Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the 43rd Annual Report,
together with the Audited Statements of Account of the Company for the
financial year ended 31st March, 2015 in terms of the Companies
Act'2013 and rules & regulation made there under.
The Financial 'Performance of the Company, for the year ended March
31,2015 is summarized below:
FINANCIAL RESULTS (Rs. in Millions)
Particulars Year Ended Year Ended
31.03.2015 31.03.2014
Total Income 6426.83 8058.24
Operating Earnings/Losses before Financial
Expenses, Depreciation & Amortization and 194.69 417.61
Tax
Finance Cost 42.02 1144.47
Depreciation 447.54 449.70
Profit/Loss Before Tax (294.87) (1176.56)
Provision for Tax -
Profit/Loss After Tax (294.87) (1176.56)
Exceptional Items - -
Surplus of last year Add: (9260.77) (8084.21)
Surplus available for appropriation (9568.15) (9260.77)
Appropriations - -
Surplus carried to Balance Sheet (9568.15) (9260.77)
Surplus available for appropriation (9568.15) (9260.77)
OPERATING SCENARIO
At Macro Level - Domestic & Exports
During the year, low export demand from China has been weighing heavily
on cotton till now. But prices are expected to move northwards in the
near to medium term as the minimum support price (MSP) for kharif crops
are likely to be revised and a deficient monsoon will affect sowing of
cotton. Cotton prices had touched the four-year low as they dipped to
Rs 13,990 per bale in the third week of January. Prices had seen a high
of Rs 21,440 per bale in May 2014. In 2014-15, cotton prices have been
falling continuously and trading on a negative note because of higher
production and lower export demand from China. The off take by China,
which used to buy 50 per cent of Indian cotton, came down to 10 per
cent this time. Against 11.79 million bales of cotton exported in
2013-14, only 4.5 million bales have been exported till now in 2014-15.
As the price of kapas or raw cotton fell below MSP, the Cotton
Corporation of India hiked the procurement of cotton from farmers. CCI
has procured over 86 lakh bales of cotton in 2014-15 against 40,800
bales in the previous year. The global tender will be one of the
factors that will support the prices in the near to medium term.
Further, the Government is expected to revise MSP of most kharif crops
in shortly. Once kapas prices are revised, it will have a bearing on
the prices of ginned cotton as well. The other cause of current
distress is high volatility, either coming from vagaries of nature or
tumbling prices. Today, it is not only unseasonal rains and hailstorms,
but also crash in prices of several Agri-commodities, be it potatoes or
corn or cotton. Their tumbling prices have slashed farmers' incomes
substantially, and the MSP system is benefiting less than 10% of the
farmers. It is the efforts of Indian companies to take the initiative
of the Trans-Pacific Partnership [TPP] trade deal which will offer a
boost to the local garment and textile industry.
Man-made fibre yarn as well as woven and knitted fabrics, in addition
to Garments, have been extended a 2 percent incentive (in the form of
fully transferable duty scrips) in the EU, the US, Canada and Japan.
However, sops in these markets do not help yarn and fabric producers,
as they export very little to these markets. The Merchandise Export
Incentive Scheme (MEIS), however, ignores markets such as China,
Bangladesh, Sri Lanka, Turkey, Vietnam and South Korea, which are major
destinations for yarn and fabric from India. India's only major hope in
textiles now is as supplier of raw cotton. But that would imply it
getting confined to the upstream and lower end of the textile value
chain. Exports of raw cotton during April-February 2015 have declined
by 41.32 per cent in quantity terms and 46.6 per cent in value terms as
compared to same period 201314. As exports account for a substantial
share of India's production of cotton, the decline in exports has
resulted in a surplus for the domestic market and has impacted the
cotton growers. Unseasonal rains in central parts of the country
including Gujarat, Maharashtra and Madhya Pradesh has resulted in loss
of about five lakh bales (of 170 kg each) of cotton this season to
September.
Technology should be evaluated on a cost-benefit basis. At present, the
Indian spinning industry is essentially paying for the R&D done abroad.
Unless this scenario changes, this arrangement cannot be in the best
interest of our nation. But technology is such an extremely powerful
tool that every new development has to be evaluated for its merits.
Ignoring key technological developments is extremely dangerous.
Embracing any bought-out technology far ahead too early or far behind
too late the pack will be monetarily disadvantageous. Textile exporters
are feeling let down by the new foreign trade policy (FTP), which they
said has ignored the cotton yarn sector. The estimated exports for the
Textile& Clothing sector during the previous fiscal year (2014-2015) is
approximately US$ 35.96 billion against US$ 34.29 billion in
fiscal2013-2014 marking a growth of 4.88%.
At micro level- overall performance
During the period under review, the impact on the financial performance
of the company due to consolidation its operations during the previous
year, has been reflected marginally but which will be improve during
the coming years.
In the fabric export segment, the current fiscal year has shown
improvement due to the consolidation in various markets for "fabric by
roll" exports. In "fabric by roll', focus is always on quantity as well
as quality to serve the customers in best possible way. The last year's
performance was better as compared to past years, in terms of Values,
Quality etc. US market has been developing well, both on the
residential fabric and contract business viz. hotel and hospitality
industry. Middle East has shown significant jump on the volumes. Your
company has spread its wings in most of the markets now, like US, UK,
South East Asia, Australia, NZ and Middle East. It was planned to avoid
Europe and Latin America for sometime till the worst is over there.
Your company has emerged as a prominent supplier of blackouts cotton
and natural upholstery fabrics, in last few years. We expect an upward
trend in export business in coming years. The Company has also
introduced some new products in export segment like multi-head
embroidered fabrics which has higher value proposition, outdoor fabrics
etc. This range is expected to have lesser competition, is highly
technical with a higher value addition.
Overall Furnishing industry globally has been under a lot of pressure
for past couple of years. This year US market has shown significant
improvement in terms of retail sales. Hence exports has picked up in
USA also. In the range of cotton and blackouts products, your company
has been able to penetrate further in these categories globally also.
Indian market has shown tremendous growth for both fabrics and
readymade products in the past year. In the efforts to gain wide reach
to valuable customers, E-commerce has also become a part of channel
through big home furnishing online retailers domestically and globally.
It looks promising for coming years as well. In one ofthe most
important and major segment i.e. yarn, your company is focusing on some
ofthe key markets like domestic, South America and China. To penetrate
the market with only sizeable buyers, the market friendly terms of
supply are being offered. Your company is also taking various steps to
strengthen the buyer base, domestic as well as overseas. Efforts are
also made to introduce various variety of value added yarn. Your
company has also added more value added yarn like Core Spun Lycra, Slub
Yarn, Multi Fold & Multi Count Yarn etc. in the product range. We are
also striving to take a balanced approach towards all premium paying
markets, increasing the share in most contributing count. Besides
above, your company has also to expand the export of yarn. One of the
segments of the company i.e. Vista, in domestic market, has earned an
enviable reputation and is the market leader in window dressing range
of products, which are well known in the domestic market for its world
class quality & continuous innovations in the segment. Under this
product range, which are crafted with absolute focus towards customer's
needs and desire, company has introduced various new products like
Carpet tiles, Hospital Curtains, New Gallery & window blinds, Mellee,
Medley & Milange for residential sectors, new shades in Naturons,
S-contour & Sheer dimout blinds , New mechanism called "Top Down Bottom
Up" have been introduced in cellular blinds range, roller blinds etc.
apart from various other customer-friendly services like after sale
services to the buyers, free home deliveries, arranging for spare parts
& its installation at the door ofthe customers, to boost the market
share. The Carpet tiles are emerging trends in floor covering. Owing to
its ease of maintenance the trend is gripping up in commercial as well
as in residential sectors. Its maintenance includes regular vacuuming
only. Vista Carpet tiles are available in two base materials; PP &
Nylon in different shades to choose from. The range encompasses
Bendable Curtain Track, Decorative Curtain Track, Hospital Curtain
tracks and many more. Our range of curtains is appreciated for their
smooth & noiseless movement, longer functional life and easy
installation. These products find application in hospitals, hotels,
houses, offices etc. Vista laminated flooring, capturing design, appeal
and elegance with special attention to physical texture. Vista Laminate
flooring consists of full textural coverage. With continuous urge of
giving the bestto the consumer, vista has made a mark in the market for
its classy, elegance and durability. The natural variations and
randomness found in flooring is indicative of perfection.
To maintain the market share in domestic Market in Made ups Segments,
company has introduced various new products/range in its CMT divisions
and fabric. Your company is catering to almost all big retailers
related to above segment by introducing various range in the product
line like Curtains, Cushions, Pillows, Bed Linen and Table Cloth etc.
It is our endeavor to increase the business by meeting the demands
ofthe market timely. Your company is targeting to be a leading name in
the field of home textiles, for which networking for direct supply to
leading international customers, implementation of SAP and introducing
the new segment e-business on domestic and exports. During the period
under review your company could not maintain the EBITDA which drops to
Rs.194.69 millions in comparison to Rs 417.61 million in previous year
due to various unavoidable factors. Company has incurred a net loss of
Rs 294.87 millions in comparison to net loss of Rs. 1176.56 millions in
the previous year showing the increase, inspite of meeting the various
operational challenges in the production and marketing front, like
decrease in the margin of yarn, uptrend in cotton prices and
consolidation/merging and closing of some of its units on economical
viability grounds during the previous year but having the financial
impact during the current year under review. The impact of measures for
improvement in the performance will be reflected in the current year's
financial parameters.
FUTURE OUTLOOK-TECHNICAL FRONT
In view ofthe economical, technical & financial viability and to
centralize the production & marketing activities, your company had
consolidated/closed down the operation at various units ofthe company
during previous year. The impact of the these efforts has been shown
for whole year during this financial year and resulted to reduce the
losses. At the yarn manufacturing units located at Haridwar, some major
technical contribution has been carried out by inducting machineries or
manufacturing of soft yarn which is in good demand in the Rugs segment.
Unit has also planned comprehensive modernization of technical support
to improve thequality as well as quantity.
The Weaving and Processing units manufacture Furnishing & Automotive
Fabric for export and domestic segments. There has been a significant
growth of market share in US, UK, Middle East, South East Asia,
Australia, New Zealand and Japan during the fiscal year 2014-15,
parallel to the same trend as compared to previous year. The competition
has intensified but the pace with which this segment has been growing
due to the novelty and uniqueness of designs/patterns. The economic
scenario in Europe/US is showing signs of revival and resultant, the
demand for fabric in these regions will go up. Due to recent pick up in
the export demand and the offering of variety, the turnover is expected
to increase in the coming years. To strengthen the market, the company
introduced various new products in residential and contract business
segments. The unit has been able to create a niche at market place by
way of new product offerings in different fiber blends, which are unique
from other players. The unit had launched new product range in
decorative curtain fabrics which includes Fire Resistant Coated Fabric,
which has been very well accepted in the international market. New
products like Embroidery, Laminated, Cotton Dyed & Peached in bigger
widths have also been introduced. There is a continuous effort on
product innovation as well as cost optimization in operations. Under the
Automotive Fabric Segment range, the unit is continuing to cater the
demands of various fabrics for OEM and Non OEM consumers. For OEM fabric
supply to international car makers, company has made arrangements for
Technical & Marketing tie-ups with some of the leading companies to
cater to the OEM reputed consumers. It will boost the turnover in the
coming years significantly. For Non OEM Fabric, the focus is mainly on
"after sale market" for Car and Bus segment. The unit is exploring the
opportunities in overseas market for Car, Bus, Railway Projects &
Automotive Seating Fabrics Segment with Japanese technology which
requires high performance fabrics with good level of aesthetics. Due to
the best quality management, the division has, in a short span of over
three years, secured the business from highly quality oriented OEM
consumers. Beside these OEM consumers, the other products contribute
"after markets" of various other reputed car makers. The unit is
targeting to enter some more OEMs and international market to increase
the volumes.
The unit is also focusing on technically special PU coated fabric and
TPU membrane lamination, which provides excellent water proof and
moisture vapor transmission. These fabrics having high technicality
involved to fulfill the demands of Indian Defence and also useful for
high altitude temperature.
RESTRUCTURING/REHABILATATION OF THE COMPANY UNDER THE PROVISIONS OF CDR
AND THE SICK INDUSTRIAL COMPANIES (SPECIALPRO VISIONS) ACT,1985 (SICA).
In Aug 2009, while the company was facing liquidity crunch, a
restructuring scheme was sanctioned and implemented under the Capital
Debt Restructuring (CDR) mechanism set up by Reserve Bank of India. The
main features of the scheme were among others, the conversion of a
portion of debt/liability into OCCPS/CRPS, extension of debts repayment
period and reduction of rate of interest. In the mean time, due to
erosion of the Net Worth of the company as per Audited Accounts as of
31st March 2010, the Company filed a reference with Hon'ble BIFR for
its rehabilitation under Section 15(1) of Sick Industrial Companies
(Special Provisions) Act, 1985 (SICA) which was registered vide Case
No. 32/2010 as per BIFR's letter dated June 29,2010 and vide BIFR's
order dated 06.12.2010, company has been declared as a "Sick Industrial
Company". Vide the same order, State Bank of India has been appointed
as the Operating Agency (O.A.) and Hon'ble BIFR also directed to
prepare and submit a fully tied up Draft Rehabilitation Scheme for the
revival of the company. Afterwards, due to another setback faced by the
company, in the year 2011, the CDR Scheme was reworked and was partly
implemented while the remaining part of the package was to be
implemented after the approval of Hon'ble BIFR. However, the case of
the company has been withdrawn by CDR EC w.e.f. November 16, 2012.
State Bank of India, the operating Agency, has filed the Draft
Rehabilitation Scheme (DRS) for the rehabilitation of the company with
Hon'ble BIFR on 07.07.2011, as recommended by the majority of lenders
in their Joint Lenders Meet (JLM) held on 15th June'2011 and by the
Statutory Agencies in their meet held on 5th July'2011 from whom
company sought some reliefs and concessions in the DRS however in view
of the developments taken place afterwards, the Hon'ble BIFR has
directed to file the updated DRS for its consideration.
Accordingly company has filed the updated DRS which has been approved
by the majority of secured lenders of the company in their Joint
meeting held on 29th Nov 2014 accordingly the State Bank of India (OA)
has recommended the Draft Rehabilitation Scheme of the company to the
Hon'ble BIFR for its circulation. The said DRS is under consideration
of the Hon'ble BIFR.
In view of consent of majority of secured creditors of the company to
the Draft Rehabilitation Scheme pending under consideration of the
Hon'ble BIFR, inter alia envisages complete waiver of interest
outstanding and future, towards secured and unsecured loans from
Banks/ARC/Financial institutions and subsidiary companies Accordingly
the provision for interest for the Financial Year 2014-15 amounting to
Rs. 12291.37 Lac payable to these lenders is not considered necessary
in the financial statements.
CREDENTIALS/CERTIFICATIONS
With the contribution and efforts of all concerned, the various
credentials have been renewed /continued during the period under review
viz.:
Certificate for ISO/TS 16949:2009 for manufacturing seat fabrics for
the automotive application.
Certificate for Oeko-Tex for Hohenstein Textile Testing Institute,
Germany
Certificate for ISO 9001:2008 and ISO 14001:2004 for the management
system implemented, renewed by A fnor Certification for the period 2013
to 2015 covering the manufacturing activities i.e. Spinning, Weaving
and Processing of Yarn, Fabric and Home Furnishing and Coating (fire
retardant curtain fabric, upholstery and stain proof fire retardant
upholstery cloth for the company's units situated at Haridwar and
Meerut).
Certificate of Compliance of standards issued by the CU Inspections &
Certifications Private Limited.
Certification to use the Trademarks from Cotton Egypt Association
(CEA).
Certification of membership of Indian Green Building Council (IGBC)
issued by the Cll.
Achievement award for the workplace conditions issued by the Workplace
Conditions Assessment (WCA).
MEASURES TO REDUCE/CONTROL COST
To meet out the market competitiveness and improve the financial
performance, the company is committed to reduce the cost, upgrade the
efficiency and ensure optimum utilization of the current as well as
fixed assets of the company. On technical front, your company is
continuously try to achieve the reduction in raw material cost by
making different composition of mixing/purchase of cotton through
commodity exchange, increase in machine productivity, better yarn yield
with optimum use of raw material, control waste generation to bare
minimum and best use of work force, best utilization of capacity with
lowest Raw Material Cost and good quality of end product to fetch best
yarn price. The major units located at Meerut and Haridwar have taken
various important steps which includes buying of raw material in bulk
quantity, directly from suppliers, after proper negotiation and
studying market prices, reducing the fixed overheads, increase the
utilization and efficiency of machineries to reduce the cost,
standardize the production process flow chart to avoid the rejection,
maintain the inventory level as per the requirement, constant check on
power consumption, controlling/reducing rejections & re-processing,
reusing / recycling all possible items, strict follow-up on regular
maintenance schedule to avoid major break downs, increasing overall
efficiency to reduce production cost, using low consumption LED lights.
In order to reduce the substantial logistic cost, the company is opting
for land ports nearest to the units. Transportation cost reduced by
finalizing the transport & courier contracts at best possible lowest
rates for the goods movement of the Units. The unit located at Meerut
has also optimized its cost structure by way of strong emphasis on
consumption control, waste reduction and rationalization, inventory
control & Manpower optimization.
STATUS OF HOLDINGS OF SUBSIDIARY COMPANIES
During the year under review, there is no change in the status of
subsidiary companies. As per Section 2(87) of the Companies Act, 2013,
after considering the indirect holding through it's another subsidiary
(Alps USA Inc.), the percentage of shareholding continued to be 78.22%
in Alps Energy Pvt. Ltd. and 81.65 % in Snowflakes Meditech Pvt. Ltd.
FINANCIAL STATEMENTS OF SUBSIDARY COMPANIES
The company had three subsidiaries at the end of the financial year
viz; M/s.Alps Usa Inc., M/s. Alps Energy Pvt. Ltd. and M/s. Snowflakes
Meditech Pvt. Ltd. As required Under Section 129(3) of the Companies
Act, 2013 and applicable rules, the Financial Statements of all three
Subsidiaries Companies are being annexed.
GOVERNMENT INITIATIVES- TEXTILE SECTOR
Zero central Excise Duty Route as existed in the past is being
continued on Yarn, Fabric, Clothing Accessories & Made-Ups, provided
the CENVAT Credit Route is not adopted by the unit/assesses, as per
current union budget 2015-2016.
Textile exporters are feeling let down by the new Foreign Trade Policy
(FTP), which has ignored the cotton yarn sector. The Commerce Ministry
announced the much-awaited FTP which outlines the vision, goals and
objectives for the country's export-import sector for 2015-20, with the
high export targets set by the government. The sectors like textile and
clothing, the second-largest employment provider in the country, has not
got its due in the FTP. The textile sector has been granted duty scrips
of 2 per cent only for mainstream cotton textile products at a time when
it's facing challenges in the form of high tariffs and barriers due to
preferential tariff arrangements. In contrast, higher rates have been
given for hand looms, carpets, coir products under the Merchandise
Exports from India Scheme (MEIS).Sectors like cotton yarn have been
totally ignored, especially at a time when exports of these products
have declined sharply and face high logistics cost. Under FTP 2015-2020
some amendments have been notified like omission of Provision related to
EPCG authorization on annual requirement and technological upgradation
of existing EPCG Machinery. The limit on value of spares imported has
now been relaxed, validity ofthe authorization is now limited to 18
months from the date of issue of such authorization, export of
restricted goods under the authorization now allowed. In the backdrop of
nationwide farmer distress, particularly among cotton farmers, the
government has been urged to allow farmers to use the reusable straight
line BN Bt cotton seed and other similar varieties as against those
non-reusable hybrid seeds being sold by corporate.
Union Budget 2015-16 has evoked mixed response from the Indian textile
industry. Budget ignored the highly labour intensive textile industry
which has significant potential for growth. The only positive aspect
ofthe Budget for the textile sector was the continuation of the
optional excise duty regime. Fresh investments will be impossible under
the Technology Upgradation Fund Scheme (TUFS) during 2015-16, owing to
reduction in allocation for the scheme from Rs 1864 crore in 2014-15 to
Rs 1520 crore for 2015-16. There is no funds available for fresh
investments under the scheme as of now. Increase in service tax to 14
per cent will have an adverse impact on the textile industry. The hike
in effective rate of excise duty on manmade fibres from 12.36 per cent
to 12.5 per cent under the current Budget will also negatively affect
the industry. However it has marked a good beginning to achieve the
'Make in India' vision. The government is extending the optional CENVAT
route for cotton textiles and also for the announcement of implementing
GST with effect from 1 April, 2016. The decision in the reduction in
corporate tax from 30 per cent to 25 per cent is a positive feature.
