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Alok Industries Ltd.

BSE: 521070 Sector: Industrials
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OPEN 3.19
VOLUME 77563
52-Week high 4.40
52-Week low 2.30
Mkt Cap.(Rs cr) 423
Buy Price 3.06
Buy Qty 19137.00
Sell Price 3.07
Sell Qty 127.00
OPEN 3.19
CLOSE 3.12
VOLUME 77563
52-Week high 4.40
52-Week low 2.30
Mkt Cap.(Rs cr) 423
Buy Price 3.06
Buy Qty 19137.00
Sell Price 3.07
Sell Qty 127.00

Alok Industries Ltd. (ALOKTEXT) - Director Report

Company director report



Your Directors present to you their 29th Annual Report together with the AuditedAccounts for the financial year ended 31 st March 2016.

1 Financial Results

The financial performance of the Company for the current year is for 12 monthsascompared to 18 months period for the previous yearperiod ended is summarized below:( crores)

Particulars Standalone Consolidated
31.03.2016 31.03.2015 31.03.2016 31.03.2015
(12 Months) (18 Months) (12 Months) (18 Months)
Sales / Job charges (net of excise) 11752.39 22130.72 13040.90 24153.06
Other Income 86.98 224.82 93.12 467.20
Total Income 11839.37 22355.54 13134.02 24620.26
Total Expenditure 14297.62 17085.13 15435.77 19114.71
Operating Profit/ (Loss) before Interest Depreciation &Taxes (2458.25) 5270.41 (2301.75) 5505.55
Interest 2525.45 3251.16 2690.54 3512.72
Depreciation 635.35 1461.21 682.04 1521.78
Profit / (Loss) Before Tax (5619.05) 558.04 (5674.33) 471.05
Less : Provision for Taxation
- Current 63.88 (92.90) (2.99) (98.19)
- MAT credit entitlement (87.74) 87.74 (87.74) 87.74
- Deferred 1920.11 (204.12) 1922.05 (206.51)
- Prior period adjustment of Tax 63.87 0.22
Profit / (Loss) After Tax (3722.80) 348.76 (3779.14) 254.30
Add / (Less): Share of Profit from Associates - - 4.95 3.95
Profit /(Loss) After Tax After Minority Interest (3722.80) 348.76 (3774.19) 258.26
Add : Balance Brought Forward 2674.57 2328.84 1256.09 1002.21
Available Profit / (Loss) dealt with as under (1048.23) 2677.60 (2518.10) 1260.47
(Transfers) and Appropriations
i) Excess Provision of Dividend for Earlier Years (0.01) -
ii) Tax on Dividend - 0.57
iii) Transfer (from) / to Debenture Redemption Reserve (12.18) 3.03 (12.18) 3.03
iv) Transfer to General Reserve - 0.78
Balance Carried to Balance Sheet (1036.05) 2674.57 (2505.93) 1256.09

Notes: Previous years’ figures have been reclassified / regrouped wherever

2. Performance of the Company:

The total revenue from operations for the year 2015-16 was Rs. 11752.39 croresincluding exports (with incentives) of Rs. 1223.49 crores.

The loss before tax was Rs. 5619.05 crores mainly due to subdued manufacturingoperations lower profitability provision for doubtful debtors bad debts writtenoffhigher interest burden and depreciation.

Your Company’s performance for the year under review are given in greater detailin the ‘Management Discussion and Analysis’ which forms part of this AnnualReport.

3. Awards and Recognition:

During the year under review your Company won awards in following categories:

From Cotton Textile Exports Council of India (TEXPROCIL):

1. Gold Trophy for the Highest Exports of Fabrics in ‘Other Fabrics includingEmbroidered Fabrics Laces etc.’ under the Category II

2. Gold Plaque for the Highest Exports of Yarn in ‘Counts 50s and below’under the Category I

3. Bronze Trophy for the Third Highest Exports of Madeups in ‘Bed Linen/BedSheets/Quilts’ under the Category III

4. Bronze Trophy for the Third Highest Exports of Madeups in ‘Terry Towels’under the Category II

5. Bronze Trophy for the Third Highest Exports of ‘Bleached/Dyed/Yarn Dyed/PrintedFabrics’ under the Category II


Your Company has the following subsidiaries and step down subsidiaries:

