0000 15,0000 10,0000 2,00,0000

To otal No. of Shaares applied forr at each lot

No. of investors wh ho shall receiive minimu um bid-lot (to o be selected on lottery y)

D = (B*C) 2,00,000 4,00,000 6,00,000 8,00,000 20,00,000 24,00,000 21,00,000 32,00,000 18,00,000 30,00,000 22,00,000 24,00,000 26,00,000 14,00,000 45,00,000 32,00,000 3 328,00,000

E 8,750 = (1,75,000/2,,00,000)*10,0000 8,7500 8,7500 8,7500 17,5000 17,5000 13,1255 17,5000 8,7500 13,1255 8,7500 8,7500 8,7500 4,3755 13,1255 8,7500 1,75,0000

N onal Bidders B. For Non-Institutio ¾

Bidss received fro om Non-Instittutional Biddeers at or abov ve the Issue Price P shall be grouped togeether to determine d th he total dem mand under this category y. The Allottment to all successful NonN Instiitutional Bidd ders will be made m at the Isssue Price.

¾

The Issue size lesss Allotment to QIBs an nd Retail Po ortion shall be b available for Allotmen nt to Non n-Institutional Bidders wh ho have bid in n the Issue att a price that is equal to orr greater than n the Issu ue Price.

¾

If th he aggregate demand d in this category is less than or equal e to 40,222,782 Equity Shares S at or ab bove the Issue Price, full f Allotmen nt shall be made m to Non-Institutional Bidders to th he extent of their dem mand.

In case the aggregate demand d in thiis category is greater than 40,22,782 Equity Shares at or above thee Issue Price, Allo otment shall be made on a proportionate basis up to t a minimum m of 100 Equ uity Shares. For F the method of proportiona ate basis of alllotment, referr below.

271

Scotts Ga arments Limiited C. For QIBs Q ¾

Bidss received fro om the QIB Bidders at or o above the Issue Price shall be grou uped togetheer to deteermine the tottal demand under u this porrtion. The Alllotment to alll the QIB Bidd ders will be made m at th he Issue Price.

¾

The QIB Portion n shall be avaailable for Alllotment to QIB Q Bidders who w have bid d in the Issue at a price that is equa al to or greater than the Issu ue Price.

¾

Allo otment shall be b undertaken n in the follow wing manner:: (a) In n the first in nstance allocaation to Mutu ual Funds fo or up to 5% of the QIB Portion shalll be determined as follows: In the event that Mutual Fund d Bids exceed ds 5% of th he QIB Portiion, allocatio on to Mutuall Funds shall be b done on a proportionatte basis for up p to 5% of the QIB Portion. (ii) In the event that th he aggregatee demand fro om Mutual Funds F is lesss than 5% off the QIB Po ortion, then alll Mutual Fu unds shall gett full Allotmeent to the exttent of valid bids received d above the Isssue Price. (iii) Equity Shares remaaining unsub bscribed, if any, a not alloccated to Mu utual Funds shall be availlable to all QIIB Bidders as set out in (b) below; (i)

n the second instance, i Allo otment to all QIBs Q shall be determined as a follows: (b) In In the event e that th he oversubscrription in thee QIB Portion, all QIB Biidders who have h submittted Bids abov ve the Issue Price P shall be Allotted Equ uity Shares on n a proportio onate basis fo or upto 95% of the QIB Porrtion. (ii) Mutuall Funds, who have receiveed allocation as a per (a) above, for less th han the numb ber of Equity Shares Bid fo or by them, are a eligible to o receive Equ uity Shares on n a proportio onate basis allong with other QIB Bidderrs. (iii) Under-ssubscription below b 5% of the QIB Porttion, if any, from f Mutual Funds, woulld be includeed for allocatio on to the rem maining QIB Bidders B on a proportionate p basis. (i)

¾

Q Bidders sh hall be 25,14,2238 Equity Shaares. The aggregate Alllotment to QIB

n Portion Employeee Reservation Only Eligible Employeees are eligiblee to apply un nder the Emplloyee Reservaation Portion Bids receiived from thee Employees at a or above th he Issue Price shall be grou uped togetherr to determinee the total dem mand under th his category. The allocatio on to all the successful Em mployees willl be made att the Issue Price. If the agg gregate deman nd in this cattegory is less than or equaal to 4,50,000 Equity Sharees at or abovee the Issue Pricce, full allocattion shall be made m to the Employees E to o the extent of o their deman nd. Provided that the value of allotment to t any emplo oyee in pursuaance of this reeservation, sh hall not exceed d ` 2,00,000/--. If the agg gregate dema and in this caategory is greeater than 4,550,000 Equity y Shares at orr above the Issue I Price, the allocation sh hall be made on o a proportiionate basis up u to a minim mum of 4,50,0000 Equity Sh hares. Only Emp ployees (as defined d abovee) are eligible to apply und der Employee Reservation n Portion. Forr the method of proportiona ate allocation,, refer below.

272

Scotts Ga arments Limiited Proceduree and Time of o Schedule fo or Allotment and Demat Credit C of Equ uity The Issue will be cond ducted throug gh a "100% bo ook building process" p purssuant to which the membeers of the Syndicate or SCS SBs will acceept bids for the Equity Shares durin ng the Biddiing/Issue Perriod. Following g the expiratio on of the Bidd ding/Issue Peeriod, our Company, in co onsultation wiith the BRLM M and the Co-BR RLM, will dettermine the Isssue Price, and, in consultaation with thee BRLM and the t Co-BRLM M, the basis of allocation and d entitlement to Allotmentt based on thee bids receiveed and subjecct to confirmaation by the BSE. The SEBI (ICDR) ( Regullations requirre our Compaany to compleete the Allotm ment to successful Bidders within w ten (10) working daays of the exp piration of thee Bidding / Isssue period. The T equity sh hares will be th hen be crediteed and Allottted to the inv vestors’ Dem mat Accounts maintained with w the releevant depository y participantt. Upon apprroval by the Stock Exchan nges, the Equ uity Shares will w be listed and trading will w commencee. o Proportion nate Basis of Allotment A in the Issue Method of In the eveent the Issue is over-subsccribed, the baasis of Allotm ment shall bee finalized by y the Compan ny in consultatiion with the Designated Stock S Exchan nge. The Execcutive Directo or (or any oth her senior offficial nominated by them) of the Desig gnated Stock Exchange along a with th he BRLM, Co o-BRLM and d the Registrar to the Issue shall be responsible for en nsuring that basis of allotment is finaliized in a fairr and proper manner m in acccordance with the allotm ment procedu ure specified Schedule XV V of SEBI (IC CDR) Regulatio ons 2009. The Allotment to the QIB Q Bidders and a Non-Insttitutional Bidd ders shall be made in marrketable lots, on a proportionate basis as explained bellow: (a) Biddeers in that resspective category will be categorized according to the number of Equity Sh hares applieed for. (b) The to otal number of o Equity Shaares to be allo otted to each category c as a whole shall be b arrived at on a propo ortionate basis, which is th he total numb ber of Equity Shares S applieed for in that category c (num mber of Bid dders in the category multtiplied by the number of Equity E Shares applied for) multiplied by y the inversse of the overr-subscription n ratio. (c) Numb ber of Equitty Shares to be allotted to the succcessful Biddeers will be arrived at on o a propo ortionate basiis, which is total numberr of Equity Shares S applieed for by eacch Bidder in that catego ory multiplied by the inverse of the oveer-subscriptio on ratio. (d) In alll Bids wheree the proporttionate Allottment is less than 100 Equity Sharess per Bidder,, the Allotm ment shall be made as follo ows: ¾

¾

The successfu ul Bidders ou ut of the totall Bidders for a category sh hall be determ mined by draaw of lots in a man nner such thatt the total num mber of Equitty Shares Allo otted in that portion p is equ ual to the number of o Equity Sharres calculated d in accordancce with (b) ab bove; and Each successful Bidder sh hall be allotted d a minimum of 100 Equity y Shares.

t a Bidder iss a number th hat is more th han 100 but iss not a multip ple of (e) If the proportionatte Allotment to one (w which is the market m lot), th he decimal would w be roun nded off to th he higher who ole number iff that decim mal is 0.5 or higher. h If thaat number is i lower thaan 0.5, it wo ould be rou unded off to the lowerr whole num mber. Allotm ment to all Bid dders in such h categories would w be arriived at after such round ding off. (f) If thee Equity Sha ares allocated on a prop portionate basis b to any category aree more than n the Equity y Shares Allotted to the Bidders in that category y, the remain ning Equity Shares availlable for Allotment A sha all be first ad djusted again nst any other category, wh here the Allottted shares aree not 273

Scotts Ga arments Limiited sufficient for propo ortionate Allo otment to thee successful Bidders B in that category. Th he balance Eq quity Sharees, if any, rem maining after such adjustm ment will be added to thee category com mprising Bid dders apply ying for minim mum numberr of Equity Shares. Illustration n of Allotmen nt to QIBs and d Mutual Fun nds (“MF”) (IInvestors shou uld note that thhis example is solely s for illustrativve purposes and is not specifiic to the Offer) A. Issue Deetails Sr. No. 1. 2. 3. 4.

Particulars

Issu ue details

IIssue size 200 million equity e shares A Allocation to QIB* 100 million equity e shares A Anchor Invesstor Portion 30 million n equity sharres P Portion availa able to QIBs other o than An nchor 70 million n equity sharres I Investors [(2) minus (3)] O which: Of a Allocation to MF (5%) a. 3.50 millio on equity shaares b Balance forr all QIBs inclluding MFs b. 66.50 milliion equity shaares 5. N of QIB ap No. pplicants 10 6. N of shares applied for No. 500 millio on equity sharres * Wheree 50% of the isssue size is reequired to be allotted to QIIBs. B. Detailss of QIB Bidss Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Type of QIB B bidders #

No. of shares bid for (in million) m

A11 50 A22 20 A33 130 A44 50 A55 50 MF F1 40 MF F2 40 MF F3 80 MF F4 20 MF F5 20 Tottal 500 # A1-A55: (QIB bidderss other than MFs), M MF1-MF F5 (QIB bidderss which are Mu utual Funds)

274

Scotts Ga arments Limiited C. Detailss of Allotmen nt to QIB Bid dders/ Applicaants Typee of QIB bidderrs

(I) A1 A2 A3 A4 A5 MF 1 MF 2 MF 3 MF 4 MF 5

Shares S bid b for

Alloccation of 35 m million Equity Shares to MF F proportionately (pllease see notee 2 below)

(II)

(III))

(Numberr of equity shaares in million n) Allocattion of A Aggregate balancce 665 allocation to million Equity MFs Shares to QIBs proportio onately (please see note 4 below) b (IV)

50 20 130 50 50 40 40 80 20 20 500

0 0 0 0 0 0.770 0.770 1.440 0.335 0.335 3 3.5

(V V) 6.65 2.66 17.29 6.65 6.65 5.32 5.32 10.64 2.66 2.66 66.5

0 0 0 0 0 6.022 6.022 12.044 3.011 3.011 30.011

Please note: 1. 2.

3.

4.

The illustration presumes co ompliance with w the requ uirements sp pecified in th his Red Herrring Prospectus in “Isssue Structure”” beginning on o page 233. Out of 70 millio on equity shaares allocated d to QIBs, 3.5 3 million (ii.e. 5%) will be allocated d on prop portionate bassis among fiv ve Mutual Fun nd applicantss who applied d for 200 milllion equity sh hares in QIIB category. The balance 70 million equiity shares (i.e. 100 - 5 (available ( forr MFs)) will be allocated d on prop portionate bassis among 10 QIB applican nts who appliied for 500 million m equity shares (inclu uding five MF M applicantts who applieed for 200 milllion equity sh hares). The figures f in thee fourth colum mn entitled arre arrived as under: u ƒ

For QIBs otther than Muttual Funds (A A1 to A5) = No. of equity shares bid for (i.e. in colum mn II) X 66.5 / 496 6.5

ƒ

For Mutuall Funds (MF1 to MF5) = [(N No. of shares bid for (i.e. in n column II of o the table ab bove) less equity shares s allotteed ( i.e., colum mn III of the taable above)] X 66.5 / 496.5

ƒ

The numera ator and deno ominator for arriving at alllocation of 666.5 million eq quity shares to o the 10 QIBs aree reduced by 3.5 3 million eq quity shares, which w have already been allotted a to Mu utual Funds in th he manner speecified in colu umn III of the table above.

A or Refund R Ordeers or instructtions to the SCSBs S Letters of Allotment Bidders resiiding at the centres c wheree clearing ho ouses are man naged by the RBI will gett refunds thro ough NECS only,, except wherre the Bidder is otherwise disclosed as eligible e to gett refunds thro ough direct crredit and RTGS. Our O Compan ny shall ensurre dispatch off refund orderrs, if any, by registered or speed post at a the sole or first Bidder’s solee risk within 10 Working Days D of the Bid B Closing Date. D Bidders to whom refu unds 275

Scotts Ga arments Limiited are made th hrough electro onic transfer of funds willl be sent a lettter through ordinary o postt, intimating them t of the modee of credit of refund r within n 10 Working Days of the Bid B Closing Date. D In case of ASBA A Bidders, the Registraar to the Issuee shall instrucct the relevantt SCSB to unb block the fund ds in the relevantt ASBA Acco ount to the ex xtent of the Biid Amount sp pecified in th he Bid cum Application A Fo orms for withdrawn, rejected or unsuccesssful or partiallly successfull ASBA Bids within w eight Working Day ys of the Bid Clossing Date.. U Agreement and Filing witth Registrar of Companies (ROC) Signing of Underwriting (a) We, th he BRLM, Co o-BRLM and the Syndicatee Members sh hall enter into o an Underw writing Agreem ment on fin nalization of th he Issue Pricee and allocatio on/ Allotmen nt to the Bidd ders. (b) After signing the Underwriting g Agreementt, we would update and file the updaated Red Herrring Prosp pectus with ROC R in accorrdance with the applicab ble law,, whiich then wou uld be termeed as ‘Prosp pectus’. The Prospectus would have details of the t Issue Prrice, Issue size, underwriting arrang gements and would be com mplete in all material m respeects. Filing of thee Prospectus with w the Regiistrar of Com mpanies We will filee a copy of th he Prospectuss with the Reegistrar of Co ompanies in terms t of Sectiion 56, Sectio on 60 and Section n 60B of the Co ompanies Actt. AKINGS BY THE T COMPA ANY UNDERTA Our Comp pany underta akes that: • •

• •

• • • • •

The complaints c reeceived in reespect of thee captioned Public Issue shall be atttended to by y the Comp pany expeditiiously and sattisfactorily All steps for comp pletion of the necessary forrmalities for listing l and co ommencemen nt of trading at a all stock exchanges where w the secu urities are to be b listed are taken t within twelve workiing days from m the closurre of the issuee The fu unds required d for making refund to unssuccessful applicants as peer the modes disclosed shaall be madee available to the t Registrar to the caption ned Public Isssue. Wherre refunds aree made throug gh electronic transfer of fu unds, a suitablle communicaation shall be sent to thee applicant wiithin 12 days of closure off the issue, giv ving details of o the bank where w refund shall be creedited along with w amount and expected d date of electronic credit of o refund. The ceertificates of the shares/ refund orderss to the Non-R Resident Indians shall be dispatched d within the sp pecified time. No fu urther issue of securities sh hall be made till the sharess offered through the pro ospectus are liisted or till the application moneys arre refunded on o account of non-listing, undersubscrip u ption, etc That at a any given time t there shaall be only on ne denominatiion for the sh hares of the co ompany, That the t company shall comply y with such disclosure d and d accounting norms speciffied by the Board (SEBI) from time to o time and That the adequatee arrangemen nts under thee ASBA Proccess shall be made to colllect all Bid cum Appliication Form m and to con nsider them similar to Bid B cum App plication Form by non-A ASBA appliccations while finalizing thee basis of allo otment.

276

Scotts Ga arments Limiited UTILISATION OF ISS SUE PROCEE EDS Our Board d of Directorss certify that: (a) all mo onies receiveed out of the issue to the public shall be transferreed to a separrate bank account other than the bank k account refeerred to in su ub-section (3) of Section 73 of the Compaanies Act, 19556. (b) detaills of all monies utilised ou ut of the issuee referred to in sub-item (a) ( shall be diisclosed undeer an appro opriate separa ate head in th he balance sh heet of the Company C indiicating the pu urpose for which w such monies m had been b utilised, and (c) detaills of all unutiilised monies out of the isssue, if any, reeferred to in sub-item s (a) shall s be disclosed underr an approprriate separatee head in the balance sheet of the Com mpany indicaating the form m in which h such unutiliised monies have h been inv vested. The Comp pany shall no ot have recourse to the Issu ue proceeds until u the apprroval for trad ding of the Eq quity Shares fro om all the Stocck Exchangess where listing g is sought haas been receiv ved. The Board d of Directorss also certifiess that: •

the utilization of monies receiived under th he Employeee Reservation n shall be dissclosed undeer an appro opriate head in i the balancee sheet of thee issuer company, indicatin ng the purposse for which such moniees have been utilized and,

•

the deetails of all monies m out off the funds reeceived undeer Employee Reservation R s shall be disclosed underr a separate head h in the baalance sheet of o the issuer company, indiicating the form in which such moniees have been invested.