All industries Duty drawback rate should be enhanced immediately after
taking into account the new incidence of service Tax, excise duty and
increase of excise duty on diesel.
DIVIDEND
Due to the operational loss suffered by the company, your directors do
not propose any dividend for the current financial year.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 124 ofthe Companies Act, 2013, the unclaimed
dividend relating to the financial year 2013-2014 which was due for
remittance during the financial year 2014-2015 amounting to Rs.
6,03,111.75 have been transferred to the Investor Education and
Protection Fund established by the Central Government.
DECLARATION BY INDEPENDENT DIRECTORS
All the Independent directors viz. Mr. Prabhat Krishna, Mr. Pradyumn
Kumar Lamba, Mr. Tilak Raj Khosla and Ms. Deepika Shergill have
submitted their disclosure to the Board that they fulfill all the
requirements as to qualify for their appointment as an Independent
Director under the provisions ofthe Companies Act, 2013 as well as
Clause 49 ofthe Listing Agreement with the Stock Exchanges.
RISK MANAGEMENT POLICY
In compliance of clause 49(VI)(C) ofthe Listing Agreement related to
corporate governance, Risk Management policy ofthe company recognizes
that the Enterprise Risk Management is an integral part of good
management practice. Hence Risk Management is an essential element in
achieving business goals. In terms of Policy the Company is committed
for managing the risk in a manner appropriate to achieve its strategic
objectives. The Company will keep investors informed of material
changes to the Company's risk profile through its periodic reporting
obligations and ad hoc investor presentations. The Company reviews and
reports annually on its compliance of Corporate Governance Principles
and recommendations for betterment, which include Risk Management and
the internal control framework.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
In terms of section 177 ofthe Companies Act, 2013 and Clause 49 ofthe
Listing Agreement, the company has established a Vigil Mechanism policy
for the Directors and Employees to report genuine concerns in such
manner as may be prescribed and such a vigil mechanism has provided for
adequate safeguards against victimization of persons who use such
mechanism and make provision for direct access to the Chairman ofthe
Audit Committee, in appropriate or exceptional cases, instances of
unethical behavior, actual or suspected, fraud or violation of the
company's code of conduct etc. This neither releases employees from
their duty of confidentiality in the course of their work nor can it be
used as a route for raising malicious or unfounded allegations against
people in authority and/or colleagues in general. The scope of the
policy covers malpractices and events which have taken place / suspected
to have taken place, misuse or abuse of authority, fraud or suspected
fraud, violation of company rules, manipulations, negligence causing
danger to public health and safety, misappropriation of monies & assets
ofthe company, and other matters or activity on account of which the
interest ofthe Company is affected and formally reported by whistle
blowers concerning its employees.
NOMINATION & REMUNERATION, EVALUATION, BOARD DIVERSITY POLICY &
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS.
As mandated by the statutory provisions contained under section 178
ofthe Companies Act, 2013 and the Listing Agreement with Stock
Exchanges, Nomination & Remuneration Committee of the Company has
formulated this policy and on its recommendation the Board of Directors
has approved the same at their meeting held on May 30,2014. This policy
contains guidelines on nomination and remuneration of Directors, Key
Managerial Personnel (KMP) and Senior Management Personnel ofthe
Company and Evaluation and Board Diversity policy for directors. This
policy may be treated as a benchmark for determining the
qualifications, positive attributes and independence of a Director,
criteria for evaluation of Independent Directors and the Board, matters
relating to the remuneration, appointment, removal and evaluation of
performance ofthe Directors, Key Managerial Personnel and Senior
Management Personnel of the Company. To provide insights into the
Company to enable the Independent Directors to understand the Company's
business in depth that would facilitate their active participation in
managing the Company, familiarization Program have been formulated and
introduced by the Company to simplify the understanding of various
responsibilities and rights of the Independent Directors during the
year under review.
SHARE CAPITAL
During the year under review there is no change in the capital
structure ofthe company.
RELATIONSHIP WITH INVESTORS
To have the participation by all the valued investors in the voting
pattern for any proposal and in terms ofthe compliance of the Companies
Act, 2013 and relevant rules and in terms ofthe Clause 35B ofthe
listing agreement the company has made arrangements for e-voting
facility through which any investor can participate in the AGMs through
e-voting and need not struggle to attend the meetings in person.
Your company is fully committed and accountable to the valued
investors, who have reposed the confidence in the company by investing
their hard earned money in the company and supported the management in
such a crucial time.
The relationship with the investors continues to be cordial. Your
company's management is fully aware and dedicated for survival ofthe
company and committed to take all efforts to resolve the investors'
grievances received during the year to the satisfaction ofthe investors
within a reasonable time. Alankit Assignments Limited, the R&T Agent
ofthe company, continued to extend their positive contribution to
resolve the Investors' grievances efficiently and effectively, whenever
they arose. By contribution from all concerned, the investor grievances
have been resolved to the fullest satisfaction of investors. We
sincerely place on record, the appreciation for our valued investors,
who have contributed and reposed the confidence in the company at this
difficult time. The management not only believes in legal compliance
related to the investors, but also morally protects their interest, and
treats them as part of Alps Group. In its endeavor to improve investor
services, your Company has created an investor section, and designated
exclusive E-Mail ID for the purpose of registering complaints by
investors and necessary follow up action by the company/compliance
officer in compliance with Clause 47(f) ofthe Listing Agreement. The
e-mail ID is: [email protected]
HUMAN RESOURCES-VALUABLE ASSETS
It's a firm belief that while productivity ofthe machines can be
enhanced to a limited level as per its capacity through better
maintenance and effective Production Planning, that of Human Resources
can be enhanced to any level through various HR initiatives on
training, motivation, engagement, leadership development, leadership
synergy, etc. Therefore, Alps management is continuously endeavoring to
implement good HR practices in all these areas thereby aligning the
skill levels ofthe people with the job requirements, improving their
engagement with the job as well as organization through their better
participation in the discussions for various improvement initiatives
and making the work environment more conducive for efficient working.
During the year, special attention has been given to strengthen the
training set-up at different Unit locations starting with mandatory
Induction Training for all the new joinees in the team, developing
internal trainers, restructuring the training modules, developing good
training material and hiring more competent trainers. Besides,
initiatives have been taken to get affiliation from the Textile Sector
Skill Council (TSC) for various job roles in Spinning, Weaving,
Processing and knitting to benchmark the training material and
processes with the best in the Industry.
Our basic objective to ensure availability of the right Human Resources
at right time is met through timely sourcing. The initiatives to
improve the organization structure optimize the utilization of
available human resources, clearly defining the job responsibilities so
as to avoid over-lapping and also defining Key Results Areas and Key
Performance Indices for better focus and assessment of the
contributions are part of the continuous improvement process.
Formulating/continuously reviewing HR policies for its effective and
fair implementation and improving hygiene factors for facilitating
creation of a conducive work environment are part of the routine.
Consistent efforts continued to improve the female workers/employees
ratio, particularly at the shop floor, in-line with the national policy
of gender equality. The Sexual Harassment Policy formulated during
previous year in line with the government directives implemented,
though there was no case reported, thereby reassuring that the company
gives safe and congenial environment for females to work. The company's
commitment for treating its employees with human dignity and fairness
were visible in its efforts throughout the year. The company's concerns
for welfare of its workforce continued during the year and accordingly
Croup Personnel Accident Insurance policy/ESI/WC policies were
continued further as in the past. The company has been consistently
maintaining harmonious & cordial relations with the employees at all
the locations. During the year, the Company employed around 2300
employees (2600 employees during previous year 2013-14). Pursuit of
proactive policies for industrial relations has resulted in a peaceful
and harmonious situation on the shop floors of the various plants.
BOARD OF DIRECTORS-APPOINTMENTS/REAPPOINTMENTS PROPOSALS
Re-appointment of Managing Director
Mr. Sandeep Agrawal, Managing Director (DIN No. 00139439)proposed to be
reappointed at the forthcoming Annual General meeting as-Whole time
director designated as Managing Director of the company due to
implementation of Companies Act 2013, again and proposing some revised
terms for payment of remuneration, as the Re-appointment was earlier
approved at the AGM held on September 30 2013. The information/details
pertaining to the above Whole time director that is to be provided in
terms of Clause 49 of the Listing Agreement and in terms of the Article
No. 106-109 of Articles of Association of the company. The disclosures
as required under the Companies Act 2013 and clause 49 of the Listing
agreement related to Corporate Governance published elsewhere in the
Annual Report.
APPOINTMENT OF INDEPENDENT DIRECTORS
In terms of section 149 of the Companies Act 2013 and clause 49 of
Listing Agreement Mr. Pradyumn Kumar Lamba (DIN N0.02843166), Mr. Tilak
Raj Khosla (DIN N0.02724242), Mr. Prabhat Krishna (DIN N0.02569624)
appointed as Independent Directors of the Company by the Board at their
meeting held on Lebruary 11,2015 as recommended by the Nomination &
Remuneration Committee w.e.f. 11.02.2015 for a first term of three
years and proposal for the approval of the members of the company at
the forthcoming AGM of the company. The disclosures as required under
the Companies Act 2013 and clause 49 ofthe Listing agreement related to
Corporate Governance published elsewhere in the Annual Report.
APPOINTMENT OF INDEPENDENT WOMAN DIRECTOR
In terms of Section 149,152 and 161 of the Companies Act 2013 and
Clause 49 II (A) of the Listing Agreement related to Corporate
Governance, Ms. Deepika Shergill (DIN N0.07093795) was appointed as
Additional Women Independent Director ofthe Company by the Board at
their meeting held on Lebruary 11, 2015 as recommended by the
Nomination & Remuneration Committee w.e.f. 11.02.2015 for a first term
of three years and proposal for the approval ofthe members ofthe
company at the forthcoming AGM ofthe company. The disclosures as
required under the Companies Act 2013 and clause 49 ofthe Listing
agreement related to Corporate Governance published elsewhere in the
Annual Report.
REAPPOINTMENT OF NON-INDEPENDENT DIRECTOR BY ROTATION
In terms of the provisions of Section 152 of the Companies Act, 2013 and
Companies (Appointment and Qualification of Directors) Rules, 2014 &
Article No. 106,107 & 108 ofthe Articles of Association ofthe Company,
Mr. K.K. Agarwal, Non Executive Director (DIN No.00139252) recommended
by the Nomination & Remuneration Committee and by the Board of Directors
at their meeting held on May 30, 2015 for re-appointment who retires by
rotation and eligible for re-appointment and offer himself for
reappointment at the ensuing Annual General Meeting. The disclosures as
required under the Companies Act 2013 and clause 49 of the Listing
agreement related to Corporate Governance published elsewhere in the
Annual Report.
KEY MANAGERIAL PERSONEL
During the under review as required under Section 203 of the Companies
Act, 2013 and applicable rules, Mr. Ashok Kumar Singhal the existing
President(Corp. Accounts & Finance) has been appointed as Key
Managerial Personnel along with existing KMP viz. Mr. Sandeep Agarwal
(Managing Director) and Mr. Ajay Gupta (Company Secretary & General
Manager-Legal).
NOMINEE/SPECIAL DIRECTOR
There is no change in the Special Director appointed by BIFRduringthe
period under review.
INTERCORPORATE LOANS, GUARANTEES AND INVESTMENTS
During the year under review company has not given any Inter Corporate
Loans, Guarantees and Investments covered under section 186 ofthe
Companies Act, 2013
CORPORATE SOCIAL RESPONSIBILITY
Due to the losses incurred by the company the provisions of section 135
and schedule VII ofthe Companies Act, 2013, related to CSR are not
applicable to the company.
RELATED PARTY TRANSACTIONS
In terms ofthe Section 188 ofthe Companies Act 2013 and Companies
(Meetings of Board and its Powers) Rules, 2014 and further in terms of
clause 49 (VII) ofthe listing agreement related to the corporate
governance, company has formulated Related Party Transaction Policy
ofthe company. During the year under review company has entered into
related party transactions which are at the market prevailing prices
and on arm's length basis are in its ordinary course of business. The
details ofthe transactions are annexed elsewhere in the report. Hence
there are no conflicts of interest and in compliance of companies
policy related to Related party transactions.
DIRECTORS'RESPONSIBILITY STATEMENT
In compliance with the provisions of Section 134(5) of the Companies
Act 2013, the Board confirms and submits the Directors' Responsibility
Statement:
(a) In the preparation ofthe annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
(b) The directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent, so as to give a true and fair view ofthe state of affairs
ofthe company at the end ofthe financial year and ofthe profit and loss
ofthe company for that period;
(c) The directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets ofthe company and
for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on agoing concern
basis; and
(e) The directors, in the case of a listed company, had laid down
internal financial controls to be followed by the company and that such
internal financial controls are adequate and were operating effectively
which means the policies and procedures adopted by the company for
ensuring the orderly and efficient conduct of its business, including
adherence to company's policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and
completeness ofthe accounting records, and the timely preparation of
reliable financial information;
(f) The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
PARTICULARS OF EMPLOYEES
In terms of Section 197 ofthe Companies Act 2013 and applicable Rules
made there under the details of the employee was drawing in excess
ofthe highest paid Whole Time Directors are enclosed as Annexure I.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO.
Information in accordance with the provisions of Section 134 (3) (m) of
the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts)
Rules, 2014 regarding conservation of energy, technology absorption and
foreign exchange earnings and outgo is given in the statement annexed
(Annexure-ll) here to and forms part of this report.
COST AUDIT REPORT
In compliance with the Order dated 24th January, 2012 reference no. F.
No. 52/26/CAB-2010 issued by the Cost Audit Branch under Ministry of
Corporate Affairs and further in terms of the Powers conferred by
Section 148, of the Companies Act, 2013, Company has appointed M/s.
Neeraj Sharma & Co., Cost Accountants, Ghaziabad, to submit the Cost
Audit Report duly approved by the Board of Directors, to the Central
Government, for the financial year ended on March 31, 2015 for the
products which are specified in the Notification No. GSR No. 01(E) on
January 1,2015 and Companies (Cost Records and Audit) Rules, 2014 The
Cost Audit report will be filed by the company within the due date i.e.
on or before September 27, 2015, being 180 days from the close of the
financial year or as may be extended by the department from time to
time.
Further, in compliance of Notification Reference No. GSR No. 01(E) on
January 1,2015 and Companies (Cost Records and Audit) Rules, 2014 the
aforesaid firm of Cost Accountants has also been appointed as the Cost
Auditors of the company under Section 148 of the Companies Act, 2013
for the next financial year ended on March 31, 2016, at the meeting of
Audit Committee and Board of Directors of the company held on May 30,
2015. As required under Section 148 of the Companies Act, 2013, the
ratification for their appointment & remuneration has been recommended
at the forthcoming Annual General Meeting of the company. However, it
is strictly applicable in terms of any Notifications/Circulars related
to Cost Records and Cost Audit Rules, as may be specified at any time
by the MCA or any regulatory authorities. If due to any reasons the
mandatory requirements abolish, then continuation of the appointment of
Cost Auditors, will be at the discretions of the board of directors as
per the requirements of the company.
STATUTORY AUDITORS
M/s. P. Jain & Co., Chartered Accountants, the Statutory Auditors ofthe
Company, completes one year out of their first term of four years as
approved at the previous Annual General Meeting ofthe Company held on
September 30 2014. Now they have submitted their resignation vide
letter dated August 19, 2015 showing their inability to continue in the
position of Statutory Auditors with immediate effect due to their
occupation in some of their other assignments. The resignation was
placed before the Audit Committee and Board of Directors at their
meetings held on August 22, 2015 and taken on record after the approval
of the members. Therefore the Audit Committee and Board of Directors
have expressed their opinion to appoint M/s. R. K. Govil & Co.
Chartered Accountants (Firm Regn. Number 000748C) being eligible as
Statutory Auditors ofthe company to fill the casual vacancy arises due
to resignation of existing Auditors under Section 139 (8) and Companies
(Audit and Auditors) Rules, 2014, initially for a period of three
months or up to the conclusion ofthe General Meeting in which the
approval of their appointment by the members ofthe company, whichever
is earlier, from the date of appointment i.e. August 22, 2015. The
members ofthe Board approved the aforesaid appointment for filling the
casual vacancy. After the confirmation of eligibility of M/s. R. K.
Govil & Co., Chartered Accountants, (Firm Regn. Number 000748C) to
continue as the Statutory Auditors ofthe company and on the
recommendations by the Audit Committee, it is further approved and
recommended by the Board of Directors at their meeting held on August
22, 2015 of their appointment under Section 139 ofthe Companies Act,
2013 and Companies (Audit and Auditors) Rules, 2014 for a further
period of four years from the conclusion of 43rd AGM till the
conclusion of 47th AGM of the company subject to ratification by the
subsequent Annual General Meeting on the recommendations ofthe Board of
Directors.
The company has received the confirmation certificates from the new
auditors to the effect that their appointment, if made, would be within
the limits prescribed under Section 141 ofthe Companies Act, 2013.
INTERNAL AUDITORS
In terms of Section 138 ofthe Companies Act, 2013 and Companies
(Accounts) Rules, 2014, M/s. Manoj Kumar Mittal & Co., Chartered
Accountants, Board has appointed as the Internal Auditors ofthe Company
for the financial year 2015-16 to submit the internal audit reports
from time to time
FIXED DEPOSITS
During the year under review, your company has not raised any money by
way of Fixed Deposits.
CORPORATE GOVERNANCE
A report as per the requirements of Clause 49 of the listing agreement
on the Corporate Governance practices followed by the Company and the
Statutory Auditors' Certificate on Compliance of mandatory requirements
alongwith Management Discussion and Analysis is given as an Annexure
III & IV to this report. The mandatory and non-mandatory information
under corporate governance is annexed as Annexure-IV. It has always
been the endeavor of your company to practice transparency in its
management and disclose all requisite information to keep the public
well informed of all material developments.
ABSTRACT OF THE ANNUAL RETURN
In terms of section 92 of the Companies Act 2013 the extract of the
Annual Return as on it stood on the close of the Financial Year 2014-15
being attached with the Directors Report as Annexure V.
SECRETARIAL AUDIT REPORT
In terms of the Section 204 of the Companies Act, 2013 and Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014,
company has appointed M/s. V.K. Chaudhary & Co., Company Secretaries to
provide the Secretarial Audit Report for the Financial year ended on
March 31 2015. In compliance of aforesaid requirement they has provided
the Secretarial Audit Report which has been annexed with Board report
as Annexure VI.
AUDITORS'OBSERVATIONS
Observations in the Statutory Auditors' Report are dealt within Notes
to Accounts at appropriate places and being selfexplanatory, need no
further explanations. As required under amended Clause 31(a) of the
listing agreement and SEBI Circular No.CIR/CFD/DIL/7/2012 dated August
13, 2012, the necessary disclosures/details in the prescribed Form 'A'
and Form 'B'have been appended with the Annual Report to the Stock
Exchanges.
GENERAL DISCLOSURES
No disclosure or reporting is required in respect of the following
items as there were no transactions on these items during the period
under review:
1. Detailsrelating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme save and except ESOS referred to in this
Report.
4. Neither the Managing Director nor the Whole-time Directors of the
Company receive any remuneration or commission from any of its
subsidiaries.
5. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operations in future.
During the year under review, there were no cases filed pursuant to the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
ACKNOWLEDGMENT
Your Directors take this opportunity to thanks the Financial
Institutions, Banks, Board for Industrial and Financial Reconstruction
(BIFR), ARCs, Reserve Bank of India, Central and State Governments
Authorities, Regulatory Authorities, Stock Exchanges, Stakeholders,
Customers and Vendors for their continued support and co-operation, and
also thanks them for the trust reposed in the Management. Your
Directors also wish to thank all the employees of the Company for their
commitment and contributions. Your Directors also wish to place on
record their appreciation towards all associates including Customers,
Suppliers, and others, who have reposed their confidence in the
Company. Your Directors look forward to their unsustained support in
future also.
For and on behalf of the Board of
Alps Industries Limited
Place : Ghaziabad P.K. Rajput Sandeep Agarwal
Date : August 22, 2015 Executive Director Managing Director
DIN- 00597342 DIN- 00139439
Mar 31, 2014
Dear members,
The Directors have pleasure in presenting the 42nd Annual Report,
together with the Audited Statements of Account of the Company for the
financial year ended 31st March, 2014. In terms of the General Circular
08/2014 No. 1/19/2013-CL-V dated April 4, 2014 issued by Ministry of
Company Affairs (MCA), the report of the Board of the Directors has
been prepared in compliance with the erstwhile Companies Act'' 1956 and
rules & regulation made thereunder only.
