DIRECTORS' REPORT TO THE MEMBERS, Your Directors are pleased to present their 28th Annual Report together with the Audited Accounts for the 18 months period ended 31st March, 2015. Year in Retrospect: For the 18 months period ended 31st March, 2015 your Company recorded sales of Rs. 22130.72 crore. The exports of your Company for the year (including incentives) stood at Rs. 3861.60 crore. The profit before tax was at Rs. 558.04 crore. Your Company's performance for the period under review are given in greater detail in the 'Management Discussion and Analysis', which forms part of this Directors' Report. Awards and Recognition During the year under review, your Company has won awards in following categories: A. From Cotton Textile Exports Council of India (TEXPROCIL): 1. Gold Trophy for the Highest Exports of Bed Linen/Bed Sheets/Quilts in Madeups; 2. Gold Trophy for the Highest Exports of Other Fabrics including Embroidered Fabrics, Laces; 3. Gold Trophy for the Highest Exports of Terry Towels in Madeups; 4. Silver Trophy for the Second Highest Exports of Bleached/ Dyed/Yarn Dyed/Printed Fabrics; 5. Silver Trophy for the Second Highest Global Exports (Overall). B. From The Synthetic & Rayon Textiles Export Promotion Council: 6. Award for Fourth Best Overall Export Performance in the Category of SRTEPC Special Award (Trophy); Dividend The Board of Directors has not recommended any dividend on the Share Capital of the Company for the period ended 31st March 2015 considering the current cash flow position of the company. Share Capital During the period under review, your Company on 13th November, 2014 has granted 2,02,300 Equity Shares of Rs. 10.00 each for cash at par under ESOP Scheme to its employees. Accordingly, the Company's equity share capital as on 31st March, 2015 stands at Rs. 1377.33 crore divided into 137,73,17,895 fully paid equity shares of Rs. 10/- each. Loans During 18 months period ended 31st March, 2015, your Company has repaid debt of Rs. 683.51 crore, both secured and unsecured. The total debt at the end of the period stood at Rs. 15346.67 crore compared to Rs. 16030.18 crore at the end of previous year. Capital Expenditure As at 31st March, 2015, the gross fixed assets (including CWIP) stood at Rs. 13563.18 crore and the net fixed assets stood at Rs. 8376.75 crore. During the period 18 Months ended 31st March, 2015, your company has incurred a capital expenditure of Rs. 147.41 crore across various divisions. Details of your Company's capacities across various divisions are provided under the head 'Alok's Capacities' (Table No.10) in the Management Discussion and Analysis annexed to this Report. Extension of Accounting Period Your Company has extended its accounting period up to 18 months, i.e. 1st October, 2013 to 31st March, 2015 and has obtained necessary approvals in this regard. Accordingly the Company has also obtained necessary approval to convene the Annual General Meeting on or before 26th June, 2015 in accordance with Section 166 read with Section 210 of the Companies Act, 1956. Deposits During the period under review your Company has not accepted any fixed deposits from the public. All deposits accepted during the previous periods have been repaid together with interest accrued up to the date of maturity. The Members are requested to note that the Ministry of Corporate Affairs vide its General Circular No. 2/2011 dated February 8, 2011, has granted a general exemption to all the companies under Section 212(8) of the Companies Act, 1956, with regard to attaching the Balance Sheet, Profit & Loss Account and other documents of the subsidiaries of the company after complying with the directions given therein. However, the Members who wish to have a copy of the annual audited accounts of the subsidiaries will be provided the same upon receipt of a request from them and will also be available for inspection by any Member at the registered office of the Company and of the subsidiary companies on any working day except Saturday, between 11.00 am to 6.00 pm. The specified financial information of subsidiary companies is disclosed along with the consolidated financial statements of the Company. In accordance with the requirements of the Listing Agreement executed with the Stock Exchanges, the consolidated financial statements of the Company are annexed to the Annual Report. Auditors' Report There are no qualifications, reservations, or adverse remarks or disclaimers made by the Deloitte Haskins & Sells LLP, Statutory Auditors, in their report. Observations made in the Auditors'' Report are self-explanatory and therefore do not call for any further comments under Section 134(1) of the Companies Act, 2013. Employees Stock Option Plans On September 28, 2013, the Remuneration Committee granted 2,30,44,650 options under Grant 3 at an exercise price of Rs. 10 each. The above options vests for a year i.e. upto September 28, 2014 and can be exercised by the Employees upto September 28, 2016. Each option represents a right but not obligation to apply for 1 fully paid equity share of Rs. 10/-During the period, the Company on 13th November, 2014 has allotted 2,02,300 options for cash at par under ESOP Scheme to its employees. 36,90,950 options lapsed during the period due to separations. 1,91,29,600 options are in force as at 31st March 2015 and all these options have vested. The information as required pursuant to the Securities & Exchange Board of India (Employees' Stock Option Scheme and Employees' Stock Purchase Scheme) Guidelines, 1999 is annexed hereto as Annexure I and forms part of this report. Business Responsibility Reporting SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has mandated the top 100 listed entities, based on market capitalisation on BSE Limited and National Stock Exchange of India Limited at March 31, 2012, to include Business Responsibility Report ("BRR") as part of the Annual Report. Though, the aforesaid circular does not apply to your company, the Board of Directors are voluntarily providing a separate section on BRR as part of this Annual Report. Corporate Social Responsibility (CSR) and CSR Committee In accordance with the provisions of Section 135 of the Companies Act, 2013, the Company is required to