ALOK INDUSTRIES LIMITED Our Company was incorporated by way of a certificate of incorporation dated March 12, 1986 as „Alok Textile Private Limited‟, a private limited company under the provisions of the Companies Act, 1956, as amended. Subsequently, by way of a fresh certificate of incorporation dated November 17, 1992, the name of our Company was changed to „Alok Textiles Industries Private Limited‟. Our Company was thereafter, by way of a certificate of incorporation dated February 11, 1993, converted into a public limited company. Consequently, by way of a fresh certificate of incorporation dated November 8, 2000, our Company‟s name was changed to „Alok Industries Limited‟. Registered Office: 17/5/1 and 521/1, Village Rakholi / Saily, Silvassa – 396 230, Union Territory of Dadra & Nagar Haveli, India Corporate Office: Peninsula Towers, “A” Wing, Peninsula Corporate Park, G. K. Marg, Lower Parel, Mumbai – 400 013, Maharashtra, India Tel: +91 22 2499 6200 / 6500; Fax: +91 22 2493 6078 | Contact Person: Compliance Officer, Mr. K. H. Gopal, (Executive Director & Company Secretary) E-mail: [email protected]Website: www.alokind.com PROMOTERS OF OUR COMPANY MR. ASHOK JIWRAJKA, MR. DILIP JIWRAJKA, AND MR. SURENDRA JIWRAJKA FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF ALOK INDUSTRIES LIMITED (“COMPANY” OR “ISSUER”) ONLY ISSUE OF 55,08,46,238 EQUITY SHARES WITH A FACE VALUE OF `10 EACH (“EQUITY SHARES”) FOR CASH AT PAR PER EQUITY SHARE FOR AN AGGREGATE AMOUNT OF ` 550.85 CRORE ON A RIGHTS BASIS TO THE ELIGIBLE EQUITY SHAREHOLDERS OF THE COMPANY IN THE RATIO OF 2 EQUITY SHARE(S) FOR EVERY 3 FULLY PAID-UP EQUITY SHARE(S) HELD BY THE ELIGIBLE EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS ON FEBRUARY 19, 2013 (“ISSUE”). THE ISSUE PRICE IS ONE (1) TIME THE FACE VALUE OF THE EQUITY SHARES. FOR FURTHER DETAILS, PLEASE REFER TO “TERMS OF THE ISSUE” ON PAGE 73. GENERAL RISKS Investments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in the Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in the Issue. For taking an investment decision, Investors must rely on their own examination of the Company and the Issue including the risks involved. The securities being offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Investors are advised to refer to the section “Risk Factors” on page xvi before making an investment in this Issue. THE COMPANY‟S ABSOLUTE RESPONSIBILITY The Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The existing Equity Shares are listed on the BSE Limited (“ BSE”) and the National Stock Exchange of India Limited (“NSE”). We have received “in-principle” approvals from BSE and NSE for listing the Equity Shares to be allotted in the Issue vide their letters dated November 2, 2012 and October 23, 2012, respectively. For the purposes of the Issue, the Designated Stock Exchange is BSE. LEAD MANAGERS TO THE ISSUE REGISTRAR TO THE ISSUE SBI Capital Markets Limited 202, Maker Tower E, Cuffe Parade, Mumbai – 400 005 Maharashtra, India Tel: +91 22 2217 8300 Fax: +91 22 2218 8332 Email: [email protected]Investor Grievance E-mail.: [email protected]Website: www.sbicaps.com Contact Person: Ms. Shikha Agarwal SEBI Registration No: INM000003531 Axis Capital Limited 1 , 1st floor, Axis House, C-2 