Total Embroidery Solutions 1 Corporate Presentation January 2007 Grabal Alok Impex Limited.

1Total Embroidery Solutions

Corporate PresentationJanuary 2007

Grabal Alok Impex Limited

2Total Embroidery Solutions 2

Forward Looking StatementsThis presentation contains statements that constitute “forward looking

statements” including, without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to our future business developments and economic performance.

While these forward looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations.

These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that we have indicated could adversely affect our business and financial performance.

Grabal Alok Impex Limited undertakes no obligation to publicly revise any forward looking statements to reflect future events or circumstances.


Section 1 Highlights

Section 2 Industry Overview

Section 3 Company Overview

Contents


Investment Highlights

Embroidery Industry

Removal of quotas has opened export opportunities for textile manufacturers in China and India

Strong demand for embroidery fabrics in the domestic as well as the international market

Indian embroidery industry benefits from rich traditional heritage and skilled and creative labor at low cost

With better access to international market, margins have significantly improved in the embroidery industry

Grabal AlokImpex Limited

Most modern & largest embroidery manufacturing capacity in India with an installed capacity of 9248 million stitches – Significant benefit from economies of scale

Vast library of over 25,000 in-house designs – Strong team of experienced and creative designers

Large customer base comprising of well known garment exporters, export houses and overseas buyers

Technical and design support from Grabal, Austria

Access to Alok’s integrated manufacturing facilities

Complete embroidery range to meet customer demand

Higher value addition, resulting in better margins

Acquired a stake of 26% in a UK based retailing company Hamsard 2353 Ltd for enhanced forward integration


Track RecordNet Sales

460 425

569

844

0

200

400

600

800

1000

2003-04 2004-05 2005-06 2006-07 *

INR

mil

lio

ns

EBITDA

93 79

146

272

0

50

100

150

200

250

300

2003-04 2004-05 2005-06 2006-07 *

INR

mil

lio

ns

PAT

3324

45

77

0

20

40

60

80

100

2003-04 2004-05 2005-06 2006-07 *

INR

mil

lio

ns

EPS

2.76

1.6

4.09

6.74

0

1

2

3

4

5

6

7

8

2003-04 2004-05 2005-06 2006-07*

INR

* Annualized based on 6 months ended 30 September 2006 results

CAGR 22.4%

CAGR 32.1%

CAGR 42.8%CAGR 34.7%


Financials

Particulars 2003-04 2004-05 2005-06 2006-07 CAGR (%)*

Rs Millions (Audited) (Audited) (Audited)Half Year

Ended 30.09.2006

Net Sales 460.3 424.9 568.7 422.1 22.4%

Operating Profit 93.5 78.9 146.4 136.2 42.8%

Interest 15.7 17.6 18.6 31.9 -

Depreciation 26.5 31.1 61.5 46.7 -

PAT 33.3 23.7 45.0 38.4 32.1%

Cash Profit 61.5 54.9 106.5 85.1 -

Ratios

EBITDA Margins (%) 20.31% 18.57% 25.74% 32.27% -

PAT to Sales (%) 7.23% 5.57% 7.91% 9.09% -

RONW (%) 11.09% 7.26% 11.97% - -

ROCE (%) 16.55% 7.19% 7.73% - -

EPS (Rs) 2.76 1.60 4.09 3.37 34.7%

* For the period between FY2004 and FY2007(annualized based on 6 months ended 30 September 2006 results)


Indian Textile Industry – An Overview


Opportunities - Global Textile IndustryRemoval of quotas has ushered a number of changes at demand as well as supply end

Gradual shift of manufacturing base from high cost Western countries to low cost Asian countries

China and India are the biggest beneficiaries of quota removal

World textile trade expected to grow from US$ 480 billion in 2005 to US$ 650 billion by 2010

India to emerge as a preferred supplier due to strong legacy in textiles and the perceived need to reduce dependence on China

India’s exports to grow from present level of USD 17 bn to USD 50 bn by 2010

USD

650 bn

USD

480 bn.