CTIONS ON FOREIGN OWNERSHIP O P OF INDIAN N SECURITIE ES RESTRIC Foreign in nvestment in Indian securrities is regulaated through the Industriaal Policy of th he Governmen nt of India notiified through h press notes and a press releases issued from time to time and FEM MA and circu ulars and notifiications issueed there undeer. While the policy of thee Governmen nt prescribes the t limits and d the conditions subject to which w foreign n investment can c be made in different sectors s of the Indian econo omy, FEMA reg gulates the prrecise mannerr in which succh investmen nt may be mad de. Under thee Industrial Po olicy of the Gov vernment, un nless specificaally restricted d, foreign investment is freeely permitteed in all secto ors of Indian eco onomy up to any extent and a without any a prior app provals, but th he foreign inv vestor is requ uired to follow certain prescrribed procedu ures and repo orting requireements for maaking such inv vestment. Subscripttion by NRIs// FIIs It is to bee distinctly understood th hat there is no o reservation n for Non-Ressidents, NRIss and FIIs and all Non- Ressident, NRI and a FII appliccants will bee treated on the t same bassis as other categories c forr the purpose of o allotment. As per thee RBI regulatiions, OCBs caannot particip pate in this Isssue. As per thee current regu ulations, the following f resttrictions are applicable a for investments by FIIs: No singlee FII can hold more than 100% of the posst-Issue paid-u up capital of our Company y. In respect of o an FII investting in our Equity E Sharess on behalf of its sub-acccounts, the investment i o behalf of each on 277

Scotts Ga arments Limiited subaccoun nt shall not ex xceed 10% off our total issu ued capital orr 5% of total issued i capitall of our Comp pany incase succh sub account is a foreig gn corporate or o an individ dual. The agg gregate FII ho olding should d not exceed 244% of the totall issued capitaal of our com mpany. The abovee information n is given forr the benefit of o the Bidderss. The Company and the BRLM, B Co-BR RLM are not liaable for any amendments a or modification or changees in applicab ble laws or reegulations, which w may happen after th he date of th his Red Herrring Prospecctus. Bidderss are advised to make their independent investiga ations and en nsure that thee number off Equity Sharres bid for do not exceed d the applicablee limits underr laws or regu ulations.

278

Scotts Ga arments Limiited S SECTION VII - MAIN PR ROVISIONS OF O THE ART TICLES OF ASSOCIATIO A ON “C CAPITAL AND D INCREASE E AND REDU UCTION OF CAPITAL” C

3

4

6

6A A

Authorissed Share Cap pital he Authorised d Share capitaal of the Com mpany is ` 44,000,00,000/- (R Rupees Forty Four Crores only) Th div vided into 4,4 40,00,000 (Fou ur Crore Fortty Lakh) Equ uity Shares of `10/- (Rupeees Ten only) each, wiith power to increase mod dify the said capital c and to o divide the Shares S for thee time being of o the Co ompany into several classees and attach h thereto prefeerential, deferred, qualifieed or special rights r or conditions, as a may be deetermined by or in accordance with thee Articles of Association of o the Co ompany and subject s to app plicable legisllative provisiions for the tiime being in force, and to vary, mo odify or abro ogate any such h rights, priv vileges or con nditions in such manner ass may for thee time beeing be provided for by th he Articles off Association n of the Comp pany and sub bject to appliicable leg gislative prov visions for thee time being in force. The Company sh hall be entitleed to dematerrialise itss existing sha ares, reconverrt its shares held h by the depositories d electronically y to physical form an nd/or to offerr its fresh shaares in electro onic form purrsuant to the Depositories Act, 1996 an nd the rules framed th hereunder, if any. a Th he minimum Paid-up Shaare Capital off the Compan ny shall be `5,00,000/` (R Rupees Five Lakhs L on nly). Increase of Capital by y the Compan ny and how caarried into efffect. he Company at the Generaal Meeting may, m from timee to time, inccrease the cap pital by creatiion of Th neew shares, succh increase to o be of such aggregate a am mount and to be divided in nto shares off such resspective amou unts as the reesolution shalll prescribe. Su ubject to the provisions p of the Act, any share of the original or o increased capital c shall be b issued upo on such termss and conditio ons and with h such rig ghts and privileges annexeed thereto, as the general meeting m resollving upon th he creation thereof, sh hall direct, and d if no direction be given,, as the Directors shall dettermine, and in particular,, such sh hares may be issued i with a preferential or qualified right r to divid dends, and in the distributiion of asssets of the Company, C and with, and if the act allows without, a right of voting at geeneral meeeting of the Company C in conformity with w Section 87 and 88 of th he Act. Whenever the Capiital of thee Company has h been increeased under the provision ns of this Artiicle, the Direcctors shall co omply wiith the provissions of Sectio on 97 of the Act. A Buy back k of shares: otwithstandin ng anything contained in n these articles, in accorrdance with the provisions of No Sections 77A, 77AA 7 and 777B of the Actt or any stattutory modifiication theretto and such other reg gulations and d guidelines as a may be isssued in this reegard by the relevant auth horities, the Board B of Directors ma ay, if and wh hen deem fit, buy back su uch of the Com mpany’s own n shares, stoccks or seccurities, whetther or not th hey are redeem mable, as it may m decide, su ubject to such h limits, upon n such terrms and cond ditions, and su ubject to such h approval, ass are specified d in this regarrd. ubject to Articcle 6, the fund ds of the Company shall no ot be employeed for the purrchase of or leent on Su thee security of shares of the Company an nd the Compaany shall not give, directly y or indirectly y any fin nancial assista ance whether by way of loan, guaranteee or by provission of securitty or otherwise for thee purpose off or in connection with any purchasee of or subsscription for the Shares in n the

279

Scotts Ga arments Limiited Co ompany, its Holding H Comp pany. 6B

7

he article shalll not be deem med to affect the t power of the Company y to enforce repayment of loans Th to members or to t exercise a lien l conferred d by Article 400. Further issue i of Capittal (1) e of two o years from the t formation n of the Comp pany or at any y time Where at any tiime after the expiry aftter the expiry y of one year from the allo otment of shaares in the Co ompany made for the firstt time aftter its formattion, whichev ver is earlier, it is proposeed to increasse the subscriibed capital of o the Co ompany by alllotment of fu urther shares out of the un nissued capitaal or out of th he increased share cap pital then; (a)) such furtherr shares shalll be offered to o the personss who at the date d of the offfer, are holdeers of thee equity shares of the Com mpany, in pro oportion, as nearly n as circu umstances ad dmit, to the caapital paaid up on thosse shares at th hat date. (b)) Such offer shall s be madee by a noticee specifying th he number of o shares offerred and limitting a tim me not being less than fifteeen days from m the date of offer within which w the offer, if not acceepted, wiill be deemed d to have been n declined. (c)) The aforesaiid offer shall be deemed to t include a right r exercisab ble by the peerson concern ned to ren nounce the sh hares offered d to them in favour of any y other perso on and the no otice referred to in su ub clause (b) hereof h shall co ontain a stateement of this right. PROVIIDED THAT the Directorss may deecline, withou ut assigning any reason to t allot any shares s to any y person in whose w favourr any meember may reenounce the shares s offered d to him.

(2)

(d)) After the ex xpiry of the tiime specified d in the noticee aforesaid or on receipt off earlier intim mation fro om the person to whom such s notice iss given that he h declines to o accept the shares s offered d, the Bo oard may disp pose of them in such mann ner and to su uch person(s) as they may think, in theiir sole disscretion, fit. otwithstandin ng anything contained c in preceding p sub b-clause, the further f sharess aforesaid may m be No offfered to any persons p (wheether or not th hose persons include the persons p referrred to in clau use (a) of sub-clause (1 1) hereof) in any a manner whatsoever. w i. ii.

(3)

If a specia al resolution to t that effect is i passed by the t Company y in General Meeting; M or where no o such special resolution is passed, if thee votes cast (w whether on a show s of hand ds, or on a poll, as the case may m be) in fav vour of the pro oposal contaiined in the mo otion moved in the generral meeting (in ncluding the casting c vote, if any, of the Chairman) by y members who, w being entitled so to do, vote in person, or where proxies are allowed, by prroxy, exceed the t votes, if any, a cast again nst the proposal by membeers so entitled d and voting and a the Centrral Governm ment is satisfieed, on an appllication madee by the Board d of Directorss in this behalf, that the proposal p is mo ost beneficial to the Compaany. No othing in sub--clause (1)(c) above shall be b deemed: a.. b..

To extend d the time witthin which th he offer should d be accepted d; to To authorrise any perso on to exercisee the right of renunciation r f a second time for t on the ground th hat the person n in whose fav vour the renu unciation wass first made has h declined to o 280

Scotts Ga arments Limiited

(4)

take the shares s compriised in the ren nunciation othing contaiined in this Article A shall apply a to the increase i of th he subscribed capital causeed by No thee exercise of an a option attaached to the debentures d isssued or loans raised by thee Company i. ii.

to converrt such debenttures or loanss into shares in i the Compaany; or to subscriibe for sharess in the Comp pany (whetherr such option is conferred in these Articcles or otherw wise). ROVIDED TH HAT the termss of issue of such s debenturres or the term ms of such loans include a term PR provided for su uch option and such term: a..

8

9

Either hass been approv ved by the Ceentral Govern nment before the issue of th he debenturess or the raisin ng of the loanss or is in confo ormity with Rules; R if any, made by, that Governmen nt in this behallf; and b.. In the casse of debenturres loans or other than deb bentures issueed to or loanss obtained from m Governm ment or any institution speccified by the Central C Goverrnment in this behalf, has also a been apprroved by a sp pecial resolutiion passed bu ut the Compan ny in Generall Meeting beffore the issue of the debenttures or raisin ng of the loanss. Redeemaable Preferen nce shares. ubject to the provisions of o Sections 80, 8 85 and otther applicab ble provision ns of the Actt, the Su Co ompany shalll have power to issue Prefeerence Sharess which are or at the optio on of the Com mpany aree liable to bee redeemed and a the resolu ution authoriising such isssue shall presscribe the maanner, terrms and cond ditions of redeemption thereeof. Provision ns to apply on n issue of Red deemable Preeference Sharees. n the issue of o Redeemab ble Preferencee Shares und der the proviisions of Artticle 8 hereoff, the On folllowing proviisions shall taake effect: a..

10

no such shares shall bee redeemed ex xcept out of the t profits of the t Company y which would d or out of thee proceeds of a fresh issue of o shares mad de for otherwisee be availablee for dividend the purpo ose of the redeemption; b.. no such shares shall bee redeemed unless u they aree fully paid; the premiium, if any, payable c. p on red demption mu ust have been provided for out of the profits of the Com mpany or thee Company's Share S Premiu um Account before b the shaares are redeem med; ny such sharess are redeemeed otherwise than out of th he proceeds of o a fresh issuee, d. Where an there shalll out of profiits which wou uld otherwisee have been av vailable for diividend, be transferreed to a reservee fund to be called c the “Caapital Redemp ption Reservee Account” a sum equal to the t nominal amount a of thee shares redeeemed and the provisions off the Act relatting to reductiion of the shaare capital of the t company shall, except as provided in i Section 80 of the Act, apply a as if thee Capital Redeemption Reseerve Account were paid-up p share capitaal of the Comp pany. Reductio on of Capital. he Company may m (subject to the provissions of Sectio ons 78,80,100 to 105 of thee Act) from tim me to Th tim me by Special Resolution, reduce its caapital and an ny Capital Reedemption Reeserve Accou unt or Sh hare Premium m Account in any mannerr for the timee being autho orised by law w by followin ng the procedure prescribed by thee Act.

281

Scotts Ga arments Limiited

11

12

13

Sub-diviision consolid dation and can ncellation of shares. s ubject to the provisions p of Section S 94 of the t Act, the Company C in general g meetin ng may, from m time Su to time, sub-div vide or consollidate its sharres, or any of them, and th he resolution whereby w any share is subdivided, may determ mine that, as between b the holders of the t shares resulting from such ub-division, one o or more of such sharres shall havee some prefeerence or speecial advantaage as su reg gards dividen nd, capital orr otherwise over o or as com mpared with the other or others. Subjeect as afo oresaid the Company C in general g meetin ng may also cancel sharess which have not been tak ken or ag greed to be taken by any person p and diiminish the amount of its share capitall by the amou unt of thee shares so ca ancelled. Modificaation of rightss. d into Whenever the capital, by reeason of the issue of Prefference Sharees or otherwisse, is divided o each class may m subject to t the claasses of sharees all or any of the rights and privilegees attached to provisions of Sections S 106 and a 107 of the Act be mod dified, comm muted, affected d or abrogateed, or deealt with by Agreement A beetween the Co ompany and any person purporting p to contract on behalf b of that class, prrovided such agreement iss ratified in writing w by holders of atleaast three-fourtths in no ominal value of o the issued shares of thee class or is co onfirmed by a Special Reso olution passed d at a sep parate genera al meeting of the holders of o shares of th he class. t provision ns of Section n 76 of the Act, A the Com mpany may at a any time pay p a (a)) Subject to the commission to any person in i consideratiion of his sub bscribing or agreeing a to subscribe s (wh hether bsolutely or conditionally) c ) for any shaares in or deb bentures of th he Company y, or procurin ng, or ab ag greeing to prrocure, subsccriptions (wh hether absolu ute or cond ditional) for any shares in or deebentures of th he Company,, but so that the t commissio on shall not exceed, e in the case of sharees five peer cent of the price p at which h the shares are a issued, an nd in the case of debenturees two and haalf per cen nt of the pricee at which thee debentures are issued. (b)) The Compan ny may pay such s sum for brokerage b as may be lawfu ul and reason nable. Issue of Sweat S Equity y Shares:

14

ompany shalll subject to an nd in accordaance with thee provisions of o section 79A A of the Act, shall Co haave the powerr, by a Speciall Resolution passed p at a General Meetin ng to issue Sw weat Equity Shares S to the Directorrs, Employees of either of o the Compaany or of an ny of its subssidiary or ho olding Co ompany. SH HARES AND SHARE S CERT TIFICATE 15 he Company shall cause to t be kept a Register and d Index of Members M in acccordance wiith all Th ap pplicable prov visions of thee Companies Act, 1956 and d the Deposiitories Act, 19996 with detaails of sh hares held in physical and d dematerialissed forms in any medium m as may be permitted by y law inccluding in an ny from of eleectronic mediium. The Com mpany shall be b entitled to o keep in any State or Country outsside India a branch b Registeer of Memberrs Resident in n that State or Country. Shares to o be numbereed progressiveely and no sh hare to be subdivided. 16 he shares in n the capitaal shall be numbered progressively p y according to their seeveral Th deenominations,, provided ho owever, that the t provision n relating to progressive nu umbering shaall not ap pply to the sh hares of the co ompany whicch are demateerialised or may m be dematterialised in future f or issued in fu uture in dematerialised fo orm. Except in i the manneer herein before mentioneed no sh hare shall be sub-divided.. Every forfeeited or surreendered sharre held in material m form shall

282

Scotts Ga arments Limiited continue to bea ar the numberr by which thee same was orriginally distiinguished. Shares att the Disposal of the Directors. 17

18

19

20

21

ubject to the provision p of Section S 81 of the t Act and th hese Articles,, the shares in n the capital of o the Su Co ompany for th he time being g shall be un nder the contrrol of the Dirrectors who may m issue, allot or oth herwise dispo ose of the sam me or any off them to succh persons, in n such propo ortion and on n such terrms and cond ditions and either e at a preemium or at par or (subjeect to the com mpliance witth the provisions of Seection 79 of the t Act) at a discount d and at such time as they may from time to o time thiink fit and with w the sanctiion of the Co ompany in th he General Meeeting to givee to any persson or peersons the opttion or right to call for an ny shares either at par or premium p durring such timee and forr such consid deration as th he Directors th hink fit, and may issue an nd allot sharees in the capiital of thee company on n payment in n full or part of any propeerty sold and transferred or o for any serrvices ren ndered to thee Company in n the conductt of its busineess and any sh hares which may m so be alllotted maay be issued as fully paid d up shares an nd if so issueed, shall be deemed d to be fully paid sh hares. Provided that option o or righ ht to call of sh hares shall no ot be given to any person or o persons wiithout y in the General Meeting. thee sanction of the company Powers of o Company to t issue sharees in General Meeting. M a without derogating frrom the poweers for that purpose p confeerred on the Board B In addition to and by y these Articlees, the Compaany in Generaal Meeting may, m subject to o the provisio ons of Section n 81 of thee Act, determ mine that an ny shares (w whether formiing part of the t original capital or off any inccreased capittal of the Com mpany) shall be offered to o such person n (whether members m or not) n in su uch proportion and on succh terms and d conditions and either (ssubject to com mpliance witth the provisions of Seection 78 and 79 of the Actt) at a premiu um or at par or o at a discoun nt, as such Geeneral d and d with full power to give any person (whether ( a member m or no ot) the Meeeting shall determine op ption to call fo or or be allottted shares off any class of the Compan ny either (sub bject to complliance wiith the provissions of Sectio ons 78 and 799 of the Act) at a a premium or at par or at a discountt such op ption being exercisable at such time and a for such consideration n as may bee directed by such Geeneral Meetin ng or the Com mpany in Gen neral Meeting g may make any a other pro ovision whatsoever forr the issue, alllotment or disposal of any y shares. Acceptan nce of shares.. ny application n signed by or o on behalf of o an applican nt for share in n the Compan ny, followed by b an An alllotment of an ny share therrein, shall bee an acceptan nce of sharess within the meaning of these Arrticles, and ev very person who w pays or otherwise o acccepts any shares and whosse name is en ntered in the Register of o Members shall s for the purpose p of theese Articles, be b a Member. Deposit and call etc. to t be a debt payable immediately. he money, if any, a which the Board shalll, on the allotm ment of any shares s being made m by it, reequire Th or direct to be paid p by way of deposit caall or otherwiise in respect of any sharees so allotted,, shall im mmediately on n the insertion n of the namee of the allotteee in the Regiister of Memb bers as the nam me of thee holder of su uch shares, beecome a debt due to and reecoverable by y the Compan ny from the allottee theereof, and sha all be paid by y him accordin ngly. Liability y of Members.. very member,, or his heirs, executors or administrato ors, shall pay to the Comp pany the portiion of Ev cap pital represen nted by his sh hare or sharees which may y, for the timee being remaiin unpaid theereon, in such amountts, at such tim me or times, and a in such manner m as thee Board shall, from time to o time 283