Wadia International Centre, P.B. Marg, Worli, Mumbai- 400025 Maharashtra, India Tel: +91 22 4325 3101 Fax: +91 22 4325 3000 Email: [email protected]Investor Grievance E-mail.: [email protected]Website: www.axiscapital.co.in Contact Person: Ms. Dipali Dalal SEBI Registration No: INM000012029 Centbank Financial Services Limited 15-16 Bajaj Bhavan, 1 st Floor, Opp. Inox Multiplex, Nariman Point, Mumbai - 400021 Maharashtra, India Tel: +91 22 2202 2788/5018 Fax: + 91 22 2202 5043 Email: [email protected]Investor Grievance E-mail: [email protected]Website: www.cfsl.in Contact Person: Mr. Rakesh K. Singh SEBI Registration No: INM000011781 Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup West, Mumbai – 400 078, Maharashtra, India Tel: +91 22 2596 7878 Fax: +91 22 2596 0329 E-mail: [email protected]Investor Grievance E-mail: [email protected]Website: www.linkintime.co.in Contact Person: Mr. Pravin Kasare SEBI Registration No: INR000004058 LEAD MANAGERS TO THE ISSUE Emkay Global Financial Services Limited The Ruby, 7 th Floor, Senapati Bapat Marg, Dadar (West), Mumbai – 400 028, Maharashtra, India Tel: +91 22 66121212 Fax: +91 22 66121299 Email:[email protected]Investor Grievance E-mail: [email protected]Website: www.emkayglobal.com Contact Person: Mr. Rajesh Ranjan SEBI Registration No: INM000011229 Fortune Financial Services (India) Limited K.K. Chambers, 2 nd Floor, Sir. P. T. Marg, Fort, Mumbai – 400 001 Maharashtra, India Tel: +91 22 2207 7931 Fax: +91 22 2207 2948 Email: [email protected]Investor Grievance Email: [email protected]Website: www.fortune.co.in Contact Person: Mr. Abhishek Kumar Sureka SEBI Registration No.: INM000000529 IDBI Capital Market Services Limited 3 rd Floor, Mafatlal Centre, Nariman Point, Mumbai – 400 021 Maharashtra, India Tel: +91 22 4322 1212 Fax: +91 22 2285 0785 E-mail: [email protected]Investor Grievance Email: [email protected]Website:www.idbicapital.com Contact Person: Mr. Swapnil Thakur SEBI Registration No.: INM000010866 ISSUE PROGRAMME ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS ISSUE CLOSES ON March 30, 2013 (Saturday) April 20, 2013, (Saturday) April 27, 2013 (Saturday) 1 The merchant banking business of Enam Securities Private Limited has vested with Axis Capital Limited which has been given SEBI registration under the SEBI (Merchant Bankers) Regulations, 1992, as amended in lieu of earlier registration. Letter of Offer March 20, 2013 For our Eligible Equity Shareholders only March 20, 2013 For our Eligible Equity Shareholders only
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ALOK INDUSTRIES LIMITED
Our Company was incorporated by way of a certificate of incorporation dated March 12, 1986 as „Alok Textile Private Limited‟, a private limited company under the
provisions of the Companies Act, 1956, as amended. Subsequently, by way of a fresh certificate of incorporation dated November 17, 1992, the name of our Company was
changed to „Alok Textiles Industries Private Limited‟. Our Company was thereafter, by way of a certificate of incorporation dated February 11, 1993, converted into a public limited company. Consequently, by way of a fresh certificate of incorporation dated November 8, 2000, our Company‟s name was changed to „Alok Industries Limited‟.