The Financial ''Performance of the Company, for the year ended March 31,
2014 is summarized below;
FINANCIAL RESULTS (Rs. in Millions)
Particulars Year Ended Year Ended
31.03.2014 31.03.2013
Total Income 8058.24 7007.26
Operating Earnings/Losses
before Financial Expenses,
Depreciation & Amortization and Tax 421.66 425.14
Finance Cost 1148.51 1012.00
Depreciation 449.71 449.51
Profit/Loss Before Tax (1176.56) (1036.37)
Provision for Tax - -
Profit/Loss After Tax (1176.56) (1036.37)
Exceptional Items - (116.61)
Surplus of last year Add: (8084.21) (6931.23)
Surplus available for appropriation (9260.77) (8084.21)
Appropriations - -
Surplus carried to Balance Sheet (9260.77) (8084.21)
Surplus available for appropriation (9260.77) (8084.21)
OPERATING SCENARIO
At Macro Level - Domestic & Exports
The Indian cotton yarn industry is in a spot. The recently announced
Chinese cotton policy has made cotton yarn exports to the dragon
country unattractive, thus denting Indian yarn exports by 25% in the
month of April'' 2014. Though the demand of cotton yarn in domestic
market is showing some recovery'', but the robust growth is yet to be
felt, thus raising concern for the industry which has just come out
from the financial hardship of 2009-10. Last year, the average monthly
exports was around 120 million kgs. This was largely driven by Chinese
demand. But this April''14, yarn exports have come down to 90 million
kg. Chinese cotton policy is one of the major reasons for a drop in
cotton yarn exports from the country. China accounts for nearly 50% of
the yarn exports from India. China has reduced its cotton yarn import
volumes from India in the last two months, which has put Indian yarn
exports under pressure. According to the new policy which has become
effective from April 1 2014, the Government has lowered cotton auction
bids to 17,250 Yuan per tonne, down 4.2% from its floor price of 18,000
Yuan pertonne. Price is the main concern for Indian yarn exporters. But
things will start changing shortly. Exporters are trying to beef up
their presence in Bangladesh, Korea and Hong Kong.
The Textile Ministry has made a comprehensive plan to increase export
growth rate from present level of 6-10% to 15-20% in next five years,
in the 12th plan period. Towards this, Planning Commission has already
allocated Rs. 2,5931 Crores to the Ministry for overall schemes.
Further, the textile up gradation fund scheme is proposed to be
continued. The report of the Working Croup, constituted by the Planning
Commission on boosting India''s manufacturing exports during 12th Five
Year Plan (2012-17), envisages India''s exports of Textiles and Clothing
at USD 64.41 billion by the end of March, 2017. As per the report, in
the global exports of Textiles, India ranked as the third largest
exporter, trailing European Union and China. In the global exports
market of clothing, India ranked as the fifth largest exporter,
trailing Bangladesh, Hong Kong, EU and China.
On the other hand, India accounts for 22% of the world''s installed
capacity of spindles and is one of the largest exporters of yarn in
international market. It has the second highest spindleage in the world
after China, highest loomage (including handlooms) in the world and
contributes about 61% to the world loomage. Keeping this in mind, one
of the major strategies adopted to increase exports is to tap new
markets in Latin American Countries, Eastern European Countries and
Middle East. As part of this strategy, mega textile shows have been
held to capture new markets in Japan, South Asia and Latin American
Countries. Besides, Memorandum of Understanding on international
cooperation on Textiles has been signed with the countries like Sri
Lanka, Australia, and Czech. This strategy will improve export
competitiveness. Further, in the next 10 years, China''s Textile and
Garment export growth rate is projected to slow down because of rising
costs and increasing domestic demand. The export space that is likely
to be ceded by China is open to other Asian countries including India.
In order to improve competitiveness and thereby increase textile
exports, the focus is on upgrading infrastructure, modernization &
technological up gradation, setting up of integrated textile parks,
development of mega clusters for power loom, handloom and handicrafts,
skill development of the textile workforce, enhancing welfare of the
weavers and artisans etc.
India''s cotton yarn export registration raised 33% last fiscal, aided
by the initial rupee appreciation and a relatively steady order flow,
especially from China, outpacing the pace of growth in overall textile
and garment shipments. Traders registered contracts to export 1,415
million kg of cotton yarn in 2013-14 compared with 1,067 million kg a
year before. There was a steady flow of orders for Indian companies, as
China has been facing some problems in terms of credit and pollution.
The neighboring country is seeking to move away from labour-intensive
sectors, including garments and textiles, as well. The rupee
depreciation in the initial months also added to our competitiveness in
the export market. The rupee hit a record low of 68.81 against the
dollar in August last year, although the domestic currency has
appreciated 12.4% since then, causing some distress to exporters.
Industry also noticed that actual shipments of cotton yarn in 2013-14
could be to the tune of the registration level, even though it takes
some time to physically ship out. This is because shipments against
some contracts registered in FY13 were also made in FY14. Cotton yarn
exports fared better than some other textile segments, as shipments of
cotton fabric and made-ups rose 20% while those of man-made fabric and
made-up grew 13%. Overall garment exports grew 15.4% last fiscal from a
year before.
Despite the surge in cotton yarn exports, the fluctuation in raw
material prices and the economic slowdown have hurt the textile and
garment sector, as the profitability of listed companies tumbled 33% in
the first three quarters of the last fiscal from a year before.
At micro level- overall performance
During the period under review, the company has consolidated its
operations for optimum utilizations of resources and cost reduction, to
achieve the market competiveness.
In the fabric export segment, the next fiscal year will be a
significant period in terms of consolidation in various markets for
"fabric by roll" exports. In "fabric by roll'', focus is always on
quantity as well as quality to serve the customers in best possible
way. The last year''s performance was better as compared to past years,
in terms of Values, Quality etc. US market has been developing well,
both on the residential fabric and contract business viz. hotel and
hospitality industry. Middle East has shown significant jump on the
volumes. Your company has spread its wings in most of the markets now,
like US, UK, South East Asia, Australia, NZ and Middle East. It was
planned to avoid Europe and Latin America for sometime till the worst
is over there. Your company has emerged as a prominent supplier of
blackouts cotton and natural upholstery fabrics, in last few years. We
expect an upward trend in export business in coming years. The Company
has also introduced some new products in export segment like multi-head
embroidered fabrics which has higher value proposition, outdoor fabrics
etc. This range is expected to have lesser competition, is highly
technical with a higher value addition.
During the year under review, under the Fashion Accessories Division,
your company had initiated holistic changes in this segment. Your
company also plans to introduce various intimate blends to provide
innovative products including metallic based fabrics, intricate
jacquard patterns using ancient ethnic patterns, Persian motifs and
contemporary geometrical patterns, humungous range of printed scarves,
stoles, shawls & sarongs to our product range in the coming year to
maintain the domestic market. In the Anti-Bacterial "Sleep Dry" baby
product, your company has maintained the brand category. To continue
the maximum reach to valued consumers, the company participates in
exhibitions, advertises in magazines etc., apart from other promotional
efforts towards domestic market, promoting through various promotional
materials and hopeful to have better profitability in coming years. In
one of the most important and major segment i.e. yarn, your company is
focusing on some of the key markets like domestic. South America and
China. To penetrate the market with only sizeable buyers, the market
friendly terms of supply are being offered. Your company is also taking
various steps to strengthen the buyer base, domestic as well as
overseas. Efforts are also made to introduce various variety of value
added yarn. Your company has also added more value added yarn like Core
Spun Lycra, Slub Yarn, Multi Fold & Multi Count Yarn etc. in the
product range. We are also striving to take a balanced approach towards
all premium paying markets, increasing the share in most contributing
count. Besides above, your company has also plan to expand the export
of yarn.
One of the segments of the company i.e. Vista, in domestic market, has
earned an enviable reputation and is the market leader in window
dressing range of products, which are well known in the domestic market
for its world class quality & continuous innovations in the segment.
Under this product range, which are crafted with absolute focus towards
customer''s needs and desire, company has introduced various new
products like Carpet tiles, Hospital Curtains, New Gallery & window
blinds, Mellee, Medley & Milange for residential sectors, new shades in
Naturons, S-contour & Sheer dimout blinds , New mechanism called "Top
Down Bottom Up" have been introduced in cellular blinds range, roller
blinds etc. apart from various other customer-friendly services like
after sale services to the buyers, free home deliveries, arranging for
spare parts & its installation at the door of the customers, to boost
the market share.
To maintain the market share in domestic Market in Made ups Segments,
company has introduced various new products/range in its CMT divisions
and fabric. Your company is catering to almost all big retailers
related to above segment by introducing various range in the product
line like Curtains, Cushions, Pillows, Bed Linen and Table Cloth etc.
It is our endeavor to increase the business by meeting the demands of
the market timely. Your company is targeting to be a leading name in
the field of home textiles, for which networking for direct supply to
leading international customers, implementation of SAP and introducing
the new segment e-business on domestic and exports. During the period
under review your company struggled to maintain the EBITDA at near
about the same level to Rs.421.66 millions in comparison to Rs 425.14
million in previous year. Company has incurred a net loss of Rs 1176.56
millions in comparison to net loss of Rs. 1036.37 millions in the
previous year showing the same level of performance inspite of meeting
the various operational challenges in the production and marketing
front, like decrease in the margin of yarn, uptrend in cotton prices
and consolidation/merging and closing of some of its units on
economical viability grounds during the year. The impact of measures
for improvement in the performance will be reflected in the current
year''s financial parameters.
FUTURE OUTLOOK-TECHNICAL/CONSOLIDATION/CLOSING DOWN/ EXPANSION OF
OPERATIONS
In view of the economical, technical & financial viability and to
centralize the production & marketing activities, your company has
taken various drastic steps during the year. In this efforts the CMT
units which were earlier operated at three units situated at B-2, Loni
Road Industrial Area, Ghaziabad, A-16/2, Site IV Industrial Area,
Sahibabad, Ghaziabad and 57/2 ,Site IV Industrial Area, Sahibabad,
Ghaziabad, have been merged at the recently started main unit at 57/2,
Site-IV Sahibabad , Ghaziabad. The Fashion Accessories Division, which
was earlier operating at B-2, Loni Road Industrial Area, Ghaziabad, has
also been shifted to 57/2, Site- IV Sahibabad, Ghaziabad.
Further, the lease hold weaving units of SIDCUL, located at Kashipur
Spinning Mills, Near Govt. Degree College, Kashipur-Bazpur Road,
Kashipur, Udham Singh Nagar, Uttrakhand and Jaspur Spinning Mills,
Afzal Garh Road, Jaspur, Udham Singh Nagar, Uttrakhand have been closed
down and surrendered during the year.
At the yarn manufacturing units located at Haridwar, the technical
thrust is on the development of the value added items like Fancy yarns,
Slub yarns, Core spun yarns, Multi Folded Yarns and Zero twist yarns
etc. The technical team constantly conducts the trial runs, special
studies to meet out the requirements of the latest developments in the
manufacturing process, to meet out the demands of the competitive
domestic & export market.
The Weaving and Processing units manufacture Furnishing & Automotive
Fabric for export and domestic segments. There has been a significant
growth of market share in US, UK, Middle East, South East Asia,
Australia, New Zealand and Japan during the fiscal year 2013-14, as
compared to previous year. The competition has intensified but the pace
with which this segment has been growing due to the novelty and
uniqueness of designs/patterns. The economic scenario in Europe/US is
showing signs of revival and resultant, the demand for fabric in these
regions will go up. Due to recent pick up in the export demand and the
offering of variety, the turnover is expected to increase in the coming
years. To strengthen the market, the company introduced various new
products in residential and contract business segments.
The unit has been able to create a niche at market place by way of new
product offerings in different fiber blends, which are unique from
other players. The unit has launched new product range in decorative
curtain fabrics which includes Fire Resistant Coated Fabric, which has
been very well accepted in the international market. New products like
Embroidery, Laminated, Cotton Dyed & Peached in bigger widths have also
been introduced. There is a continuous effort on product innovation as
well as cost optimization in operations. Under the Automotive Fabric
Segment range, the unit is catering to the demands of various fabrics
for OEM and Non OEM consumers. For OEM fabric supply to international
car makers, company has made arrangements for Technical & Marketing
tie-ups with some of the leading companies to cater to the OEM reputed
consumers. It will boost the turnover in the coming years
significantly. For Non OEM Fabric, the focus is mainly on "after sale
market" for Car and Bus segment. The unit is exploring the
opportunities in overseas market for Car, Bus, Railway Projects &
Automotive Seating Fabrics Segment with Japanese technology which
requires high performance fabrics with good level of aesthetics. Due to
the best quality management, the division has, in a short span of over
three years, secured the business from highly quality oriented OEM
consumers. Beside these OEM consumers, the other products contribute
"after markets" of various other reputed car makers. The unit is
targeting to enter some more OEMs and international market to increase
the volumes.
The unit is also focusing on technically special PU coated fabric and
TPU membrane lamination, which provides excellent water proof and
moisture vapor transmission. These fabrics having high technicality
involved to fulfill the demands of Indian Defence and also useful for
high altitude temperature.
RESTRUCTURING/REHABILATATION OF THE COMPANY UNDER THE PROVISIONS OF CDR
AND THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT,1985 (SICA).
In Aug 2009, while the company was facing liquidity crunch, a
restructuring scheme was sanctioned and implemented under the Corporate
Debt Restructuring (CDR) mechanism set up by Reserve Bank of India. The
main features of the scheme were among others, the conversion of a
portion of debt/liability into OCCPS/CRPS, extension of debts repayment
period and reduction of rate of interest. In the mean time, due to
erosion of the Net Worth of the company as per Audited Accounts as of
31st March 2010, the Company had filed a reference with Hon''ble BIFR
for its rehabilitation under Section 15(1) of Sick Industrial Companies
(Special Provisions) Act, 1985 which was registered vide Case No.
32/2010 as per BIFR''s letter dated June 29, 2010 and vide BIFR''s order
dated 06.12.2010, has been declared as a "Sick Industrial Company".
Vide the same order, State Bank of India has been appointed as the
Operating Agency (O.A.) by Hon''ble BIFR and directed to prepare and
submit a fully tied up Draft Rehabilitation Scheme. Afterwards, due to
another setback faced by the company, in the year 2011, the CDR Scheme
was reworked and was partly implemented while the remaining part of the
package was to be implemented after the approval of Hon''ble BIFR.
However, the case of the company has been withdrawn by CDR EC w.e.f.
November 16, 2012.
In the mean time, State Bank of India, the operating Agency, has filed
the Draft Rehabilitation Scheme (DRS) for the rehabilitation of the
company with Hon''ble BIFR on 07.07.2011, as recommended by the majority
of lenders in their Joint Lenders Meet (JLM) held on 15th June'' 2011
and by the Statutory Agencies in their meet held on 5th July'' 2011 from
whom company sought some reliefs and concessions in the DRS. On the
directions of Hon''ble BIFR, company has filed the latest amended Draft
Rehabilitation Proposal in the month of Jan.''2014 and at present the
rehabilitation scheme of the company is under formulation with Hon''ble
BIFR under the provisions of SICA.
Recently EXIM Bank, State Bank of India and State Bank of Mysore have
communicated to the Company that they have assigned their rights,
titles & interests in the financial assistance provided to the company
in favour of an Assets Reconstruction Company, M/s. Edelweiss Assets
Reconstruction Company Ltd., except an amount of Rs. 100 lacs, the
amount of invoked bank guarantee, which is retained by State Bank of
India. The name of ARC is yet to be substituted before the Hon''ble BIFR
in the rehabilitation proceedings pending under the provisions of SICA.
The same however does not have any affect on the Balance Sheet or
Profit and Loss account of the company for the year. However, the
company is exploring the possibility of settlement of the dues of
lenders as an alternative to the restructuring, and negotiation for the
same are also in progress.
CREDENTIALS/CERTIFICATIONS
With the contribution and efforts of all concerned, the various
credentials have been renewed /continued during the period under review
viz.;
* Certificate for ISO/TS 16949;2009 for manufacturing seat fabrics for
the automotive application.
* Certificate for Oeko-Tex for Hohenstein Textile Testing Institute,
Germany
* Certificate for ISO 9001;2008 and ISO 14001;2004 for the management
system implemented, renewed by Afnor Certification for the period 2013
to 2015 covering the manufacturing activities i.e. Spinning, Weaving
and Processing of Yarn, Fabric and Home Furnishing and Coating, fire
retardant curtain fabric, upholstery and stain proof fire retardant
upholstery cloth for the company''s units situated at Haridwar and
Meerut.
* Certificate of Compliance of standards issued by the CU Inspections &
Certifications Private Limited.
* Certification to use the Trademarks from Cotton Egypt Association
(CEA).
* Certification of membership of Indian Green Building Council (ICBC)
issued bythe Cll.
* Achievement award for the workplace conditions issued by the
Workplace Conditions Assessment (WCA). MEASURES TO REDUCE/CONTROL COST
To meet out the market competitiveness and improve the financial
performance, the company is committed to reduce the cost, upgrade the
efficiency and ensure optimum utilization of the current as well as
fixed assets of the company. On technical front, your company is trying
to achieve the reduction in raw material cost by making different
composition of mixing/purchase of cotton through commodity exchange,
increase in machine productivity, better yarn yield with optimum use of
raw material, control waste generation to bare minimum and best use of
work force, best utilization of capacity with lowest Raw Material Cost
and good quality of end product to fetch best yarn price. The major
units located at Meerut and Haridwar have taken various important steps
which includes buying of raw material in bulk quantity, directly from
suppliers, after proper negotiation and studying market prices,
reducing the fixed overheads, increase the utilization and efficiency
of machineries to reduce the cost, standardize the production process
flow chart to avoid the rejection, maintain the inventory level as per
the requirement, constant check on power consumption,
controlling/reducing rejections & re-processing, reusing / recycling
all possible items, strict follow-up on regular maintenance schedule to
avoid major break downs, increasing overall efficiency to reduce
production cost, using low consumption LED lights. In order to reduce
the substantial logistic cost, the company is opting for land ports
nearest to the units. The spinning units located at Uttarakhand have
also reduced the power cost by making arrangement with the Indian
Energy Exchange / Power Exchange India Limited by availing the best
market rates for supply of power. The efforts are there to implement
the system at other units also as and when it is allowed by the state
government. It is apart from the other energy conservation steps taken
by the units. The unit located at Meerut has also optimized its cost
structure by way of strong emphasis on consumption control, waste
reduction and rationalization, inventory control & Manpower
optimization.
In continuation of its efforts, your company has taken drastic
decisions to control overall cost, improve production & marketing
efficiencies by consolidating/ transferring/merging the operations of
CMT /FAD & Vista Division of the company and closing down the
operations of yarn manufacturing units located at Kashipur & Jaspur,
which will considerably improve the efficiency which will be reflected
in the coming years of operations. STATUS OF HOLDINGS OF SUBSIDIARY
COMPANIES
During the year under review, there is no change in the status of
subsidiary companies. However, due to implication of Section 2(87) of
the Companies Act, 2013, after considering the indirect holding through
its another subsidiary (Alps USA Inc.), the percentage of shareholding
has been increased from 69.75% to 78.22% in Alps Energy Pvt. Ltd. and
from 73.94 % to 81.65 % in Snowflakes Meditech Pvt. Ltd.
FINANCIAL STATEMENTS OF SUBSIDARY COMPANIES
The company had three subsidiaries at the end of the financial year.
The Ministry of Corporate Affairs, Government of India, vide General
Circular No; 2/2011:51/12/ 2007-CL-lll dated February 8, 2011 has
granted general exemption from the requirement to attach various
documents in respect of subsidiary companies, as set out in Sub-Section
(1) of Section 212 of the Companies Act, 1956. Accordingly, the Balance
Sheet and Profit & Loss Account and other documents of subsidiary
companies are not being attached with the Balance Sheet of the company.
However, the summarized financial information of the subsidiary
companies, as required by the said Circular is disclosed in the Annual
Report. The company will make available the Annual Accounts and related
details upon request by any member of the company. These documents will
also be available for inspection at the Registered Office of the
company during business hours. The Consolidated Financial Statements
presented by the company includes financial results of its subsidiary
companies.