Scotts Ga arments Limiited

22

23

in accordance with w the Comp pany's regulaations, requiree or fix for thee payment theereof. Limitatio on of Time for Issue of Cerrtificates a Every Mem a. mber shall be entitled, with hout payment, to one or more m certificatees in marketaable lots, for alll the Shares of each class of denominatiion registered d in his name,, or if the direectors so approveed (upon pay ying such fee as a the Directo ors may from time to time determined) to several cerrtificates, each h for one or more m of such shares s and thee company sh hall complete and keep ready y for delivery y such certificaates within th hree months from f the date of allotment,, unless the conditions off issue thereof otherwise provide, p or wiithin one mon nth of the receeipt of applicattion of registrration of transsfer, transmission, sub-div vision, consoliidation or ren newal of any of itt shares as thee case may bee. Every certifficate of sharees shall be und der the seal of o the company and a shall speccify the numb ber and distin nctive numberrs of shares in n respect of which w it is issued d and amountt paid-up therreon and shall be in such fo orm as the dirrectors may prescribe or approve, provided p thatt in respect of a share or sh hares held join ntly by severaal hall not be bou und to issue more m than on ne certificate and a delivery of o a person, thee company sh certificate of shares to one o of several joint holderss shall be suffiicient delivery y vis-à-vis alll such holders. b Any two or b. o more joint allottees a of a share s shall, fo or the purpose of this Articcle, be treated d as a single mem mber, and thee certificate off any share, which w may be the subject off joint ownersship may be delivered to any yone of such joint j owners on behalf of all a of them. c A Directorr may sign a share c. s certificaate by affixing g his signaturee thereon by means m of any y machine, equipment e or other mechanical means, such as engraaving in metaal or lithograp phy; but not by means of a ru ubber stamp provided thaat the Directorr shall be resp ponsible for th he safe custod dy of such maachine, equipment or otherr material useed for the purrpose. Issue of New N Certifica ate in place off One Defaced d, Lost or Desstroyed w out, defaaced, mutilateed or torn or if there be no o further spaace on If any share cerrtificate be worn of for endorseement of tran nsfer, then up pon productio on and surren nder thereof to t the thee back thereo Co ompany, a neew certificatees may be isssued in lieu, thereof, If any a Share Cerrtificates is lo ost or deestroyed then n upon proof thereof to th he satisfaction n of the comp pany and on execution off such ind demnity as th he company deems d adequaate, being giv ven, a new Ceertificate in lieeu thereof sh hall be giv ven to the party p entitled to such lostt or destroyeed certificate. Every Certtificates undeer the Arrticles shall bee issued with hout paymentt of fees if thee Directors so o decide, or on n payment off such feees (not exceed ding `2/- for each certificaate) as the Diirectors shall prescribe. Provided that no n fee sh hall be chargeed for issue of o new certificates in replaacement of th hose which are a old, defacced or wo orn out or wh here there is no n further spaace on the bacck thereof for endorsementt of transfer. Provided that the t Directorss shall comply with such rules or regu ulation or req quirements of o any Sto ock Exchangee or the Rulees made under the Act orr the rules made m under Securities S con ntracts (R Regulation )Acct,1956 or any y other Act, orr rules applicable in this beehalf.

24

Th he provisions of this Articcle shall muttatis mutandiis apply to th he debenture certificates of o the Co ompany. Power off Board of Dirrectors to Reg gulate sub-div vision or conssolidation. otwithstandin ng anything contained in n Article 23, the Board of o Directors or o any comm mittee No theereof shall bee entitled to refuse r any ap pplication for sub-division or consolidaation of sharess into deenominations of less than ten except when w such sub b-division or consolidation n is required to be 284

Scotts Ga arments Limiited maade to comply y with a statu utory order or o an order orr a decree of a Competent Court of Law w or a req quest from a member to convert c his ho olding of odd d lots of sharees into transfeerable/markeetable lotts, subject, ho owever, to neccessary verificcation by the Company. The first named of joiint-holders deeemed sole ho older. 25 a share sta ands in the naames of two or o more perso ons, the perso on first named d in the Regisster of If any Meembers shall,, as regards reeceipts of div vidends or bon nus or servicee of notices an nd all or any other maatter connecteed with the Company, C exccept voting att meetings, an nd the transfeer of the shares, be deeemed the solle holder therreof but the other o joint-holders of a shaare shall be seeverally as well w as joiintly liable fo or the paymeent of all insstalments and d calls due in i respect of share and fo or all inccidents thereo of according to t the Compaany's regulatio ons. Compan ny not bound to recognise any a interest in n share other than that of registered r hollder. 26 xcept as orderred by a Courrt of competeent jurisdictio on or as by law w required, the t Company y shall Ex bee entitled to trreat the perso on whose nam me appears on o the Registeer of Memberrs as the hold der of an ny share or whose w namee appears as the beneficiial owner of shares in th he records of o the Deepository, as the absolute owner thereof and accord dingly shall not n be bound d to recognisee any beenami trust, eq quity, equitab ble, contingen nt or other claaim to or interrest in such sh hare on the part p of an ny other perso on whether orr not it shall have h express or o implied no otice thereof. The T Board sh hall be en ntitled at theiir sole discreetion to regisster any shares in the join nt names of any two or more peersons or the survivor s or su urvivors of th hem. Provision n for Employ yees' Stock Op ption 27 he provisionss of section 811(1A) and other applicable provisions, iff any, of the a.. Subject to th Companies Act, 1956, an nd subject to the t Articles off Association,, the Board may, m from timee to t benefit of the Company y's employeess including th he time, createe, offer and isssue to or for the Executive Chairman, C Vicce-Chairman, the Managin ng Directors and a the Wholee time Directo ors such numbeer of equity sh hares of the Company, C in one o or more trenches t on su uch terms as may m be determin ned by the Bo oard prior to the t issue and offer, in conssultation with h the authoritiies concerned and a in accord dance with succh guideliness or other prov visions of law w as may be prevalent att that time bu ut ranking parri passu with the existing equity e shares of the Company. b.. The issue price of such shares shall bee determined by the Board d in accordancce with the law ws prevalent att the time of the t issue. c. In the altern native to equiity shares, meentioned hereeinabove, the Board may allso issue bond ds, equity warrrants or otherr securities as may be perm mitted in law, from time to time. All such h issues as ab bove are to be made in pursuance of Em mployees' Stocck Option (ES SOP) scheme to t be drawn up and a approved d by the Board d. IN NTEREST OUT T OF CAPITA AL Interest may m be paid out o of capital. 28 Where any sha ares are issueed for the pu urpose of raiising money to defray th he expenses of o the construction off any work or o building, or the proviision of any plant which h cannot be made m profitable for a lengthy perio od, the Comp pany may pay y interest on so s much of th hat share capiital as is for the timee being paid--up, for the period, at th he rate and subject to th he conditionss and resstrictions pro ovided by Secction 208 of th he Act and may m charge th he same to cap pital as part of o the cost of construcction for the work w of buildiing, or the provision of plaant. CA ALLS Directorss may make calls. c 285

Scotts Ga arments Limiited 29

30

31

32 33 34

he Board may y, from time to o time, subjecct to the termss on which an ny shares may y have been isssued Th an nd subject to the condition ns of allotmeent by a resollution passed d at a meetin ng of the Boaard in resspect of all moneys m unpaid d on the sharres held by th hem respectively and each member shalll pay thee amount of every call so o made on him m to the persson or person ns and at thee times and places p ap ppointed by th he Board. A call may be maade payable by b instalmentts. Notice of calls. Fiffteen day's no otice in writin ng of any calll be given by the Company y specifying the t time and place of payment and d the person or o persons to whom such call c shall be paid. Calls to date d from ressolution. A call shall be deemed d to haave been mad de at the time when the ressolution autho orising such call c is paassed at a meeeting of the Bo oard. Call may y be revoked or postponed d A call may be reevoked or po ostponed at th he discretion of o the Board. Joint-hollders, jointly and a severally y liable to pay y calls Th he joint-holdeers of a share shall s be jointlly and severallly liable to pay all calls in respect thereeof. Power off Board to exttend time for payment of calls. c Th he Board may y, from time to t time at its discretion, ex xtend the tim me fixed for th he payment of o any callls under Artiicle 29. Calls to carry c interestt.

35

If any member fails to pay any a call due from him on n the day app pointed for paayment thereeof, or an ny such extenssion thereof as a aforesaid, he h shall be liaable to pay intterest on the same s from th he day ap ppointed for the t payment thereof to tim me of actual payment at such s rate as shall, s from tim me to tim me, be fixed by b the Board not exceedin ng 9 per cent per annum but b nothing in n this Articlee shall ren nder it obliga atory for the Board B to demaand or recoveer any interest from any su uch member. Partial payment p not to o preclude fo orfeiture.

38

Neeither receipt by the Comp pany of a porrtion of any money m which shall from time to time bee due fro om any memb ber to the Co ompany in resspect of his shares, s either by way of prrincipal or in nterest no or any indulgence granted by the Comp pany in respeect of the pay yment of any such money,, shall preclude the Company C fro om thereafterr proceeding to enforce a forfeiture of o such sharres as heereinafter prov vided.

LIE EN Compan ny to have lien n on shares. Th he Company shall have a first and parramount lien upon all thee share/Deben ntures (otherr than fullly paid-up shares/deben s ntures) registtered in the name of succh member (w whether soleely or joiintly) with otthers) and up pon the proceeeds of sale thereof for all a moneys (w whether pressently paayable or not) called or payable at a fixed f time in respect of su uch shares/d debentures an nd no eq quitable intereest in any shaares shall be created c except on the cond dition that thiis Article willl have fulll affect. Such h lien shall extend e to all dividends and a bonuses from time to o time declarred in resspect of such h shares/deb benture. Unleess otherwise agreed thee registration n of a transffer of sh hares/debentu ures shall operate o as a waiver off the Comp pany’s lien if any, on such sh hares/debentu ures. The Dirrectors may at a any time declare d any sh hares/debenttures wholly or in paart to be exem mpt from the provision p of th he clause. FO ORFEITURE OF O SHARES 39

286

Scotts Ga arments Limiited

42

44

If money y payable on share s not paid d notice to bee given to mem mbers a call or in nstalment of a call on or beefore the day y appointed fo or the If any member fails to pay any paayment of thee same or an ny such exten nsion thereoff as aforesaid d, the Board may at any y time theereafter, during such time as the call orr instalment remains r unpaaid, give noticce to him requ uiring him m to pay the same togetheer with any in nterest that may m have accru ued by the Co ompany by reeason of such non-pay yment. In default of paymentt, shares to bee forfeited. If the t requirements of any su uch notice as aforesaid shaall not be com mplied with, every e or any share in respect of wh hich such nottice has been given, may at a time thereaafter before payment of alll calls or instalments, interest and d expenses du ue in respect thereof, be forfeited f by a resolution of o the Bo oard to that effect. e Such forfeiture f shaall include alll dividends declared or any a other mo oneys paayable in resp pect of the forffeited share and a not actuallly paid beforre the forfeitu ure. Memberr still liable to pay money owing o at the time t of forfeitture and interrest.

47

An ny member whose w shares have been fo orfeited shall not withstan nding the forffeiture, be liab ble to paay and shall forthwith paay to the Co ompany on demand d all calls, c instalm ments, interestt and expenses owing upon or in n respect of such s shares at a the time of o the forfeitu ure, together with intterest thereon n from the tiime of the fo orfeiture untill payment, att such rate not n exceeding g nine peercent per ann num as the Bo oard may dettermine and the t Board maay enforce thee payment theereof, if it i thinks fit. Effect of forfeiture

48

Th he forfeiture of o a share shaall involve exttinction at thee time of the forfeiture, off all interest in n and alll claims and demands against the Company, C in respect of the t share and d all other rights r inccidental to thee share, excep pt only such of o those rightss as by these articles a are ex xpressly saved d. Cancellaation of share certificates in n respect of fo orfeited sharees.

51

Up pon any sale, re-allotmentt or other disp posal under the t provision ns of the preceeding Articlees, the cerrtificate of sh hares originallly issued in reespect of the relative r sharee shall (unlesss the same shaall on deemand by the Company haave been prev viously surren ndered to it by y the defaultiing member) stand can ncelled and become b null and a void and of no effect, and the Direcctors shall bee entitled to isssue a du uplicate certifficate or certifficates in resp pect of the saaid shares to the person or o persons en ntitled theereto. Po ower to annull forfeiture

52

Th he Board may y at any tim me before any y share so forfeited shall have been sold, s re-allotteed or oth herwise dispo osed off, annu ul the forfeitu ure thereof up pon such cond ditions as it th hinks fit. TR RANSFER AN ND TRANSMIISSION OF SH HARES

53

54

Transferr or transmission of shares In the case of trransfer or tran nsmission of shares s or otheer marketablee securities wh here the Com mpany haas not issued any certificattes and wheree such sharess or securitiess are being heeld in an electtronic an nd fungible fo orm in a Depo ository, the prrovisions of th he Depositories Act, 1996 shall s apply. Register of Transfer Th he Company shall s keep a `Register ` of Transfer' T and therein shall be fairly and d distinctly en ntered paarticulars of ev very transfer or transmissiion of any shaare held in maaterial form. Instrumeent of transferr 287

Scotts Ga arments Limiited 55

Th he instrumentt of transfer shall s be in wrriting and all provisions of Section 108 of the Comp panies Acct, 1956 and statutory s mo odification theereof for the time being shall s be duly complied with in resspect of all tra ansfer of sharres and registration thereoff. Directorss may Refusee to Register Transfer T

56

ubject to the provisions p off Section 111 of the Act and a Section 22A 2 of the Seecurities Con ntracts Su (R Regulation Acct, 1956, the Directors D may y, at their ow wn absolute an nd uncontrolled discretion n and by y giving reaso on, decline to register or acknowledge any a transfer of o shares wheether fully paaid or no ot and the righ ht of refusal, shall not be affected a by th he circumstan nce that the prroposed transsferee is already a member of the Company C butt in such casess, the Directo ors shall withiin one month h from thee date on whiich the instrument of transsfer was lodgeed with the Company, C sen nd to the transsferee an nd transferor notice of the refusal to reg gister such trransfer provid ded that regisstration of traansfer sh hall not be reffused on the ground of th he transferor being b either alone or jointtly with any other peerson or perso ons indebted to the compaany or any acccount whatso oever except when w the com mpany haas a lien on the shares How wever, no tran nsfer of sharess/debenturess shall be refu used on the grround of them not bein ng held in maarketable lotss. Dematerrialisation of Securities S Co ompany to reccognise intereest in dematerialised securrities under Depositories D A Act.

58

(i) Either the Compan ny or the in nvestor may exercise e an option o to issuee, deal in, holld the securitiies (including g shares) with h a Depository in electron nic form and d the certificates in respectt thereof shall be dematerialised, in wh hich event th he rights and obligations of o the parties concerned and a matters connected therewith t or incidental thereof, t shaall be govern ned by the provisions p of the Deposito ories Act, as amended fro om time to tim me or any statutory modiffication thereto or re-enacttment thereoff. (ii) Notwitthstanding an nything contaained in thesee Articles, thee Company shall s be entitlled to demateerialise its ex xisting securitties, dematerrialise its securities held In the Depossitory and/orr offer Its fressh securities in the dematterialised form m pursuant to o the Depositories Act and d the rules fraamed thereun nder, If any. (iii) Every person sub bscribing to or holding securities of o the Compaany shall hav ve the option to receive security s certifficate or to hold h the seccurity with a Depository y, the Compa any shall Intim mate such Deepository the details of alllotment of th he security, an nd on receipt of the Inform mation, the Depository D shaall enter in itss record the name of the allottee ad the Beneficial B Ow wner of the security. (iv) All seccurities held by a Deposiitory shall bee dematerialiised and be in fungible form. Nothin ng contained in Sections 153, 153A, 187C and 3772 of the Actt shall apply y to a Depository in respecct of the secu urities held by b it on behaalf of the Beneeficial Ownerrs. nything to th he contrary contained c in n the Act or o the Articcles, a (v) Notwitthstanding an Depository shall be b deemed to o be the regiistered owneer for the pu urpose of effeecting t Beneficiall Owner. transferr of ownershiip of security on behalf of the (vi) Same as a otherwise p provided In (1) ( above, thee Depository as the registtered owner of o the securitiies shall not have h any votting rights or any other rig ghts in respecct of the secu urities 288