Registered Office: 17/5/1 and 521/1, Village Rakholi / Saily, Silvassa – 396 230, Union Territory of Dadra & Nagar Haveli, India
Corporate Office: Peninsula Towers, “A” Wing, Peninsula Corporate Park, G. K. Marg, Lower Parel, Mumbai – 400 013, Maharashtra, India Tel: +91 22 2499 6200 / 6500; Fax: +91 22 2493 6078 | Contact Person: Compliance Officer, Mr. K. H. Gopal, (Executive Director & Company Secretary)
MR. ASHOK JIWRAJKA, MR. DILIP JIWRAJKA, AND MR. SURENDRA JIWRAJKA
FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF ALOK INDUSTRIES LIMITED
(“COMPANY” OR “ISSUER”) ONLY
ISSUE OF 55,08,46,238 EQUITY SHARES WITH A FACE VALUE OF `10 EACH (“EQUITY SHARES”) FOR CASH AT PAR PER EQUITY SHARE FOR
AN AGGREGATE AMOUNT OF ` 550.85 CRORE ON A RIGHTS BASIS TO THE ELIGIBLE EQUITY SHAREHOLDERS OF THE COMPANY IN THE
RATIO OF 2 EQUITY SHARE(S) FOR EVERY 3 FULLY PAID-UP EQUITY SHARE(S) HELD BY THE ELIGIBLE EQUITY SHAREHOLDERS ON THE
RECORD DATE, THAT IS ON FEBRUARY 19, 2013 (“ISSUE”). THE ISSUE PRICE IS ONE (1) TIME THE FACE VALUE OF THE EQUITY SHARES.
FOR FURTHER DETAILS, PLEASE REFER TO “TERMS OF THE ISSUE” ON PAGE 73.
GENERAL RISKS
Investments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in the Issue unless they can afford to take the risk of
losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in the Issue. For taking an investment decision, Investors must rely on their own examination of the Company and the Issue including the risks involved. The securities being offered in the Issue have not been recommended or
approved by the Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Investors are advised to refer
to the section “Risk Factors” on page xvi before making an investment in this Issue.
THE COMPANY‟S ABSOLUTE RESPONSIBILITY
The Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to the Issuer and the
Issue, which is material in the context of the Issue, that the information contained in this Letter of Offer is true and correct in all material aspects and is not misleading in any
material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect.
LISTING
The existing Equity Shares are listed on the BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”). We have received “in-principle”
approvals from BSE and NSE for listing the Equity Shares to be allotted in the Issue vide their letters dated November 2, 2012 and October 23, 2012, respectively. For
the purposes of the Issue, the Designated Stock Exchange is BSE.
Website:www.idbicapital.com Contact Person: Mr. Swapnil Thakur
SEBI Registration No.: INM000010866
ISSUE PROGRAMME
ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS ISSUE CLOSES ON
March 30, 2013 (Saturday) April 20, 2013, (Saturday) April 27, 2013 (Saturday)
1 The merchant banking business of Enam Securities Private Limited has vested with Axis Capital Limited which has been given SEBI registration under the SEBI (Merchant
Bankers) Regulations, 1992, as amended in lieu of earlier registration.
SECTION I – GENERAL ..................................................................................................................................... I
DEFINITIONS AND ABBREVIATIONS .............................................................................................................. I
NOTICE TO OVERSEAS SHAREHOLDERS .................................................................................................... IX
CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA
AND CURRENCY OF PRESENTATION .......................................................................................................... XII
FORWARD LOOKING STATEMENTS ........................................................................................................... XIV
SECTION II - RISK FACTORS ...................................................................................................................... XVI
SECTION III – INTRODUCTION ..................................................................................................................... 1
SUMMARY OF THE ISSUE ................................................................................................................................. 1
SUMMARY FINANCIAL INFORMATION ......................................................................................................... 2
GENERAL INFORMATION ............................................................................................................................... 13
CAPITAL STRUCTURE ..................................................................................................................................... 19
OBJECTS OF THE ISSUE ................................................................................................................................... 27
SECTION IV - STATEMENT OF TAX BENEFITS ....................................................................................... 34
SECTION V - OUR MANAGEMENT ................................................................................................................. 35
SECTION VI – FINANCIAL INFORMATION .............................................................................................. 45
STOCK MARKET DATA FOR EQUITY SHARES ....................................................................................... 46
MATERIAL DEVELOPMENTS ...................................................................................................................... 49
ACCOUNTING RATIOS AND CAPITALISATION STATEMENT ................................................................. 55
SECTION VII – LEGAL AND OTHER INFORMATION ............................................................................. 57
GOVERNMENT APPROVALS .......................................................................................................................... 58
OTHER REGULATORY AND STATUTORY DISCLOSURES ........................................................................ 61
SECTION VIII – OFFERING INFORMATION ............................................................................................. 73
TERMS OF THE ISSUE....................................................................................................................................... 73
SECTION IX – STATUTORY AND OTHER INFORMATION .................................................................. 110
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ............................................................ 110
6. Alok Land Holdings Private Limited Lotus Corporate Park 24.91
7. Alspun Infrastructure Limited Land at Vapi 16.34
8. Alok Infrastructure Limited Land at Silvassa* 63.12
Total 1,922.98
* The land at Silvassa was initially intended to be utilised for the operations of Alok Infrastructure Limited and was classified as a fixed asset. However, this land at Silvassa has subsequently been considered for onward sale.