GOVERNMENT INITIATIVES- TEXTILE SECTOR
The textile ministry has made a comprehensive plan to increase export
growth rate from present level of 6-10% to 15-20% in next five years,
in the 12th plan period. Towards this, the Planning Commission has
already allocated Rs 2,5931 Crore to the ministry for overall schemes
and the textile upgradation fund which is proposed to continue. The
report of the Working Croup constituted by the Planning Commission on
boosting India''s manufacturing exports during 12th Five Year Plan
(2012-17), envisages India''s exports of Textiles and Clothing at USD
64.41 billion by the end of March, 2017. In continuation of the efforts
of Government of India to boost the textile industry, various steps
have been taken from time to time. It includes Restoration of Zero
Central Excise Duty Route which existed prior to 01.03.2011, and is
being continued on Branded Ready Made Garments & Made-Ups. The Zero
Duty EPCG benefits are still available to all sectors, though in the
past it was available under certain restrictions to some sectors. The
quantum of specific Export Obligation (EO) in case of domestic sourcing
of capital goods under EPCG authorizations reduced by 10% still
continued. The 2% Interest Subvention widened to include items covered
under Chapter 63 of ITC (HS) (other made-up textile articles, sets,
rags) still continued. The government has further widened the Scope of
Utilization of Duty Credit Scrip under Focus Market Schemes, Focus
Product Scheme and Vishesh Krishi Gramin Udyog Yojana (VKCUY). All duty
credit scrips issued under Chapter 3 utilized for payment of
application fee to DCFT for obtaining any authorization under Foreign
Trade Policy, still continued. The Government had announced Incremental
Export Incentivisation Scheme on 26.12.12 for the exports made during
January''2013 to March''2013. This scheme is available for exports made
to USA, EU and Asia. This scheme was also extended for the year
2013-14. Integrated Skill Development Scheme (ISDS), launched by the
Government of India, that currently provides training and skill
development programmes in the textile and apparel sectors, will be
further strengthened at a cost of Rs. 1900 Crores to provide training
to 15lakh persons for jobs in the textile and apparel sectors,
including Jute & Handicrafts during 2012-17, leveraging the existing
training infrastructure within the textile ministry, on one hand and
private sector participation through a PPP Model on the other. The
Government is also trying to implement the GST Laws and the Direct Tax
Code in 2014-15 to further streamline the tax regime for the industry
in coming years. SIDBI has also come out with some niche areas like
financing for energy savings schemes and cleaner production norms.
SIDBI has been given additional window by RBI to lend to small and
medium scale industry through the External Commercial Borrowings (ECB)
route. RBI has allowed SIDBI to raise upto USD 500 million through this
route.
DIVIDEND
Due to the operational loss suffered by the company, your directors do
not propose any dividend for the current financial year. SHARE CAPITAL
In pursuant to the approval of the shareholders at the Annual General
Meeting held on 11th December, 2009 and further on 30th September'' 2011
and approval from the Stock Exchanges, vide letter reference no.
DCS/PREF/AK/PRE/357/2012-13 dated 17/08/2012 from Bombay Stock Exchange
Limited & Ref. no. NSE/LIST/174591-4 dated 11/07/2012 and
NSE/LIST/178703-W dated 21/08/2012 from National Stock Exchange of
India Limited and under the CDR scheme, the Company had allotted
26,934,146, 6% OCCPS under Category ''B'', on August 22,2012 at an issue
price and face value of Rs. 10/-. As none of the allotees had exercised
the option to convert the OCCPS into Equity shares within 18 months
from the date of allotment i.e. latest by February 21, 2014, it has
been reclassified into 6% Cumulative Redeemable Preference Shares,
under Category ''B'' instruments at an issue price and face value of
Rs.10/- each, w.e.f. February 22, 2014. The necessary circular has
been notified by National Securities Depository Limited vide their
letter Ref.: II/CA/COM/APR00021/2014 dated 25.04.2014.
The reclassification of authorized share capital which was approved at
the ACM held on September 29, 2012 to accommodate the conversion of
OCCPS into equity shares could not be utilized, as none of the OCCPS
got converted into equity shares during the period under review.
RELATIONSHIP WITH INVESTORS
To have the participation by all the valued investors in the voting
pattern for any proposal and in terms of the compliance of the
Companies Act, 2013 and relevant rules, the company has commenced
e-voting facility through which any investor can participate in the
AGCMs through e-voting and need not struggle to attend the meetings in
person.
Your company is fully committed and accountable to the valued
investors, who have reposed the confidence in the company by investing
their hard earned money in the company and supported the management in
such a crucial time.
The relationship with the investors continues to be cordial. Your
company''s management is fully aware and dedicated for survival of the
company and committed to take all efforts to resolve the investors''
grievances received during the year to the satisfaction of the
investors within a reasonable time. Alankit Assignments Limited, the
R&T Agent of the company, continued to extend their positive
contribution to resolve the Investors'' grievances efficiently and
effectively, whenever they arose. By contribution from all concerned,
the investor grievances have been resolved to the fullest satisfaction
of investors. We sincerely place on record, the appreciation for our
valued investors, who have contributed and reposed the confidence in
the company at this difficult time. The management not only believes in
legal compliance related to the investors, but also morally protects
their interest, and treats them as part of Alps Croup. In its endeavor
to improve investor services, your Company has created an investor
section, and designated exclusive E-Mail ID for the purpose of
registering complaints by investors and necessary follow up action by
the company/ compliance officer in compliance with Clause 47(f) of the
Listing Agreement. The e-mail ID is;
[email protected]
MANPOWER-VALUABLE ASSETS
Our basic objective is to ensure that a robust talent pipeline and a
high-performance culture, centered on accountability, is in place. We
feel this is critical to enable us retain our competitive edge. Your
company is continuously benchmarking of the best HR practices across
the industry and carrying out necessary improvements to attract and
retain the best talent.
The company has been treating its human resources as its valuable
assets and accordingly the HR strategies were formulated to build the
professional HR management systems so as to make continuous efforts to
build a system based organization instead of person based one.
Consistent efforts are being made to improve the organization
structure, optimize the utilization of available human resources,
clearly defining the job responsibilities so as to avoid over-lapping
and also key results areas and key performance indices for better focus
and assessment of the contributions, formulating/continuously reviewing
HR policies for effective and fair implementation of the same and
improving hygiene factors for facilitating to conclusive working
environment. Efforts made to improve the female workers/employees
ratio, particularly at the shop floor, in-line with the national policy
of gender equality, policy to restrict the sexual harassment was
formulated/implemented in line with the government directions. The
company''s commitment for treating its employees with human dignity and
fairness were visible in its efforts made for the same throughout the
year. The company''s concerns for welfare of its workforce continued
during the year and accordingly Croup pension/Accident Insurance
policy/ESI/WC policies were continued further as in the past. The
company has been consistently maintaining harmonious & cordial
relations with the employees at all the locations. The Company
continues to lay emphasis on building and sustaining an excellent
organizational climate based on human performance. Performance
management is the keyword for the company. During the year, the Company
employed around 2600 employees (3800 employees during previous year
2012-13). Pursuit of proactive policies for industrial relations has
resulted in a peaceful and harmonious situation on the shop floors of
the various plants.
The information required under Section 217(2A) of Companies Act, 1956,
read the Companies (Particulars of Employees) Rules, 1975, duly amended
by the Companies (Particulars of Employees) Rules, 1999 and further
amended vide G.S.R. No. 289(E) dated March, 31, 2011, is not applicable
to the company as none of the employee is drawing remuneration more
than the limits prescribed specified under the said Rules during the
financial year 2013-14.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO.
Information in accordance with the provisions of Section 217 (1) (e) of
the Companies Act, 1956 read with Companies (Disclosure of Particulars)
in the Report of Board of Directors Rules, 1988 regarding conservation
of energy, technology absorption and foreign exchange earnings and
outgo is given in the statement annexed (Annexure-1) here to and forms
part of this report.
REAPPOINTMENT OF EXECUTIVE DIRECTOR
The Board of Directors at their meeting held on May 30, 2014 based on
the recommendations of Nomination & Remuneration Committee, has
recommended the reappointment of Mr. P.K. Rajput as Executive Director
again for another term of 3 years w.e.f. July 28, 2015. The necessary
resolution for the approval by the members of the Company has been
included in the Notice of the Annual General Meeting subject to the
approval of the Central Government and Rehabilitation Scheme under BIER
of the company, if required. A brief note in terms of the requirement
of the Corporate Governance on the aforesaid reappointment of Whole
Time Director has been included in Part-1 of Annexure-3.
REAPPOINTMENT OF DIRECTORS
In terms of the provisions of Article No. 106,107 & 108 of the Articles
of Association of the Company and Section 152 of the Companies Act,
2013 and Sections 255 and 256 of the erstwhile Companies Act, 1956, Mr.
Pradyuman Kumar Lamba, Independent Director (DIN No.02843166) retires
at the ensuing Annual General Meeting, and being eligible, offer
himself for reappointment.
CHANGE IN THE NOMINEE DIRECTOR
The State Bank of India has withdrawn the Nomination of Mr. Sonalal
Dutta (DIN No.03011996) as its nominee director from the Board of
Directors of the company and accordingly, he has submitted the
Resignation letter dated May 11 2014, which has been approved by the
Board of Directors, with a sincere thanks to him for his expert advises
given to the company during his tenure, at their meeting held on May
30,2014.
STATEMENT OF DIRECTORS'' RESPONSIBILITY
In terms of Section 217 (2AA) of the Companies Act, 1956, the members
of the Board place on record the Directors'' Responsibility Statement as
under ;-
(i) In the preparation of the annual accounts for the financial year
under review, the applicable accounting standards have been followed
alongwith proper explanation relating to material departures;
(ii) That the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit or loss of the company for that period;
(iii) That the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of related Act for safeguarding the assets of the company
and for preventing and detecting fraud and other irregularities; and
(iv) That the directors have prepared the annual accounts on a ''going
concern'' basis.
COMPLIANCE REPORT/COST AUDIT
In compliance with the Notification dated June 3, 2011 issued by MCA,
Company has appointed M/s. Neeraj Sharma & Co., Cost Accountants,
Ghaziabad, to submit the Compliance Report under the Companies (Cost
Accounting Records), Rules 2011, duly approved by the Board of
Directors, to the Central Government, for the financial year ended on
March 31, 2014 for the products which are not specified for the Cost
Audit. The compliance report will be filed by the company within the
due date i.e. on or before September 27, 2014, being 180 days from the
close of the financial year or as may be extended by the department
from time to time.
Further, in compliance of Notification Reference No. F. No
52/26/CAB-2010 dated January 24, 2012 issued by the Cost Audit Branch
under MCA, the aforesaid firm of Cost Accountants has also been
appointed as the Cost Auditors of the company under Section 148 of the
Companies Act, 2013 and Section 233 B of the erstwhile Companies Act
1956, for the next financial year ended on March 31, 2015, at the
meeting of Audit Committee and Board of Directors of the company held
on May 30, 2014. As required under Section 148 of the Companies Act,
2013, the ratification for their appointment & remuneration has been
recommended at the forthcoming Annual General Meeting of the company.
However it is strictly applicable in terms of any
Notifications/Circulars related to Cost Records and Cost Audit Rules,
as may be specified at any time by the MCA or any regulatory
Authorities. If due to any reasons the mandatory requirements abolish,
then continuation of the appointment of Cost Auditors, will be at the
discretions ofthe Board of Directors as per the requirements of the
company.
FIXED DEPOSITS
During the year, your company has not raised any money by way of Fixed
Deposits.
CORPORATE GOVERNANCE
A report as per the requirements of Clause 49 of the listing agreement
on the Corporate Governance practices followed by the Company and the
statutory Auditors'' Certificate on Compliance of mandatory requirements
alongwith Management Discussion and Analysis is given as an Annexure to
this report. The non-mandatory information is annexed as Part-ll of
Annexure-3. It has always been the endeavor of your Company to practice
transparency in its management and disclose all requisite information
to keep the public well informed of all material developments.
STATUTORY AUDITORS
M/s. P. Jain & Co., Chartered Accountants, the Statutory Auditors of
the Company, retires at the forthcoming Annual General Meeting of the
Company and have confirmed their eligibility and willingness to accept
office, if re-appointed. The company has received certificates from the
said auditors to the effect that their re-appointment, if made, would
be within the limits prescribed under Section 141 of the Companies Act,
2013. Your Directors recommend their reappointment under Section 139 of
the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014
for a further period of 4 years i.e. till the conclusion of 46th ACM.
AUDITORS'' OBSERVATIONS
Observations in the Auditors'' Report are dealt within Notes to Accounts
at appropriate places and being self-explanatory, need no further
explanations. As required under amended Clause 31(a) of the listing
agreement and SEBI Circular No.CIR/CFD/DIL/7/2012 dated August 13,
2012, the necessary disclosures/details in the prescribed Form ''B'' have
been appended with the Annual Report.
ACKNOWLEDGMENT
Your Directors take this opportunity to thank the Financial
Institutions, Banks, Board for Industrial and Financial Reconstruction
(BIFR),Corporate Debt Restructuring (CDR) Cell, Reserve Bank of India,
Central and State Governments Authorities, Regulatory Authorities,
Stock Exchanges, Stakeholders, Customers and Vendors for their
continued support and co-operation, and also thank them for the trust
reposed in the Management. Your Directors also wish to thank all the
employees of the Company for their commitment and contributions. Your
Directors also wish to place on record their appreciation towards all
associates including Customers, Suppliers, and others, who have reposed
their confidence in the Company. Your Directors look forward to their
unsustained support in future also.
For and on behalf of the Board
of Alps Industries Limited
Place : Ghaziabad P.K. Rajput Sandeep Agarwal
Date : May 30, 2014 Executive Director Managing Director
Mar 31, 2013
To, The Members of Alps Industries Limited
The Directors have pleasure in presenting the 41st Annual Report
together with the Audited Statements of Account of the Company for the
financial year ended on March 31, 2013.
The Financial performance of the company, for the year ended March
31,2013 is summarized below:
FINANCIAL RESULTS (Rs. in Millions)
Particulars Year Ended Year Ended
31.03.2013 31.03.2012
Total Income 7002.26 6686.09
Operating Earnings/Losses before
Financial Expenses, Depreciation &
Amortization and Tax 425.14 (1286.31)
Finance Cost 1012.00 1009.91
Depreciation 449.51 456.04
Profit/Loss Before Tax (1036.37) (2752.26)
Provision for Tax - -
Deferred Tax - -
Profit/Loss After Tax (1036.37) (2752.26)
Exceptional Items (116.61) (22.78)
Surplus of last year Add: (6931.23) (4156.19)
Surplus available for appropriation (8084.21) (6931.23)
Appropriations
Surplus carried to Balance Sheet (8084.21) (6931.23)
Surplus available for appropriation (8084.21) (6931.23)
OPERATING ENVIRONMENT
India has a long history in weaving. During the Industrial Revolution,
technology stole a march over a tradition in textiles production for
the first time and our dominance in weaving has come down almost
steadily ever since. Competitiveness in textiles production has
travelled from country to country during the last several decades
depending on technology and cost of production in the respective
countries. Even after losing its tradition based dominance, India has
been able to retain a significant presence in textiles sector over
these decades by adopting a blend of tradition and technology. But even
countries like Pakistan , Bangladesh and Sri Lanka which share the same
textile heritage as ours, have been relying more on technology than on
tradition in their textile production during the last few decades and
they have all achieved higher growth than ours, especially in fabrics
by Pakistan. In India, technology has played its due role in textiles
production only in the case of spinning. Where our production
facilities are truly world class and nearly 90 percent of production is
in the organized sector. In fabric, over 95 % of our production is in
the decentralized sub sector and in garments & home textiles, over 80%
ofour units continue in the SME sector. Exports of textile product
during April,2012 Â January,2013 over the same period of previous year
saw a decline of 4.7 %. Total export of textiles product were worth US
$19,987 million during ten months of fiscal year 2012-13. Textile
product exports have increased from Rs.99,786 crore of Apr-Jan
2011-2012 to Rs.1,08,869 crore in the same periodof2012-2013.
In the Fabric export segment, the next fiscal year will be a
significant period in terms of consolidation in various markets for
fabric by roll exports. US market has been developing well both on the
residential fabric and contract business viz. hotel and hospitality
industry. Middle East has shown significant jump on the volumes. Your
company has spread its wings in most of the markets now like US, UK,
South East Asia, Australia, NZ and Middle East. It was planned to avoid
Europe and Latin America for sometime till the worst is over there.
Your company have emerged in last few years as a serious supplier of
blackouts cotton and natural upholstery fabrics. We expect the upward
trend in export business. Company has also introduced some of the new
product in export segment like Multi-head embroidered fabrics which has
higher value proposition, outdoor fabrics etc. This range is expected
to have lesser competition, is highly technical and with a higher
value.
To contribute in the turnover of the company, the value added made ups
division had been started some time back. The division had been facing
some teething problems but some have been addressed and corrective
actions were taken. This is a high fashion category which needs
innovation and creativity all the time to create a new design. Your
company foresees growth in this segment and is hopeful to achieve the
targets during the next fiscal year.
As a part of efforts to revamp Fashion Accessories Division , your
company has initiated holistic changes in this segment. Your company
has introduced various intimate blends to provide innovative products
including metallic based fabrics, intricate jacquard patterns using
ancient ethnic patterns, Persian motifs and contemporary geometrical
patterns, humungous range of printed scarves, stoles, shawls & sarongs
to our product range. FAD has also introduced new products with
spectacular array of specialized weaves and patterns using electronic
dobby machines, intricate jacquard patterns using ancient ethnic
patterns. In this division, your company has introduced around 360''
varieties in embellished products including Aari, Dabka, Jardosi,
sequin, bead work along with the variety of hot fix studs and crystals,
various varieties of tassels, laces, fringes etc. Your company is also
striving to tap the new buyers of USA & Europe. The printing facilities
have also been arranged to avail an edge with other suppliers.
In the Anti-Bacterial "Sleep Dry" Baby product, your company has
reached the Brand category. To enjoy maximum reach to valued consumers,
the company participates in exhibitions , magazine etc. apart from
other promotional efforts towards domestic market, promoting through
various promotional materials and hopeful to have better profitability
in coming years. In one of the most important and major segment i.e.
Yarn, your company is focusing on some of the key markets like
domestic, South America and China. To penetrate the market with only
sizeable buyers, the market friendly terms of supply are being offered.
Your company is also taking various steps to strengthen the buyer base
domestic as well as overseas. Efforts are also made to introduced
various variety of value added yarn. Your company have also plan to add
more value added yarn like Core Spun Lycra, Slub Yarn, Multi fold &
Multi count Yarn etc. in the product range. We are also striving to
take a balanced approach towards all premium paying markets ,
increasing the share in most contributing count. Besides above, your
company has also to expand the exporting yarn.
One of the major brands of the company i.e. Vista, in domestic market
has earned an enviable reputation and is the market leader in window
dressing range of products, which are well known in the domestic market
for its world class quality & continuous innovations in the segment.
Under this product range, which are crafted with absolute focus towards
customer''s needs and desire, company has introduced various new
products like Hardwood Flooring, Hospital Curtain Tracks & Monsoon
Blinds, Lexus, Murano & Folliage, Naturons- Roll-up & Roman Blinds
Scontour, Cellular & Sheer Dimout Blinds under the new variety of
fabric for Roller Blinds. To expand the product range for open spaces
like large windows, terraces, balconies, Glass houses etc. new range of
Awnings, FTS & Skylight systems have also been introduced. During the
period under review, company has also commenced operational activities
partly at the company''s unit situated at 57/2, Site IV, Industrial
Area, Sahibabad to expand the production of CMT to meet out the new
buyers demands.
The financial performance of the company is on improvement trend which
is evident from the fact that the EBITA has increased to Rs. 425.14
millions during the financial year under review in comparison to Rs.
(1286.31) million in previous year. However, company has incurred net
loss of Rs. (1036.37) millions in comparison to Rs. (2752.26) millions
in the previous period. The loss has decreased due to various reasons
like increase in the margin of yarn, down trend in cotton prices and
betterment of utilization of capacity of Meerut unit which is further
expected to improve in current year.
FUTURE OUTLOOK TECHNICAL AND EXPANSION GROWTH
In the Fashion Accessories division, impressive collection of hand as
well as machine embellished products have been developed during the
period under review. The production Capacity has also been increased
and printing facility proposed to be implemented during the current
financial year. In Haridwar unit, Yarn Dyeing vessel capacity have been
increased after modification of spindle height. In view of the
deteriorating conditions of plant and machineries and acute labor
shortage at Kashipur unit, the utilization capacity have been reduced.