Scotts Ga arments Limiited held by y it. (vii) Every person holding securities of the Compaany and whosse name is en ntered as Beneeficial Owner in the records of the Depository D sh hall be deem med to be th he member of o the Compa any. The Beneeficial Owner of securities shall be entitlled to all the rights r and benefits subject to all the liab bilities in resp pect of his secu urities which h are held by a Depository. (viii) Exceptt as ordered by a court of competen nt jurisdiction or as requ uired by law w, the Compa any shall be entitled to trreat the perso on whose naame appears on the registter of membeers as holders of any shaare or where the name ap ppears as Beeneficial Own ner of shares in the record ds of the Dep pository as th he absolute owner o thereo of and accord dingly ot be bound to recognise any benami tru ust or equitab ble, contingen nt, future or partial p shall no interestt in any sharee, or (except only o as is by th hese Articles,, otherwise ex xpressly prov vided) any rig ght in respectt of a share other o than an n absolute rig ght thereto in n accordance with these Articles, A on th he part of any y other perso on whether or not it has express e or im mplied notice thereof, t but the t Board shaall be at theirr sole discretiion to registeer any share in i the joint na ames of any tw wo or more persons p or thee survivor or survivors s of them. t (ix) Every Depository D shall furnish to the Comp pany about th he transfer of o securities in i the name of o the Beneficiial Owner at such s intervalss and in such manner as may m be specified by the byee-laws and thee Company in n that behalf. (x) Upon receipt r of certtificate of secu urities of surrrender by a person p who has h entered in nto an agreem ment with thee Depository through a Participant, P th he Company shall cancel such certifica ate and substtitute in its reecords the nam me of Deposiitory as the reegistered own ner in respectt of the said seecurities and shall also info orm the Depo ository accord dingly. (xi) If a Beeneficial Own ner seeks to opt o out of a Depository in i respect off any security y, the Beneficcial Owner shall s inform the Deposito ory accordin ngly. The Deepository shaall on receipt of informatio on as above make m approp priate entries in its recordss and shall in nform the Com mpany. The Company sh hall, within th hirty (30) day ys of the recceipt of intim mation from th he Depository y and on fulfiilment of such h conditions and a on paym ment of such feees as may bee specified by y the regulattions, issue the t certificatee of securitiess to the Beneeficial Owner or the transfeeree as the case may be. (xii) Notwitthstanding an nything in thee Act or thesee Articles to th he contrary, these t securitiees are held in n a Depositorry, the record ds of the ben neficial owneership may be b served by such Depository on the Company C be means of eleectronic mode or by deliv very of floppiies or discs. (xiii) Exceptt as specificallly provided in these Artiicles, the prov visions relatin ng to joint ho olders of sharees, calls, lien on shares, forrfeiture of shares and tran nsfer and tran nsmission of shares s shall bee applicable to shares helld in Deposittory so far as they apply to shares heeld in physica al form subjecct to the provisions of the Depository D A Act. (xiv) Notwiithstanding an nything in the Act or thesee Articles, wh here securitiess are dealt wiith by a Depository, the Company shall s intimatte the detaills thereof to o the Depossitory 289

Scotts Ga arments Limiited immed diately on allotment of such h securities. (xv) The sh hares in the capital be numbered n prrogressively according a to their seeveral denominations, prov vided howev ver, that the provision p relaating to progrressive numb bering shall not n apply to the shares of o the Comp pany which are a demateriialised or maay be demateerialised in fu uture or issued d in future in n dematerialiised form. Exccept in the maanner hereinb before mentio oned, no sharre shall be su ub-divided. Every E forfeiteed or surrend dered share held h in materrial form shalll continue to o bear the nu umber by wh hich the samee was origina ally distinguisshed. (xvi) The Company C shaall cause to be b kept a Reg gister and ind dex of Membeers and a Register and ind dex of Deben nture holderrs in accordaance with Secctions 151 an nd 152 of thee Act respecttively, and th he Depositoriies Act, with h details of shares s and debentures d heeld in materia al and demateerialised form ms in any med dia as may bee permitted by law includiing in any forrm of electron nics media. The Register and a index of Beneficial Owners O maintained by a Deepository und der Section 111 of the Depo ositories Act shall s be deem med to the Register and ind dex of Members and Regisster and indeex of Debentu ure holders, as a the case maay be, for the purpose of the t Act. The Company sh hall have the power to keeep in any staate or country y outside Indiia a branch Register of Members residen nt in that statte or country.

61

(xvii) The Company C shaall keep a Register of Tran nsfer and shaall have recorrded therein fairly and disstinctly particculars of everry transfer orr transmission n of any sharre held in maaterial form. Death off one or more joint-holderss of securities. very holder off share(s) in and/or a deben nture(s) of thee Company may m at any tim me nominate in i the Ev maanner prescriibed under th he Act a persson to whom m his share(s) in and/or debenture(s) d o the of Co ompany shall vest in the ev vent of his deeath. Where the sharre(s) in and /or / debenturee of the Comp pany, are held d by more th han the one person joiintly, all the joint holderss may together nominate in the mann ner prescribed d under the Act A a peerson to whom m all the righ hts in the shaare(s) and/orr debenture(ss) of the Com mpany, as thee case maay be shall veest in the even nt of death of all the joint holders. h No otwithstandin ng anything contained c in any a other law w for the time being in forcee or in these article a or in any dispo osition, wheth her testamenttary or otherwise, in respect of such sh hare(s) in , an nd/or deebenture(s) off the Compan ny, where a no omination maade in the maanner prescrib bed under th he Act pu urports to con nfer on any person the right r to vest the share(s) in and/or debenture(s) of o the Co ompany the nominee n shalll on the death h of the shareeholder and/or debenturee holder conceerned or on the death h of all the jo oint holder, as a the case may m be, becam me entitled to t all the righ hts in rellation to such share(s) an nd/or deben nture(s) to the exclusion of o all other person p unlesss the no omination is varied v cancellled in the man nner prescribeed under thee Act. Where the nom minee is a min nor the holderr of the sharee(s) in and/orr debenture(ss) of the Comp pany, can n make a nom mination in th he manner prrescribed und der the Act to o appoint any y person to beecame en ntitled to the share(s) s in an nd/or debenttures(s) of thee Company in n the event of his death during thee minority. 290

Scotts Ga arments Limiited 62

otwithstandin ng anything contained c in these t article any a person wh ho became a nominee by virtue v No of the provision n of Article 60 6 upon the production p o such eviden of nce as may be b required by b the Bo oard and subjeect as hereinaafter provided d may elect eiither. To o be registered d himself as holder h of the share(s) s and/ /or debenturee(s) as the casee may be or To o make such transfer of th he share(s) an nd/ or deben nture(s) as the case may be b as the deceeased sh hareholder and d debenture holder h as the case may be could c have made. m If the t person beeing a nomineee so becomin ng entitled eleects to be registered as hollder of the share(s) an nd/or debenture(s) himsellf he shall deeliver or sen nd to the Com mpany, noticce in writing duly sig gned by him starting thatt he so electss and such notice n shall bee accompanieed with the death d cerrtificate of thee deceased sh hareholder an nd/or debentu ure holder, ass the case may y be.

63

64

65

Alll the limitatiion restriction n and provission of the Act A relating to o the right to o transfer an nd the reg gistration tra ansfer of sharre(s) and/or debenture (ss) shall be ap pplicable to any a such notiice or traansfer as aforresaid as if th he death of th he share hold der/debenture holder had d not occurred d and thee notice or transfer were a transfer sign ned by that shareholder s a and/or deben nture holder as a the casse may be. g nominee beecoming entittled to the sh hare(s) and/orr debenture(ss) by reason of o the A person, being areholder shaall be entitled d to the same dividend and d other advaantage to whiich he deeath of the sha wo ould be entiitled if he were w the reg gistered a member m in reespect of hiss share(s) an nd/or deebenture(s) ex xpect that he shall not, beffore being reg gistered a meember in resp pect of his share(s) or debenture(s)) be entitled in respect of it to exerciise any right conferred by y membershiip in rellation to meetting of the Co ompany. Provided that the t Board maay, at any tim me give notice requiring an ny such perso on to elect eith her to h or to transfer the share(s) and d/ or debentture(s) and iff the notice is i not bee registered himself complied with within ninety y days, the Board B may heereinafter withhold paymeent of all diviidend ounces or oth her moneys payable in respect of th he share(s) and/or a debeenture(s) untiil the bo req quirement of the notice haave been comp plied with. No transsfer to infant, etc. No o share shall in any circum mstances be trransferred to o any infant, insolvent i or person p of unssound miind. Registrattion of person ns entitled to share otherw wise than by trransfer. Su ubject to the provisions p of the t Act and Articles A 60 and 61 any persson becoming g entitled to shares s in consequencees of the death h, lunacy, ban nkruptcy or insolvency i off any memberr or by any laawful meeans other than by transfeer in accordan nce with thesee articles may y with the con nsent of the Board B (w which it shalll not be und der any oblig gation to givee), upon pro oducing such evidence th hat he su ustains the cha aracter in resspect of which h he proposes to act undeer this Articlee or of such tiitle as thee Board think ks sufficient, either e be registered himsellf as the holder of the sharres or elect to o have some person no ominated by him and app proved by thee Board regisstered as such h holder prov vided hat if such peerson shall elect e to have his nominee registered, he h shall testiffy the neevertheless, th eleection by executing in fav vour of his no ominee an insstrument of transfer t in acccordance witth the provisions hereein contained and until he does so, he sh hall not be freeed from any liability in reespect of the shares. 291

Scotts Ga arments Limiited Persons entitled may receive divid dend. 66

A person entitlled to a sharee by transmisssion shall, su ubject to the right of the Directors D to retain r su uch dividendss or money as a hereinafter provided, be b entitled to o receive and d may be giv ven a disscharge for, any a dividendss or other mon neys payable in respect of the share. No Fee on o transfer or transmission n.

67

No o fee shall bee charged forr registration of transfer, transmission, t Probate, Succcession certiificate an nd Letters of administration a n, Certificate of Death or Marriage, M Pow wer of Attorney or similar other do ocument with h the Compan ny. BO ORROWING POWERS P Powers to t borrow 70 Su ubject to the provision p of Seection 292 of the Act the Board may, fro om time to tim me at its discrretion by y a resolution passed at a meeting m of th he Board accep pt deposits frrom memberss either in adv vance of calls or otherrwise and gen nerally raise or borrow orr secure the payment p of an ny sum or sum ms of mo oney for the purpose of th he Company y. Provided however, wheere the money ys to be borrowed tog gether with the moneys already borrrowed (apartt from temporary loan obtained o from m the Co ompany's ban nkers in the orrdinary coursse of businesss) exceed the aggregate a of the t paid up caapital of the Compan ny and its freee reserves (not being reseerves set aparrt for any speecific purposee) the Bo oard shall not borrow such h moneys with hout the consent of the Com mpany in Gen neral Meeting g. Paymentt or repaymen nt of moneys borrowed. 71

Th he payment orr repayment of moneys bo orrowed as afforesaid may be secured in n such manneer and up pon such terms and conditions in alll respects ass the Ordinaary Resolutio on shall presscribe inccluding by th he issue of deb bentures or debenture-stoc d ck of the Com mpany, chargeed upon all or o any paart of the prop perty of the Company C (bo oth present an nd future), in ncluding its uncalled u capittal for thee time being and a debenturres, debenturee-stock and otther securities may be mad de assignablee from an ny equities bettween the Co ompany and th he person to whom w the sam me may be issued. Terms off issue of Deb bentures.

72

ny debenturee, debenture-stock or otheer securities may be issu ued at a disco ount, premiu um or An oth herwise and may be issu ued on condition that theey shall be convertible c in nto shares off any deenomination, and with an ny privileges and conditions as to redemption, su urrender, draawing alllotment of shares and atten nding (but no ot voting) at General G Meettings, appoin ntment of Direectors an nd otherwise. Debentures with w the rightt to conversio on into or allo otment of shaares shall be isssued on nly with the co onsent of the Company in General Meeeting accorded d by a Speciall Resolution. Register of Mortgagess, etc. to be keept. Th he Board shalll cause a pro oper Register to be kept in n accordance with the pro ovisions of Seection 143 of the Act of o all mortgaages, debenturres and charg ges specifically affecting th he property of o the Co ompany; and shall cause th he requiremeents of Section ns 118, 125 an nd 127 to 144 (both inclusiv ve) of thee act in that behalf to be duly compliied with, so far f as they faall to be com mplied with by b the Bo oard. Register and Index off Debenture-h holders.

73

74

Th he Company y shall, if att any time it issues deebentures, keeep a Registter and Indeex of Deebenture-hold ders in accord dance with Seection 152 of the t Act. The Company C shaall have the power p to keep in any state or coun ntry outside India I a brancch Register off Debenture-h holders resideent in thaat State or Co ountry. 292

Scotts Ga arments Limiited SH HARE WARRA ANTS 75

76

Power to o issue share warrants. w Th he Company may issue share s warrantts subject to and in acco ordance with the provisio ons of Sections 114 an nd 115; and accordingly th he Board may y in its discreetion, with respect to any share wh hich is fully paid p upon ap pplication in writing w signed by the perssons registereed as holder of o the sh hare and autheenticated by such evidencce (if any) as the t Board maay, from time to time requ uire as to the identity of o the person signing the application, a a on receiviing the certifiicate (if any) of and o the sh hare, and the amount a of thee stamp duty on the warraant and such fee f as the Boaard may from m time to time require,, issue a sharee warrant. Deposit of share warrrant he bearer of a share warran nt may at any y time depossit the warran nt at the officee of the Comp pany, Th an nd so long ass the warran nt remains so o deposited, the t depositorr shall have the same rig ght of sig gning a requiisition for caalling a meetiing of the Co ompany, and d of attending g, and voting g and exercising the other o privileg ges of a memb ber at any meeeting held aftter the expiry y of two clearr days fro om the time of o deposit, as if his name were w inserted in the Registter of Membeers as the hold der of thee share includ ded in the dep posited warraant. No ot more than one person sh hall be recogn nised as depo ositor of the sh hare warrant..

77

Th he Company shall, on tw wo days' writtten notice, return r the deeposited sharre warrant to the deepositor. Privilegees and disabillities of the ho olders of sharre warrant. ubject as hereein otherwise expressly prrovided, no persons p shall, as bearer of a share warrant, Su sig gn a requisitiion for calling g a meeting of o the Compaany or attend d or vote or exercise e any other privileges of a member m at a meeting m of th he Company, or o be entitled d to receive an ny notices from m the ompany. Co

Th he bearer of a share warrrant shall be entitled in all other respeect to the sam me privilegess and ad dvantages as if i he were nam med in the Reegister of Members as the holder of thee share includ ded in thee warrant, an nd he shall be a member of the Company y. Issue of new n share wa arrant or coup pon. 78 he Board may y, from time to o time, make rules as to th he terms on which w (if it shaall think fit) a new Th sh hare warrant or coupon may m be issueed by way of o renewal in n case of deefacement, lo oss or deestruction. ME EETINGS OF MEMBERS Annual General G Meetting—Annuall Return. 81

he Company shall in each year hold a General Meeting M as itts Annual Geeneral Meetin ng in Th ad ddition to any y other meetiings in that year. y All Gen neral Meeting gs, other than n Annual Geeneral Meeetings shall be called “E Extraordinary y General Meeetings”. The first Annuall General Meeeting sh hall be held within w six mon nths after thee expiry of the financial yeear in which the Company y was esttablished and d thereafter an a Annual Geeneral Meetin ng of the Com mpany shall be b held within six mo onths after th he expiry of each e financial year provid ded that not more m than fiffteen months shall lap pse between the t date of on ne Annual Geeneral Meetin ng and that off the next. No othing contain ned in 293

Scotts Ga arments Limiited

82

86

thee foregoing provisions p shaall be taken as a affecting th he right confeerred upon th he Registrar under u thee provisions of Section 1666(1) of the Act A to extend the time with hin which an ny Annual Geeneral Meeeting may be b held. Every y Annual Gen neral Meeting g shall be callled for a tim me during bussiness ho ours, on a day y that is not a public holid day, and shalll be held at th he Office of the t Company y or at some other place within thee city in whicch the office of o the Compaany is situate as the Board d may deetermine and the Notices calling the Meeeting shall sp pecify it as thee Annual Gen neral Meeting g. The Co ompany may in any one Annual A Generaal Meeting fix x the time for its subsequen nt Annual Geeneral Meeetings. Every y member of the Compan ny shall be en ntitled to atten nd either in person p or by proxy p an nd the Audito or of the Com mpany shall have h the righ ht to attend and a to be heaard at any Geeneral Meeeting which h he attends on o any part of o the businesss which conccerns him as Auditor. At every An nnual Genera al Meeting off the Compan ny, there shalll be laid on the table thee Director's Report R an nd Audited Sttatement of Accounts, A Aud ditor's Reportt (if not alread dy incorporatted in the Au udited Staatement of Accounts), A thee Proxy Reg gister with prroxies and th he Register of o Directors' share ho oldings which h latter registter shall rem main open and accessible during the continuance c o the of meeeting. The Bo oard shall cau use to be prep pared the Ann nual List of members, m Sum mmary of the Share S Caapital, Balancce Sheet and Profit and Loss L Accountt and forward d the same to t the Registrrar in acccordance with h Sections 1599, 161 and 2200 of the Act. Extraord dinary Genera al Meeting. he Board may y, whenever it i thinks fit, call c an Extra ordinary o Gen neral Meeting g and it shall do so Th up pon a requisittion in writin ng by any mem mber or mem mbers holding g in the aggreegate not lesss than on ne-tenth of su uch of the paid d up capital as a at that datte carries the right of votin ng in regard to t the maatter in respecct of which th he requisition n has been maade. Twenty one o days' nottice of meetin ng to be given. y-one days' notice n of everry General Meeeting—Annu ual or Extrao ordinary — an nd by Att least Twenty wh homsoever ca alled specifying the day, place p and hou ur of meeting g, and the gen neral nature of o the bu usiness to be transacted thereat t shall be given in the manner hereinafter provided, p to such peersons as are under u these Articles A entitlled to receive notice from the Company y. Provided th hat in thee case of an Annual A Generral Meeting with w the conseent in writing g of all the members m entitlled to vo ote thereat and in case of any a other meeeting, with th he consent of members hollding not lesss than 95 percent of su uch part of th he paid-up sh hare capital off the Compan ny as gives a right r to vote at a the meeeting, a meeeting may bee convened by b a shorter notice. In th he case of an n Annual Geeneral Meeeting, if any y business otther than (i) the considerration of the Accounts, Balance Sheetss and Reeports of thee Board of Directors D and d Auditors, (ii) the decllaration of dividend, d (iiii) the ap ppointment of Directors in n place of th hose retiring, (iv) the appointment of, and fixing of o the rem muneration of o the Audito ors is to be trransacted, an nd in the casee of any otheer meeting, in n any ev vent, there sha all be annexed d to the noticce of the Meetting a statemeent setting ou ut all materiall facts concerning each h such item of o business, in ncluding in paarticular the nature n or inteerest if any, th herein of every Directtor of the co oncern, and the t Manager,, (if any). Where W any succh item of sp pecial bu usiness relates to, or affeccts any otherr company, th he extent of shareholding g interest in other company of every Director, and the Man nager if any, of the Company shall also o be set out in i the staatement if thee extent of su uch share-hollding interestt is not less th han 20 per ceent of the paid-up sh hare capital off that other co ompany. Wheere any item of o business co onsists of acco ording of app proval to any document by the meeeting, the tim me and place where the do ocument can be inspected d shall bee specified in the t statementt aforesaid.