For the period ended September 30, 2012, the contribution of the real estate business to the total income of
our Company was nil on a standalone basis and ` 0.16 crore, on a consolidated basis. The extent of total
leverage, i.e. total outstanding debt in the real estate business, as on September 30, 2012, was nil and `
840.11 crore respectively, on a standalone basis, and consolidated basis.
We intend to deleverage our balance sheet by exiting from the real estate business to reduce our existing
debt obligations. However, any inability to exit the real estate business at the time or in the manner we
expect could adversely affect our operations and profitability.
6. We rely on our IT systems for our business functions, production planning and scheduling. Any failure
or disruption of our information technology systems could adversely impact our business and operations.
We rely on our IT systems to provide us with connectivity across our business functions and manufacturing
facilities through our software, hardware and network systems. Seamless connectivity across our plants,
storage locations and offices is critical to ensure accessibility of SAP across all our locations. In this regard,
our entire database in relation to planning, production and sales is stored at our Silvassa, Vapi, Bhiwandi
and Navi Mumbai units. Any failure or disruption in connectivity can impact real time / online transactions
related to planning, production, sales, etc. While all our locations are facilitated with MPLS-VPN
connections from multiple service providers, events such as natural disasters, net hacking or key hardware
failures could adversely impact our business and disrupt our operations.
xx
7. Our business is dependent on the delivery of adequate and uninterrupted supply of electrical power and
water at a reasonable cost. Failure on account of unavailability of electrical power and water may
restrict us in utilising our full capacity and, hence, may impact our business and results of operation.
Furthermore, we face certain risks with regard to the operation of our captive power plants. The
outbreak of any fire and occurrence of any accidents or damages at the power plants may have an impact
our business and results of operations.
Adequate and cost effective supply of electrical power is critical to our operations, which entails significant
consumption of electrical power. Currently, we have power plants at Vapi and Silvassa supplying to our
manufacturing facilities at Silvassa and Vapi, which provides us with part of our energy requirements for
our manufacturing facilities and also serves as our back-up electricity supply. Furthermore, we also source a
certain portion of our power requirements from the relevant State Electricity Board. Operation of these
power plants entails certain risks associated with typical power plant operation, including, but not limited
to, industrial accidents such as explosions or fire damage. The occurrence of any industrial accidents could
damage the power plant and interrupt our power supply for our manufacturing operations, which could
adversely affect our business and results of operations.
There can be no assurance that electricity supplied by our existing and proposed captive power plants and
third party sources will be sufficient to meet our requirements or that we will be able to procure adequate
and interrupted power supply in the future at a reasonable cost. Further, if the per unit cost of electricity is
increased by the state electricity boards, our power costs will increase and it may not be possible to pass on
any increase in our power costs to our customers, which may adversely affect our profit margins.
We are also dependent on the availability of water from the States of Gujarat and Maharashtra for use in our
manufacturing facilities. Lack of sufficient water resources or an increase in the cost of such water used in
manufacturing facilities could adversely affect our business, financial condition and results of operation.