constitute a Corporate Social Responsibility (CSR) Committee of Directors comprising at least three directors including an independent director. The board has constituted the CSR Committee comprising Mr. S. K. Bhoan, Mr. Sunil O. Khandelwal and Mr. K.H. Gopal. The Companies Act, 2013 and the rules made thereunder has defined various activities that can be undertaken towards CSR initiatives which inter alia include poverty eradication, health, education, promoting gender equality, environment sustainability, protection of national heritage, benefits for armed forces veterans and their dependents, sports, contributions to approved central government funds and rural development projects. The terms of reference of the committee inter alia include formulation of a CSR policy indicating the activities that will be undertaken, recommending the CSR policy to the board for adoption, recommending the amount of expenditure to be incurred and ensuring a transparent monitoring mechanism for undertaking such activities. The CSR committee will monitor the implementation of the CSR policy and apprise the board accordingly. Details of CSR initiatives undertaken by the Company during the year are given under the head 'Sustainability', in the Management Discussion and Analysis forming part of this Annual Report. Corporate Governance The Securities and Exchange Board of India (SEBI) has prescribed certain corporate governance standards vide Clause 49 of the Listing Agreement with stock exchanges. Your Directors reaffirm their commitment to these standards and a detailed Report on Corporate Governance together with the Auditors' Certificate on its compliance is annexed hereto. Directors During the year, Mr. Ashok B. Jiwrajka, Executive Chairman of the Company has relinquished the post of Executive Chairman from the Board and continues as an Executive Director of the Company. The Board of Directors through circulation appointed Mr. S K Bhoan as an additional independent Director effective from 30.03.2015. In accordance with the Articles of Association of your Company, Mr. Sunil O. Khandelwal, Executive Director & CFO and Mr. K. H. Gopal, Executive Director & Secretary, retires from office by rotation, and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting of the Company. The brief resume of Mr. Sunil O. Khandelwal, Mr. K. H. Gopal, Mr. Timothy Ingram and Mr. S. K. Bhoan, as required interalia in terms of Clause 49 of the Listing Agreement with the stock exchanges, are provided elsewhere in this Annual Report. During the year Mr. Sudhir Garg was appointed as Nominee Director representing IFCI Limited to fill the casual vacancy caused by the resignation of Mr. M. V. Muthu with effect from 13th February, 2014. During the year Mr. K. R. Modi, Independent Director and Mr. Samuel Joseph, Nominee Director of Export-Import Bank of India, had resigned from the Board of Directors with effect from 13th February, 2014 and 1st December, 2014 respectively. The Board of Directors places on record their sincere appreciation for the contribution and valuable service rendered by Mr. M. V. Muthu, Mr. K R Modi and Mr. Samuel Joseph during their tenure. Section 149 and other applicable provisions of the Companies Act, 2013, require the Company to have atleast one-third of the total number of Directors as Independent Directors. In the opinion of the Board, Mr. Timothy Ingram and Mr. S.K.Bhoan are Independent Directors in terms of the Listing Agreement, meet the criteria of independence in terms of section 149 (6) of the Act, are being considered for appointment as Independent Directors of the Company under sections 149,150 and 152 read with Schedule IV of the Act. The Company has received declarations from all these Directors of the Company confirming that they meet with the criteria of independence as prescribed both under section 149 (6) and Schedule IV of the Companies Act, 2013 and clause 49 of the Listing Agreement with the Stock Exchanges. Accordingly resolutions will be placed at the ensuing Annual General meeting (AGM) for their appointment as Independent Directors for a period of five consecutive years from the date of ensuing AGM not liable to retire by rotation. Further, the required resolutions for confirmation/appointment/ re-appointment of the above Directors at the forthcoming Annual General Meeting are included in the Notice convening 28th Annual General Meeting. Directors' Responsibility Statement Your Directors state that: i. in the preparation of the annual accounts for the 18 months period ended 31st March, 2015, the applicable Accounting Standards have been followed and there has been no material departure from the same; ii. the Directors have selected such accounting policies, consulted 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 your Company as at 31st March, 2015 and of the profit of your Company for the period ended on that date; iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; iv. they have prepared the annual accounts for the 18 months period ended 31st March, 2015 on a 'going concern' basis and v. the Company has adequate internal systems and controls in place to ensure compliance of laws applicable to the Company. vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Consolidated financial statements Your Company has prepared Consolidated Financial Statements in accordance with Accounting Standards AS-21, AS-23 and AS-27 issued by the Institute of Chartered Accountants of India. The Consolidated Statements reflect the results of the Company and that of its Subsidiaries, Joint Ventures and Associates. As required by clause 32 of the Listing Agreement with the Stock Exchanges, the Audited Consolidated Financial Statements together with the Auditors Report thereon are annexed and form part of this Annual Report. The Consolidated Financial Statements of the Company prepared as per the Accounting Standard AS-21 and Accounting Standard AS-23, consolidating the Company's accounts with its subsidiaries and an associate have also been included as part of this Annual Report. Auditors Messrs Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No.117366W/ W-100018), Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a confirmation from Messrs Deloitte