294

Scotts Ga arments Limiited

88

89

90

91

General Meeting not to t transact bu usiness not mentioned in th he notice. No o General Meeting, M Annu ual or Extrao ordinary, shaall be compeetent to enterr upon discu uss or traansact any bu usiness which h has not beeen mentioneed in the notice or notices upon whicch the meeeting was co onvened. Quorum m at General Meeting. M Fiv ve Members present p in perrson shall form m a quorum for f a General Meeting. If quorum m not presen nt meeting to be b dissolved or o adjourned.. o the If at the expirration of halff an hour frrom the timee appointed for holding a meeting of ompany, a qu uorum shall not n be presen nt, the Meetin ng if convened d by or upon n the requisitiion of Co Meembers, shalll stand dissollved, but in any a other casse the Meetin ng shall stand d adjourned to t the sam me day in thee next week or o if that day is i a public ho oliday until th he next succeeeding day wh hich is no ot a public ho oliday at the same time an nd place or at a such other time and plaace within the city tow wn or villagee in which th he Registered d Office of th he Company y is situated as a the Board d may deetermine, and d if at such ad djourned meeeting, a quoru um is not pressent at the ex xpiration of haalf an ho our from the time t appointed for holdin ng the meetin ng, the Memb bers present shall s be a quo orum, an nd may transa act the busineess for which the Meeting was called. It I shall not bee necessary to o give an ny notice of an n adjournmen nt or of the bu usiness to be transacted t at an adjourned d meeting. Chairmaan of General Meeting. Th he Chairman of the Board shall be entiitled to take the t chair at every e Generall Meeting wh hether An nnual or Extrra Ordinary. If I the Chairm man is unable or unwilling to take the chair c or if he is i not present within fifteen minu utes of the tiime appointeed for holdin ng such meetting then thee Vice hairman shalll be entitled to o take the chaair at such meeeting. If therre be no such Chairman an nd/or Ch Viice Chairman n if he/they are a unable/un nwilling to taake the chairr, or if he/theey are not prresent wiithin fifteen minutes m of thee time appoin nted for holdiing such meeting, then thee Directors prresent sh hall elect anotther Directorr as Chairmaan, and if no Director is present, or iff all the Direectors present declinee to take the chair, c then th he members present p shall elect e one of their t number to be thee Chairman. Scrutineeers at poll.

97

he Chairman of the meetin ng shall appoint two scrutiineers to scru utinise Where a poll is to be taken th thee vote given on o the poll an nd to report thereon t to him m. One of thee scrutineers so appointed d shall alw ways be a meember (not beeing an officeer or employeee of the Com mpany) preseent at the meeeting, provided such a member is available a and d willing to bee appointed. The T Chairman n shall have power p ult of the polll is declared to remove a scrutineer frrom office an nd fill at any time beffore the resu vaacancies in thee office of scru utineer arisin ng from such removal r or fro om any otherr cause. Passing of o resolutionss by postal baallot 1000 Su ubject to the provisions of o Section 1992A of the Act A read witth the Comp panies (passin ng of ressolutions by postal ballott) rules, 2001, the Compaany may passs resolutions by way of postal p baallot from timee to time. VO OTES OF MEM MBERS Memberrs in arrears not n to vote. 1011 No o member sh hall be entitleed to vote eitther personallly or by pro oxy at any General Meetin ng or meeetings of cla ass of shareho olders either upon a show w of hands orr upon a polll in respect of o any sh hares registereed in his name on which an ny calls or oth her sums presently payablle by him hav ve not 295

Scotts Ga arments Limiited beeen paid or in regard to wh hich the Comp pany has, and d has exerciseed, any right of o lien. Numberr of votes to which w Membeer entitled. 1022

1033

Su ubject to the Provisions of o these Articcles and with hout prejudicce to any speecial privileg ges or resstrictions as to voting forr the time beeing attached d to any class of shares for f the time being b forrming part off the capital of o the Company, every meember, not dissqualified by the last preceeding Arrticle shall bee entitled to be b present an nd to speak and vote at su uch meeting, and on a sho ow of haands every member m presen nt in person shall have on ne vote and upon u a poll the t voting rig ght of ev very member present in person shall have h one votee and upon a poll the votting right of every e meember presen nt in person or o by proxy shall s be in prroportion to his h share of the t paid-up equity e sh hare capital off the Compan ny. Provided, however, if any a preference shareholderr be present at a any meeeting of the Company, saave as provideed in Section 87 (2) (b) of the t Act, he sh hall have a rig ght to vo ote only on reesolution placced before thee meeting wh hich directly affects a the rig ght attached to t his preference sharres. Casting of o votes by a member entittled to more than t one votee. On n a poll taken n at a meetin ng of the Com mpany a mem mber entitled d to more thaan one vote, or o his proxy or other persons p entitlled to vote fo or him as the case c may be, need not, if he h votes, use all a his otes or cast in the same way y all the votess he uses. vo Votes of joint-membeers.

1055

If there t be jointt registered ho olders of any y shares, any one o of such person p may vo ote at any meeeting or may appointt another persson (whetherr a member orr not) as his proxy p in resp pect of such sh hares, as if he were so olely entitled thereto t but th he proxy so ap ppointed shalll not have an ny right to speeak at thee meeting and, if more thaan one of succh joint holdeers be presentt at any meetiing that one of o the saiid persons so o present who ose name stan nd higher on the Register shall alone bee entitled to speak s an nd to vote in respect r of such h shares, but the other or others o of the joint-holders j shall be entitlled to bee present at th he meeting. Several S execu utors or administrators off a deceased member in whose w naame shares sta and shall for the t purpose of o these Articlles be deemed d joint holderrs thereof. Voting in n person or by proxy.

1066

Su ubject to the provisions p off these Articlees votes may y be given eitther personallly or by prox xy. A bo ody corporatee being a mem mber may votee either by a proxy p or by a representativ ve duly autho orised in accordance with w Section 187 1 of the Actt and such reepresentative shall be entittled to exercisse the sam me rights and powers (in ncluding the right r to vote by proxy) on n behalf of th he body corp porate wh hich he repressents as that body b could ex xercise if it were an individ dual memberr. Votes in respect of shares of deceassed and insollvent Memberr.

1077

An ny person en ntitled under Article 64 to transfer any share may vote v at any General G Meetiing in resspect thereof in the same manner as iff he were thee registered holder h of such h shares prov vided thaat forty-eightt hours atleasst before the time t of holdin ng the meetin ng or adjourn ned meeting as a the casse may be at which he pro oposes to votee he shall satisfy the Directtors of his rig ght to transferr such sh hares and givee such indem mnity (if any) as the Directtors may requ uire or the Directors shall have previously adm mitted his righ ht to vote at su uch meeting in i respect theereof. Appointtment of proxy.

1088

Ev very proxy (w whether a meember or nott) shall be ap ppointed in writing w undeer the hand of o the ap ppointer or his attorney or if such appo ointer is a corp porate body under u the com mmon seal off such corporation, or be signed by y an officer orr any attorneey duly autho orised by it, and a any comm mittee 296

Scotts Ga arments Limiited or guardian ma ay appoint su uch proxy. The proxy so ap ppointed shalll not have an ny right to speeak at thee meetings. Proxy to o vote only on n a poll. 1100

A member pressent by proxy y shall be entittled to vote on nly on a poll. Chairmaan of the meetting to be the judge of validity of any vo ote.

1155

1166

Th he Chairman of o any meetin ng shall be thee sole judge of o the validity y of every votte tendered att such meeeting. The Chairman C preesent at the taaking of a po oll shall be th he sole judgee of the validity of ev very vote tend dered at such poll. Th he Company shall cause minutes m of all proceeding gs of every General G Meetting to be kep pt by maaking within thirty days of o the conclussion of every y such meetin ng concerned,, entries thereeof in bo ooks kept forr that purpo ose with theiir pages con nsecutively nu umbered. Minutes of Geeneral Meeeting and in nspection thereof by memb bers. Eaach page of every e such book shall be initialled or signed and the last pagee of the reco ord of proceedings of each meeting g in such book k shall be datted and signeed by the Chaairman of the same meeeting within n the aforesaid d period of th hirty days or in the event of the death or inability of o the Ch hairman with hin that period d, by a Directo or duly autho orised by the Board for thee purpose. In no case the minutes m of pro oceedings of a meeting shaall be attached d to any such h book as aforresaid by y pasting or ottherwise. Th he minutes of each meeting g shall contain n a fair and co orrect summaary of the pro oceedings therreat. Alll appointmen nts of Officerrs made at an ny meeting afforesaid shalll be included d in the minutes of thee meeting. No othing herein n contained sh hall require orr be deemed to require thee inclusion in n any such miinutes of any matter which w in the opinion o of th he Chairman of o the meetin ng (a) is or co ould necessariily be reg garded as deffamatory of any a person, or (b) is irrelev vant or immaaterial to the proceedings, p or (c) deetrimental to the interest of the Com mpany. The Chairman C of the meeting shall exercisse an ab bsolute discrettion in regard d to the inclussion or non-in nclusion of an ny matter in the t minutes on o the afo oresaid groun nds. An ny such minu utes shall be ev vidence of the proceedings recorded th herein. Th he book conta aining the min nutes of procceedings of General G Meetin ng shall be kept at the offfice of thee Company and a shall be open during g business ho ours, for such h periods as the t Directorss may deetermine, for the t inspection n of any mem mber without charge. c

DIRECTORS Numberr of Directors 1177 Un ntil otherwisee determined by a General Meeting of th he Company and subject to o the provisio ons of Section 252 of the Act, the number of th he Directors shall not be less than thrree nor moree than tw welve. The preesent Directorrs of the Com mpany are: 1.M Mr. Naseer Ahmed

297

Scotts Ga arments Limiited 2. Mrs. Nuzhat Aisha Naseerr 3. Mr. A. Arum mugham 1188

ubject to the provisions p of the t Act and within w the oveerall limit prescribed under these Articles for Su thee number off Directors on the Board,, the Board may appointt any Seniorr Executive of o the Co ompany as a whole-time Director D of th he Company for such perriod and upo on such termss and conditions as th he Board maay decide. A Senior S Execu utive so appoiinted shall bee governed by b the folllowing proviisions: When no Execu utive Chairman is appointted, the Wholle-time Director or Directo ors, shall fun nction, su ubject to the su upervision an nd control of the t Managing g Director or Managing M Directors. Hiis remuneration shall be fixed by thee Board and shall be pay yable out of the funds of o the Co ompany subjeect to the prrovisions of the t Act and approval of the Compan ny in the Geeneral Meeeting.

1199

1200

Hee shall not be required to o hold any qualification q s share for his appointmen nt as a wholee-time Diirector of the Company. C othing contaiined in this Article A shall be b deemed to restrict or prrevent the rig ght of the Boaard to No rev voke, withdrraw, alter, vaary or modiffy all/or any y of such po owers, autho orities, dutiess and ressponsibilities conferred up pon or vested in or entrusteed to such wh hole-time Dirrectors. w any colllaboration arrrangement with w any comp pany or corp poration or firrm or In connection with peerson for sup pply of techniical know-ho ow and/or machinery m or technical adv vice, the Direectors maay authorise such Compan ny, Corporatiion, firm or person p (herein nafter in this clause referrred to as “Collaborato or”) to appoin nt from time to t time, any person p or perrsons as Direcctor or Directo ors of thee Company (hereinafter referred to as a `Special Director’) D and d may agree that such sp pecial dirrector shall not n be liable to t retire by ro otation and need n not posssess any quallification sharres to qu ualify him for the office of such Directorr, so howeverr, that such Sp pecial Directo or shall hold office so long as succh collaborattion arrangem ment remain ns in force unless u otherw wise agreed upon beetween the Co ompany and such s Collaborrator arrangem ments or at an ny time thereeafter. Th he Collaborattor may at any a time and d from time to time rem move any succh special dirrector ap ppointed by itt and may at the t time of su uch removal and a also in thee case of deatth or resignatiion of thee person so appointed, a at any time, ap ppoint any other person ass a special diirector in his place an nd such appo ointment or removal shaall be made in writing signed by such s Compan ny or Co orporation or any partner or o such perso on and shall be b delivered to o the Compan ny at its regisstered offfice.

1211

It is i clarified th hat every collaaborator entittled to appoin nt a Director under this Arrticle may ap ppoint on ne or more su uch person or persons as Director(s) D and d so that if more m than one Collaboratorr is so en ntitled there may m at any tim me be as man ny special dirrectors as thee Collaboratorrs eligible to make thee appointmen nt. Power to o appoint ex-o officio Directo ors. Whenever Direectors enter in nto a contractt with any Go overnment, Central, State or o Local, any bank or financial insstitution or an ny person or persons (herreinafter referred to as “th he appointer””) for 298

Scotts Ga arments Limiited

1244

1255

1266

bo orrowing any money or forr providing any a guaranteee or security or o for techniccal collaboratiion or asssistance or fo or underwriting or enterin ng into any otther arrangem ment whatsoeever, the Direectors sh hall have, sub bject to the provisions p off Section 255 of the Act, the power to agree that such ap ppointer shalll have the rig ght to appoin nt or nominaate by a noticce in writing g addressed to t the Co ompany one or o more Directors on the Board B for succh period and d upon such conditions ass may bee mentioned in i the agreem ment and that such Directo or or Directorrs may not bee liable to retiire by rottation nor bee required to hold any quaalification shaares. The Dirrectors may also a agree thaat any su uch Director or o Directors may m be remov ved from timee to time by th he appointer entitled e to ap ppoint or nominate theem and the appointer a may y fill any vaccancy that maay occur as a result of any y such Diirector or Diirectors ceasiing to hold that office for f any reaso on whatsoev ver. The Direectors ap ppointed or no ominated und der this Articcle shall be en ntitled to exerrcise and enjo oy all or any of o the rig ghts and privileges exercissed and enjoy yed by the Diirectors of thee Company in ncluding paym ment, rem muneration and a travelling expenses to t such Direcctor or Directors as may be agreed by b the Co ompany with the appointeer. Directorss' power to ad dd to the Board. Su ubject to the provisions p of Section 260, 261 2 and 264, the t Board shaall have poweer at any time and fro om time to tim me to appoin nt any other qualified q persson to be an additional a Diirector, but so o that thee total number of Directorrs shall not at a any time ex xceed twelvee. Any such additional a Dirrector sh hall hold officee only up to the date of thee next Annual General Meeting. Directorss' power to filll casual vacaancies. Su ubject to the provisions p of Section 261, 264 and 284 (4) the Board d shall have power p at any y time an nd from time to time to appoint a any other qualifiied person to o be a Directtor to fill a casual c vaacancy. Any person p so app pointed shall hold h office on nly up to the date d upto wh hich the Direcctor in wh hose place hee is appointed d would have held office if it had not been vacated by y him. Remuneration of Direectors. Su ubject to the provisions p of the Act, the Executive E Ch hairman or a Managing M Diirector or Director, wh ho is in the whole-time w em mployment off the Compan ny may be paaid remunerattion either by y way of a monthly pa ayment or at a specified percentage p of the net profitts of the Com mpany or parttly by on ne way and pa artly by the otther. Su ubject to the provisions p of the t Act, a Dirrector other th han the Execu utive Chairm man or a Direcctor in thee whole-time employmentt or a Managin ng Director may m be paid reemuneration either: by y way of montthly, quarterly or annual payment p with h the approvall of the Centrral Governmeent; or by y way of comm mission if the Company by y a special ressolution autho orised such payment. p

1300

Th he fee payable to a Directo or (including g the Executiv ve Chairman or a Managiing or Wholee time Diirector, if any)) for attendin ng a meeting of o the Board or o Committeee thereof shalll be decided by b the Bo oard of Direcctors from time to time within the minimum m lim mit of such a fee that maay be prescribed by the t Central Government G u under the pro oviso to sectiion 310 of th he Companiess Act, 1956. Director may contractt with Compaany. (a)) A Director or o his relativee, a firm in which w such Director D or rellative is a parrtner, or any other paartner in such h firm or a private p compaany of which h the Directorr is a membeer or directorr may

299

Scotts Ga arments Limiited en nter into any contract c with the Company y for the sale, purchase or supply of any y goods, mateerials, or services, or for f underwritting the subscription of an ny shares in, or debenturees of the Com mpany su ubject to the prrovisions of the Section 2997 of the Act. (b b) No sanction n shall, howev ver, be necesssary for : an ny purchase of o goods and materials fro om the Company, or the saale of goods or o materials to t the Co ompany, by any a such Direcctor, relative,, firm, partnerr or private co ompany as afforesaid for caash at prevailing mark ket prices; or