2010 2005

Global Textile Trade

Source: Home fashion magazine


Indian Textile Industry

Strengths

Self sufficient in raw material base - Major producer for a wide range of textile fibers like cotton, man-made, jute, linen and silk

One of the few countries to have presence across the textile value chain from fiber production through spinning, weaving, knitting, dyeing & finishing to production of final products like apparels and home textiles

Vast pool of workers, both skilled and unskilled as well as technicians and managers at relatively low cost

Strong designing capabilities

Flexible facilities that facilitate short runs for high fashion items and long run for basics

Industry friendly policies by government to boost investments and facilitate trade

Opportunities

Healthy GDP growth of 7%-8%

Rapidly increasing middle income group accompanied by rise in aspirations and purchasing power

Per Capita textile consumption to go up from about 20 meters to 30 meters by 2010

Domestic Textile market alone expected to reach USD 50 bn in 2010 from the present USD 33 bn – assuming CAGR of 8.7% p.a.


Global Embroidery Industry

Source : Market survey conducted by Gherzi Eastern Ltd.

World's Export of Embroidery Fabric and Products

1457

1495

15251548

1585

1350

1400

1450

1500

1550

1600

2002 2003 2004 2005 2006

Val

ue in

Mill

ion

US

$

World Exports of Embroidery Fabric

91108

121133

154

0

20

40

60

80

100

120

140

160

180

2002 2003 2004 2005 2006

Mill

ion

Kgs

World Market 2002 2006 CAGR

In Quantity Terms (Kgs) 91 mn 154 mn 14%

In Terms of Value (USD) – World

1457 mn 1585 mn 2%

Asia 865 mn 1176 mn 8.4%

Demand for embroidery due to fashion and high value addition is increasing in manifold applications in garments, made ups, curtains etc

The world trade in embroidery is growing at a CAGR of 3%. Supply from Asia is rapidly growing at higher rate of 8% due to its wide application

Key producing countries: China, India, Korea, Switzerland, Turkey

Key consumer countries: Africa, Middle East, Asia


Indian Embroidery Industry

Indian Market 2003 2008 CAGR

Domestic 8.0 15.1 13.5%

Exports 3.0 5.9 14.5%

Value in INR bn. 11.0 21.0 14.0%

Embroidery being a high fashion item has application both in the domestic and exports – Expected growth of about 14% CAGR for Indian embroidery industry

Indian embroidery enjoys the inherent advantage of traditional heritage and design capabilities

Embroidery is a labour intensive industry; India has a large pool of workers

Indian labour is skilled and relatively low cost resulting in finer embroidery at competitive prices - for Grabal Alok Impex cost of labor is 5% of sales; for most European manufacturers it would be 30-40% of the sales

India expected to be the second largest supplier of embroidered products after China

Source : Market survey conducted by Gherzi Eastern Ltd.


Grabal Alok – Total Embroidery Solutions


Introduction Promoted by Alok Industries Limited in financial and

technical collaboration with Grabal Group, Austria

Leading manufacture of all kinds of embroidered products (like Edgings, Allovers, Guipures, Embroidered curtains, Embroidered Table-ware, Napkins etc.) for application on Home Textiles and Apparel.

A professionally managed profit making company with a consistent dividend record since 1998-99

State of the art manufacturing facilities and strong designing capabilities


Corporate Structure

Promoter Group

25.64%

Alok Industries Limited

Grabal Alok Impex Limited

Grabal Alok International

Limited

Hamsard 2353 Limited

28.90%

13.63%

100.00%

26.03% Proposed to increase to 75%

xx.xx % Indicates the current percentage hold


Promoters

Established textile player with a turnover of Rs. 1420 crores (USD 312 mn)

Most modern integrated facilities for home textiles, apparel fabrics, garments and texturising

Well established contacts in the industry, both domestic and overseas

Alok Group

Embroidery group in Austria with more than 5 decades of experience

Engaged in manufacturing all kinds of embroidered products for application in Home Textiles and Apparel.