8. We do not usually enter long-term contracts for the supply of our raw materials and obtain nearly all of
our raw materials on a spot delivery basis. Any fluctuations in the prices of our raw materials including
raw cotton, PTA and MEG, will materially and adversely affect our business, results of operations and
financial condition.
Our textile manufacturing business and operations are significantly dependent on the timely availability and
price of raw materials used in our production process. The primary raw material for our textile operations is
cotton. Being an agricultural commodity, there can be fluctuations in price of cotton due to certain factors,
including the changing weather conditions. Further, pricing of cotton is significantly affected by
government policies and regulations. Governmental policies affecting the agricultural industry (such as
taxes, tariffs, duties, subsidies, import and export restrictions on agricultural commodities and commodity
products) can influence industry profitability, the planting of certain crops versus other uses of agricultural
resources, the location and size of crop production, whether unprocessed or processed commodity products
are traded and the volume and types of imports and exports. Currently, we obtain nearly all of our cotton
requirements in the spot markets, known as “mandis” located primarily in the States of Gujarat,
Maharashtra and Andhra Pradesh, and from certain cotton ginning units and stockists, such as the Cotton
Corporation of India Limited. Apart from cotton obtained from India, we also import cotton from varying
locations based on specific customer requirements. Further, for our polyester yarn operations, PTA and
MEG are the major raw materials that are required in manufacturing POY and polyester yarn, which are
also procured on spot basis. PTA and MEG are procured domestically as well as imported from the Middle
East and Korea. Being petrochemical products, prices of PTA and MEG are linked to naptha prices and
ethylene prices, respectively, and fluctuate in line with fluctuations in the crude oil prices. In the half year
ended September 2012, our Company‟s key raw materials such as raw cotton, PTA and MEG constituted
approximately 56.96% of our total raw material costs.
We generally do not enter into long-term contracts with fixed prices for the supply of such raw materials.
xxi
While we have not experienced any significant disruptions to our operations due to the shortage in the
supply of raw materials, deterioration in quality due to natural causes or other factors, the absence of an
assured supply of raw materials or protection against an increase in the price of the raw materials may
adversely affect our business and results of operations. Any increase in the prices of our raw materials may
have an adverse effect on our business, financial condition and results of operations, particularly if we are
unable to proportionately increase the sale price of our products and pass the increased cost on to our
customers. For instance, even though the prices of our yarn rise due to an increase in cotton prices we
cannot increase the prices of our fabrics in the same manner or if there is a decrease in fabric prices between
the time that we purchase raw materials and the time that our products are sold, then our margins for our
fabric business will be reduced.
9. Lack of long term firm supply contracts with our customers may adversely affect our business and results
of operations. If our customers do not continue to purchase products from us, or if we are unable to sell
our products at competitive prices, our business and results of operations may be adversely affected.
We generally do not enter into long-term supply contracts with our customers. While we believe this is
beneficial to our business, on one hand, as we retain the ability to take advantage of fluctuating demand and
price our products, on the other hand, this also leads to volatility in our revenues. In addition, while certain
of our customers make regular purchases from us, there can be no assurance that they will continue to do so
in the future. If our customers do not continue to purchase products from us, or if we are unable to sell our
products at competitive prices, our business, financial condition and results of operations may be adversely
affected.
10. Our business is dependent on our manufacturing facilities, which is mostly concentrated at two
locations. The loss of or shutdown of operations at any of our manufacturing facilities may have a
material adverse effect on our business, financial condition and results of operations.
As of the date of this Letter of Offer, our manufacturing units in India include units located in Silvassa
(Union Territory of Dadra & Nagar Haveli), Vapi, Valsad (Gujarat), Bhiwandi (Maharashtra), Daman and
Navi Mumbai (Maharashtra). In addition, we have a weaving and administration facility at Horice and a
processing facility at Cerny Dul in the Czech Republic. These units are equipped with modern technology.