1311

1322

1333

an ny contract orr contracts bettween the Co ompany on on ne side and any a such Direector, relative, firm paartner or priva ate company on the other side for sale, purchase or supply of an ny goods, matterials an nd services in n which eith her the Comp pany or the Director, relative firm partner p or prrivate company, as th he case may be b regularly trrades or does business, wh here the valuee of the good ds and maaterials or th he cost of succh services does d not exceeed ` 5,000/-- in the aggrregate in any y year comprised in the period of the contractt or contractss. Provided th hat in circum mstances of urgent u neecessity, a Director, D relattive, firm paartner or priivate compan ny as aforessaid may wiithout ob btaining the consent c of thee Board enterr into any su uch contract with w the Com mpany for thee sale, pu urchase or sup pply of any goods, g materiaals or servicees even if the value of such h goods or thee cost of such servicees exceeds ` 5000/- in thee aggregate in i any year comprised c in the period of o the contract if the consent c of th he Board shalll be obtained d to such con ntract or conttracts at a meeeting wiithin three mo onths of the date d on which h the contract was entered into. Disclosu ure of interest. A Director of the t Company y who is in any a way—wh hether directtly or indirecctly—concerned or c or arrrangement, or o proposed contract c or arrrangement en ntered into or to be intterested in a contract en ntered into by y or on behalff of the Comp pany shall dissclose the natu ure of his con ncern or interrest at a meeting m of th he Board in th he manner pro ovided in Secction 299 (2) of o the Act, pro ovided that itt shall no ot be necessarry for a director to disclosse his concern n or interest in i any contraact or arrangeement en ntered into orr to be entereed into with any other co ompany wheere any of th he Directors of o the Co ompany or tw wo or more of them togeether holds or o hold not more than tw wo percent of o the paaid-up share capital c in any such other co ompany. General Notice of Inteerest. A general Noticce given to th he Board by th he Director to o the effect thaat he is a direector or memb ber of specified body corporate or is a member of a specified d firm and is to be regardeed as concern ned or intterested in an ny contract orr arrangemen nt which may y after the date of the notiice be entered d into wiith that body y corporate or o firm shall be deemed to be a suffiicient disclosure of conceern or intterest in relattion to any co ontract or arraangement so made. Any such s general notice shall expire e at the end of th he financial yeear in which it i is given butt may be reneewed for a furrther period of o one fin nancial year in n which it wo ould have oth herwise expirred. No such general noticce, and no ren newal theereof shall be b of effect unless, u either it is given at a a meeting g of the Boarrd or the Dirrector concerned takess reasonable steps s to securre that it is brought up and d read at the first f meeting of o the Bo oard after it iss given. Interesteed Directors not n to particip pate or vote in n Board's procceedings. No o Director sh hall as a direector, take an ny part in thee discussion of, or vote on o any contraact or arrrangement en ntered into or to be entereed into by orr on behalf of o the Company, if he is in n any 300

Scotts Ga arments Limiited waay, whether directly d or ind directly, conccerned or inteerested in succh contract orr arrangemen nt, nor sh hall his presen nce count for the purpose of forming a quorum at the t time of an ny such discu ussion or vote and if he does vo ote, his vote shall be void d, provided however, th hat nothing herein h contained shall apply to: an ny contract off indemnity against a any lo oss which thee Directors orr anyone or more m of them,, may su uffer by reason n of becoming g or being surreties or a surrety for the Co ompany; an ny contract or arrangementt entered into o or to be enteered into with h a public com mpany or a prrivate company which h is a subsidiiary of a publlic company in i which the interest of thee Director con nsists solely; (i))

in his being:

a director d of succh company, and thee holder of not more than n shares of succh number orr value thereiin as is requissite to qualify y him forr appointmen nt as a Direector thereof,, he having been nomin nated as such h director by y the company; or [iii] in his bein ng a member holding h not more m than 2% of its paid-up p share capitaal.

1344

1355

1366

1411

Register of contracts in i which Direectors are inteerested. Th he Company shall keep a Register in acccordance wiith Section 3001 (1) and shaall within thee time specified in Secction 301 (2) enter e therein such of the particulars p as may be relev vant having reegard to the applicatio on thereto of Section 297 or o Section 2999 of the Act as the case maay be. The Register afo oresaid shall also specify, in relation to o each Directo or of the Com mpany the names of the bo odies, corporate and firms f of whicch notice has been given by b him underr Article 132. The Registerr shall bee kept at the office o of the Company C and d shall be op pen to inspecttion at such office, o and ex xtracts maay be taken therefrom t and d copies thereeof may be reequired by an ny member of o the Compaany to thee same extentt, in the samee manner, and d on paymentt of the same fee as in the case of Regisster of Meembers of thee Company an nd the provissions of Sectio on 163 of the Act A shall applly accordingly y. Directorss may be direectors of comp panies promo oted by the Co ompany. A Director may y be or becom me a Director of o any company promoted d by the Comp pany or in wh hich it maay be interestted as vendorr, shareholderr, or otherwisse, and no succh Director sh hall be accoun ntable forr any benefitss received as a director or shareholder of such comp pany except in i so far as Seection 309 (6) or Sectio on 314 of the Act A may be ap pplicable. Retiremeent by Rotatio on of Directorrs. Att every Annual General Meeting M of the Company, on ne third of su uch of the Dirrectors for thee time beeing as are lia able to retiree or if their number n is no ot three or a multiple of three, t the nu umber neearest to one-tthird shall rettire from offiice. The Debeenture Directo ors, if any, sh hall not be cou unted in determining the number of o Directors liiable to retire by rotation. Compan ny may increa ase or reduce the number of o Directors. Su ubject to Sectiion 259 of thee Act, the Co ompany may by Ordinary Resolution, from f time to time, inccrease or redu uce the numb ber of Directo ors, and may,, (subject to the t provisions of Section 284 2 of thee Act) remov ve any director before thee expiration of o his period of office and d appoint an nother 301

Scotts Ga arments Limiited

1455

qu ualified perso on in his stead d. The person n so appointeed shall hold office during g such time as a the Diirector in who ose place he iss appointed would w have held the same if he had not been removeed. Disclosu ure by directorr of appointm ment to any otther body corrporate. Ev very Directorr (including a person deeemed to be a Director by y virtue of th he Explanatio on to su ub-section (1) of Section of the Act), Maanaging Direcctor, Managerr, or Secretary of the Com mpany sh hall within tw wenty days of o his appoin ntment to an ny of the ab bove office in n any other body corporate, discclose to the Company th he particularss relating to his office in n the other body h are required d to be specified under sub b-section (1) of o Section 3033 of the Act. corporate which

Disclosu ure by a Director of his hold ding of shares and debentu ures of the Co ompany, etc. Ev very Director and every peerson deemed d to be a Direcctor of the Co ompany by virrtue of sub-seection (100) of Section 307 3 of the Act, shall give notice n to the Company C of such s matters relating to hiimself as may be neceessary for thee purpose of enabling e the Company to comply with h the provisio ons of thaat section. MA ANAGEMEN NT Board may m appoint Executive Chaairman and Managing M Direectors 1477 Su ubject to the provisions p of the Act and of these Articcles, the Boarrd shall have power to ap ppoint fro om time to tiime any of itss members as Executive Chairman, C M Managing Direector or Manaaging Diirectors of thee Company fo or a fixed term m not exceediing five yearss at a time and d upon such terms t an nd conditions as the Board thinks fit, an nd subject to the t provision ns of Article 143, the Board d may est in such Ex by y resolution v xecutive Chaiirman, Manag ging Directorr or Managing g Directors su uch of thee powers herreby vested in n the Board generally g as it i thinks fit, and a such pow wers may be made m exercisable for such period or o periods, an nd upon such h conditions and subject to such restricctions on of the Ex xecutive Chaairman, Manaaging Director or as it may deteermine. The remuneratio Maanaging Direectors may be by way of monthly m paym ment, fee for each e meeting or participatiion in profits, or by an ny or all thesse modes, or any a other mo ode not expreessly prohibiteed by the Actt. The xecutive Chairman and thee Managing Director D shalll not be requiired to retire by Rotation under u Ex Arrticle 137. No otwithstandin ng anything co ontained in th his Article where w no Execcutive Chairm man is ap ppointed as such, the Board of Directo or may elect, from time to o time, any of o its membeers, as Ch hairman who shall be subjject to retirem ment by rotatiion. Subject to o the provisio ons of the Acct and of these Article,, the Board sh hall have the power p to nom minate from tiime to time, any a of its mem mbers as Vice-Chairm man on such terms and conditions c ass the Board thinks fit. The T Directors may wh henever they y appoint mo ore than one Managing Director, D desig gnate one orr more of theem as “Jo oint Managin ng Director” or “Joint Maanaging Direectors” or “D Deputy Manaaging Directo or” or “D Deputy Mana aging Directorrs”, as the caase may be, and a accordin ngly the expression “Manaaging Diirector” shall also includee and be deeemed to inclu ude “Joint Managing M Direector” or “Deeputy Maanaging Director” as the case may be. Managin ng Directors and a Whole-tim me Directors to t report to Executive E Chaairman 1488 “T The Managin ng Director or o Managing g Director or o Directors who are in n the whole time em mployment in n the Compan ny shall subject to supervission and conttrol of the Executive Chairrman, exercise such po owers as are vested v in them m by the Boarrd”, Restrictio on on manag gement. 1499 Th he Executive Chairman or o Managing Director or Managing Directors D shalll not exercisse the po owers to: 1466

302

Scotts Ga arments Limiited (a)) make calls on o shareholdeers in respectt of money un npaid on the shares s in the Company; C (b)) issue deben ntures; and except to the extent mentioned in the resolution r paassed at the Board B meeting un nder Section 292 of the Act shall also nott exercise the powers to; (c)) borrow mon neys otherwisse than on deebentures; (d)) invest the fu unds of the Company; C and d (e)) make loanss

1500

Certain persons not to be appoiinted as Execcutive Chairm man or Man naging Directtor or Wholee-time Director. he Company shall not appoint or emp ploy, or continue the app pointment or employmentt of a Th peerson as its Ex xecutive Chairrman or Man naging or Who ole-time Direcctor who, is an undischarged insolventt, or has any time t been adjjudged an inssolvent; su uspends, or ha as at any tim me suspended d payment to his creditorss, or makes, or o has at any y time maade, a composition with th hem, or is, or has at any y time, been, convicted c by a Court of an n offence invollving moral turpitude.

PR ROCEEDINGS S OF THE BO OARD OF DIR RECTORS Meetingss of Directorss. 1522 Th he Directors may m meet tog gether as a Bo oard for the purpose p of bu usiness from time to timee, and sh hall so meet atleast a once in n every threee months and d atleast four such meeting gs shall be heeld in ev very year. Thee Directors maay adjourn an nd otherwise regulate theirr meetings as they think fitt. Notice of Meetings. 1533 Fo our clear day'ss notice at leaast of every meeting m of thee Board shall be b given by th he Secretary of o the Co ompany, if an ny, or by any person or peersons nomin nated by the Executive E Chairman, in writing to every Directtor at his usu ual address. Provided, P how wever, that th he Chairman of the Board shall haave the powerrs to convenee a meeting off the Board orr to request th he Secretary of o the Compaany to convene a Meeeting of the Bo oard by givin ng a shorter notice. n Such notice n or shorrter notice may m be sen nt by hand deelivery or posst or by cable or telegram depending d up pon the circum mstances. Quorum m. 1544 Su ubject to Section 287 of thee Act, the Quo orum for a meeting m of thee Board shall be one third of its tottal strength (excluding ( D Directors, if any, a whose places p may be b vacant at the time and d any fraaction contain ned in that one-third o bein ng rounded off as one) or o two Directtors, whichev ver is hig gher provided that where at any time the t number of o interested Directors D exceeds or is equ ual to tw wo-thirds of th he total streng gth the numb ber of the rem maining Direcctors, that is to t say, the nu umber of Directors wh ho are not intterested, pressent at the meeting m being not less than n two, shall be b the qu uorum during g such time. Adjourn nment of meetting for want of quorum. 1555 If a meeting of o the Board d could not be held for want of quo orum, then the t meeting shall au utomatically stand s adjourn ned to such other date and a time (if any) as may y be fixed by the Ch hairman not being b later thaan seven dayss from the date originally fixed f for the meeting. m 303

Scotts Ga arments Limiited

1577

1588

1599

1600

1622

1655

Chairmaan and Vice Chairman. C Th he Executive Chairman C or Chairman sh hall be the Chaairman of thee Board. If at any a meeting of o the Bo oard, the Execcutive Chairm man or Chairrman is not present p within n fifteen minu utes after thee time ap ppointed for holding h the saame or if the Executive Ch hairman or Ch hairman is un nable or unw willing to take the chaiir, the Vice-Ch hairman shalll be entitled to t take the ch hair at such meeting. m If theere be no o such Executtive Chairman n or Chairmaan and / or Vice-Chairma V an or if he / they t are unab ble or un nwilling to ta ake the chair,, or if he / they t are not present with hin fifteen miinutes of the time ap ppointed for holding the meeting, theen the Directtors present may choose any one of their nu umber to be th he Chairman of the meetin ng. uestions arising at any meeeting of the Board, shall be b decided by a majority of vote and in i the Qu casse of an equality of votes the t Chairman n shall have a second or a casting c vote. Powers of o Board Meeeting. A meeting of the Board forr the time beiing at which a quorum iss present shalll be competeent to uthorities, po owers and diiscretion whiich by or und der the Act or o the exercise all or any of the au C are for the time being b vested in or exercisaable by the Bo oard generally y. Arrticles of the Company Directorss may appoin nt Committee. Su ubject to the restriction r con ntained in Secction 292 of the t Act the Board may delegate any off their po owers to Com mmittees of thee Board consiisting of such Member or Members M of itts body as it thinks fit,, and it may from time to o time revokee and discharrge any such committee of o the Board either e wh holly or in part p and eitheer as to perssons or purpo oses, but eveery committee of the Board so forrmed shall in n the exercise of the powerrs so delegated conform to any regulatio ons that may from tim me to time be imposed on it by the Boaard. All acts done d by any such s Committtee of the Boaard in conformity with such regulaations and in n fulfilment of o the purpose of their app pointment bu ut not oth herwise, shalll have the likee force and efffect as if don ne by the Boarrd. Resolutio on by circulattion. No o resolution shall s be deem med to have beeen duly passed by the Bo oard or by a Committee C th hereof by y circulation unless u the resolution has been b circulated in draft, by y the Secretary y of the Comp pany, if any, or by any a person orr persons nominated by the t Executivee Chairman, together witth the neecessary papeers if any to all the Directo ors or to all th he Members of o the Commiittee, then in India (no ot being less in number th han the quoru um fixed for a meeting of the t Board or Committee, as a the casse may be), and a to all oth her Directors or Members of the Comm mittee at theirr usual addreess in Ind dia and has been b approved d by such of the t Directors or Members of the Comm mittee as are th hen in Ind dia, or by a majority m of succh of them, ass are entitled to vote on thee resolution. Powers of o Directors Th he Board may y exercise all such powerss of the Comp pany and do all such actss and things as a are no ot by the Com mpanies Act, or any otherr Act or by the t Memoran ndum or by the t Articles of o the Co ompany requ uired to be ex xercised by th he Company in General Meeting, M subjeect nevertheleess to theese Articles, to the provissions of the Act, A or any other o Act and d to such regu ulations bein ng not incconsistent witth the aforesaaid regulation ns or provisions, as may bee prescribed by b the Compaany in Geeneral Meetin ng but no regu ulation made by the Comp pany in Generral Meeting sh hall invalidatte any prior act of th he Board whiich would have been valid if that reegulation had d not been made. m Provided that the t Board shaall not, excep pt with the co onsent of the Company in n General Meeeting acccorded by an n ordinary reso olution.

304

Scotts Ga arments Limiited (a)) sell, lease or otherwise dispose of th he whole or su ubstantially th he whole, of the t undertakiing of thee Company, or where th he Company y owns moree than one undertaking u of the wholle, or su ubstantially th he whole of an ny such underrtaking; (b))

remit, or o give time fo or the repaym ment of, any debt d due by a Director;

(c)) invest otherwise th han in trust securities s thee amount of compensation n received by b the Co ompany in reespect of the compulsory c a acquisition off any such un ndertakings as a is referred to in claause (a) or off any premisees or propertiies used for any a such und dertaking and d without wh hich it can nnot be carrieed on or can be b carried on o only with difficulty d or only o after a co onsiderable tim me; (d)) borrow w moneys wh here the mon neys to be bo orrowed togeether with the moneys alrready bo orrowed by th he Company (apart ( from teemporary loaans obtained from f the Com mpany's bank kers in thee ordinary co ourse of busin ness), will excceed the aggreegate of the paid-up p capitaal of the Com mpany an nd its free reseerves that is to o say, reservees not set apart for any speecific purposee. Provided fu urther thaat the powerss specified in Section 292 of o the Act shaall subject to these t Articless be exercised d only at meeting of th he Board unleess the same be b delegated to t the extent therein t stated d; or

1666

(e)) contrib bute to charittable and oth her trusts no ot directly reelating to th he business of o the Co ompany or th he welfare of o its employ yees, any amo ounts the ag ggregate of which w will, in n any fin nancial year exceed e twentty-five thousaand rupees or o five percen nt of its averrage net proffits as deetermined in accordance a w the proviisions of Sectiions 349 and 350 of the Acct during the three with fin nancial years immediately i preceding, whichever w is greater. Certain powers p of thee Board. (a))Without prejjudice to the general pow wers conferred d by the precceding Articlee and so as not n in an ny way to limit or restrict those t powers,, and withoutt prejudice to o the other po owers conferreed by theese Articles, but subject to o the restrictiions containeed in the last preceding Article, A it is hereby deeclared that the t Directors shall have th he following g powers, thaat is to say power p to adopt all preliminary con ntracts, if any y, entered intto by the pro omoters eitherr by entering g into a contraact or m or compan ny on behalf of the Comp pany by way y of ratificatio on or wiith any otherr person, firm su ubstitution and d to remunerrate person orr company forr services ren ndered or to be b rendered fo or the forrmation or promotion p o the Comp of pany or for the acquisitiion of any property, liccence, traademarks, lettter of intent, allotments, a kn now how or similar s thing by b the Company. (b)) Without prrejudice to th he generality y of the foreegoing, upon n the adoptio on of prelim minary contracts, if any y, entered in nto by and beetween the prromoters and d any other persons, p the Board B hall have power in its absollute discretio on to issue and a allot fullly paid Equ uity or Prefeerence sh Sh hares of the Company C or by issue of Fully F and/orr Partly paid Convertible /Non-Conveertible Deebentures or such s other Securities or paartly by one and a partly by y other, in an ny combinatio on, in trenches maay be thought fit by the Boaard, for consideration in caash on ne or more or oth herwise than in cash to thee Promoters or o to any otheer person in n terms of th he agreementt that maay be entered d into between n the Compan ny and the Prromoters or to o any other person p includiing. To o pay cost, charges c and expenses preeliminary an nd incidental to the prom motion, formaation, esttablishment and a registratio on of the Com mpany.