Technical and designing support, access to the new developments in European markets

Grabal Group


Operations

Current June 2007 (Post Phase 1 expansion)

June 2008 (Post Phase 2 expansion)

Machine name / makeNo. of

machinesCapacity No. of

machinesCapacity No. of

machinesCapacity

Schiffli – Lasser make, Swiss 21 3,830 25 4,653 55 10,826

Multihead - Tajima & Barudan make

14 5,128 30 11,320 60 22,930

Quilting Machine - MECA make 1 290 1 290 1 290

Total Capacity 36 9,248 56 16,263 116 34,046

No. of Employees 700 +

No. of Share holders 1200 +

Board of Director

Total Directors - 8

Promoters - 3

Non-Executive - 5

Capacity in million stitches per annum

Capacity Growth

Estimated cost of capacity expansion for Phase 1 is Rs 250m and Phase 2 is Rs 1,500m


Customer Base African countries continue to be one of the largest markets for embroidery fabrics.

Grabal Alok reaches 14 African countries through a network of distributors and traders

Key apparel fabric customers

Key home textile customers

Key domestic customers: Orient Craft Limited, Morarjee Mills, Ambattur Clothing


Recent Acquisition

Acquired a stake of 26% (starting in December 05) in a UK based retailing company Hamsard 2353 Ltd for £ 6.4 million. Hamsard 2353 Ltd operates retail stores across England, Scotland and Wales

The stores operate under the name “qs” and are value for money stores to sell garments and home textile

Completed the restructuring of the retail business by implementing a Creditors Voluntary Arrangement (CVA). The number of stores stands at 207 spread over 850, 000 sq. feet with an annual turnover of UK ₤ 110 mn and staff strength of 2670

Grabal Alok is considering a further investment of £ 8 million in Hamsard 2353 Ltd to increase its stake to 75%

Rationale Behind Stake Acquisition

Sourcing office being set up in India, resulting in

reduction of 10%-15% in purchase cost.

Strong synergy with Alok Group to supply

garments/made ups to Hamsard.

Turnaround of stores of Hamsard to create

substantial shareholder value.

Brands / stores /concept can be launched in India

to capitalise on retail boom.

Recent Investment in UK Based Retail Chain


Hamsard 2353 Ltd.

Financials (£ millions)

Operates 207 retail outlets across England, Scotland and Wales under the brand name “qs”

The stores offer quality fashion products for women, men, girls, boys and babies and home wares

The Company also owns the “LEE SHARK” brand and is franchise for “NAF NAF” brand

Particulars 2003-04 (31st Jan 2004)

2004-05 (29th Jan 2005)

2005-06 (31st March 2006)

14 months

31st December 2006

(9 months)

Net Sales 208.00 188.30 199.64 79.54

Gross Margin 96.24 89.15 79.76 36.97

Gross Margin (%) 47.9% 47.4% 39.95% 46.48%

Store Costs 78.11 76.50 96.02 37.69

Warehouse & Distribution Costs 5.40 5.30 6.24 3.07

Head Office Costs 15.45 10.75 12.20 5.05

Financial Items 0.14 (0.55) 17.64 0.68

Pre Interest Profit (2.58) (3.95) (17.02) (8.16)

Interest (1.27) (1.40) (2.00) 0.28

Profit Before Exceptional (3.85) (5.35) (19.02) (8.44)


Grabal’s strategy for Hamsard 2353 Ltd.

Reconstitution of Board of Hamsard.

• The existing Board of directors will retire and new board to be constituted.

• Grabal and Hamsard to appoint 5 board members each.

• Mr. Ashok B. Jiwrajka to be appointed as the Chairman of Hamsard with a casting vote.

• Already appointed a senior person from Alok group as Vice Chairman of Hamsard.