Subsidiaries of Alok Industries Limited

1. Alok Infrastructure Limited

2. Alok International Inc. (incorporated in the state of New York USA)

3. Alok International (Middle East) FZE (incorporated in Dubai)

4. Alok Singapore Pte Limited (incorporated in Singapore)

5. Alok Worldwide Limited (incorporated in the British Virgin islands)

6. Alok Trading Singapore Pte Limited (incorporated in Singapore- in the process ofbeing struck off)

7. Alok Universal Singapore Pte Limited (incorporated in Singapore- in the process ofbeing struck off)

8. Alok Global Singapore Pte Limited (incorporated in Singapore- in the process ofbeing struck off)

9. Alok Merchant Singapore Pte Limited (incorporated in Singapore- in the process ofbeing struck off)

10. Alok Global Trading (Middle East) FZE (incorporated in Dubai)

Step-down subsidiaries of Alok Industries Limited
Parent Company Subsidiary %Holding
Alok Infrastructure Limited Alok Industries International Ltd. (incorporated in the British Virgin 100.00%
Grabal Alok International Limited (incorporated in the British 100.00%
Virgin Islands)
Alok Industries International Ltd. (incorporated in the Mileta a.s.(incorporated in the Czech Republic) 100.00%
British Virgin Islands)
Alok Industries International Ltd (incorporated in the Grabal Alok (UK) Limited (incorporated in UK)
British Virgin Islands) 99.21%
Grabal Alok International Limited. (incorporated in the 0.66%
British Virgin Islands)

Joint Venture

(i) New City of Bombay Manufacturing Mills Limited

(ii) Aurangabad Textiles and Apparel Parks Limited


(i) Ashford Infotech Private Limited

(ii) Alspun Infrastructure Limited

As on 31st March 2016 the Company had 10 subsidiaries (Direct) and 7 step downsubsidiary 2 Joint Venture companies and 2 Associate Companies. During the year underreview no new subsidiary Company was incorporated and all the above mentionedsubsidiaries and step down subsidiaries existed as on 31st March 2016.

Pursuant to the provisions of Section 129(3) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 a statement containing salient features of financialstatements of subsidiaries associates and joint venture companies in Form AOC-1isattached to the Financial Statements. The separate audited financial statements in respectof each of the subsidiary shall be kept open for inspection at the Registered Office ofthe Company. The Company will also make available these documents upon request by anyMember of the Company interested in obtaining the same.

The Company has framed a policy for determining material subsidiaries which has beenuploaded on company’s website www.

5. Consolidated financial statements

In accordance with the Companies Act 2013 ("the Act") and AccountingStandards AS-21 on Consolidated Financial statements read with AS-23 on Accounting forInvestments in Associates and AS-27 on Financial reporting of Interest in Joint Venturesissued by the Institute of Chartered Accountants of India the Consolidated Statements ofthe Company and that of its Subsidiaries Joint Ventures and Associates together with theAuditors Report thereon are provided in the Annual Report.

6. Dividend

The Board of Directors have not recommended any dividend on the Share Capital of theCompany for the financial year ended 31st March 2016 considering the loss during the year.

7. Share Capital

The Company’s equity share capital as on 31st March 2016 remained at Rs.1377.32crore divided into 1377317895 fully paid equity shares of Rs.10/- each. During theperiod under report your company has not issued any Equity / ESOPs and / or ConvertibleDebentures.

The Company at its Extra Ordinary General Meeting held on 14th March 2016 interaliaresolved to raise the authorized share capital of the Company from Rs.1500 crore toRs.4000 crore. HSBC the Security Agent for Singapore based bank led consortium oflenders have filed a winding up petition in the

Hon’ble High Court Bombay and further sought an injunction restricting the Companyfrom carrying out the changes to the Memorandum Of Association (MOA) and Articles ofAssociation (AOA) since the same was a pre-condition stipulated in the documents signedby the Company with HSBC and the lenders.

The Company provided an Affidavit on 11th March 2016 before the Court stating thatnone of the resolutions passed at the EOGM shall be implemented without the prior approvalof HSBC.

In view of the above the increase in the authorized share capital of the Company hasnot been carried out.