305

Scotts Ga arments Limiited (ii)) To enteer into contraacts for the accquisition of fixed f assets, net n current asssets, selling rights r etcc and to enterr into non-com mpete agreem ments with an ny other persson, firm or company on behalf b of the Compan ny by way of ratification or substitution n and to remu unerate perso on or compan ny for serrvices renderred or to be rendered r or for f the acquisition of any property, liccence, tradem marks, lettter of intent, allotments, know k how or similar s thing by the Comp pany and for the t purpose to pay forr such consideration as maay arise thereffrom by issuee of fully paid d Equity or Prreference Shares of thee Company or o by issue of Fully and/or Partly paid Convertible / Non-Conveertible Deben ntures or partly by on ne and partly y by other, in any combinaation, in one or more tren nches as the Board B maay deem fit. (iiii) To pay y and charge to t the capitall account of th he Company any commisssion, brokeraage or intterest lawfully y payable theereon under th he provisionss of Sections 76 7 and 208 of the Act. (iv v) Subjectt to Sections 292, 2 297 and 360 of the Act A to purchasse or otherwiise acquire fo or the Co ompany any property, p righ hts or privileg ges which thee Company iss authorised to acquire, at or o for su uch price or co onsideration and a generally y on such term ms and condiitions as they y may think fiit and in any such purrchase or oth her acquisition n to accept su uch title as thee Directors may m believe orr may bee advised to be reasonably satisfactory. (v)) At their discretion and a subject to o provision of the Act to pay p for any property, p righ hts, or privileges acqu uired by or serrvices renderred to the Com mpany, eitherr wholly or partially, p in caash or in shares, bond ds, debenturess, mortgages or other secu urities of the Company, C an nd any such shares s maay be issued either e as fully y paid up or with w such am mount credited d as paid up thereon as may m be ag greed upon; and a any succh bonds, debentures, mo ortgages or other o securitiies may be either e specially chargeed upon all or o any part off the property y of the Comp pany and its uncalled u capiital or ot so charged. no (vii) To secu ure the fulfillm ment of any contracts c or en ngagement en ntered into by y the Compan ny by mo ortgage or ch harge of all orr any of the property p of th he Company and its uncallled capital fo or the tim me being or in n such manneer as they may y think fit. (viii) To accept a from any a member, as far as may y be permisssible by law, a surrender of o his sh hares or any part thereof, on n such terms and conditions as shall bee agreed. (viiii) To ap ppoint any person p to acccept and hold d in trust fo or the Company any pro operty beelonging to th he Company, in i which it is interested, orr for any otheer purposes, and a to executte and do o all such deeeds and thing gs as may be required in relation r to an ny trust, and to provide fo or the rem muneration of o such trusteee or trustees. (ix x) To instiitute, conduct, defend, com mpound, or abandon a any legal proceed dings by or ag gainst thee Company or its officers or otherwise concerning the affairs of the Comp pany, and allso to compound and d allow time for paymentt or satisfactiion of any debts d due and d or any claiim or C and d to refer any y differences to arbitration n, and observe and deemands by orr against the Company peerform any aw wards made th hereon. (x))

To act on o behalf of th he Company in all matterss relating to bankruptcy b an nd insolvency y.

306

Scotts Ga arments Limiited (xii) To mak ke and give receipts, releeases, and otther discharg ges for moneeys payable to t the Co ompany and for f the claimss and demand ds of the Com mpany. (xiii) Subjecct to the prov visions of Secttions 292, 2955, 369, 370 an nd 372 of the Act, to invesst and deeal with any moneys m of th he Company not n immediattely required for the purp poses thereof upon su uch security (n not being shaares of this Co ompany) or without w security and in succh manner ass they maay think fit, and from tim me to time to o vary or realise such inv vestments. Sav ve as provid ded in Section 49 of th he Act, all inveestments shalll be made an nd held in the Company's own o name. (xiiii) To execute in the naame and on behalf of the Company C in favour f of any y Director or other peerson who ma ay incur or bee about to inccur any perso onal liability whether as principal p or su urety, forr the benefit, of the Comp pany, such mo ortgages of th he Company'ss property (p present and fu uture) as they think fit, f and any such s mortgag ge may contaain a power of o sale and su uch other po owers, provisions, covenants and ag greements as shall be agreed upon. (xiiv) To dettermine from m time to timee who shall be b entitled to sign on the Company's behalf b billls, notes, recceipts, acceptaances, endorssements, cheq ques, dividen nd warrants, releases, con ntracts an nd documentss and to give them t necessary authority for f such purp pose. (xv v) To distribute by way y of bonus am mongst the sttaff of the Co ompany a shaare or shares in i the profits of the Company C and d to give to an ny officer or other persons employed by b the Company a n the profits of o any particu ular business or transactio on and to chaarge such bon nus or commission on nses of the Com mpany. commission as part of the working expen vi) To provide for the welfare w of Diirectors or ex--Directors or employees or o ex-employeees of (xv thee Company and a their wives, widows and a families or o the depend dants or any connection c off such peersons, by buiilding or conttributing to th he building of o houses, dw wellings, or ch hawls, or by grants g of moneys, pen nsion, gratuitiees, allowancees, bonus or other paymentts or by creatiing, and from m time to time subscrib bing or contrributing to prrovident fund d and other associations, a i institutions, funds, tru usts and by providing or o subscribin ng or contrib buting towarrds places of o instruction n and reccreation, hosp pital and dispensaries, medical and otther attendan nce and otherr assistance as a the Bo oard shall thiink fit, and to t subscribe or contributee or otherwisse to assist or o to guaranttee to ch haritable, beneevolent, religiious, scientific, national orr institutions or o objects wh hich shall hav ve any mo oral or other claim c to supp port or aid by the Company y either by reeason of localiity of operatio on, or of public and geeneral utility or otherwise. (xv vii) Beforee recommend ding any divid dend, to set aside a out of th he profits of the t Company y such su ums as they may m think pro oper for depreeciation or to Depreciation n Fund or to an a Insurance Fund or as a Reserve Fund or Siinking Fund or any speciial fund to meet m contingeencies or to repay r deebenture or deebenture-stocck or for speciial dividends or for equalising dividend ds or for repaairing, im mproving, exteending, and maintaining m any of the prroperty of thee Company and a for such other pu urposes (inclu uding the purrposes referreed to in the preceding p clau use), as the Board may, in n their ab bsolute discretion, think co onducive to th he interest off the Compan ny and subjecct to Section 292 2 of thee Act, invest the several su ums to set aside for so mu uch thereof ass required to be invested, upon su uch investmen nts (other than n shares of th he Company) as they may think fit, and d from time to o time to deal with an nd vary such h investmentss and disposee of and app ply and expen nd all or any y part 307

Scotts Ga arments Limiited theereof for the benefit b of the Company in n such mannerr and for such h purposes ass the Board in n their ab bsolute discreetion, think conducive c to the interest of the Comp pany notwith hstanding thaat the maatters to whicch the Board apply or upo on which they y expend the same, or any y part thereoff may bee matters to or o upon whicch the capitaal moneys of the Compan ny might righ htly be applied or expended, and to divide thee Reserve Fun nd into such special s funds as the Board may think fitt with fulll power to trransfer the wh hole or any po ortion of a Reeserve Fund or o division of a Reserve Fu und to an nother Reserv ve Fund or Division of a Reserve R Fund d and with fu ull power to employ the assets a constituting all or any of thee above fundss, including th he Depreciatiion Fund, in the t business of o the Co ompany or in n the purchasse or repaymeent of Debentture or deben nture stock and a without being b bo ound to keep the same sep parate from th he other asseets and witho out being bou und to pay in nterest on n the same wiith power how wever to the Board at theeir discretion to pay or allo ow to the credit of su uch funds inteerest at such rate as the Board B may th hink proper, not n exceeding g nine percen nt per an nnum. (xv viii) To app point, and at their discretio on remove orr suspend succh general maanagers, manaagers, seccretaries, asssistants, supeervisors, clerk ks, agents an nd servants for permaneent, temporary or special servicess as they may from time to o time think fiit, and to deteermine their powers p and duties d an nd fix their sa alaries or emoluments or remuneration n, and to req quire security y in such insttances an nd to such am mount as th hey may thin nk fit. And also a from tim me to time to o provide fo or the maanagement an nd transaction of the affaiirs of the Com mpany in any y specified localities in Ind dia or elssewhere in su uch manner ass they think fiit and the pro ovisions contaained in the fo our next follo owing su ub-clauses sha all be withoutt prejudice to the general powers p conferrred by this su ub-clause. (xiix) To com mply with th he requiremen nts of any locaal law which h in their opin nion shall be in i the intterests of the Company necessary or exp pedient to com mply with. (xx x) From time t to time and at any time to establiish any local Board for maanaging any of o the afffairs of the co ompany in an ny specified lo ocality in Ind dia or elsewheere and to ap ppoint any peersons to be members of such local Boards, and to t fix their rem muneration. (xx xi) Subjectt to Section 292 2 of the Acct, from time to time and at any time to t delegate to o any peersons so app pointed any of o the powerss, authorities and discretio on for the tim me being vestted in thee Board, otheer than theirr power to make m calls or to make loaans or borrow w moneys, an nd to au uthorise the Members M for the t time bein ng of any such h local Board d, or any of th hem to fill up p any vaacancies thereein and to actt notwithstan nding vacancies and any su uch appointm ment or deleg gation maay be made on o such term ms and subjectt to such con nditions as th he Board may y think fit, an nd the Bo oard may at any time rem move any peerson so app pointed, and may annul or vary any such deelegation. (xx xii) At any time and from m time to time by power of Attorney und der the Seal of o the Compan ny, to ap ppoint any person or perso ons to be the Attorney A or Attorneys A of th he Company for such purp poses an nd with such powers, p autho orities and diiscretion (not exceeding th hose vested in n/or exercisab ble by thee Board undeer these preseents and exclu uding the power to make calls and exccluding also except e in their limits, authorised by b the Board, the power to o make loanss and borrow w moneys) an nd for su uch period and d subject to such s condition ns as the Boaard may from m time to timee think fit; and d any su uch appointm ment may (if th he Board thin nks fit) be maade in favourr of the mem mbers or any of o the 308

Scotts Ga arments Limiited Meembers of an ny Local Boaard, establish hed as aforessaid or in fav vour of any Company, or o the sh hareholders, directors, d nom minees, or man nagers of any y company or firms or otheerwise in favo our of an ny fluctuating g body of perrsons whetherr nominated directly or in ndirectly by the t Board and d any su uch Power of Attorney maay contain su uch Powers fo or the protecttion or conveenience of peersons deealing with su uch Attorney ys as the Boarrd may think k fit, and may y contain pow wers enabling g any su uch delegates or attorneys as aforesaid to sub-delegaate all or any y of the poweers authorities and disscretion for th he time being g vested in theem. (xx xiii) Subject to o Section 294 and 297 of th he Act, for or in relation to o any of the matters m aforesaaid or oth herwise for th he purposes of o the Compaany to enter into i all such negotiations and contractts and resscind and va ary all such contracts, c and d execute and d do all such h acts, deeds and things in i the naame and on beehalf of the Company C as th hey may conssider expedien nt. (xx xiv) From tim me to time to make, m vary an nd repeal by-llaws for the regulation r of the t business of o the Co ompany its offficers and serrvants. TH HE SECRETARY Secretary y. 1688 Su ubject to the provisions p of Section S 383A of the Act, th he Board of Directors D may,, from time to o time ap ppoint and, at their discreetion remove any individu ual (hereinaffter called `th he Secretary’)) who sh hall have such h qualification ns as the auth hority under the t Act or theese Articles arre to be perfo ormed by y the Secretary y, and to execute any otheer purely min nisterial or ad dministrative duties which h may fro om time to tiime be assig gned to the Secretary. S Thee Board of Directors D may y also at any y time ap ppoint some persons p (who need not be the t Secretary)) to keep the registers requ uired to be keept by thee Company. TH HE SEAL The seal,, its custody and a use. 1699 (a)) The Board sh hall provide a Common seeal for the purrpose of the Company C and d shall have power p fro om time to tim me to destroy y the same and d substitute a new seal in lieu of the same, and the Board B sh hall provide fo or the safe cu ustody of the seal for the time t being, an nd the Seal sh hall never be used except by the au uthority of th he Board or a Committee C off the Board prreviously giv ven. ny shall also be b at liberty to t have an offficial seal in (b)) The Compan 50 of the Act, fo or use in any territory, t d district or plaace outside India.

1700

accord dance with Seection

Deeds ho ow executed. Ev very Deed or other instrum ment, to whicch the seal of the Company y is required to be affixed d shall un nless the sam me is executed d by a duly constituted c atttorney, be siigned by two o Directors or o one Diirector and Seecretary or som me other persson appointed d by the Boarrd for the purp pose.

DIVIDENDS Division n profits. 1711 Th he profits of th he Company,, subject to an ny special rig ghts relating thereto t createed or authorissed to bee created by these Articlees and subjecct to the prov visions of th hese Articles, shall be div visible am mong the mem mbers, in prop portion to thee amount of capital c paid-u up or credited d as paid-up on o the sh hares held by them t respectiively.

309

Scotts Ga arments Limiited

1722

1733

The Com mpany in Gen neral Meeting may declare a dividend. Th he Company in General Meeting M may declare divid dends to be paid to mem mbers accordiing to theeir respectivee rights, but no n dividends shall s exceed the t amount reecommended d by the Board d, but thee Company in n General Meeeting may deeclare a smalleer dividend. Dividend ds only to be paid out of profits. p No o dividends shall s be declaared or paid otherwise o thaan out of proffits of the finaancial year arrrived at after providiing for depreciation in acccordance with h the provisio ons of Section n 205 of the Act A or ou ut of the pro ofits of the Company C forr any previou us financial year or yearrs arrived at after providing for depreciation d i accordancee with these provisions an in nd remaining g undistributted or ou ut of both prov vided that: (a)) If the Comp pany has nott provided for depreciation n for any preevious financiial year or yeears it sh hall, before declaring or pay ying a d dividend forr any finan ncial year, provide p for such deepreciation ou ut of the profits of the fin nancial year or out of thee profits of any other previous fin nancial year or o years;

1744

1755

1766

1777

1788

(b)) if the Comp pany has incurrred any loss in any previo ous financial year or yearss the amount of o the losss or an amou unt which is equal to the amount prov vided for dep preciation for that year or those yeears whicheever is less, sh hall be set off against the profits of the Company C for the year for which w thee dividend iss proposed to o be declared d or paid or against a the profits p of the Company for any previous financial year or years arrived at in both h cases after providing fo or depreciatio on in acccordance with h the provisio ons of sub-secction (2) of Seection 205 of the t Act or agaainst both. Interim dividend. d Th he Board ma ay from timee to time, paay to the Meembers such interim diviidends as in their jud dgement the position p of th he Company ju ustifies. Capital paid p up in advance to interrest but not to o earn dividen nd. Where Capital is paid in ad dvance of calls such capitaal may carry interest i but shall not in reespect theereof confer a right to diviidend or partiicipate in proffits. Dividend ds in proportion to amoun nt paid-up. Alll dividends shall s be appo ortioned and paid proporttionately to th he amounts paid p or creditted as paaid on the sha ares during an ny portion or portions of th he period in respect r of whiich the divideend is paaid; but if an ny share is isssued on term ms providing g that it shalll rank for diividend as frrom a paarticular date,, such share sh hall rank for dividend d acco ordingly. Retention of dividend ds until comp pletion of tran nsfer under Arrticle 64. Th he Board may y retain the diividends payaable upon shaares in respecct of which an ny person is, under u Arrticle 64 entittled to becom me a Memberr or which any a person un nder that Arrticle is entitlled to traansfer, until such s person sh hall become a member, in respect of su uch shares or shall duly traansfer thee same. Dividend d etc. to joint--holders. An ny one of seveeral persons who w are regisstered as the joint-holders j of any share may give effeectual recceipts for all dividends or o bonus and d payments on o account off dividends or o bonus or other mo oneys payable in respect of o such sharess. No mem mber to recceive dividen nd whilst in ndebted to the Compan ny, and Com mpany's righ ht of reimburssement therea at. 310

Scotts Ga arments Limiited 1799

1800

No o member sha all be entitled d to receive paayment of an ny interest or dividend d in respect r of his share or shares whilsst any money ys may be duee or owing frrom him to th he Company in respect off such sh hare or shares or otherwisee howsoever, either alone or jointly witth any other person p or perrsons; an nd the Board may deductt from the in nterest or div vidend payab ble to any meember all sum ms of mo oneys so due from him to the Company y. Right to o Dividend, rights r shares and bonus shares to bee held in abeeyance pendiing registratio on of transfer of shares. Where any insttrument of trransfer of shaares has been n delivered to o the Compan ny for registrration nd the transferr of such sharres has not beeen registered d by the comp pany, it shall. an (a)) transfer thee dividend in n relation to such s shares to the special account refeerred to in Seection 205A of the Acct, unless thee Company iss authorised by the registered holder of such sharres in s dividend d to the transfferee specified in such insttrument of traansfer; and wrriting to pay such

1811

1822

(b)) keep in abeeyance in rellation to such h shares any y offer of rig ghts shares un nder clause (a) of su ubsection (1) of Section 81 8 and any issue of fullly paid up bonus b sharess in pursuan nce of su ub-section (3)o of Section 2055 of the Act. Dividend ds how remittted. Un nless otherwiise directed any a dividend d may be paid d by cheque or warrant or o by a paysllip or recceipt having the t force of a cheque or warrant w sent th hrough the post p to the reg gistered addreess of thee member orr person entiitled or in caase of joint-h holders to thaat one of theem first nam med in Reegister in resp pect of the joiint-holdings. Every such cheque c or waarrant shall bee made payab ble to thee order of thee person to whom w it is sent. The Compaany shall not be liable or responsible r fo or any ch heque or warrrant or paysslip or receip pt lost in tran nsmission, orr for any div vidend lost to t the meember or perrson entitled thereto by th he forged end dorsement off any cheque or warrant or o the forrged signaturre of any paysslip or receiptt or the fraud dulent recoverry of the dividend by any other meeans. Unclaim med dividend (a)) Where the Company C haas declared a dividend bu ut which has not been paiid or the diviidend waarrant in resp pect thereof has not been posted p within n 30 days from m the date of declaration to o any sh hareholder entitled to the payment p of th he dividend, the Compan ny shall withiin 7 days from m the daate of expiry of o the said perriod of 30 day ys, open a speecial account in that behalf in any sched duled baank called un npaid dividen nd of Scotts Garments G Lim mited and traansfer to the said accoun nt, the tottal, amount of o dividend which w remainss unpaid or in n relation to which w no dividend warran nt has beeen posted. An ny money transferred to th he unpaid div vidend accoun nt of the Com mpany which remains r unpaaid or un nclaimed for a period of seeven years frrom the date of such transsfer, shall be transferred by b the Co ompany to th he general rev venue accoun nt of the Centtral Governm ment. A Claim m to any mon ney so traansferred to the t general reevenue accou unt may be preferred p to th he Central Government G b the by sh hareholders to o whom the money m is due. (b)) That there shall s be no fo orfeiture of un nclaimed div vidends beforre the claim becomes b barreed by law w and the Co ompany shall comply with h all the prov visions of Secttion 205-A of the Act in reespect of unpaid or un nclaimed diviided. 311

Scotts Ga arments Limiited

1833

No interest on dividends. No o unpaid diviidend shall beear interest ass against the Company. C Dividend d and call tog gether.