We also intend to further expand the capacities of our spinning, knitting and polyester manufacturing units
in Silvassa by Fiscal 2013. Our manufacturing facilities at Silvassa and Vapi are integral to our
manufacturing process and comprise facilities for spinning, weaving, knitting, made-ups, garments,
polyester capacities, hemming, embroidery, terry towels and processing. Our business is therefore
significantly dependent on our units at Silvassa and Vapi and, therefore, the general economic condition
and activity in Silvassa and Vapi, and the local government policies and applicable laws relating to the
manufacturing, spinning and weaving of textiles and fabrics. Further, the concentration of our operations in
these regions increases our exposure to risks which may arise on account of natural calamities or other
adverse developments related to competition, as well as economic, demographic and other changes in these
areas, which may adversely affect our business prospects, financial conditions and results of operations.
Our manufacturing facilities are subject to operating risks, such as the breakdown or failure of equipment,
inadequate performance leading to unexpectedly low levels of output or efficiency, obsolete technology and
machinery, industrial accidents and the need to comply with the directives of relevant government
authorities. Our results of operations are therefore dependent on the successful operation of our
manufacturing facilities.
There is no assurance that those of our manufacturing facilities unaffected by an interruption will have the
capacity to increase their output to manufacture products which compensate for the affected manufacturing
facilities, to the extent that all outstanding orders will be filled in a timely manner. In the event of prolonged
interruptions in the operations of our manufacturing facilities, we may have to purchase supplies and
products from third parties in order to meet our production requirements and client order bookings, which
xxii
could affect our profitability and also result in loss of customers. Although we take precautions to minimize
the risk of any significant operational issues at our facilities, our business, financial condition and results of
operations may be adversely affected on the occurrence of any of the factors mentioned above.
11. We rely significantly on exports of our products to the United States and Europe, collectively being 14.85%
as a percentage of our Company‟s total sales on a standalone basis for the half year ended September
2012 and any adverse change in the demand in these countries will have a negative impact on our
business.
We rely significantly on the export of our products such as home textiles to the United States and Europe.
The total export sales to the United States and Europe were 14.85%, 18.08% and 19.19% as a percentage of
our Company‟s total sales on a standalone basis for the half year ended September 2012, Fiscal 2012 and
Fiscal 2011 respectively. Accordingly, we are particularly prone to any fluctuations in the demand of textile
products manufactured by us in the United States and Europe. The textiles market in the United States and
Europe may be affected by a number of factors outside our control, including local and economic
conditions, changes in demand and supply for products we develop, or comparable to those that we develop,
and changes in government regulations. Any adverse change in the demand for our products in these
countries may have a negative impact on our business, financial condition and results of operations.
12. The business of our Company is working capital intensive. Any increase in our Company‟s working
capital cycle could result in insufficient cash flows, thereby affecting our ability to meet required
payments on our debt and capital requirements, as a result of which, there may be an adverse effect on
our results of operations and future expansion prospects.
Our Company is vertically integrated both in its cotton and polyester business, as a result, we require
substantial amounts of working capital for our business operations vis-à-vis a non-integrated player. Also,
given the nature of our business, our Company supplies products to a majority of its customers within
defined credit periods, which could in turn affect our working capital requirements. We require significant
capital to expand, maintain and operate our manufacturing facilities. Our net working capital, on a
standalone basis, was ` 6,844.61 crore as on September 30, 2012, ` 6,036.96 crore as on March 31, 2012
and ` 3,565.35 crore as on March 31, 2011.