8. Loans/Finance

During the year under report your company has availed disbursement of term loan of Rs.3553.60 crores from various banks and repaid Rs. 2809.40 crores of term loans. TheCompany also received export advance backed by Export Performance Bank Guarantee (EPBG) ofRs. 2984.98 crore. The Company raised working capital and other short term loan of Rs.3120.27 crores (net) during the year. The total standalone debt as at 31st March.2016stood at Rs. 23088.30 crores including export advance.

9. Credit Ratings

Credit Rating Agency has suspended the ratings assigned to the bank facilities &NCDs issued by the Company.

10. Operations:

During the year the overall operations of the Company were subdued due to shortage ofworking capital. The Company is in discussion with its working capital bankers for rampingup the operations. The Steering Committee of the Joint Lenders Forum (JLF) have agreed toconsider Rs. 120.00 crores as Priority loan for ramping up of operations and the same isexpected to be sanctioned and released in next few months. With this infusion of Priorityloan the operations would be ramped up gradually.

11. Human Resources and Industrial Relations:

HR function is at the core of the Company and plays a major role in nurturingenhancing and retaining talent through job satisfaction management development programmeetc. The Company has an induction process and Goals/Deliverables are in place foremployees based on which appraisals are done.

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said Rules is to be annexed to this Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act andas advised the Annual Report excluding the aforesaid information is being sent to themembers of the Company. The said information is available for inspection at the registeredoffice of the Company during business hours and any member interested in obtaining suchinformation may write to the Company Secretary and the same will be furnished on request.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed as Annexure-E to this report.

12. Significant and Material Order Passed by the Regulator(s) or /Court(s)/Matter ofEmphasis:

HSBC the Security Agent for a Singapore based bank led consortium of lenders havefiled a winding up petition in the Hon’ble High Court Bombay and further sought aninjunction restricting the Company from carrying out the changes to the Memorandum OfAssociation (MOA) and Articles of Association (AOA) since the same was a pre-conditionstipulated in the documents signed by the Company with HSBC and the lenders. In order toensure that the Extra Ordinary General Meeting (EOGM) of the Company is allowed to beconducted smoothly on 14th March 2016 the Company provided an Affidavit on 11th March2016 before the Court stating that none of the resolutions passed at the EOGM shall beimplemented without the prior approval of the HSBC. The shareholders of the Company at theEOGM gave their approval for carrying out the Strategic Debt Restructuring (SDR) by theLenders.

The Hon’ble High Court has thus directed the Company to not carry out any changesin the MOA and AOA without obtaining prior written approval of the Court. in replyTheCompanysubsequently filed seeking the Court’s approval to retract its statementregarding implementation of the resolutions passed in the EOGM as the same was given undercoercion.

The Company is confident of getting a favorable order from the Hon’ble High Court.As on date this ongoing matter does not impact the going concern status of the Company.

13. Corporate Governance

The Company is committed to observe good corporate governance practices. The report onCorporate Governance for the financial year ended March 31 2016 as per Clause 49 of theListing agreement and regulation 34(3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms a part of this AnnualReport. The requisite Certificate from the Statutory Auditors of the Company confirmingcompliance with the conditions of Corporate Governance is annexed to this Report.

14. Deposits

During the year under review your Company has not accepted any fixed deposits from thepublic.

15. Vigil mechanism/ Whistle Blower Policy:

The Company has adopted a Whistle Blower policy to provide a formal mechanism to theDirectors and employees of the Company for reporting genuine concerns about unethicalpractices and suspected or actual fraud or violation of the code of conduct of the Companyas prescribed under the Companies Act 2013 Clause 49 of the Listing Agreement andRegulation 22 of the Listing Obligation and Disclosure Requirements 2015. This VigilMechanism shall provide a channel to the employees and Directors to report to themanagement concerns about unethical behavior and also provide for adequate safeguardsagainst victimization of persons who use the mechanism and also make provision for directaccess to the chairperson of the Audit Committee in appropriate or exceptional cases. Itis affirmed that no personnel of the company has been denied access to the AuditCommittee.

The Whistle Blower policy is displayed at the Company’s

16. Internal Financial Control:

The Board has adopted policies and procedures for ensuring orderly and efficientconduct of its business including adherence to the company’s policies safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures.