WEAVING AND PROCESSING PLANT ATMEERUT
Under the furnishing fabric segment range, various products are being
produced at the Meerut unit. It has created a niche for itself in terms
of its products, which are in a much different league from those of
other Indian exporters, who are producing mainly polyester and
polyester blends. It is more into cotton and organic products, cotton
fabrics, cotton linen, viscose linen blends and other natural fibers,
as the worldwide demand for natural fiber curtains and upholstery is
increasing. There are very few suppliers of this range in India.
Globally, the main suppliers are from Europe, but they are not as
competitive as Indian suppliers.
It has introduced few innovative products which have received very good
response across the markets. Washable cotton & brushed cotton, pigment
dyed, washed look upholsteries are some of them, to name a few.
This is the only unit of the company with blackout coating facility in
India. Blackout curtains have a very big market in residential and
contract business. The unit has been very successful in creating value
added products in jacquard blackout and cotton blackouts. Contract and
Hospitality business (Hotels, Guest houses and public areas) has good
requirement of blackout curtains, and the unit is catering to that
market well.
The feature of automotive fabric market is such that to ensure
standardization of quality worldwide, the international car makers
source fabric from only those companies that have relationships /
technical tie-ups with one of their worldwide suppliers. This is
largely driven by the vendor-customer relationships at parent plants /
head offices of the international car makers. To overcome this feature
of the OEMs, and to win long term business, it has put a great deal of
thrust on the after sale market for seat covers and the bus segment.
These two segments are not bound by any requirement of a foreign
collaborator. It has made a noticeable head way with leading car
manufacturers.
FINANCIAL OUTLOOK
The company was sanction dear structuring scheme under CDR Mechanism by
CDR Empowered Group on August 31, 2009 and as amended from Time to
time. The package comprised of conversion of unsustainable debt into
OCCPS/CRPS, funding of Interest and reduction of interest to 9% among
other reliefs. However, the Company could not achieve the projected
Operating Profit level in subsequent year i.e.2010-11, mainly due to
higher cost of raw materials and delay in implementation of Meerut
Plant. These adverse situations demanded the reworking of existing
sanctioned CDR package. The CDR-EG reworked its existing package
accordingly by issuing of LOA dated 04.05.2011 and allowed some
additional reliefs to the Company like Conversion of additional
unsustainable portion of Term Loan into equity, reduced and step-up
Rate of Interest and Realignment of the balance Term Loan installments.
However due to unprecedented situation of cotton and cotton yarn market
company could not achieve the estimated profit and incurred a negative
EBIDTA resulted into the depletion of working capital. However, the
company honored its due liabilities towards secured lenders up to June''
2011. With a view to tide over the above difficulty arising out of the
industry situation, the company had approached SBI and other lenders to
commensurate the debt obligations of the company in line with the
expected operating profits of the company based on the recommendations
on restructuring of Textile loans forwarded by Government of India to
the RBI for their consideration. The CDR scheme has been withdrawn by
CDR cell of RBI w.e.f. November 16, 2012.
DECLARATION OF SICK INDUSTRIAL UNIT UNDER SECTION 3(1) (O) OF THE SICK
INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT,1985.
Due to erosion of total Net worth of the company as per Audited
Accounts as of 31st March 2010, the Company has filed a reference with
Humble BIFR under Section 15(1) of Sick Industrial Companies Act. The
company was registered vide Case No. 32/2010 as per BIFR''s letter dated
June 29, 2010 and subsequently after the hearings and finding
justifications, BIFR declared the company as "Sick Industrial Company"
under Section 3 (1) (o) of the SICA vide their order dated 06.12.2010.
In the same order of Humble BIFR, the State Bank of India, was
appointed as the Operating Agency (O.A.). In terms of the directions of
the BIFR, company had prepared the Draft Rehabilitation Proposal and
submitted to State Bank of India and BIFR. After due consideration in
the joint meeting held on 15th June'' 2011 (with Lenders) and 5th July''
2011 (with Statutory agencies, from whom company sought some reliefs
and concessions), State Bank of India has filed the Draft
Rehabilitation Scheme (DRS) with BIFR on 07.07.2011. On the directions
of Humble BIFR, company has also filed amended DRS with O.A. and Humble
BIFR during the month of March''2013 which is under consideration of
O.A. & Humble BIFR."
CREDENTIALS
With the contribution and efforts of all concerned the various
credentials have been awarded to the company during the period under
review viz.:
- Certificate for ISO/TS 16949:2009 for manufacturing seat fabrics for
the automotive application.
- Certificate for Oeko-Tex for Shorenstein Textile Testing Institute,
Germany
- Membership of BCI (Better Cotton Initiative) from BCI, Switzerland.
- Certificate for ISO 9001 :2008 and ISO 14001:2004 for the management
system implemented renewed by Afnor Certification for the period 2013
to 2015 covering the manufacturing activities i.e. Spinning, Weaving
and Processing of yarn, Fabric and Home furnishing and Coating (fire
retardant curtain fabric, upholstery and stain proof fire retardant
upholstery cloth for the company''s unit situated at Haridwar and
Meerut.
MEASURES TO REDUCE/CONTROL COST
During the crisis phase running in the company, the acute measures are
being taken to control the cost, increase the efficiency and best
utilization of resources of manpower. On technical front, your company
is trying to achieve the reduction in raw material cost by making
different composition of mixing for best use of Polyester Fiber,
increase in machine productivity, better yarn yield with optimum use of
raw material, control waste generation to bare minimum and best use of
workforce, best utilization of capacity with lowest Raw Material Cost
and good quality of end product to fetch best yarn price at the company
unit located at Kashipur/Jaspur. The major units located at Meerut and
Haridwar have taken various important steps which includes buying of
raw material in bulk quantity directly from suppliers after proper
negotiation and studying market prices, reducing the fixed overheads,
increase the utilization and efficiency of machineries to reduce the
cost, standardize the production process flow chart to avoid the
rejection, maintain the inventory Level as per the requirement,
constant check on power consumption, controlling/reducing rejections &
re processing, reusing/recycling all possible items, strict follow up
on regular maintenance schedule to avoid major break downs, increasing
overall efficiency to reduce production cost, using low consumption LED
lights. In order to reduce the substantial logistic cost the company is
opting for land ports nearest to the units. The company is also
purchasing capital goods & other items under EPCG authorizations and
saved substantial duties.
STATUSOF HOLDINGSOF SUBSIDIARY COMPANIES
During the year under review, there is no change in the status/holding
of subsidiaries companies.
FINANCIAL STATEMENTS OF SUBSIDIARIES COMPANIES
The company has three subsidiaries at the end of the financial year.
The Ministry of Corporate Affairs, Government of India, vide General
Circular No: 2/2011:51/12/2007-CL-III dated February 8, 2011 has
granted general exemption from the requirement to attach various
documents in respect of subsidiary companies, as set out in Sub-Section
(1) of Section 212 of the Companies Act, 1956. Accordingly, the Balance
Sheet and Profit & Loss Account and other documents of subsidiary
companies are not being attached with the Balance Sheet of the company.
However, the summarized financial information of the subsidiary
companies, as required by the said circular is disclosed in the Annual
Report. The company will make available in the Annual Accounts and
related details upon request by any member of the company. These
documents will also be available for inspection at the Registered
Office of the company during business hours. The Consolidated Financial
Statements presented by the company includes financial results of its
subsidiary companies.
GOVERNMENT INITIATIVES- TEXTILESECTOR
The Textiles is the second largest sector which provides employment
after agriculture. It contributes about 14% to industrial production,
4% to the GDP, and 17% to the country''s export earnings. It provides
direct employment to over 35 million people, which includes a
substantial number of SC/ST, and women, keeping in line with the policy
of inclusive growth Union Budget for 2013-14, provided strong support
to the sector. Apart from continuing major schemes, the budget has
taken many measures to assure affordable credit, technology up
gradation, skill development and duty relief has been envisaged to
safeguard the livelihood of the weavers and keep the industry
competitive. The Budget has made an additional provision of Rs. 96
crores for 2013-14 for providing interest subvention to make working
capital and term loans available at a concessional interest rate of 6%
(earlier this was 11% with 3% interest subvention available under the
Comprehensive Handloom Package).The existing packages, namely
Comprehensive Handloom Package of Rs. 3884 crores and Revival, Reform
and Restructuring Package of Rs. 2350 crores. Technology Up gradation
Fund Scheme (TUFS) has been continued in the 12th Plan with major focus
on modernization of the power loom sector for which Rs. 2400 crores has
been allocated in 2013-14. Scheme for Integrated Textile Parks (SITPs)
have been continued. A new scheme called the Integrated Processing
Development has been introduced. The customs duty on raw silk has been
enhanced from 5% to 15%. Zero excise duty routes in addition to CENVAT
route are now available to the cotton and manmade sector and spun yarn
at the yarn, fabric and garment stages. In case of cotton, there will
now be zero duty at the fiber stage and in case of spun yarn, there
will be a duty of 12% at the fiber stage. This is in keeping with the
Textiles Ministry''s initiative for ensuring a Fiber Neutral Textile
Policy. All the excise duty relief measures will restore
competitiveness of Indian exports which are under stress due to
favorable treatment given to the new competitors in major markets like
EU.
Zero Central Excise Duty Route as existed prior to 01.03.2011 is being
restored on Branded Ready Made Garments & Made-Ups by the current Union
Budget 2013-2014. Products falling under Made-Ups/Garments are now
exempted from payment of Central Excise Duty provided the CENVAT Credit
is not taken on inputs. Now the Zero Duty EPCG benefits are made
available to all sectors, though in the past it was available under
certain restrictions to some sectors. Now we may work under Zero Duty
Scheme as announced by the Minister for Commerce, Industry & Textiles
on 18.4.2013. The quantum of specific Export Obligation (EO) in the
case of domestic sourcing of capital goods under EPCG authorizations
has been reduced by 10%. Duty Credit Scrips issued under Focus Market
Schemes, Focus Product Scheme and Vishesh Krishi Gramin Udyog Yojana
can be used for payment of service tax on procurement of services
within the legal framework of service tax exemption notifications under
the Finance Act, 1994. Some more countries have been added under focus
market scheme. The Government has also announced Incremental Export
Incentivisation Scheme on 26.12.12 for the exports made during January
2013 to March 2013.Some additional items are included in the list of
items which are allowed duty free within the existing limits up to 5%
FOB value of exports of handloom made ups in preceding year or within
the existing limit of up to 1% of FOB value of exports of
cotton/man-made up sin preceding year.
DIVIDEND
Due to the operational loss suffered by the company, your directors do
not propose any dividend for the current financial year.
SHARECAPITAL
In terms of the Scheme of Financial Restructuring sanctioned by the
Corporate Debt Restructuring Empowered Group (CDR-EG) on August 31,
2009 and as amended from time to time and in terms of the approval from
the shareholders at the Annual General Meeting held on September 30,
2011 and from the stock exchanges, vide letter Reference No.
DCS/PREF/AK/PRE/357/12-13 dated 17/08/2012 from Bombay Stock Exchange
Limited & Ref. no. NSE/LIST/174591-4 dated 11/07/2012 and
NSE/LIST/178703-W dated 21/08/2012 from National Stock Exchange of
India Limited, company has allotted 26,934,146, 6% Optionally
Convertible Cumulative Preference shares (OCCPS) on August 22, 2012
against the approval of 27,520,000 OCCPS. The aforesaid 26,934,146, 6%
OCCPS may be converted into 24,892,926 equity sharesat a conversion
price of Rs. 10.82/- per equity shares, as approved by the stock
exchanges, at the option of the bankers on or before February 21, 2014.
The necessary approval from the members of the company, as required by
stock exchanges for amendment in the MAP from Rs. 6.69 to Rs.10.82 for
conversion of OCCPS into equity share have been obtained at the Annual
General Meeting held on September 29, 2012.
Further, in terms of the CDR Scheme dated August 31, 2009 and as
amended from time to time, including re-work of CDR scheme and in terms
of the approval from the shareholders at the AGM held on September 29,
2012 & deed of settlement dated September 17, 2012, the company has
also allotted 11,661,448, 1% Cumulative Redeemable Preference Shares
under category ''C''(CRPS)on November 21, 2012 against the approval of
14,960,419 CRPS at an issue price and face value of Rs. 10/- each in
favor of Development Credit Bank Ltd. In pursuant to the approval of
the shareholders at the Annual General Meeting held on 11th
December,2009 and approval from the stock exchanges, vide letter
reference no. DCS/PREF/SR/PRE/767/10-11 dated 16/11/2010 from Bombay
Stock Exchange Limited & Ref. no. NSE/LIST/16331-Q dated 15/04/2011
from National Stock Exchange , under the CDR scheme, the Company had
allotted 12,84,87,790, 6%OCCPS under Category ''A'', on August19, 2011 at
an issue price and face value of Rs. 10/-. As none of the allotters had
exercised the option to convert the OCCPS into Equity shares within 18
months from the date of allotment i.e. latest by February 18, 2013, it
has been reclassified into 6% Cumulative Redeemable Preference Shares,
under Category ''A'' instruments at an issue price and face value of Rs.
10/- each, w.e.f. February 19, 2013.The necessary circular have been
notified by NSDL vide their letter Ref. :II/CA/COM/82966/2013 dated
25.03.2013, w.e.f. March23, 2013.
The reclassification of authorized share capital which was approved at
the AGM held on September 29, 2012 to accommodate the conversion of
OCCPS into equity shares could not be utilized as none of the OCCPS got
converted into equity shares during the period under review.
AWARENESS FOR INVESTORS
The management of the company is fully committed and accountable to the
valued investors, who has reposed the confidence in the company by
investing their hard earned money in the company and supported the
management in such a crucial time.
The relationship with the investors continues to be cordial. Your
company''s management is fully aware and dedicated for survival of the
company and committed to take all efforts to resolve the investors''
grievances received during the year to the satisfaction of the
investors within a reasonable time. Alankit Assignments Limited, the
R&T Agent of the company, continued to extend their positive
contribution to resolve the Investors'' grievances efficiently and
effectively, whenever they arose. By contribution from all concerned,
the investor grievances have been resolved to the fullest satisfaction
of investors. We sincerely place on record, the appreciation for our
valued investors who have contributed and reposed the confidence in the
company at this difficult time. Your company not only believes in legal
compliance related to the investors, but also morally protects their
interest, and treats them as part of Alps Group family. In its endeavor
to improve investor services, your Company has created an investor
section, and designated exclusive E-Mail ID for the purpose of
registering complaints by investors and necessary follow up action by
the company / compliance officer in compliance with Clause 47(f) of the
Listing Agreement. The e-mail ID is:
[email protected]
MANPOWERÂ VALUABLE ASSETS
As the company is expanding in size, systematic thinking and working in
a more transparent environment, is the need of the hour. Hence the
company is working upon re-building the culture of professional
management by making it more system dependent rather than people
dependant. To cater to this, the company has organized training and
skill development programs for the employees.
The company is committed for treating its employees with value for
human dignity, integrity, openness and fairness. The company has
continuously been promoting the welfare and motivational activities for
further strengthening the employee''s relationship by providing better
transportation services for employees, direct from the door step of
their residence to the work place to enhance and spread the feeling of
ownership and belongingness. The company has further improved the
facilities by way of the hygienic and fresh eatables being supplied in
the canteens and residential colony for the employees. To promote the
national policy of gender equality, the company has increased the
employment of the women employees at the shop floor, in the Haridwar
unit. The employee''s motivational policies like "Employees Recognition
Policy", for their extra ordinary contributions in the organization,
have been proved to be an excellent tool for motivation and has
improved the attrition rate of the employees. The company has promoted
healthier environment by enhancement of the activities of games, sports
and cultural activities. The company is running the group insurance
scheme, personal accident policy, for the welfare and health risk
coverage of the employees at all the units to provide the medical
benefits in case of any mishappening. The company has been consistently
maintaining harmonious and cordial relations with the employees during
the year.
The information required under Section 217(2A) of Companies Act, 1956,
read the Companies (Particulars of Employees) Rules, 1975, duly amended
by the Companies (Particulars of Employees) Rules, 1999 and further
amended vide G.S.R. No. 289(E) dated March, 31, 2011, is not applicable
to the company as none of the employee is drawing remuneration more
than the limits prescribed specified under the said Rules during the
financial year 2012-13
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUT GO.
Information in accordance with the provisions of Section 217 (1) (e) of
the Companies Act, 1956 read with Companies (Disclosure of Particulars)
in the Report of Board of Directors Rules, 1988 regarding conservation
of energy, technology absorption and foreign exchange earnings and
outgo is given in the statement annexed (Annexure-1) hereto and forms
part of this report.
REAPPOINTMENT OF WHOLE TIME DIRECTOR
In terms of the provisions of Sections 198, 269, 309, 310 read with
Schedule XIII and all other applicable provisions, if any, of the
Companies Act, 1956, and subject to the limits specified in Schedule
XIII of the said Act, directions as may be provided by Board of
Industrial and Financial Reconstruction (BIFR) under the Draft
Rehabilitation Scheme (DRS), Mr. Sandeep Agarwal has proposed to be
re-appointed as Managing Director of the Company for a further period
of five years w.e.f. 01.02.2014. The necessary proposal has been
included in the Notice for the forthcoming Annual General Meeting.
REAPPOINTMENT OF DIRECTORS
In terms of the provisions of Article No. 106,107 & 108 of the Articles
of Association of the Company and Sections 255 and 256 of the Companies
Act, 1956, Mr. Pramod Kumar Rajput, Director retires ( DIN No.00597342)
at the ensuing Annual General Meeting, and being eligible, offer
himself for reappointment.
STATEMENT OF DIRECTORS'' RESPONSIBILITY
In terms of Section 217 (2AA) of the Companies Act, 1956, the members
of the Board place on record the Directors'' Responsibility Statement as
under:-(i) In the preparation of the annual accounts for the financial
year under review, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
(ii) That the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and ofthe
profit or loss of the company for that period;
(iii) That the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities; and
(iv) That the directors have prepared the annual accounts on a ''going
concern'' basis.
COMPLIANCEREPORT/COSTAUDIT
In compliance with the Notification dated June 3, 2011 issued by MCA,
Company has appointed M/s. Neeraj Sharma & Co., Cost Accountants,
Ghaziabad, to submit the Compliance Report under the Companies (Cost
Accounting Records), Rules 2011, duly approved by the Board of
Directors, to the Central Government, for the financial year ended on
March 31, 2013 for the products which are not specified for the Cost
Audit. The compliance report will be filed by the company within the
due date i.e. on or before September 27, 2013, being 180 days from the
close of the financial year or as may be extended by the department
from time to time.
Further, in compliance of Notification Reference No. F. No
52/26/CAB-2010 dated January 24, 2012 issued by the Cost Audit Branch
under MCA, the aforesaid firm of Cost Accountants has also been
appointed as the Cost Auditors of the company under Section 233B of the
Companies Act 1956, for the next financial year ended on March 31,
2014, at the meeting of Audit Committee and Board of Directors of the
company held on May 30, 2013.
FIXED DEPOSITS
During the year, your company has not raised any money by way of Fixed
Deposits.
CORPORATE GOVERNANCE
A report as per the requirements of Clause 49 of the listing agreement
on the Corporate Governance practices followed by the Company and the
Statutory Auditors'' Certificate on Compliance of mandatory requirements
along with Management Discussion and Analysis is given as an Annexure
to this report. The non-mandatory information is annexed as Part-II of
Annexure-3. It has always been the endeavor of your company to practice
transparency in its management and disclose all requisite information
to keep the public well informed of all material developments.
STATUTORY AUDITORS
M/s. P. Jain & Co., Chartered Accountants, the Statutory Auditors of
the Company, retires at the forthcoming Annual General Meeting of the
Company and has confirmed their eligibility and willingness to accept
office, if re-appointed. The company has received certificates from the
said auditors to the effect that their re-appointment, if made, would
be within the limits prescribed under Section 224(1B)of the Companies
Act, 1956. Your Directors recommend their reappointment.
AUDITORS'' OBSERVATIONS
Observations in the Auditors'' Report are dealt within Notes to Accounts
at appropriate places and being self-explanatory, need no further
explanations. As required under amended clause 31(a) of the listing
agreement and SEBI circular no. CIR/CFD/DIL/7/2012 dated August 13,
2012, the necessary disclosures/details in the prescribed Form ''B'' will
be complied with as per the requirement.
