We have plea sure in presenting the Annual Report of your Company together with the
Audited Accounts for the financial year ended 31 March 2009. The summarised financial
results (stand-alone) are given below in Table 1.
Table 1: Financial Highlights: Stand-Alone
|Sales / Job Charges (net of Excise)
|Profit Before Interest, Depreciation & Taxes
|Profit / (Loss) Before Tax
|Provision For Taxation
|— MAT Credit Entitlement
|— Fringe Benefit Tax
|— Excess / (Short) Provision Of Income Tax in respect of earlier years
|Net Profit / (Loss) After Tax
|Add: Share of Profit of Associates
|Add: Share of Profit from Joint Ventures
|(Add)/Less: Minority Interest
|Profit After Tax after Minority Interest
|Add: Balance brought forward
|Balance Available for Appropriation
|Add / (Less): Dividend for Earlier Years
|Tax On Dividend
|Transfer to Debenture Redemption Reserve
|Transfer to General Reserve
|Balance Carried To Balance Sheet
Foreign exchange loss. Rs. 14.25 crore for year ended 31 March 2009 Foreign exchange
gain. Rs. 43.63 crore for year ended 31 March 2008
Previous years figures have been regrouped wherever necessary to bring them in line
with the current year s representation of figures
During the financial year, your Company recorded sales of Rs. 2,976.93 crore (increase
of 37.16%) and profit before tax of Rs. 284.99 crore (decrease of 4.23%) over the previous
year. Including extraordinary items, your Company's profit before tax stood at Rs. 306.51
crore. Your Company's exports (including incentives) increased 1.70% — from Rs.
1,036.88 crore in 2007-08 to Rs. 1,054.50 crore during the year under review.
The sales performance of all the divisions of your Company, their share in the overall
business and their growth over last year are reflected in Table 2 below.
Table 2. Division-wise Sales Performance. 2008-09 vs. 2007-08
||Total Sales for the Year ended 31 March 2009
||% to Total Sales
||Total Sales for the Year ended 31 March 2008
||% to Total Sales
The Retail Operations of Alok Industries Ltd. has been transferred to Alok Retail
(India) Ltd. w.e.f. 1 December 2008. All sales of Retail Operations till that date have
been allocated to the respective business segments. Apparel Fabrics, Home Textiles and
Details of your Company's performance for the year under review are given in the
'Management Discussion and Analysis', which forms part of this Directors' Report.
Your Directors had recommended and you had approved the payment of interim dividend of
Rs. 0.75 per equity share of Rs. 10/- each. A total amount of Rs. 14.17 crore (excluding
tax of Rs. 1.75 crore) was made on 6 May 2009, with the record date of 2 May 2009.
Your Directors feel that prudent business practice demands that, at a stage where your
Company is growing rapidly, the financial reserves of your company should be built up.
Keeping this in mind, the Directors recommend that the interim dividend paid be treated as
the final dividend and no further dividend be declared for the year ended 31 March 2009.
During the year under review, your Company allotted following equity shares.
||No. Of Shares Issued
||Amount Of Issue
||Equity Capital Amount
|Equity as at 1 April 2008
|Preferential allotment to Promoter Directors @ Rs. 102.00 per share
|Equity as at 31 March 2009
The Company, on 31 March 2009, announced Rights Issue of 408,723,061 equity shares with
a face value of Rs. 10/- each for cash at a price of Rs. 11/- including premium of Rs. 1/-
aggreg ating to Rs. 4,495,953,671/- to the existing shareholders of the company on Right
Issue basis in the ratio of 83 rights e quity shares for every 40 equity shares held on
the record date, i.e. 25 March 2009. The is sue was closed on 22 April 2009 and wa s
oversubscribed 1.15 times.
Your Company proposes to transfer Rs. 190.83 crore to Debenture Redemption Reserve out
of the balance available for appropriation, therefore, after transfer to Debenture
Redemption Reserve, the balance of the Profit &
Loss Account would stand at Rs. 276.63 crore. At the end of the financial year, the
total reserves of the Company stood at Rs. 1,410.39 crore, the corresponding figure at the
end of the previous year was Rs. 1,134.01 crore.