(a) Risk Management

The Company had put in place an enterprise wide Risk Management framework. Thisholistic approach provides the assurance that to the best of its capabilities theCompany identifies assesses and mitigates risks that could materially impact itsperformance in achieving the stated objectives. The Audit and Risk committee ensures thatthe Company is taking appropriate measures to achieve prudent balance between risk andreward in both ongoing and new business activities.

The Committee reviews strategic decisions of the Company and on regular basis reviewsthe Company’s portfolio of risks and considers it against the Company’s RiskAppetite. The Committee also recommends changes to the Risk Management Technique and / orassociated frameworks processes and practices of the Company.

(b) Nomination and Remuneration Committee:

The Board of Directors has on the recommendation of the Nomination & RemunerationCommittee framed a policy which lays down a framework concerning remuneration ofDirectors Key Management Personnel and Senior Management of the Company. TheRemuneration Policy is stated in the Corporate Governance Report.

(c) Contracts and Arrangements with Related Parties

The Company undertakes various transactions with related parties in the ordinary courseof business. The Company has a Board approved policy on Related Party Transactions whichhas been disclosed on the website of the Company and can be viewed at Allrelated party transactions that were entered into during the financial year were on anarm’s length basis in the ordinary course of business and were in compliance withthe applicable provisions of the Companies Act 2013 (‘the Act’) and Listingagreement and the provisions of Section 185 and Section 188 of the Companies Act 2013 arenot attracted. Thus disclosure in Form AOC-2 is not required.

All related Party Transactions are placed before the Audit Committee for approval.Prior omnibus approval of the Audit Committee is obtained for the transactions which areof foreseen and repetitive nature. The transactions entered into pursuant to the omnibusapproval so granted along with a statement giving details of all related partytransactions is placed before the Audit Committee.

17. Auditors’ Report on Corporate Governance:

As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the auditors certificate on Corporate Governance is enclosed as Annexure to theCorporate Governance Report. The auditors certificate for year ended 31st March 2016 doesnot contain any qualification reservation or adverse remark.

18. Directors

The composition of the Board and category of Directors are as follows:

Sr. No Full Name Designation
1 Mr. Ashok Bhagirathmal Jiwrajka Executive Director
2 Mr. Dilip Bhagirathmal Jiwrajka Managing Director
3 Mr. Surendra Bhagirathmal Jiwrajka Joint Managing Director
4 Mr. Sunil Omprakash Khandelwal Executive Director & CFO
5 Mr. K. H. Gopal Executive Director & Secretary
6 Mr. Sudhir Garg Nominee Director of IFCI Ltd.
7 Mr. Surinder Kumar Bhoan Non-Executive Independent Director
8 Mr. Kamalkishore Jani Additional Non- Executive Independent Director
9 Mr. Atanu Sen Nominee Director of State Bank of India
10 Mr. Pradeep Kumar Rath Nominee Director of LIC of India
11 Mr. Rajeev Kumar Nominee Director of IDBI Bank Ltd.

Changes in the composition of the Board of Directors and other Key ManagerialPersonnel.

The Board of Directors through circulation appointed Mr. Kamal Kishore Jani as anAdditional Non- Executive Independent Director and noted the appointment of Mr. Atanu Senas the Nominee Director of State Bank of India on the board both effective from 24thSeptember 2015. The brief resumes of Mr. Kamalkishore Jani and Mr. Atanu Sen are providedelsewhere in this Annual Report.

During the year Mr. Pradeep Kumar Rath was nominated on the board of the Company by LICof India effective from 14th October 2015 in place of Mrs. Thankom Mathew. Mr. RajeevKumar was nominated by IDBI Bank Limited on the Board of the Companyin place of Mrs.Lalita Sharma with effect from 28th December 2015. The Board of Directors places onrecord their sincere appreciation for the services rendered by Mrs. Thankom Mathew andMrs. Lalita Sharma during their tenure.

During the year Mr. Ashok Rajani and Mr. Timothy Ingram stepped down as the Directorsof the Company due to their other commitmentseffective from 13th August 2015 and 05thSeptember 2015 respectively. The Board of Directors places on record their sincereappreciation for the contribution and valuable service rendered by them during theirtenure.

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 retire from office of

Executive Director by rotation render themselves ineligible for reappointment at theensuing Annual General Meeting of the Company pursuant to the provisions of Section164(2) of the Companies Act 2013. They shall however be continuing in the service of theCompany as Executive Director& CFO and Executive Director & Secretaryrespectively in a functional capacity.