Please find below the details on the net working capital:
Particulars
Half year ended
September 2012 Fiscal 2012 Fiscal 2011
Holding
level (in
days of
sales)
Amount (` in
crore)
Holding
level (in
days of
sales)
Amount (` in
crore)
Holding
level (in
days of
sales)
Amount (` in
crore)
Historical1 Limited
Review Historical1 Audited Historical
1 Audited
CURRENT ASSETS
Inventory 108 3,448.47 139 3,379.91 114 2,002.62 which includes
- Raw Material 14 442.01 18 435.09 34 587.63 - Stock In Progress
Alok International (Middle East) FZE 0.52 (0.38)* –
^
Grabal Alok (UK) Limited** (100.09) (151.76)* –
Grabal Alok International Limited**
(8.74) (13.78) –
Alok H&A Limited (18.44) (26.37)* (1.49)
*
# Incorporated on December 28, 2011 ^ Incorporated on August 1, 2011 * Unaudited figures ** Subsidiaries of our Company with effect from April 1, 2011, pursuant to the merger with Grabal Alok Impex Limited @ Subsidiaries struck off in terms of the Companies Act and therefore stand dissolved post March 31, 2012
## Wound up in FY 2012
### Wound up in the half year ended September 2012
^^ Indicates negligible loss / negligible profit
In the event that our Subsidiaries incur losses or continue to incur losses, our consolidated results of
operations and financial condition will continue to be adversely affected.
14. We compete with other low cost producing countries to sell our products in highly competitive markets
and have limited ability to influence prices in these markets for our products.
We export our products to highly competitive markets, particularly in the United States and Europe. As a
result, to remain competitive, we must continuously strive to reduce our costs of production, transportation
and distribution and improve our operating efficiencies. If we fail to do so, other producers in low cost
manufacturing countries may be able to sell their products at lower prices, which would have an adverse
effect on our market share and results of operations.
We face competition from leading textile manufacturers in India and internationally. In particular, we also
face increasing competition from manufacturers from low cost manufacturing countries such as China,
Pakistan, Indonesia and Bangladesh. Some of our competitors may have a lower cost of production and
therefore, their products may be more price competitive both in international and domestic markets. Certain
competitors may be larger than us, may have significantly greater financial resources, may benefit from
greater economies of scale and operating efficiencies, may benefit from government subsidies, and/or may
also have a broader product range less affected by cyclical downturns. There can be no assurance that we
can continue to effectively compete with such producers in the future, and failure to compete effectively
may have an adverse effect on our business, financial condition and results of operations. Our inability to
attract new customers could have a material adverse effect on our results of operations. In the event that we
are unable to manage our costs efficiently or reduce our operating expenses, our profit margin and results of
operations may be adversely affected.
15. We have experienced negative operating cash flows for half year ended September 2012 and Fiscal 2012
and negative investing cash flows for half year ended September 2012, Fiscal 2012, 2011 and 2010, on a
xxv
standalone basis. Such negative cash flows as well as any negative cash flow that may arise in the future
would adversely affect our results of operations and financial condition.
We have, in the last few years, significantly increased our apparel fabrics and polyester business. Our most
significant capacity expansion plans were completed in the last few years and our current expansion plans
are primarily focused on expanding capacities for operations in our cotton yarn division and some
expansion in the knitting operations and polyester business, which we expect will get commissioned by
Fiscal 2013. Furthermore, we supply our products to a majority of our customers within defined credit
periods. As a result, we have to maintain significant inventory levels for a period of at least three to four
months to ensure continuous manufacturing operations. Our inventory holding days have increased from
114 days in Fiscal Year 2011 to 139 days in Fiscal 2012. This increase in Fiscal 2012, primarily, has
resulted in negative operating cash flows for the Fiscal 2012. The increase in receivables/ advances has
resulted in negative operating cash flows for the half year ended September 2012.
Being an integrated textile player, we require significant capital to expand, maintain and operate our
manufacturing facilities and deploy a substantial portion of our accruals towards such working capital. A
substantial portion of our cash flows has been utilised towards such working capital and capital
expenditures, particularly for our expansion projects. As a result, there has been no free investing cash flow
generation over the last three Fiscal Years and half year ended September 2012.
