COX AND KINGS (INDIA) LIMITED - Securities and Exchange Board ...

We are exposed to many types of operational risk, including increases in operating expenses, such as salaries and staff
costs, insurance and taxes, increases in hotel room rates and air fares, transportation and fuel costs for sustained periods
in India and internationally. Our inability to manage costs could adversely impact our operating margins. Increases in
transportation and fuel costs for sustained periods in India and internationally (affecting inbound travel from abroad)
could also unfavourably impact future results. Similarly, we are dependent on our IT information systems and
electronic reservation system. Any disruption in these systems could result in the loss of important data, increasing our
expenses and generally harm our business.
36. The Travel and Tours Industry is cyclical and sensitive to changes in the economy and this could have a significant
impact on our operations and financial results
The Travel and Tours industry is cyclical and sensitive to changes in the economy in general. The sector may be
unfavourably affected by such factors as changes in the global and domestic economies, changes in local market
conditions. If the economic growth of India or other countries that we operate in slows down there may be a gradual
decline in the willingness for people to travel. A global or domestic recession may severely imp act the Tour and Travel
Industry and consequently our business. Such adverse developments in the Tour and Travel Industry in India or in the
countries where our subsidiaries are located or where we have our agents, branches and representative offices, will have
a negative impact on our profitability and financial condition.
37. Some segments of our business, for example leisure, are seasonal in nature
Revenues and cash flows in the travel and tourism industry are affected by seasonality and depend on various factors
such as school holidays, public holidays, conducive weather conditions and political conditions in the destination for
travel. Our revenues are generally higher for inbound tourism during the second half of each fiscal year as compared to
the first half of the fiscal year. The first half of our fiscal year includes India’s summer and monsoon seasons hence
international leisure travellers to, and domestic leisure travellers in, India are substantially fewer than in the second half
of the year but revenues for outbound tourism are higher in the first half of the fiscal year. Any disruptions of our
operations or adverse external factors affecting business during these key seasons may lead to a reduction in our
revenues and may have a material adverse impact on our results of operations.
Risks related to Our Shareholders and Equity Shares
38. The Offer for Sale proceeds will not be available to us.
This Issue includes an Offer for Sale of 3,046,640 Equity Shares by the Selling Shareholders, aggregating to Rs. [? ]
million. The proceeds of the Offer for Sale shall be remitted to the Selling Shareholders and we will not benefit from
such proceeds.
39. We have in the last 12 months, issued Equity Shares at a price that could be lower than the Issue Price.
We issued 19,547,682 fully paid up equity shares of the face value of Rs.10/- each for cash per share at par on rights
basis in the ratio of 7 fully paid up equity shares for every 10 fully paid up equity shares held on the record date June
19, 2009. Besides, this, we have in the last 12 months, not issued Equity Shares at a price that could be lower than the
Issue Price. For details, refer to the chapter titled “Capital Structure” beginning on page 20 of this Draft Red Herring
Prospectus.
40. Future issuances or sales of the Equity Shares could significantly affect the trading price of the Equity Shares
The future issuance of Equity Shares by our Company or the disposal of Equity Shares by any of our Company’s major
shareholders or the perception that such issuance or sale may occur may significantly affect the trading price of the
Equity Shares.
41. The Promoters and Promoter Group will hold a majority of our Equity Shares after the Issue and can therefore
determine the outcome of shareholder voting and influence our operations
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