Section 149 and other applicable provisions of the Companies Act 2013 require theCompany to have atleast one-third of the total number of Directors as IndependentDirectors. In the opinion of the Board Mr. Kamal Kishore Jani in terms of the ListingAgreement and meets the criteria of independence in terms of section 149 (6) of the Actand is being considered for appointment as Independent Director of the Company undersections 149150 and 152 read with Schedule IV of the Act. The Company has receiveddeclarations from the above

Director of the Company confirming that he meets the criteria of independence asprescribed both under section 149 (6) and Schedule IV of the Companies Act 2013 andclause 49 of the Listing Agreement with the Stock Exchanges. Accordingly resolutions willbe placed at the ensuing Annual General meeting (AGM) for his appointment as IndependentDirector for a period of five consecutive years from the date of ensuing AGM not liable toretire by rotation.

Further the required resolutions for confirmation/appointment/ re-appointment of theabove Director at the forthcoming Annual General Meeting are included in the Noticeconvening 29th Annual General Meeting.

19. Meetings of the Board

Five Meetings of the Board of Directors were held during the year. For further detailsplease refer the Corporate Governance Report forming part of the Annual Report.

20. Board Evolution

Pursuant to the provision of the companies Act 2013 and Regulation 17 of the ListingRegulations the Board has carried out an annual performance evaluation of its IndependentDirectors and the Independent Directors also evaluated the performance of the Chairman andother Non-Independent Directors. The Board of Directors expressed their satisfaction withthe evaluation process.

21. Directors’ Responsibility Statement

As required by Section 134(3)(C) of the Companies Act 2013 your Directors state that:

a) in the preparation of the annual accounts for the year ended March 312016 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2016 and of the loss ofthe Company for the year ended 31 March 2016 on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a ‘going concern’ basis

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

22. Auditors

(1) Statutory Auditors:

During the year under review M/s Deloitte Haskins & Sells LLP- CharteredAccountants (Firm Registration no.117366W/ W-100018)stepped down as the Statutory Auditorsof the Company owing to the Company’s inability to accede to their request for asubstantial increase in their fees.

Subsequently M/s. NBS & Co. Chartered Accountants Mumbai (Firm Regn.No.110100W)and M/s. Shah Gupta & Co Chartered Accountants Mumbai (Firm Regn. No.109574W) wereappointed as the Joint Statutory

Auditors of the Company to hold office till the conclusion of the ensuing AnnualGeneral Meeting (AGM).

(2) Cost Auditor:

Pursuant to the provisions of section 148 read with section 141(3)(g) of the CompaniesAct 2013 and subject to the approval of the Central Government the Board of Directorsat their meeting held on 28th May 2015 has appointed M/s B. J. D. Nanabhoy & Co. CostAccountants as Cost Auditors to conduct audit of cost records relating to the productsmanufactured by your Company for the Financial Year 2015-16.

(3) Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Virendra G BhattPracticing Company Secretary as Secretarial Auditor toconduct the Secretarial Audit of the Company for the financial year 2015-16. TheSecretarial Audit Report is annexed herewith as "MR-3". The Secretarial AuditReport contains remarks which have been addressed under the section Management’sOpinion on the Comments/ remarks/ qualifications given by the Auditors in this report.

23. Corporate Social Responsibility (CSR) and CSR Committee

During the year under review the Board constituted a Corporate Social ResponsibilityCommittee (CSR Committee) consisting of three Directors of which one is IndependentDirector. The CSR Committee at its meeting held on 28th May 2015 recommended to the Boardthe CSR policy formulated by it following which the policy document was approved by theBoard. The composition terms of reference etc. of the CSR Committee are laid out in theCorporate Governance Report which forms part of this Annual Report.

Further the CSR policy of the Company has been uploaded on the Company’s

In pursuance of the provisions of the Companies Act 2013 and CSR Policy of the Companyit is required to spend two percent of the average net profits of the Company for thethree immediately preceding financial years i.e. Rs.13.05 Crore on CSR activities duringthe year. However due to the unfavorable financial conditions and the mounting losses theCompany has not been able to meet this requirement..The Company has incurred lossesamounting to Rs. 3722.80 Crores during the financialyear 2015-16and it is facing achallenge in meeting its financial obligations.

