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Directors Report of Alps Industries Ltd.

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: investorsgreviences@alpsindustries.com

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; investorsgreviences@alpsindustries.com

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 – 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: investorsgreviences@alpsindustries.com

MANPOWER– 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

 
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