Changing the existing sourcing pattern of Hamsard.

• Hamsard presently sources 80% its requirement of fabric / garment from in and around U.K and 20% from other countries.

• Grabal to change this and source 80% of the requirement of fabric / garment from Asian countries like India and China and balance from in and around U.K.

• This would result in substantial savings in the procurement costs.


Grabal’s strategy for Hamsard 2353 Ltd… contd.

• Refurbishing the Stores

• Introduction of new products like bed linen and other furnishing items.

•Discontinuation of slow moving items.

•Carrying out extensive survey and if needed, re-brand the stores.

•Increase Revenue, cut procurement costs and with this, increase margins.


Capacity Expansion

New Projects

Grabal is further expanding its existing capacity by adding 4 Lasser Embroidery machines and 16 Multihead embroidery machines at a total project cost of Rs. 250 million

Second stage of expansion to add 30 Lasser Embroidery machines and 30 Multihead embroidery machines

Capacity in terms of stitches to increase by 7,015 mn. stitches from the present level of 9,248 mn. stitches to 16,263 mn. stitches by June 2007 and to 34,046 mn stitches by June 2008

Aggressive marketing to reach existing and new customers with enhanced capacity Aggressive marketing to reach existing and new customers with enhanced capacity

Current capacity fully utilized with all units operating three shifts round the year

Yet demand is not fully met with outstanding orders from customers including unmet demand from Alok Industries' home textile and apparel division

Current capacity fully utilized with all units operating three shifts round the year

Yet demand is not fully met with outstanding orders from customers including unmet demand from Alok Industries' home textile and apparel division


Funding RequirementS No. Particulars US$ Millions

1 Additional Stake in Hamsard 2353 Ltd. 15.50

2 Working Capital Loan to Hamsard 2353 Ltd. 4.00

3 Repayment of Loan taken for existing stake in Hamsard 2353 Ltd. 11.00

4 Regular Capital and other Expenditure in Grabal Alok 9.50

Total 40.00


Share CapitalEquity Share Capital Rs.139.45 million (Fully diluted Rs. 202.9 million)

Listed at BSE, Pune and Ahmedabad stock exchange

Market Price Rs. 150.40 (US$ 3.3) as on 16.01.2007

Market Capitalisation Rs. 2097 million (US$ 46.1 mn)

52 weeks high / Low High : Rs.163 (US$ 3.58) Low : Rs. 94 (US$ 2.1)

Category No. of shares % Of holding

Promoters – Alok Industries Ltd. 1,900,000 13.63%

Promoters – Indian 3,576,030 25.64%

Foreign Collaborator 787,500 5.65%

Sub-total 6,263,530 44.92%

Mutual Funds 1,000,000 7.17%

FII/NRIs/OCBs 4,212,651 30.21%

Public/Corporate bodies 2,468,754 17.70%

Total 13,944,935 100.00%


Expected DilutionParticulars Amount in mn. (Rs.) Conversion price (Rs.) Equity Shares