Hence the company is unable to spend any funds on CSR activities for the time being.The Company will incur the sum on CSR activities as soon as the financial position of theCompany improves.

24. Statutory Information:

Extract of Annual Return

Extract of Annual Return of the company is annexed herewith as Annexure B to thisreport.

Transfer to investor’s education and Protection fund:

Section 205A of the companies Act 1956 (Section 124 of the Companies Act 2013)mandates that Companies transfer dividend that has been unclaimed for a period of sevenyears from the unpaid dividend account to the Investor Education and Protection Fund(IEPF). Accordingly during the year under review the Company has credited Rs.861915 tothe Investor Education and Protection Fund in respect of the Unpaid/ unclaimed dividendamount relating to the Final dividend declared in 2007-08. The Company sends periodiccommunication to the concerned shareholders advising them to lodge their claims withrespect to unclaimed dividend. Shareholders are cautioned that once unclaimed dividend istransferred to the IEPF no claim shall lie in respect thereof with the Company.

Green Initiative by The Ministry Of Corporate Affairs

As a part of the Green initiative in corporate governance by the Ministry of CorporateAffairs (MCA) service of documents to Members can be now made by electronic mode on theemail address provided for the purpose of communication. Your Company sincerelyappreciates shareholders who have contributed towards furtherance of Green Initiative. Wefurther appeal to other shareholders to contribute towards furtherance of Green Initiativeby opting for electronic communication. The shareholders may also reach out to theCompany/RTA by sending a request letter alongwith a self attested PAN copy. The requestcan also be made online on the website of the Company (www. post which theRTA would contact the concerned shareholder for the requisite documentation.

This initiative will ease the burden on corporates (and the environment) of sendingphysical documents such as notices annual reports etc. Those who have not provided theiremail address will continue to receive communications dissemination notice(s) documentsetc. via permitted mode of service of documents. Further the shareholders who request forphysical copies will be provided the same at no additional cost to them. The Company isproviding e-voting facility for all Members to enable them to cast their voteselectronically on all resolutions set forth in the 29thAGM Notice. This is pursuantinteralia 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 areprovided in the AGM Notice which is being sent separately as per prescribed mode ofdispatch.

Results of Operations and the State of Company’s Affairs:

No material changes and commitments have occurred after the close of the financial yeartill the date of this Report which affect the financial position of the Company.

Employee Stock Option Plans

Details of the shares issued under Employee Stock Option Plan (ESOP) as also thedisclosures in compliance with Section 62 of Companies Act 2013 and Rule 12 of Companies(Share Capital and Debentures) Rules 2014 and SEBI (Share Based Employee Benefits)

Regulations 2014 are set out in the Annexure D to this Report. No employee has beenissued share options during the year.

The excess of market value if any of the stock options as on the date of grant overthe exercise price of the options is recognized as deferred employee compensation and ischarged to the profit and loss account on vesting basis over the vesting period of theoptions. The un-amortized portion of the deferred employee compensation is reduced fromEmployee Stock Option Outstanding which is shown under Reserves and Surplus.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo:

The information under Section 134 (3) (m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 for the year ended March 31 2016 are annexedhereto as Annexure-A.

25. Management’s Opinion on the Emphasis of matters / notes given by the Auditors:

a. The Emphasis of Matters highlighted by the Statutory Auditors in their Report on theStandalone Financial Statements are self-explanatory and call for no comments from themanagement. In their Report on the Consolidated Financial Statements the StatutoryAuditors have stated that the basis for their qualified opinion is that the consolidatedfinancial statements include the unaudited financial statements of nine subsidiaries andone jointly controlled entity. The management is of the opinion that this situation wasunavoidable and in any event the audited financial statements of these entities are notgoing to be in any manner different from the unaudited versions.

b. Non Repayment of interest /principal amount to Debenture Holders for more than 1year: The Company is yet to pay the debenture interest payment due for a period beyond oneyear as at the Balance sheet date. This attracts the provisions of Section 164 (2) of theCompanies Act 2013 as per which all directors retiring by rotation at the ensuing AnnualGeneral Meeting and eligible for reappointment render themselves ineligible for suchreappointment. Further Section 167 of the said Act appears ambiguous regarding thevacation of the Board if and when such a contravention continues. The Company is informedthat the Company Law Committee appointed by the Government of India has alreadyrecommended appropriate amendments to Section 167 to remove the apparent ambiguity. TheCompany is further informed that the recommendation has been incorporated in the Companies(Amendment) Bill 2016 which has been introduced in the Lok Sabha for discussion and ispending for confirmation.

