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Alps Industries Ltd.

BSE: 530715 | NSE: ALPSINDUS |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE093B01015 | SECTOR: Textiles - General

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Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2007

Director’s Report

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

Director’s Report