FCCB 190.31 43.75 4,350,000

Share Warrants 218.00 109 2,000,000

Total 6,350,000

Shareholding pattern post all conversions

Category No. of equity shares % of shareholding

Promoters – Alok Industries Ltd. 1,900,000 9.36%

Promoters – Indian 3,576,030 17.62%

Foreign Collaborator 787,500 3.88%

Sub-total 6,263,530 30.86%

Mutual Funds 1,000,000 4.93%

FII/NRIs/OCBs 10,562,651 52.05%

Public/Corporate bodies 2,468,754 12.16%

Total 20,294,935 100.00%


Profit and Loss AnalysisOperating Results

Rs millions2003-04 2004-05 2005-06

Operating Results

Net Sales 460.27 424.89 568.74

Operating Profit 93.50 78.91 146.42

Interest 15.71 17.61 18.62

Depreciation 26.54 31.19 61.55

PBT 49.61 30.12 66.24

PAT 33.27 23.67 45.00

Operating Profit Margin (%) 20.31% 18.57% 25.74%

Profit After Tax Margin (%) 10.78% 5.57% 7.91%

Interest Coverage Ratio 5.95 4.48 7.86

Return on Capital employed 16.55 7.19 7.73

EPS (Rs.) 2.76 1.60 4.09

Assumed 1US$=RS. 45.50

Nigeria, a key market for embroidery products, placed an embargo on all fabric imports during 2003-04. This affected Company’s performance during FY2003-04. Since then, Grabal Impex has diversified its customer base resulting in significant improvement in financial performance


Balance Sheet Analysis


Analysis Of Balance Sheet

Rs millions2003-04 2004-05 2005-06

Equity Share Capital 82.90 82.90 113.95

Reserves and Surplus 121.92 105.79 237.11

Share Warrants - - 21.80

Tangible Net worth 204.86 188.74 372.86

Preference Shares 69.20 3.20 -

Unsecured Loans - 437.9 344.07

Long term Loans 104.45 188.75 930.36

Current Liabilities 147.00 239.23 192.66

Net Fixed Asset 195.46 426.88 900.97

Current Asset 333.70 634.79 643.63

Ratios

Current Ratio 2.27 2.65 3.34

Long Term Debt(net of cash) :Equity 0.55 1.36 2.55

Total Debt(net of cash):Equity 0.88 1.77 2.84


Current Year Performance


Particulars

30.09.2005

[6 Months]

(Provisional)

(Rs in mn)

30.09.2006

[6 Months]

(Provisional)

(Rs. In mn)

30.09.2006

[6 Months]

(Provisional)

(USD. In mn)

% increase / (decrease)

Net Sales 265.32 422.12 9.28 59.10%

Operating Profit 67.85 136.22 2.99 100.77%

Interest 6.72 31.95 0.70 375.45%

Depreciation 25.34 46.75 1.03 84.49%

Extra Ordinary Items* 13.97 - - -

PBT 21.83 57.52 1.26 163.49%

PAT 19.77 38.39 0.84 94.18%

Cash Profit 59.08 85.14 1.87 44.11%

Ratios

Operating Profit Margin (%) 25.57 32.27 32.27 -

Profit After Tax Margin (%) 7.45 9.09 9.09 -

Interest Coverage Ratio 10.10 4.26 4.26 -

* Loss on sale of machines


Contact Details

GRABAL ALOK IMPEX LIMITEDPeninsula Towers, Peninsula Corporate Park,

Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400 013.

Contact Nos. 022 – 24996200 / 500 Fax No. 022 – 2493 6078

Thank You


This document has been prepared by Grabal Alok Impex Ltd, ("Grabal"), for information purposes only.

You must independently determine, with your own advisors, the appropriateness for you of the securities/transaction before investing or transacting. Grabal accepts no liability whatsoever for any consequential losses arising from the use of this document or reliance on the information contained herein.

Grabal does not guarantee the accuracy or completeness of information which is contained in this document and which is stated to have been obtained from or is based upon trade and statistical services or other third party sources. Any data on past performance, modelling or back-testing contained herein is no indication as to future performance. No representation is made as to the reasonableness of the assumptions made within or the accuracy or completeness of any modelling or back-testing. All opinions and estimates are given as of the date hereof and are subject to change. The value of any investment may fluctuate as a result of market changes. The information in this document is not intended to predict actual results and no assurances are given with respect thereto.

This document is being made available in the UK to persons who are investment professionals as defined in Article 19 of the FSMA 2000 (Financial Promotion Order) 2005. Outside of the UK, it is directed at persons who have professional experience in matters relating to investments. Any investments to which this document relates will be entered into only with such persons. This document is not for distribution to retail customers.

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Disclaimer

Total Embroidery Solutions 1 Corporate Presentation January 2007 Grabal Alok Impex Limited.

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