c. Appointment of a Woman Director and Independent Directors on Board of the Company:Your Company is constantly searching for a competent Woman Director and IndependentDirectors in order to strengthen the Board in line with the provisions of the CompaniesAct 2013 and Listing Obligation and Disclosure Requirements Rules 2015. It has beenchallenging to attract people on the Board in view of the fact that the performance of theCompany during the period was sub-optimal. The Management is however confident ofappointing a Woman Director and Independent Directors in the coming year. Observationsmade in the by the Auditors in the Consolidated Financial Statements and the StandaloneFinancial Statements are are self-explanatory and therefore do not call for any furthercomments under Section 134(1) of the Companies Act 2013.

26. Erosion of Net Worth

With accumulated losses of Rs. 3722.80 crores at the end of the financial yearresulting in erosion of over 50% of peak net worth during the immediately preceding fourfinancial years we regret to inform that Your Company has become a "Potential SickCompany" within the meaning of Section 23 of the Sick Industrial Companies (SpecialProvisions) Act 1985 (SICA).

The Board at its meeting held on 30th May 2016 has reviewed the causes for such erosionand the prime reason amongst others which adversely affected the performance of theCompany the prime reasons ascribed amongst others which adversely affected theperformance of the Company was the difficult economic conditions resulting in delays inrealization of debtors pile-up of inventory rising interest costs and bunching ofrepayments leading to a tight liquidity position. This was compounded by lack ofadditional working capital facilities which resulted in lower capacity utilization andlower cash flow generation.

The Board after considering the various steps implemented and/or to be undertaken forimprovement of performance of the Company is confident/optimistic that the Company wouldbe able to implement effective measures in normal course of business to revive theoperations of the Company. Accordingly the financial statements for the Financial Year2015-16 has been prepared on a going concern basis.

In terms of the requirement of SICA the Company shall also make a reference to theBoard for Industrial and Financial Reconstruction (BIFR) the fact of erosion within thestipulated time period.

27. General

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

1. Details relating 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 the employees of the Companyunder any scheme.

4. No fraud has been reported by the Auditors to the Audit Committee or the Board.

5. The Company does not have any scheme of provision of money for the purchase of itsown shares by employees or by trustees for the benefit of employees.

Disclosures under the Companies Act 2013 and Listing


(1) Composition of Audit Committee has been disclosed in the Corporate GovernanceReport annexed to this report (2) Policy on Sexual Harassment of Women at Workplace.

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy against sexual harassment in line with the provisions of Sexual Harrasment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules madethereunder.

Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act2013.

(3) Familarision Programme for Independent Directors:

In compliance with the requirements of SEBI Regulations the Company has put in place afamiliarization programme for the Independent Directors to familiarize them with theirrole rights and responsibility as Directors the working of the Company nature of theindustry in which the company operates business model etc. The details of thefamiliarization programme are explained in the Corporate Governance Report. The same isalso available on the website of the Company (4) Particulars of Loans /Guarantees and Investments and Securities provided by the Company Details of LoansGuarantees and Investments covered under the provisions of section 186 of the CompaniesAct 2013 are given in the Financial Statements.

28. Acknowledgements

Your Directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment. The enthusiasm and unstinting efforts of theemployees have enabled the Company to provide higher levels of consumer delight throughcontinuous improvement in existing products and introduction of new products.

The Board places on record its appreciation for the support and co-operation yourCompany has been receiving from its suppliers redistribution stockiest retailersbusiness partners and others associated with the Company as its trading partners. It willbe the Company’s endeavourto build and nurture strong links with the trade based onmutuality of benefits respect for and cooperation with each other consistent withconsumer interests.

The Directors also take this opportunity to thank all Investors Clients VendorsBanks Government and Regulatory Authorities and Stock Exchanges for their continuedsupport.

For and on behalf of the Board
Surendra B. Jiwrajka
Joint Managing Director
Place: Mumbai
Dated: 30th May 2016