During the year under review, your Company has raised incremental debt, both secured
and unsecured by way of rupee loans, foreign currency terms loans and non-convertible
debentures aggregating to Rs. 829.04 crore.
The Terry Towel project, which was part of Phase I & II, was commissioned during
the year under review. Your Company has also successfully commissioned Continuous
Polymerisation (CP) Plant at Saily (Silvassa). Phase III and Phase IV of the expansion of
your Company s capacities, aggregating to Rs. 1,100 crore and Rs. 1,180 crore, stands
largely completed, the balance portion is progressing well. Details of your Company s
expansion plans have been dealt with under the head Capacity Expansion in the Management
Discussion and Analysis accompanying this Report.
Subsidiary Companies and Consolidated Financial Statements
At the end of the financial year under review, your Company had the following
|Subsidiaries of Alok Industries Ltd.
||Step-down Subsidiaries of Alok Industries Ltd.
|1. Alok Industries International Ltd.: incorporated in the British Virgin Islands
||1. Mileta a.s. - incorporated
||Alok Industries International
|2. Alok Inc.: incorporated in the State of New York, USA
||in the Czech Republic
|3. Alok Infrastructure Pvt. Ltd.
|4. Alok Land Holdings Pvt. Ltd.
|5. Alok Clothing Company Pvt. Ltd.
|6. Alok Homes & Apparel Pvt. Ltd.
|7. Alok Apparel Private Ltd.
||2. Alok Realtor Pvt. Ltd.
||Alok Infrastructure Pvt Ltd.
|8. Aurangabad Textiles & Apparel Park Ltd.
|9. New City of Bombay Mfg. Mills Ltd.
Business and Operations
Your Company s textiles operations have shown encouraging growth trends, both in the
domestic and in the exports markets. The capacity expansions which your Company had been
putting in place for the past few years are nearing completion and the volume increases
are starting to be reflected in operations and sales. Marketing initiatives across the
world have both de-risked your Company as well as contributed to a healthy order book.
Your Company believes that its scale of operations and integration across the textile
chain will, in future, offer significant advantages in both cost and revenue.
Given the increasing spending capacity of the middle-class consumer segment in India,
retail remains an exciting prospect over the medium term. Your Company s retail initiative
is operated through its wholly owned subsidiary Alok R etail India Ltd., which has opened
ninety 'H&A' stores across India as on the date of this Report. Your Company wishes to
expand the 'H&A' footprint to over 300 stores during the current financial year.
Your Company's investment in Grabal Alok (UK) L td., as part of the Group's overseas
retail foray is now starting to show improved results. The stores, which are spread across
the UK and offer quality apparel and fashion products at affordable prices, are also in
the process of being re-branded from 'qs' to Store Twenty One'. The second half of FY
2008-09 ha s reflected improved topline, thanks to cost rationalisation and efficiency
maximisation measures, the middle line has also shown improvement. I his encouraging trend
has been carried on during the first quarter of the current financial year as well.
More details about your Company's business structure and initiatives are contained in
the Management Discussion & Analysis. Awards and Recognition
During the year under review, your Company has been given the following awards and
a) GOLD TROPHY awarded by TEXPROCIL for Highest Exports of Bleached / Dyed / Yarn-dyed
/ Printed Fabrics'
b) SILVER TROPHY awarded by TEXPROCIL for 'Highest Exports of Made-ups'
c) BRONZE TROPHY awarded by TEXPROCIL for 'Highest Global Exports'
d) SPECIAL ACHIEVEMENT AWARD awarded by TEXPROCIL 'Exports in Fabrics'
e) International Trade Awards 2008-09, prese nted by DHL - CNBC TV 18 and powered by
Outstanding Exporter of the Year — Textiles Corporate Social Responsibility
Alok's Corporate Social Responsibility (CSR) philosophy is focused on growing the
business while ensuring that the concerns of the environment in which it operates are
adequately and sustainably addressed. This encompasses the natural environment, as well as
the people and communities that live in the areas where the Company operates its
Details of your Company's Corporate Social Responsibility (CSR) initiatives are given
in a separate section, 'Sustainability', which forms part of the accompanying Management
Discussion and Analysis and Annual Report.