ACKNOWLEDGMENT
Your Directors are pleased to place on record their sincere gratitude
to business constituents, Shareholders, Banks, Board for Industrial &
Financial Restructuring, CDR-EG, Banks, Government Authorities, Stock
Exchanges ,Customers, Vendors and other business associates for their
continued valuable co-operation and support to the Company during the
year for their confidence in the Company and its management and look
forward to their continued support. Last but not least, the management
appreciates the dedication with which the employees at all levels
performed their duties and for their cooperation and support in
stabilizing the production and quality.
For and on behalf of the Board of
Alps Industries Limited
Place: Ghaziabad Sandeep Agarwal K.K. Agarwal
Date : May 30, 2013 Managing Director Non Executive Chairman
& Director
Mar 31, 2012
The Directors have pleasure in presenting the 40th Annual Report
together with the Audited Statements of Account of the Company for the
financial year ended on 31st March, 2012.
The Financial performance of the company, for the year ended March
31,2012 is summarized below:
FINANCIAL RESULTS (Rs. in Millions)
Particulars Year Ended Year Ended
31.03.2012 31.03.2011
Total Income 6686.09 6934.08
Operating Earnings/Losses before
Financial Expenses, (1286.31) 88.42
Depreciation & Amortization and Tax
Finance Cost 1009.91 828.39
Depreciation 456.04 444.26
Profit/Loss Before Tax (2752.26) (1184.23)
Provision for Tax - -
Deferred Tax - (219.15)
Profit/Loss After Tax (2752.26) (965.08)
Exceptional Items (22.78) -
Surplus of last year Add: (4156.19) (3191.11)
Surplus available for appropriation (6931.23) (4156.19)
Appropriations
Surplus carried to Balance Sheet (6931.23) (4156.19)
Surplus available for appropriation (6931.23) (4156.19)
PERFORMANCE REVIEW
In this highly competitive environment, textile business is becoming
more innovative in approach. Expertise to asses and consolidate the
opportunities are essential pre-requisite and every company need to
utilize the expertise that are available throughout the globe. Out of
the total global textile and clothing trade estimated at US$ 633
Billion today, about 58% constitutes apparel, 18% is home textiles and
the balance 24% comprises other textile products like yarns, greige
fabrics, industrial fabrics, medical and other textiles. With a share
of over 35% in textile trade, home textile are amongst the best
performing sectors of the Indian textile industry. The depreciation of
the Indian rupee against the US Dollar and Euro since August' 2011 is
seen to be improving India's competitive position in the export market,
as currencies of competing countries like Bangladeshi Taka, Chinese
Yuan, Vietnamese Dong and Euro depreciated by lower rate or appreciated
during the same period. Therefore, should the trend remain, the effect
will be positive on the rupee revenue of exporters. However, the
benefit would be offset for companies with a higher percentage imports
in the production for exports. During the second quarter of previous
year the international market seen a steep rise in the cotton prices
resulting into the maximum export of cotton from country and reflecting
the same price trend in the domestic market. To protect the domestic
industry in March 2012, India had banned the cotton exports and cotton
yarn in January 2011 which resulted into the accumulation of high
inventory. During March' 11 and May 2012 the quota of export of cotton
yarn and cotton opened respectively which resulted into high supply
into international market and consequently crashing of the prices and
the situation continue till October 2011. Over the past three year,
there has been a marked change in the business strategy of spinning
companies as high operational costs pulled down their earnings. Quite a
few spinning companies are moving up the value chain in the textiles
industry as part of efforts to emerge as vertically integrated textile
players. In the past five years, the average net profit margin of
spinning companies showed a meagre growth of 140 basis points while
that of vertically integrated textile companies almost doubled in the
same period.
Recently, your company has started manufacturing value added finished
products to supply to different customers in US, UK & other parts of
the world. This product category is design based and needs high skilled
workmanship. As the company is having in-house spinning, weaving and
processing facilities, it gives an edge over others for a better price
in today's competitive global condition.
Your company has also started association with renowned UK retailers to
expand the customer base and business volumes. The business
relationship by way of developing the retail chain in USA Market is
also under process, which will help us to enjoy better business
opportunities in global market.
Fashion Accessories Division is undergoing a transition & focus is on
the product lines being offered to the market. The global recession
last year, had put the premium products out of reach for most consumers
across the world, where the volumes for the Cashmere, High value
products had dipped globally. The market hit by recession and cut in
spending power by the consumer, demanded alternate products which could
give the same aesthetic appeal, but the costs would remain marginal.
This year we see a trend reversal, where there is an upsurge of demand
in mid to high value products, where in the average value of the
product has risen from last year and volumes are lower, which is being
compensated by higher value. The endeavor has been on increasing the
bottom line, cut down on turn-around time and deliverables. We have
undertaken various steps to streamline our production processes, which
have brought down process rejections and increased productivity which
reflect in our bottom line.
Currently, we are in a process of consolidation of our existing markets
& customers, to increase the value from each customer and a higher
share of the market in the first half. In this financial year, we are
venturing into new markets where, we are receiving a good response. In
the domestic market, which has a huge potential, we have started
institutional marketing of Cashmere products as an ideal corporate gift
article capitalizing on the perceived value & pride associated by
consumers on being the proud owner of a Cashmere product.
We envisage a good growth rate in the current financial year, through
our continuous process of product re-engineering and value additions to
have a cutting edge in the market.
Due to various unavoidable reasons and natural calamity, the production
of yarn had to be curtailed down in some of the units of the company,
just to meet out the urgent market demands. In the yarn segment your
company is also expanding and exploring the market to some new countries
like Columbia, Peru etc being the focussed markets including some south
Indian market. Further some new shades in dyed yarn like Indigo Blue
and Grindle Yarns has been added to take more share in the market.
During the year, your company has introduced new variants under the
different products like Vertical, Venetian, Roller, Cellular, Roman &
Roll Up Blinds, Drapery Rods, Curtain Tracks, Awnings, Umbrellas,
Laminated Wooden Flooring and Solid hardwood floorings.
The company has ended the twelve months accounting period ended on
March 31, 2012 with a loss of Rs. 2775.04 millions in comparison with
loss of Rs. 965.08 millions in the previous year. The current year has
passed through a very hard faze and witnessed an estimated loss of Rs.
11000 crore to the Indian spinning industries due to intervention of
government on export of cotton and yarn marketing policies resulted
into a sudden fall in the domestic/international prices of cotton and
yarn. However the market is settling down slowly and at present your
company is able to earn a positive EBIDTA however your company is still
struggling to cover up its Interest and Depreciation cost and is
hopeful to perform batter in the coming year. The company is also able
to gradually enhance the utilization capacity of its Meerut, Kashipur &
Jaspur Units and is expecting the better results from these units. This
can be evident with an increase in turnover in case of Home Furnishing
Segment which has recorded a steep high, by more than 70% in comparison
with previous year. Now your directors are hopeful that this trend will
continue in current financial year also.
FOCUSON TECHNOLOGICAL GROWTH/EXPANSION
In one of the major units located at Haridwar, the focus has been
diverted to stable & less volatile products which will improve the
margins & less exposure to speculations. We have identified the markets
& products which not only give us edge in the market but also help us
to increase the capacity utilization into value added yarns like dyed
yarns, twisted yarns, PVA yarns, slub yarns LE twist, organic yarn,
core spun yarn etc. We are further planning to increase production
during the current financial year, which will increase the margins to
some extent. In one of the lease hold unit located at Kashipur, due to
increase in the cotton prices and damage stock of cotton by flood
water, the production had curtailed down. But the market improved in
the month of January' 2012 and various variants of counts like 2/60s
poly, 2/40s poly TFO, 2/30s RT poly, 2/36s RT (optical white poly) etc.
were introduced which may improve the performance of the unit in the
current financial year. The unit is continuously enhancing the
production capacity and may achieve the same level of production, as
was earlier during the current financial year.
WEAVINGAND PROCESSING PLANTATMEERUT
The unit was started in the year 2009 with state-of-art plant having
latest machineries from the world's best makers, which produce high
quality products. Although the unit had commenced the operations during
the recession time and we are a bit slow in gaining momentum, but now
it is coming back on the track. The unit produces Cotton, Polyester,
Cationic Blends, Linen Blends fabrics etc.. There are serious efforts
to add new buyers & countries in company's clientele. Presently, the
unit is catering to almost all the potential countries like USA, UK,
Australia, Russia, France, Singapore, Middle East etc. Further, the
unit specializes in Technical & Coated fabric, in which the unit has
dedicated production Lines. To control the quality checks on
international parameter, we have installed Martindale Abrasion Tester
in the fabric testing facility, which is very important parameter for
upholstery fabric. During the last financial year, your company has
introduced new range of technical textiles products under the brand
name of "Sleep Dry" for baby care having the features like, ultimate
protection from bacteria, breathable, water proof soft toys range and
absorbent, provides extreme comfort to the babies' sensitive skin,
superior barrier against bed wetting, treated with silver based
solution, easily washable and durable, antimicrobial & prevention
against dust mite, which otherwise might cause allergic reactions like
asthma, eczemaetc etc.
FINANCIALSTRATEGY
The company was sanctioned a restructuring scheme under CDR mechanism
by CDR Empowered Group on August 31, 2009 and as amended from time to
time. The package comprised of conversion of unsustainable debt into
OCCPS/CRPS, funding of Interest and reduction of interest to 9% among
other relief. However, the Company could not achieve the projected
Operating Profit level in subsequent year i.e.2010-11, mainly due to
higher cost of raw materials and delay in implementation of Meerut
Plant. These adverse situations demanded the reworking of existing
sanctioned CDR package. The CDR EG reworked its existing package
accordingly by issuing of LOA dated 04.05.2011 and allowed some
additional reliefs to the Company like Conversion of additional
unsustainable portion of Term Loan into Equity, reduced and step-up
Rate of Interest and Realignment of the balance Term Loan installments.
However due to unprecedented situation of cotton and cotton yarn
market, company could not achieved the estimated profit and incurred a
negative EBIDTA resulted into the depletion of working capital.
However, the company honored its due liabilities towards secured
lenders up to June' 2011. With a view to tide over the above difficulty
arising out of the industry situation, the company had approached SBI
and other lenders to commensurate the debt obligations of the company
in line with the expected operating profits of the company based on the
recommendations on restructuring of Textile loans forwarded by
Government of India to the RBI for their consideration.
DECLARATION OF SICK INDUSTRIAL UNIT UNDER SECTION 3(1) (O) OF THE SICK
INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT,1985.
Due to erosion of total Networth of the company as per Audited Accounts
as of 31st March 2010, the Company has filed a reference with Hon'ble
BIFR under section 15(1) of Sick Industrial Companies Act. The company
was registered vide case no.
32/2010 as per BIFR's letter dated June 29, 2010 and subsequently after
the hearings and finding justifications, BIFR declared the company as
"Sick Industrial Company" under section 3 (1) (o) of the SICA vide their
order dated 06.12.2010. In the same order of Hon'ble BIFR, the State
Bank of India, was appointed as the Operating Agency (O.A.). In terms
of the directions of the BIFR, company had prepared the Draft
Rehabilitation Proposal and submitted to State Bank of India and BIFR.
After due consideration in the joint meeting held on 15th June' 2011
(with Lenders) and 5th July' 2011 (with Statutory agencies, from whom
company sought some reliefs and concessions), State Bank of India has
filed the Draft Rehabilitation Scheme (DRS) with BIFR on 07.07.2011. On
the directions of Hon'ble BIFR, company has also filed amended DRS with
O.A. and Hon'ble BIFR duringthe month of April' 2012 which is under
consideration of O.A. & Hon'ble BIFR. However in the hearing held on
July 26, 2012 Hon'ble BIFR directed company to submit revised DRS after
considering the Audited Accounts as on March 31,2012.
CREDENTIALS
- Certificate for ISO 14001:2004 issued by AFNOR Certification for the
management system implemented for Spinning, dyeing, weaving &
processing of yarns, fabrics and home furnishings.
- Certificate for ISO 9001:2008 issued by AFNOR Certification for the
management system implemented for Spinning, dyeing, weaving &
processing of yarns, fabrics and home furnishings.
- COTTON USA License issued by Cotton Council International for
compliance with the licensing requirement to use to CCIs registered
trade mark has been renewed.
- Certificate of membership from Indian Green Building Council (IGBC)
under the category manufacturer/product suppliers.
- Certificate for Global Organic Textile Standard (GOTS) for the
processing of fibres from certified organic agriculture issued by
Control Union Certifications, Netherlands.
INSIGHTOFMANAGEMENTFORCOSTEFFICIENCY
As the company is facing acute financial crisis and shortage of various
resources due to unavoidable reasons, all the units of the company are
taking steps to control/reduce the cost of operation under different
heads, thereby contributing in reduction of losses of the company. The
major units located at Meerut and Haridwar have taken various important
steps which includes buying of Raw material in bulk quantity directly
from suppliers after proper negotiation and studying market prices,
reducing the Fixed overheads, increase the Utilization and Efficiency
of machineries to reduce the cost, Standardize the Production Process
Flow Chart to avoid the rejection, maintain the Inventory Level as per
the requirement, constant check on Power Consumption, Controlling/
Reducing Rejections & Re processing, Reusing/ recycling all possible
items, Strict follow up on regular maintenance schedule to avoid major
break downs, Increasing overall efficiency to reduce Production Cost,
using low consumption LED lights, Usage of special electrical drives on
machines to reduce power consumption, Special furnace design of boiler
to ensure low consumption of pet coke, Addition of additive in pet coke
to get maximum output, Energy reduction by reuse the cooling water in
the Process House, Energy reduction by controlling the Humidification
Plant as per the requirement, Optimization of work load to reduce the
Manpower Cost, apart from various other minor efforts. In order to
reduce the substantial logistic cost the company is opting for land
ports nearest to the units. In the unit located at Kashipur and Jaspur,
steps have also been taken to control the labour cost, Modernization of
Humidity Plant, Enhancement of machine Productivity and Reduction in
waste generation.
DILUTION IN HOLDINGOFSUBSIDIARYCOMPANIES
During the year under review, the shareholding has been diluted from
100% to 69.75% in case of Alps Energy Pvt. Limited and to 73.94% in
Snowflakes Meditech Pvt. Limited, due to the further allotment of
shares by these companies in favour of other investors. Hence, the
status of these companies has been changed from 100% subsidiary to a
ordinary subsidiary company due to holding of more than 51%.
JOINTVENTURES
The company had investment in Cody Direct Corp (erstwhile Columbine
Cody Corp.) of 2,450 Common Stock constituting 50% holding of the above
company, which has been diluted, consequent to allotment of further
stock by the company to another investor.
FINANCIALSTATEMENTSOFSUBSIDARIESCOMPANIES
The company had three subsidiaries at the end of the financial year. The
Ministry of Corporate Affairs, Government of India, vide General
Circular No: 2/2011:51/12/2007-CL-III dated February 8, 2011 has
granted general exemption from the requirement to attach various
documents in respect of subsidiary Companies, as set out in sub-section
(1) of Section 212 of the Companies Act, 1956. Accordingly, the Balance
Sheet and Profit & Loss Account and other documents of subsidiary
companies are not being attached with the Balance Sheet of the company.
However, the summarized financial information of the subsidiary
companies, as required by the said circular is disclosed in the Annual
Report. The company will make available the Annual Accounts and related
details upon request by any member of the company. These documents will
also be available for inspection at the registered office of the
company during business hours. The Consolidated Financial Statements
presented by the company includes financial results of its subsidiary
companies.
GOVERNMENT POLICIES- TEXTILE SECTOR
The union budget for 2012-13 has some welcome features, but it failed
to evoke the much needed optimism in the Indian textile industry, since
the budget lacked specified fiscal measures to help this sector to meet
the difficulties faced during the last couple of year. The abolition of
custom duties on automated shuttle less looms and their parts is a
welcome move since weaving industry in the country needs urgent
modernization. The increase in the rates of excise duty and service tax
from 10% to 12% and extension of service tax to several new services
would impose substantial additional burden on the textiles industry.
The budget has not given any indication about the extension of
Technology Upgradation Fund Scheme to the 12th Five Year Plan Period.
Extension of the Scheme is essential to upgrade the technology level in
the industry. The Indian textile section has been identified as
key-labour intensive industry in the National Manufacturing Policy. The
new manufacturing policy came into effect three months back. In the
union budget for the year 2012-13, the rate of abatement on made-ups
bearing a brand name or sold under a brand name has increased from 55%
to 70%. Hence, the tariff value for purposes of charging duty would be
@ 30% of the retail sale price. The new system of taxation under GST may
roll out on April 1, 2013. It will significantly benefit exports by
adding to competitiveness through lower incidence of taxation and
reducing cost of compliance by simplifying the tax administration.
The DGFT has also issued a new notification regarding the removal of
prohibition on export of cotton. It has recently permitted for the
purpose of utilization of re-credit of 4% Special Additional Duty (SAD)
of customs, revalidation till 30.06.2012, under some of the special
circumstance. DEPB allowed on cotton yarn export vide PN 67/04.08.2011
- retrospectively from 01.04.2011 to 30.09.2011. The government has
also announced Special Focus Market Scheme (SFMS) under which 41
countries from the existing focus market countries will be entitled for
1% additional duty credit script for exports from 01.04.2011 to
31.03.2012. As regard the Foreign Trade Policy 2009-2014, the DGFT has
also made amendment in the Hand book of procedure by adding more
products in the list of Focus products and under the list of new market
linked Focus products, which will support the Indian textile industry.
The Government has also announced the Annual Supplement 2012-13 to
Foreign Trade Policy 2009-14 extending the interest rate subvention
upto March 31, 2013, Technological Upgradation/EPCG Scheme extended
upto March 31, 2013 and introduction of a new post-export EPCG Scheme
apart from various other incentives which will help the textile
industry to perform better.
DIVIDEND
Due to the operational loss suffered by the company, your directors do
not propose any dividend for the current financial year.
SHARE CAPITAL
In terms of the Scheme of financial restructuring sanctioned by the
Corporate Debt Restructuring Empowered Group (CDR- EG) on August 31,
2009 and as amended from time to time and in terms of the approval from
the shareholders at the Annual General Meeting held on December 11,
2009 and approval taken from the stock exchanges, vide letter reference
no. DCS/PREF/SR/PRE/767/10-11 dated 16/11/2010 from Bombay Stock
Exchange Limited & Ref. no. NSE/LIST/16331-Q dated 15/04/2011 from
National Stock Exchange of India Limited, company has allotted
128,487,790, 6% Optionally Convertible Cumulative Preference Shares
(OCCPS) on August 19, 2011 against the approval of 137,250,960 OCCPS.
The aforesaid 128,487,790, 6% Optionally Convertible Cumulative
Preference Shares (OCCPS) may be converted into 118,750,268 equity
shares at a conversion price of Rs. 10.82/- per equity shares, as
approved by the stock exchanges, at the option of the bankers on or
before February 18, 2013. Further, in terms of the CDR Scheme dated
August 31, 2009 and as amended from time to time and in terms of the
approval from the shareholders at the AGM held on September 30, 2011,
the company has also allotted 5,309,420, 1% Cumulative Redeemable
Preference Shares (CRPS) on August 19, 2011 and 2,582,368, 1%
Cumulative Redeemable Preference Shares(CRPS) on January 21, 2012 at a
issue price and face value of Rs. 10/- each in favour of some of the
bankers of the company.
The authorized share capital proposed to be reclassified to accommodate
the conversion of OCCPS into equity shares as may be required during
the next financial year. The necessary proposal has been included in
the Notice of forthcoming AGM.
DEDICATION TO STOCKHOLDERS
The relationship with the investors continues to be cordial. However,
some investors raised the concerns on the performance of the company
due to the losses incurred by it. Subsequently, it became a sick
industrial company under BIFR. The company has also restructured its
borrowings under CDR. Your company's management is fully aware and
dedicated to safeguard the hard earned resources of the investors and
for survival of the company and committed to take all efforts to
resolve the investors' grievances received during the year to the
satisfaction of the investors within a reasonable time. Alankit
Assignments Limited, the R&T Agent of the company, has made a positive
contribution to resolve the Investors' grievances efficiently and
effectively, whenever they arose. By contribution from all concerned,
the investor grievances have been resolved to the fullest satisfaction
of investors. We sincerely place on record, the appreciation for our
valued investors who have contributed and reposed the confidence in the
company at this difficult time. Your company not only believes in legal
compliance related to the investors, but also morally protects their
interest, and treats them as part of Alps family.
WELLBEING OF MANPOWER
The company is consistently maintaining harmonious relations with the
employees. The company is committed for redesigning towards systematic
thinking, transparent/target oriented systems and policies to ensure
healthier work environment and promote excellent employees relations in
the organization.