1844

An ny General Meeting M declarring a dividend may on th he recommen ndation of thee Directors make m a calll on the mem mbers of such amount as th he meeting fix xes, but so thaat the call on each e memberr shall no ot exceed the dividend pay yable to him and so that th he call be maade payable at a the same tim me as thee dividend; and the divideend may, if so o arranged beetween the Co ompany and the t member, be b set offf against the calls. c Capitalissation.

1855

(a)) The Compa any in Generral Meeting may by a sp pecial resoluttion resolve that any mo oneys, inv vestments or other assets forming f part of the undiviided profits of o the Compaany standing to t the creedit of the Reeserve Accou unt or Fund, or any Capittal Redemptiion Reserve Account, A or in i the haands of the Co ompany and available a for dividend (or representing premium recceived on the issue of shares and standing to o the credit of the Sharees Premium Account) be capitalised d and disstributed am mongst such of the shareeholders as would w be en ntitled to recceive the sam me if disstributed by way of divid dend and in the same prroportions on n the footing that they beecome en ntitled thereto o as capital and a that all or o any part off such capitaalised value or o sum or fun nd be ap pplied on beha alf of such sh hareholders in n paying up in n full either at par or at succh premium as a the ressolution may y provide, any y unissued sh hares or debeentures or deebenture stock k of the Com mpany wh hich shall be distributed accordingly a or in or towarrds payment of the uncalleed liability on n any isssued shares or o debenturess or debenturre-stock and that such distribution or payment shaall be acccepted by su uch sharehold ders in full satisfaction off their interesst in the said d capitalised sum, provided that a Share Premiium account and a Capital Redemption n Reserve Acccount may, fo or the urpose of thiss Article, onlly be applied d in the payiing of any un nissued sharees to be issu ued to pu meembers of thee Company ass fully paid bo onus shares. (b)) A General Meeting M may y resolve that any surplus moneys arising from the realisation of o any cap pital assets of the Com mpany, or an ny investmen nts representting the sam me, or any other un ndistributed profits p of th he Company not subject to charge may m be distriibuted among g the meembers on thee footing thatt they receive the same as capital. c (c)) For the purrpose of giviing effect to any resolutio on under thee preceding paragraphs p o this of artticle, the Boa ard may settlle any difficu ulty which may m arise in regard r to thee distribution n as it thiinks expedien nt and in paarticular may y issue fractio onal certificates and may y fix the valu ue for disstribution of any a specific assets, a and maay deterrmine that such s cash paayments shaall be maade to any members m upon n the footing of the value so fixed or th hat fraction of less value th han ` 10/- may be dissregarded in order to adju ust the rights of all parties and may vesst any such caash or uch trusts forr the person n entitled to the dividend ds or thee specific assets in trustees upon su cap pitalised fund ds as may seeem expedientt to the Board d. Where requ uisite, a propeer contract sh hall be deelivered to thee Registrar fo or registration n in accordancce with Sectio on 75 of the Act, A and the Board B maay appoint an ny person to sign s such con ntract on behaalf of the perssons entitled to the divideend or cap pitalised fund d, and such ap ppointment shall s be effective.

AC CCOUNTS Directorss to keep truee accounts. 312

Scotts Ga arments Limiited 1866

1888

1899

1900

Th he Company shall s keep at the t Office or at such otherr place in Indiia as the Boarrd thinks fit proper Bo ooks of Accou unt in accordaance with Secttion 209 of the Act with resspect to: (a))

all sum ms of money received r and expended by y the Compan ny and the maatters in respect of which the t receipts an nd expenditu ure take place;;

(b))

all saless and purchasses of goods by b the Compaany; and

(c))

the asseets and liabiliities of the Co ompany.

Where the Boarrd decides to o keep all or any a of the Books of Accou unts at any pllace other thaan the C thee Company shall within seven days of the decission file with h the offfice of the Company, Reegistrar a nottice in writin ng giving thee full addresss of that oth her place. Th he Company shall preserve in goo od order the Books of Acccounts relatiing to a perio od of not less than eight years hers relevant to any entry y in such Boo oks of preceeding the current yearr together wiith the vouch pany has a brranch office, whether in or o outside India, the Com mpany Acccounts. Wheere the Comp sh hall be deemeed to have co omplied with this Article if i proper Boo oks of Accou unts relating to t the traansactions efffected at the branch officee are kept att the branch office and prroper summaarised retturns, made up u to dates att intervals of not n more than n three month hs, are sent by y the branch office to the Compan ny at its officee or other plaace in India, at a which the Company's Books B of Acco ounts aree kept as afo oresaid. The Books B of Accounts shall give g a true an nd fair view of the state of o the afffairs of the Co ompany or brranch office, as a the case maay be and exp plain its transaactions. The Books B of Accounts an nd other boo oks and papeers shall be open o to inspeection by an ny Director during bu usiness hours.. Statemen nt of Accountts to be furnisshed to Generral Meeting. Th he Directors shall s from tim me to time, in accordance with w Sections 210, 211, 2122, 215, 216 an nd 217 of the Act, cau use to be prep pared and to o be laid befo ore the Comp pany in Geneeral Meeting such Baalance Sheets, Profit and Lo oss Accounts and Reports as are requireed by these Seections. Copies shall s be sent to o each Memb ber. A printed copy y of every balance sheet (in ncluding everry document required by law l to be ann nexed or attached thereto) which is to be laid before b the Com mpany in An nnual Generall Meeting tog gether wiith a copy of the t Auditors' Report or a statement s con ntaining salien nt feature of such s documents in thee prescribed form, as laid d down under Section 2199 of the Act as a the Compaany may deem fit, sh hall not less th han twenty on ne days beforee the date of the t Meeting, be b sent to eveery person en ntitled theereto pursuan nt to the prov visions of the said s Section. Ev very Balance Sheet S and Pro ofit and Loss Account of the t Company y when auditeed and adopteed by thee Company in i general meeeting shall be b conclusive except as reg gards any maatters in respect of wh hich modifica ations may frrom time to tiime be consid dered properr by the Board d of Directors and ap pproved by th he shareholders at a generaal meeting. Auditorss

1911

Au uditors shall be b appointed and their rig ghts and dutiees regulated in i accordancee with Section ns 224 to 233 of the Acct. WIINDING UP Liquidattor may divid de assets in sp pecie. 2011 Th he Liquidatorr on any wind ding-up (wheether voluntaary, under su upervision or compulsory)) may 313

Scotts Ga arments Limiited wiith the sanctiion of a Speccial Resolutio on, but subject to the righ hts attached to any prefeerence sh hares capital, divide d among g the contribu utors in speciee any part of the assets of the Company y and maay with the liike sanction, vest v any part of the assets of the Comp pany in trusteees upon such h trust forr the benefit of o the contribu utors as the liiquidator, witth the like san nction, shall th hink fit. IN NDEMNITY AND A RESPON NSIBILITY Directorss' and others' right of indeemnity. 2022 Ev very officer orr Agent for th he time being of the Comp pany shall be indemnified i o of the asssets of out thee Company against a all liab bility incurred by him in defending d any y proceeding gs, whether ciivil or criiminal, in wh hich judgemen nt is given in his favour orr in which he is acquitted or o discharged d or in connection with h any applicaation under Seection 633 of the Act, in which w relief is granted to hiim by thee Court. SECRECY CLAUSE Secrecy Clause. C 2033 (a)) Every Direector, Manag ger, Auditor, Treasurer, member of a Committee, servant, agent, a acccountant or other o person employed e in the business of the Comp pany shall, if so required by b the Diirectors, beforre entering upon u his dutiies, sign a deeclaration pledging himsellf to observe strict seccrecy respectiing all transactions and afffairs of the Company C with h the customeers and the state of acccounts with individuals i a and in matterrs relating theereto, and sh hall by such declaration d pledge him mself not to reveal r any of the matters which w may co ome to his kno owledge in th he discharge of his du uties except when w required d so to do by y the Directorrs or by law or o by the persson to whom m such maatters relate and a except and a so far as may be necessary in ord der to comply y with any of o the provisions in th hese presents contained. b) No memberrs shall be en ntitled to vissit or inspectt any works of the Com mpany withou ut the peermission of th he Directors or o to require discovery of or any inform mation respeccting any detaails of thee Company's trading, or an ny matter wh hich is or may y be in the natture of a tradee secret mysteery of traade, secret prrocess of any other matterr which may relate to the conduct of the business of o the Co ompany and which w in the opinion of th he Directors, it i would be in nexpedient in n the interest of o the Co ompany to dissclose. GE ENERAL POW WER 2044 he Companiees Act, it haas been prov vided that th he Company shall have right, Wherever in th privilege or autthority or thatt the Compan ny could carry y out any tran nsaction only y if the Compaany is so authorised by b its articles, then and in that t case this regulation heereto authorisses and empo owers thee Company to t have such rights, privillege or autho ority and to carry c such traansactions as have beeen permitted d by the Actt, without theere being an ny specific reegulation in that t behalf herein h provided.

314

Scotts Ga arments Limiited SECT TION VIII - OTHER O INFO ORMATION N MATERIAL CON NTRACTS AN ND DOCUME ENTS FOR IN NSPECTION N The following contracts and agreements referred r to (n not being conttracts entered d into in the ordinary o course of bussiness carried d on or inten nded to be caarried on by the Company y or contractts entered intto more than two yeaars before thiis RHP), whicch are or may y be deemed material to be b material haave been enteered into by or o on beh half of the Co ompany. Cop pies of these contracts c togeether with co opies of docum ments referreed under Matterial Do ocuments belo ow all of wh hich have been attached to o the copy off this RHP an nd have been n delivered to o the Sto ock Exchangees and may bee inspected at a the Registerred Office of the Compan ny between 9:30 am to 5:300 pm on any working g day from thee date of this RHP until thee date of closu ure of the sub bscription Lisst. Maaterial contraacts 1 1.

Memoran ndum of Und derstanding dated d 24/09/2010 entered d into betweeen the Compaany and Key ynote Corporatee Services Lim mited, Book Running R Lead Manager to the t Issue.

2 2.

Memoran ndum of Und derstanding dated d 25/09/ /2010 entered d into betweeen the Comp pany and Caanara Bank, Co--Book Runnin ng Lead Manaager to the Isssue.

3 3.

Memoran ndum of Undeerstanding daated 25/09/2010 entered in nto between the Company y and Link In ntime Pvt. Limitted, Registrarr to the Issue.

4 4.

Escrow Agreement A da ated [•], betw ween the Com mpany, the BR RLM, the Escrow Collectio on Banks and d the Registrar to the Issue.

5 5.

Syndicatee Agreement dated d [•] betw ween the Com mpany, BRLM M and Syndicaate Members.

6 6.

Underwriiting Agreement dated [•] between the Company, C BR RLM and Syn ndicate Memb bers.

7 7.

Copy of Tripartite ag greement daated 06/12/22010 entered into betweeen the Comp pany, CDSL and Registrar to the Issue.

8 8.

Copy of Tripartite ag greement dated 29/11/2010 entered into betweeen the Comp pany, NSDL and Registrar to the Issue.

9 9.

Share Sub bscription cum m Shareholdeers Agreemen nt dated 19/112/2012 and Supplementaary Agreemen nt to Share Sub bscription cum m Shareholdeers Agreemen nt dated 21/022/2013

Maaterial Docum ments 1 1.

Memoran ndum of Asso ociation and Articles of Association A off the Company, as amend ded from tim me to time.

2 2.

Sharehold ders’ resolutio ons dated 10/ /06/2010 and d 19/12/20122 in relation to the Pre-IPO Placementt and this Issue..

3 3.

Resolution ns passed at the EGM daated 30/03/20010 approvin ng the remuneration of Mrr. Naseer Ah hmed and Mrs. Nuzhat N Aisha a Naseer.

4 4.

Audited Balance B sheetts and Profit and Loss Acccounts of the Company fo or seven mon nths period en nded on Octobeer 31, 2012 an nd for the finaancial years en nding on Marrch 31, 2012, 2011, 2 2010, 2009 and 2008.

5 5.

Consents of Auditors,, Bankers to the Compan ny, Bankers to o the Issue, BRLM, B Regisstrar to the Isssue, Directors of our Comp pany, Compaany Secretary y & Compliance Officer, Legal L Adviso or to the Issu ue as referred to o, in their respective capaccities.

315

Scotts Ga arments Limiited 6 6.

Legal Duee Diligence Report R dated 28/09/2010 2 b DSK Legal,, Advocates, Legal by L Adviso or to the Issuee and due diligeence certificatte dated 30/10/2012.

7 7.

Copy of certificate da ated 10/01/22013 issued by b the Peer Review R Audiitor of the Co ompany, M/ /s. G Anantha & Co., Charrtered Accoun ntants in term ms of Part II I Schedule III of the Com mpanies Act 1956 including g capitalisation n statement, taxation t statement and acccounting ratio o.

8 8.

Copy of certificate c datted 28/06/20012 issued by y Siddaiah & Ram Charterred Accountaant and Statu utory Auditors of the Compa any regarding g tax benefits accruing to th he company and a its shareh holders.

9 9.

Copy of certificate c datted 25/03/20013 issued by y Siddaiah & Ram, Chartered Accountaant and Statu utory Auditors of the Compa any regarding g sources and d deployment of funds.

1 Copy of In 10. n-principle ap pproval received from BSE E vide their leetter no. DCS S/IPO/RK/IP PO-IP/1349/2201011 dated 21/12/2010 2 fo or listing of th he securities offered o through this Offer Document att BSE. 1 Copy of In-principle approval recceived from NSE vide th 11. heir letter no o. NSE/LIST T/155676-Y dated d 11/01/2011 for listing of the securitties offered th hrough this Offfer Documen nt at NSE. 1 SEBI Observation Lettter No. CFD/ 12. /DIL/SP/DK K/9407/2012 dated 26/04/ /2012 issued by the Securrities and Exchaange Board of India and reeply to the ob bservation by Keynote Corrporate Servicces Limited (B Book Running Lead L Manageer) vide their letter l no. SGL L/CL/GS(01)) dated 30/10/2012 1 Tripartite MOU betw 13. ween Governm ment of Karaanataka, our Company and a Bombay Rayon Fash hions Limited dated d 03/06/ /2010 and 04/06/2010 an nd Karanatakaa Governmen nt Oder No. CI 200 SPI 2010, 2 Bangaloree dated 02/06 6/2010. 1 CARE IPO 14. O Grading vid de their letterr dated 01/03/2013 Any of the co A ontracts or do ocuments meentioned in th he RHP may be amended or modified at any time if so r required in the interest of o our Comp pany or if required by th he other partties, without reference to o the s shareholders subject to co ompliance of the provision ns contained in the Comp panies Act an nd other releevant s statutes.

316

Scotts Ga arments Limiited PAR RT III DECLA ARATION Alll the relevant provisions of o the Compan nies Act, 19566, and the guiidelines issueed by the Gov vernment of India I or the regulatio ons issued by Securities and Exchang ge Board of India, establlished under Section 3 off the Seccurities and Exchange E Bo oard of India Act, 1992, as a the case may m be, havee been compllied with and d no staatement madee in this Red Herring Prosspectus is con ntrary to the provisions p off the Compan nies Act, 19566, the Seccurities and Exchange E Boa ard of India Act, A 1992 or ru ules made theere under or regulations isssued, as the case maay be. We furtther certify th hat all statemeents in this Reed Herring Prrospectus are true and corrrect. Sig gned by all Directors D

Sd d/N Naseer Ahmed d

Sd/A Arumugh ham

Sd d/C C.R.Murali

Sd/B.S. Patil

Sd d/A Azeezulla Baig g

Sd/M.M.Choprra

Sd d/N Nuzhat Aisha Naseer

Sd/S.Thiruvad di

ecretary and Compliance C O Officer Siigned by the Company Se

Sd d/S.. Guruswamy y Babu

Date: April 122, 2013 D P Place: Bangalo ore

317