A separate report on Corporate Governance is enclosed as a part of this Annual Report.
A certificate from the Statutory Auditors of your Company regarding compliance with
Corporate Governance norms stipulated in Ola use 49 of the Listing Agreement is also
annexed to the report on Corporate Governance.
Your Company does not have any fixed deposits under section 58A and 58AA of The
Companies Act, 1956 read with Companies (Acceptance of Deposits) Rule, 1975.
All the insurable interests of your Company including inventories, buildings, plant and
machinery are adequately insured.
Mr. Dilip B. J iwrajka and Mr. Surendra B. Jiwrajka will retire from office by rotation
at the ensuing Annual General Meeting and, being eligible, offer themselves for
reappointment. Brief resumes of these Directors, in line with the stipulations of Clause
49 of the Listing Agreement, are provided elsewhere in this Annual Report.
During the year, Mr. K. C. Jani, and Mr. R. J. Kamath, nominees of IDBI Bank Limited,
resigned from the Board of
Directors w.e.f. 8 September 2008 and 30 December 2008, respectively. Mr. K. D.
Hodavdeka r was appointed in the place of Mr. K. C. Jani and Mr. A. B. Das gupta was
appointed in the place of Mr. R. J. Kamath. The Board wishes to place on record their
appreciation for the contributions of Mr. K. C Jani and Mr. R. J. Kam ath during their
tenure as Directors of your Company.
Directors Responsibility Statement
As stipulated in Section 217(2AA) of the Companies Act, 1956, your D irectors subscribe
to the 'Directors'
Responsibility Statement' and confirm that.
• in the preparation of the annual accounts for the financial year ended 31 March
2008, the applicable Accounting Standards have been followed and there has been no
• the Directors have selected such accounting policies and applied them
consistently and made judgements and estimates that were reasonable and prudent so as to
give a true and fair view of the state of affairs of your Company as at 31 March 2008 and
of the profit of your Company for the year on that date,
• the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act,1956
for safeguarding the assets of your Company and for preventing and detecting fraud and
• the Directors have prepared the annual accounts for the financial year ended 31
March 2009 on a 'going concern' basis. Auditors and Auditors Report
The observations made in the Auditors' Report are self-explanatory and therefore, do
not call for any further comments under section 217(3) of the Companies Act, 1956.
The retiring Auditors of your Company, M/s. Gandhi & Parekh, are eligible for
re-appointment and have indicated their willingness to accept re-appointment. In terms of
Section 224A of the Companies Act, 1956, their re-appointment needs to be approved by the
members and their remuneration has to be fixed.
Pursuant to the directives of the Central Government under the provisions of Section
233B of the Company s Act, 1956 and subject to the approval of the Central Government, M/s
B. J. D. Nanabhoy & Co., Cost Acc ountants, Mumbai have been appointed as Cost
Auditors to conduct cost audit relating to the products manufactured by your Company.
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 forms part
of 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. Any shareholder interested in obtaining a copy of
the said statement may write to your Company Secretary at the Corporate Office of your
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.
Your Directors appreciate the significant contribution made by the employees to the
operations of your Company during the year.
Conservation of Energy, Technology absorption, Foreign Exchange Earnings and Outgo
The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are attached as Annexure 'A' to this report.
Your Directors wish to place on record their appreciation of the dedication and
commitment of your Company's employees to the growth of your Company. Your Directors wish
to thank the Central and State Governments, Financial Institutions, Banks, Government
authorities, customers, vendors and shareholders for their continued cooperation and
Date. 29 J uly 2009
For and on behalf of the Board
Ashok B. Jiwrajka