The company has continuously been promoting the welfare and
motivational activities for further strengthening the employee's
relations by providing better transportation services for employees,
direct from the door step of their residence to the work place. The
Company has improved the canteen/food facilities in the factory and in
the residential colony. To promote the national policy of gender
equality, the company has increased the employment of the women
employees at the shop floor, in the Haridwar unit.
The skills development and technical knowledge up gradation workshops
have been organized through outsourced agencies by providing training
in the areas requiring more technical skill, based upon the production
and quality requirement, with an objective of having the manpower, as
the best motivated employee's team, to cater to the need of the
industry in this changing era of technology.
The motivational policies for "Employees Recognition", for their extra
ordinary contribution have proved to be an excellent tool for
motivation and have improved the attrition rate of the employees. The
company has promoted healthier environment by enhancement of the
activities of games & sports. The company has introduced the attendance
incentive scheme at the Kashipur Unit of the company to improve
capacity utilization. The company is also running the group insurance
scheme for the welfare and health risk coverage of the employees at all
the units to provide the medical benefits in case of any mis-
happening.
The information required under Section 217(2A) of Companies Act, 1956,
read the Companies (Particulars of Employees) Rules, 1975, duly amended
by the Companies (Particulars of Employees) Rules, 1999 and further
amended vide G.S.R. No. 289(E) dated March, 31,2011, is not applicable
to the company as none of the employee is drawing remuneration more
than the limits prescribed specified under the said Rules during the
financial year 2011-12.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO.
Information in accordance with the provisions of Section 217 (1) (e) of
the Companies Act, 1956 read with Companies (Disclosure of Particulars)
in the Report of Board of Directors Rules, 1988 regarding conservation
of energy, technology absorption and foreign exchange earnings and
outgo is given in the statement annexed (Annexure-1) here to and forms
part of this report.
REAPPOINTMENTOF DIRECTORS
In terms of the provisions of Article No. 106,107 & 108 of the Articles
of Association of the company and Sections 255 and 256 of the Companies
Act, 1956, Mr. Tilak Raj Khosla, Director retire ( DIN No.02724242) at
the ensuing Annual General Meeting, and being eligible, offer himself
for reappointment.
STATEMENTOFDIRECTORS'RESPONSIBILITY
In terms of Section 217 (2AA) of the Companies Act, 1956, the members
of the Board place on record the Directors' Responsibility Statement as
under:-
(i) In the preparation of the annual accounts for the financial year
under review, the applicable accounting standards have been followed
along with proper explanation relating to material departures;
(ii) That the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit or loss of the company for that period;
(iii) That the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities; and
(iv) That the directors have prepared the annual accounts on a 'going
concern' basis.
COMPLIANCE REPORT/COSTAUDIT
In compliance with the Notification dated June 3, 2011 issued by MCA
Company has appointed M/s. Neeraj Sharma & Co., Cost Accountants,
Ghaziabad, to submit the Compliance Report under the Companies (Cost
Accounting Records), Rules 2011, duly approved by the Board of
Directors, to the Central Government for the financial year ended on
March 31, 2012. The compliance report has been submitted by the Cost
Accountants and approved by the Board of Directors at their meeting
held on August 13, 2012, which will be filed by the company within the
due date i.e. on or before September 27, 2012, being 180 days from the
close of the financial year or as may be extended by the department from
time to time.
Further, in compliance of Notification reference no. F. No
52/26/CAB-2010 dated January 24, 2012 issued by the Cost Audit Branch
under MCA, the aforesaid firm of Cost Accountants has also been
appointed as the Cost Auditors of the company under section 233B of the
Companies Act 1956, for the financial year ended on March 31,2013, at
the meeting of Audit committee and Board of directors of the company
held on May 12, 2012.
FIXED DEPOSITS
During the year, your company has not raised any money by way of Fixed
Deposits.
CORPORATE GOVERNANCE
A report as per the requirements of Clause 49 of the listing agreement on
the Corporate Governance practices followed by the Company and the
Statutory Auditors' Certificate on Compliance of mandatory requirements
alongwith Management Discussion and Analysis is given as an Annexure- 2
to this report. The non-mandatory information is annexed as Part-II of
Annexure-3. It has always been the endeavor of your company to practice
transparency in its management and disclose all requisite information
to keep the public well informed of all material developments.
STATUTORY AUDITORS
M/s. P. Jain & Co., Chartered Accountants, the Statutory Auditors of
the Company, retire at the forthcoming Annual General Meeting of the
Company and has confirmed their eligibility and willingness to accept
office, if re-appointed. The company has received certificates from the
said auditors to the effect that their re-appointment, if made, would
be within the limits prescribed under section 224(1B) of the Companies
Act, 1956. Your Directors recommend their reappointment.
AUDITORS'OBSERVATIONS
Observations in the Auditors' Report are dealt within Notes to Accounts
at appropriate places and being self-explanatory, need no further
explanations.
ACKNOWLEDGMENT
Your directors would like to express their appreciation for the
assistance and co-operation received from the foreign institutional
Investors, Board for Industrial & Financial Restructuring, CDR-EG,
Banks, Government authorities, customers, vendors, Stock Exchanges and
members during the year under review. Your Directors also wish to place
on record their deep sense of appreciation for the committed service by
the executives, staff and workers of the company.
For and on behalf of the Board
Alps Industries Limited
Place : Ghaziabad Sandeep Agarwal K.K. Agarwal
Date : August 13, 2012 Managing Director Non Executive Chairman &
Director
Mar 31, 2010
The Directors have pleasure in presenting the Thirty Eighth Annual
Report together with the Audited Statements of Account of the Company
forthe accounting period ofNine Months ended on 31st March 2010:
Annual Accounts and Reports of the company are for a period of 9
months, from 1st July 2009 to 31st March 2010. These figures,
therefore, are not comparable with those of previousyearended 30th
June2009.
FINANCIAL RESULTS (Rs. in Millions)
Particulars 9 months period 15 months period
ended 31.03.2010 ended 30.06.2009
Total Income 4688.22 9917.29
Operating Earnings/Losses
before Financial Expenses, (183.26) (1060.68)
Depreciation & Amortization and Tax
Finance Cost 564.21 964.28
Depreciation 306.61 394.03
Profit/Loss Before Tax (1054.08) (2418.99)
Provision for Tax Including FBT - 6.00
Deferred Tax 12.50 37.50
Profit/Loss After Tax (1066.58) (2462.49)
Prior year Adjustment 149.67 (1.03)
Add: Surplus of last year (2274.20) 169.13
Surplus available for appropriation (3191.11) (2294.39)
Appropriations
General Reserve
Proposed Dividend - (17.26)
Corporate dividend Tax - (2.93)
Surplus carried to Balance Sheet (3191.11) (2274.20)
Surplus available for appropriation (3191.11) (2294.39)
PERFORMANCE REVIEW
The year under review turned out to be a difficult one. The after
effects of the global economic melt down in 2008 were still
visibleinthe current year and affected the working ofthe company
adversely.
On the micro level, while the yarn business showed improvement in
working, both in terms of efficiencies and productivity as well as
profitability, with market conditions being favourable, the new unit
set up at Meerut for weaving and processing faced teething problems. As
a result, the Meerut unit could not perform atthe optimum levels of
efficiency and productivity. A lot of new developments are taking place
at the Meerut unit accompanied with simultaneous efforts on marketing
of value added products from that unit. While the efforts are showing
positive signs for future, the current year has been a challenging one
forthis unit.
On the marketing front, a lot of new products are under development, as
mentioned in the foregoing paragraph. New markets are being explored
with a new product basket giving a better value addition. In the
international market, we are launching some new products with some
ofthe major retailers in the U.S. as well as Europe. Despite a tough
economic scenario, we trying to generate additional market like U.S.A.,
Europe, Australia & South Africa due to our variety of eco- friendly
products like 1 00% Organic, products using Natural & Vegetable Dyes,
Spinning, Weaving and Cut & Sew.
The company is also trying to do better in the domestic market. Company
is also exploring the market for export of yarn to China/Bangladesh.
Due to the factors explained above, the company has ended the nine
months accounting period with a loss of (Rs.1066.58) millions in
comparison to a net loss of (Rs. 2462.49) millions in the previousyear.
Due to economical non-viability the units located at57/2 & 58/1, Site
IV, Industrial Area, Sahibabad, Chaziabad has been closed down during
the year under review.
VISION FORTECHNOLOGICAL GROWTH/EXPANSION
In our Architectural Products Division, we have developed a wide range
of products like New Roller Blinds Fabrics, Solid Hardwood Floorings in
association with European manufacturers with a variety of shades on
each species Ash and Beech. There are various other products like New
Blinds Honeycomb, Silhouette, Pleated and Zebra, New Motorized Curtain
Tracks and Tubular Motors, Range of woodino/bambino Roman & Ailanto
Blinds New curtain tracks, Outer Decking Material and SS Hardware Locks
in the stainless steel hardware products with a view to widen our
product range for real estate projects.
WEAVING AND PROCESSING FACILITIES AT MEERUT
We feel immense pleasure to inform that despite several financial
problems since last 1 y2 year; we have been able to complete our
Weaving Project at Meerut in the last year, with the extraordinary
cooperation and support from our lenders. The complete plant &
machinery is in place and has started commercial production
successfully. We have already started suppliesto high end customers
from the Meerut plant.
As of now, at its initial stage, the Weaving Plant at Meerut is
operating at about 40-50% of its capacity but we expect that the level
of operations will improve to its optimum capacity by the end of
financial year 201 0-11.
FINANCIALMANAGEMENT
The financial management ofthe company has been regulated by the CDR
Scheme, as approved by the CDR Cell in its meeting held on August 31,
2009 and as amended from time to time. Further financial management and
analysis ofthe companys fund requirement will be subject to the
compliances/conditions as imposed by the CDR or any other regulatory
agencies, as may be applicable from time to time. There are also
proposals for disposal of some properties of the Company in terms of
CDR Scheme. Most ofthe banks have extended their support for CDR
Scheme. We are confident that with this support ofthe bankers for CDR
Scheme, the Company will restore its operations to the erstwhile
healthy levels. The CDR package is implemented by all the CDR lenders
by complying with the following
major conditions:
The package was sanctioned by the lenders concerned and effect had been
given in the books of account of the lenders as per the approved
package;
Promoters contribution to the extented vis aged in the package had
been brought in;and
MRA has been executed binding the lender(s) and the company for
compliance of all terms and conditions of the approved package.
The compliance to other terms and conditions of the CDR Sanctioned
Scheme is under implementation. Further capital investments and
utilization of funds is also governed by the CDR Monitoring authority.
In the meantime the company has also submitted a Scheme of
Compromise/Arrangement under section 391 of the Companies Act, 1956
with the Bankers which is under the sub-judice with the Honble High
Court at Allahabad. The said scheme has been approved by overwhelming
majority of the Creditors and shareholders at their meeting held on
March 11, 2010 and May 6, 2010 respectively, under the Chairmanship of
Chairperson appointed by the Honble High Court vide their order dated
February 8,2010.
Besides the above, your company is also actively implementing various
other cost reduction measures, by optimum utilization offacilities and
reducing wastages.
REFERENCE UNDER SECTION 15 AND OTHER APPLICABLE PROVISIONS OF CHAPTER
III OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985.
Due to erosion of net worth of the company by more than 50% in the
previous accounting year i.e. 1 5 months period ended on June 30, 2009,
as per the requirement of Section 23 of the Sick Industrial Companies
(Special Provisions) Act, 1985 (SICA), a reference had been made with
the Honble BIFR by submitting Form C within the prescribed time.
Since, during the current 9 months period ended 31st March, 2010, the
Company has suffered a net loss of Rs. 1066.57 Million which has
resulted in full erosion of net worth of the company, the company
became a "Sick Industrial Company" under Section 3(1 )(o) of the
aforesaid Act. Consequently, necessary reference/registration is
required to be obtained with the Honble BIFR. The necessary
recommendations of the Board for approval from the members of the
company has been received to comply with the provisions of the SICA.
CERTIFICATION & RECOGNITIONS
x According to the january201 0 edition of journal of Network 18 "The
Search", the company has been assigned rank of 379 out of 500
Manufacturing Companies.
x The company has won State Export Award for the year 2008-09.
x The company has been awarded first prize by Government of Uttar
Pradesh for excellent performance in Export, by the Department of Small
Scale Industries & Export Promotion.
x The company has been awarded "Amity Corporate Excellence Award for
Corporate Social Responsibility".
The company continues to maintain its accreditations with various
agencies like COTS, ISO 9001, IS014000 and others.
GOVERNMENT POLICY INITIATIVES
The Covernmenthas taken various steps to simplify the FDI regime and
complete liberalization ofpricing and payment of technology transfer
fee and trademarks, brand name and royalty payment in the budget for
the year 2010-11, which will also benefit the textile industry. Under
the indirect taxes the rate reduction in Central Excise duties to be
partially rolled back and the standard rate on all non-petroleum
products enhance from 8 per centto 10 per cent ad valorem
There is big thrust on technical textiles from the Government. The
Union Textile Ministry has launched a national technology mission for
technical textiles. There is also 5 per cent interest reimbursement
subsidy and a 10 per cent upfront capital subsidy for technical
textiles. The government has also allocated more funds to the TU FS
scheme to clear the subsidy claimed by the textile industries.
Subvention for timely repayment of crop loans raised from 1 % to 2% for
2010-2011, which shall helpfarmersto produce more cotton in the
country.
DIVIDEND
Due to the operational loss suffered by the company, your directors do
not propose any dividend for the current financial period.
CAPITAL ISSUES
In compliance of CDR Scheme and further approval from the Board of
Directors at their meeting held on September 22, 2009 and further
approval from the Members of the company at the Annual General Meeting
held on December 11, 2009, and in terms of the in principle approval
received from the Bombay Stock Exchange on April 12, 2010 and National
Stock Exchange of India Limited on April 19, 2010, the company has
allotted 36.00 Lacs equity shares on April 26,2010 & April 29, 201 0 in
favour of Flls (Mauritius Based). The approval from the stock exchange
for the other proposal of allotment of equity shares in favour of
Promoter and Quasi Equity Instruments is under process.
The company has also enhanced the authorized share capital from Rs.
52.00 Crores to Rs. 183.00 Crores in terms of the approval received
from the shareholders. It is also pertinent to mention here that the
company had proposed for the enhancement in the authorized share
capital upto Rs. 410.00 Crores but in view of the exact requirement of
the company, the resolution with modification by increasing the
authorized share capital from Rs. 52.00 Crores to Rs. 183.00 Crores
only was passed. Now the balance capital of Rs. 227.00 Crores shall be
issued in the shape of CRPS and accordingly the AGM approval have been
soughtto increase the authorized capital.
The company also proposed to delist the GDRs from the Luxemburg Stock
exchange as no GDRs are outstanding as on date as per the decision
taken at the meeting of Board of Directors held on May 29 2010.
INVESTOR RELATIONS
Your Board takes satisfaction from the fact that all the investors
grievances received during the year have been resolved to the
satisfaction of the investors within a reasonable time. Alankit
Assignments Limited, the R & T Agent of the company, has made a
positive contribution to resolve the Investors grievances efficiently
and effectively, whenever they arose. We sincerely place on record, the
appreciation for our valued investors who have contributed and reposed
the confidence in the company in difficult time. The Board appreciates
the investment decision by the new investors for reposing the
confidence in the company by subscribingto the 36.00 Lacs equity
shares.
HUMAN RESOURCES
The company is committed to treating its employees with value for human
dignity, integrity, openness & fairness. As the company is expanding,
the management is committed towards systematic thinking, redesigning
more transparent
systems&fairpoliciestoensurehealthierworkenvironmentand
promoteexcellentemployees relations.
The company has extended the welfare & motivational activities during
the year for strengthening the employees relations by providing better
residential accommodations and opening fair price shops in the
residential colony. Means of local transportation for the employees
have been provided to ensure and increase the individual belongingness
and commitmentto the organization
The company has introduced the training scheme to fulfill the
requirement of trained workers to meet out the short fall in capacity
utilization and also to fulfill the requirement due to increase in
capacity. Human resource management and maintaining good industrial
relation is need of the day. However, by introducing training scheme
and by maintaining good industrial relation, we are making all efforts
to fulfil I the requirement ofworkforce.
The information required under Section 217 (2A) of Companies Act, 1956,
read with Companies (Particulars of Employees) Rules, 1975, duly
amended by the Companies (Particulars of Employees) Rules, 1999 for the
period ended 31stMarch, 201 0 isenclosed as Annexure -1.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO.
Information in accordance with the provisions of Section 21 7(1) (e) of
the Companies Act, 1956 read with Companies (Disclosure of Particulars)
in the Report of Board of Directors Rules, 1988 regarding conservation
of energy, technology absorption and foreign exchange earnings and
outgo is given in the statement annexed (Annexure -2) hereto and forms
part of this report.
DIRECTORS
In terms of the provisions of Article No. 106, 1 07 & 108 of the
Articles of Association of the company and Sections 255 and 256 of the
Companies Act, 1956, Mr. P.K. Rajput, Executive and Non Independent
Director, retire at the ensuing Annual General Meeting, and
beingeligible, offer himself for reappointment.
In terms of the provisions of Article No. 92 of the Articles of
Association of the company and Section 260 of the Companies Act, 1 956,
Mr. P.K. Lamba and Mr. Nitin Carg were appointed as additional
directors on October 31, 2009 upto the conclusion of the next Annual
General Meeting, which was held on December 11, 2009. On the expiry of
tenure, Mr. P.K. Lamba, was again appointed as the Additional Director
w.e.f. December 12, 2009. The regularization has been recommended at
the forthcoming Annual General Meeting. However, the office of Mr.
Nitin Garg as a Director has been vacated duetotheexpiry of histermson
December 11,2009.
Duringthe year under review, Mr. Rakesh Gupta has been removed from
Directorship by the members of the company, as reappointment due to
rotation was not approved by the shareholders at the Annual General
Meeting held on December 11, 2009. Hence, he ceased to be a Director of
the company w.e.f. December 11, 2009.
APPOINTMENTOF NOMINEE DIRECTOR
In terms of the CDR Scheme as approved on August 31, 2009 and as
amended from time to time, State Bank of India vide their letter dated
February 20, 2010 has nominated Mr. Sonalal Datta, Asstt. General
Manager of Technical Consultancy Cell of State Bank of India as Nominee
Director. He has been appointed as a Nominee Director w.e.f. March
8,201 0.
DIRECTORSRESPONSIBILITY
In terms of Section 217(2AA) of the Companies Act, 1956, the members of
the Board place on record the Directors Responsibility Statement as
under :-
(i) That in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relatingto material departures;
(ii) That the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit or loss of the company for that period;
(iii) That the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(iv) Thatthe directors have prepared the annual accounts on agoing
concern basis.
FIXED DEPOSITS
Duringthe period, your company has not raised moneybywayof Fixed
Deposits.
CORPORATE GOVERNANCE
Areport as perthe requirements ofClause 49 of the listing agreement on
the Corporate Governance practices followed by the Company and the
Statutory Auditors Certificate on Compliance of mandatory requirements
along with Management Discussion and Analysis, are given as an Annexure
to this report. The non-mandatory information is annexed as Part-ll of
Annexure-3. It has always been the endeavor of your company to practice
transparency in its management and disclose all requisite information
to keepthe public well informed of all material developments.
AUDITORS
M/s. P. Jain & Co., Chartered Accountants, the Statutory Auditors of
the Company, retire at the forthcoming Annual General Meeting of the
Company and being eligible, have expressed their willingness to
continue, if appointed. Your Directors recommend their re-appointment.
AUDITORSOBSERVATIONS
Observations in the Auditors Report are dealt within Notesto Accounts
at appropriate places and being self-explanatory, need no further
explanations.
ACKNOWLEDGMENT
Your Directors would like to express their grateful appreciation for
the assistance and co-operation received from the financial
institutions, banks, government authorities, customers, vendors, new
investors for subscribing to the shares of the company, stock
exchanges, RBI, and members, during the year under review. Your
Directors also wish to place on record their deep sense of appreciation
for the committed services of the executives, staff and workers of the
company. It is also pertinent to mention here the valuable cooperation
extended by all concerned in such a time of recession, which has
encouraged the confidence of the management and promoters of the
company to struggle for the revival and to set the company in its old
place.