Haskins & Sells LLP to the effect that their appointment, if made, at the ensuing AGM would be in terms of Sections 139 and 141 of the Companies Act, 2013 and rules made there under and that they are not disqualified for re-appointment. Cost Auditor Pursuant to the directives of the Central Government under the provisions of the Companies Act, 2013, the Board of Directors at their meeting held on 28th May 2015 has appointed M/s B. J. D. Nanabhoy & Co., Cost Accountants as Cost Auditors to conduct audit of cost records relating to the products manufactured by your Company for the Financial Year 2015-16. Secretarial Audit Pursuant to provisions of Section 204 of the Companies Act, 2013, the Board appointed Mr. Virendra G Bhatt, Practising Company Secretary, as Secretarial Auditor to carry out the secretarial audit for the financial year 2015-2016. Since the provisions relating to the disclosures are not applicable for the year under review, the secretarial audit report is not enclosed to the Boards' report for the year ended 31st March, 2015. Particulars of Employees Your Directors appreciate the significant contribution made by the employees to the operations of your Company during the period. The information required on particulars of employees as per Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 is given in a separate Annexure to this Report. As per the provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to all shareholders of your Company excluding the Statement of Particulars of Employees (Annexure). Any shareholder interested in obtaining a copy of the said Annexure may write to your Company Secretary at the Corporate Office of your Company. More details on the Human Resources function of your Company and its various activities are given in the 'Human Resources' and 'Sustainability' sections of the attached Management Discussion & Analysis. Vigil mechanism/ Whistle Blower Policy: The Company has formulated a vigil mechanism (whistle blower policy) for its directors and employees of the Company for reporting genuine concerns about unethical practices and suspected or actual fraud or violation of the code of conduct of the Company as prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement. This vigil mechanism shall provide a channel to the employees and Directors to report to the management concerns about unethical behavior, and also provide for adequate safeguards against victimization of persons who use the mechanism and also make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo The information under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 for the year ended March 31, 2015 are annexed hereto and forms part of this report. Green Initiative by The Ministry Of Corporate Affairs The Ministry of Corporate Affairs ("MCA") has taken a Green Initiative in Corporate Governance by permitting electronic mode for service of documents to Members (shareholders) as per relevant provisions of the Companies Act, 2013 ("the Act"). Pursuant to provisions of the Act, and rules made thereunder, service of documents to Members can be now made by electronic mode on the email address provided for the purpose of communication. If a Member has not provided an email address, other permitted modes of service would to be applicable. Your Company sincerely appreciates shareholders who have contributed towards furtherance of Green Initiative. We further appeal to other shareholders to contribute towards furtherance of Green Initiative by opting for electronic communication. The shareholders may also reach out to the Company/RTA by sending a request letter alongwith a self attested PAN copy. The request can also be made online on Alok website (www.alokind.com post which the RTA would contact the concerned shareholder for the requisite documentation. This initiative will ease the burden on corporates (and the environment) of sending physical documents such as notices, annual reports etc. Those who have not provided their email address will continue to receive communications, dissemination, notice(s), documents etc. via permitted mode of service of documents. Further the shareholders, who request for physical copies, will be provided the same at no additional cost to them. The Company is providing e-voting facility for all Members to enable them to cast their votes electronically on all resolutions set forth in the Fourteenth AGM Notice. This is pursuant, interalia, to Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules 2014. The detailed instructions for e-voting are provided in the AGM Notice which is being sent separately as per prescribed mode of dispatch. Companies Act, 2013 The Companies Act, 2013 was notified in the Official Gazette of the Government of India on August 29, 2013. On September 12, 2013, the Ministry of Corporate Affairs (MCA) notified 98 sections and on March 27, 2014, the MCA notified another 198 sections, which were deemed to come into force with effect from April 1, 2014. The MCA vide Circular No. 08/2014 dated April 4, 2014 clarified that the financial statements and the documents required to be attached thereto, the auditors' and directors' report in respect of the financial year under reference shall continue to be governed by the relevant provisions of the Companies Act, 1956, schedules and rules made there under. The Company has accordingly prepared this balance sheet, statement of profit & loss, the schedules and notes thereto and the Directors' Report in accordance with the relevant provisions of the Companies Act, 1956, schedules and rules made there under. The Company has taken cognisance of the new legislation and shall comply with the provisions of the Companies Act, 2013, as applicable. Acknowledgements The Board of Directors wish to place on record its sincere appreciation for the support received from its stakeholders including shareholders, bankers, distributors, suppliers and business associates. The Directors recognize and appreciate the sincere, hard work, loyalty, dedicated efforts and contribution of all the employees that ensured sustained performance in a challenging business environment. For and on behalf of the Board Dilip B. Jiwrajka Managing Director Place: Mumbai Dated: 28th May 2015 |