For and on behalf of the Board
Sandeep Agarwal K.K. Agarwal
Managing Director Non Executive Chairman
Place : Ghaziabad
Date : May 29, 2010
Jun 30, 2009
The Directors have pleasure in presenting the Thirty Seventh Annual
Report together with the Audited Statements of Account of the Company
for the Period ended on 30th June, 2009 :
Annual Accounts and Reports of the Company are for a period of 15
months, from April 1,2008 to June 30,2009. Therefore, these figures are
not comparable with those of the previous year ended March 31, 2008.
FINANCIAL RESULTS: Rs. in Millions
15 months period Year Ended
Particulars ended on 31.03.2008
30.06.2009
Total Income 9917.29 6342.69
Operating Earnings/Losses before
Financial Expenses, (1060.68) 650.44
Depreciation & Amortization and Tax
Finance Cost 964.28 319.97
Depreciation 394.03 178.25
Profit/Loss Before Tax (2418.99) 152.22
Provision for Tax Including FBT 6.00 5.95
Deferred Tax 37.50 27.46
Profit/Loss After Tax (2462.49) 118.81
Prior year Adjustment (1.03) (3.80)
Add: Surplus of last year 169.13 160.81
Surplus available for appropriation (2294.39) 275.82
Appropriations
General Reserve - 86.50
Proposed Dividend (17.26) 17.26
Corporate dividend Tax (2.93) 2.93
Surplus carried to Balance Sheet (2274.20) 169.13
Surplus available for appropriation (2294.39) 275.82
PERFORMANCE REVIEW
During the year under review, your company somehow managed to maintain
a reasonable growth in the turnover of the company even while the
nation faced the brunt of the international slow down affecting the
exports and domestic trade very adversely. India has a lot to gain by
upping the competitive leverages in a vital sector like textiles. Apart
from contributing around 4 % of the GDP and employing nearly 35 million
people, its natural comparative advantages make it an ideal candidate
for significant export orientation. The WTO regime that applies to
global made in textiles since 2005 is an opportunity for India that has
inherent strengths. The global economic crisis did impact Indian
exports. Orders were difficult to come. Some foreign buying houses went
bankrupt. Exports realizations were hit. The appreciation of the rupee
by almost 12% during 2007 and its continued rise during the contracting
period for supplies in 2008-09 also dented the export growth. The
overall countrys Exports also dipped due to the rising inflationary
pressures in the early part of this fiscal. What must concern us is not
the decline in exports brought about by temporary phenomena but our
continued failure to achieve the targets that we set for ourselves.
What one must wake up to is the fact that there are countries like
China, Vietnam and Bangladesh who have posted faster export growth in
post quota period. It is certainly upon us to convert our basic
strengths into competitive advantage. There are, of course, major
downside to export dependent economies. Job losses on account of
current recession have been more acute in China and Vietnam. But it
would serve no purpose not to claim our deserved place in the global
market. The industry would also do well to follow their Chinese
counterparts. It is time that textile exporters focused on achieving
the necessary quality differentiation to beat price sensitiveness.
In the international market we have made significant progress in
successfully launching our products with some of the major retailers in
the U.S. as well as Europe. Despite a tough economical environment, we
have been able to generate increased sales and acceptability of our
products in all major markets like U.S.A., Europe, Australia & South
Africa due to our variety of eco-friendly products like 100% Organic,
products using Natural & vegetable Dyes & Recycled Fabric using waste
material from different production processes viz., Spinning, Weaving
and Cut & Sew.
Further, another significant achievement has been our foray into the
Mexican market, which is a growing market, and we foresee a better
opportunity to increase our penetration into this market as well as
other Latin American Market.
Your Directors are pleased to inform that your companys turnover
increased to Rs. 9917.29 millions in the previous year from Rs.
6342.69 millions, despite such acute recessionary conditions prevailing
world over, recording a growth of over 25.08% (annualised). Domestic
sales also improved and recorded an increase of 12.10% (annualised) to
Rs. 7548.58 millions. However, the exports grew over by 147.46 % to Rs.
2368.71 millions in comparison to the previous year.
We regret to mention that due to the impact of global recession and
consequently acute pressure on the prices and unprecedented losses due
to fluctuation in exchange rates, profitability of the Company took a
severe beating and ended the period with a loss of (Rs. 2462.49)
millions in comparison to a net profit after tax of Rs. 118.81 millions
in the previous year.
All the business segments, recorded a reasonable growth in the domestic
market during the year. The largest business segment of the company
viz. Home Furnishings and Fashion Accessories grew over 32.61% while
Architectural Products segment demonstrated a robust growth of over
26.47% on the support of boom in realty sector in the country. The yarn
segment grew the fastest on the back of additional capacities going
into operation registering a stupendous growth of over 86.65%.
Quality is a continuous process at each stage of production and has to
necessarily come from the passion for the same. Alps is headed by a
technocrat and this has helped in spreading a total quality culture in
the organization.
VISION FOR TECHNOLOGICAL GROWTH
Your company added 5520 spindles, and installed latest winding machines
to further improve the quality of its yarn. The Company also added
facility to spin Core Spandex yarn on two Rieter compact ring frames
and commissioned yarn dyeing facility at its Haridwar plant, with a
capacity of 4600kgs per day. During the period under review, we also
started production of polyester yarn on 7296 spindles with a view to
improve contribution and widen our product range as per market demand.
We also plan to replace old open-end spinning machines with the latest
machines.
In our Architectural Products Division, we have developed a wide range
of stainless steel hardware products with a view to expand our product
range for real estate projects. Our architectural products are marketed
under the brand name "Vista".
Our Fashion Accessories products are marketed under the brand name
"Le-Pashmina" in the domestic market through a nation wide distribution
network. Our fashion accessories and home furnishing products find
shelf places at over 1100 retail counters across country.
In the overseas markets, we export our products to USA, Europe, South
Africa, Middle East, South East Asia, Australia Portugal, Taiwan,
Turkey and Bangladesh.
WEAVING AND PROCESSING FACILITIES AT MEERUT
In the last Annual Report, we had informed the shareholders about our
new project for weaving and processing plant at Meerut, U.P.
A part of the project has been commissioned in the current financial
year. The project will start full commercial production from January,
2010.
With the completion of this project,your company will be able to cater
to high fashion segment of home textiles, technical textiles and
automotive textiles. The project of "Technical Textiles" has various
end-uses such as black out curtains, room darkners, fabrics for special
applications like high altitude protective textiles, sports wear,
fabrics for tents etc.
Our technical collaboration with Suminoe Textile Co., Ltd., Japan has
started yielding positive results. We have been approved by Honda Siel
Cars India Ltd. for supply of fabric for their various models. Further
Developments are under way for other car OEMs in the country. We expect
this segment to achieve a healthy growth in the years to come.
FINANCIAL MANAGEMENT
History of over forty years, your company had been a consistently
profit making company, discharging its liabilities on time,
continuously growing its capacities and undertaking research and
development in new areas to keep ahead of competition.
However, in the current year the Company faced unprecedented
adversities, some of which are discussed in the following paras:
1. Sudden acute meltdown in the economies world over leading to severe
economic downturn affecting demand world-wide and causing bankruptcy of
a large number of conglomerates in the developed world.
2. Cancellation of orders by the buyers resulting in our having to
negotiate with them the discounts to liquidate our inventories
exclusively produced for them.
3. Increase in Minimum Support Price of cotton by the Government of
India resulting in very hefty increase in cotton prices. However the
increase could not be passed on to the yarn customers due to adverse
economic conditions.
4. Drastic fall in the value of inventories due to lower realizable
prices.
5. The Company had entered into a number of foreign exchange contracts
with bankers to hedge its forex exposure. However, due to unprecedented
fluctuations in the currency markets consequent to sudden meltdown
worldwide, these resulted in large losses to the Company.
At the same time, the capital expenditure commitments made for its
ongoing expansion of weaving and processing facilities, resulted in
severe strain on working capital of the Company.
To tide over the difficulties, your Company filed a proposal for
restructuring of its existing debts with all its bankers. The proposal
has been approved by the CDR Empowered Group in its meeting held on
August 31, 2009 under the CDR scheme. The Company is also proposing to
dispose off some of its properties to add to its cash position. While
most of the bankers have extended their support to the company in terms
of this proposal, some banks are yet to revert thereon.
Besides the above, your company is also actively implementing various
other cost reduction measures, waste reduction and optimum utilization
of capacities. We are confident that with support of its bankers and
tight managerial controls, the Company will restore its operations to
the erstwhile healthy levels.
REFERENCE UNDER SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT,
1985
As per the audited accounts of the Company for the period ending
30.06.2009, the accumulated losses of the Company as at the end of the
said period amounting to Rs. 2274.20 millions have eroded more than
fifty per cent of its peak net worth during the immediately preceding
four financial years amounting to Rs. 2976.49 millions, the detailed
report of the directors is annexed to the Notice of Annual General
Meeting.
CERTIFICATION & RECOGNITIONS
Your Company continues to maintain its accreditations with various
agencies like. GOTS, ISO 9001, ISO 14000 and others.
ASSOCIATE PROJECTS
ALPS USA INC.
Your Company had set up a wholly owned subsidiary Company nantely Alps
USA Inc.. in the State of Delaware, USA in April 2007, to act as an
investment vehicle for overseas acquisitions. However in the light of
economic conditions in USA, the near future prospects of the company
are uncertain.
ALPS ENERGY PRIVATE LIMITED
To start the power project, the Company is under the process of
acquring the land for the project. The management is pursuing state
government & concerned authorities to allot the balance required land
at the earliest possible Soon after allotment of land by the
government, company will immediately file the project report to its
Bankers and will get the necessary funds to start the implementation of
the project.
SNQWFLAKES MEDITECH PVT. LTD. (FORMERLY KNOWN AS ALPS RETAIL PRIVATE
LIMITED)
The Company is engaged in trading of Textile products and has achieved
a sale of Rs. 105.39 Lacs with a profit of Rs.2.42 Lacs during last
year. Management is in the process of identification of some
economically viable project to be set up at its land at Meerut. The
shareholders will be informed about the selection of project as and
when it will take place,
DISINVESTMENT
In view of the difficult financial position, the Company has disposed
off 1,05,000 Equity Shares of Bulland Buildmart Pvt. Ltd. in terms of
the approval from the members of the Board at their meeting held on May
31, 2008.
During the year under review your company has also disinvested all its
investment consisting of 99,940 shares in Alps Spandex India Limited.
GOVERNMENT POLICY INITIATIVES
The Government has recognized the adverse impact of high cotton cost,
high polyester prices with strengthening of Rupee, worldwide economic
recession which has all contributed to a severe strain on the textile
industry. With a view to provide relief, the Government has taken
certain measures/relief like abolition in Basic Excise Duty on 100%
Cotton Textile products i.e. Yarn, Fabric & Made-ups etc. not
containing any other textile materials, and reduction in the rate of
Basic Excise Duty from 8% to 4% for Textile products i.e. Yarn, Fabric
& Made-ups etc., Basic Rate of Service Tax from 12% to 10% Further
extension of Export Obligation period from 24 Months to 36 Months
against advance authorization scheme of DGFT for the upliftment of
textiles industry has been extended by the Government of India. The
National Textile Policy of 2000 was an attempt to prepare the textile
industry for quota free global trade. One of the key elements of the
policy was the Technology Upgradation Fund Scheme (TUFS) as on March
2008 under which more than Rs. 53,000 crores has flown to the industry
as loans. The original scheme has been extendedupto 2012 with some new
features. The total investment in technology modernization is estimated
to be over Rs. 86,000 Crores upto April 2007. We already have over 3 %
shares in global export and we must aim at trebling in by 2020. The
Government has further decided to extend the operations of the
residuary provisions of Yarn, Fabrics & Made-ups Export Entitlement
(Quota) Policies for a further period of one year with effect from 1st
January 2009. In order to overcome the adverse impact of global
recession on production and exports the Government has announced
certain measures to stimulate growth in production & exports on
07-12-2008 and 02-01-2009. Accordingly various relaxations has been
proposed under Central Excise Duty, Customs Duty, Rate of Interest of
Export Finance, Service Tax, Release of Additional funds, Duty Drawback
Rates, DEPB Credit
Rates & RBI/External Commercial Borrowing (ECB), which will benefit to
the industry considerably.
DIVIDEND
Due to the operational loss suffered by the company, your directors do
not propose dividend for the current financial period.
CAPITAL ISSUES
During the period under review the investors have surrendered 40 lacs
zero coupon convertible warrants of Rs. 10/- each issued at a price of
Rs. 65/- each, issued pursuant to the approval of the members of the
Board of Directors at their meeting held on May 8, 2007 and
shareholders under section 80,81,and 81(1 A) of the Companies Act,
1956, at the Extra-Ordinary General Meeting held on 8th June 2007. As
per the terms of the issue, the company had received 10% of the total
consideration, amounting to Rs. 260.00 lacs, from the investors, at the
time of allotment on June 22, 2007. As the Investors have decided not
to exercise the option of converting warrants into shares, in terms of
the SEBI Guidelines the application money so received has been
forfeited.
During the year, the Authorized Share Capital of the company was
increased from Rs 45.00 Crores to Rs 52.00 Crores, pursuant to the
approval of the members of the Board of Directors at their meeting held
on November 28, 2008 and shareholders under Section 94 and any other
applicable provisions of the Companies Act, 1956 at the Extra-Ordinary
General Meeting held on 26th December, 2008.
Further, in terms of the CDR scheme, approved by the bankers and CDR
Empowered Group in its meeting held on 31st August, 2009, the Company
proposes to raise additional equity by making a preferential issue of
equity shares.
Further, the CDR Scheme stipulates issue of quasi equity instruments
i.e. Optionally Convertible Cumulative Preference shares and Cumulative
Redeemable Preference shares in favor of the lenders of the Company.
The necessary proposals for issue of equity shares on preferential
basis to the promoters and their associates, FIIs and issue of Quasi
Equity Instruments in favor of the bankers are being included in the
agenda of the forthcoming Annual General Meeting obtain the approval of
the shareholders.
INVESTOR RELATIONS
Your Board takes satisfaction from the fact that all investors
grievances, received during the period under review, have been resolved
to the satisfaction of the investors within a reasonable time. M/s.
Alankit Assignments Limited, the R & T Agent of the Company, has made a
positive contribution to resolve the investors grievances efficiently
and effectively, whenever they arose.
CORPORATE CITIZENSHIP/ COMMUNITY DEVELOPMENT
At Alps, we think beyond business. As corporate citizens, we invest in
social infrastructure, believing strongly that our business strength
fuels our social contributions. To this end, Alps encourages, funds and
develops numerous education, health, human capital and infrastructure
initiatives. These initiatives are undertaken through partnerships with
non-governmental organizations, corporates and trusts.
At the manufacturing locations, we taken care to improve the quality of
life in the surrounding communities. The Community Development programs
focus on key areas of health care, education and children care. Your
Company also discharges its social obligations by running a charitable
hospital as well as a Primary and Junior High School alongwith various
amenities for the under privileged section of the society. The company
has also developed a residential colony near its Haridwar plant for its
workmen.
HUMAN RESOURCES
The Company values the employees at Alps. We have an excellent
management track record of over 40 years. Good management and fair
policies have ensured a healthy work environment and good industrial
relations. We provide safe working conditions with motto of Zero
accident culture in the organizations.
Information required under Section 217 (2A) of Companies Act, 1956,
read with Companies (Particulars of Employees) Rules, 1975 duly amended
by the Companies (Particulars of Employees) Rules, 1999 for the period
ended 30th June, 2009 is enclosed as Annexure -1.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO.
Information in accordance with the provisions of Section 217(1) (e) of
the Companies Act, 1956 read with Companies (Disclosure of Particulars)
in the Report of Board of Directors Rules, 1988 regarding conservation
of energy, technology absorption and foreign exchange earnings and
outgo is given in the statement annexed (Annexure -2) hereto and forms
part of this report.
DIRECTORS
In terms of the provisions of Article No. 106, 107 & 108 of the
Articles of Association of the company and Sections 255 and 256 of the
Companies Act, 1956. Mr. Rakesh Gupta, Non Executive and Non
Independent Director retires at the ensuing Annual General Meeting, and
being eligible, offers himself for reappointment.
In terms of the provisions of Article No. 92 of the Articles of
Association of the company and Section 260 of the Companies Act, 1956
the appointment of Mr. P. K. Rajput, Non Independent Director, Mr.
Prabhat Krishna and Mr. Tilak Raj Khosla, both independent Directors of
the Company, appointed as Additional Directors during the year, needs
to be confirmed at the forthcoming Annual General Meeting.
During the year under review, some of the Directors, namely Mr. J.P.
Kundra, Mr. G.K. Arora, Mr. Karthik Balachandran Athreya and Dr. M.L.
Gulrajani resigned their position from the Board due to their
preoccupation with other assignments and showing their inability to
continue. Mr. J.P. Kundra, Mr. G.K. Arora, resigned w.e.f. May 26,
2009, Mr. Karthik Balachandran Athreya, resigned w.e.f. June 15, 2009
and Dr. M. L. Gulrajani, resigned w.e.f. July 1, 2009
The compliance report of the corporate governance for proper
composition of the Board and the Committees thereof is under process
and will be completed within the prescribed timeframe.
APPOINTMENT OF EXECUTIVE DIRECTOR
In view of his contribution, the Board of Directors, at their meeting
held on September 22, 2009, based on the recommendations of
Remuneration Committee, has recommended the appointment of Mr. P.K.
Rajput as Executive Director again for another term of 3 years. The
necessary resolution, for the approval of the members of the Company,
has been included in the Notice of the Annual General Meeting, subject
to the approval of the Central Government and the prescribed authority
under the CDR scheme of the Company, if required. A brief note in terms
of the requirement of the Corporate Governance on the aforesaid
reappointment of Whole Time Director has been included in Part -II of
Annexure-3.
DIRECTORS RESPONSIBILITY
In terms of Section 2l7(2AA) of the Companies Act, 1956, the members of
the Board place on record the Directors Responsibility Statement as
under:
(i) That in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanations
relating to material departures;
(ii) That the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the accounting period and of
the profit or loss of the company for that period;
(iii) That the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(iv) That the directors have prepared the annual accounts on a going
concern basis.
FIXED DEPOSITS
During the part of year, your company has raised money by way of Fixed
Deposits without invitation to the general public as per the
requirements under Section 58-A, 58-AA and any other provisions, rules
and regulations of the Companies Act, 1956. However, in terms of the
resolution passed by the Board of Directors at their meeting held on
January 30, 2009, your company has made prematured repayments of such
Fixed Deposits. The Company is no more accepting any fixed deposits.
Information, as required under the Miscellaneous Non-Banking Companies
(Reserve Bank) Directions 1977, is annexed.
CORPORATE GOVERNANCE
A report as per the requirements of Clause 49 of the listing agreement
on the Corporate Governance practices followed by the Company and the
Statutory Auditors Certificate on Compliance of mandatory requirements
along with Management Discussion and Analysis, are given as an Annexure
to this report. The non-mandatory information is annexed as Part-II of
Annexure-3. It has always been the endeavor of your company to practice
transparency in its management and disclose all requisite information
to keep the public well informed of all material developments.
FORWARD LOOKING STATEMENT
The MD&A, dealing the Companys objectives and expectations, may
contain forward looking statements within the meaning of applicable
securities laws and regulations. The actual results may differ
materially from those expressed or implied, depending upon changes in
global and Indian demand-supply conditions as well as changes in
government regulations, tax regimes, economic and market developments,
movements.
AUDITORS
M/s. P. Jain & Co., Chartered Accountants, the Statutory Auditors of
the Company, retire at the forthcoming Annual General Meeting of the
Company and being eligible, have expressed their willingness to
continue, if appointed. Your Directors recommend their re- appointment.
AUDITORS OBSERVATIONS
Observations in the Auditors Report are dealt with in Notes to
Accounts at appropriate places and being self-explanatory, need no
further explanations.
ACKNOWLEDGMENT
Your Directors would like to express their grateful appreciation for
the assistance and co-operation received from the Financial
Institutions, Banks, Government Authorities, Customers, Vendors and
Members during the year under review. Your Directors also wish to place
on record their deep sense of appreciation for the committed services
of the Executives, Staff and Workers of the Company. It is also
pertinent to mention here the valuable cooperation extended by all
concern in such a recession time, which has encouraged the confidence
of the management and promoters of the company to struggle for the
revival and to set the company in its earlier position.
For and on behalf of the Board
K. K. Agarwal Sandeep Agarwal
Place : Ghaziabad Non -Executive Chairman Managing Director
Date : September 22, 2009