The table below sets forth our cash flows on a consolidated basis for the periods indicated:
Particulars
For the half year
ended September
30, 2012
(` in crore)
For the year ended March 31,
2012
(` in crore)
2011
(` in crore)
2010
(` in crore)
Net cash (used) in / generated from
operating activities
721.87 (450.46) 896.34 326.72
Net cash (used) in / generated from
investing activities
(711.48) (1,439.16) (2,672.87) (2865.02)
Net cash (used) in / generated from
financing activities
(390.88) 2160.47 1248.73 2,906.13
The table below sets forth our cash flows on a standalone basis for the periods indicated:
Particulars
For the half year
ended September
30, 2012
(` in crore)
For the year ended March 31,
2012
(` in crore)
2011
(` in crore)
2010
(` in crore)
Net cash (used) in / generated from
operating activities
(873.13) (115.39) 1126.08 184.56
Net cash (used) in / generated from
investing activities
130.90 (1113.05) (2045.15) (1906.48)
Net cash generated from financing
activities
398.85 1515.91 353.96 2117.75
If we continue to experience such negative cash flows, our results of operations and financial condition may
be adversely affected.
16. Our Company has entered into, and expects to continue to enter into, related party transactions relating
to operating transactions viz sales, purchases, expenses, income, dividend relating to financial
transactions viz, loans and advances, non- current investments, guarantee aggregating as per the nature
of transaction (as per the below summary table*). There can be no assurance that we could not have
achieved more favorable terms had such transactions been entered into with un-related parties.
xxvi
*Summary table relating to aggregate amount pertaining to significant related party transactions on a
standalone basis: (` in crore)
Nature of Transaction September 30,
2012
March 31, 2012 March 31, 2011
Unsecured Short Term Borrowing
accepted during the year
- 11.75 -
Long Term Loans And Advances
Loans Given during the period/year 2,248.82 - -
Repaid during the period/year 789.78 - -
Short Term Loans and Advances
Given during the period/year 357.88 4,008.19 1,735.08
Repaid/Adjusted during the period/year 237.20 3,957.33 1,698.06
Non-Current Investments
Invested during the year - 27.54 1.75
Redeemed/Transferred /Provided during
the period/ year
0.04 22.82 79.15
Sale of Goods (including job work
charges)
311.94 243.66 139.35
Expenditure / Purchase of Fixed Assets 217.05 308.58 364.08
Dividend Paid 1.88 1.54 1.54
Income
Dividend 1.93 2.00 2.21
Rent 0.28 0.75 0.71
Guarantee Given 1,002.30 763.19 235.13
The details of significant related part transactions include sales of its products through its international
subsidiaries viz. Alok International Inc. and Alok Singapore Pte Limited amounting to. ` 296.24 Crore for
the half year ended September 30, 2012, guarantees given amounting to ` 987.91 Crore as of September 30,
2012 for loans taken by its subsidiaries viz. Alok Infrastructure Limited, Grabal Alok (U.K) Limited and
Alok Industries International Limited and advance extended to its subsidiary, Alok Infrastructure Limited
for which the outstanding balance as of September 30, 2012 is ` 1,459.04 crore.
While we believe that all such transactions have been conducted on an arm‟s length basis, there can be no
assurance that we could not have achieved more favourable terms had such transactions been entered into
with un-related parties. Furthermore, it is likely that we may enter into related party transactions in the
future. There can be no assurance that such transactions, individually or in the aggregate, will not have an
adverse effect on our financial condition and results of operations.
Our Company has, on a standalone basis, entered into the following transactions as at and for the half year
ended September 30, 2012, with related parties that include our Promoters and Promoter Group and entities
affiliated with our Promoters and Promoter Group:
(` in crore)
Transaction Associ
ate
Comp
anies
Entities
under
common
control
Subsidi
aries
Joint
Venture
Compa
nies
KMP Relatives
of KMP Firms in
which
Relatives of
KMP are
interested
Total
a) Unsecured Short Term
Borrowing
Balance as at 1 April - - - 11.75 - - - 11.75
xxvii
Transaction Associ
ate
Comp
anies
Entities
under
common
control
Subsidi
aries
Joint
Venture
Compa
nies
KMP Relatives
of KMP Firms in
which
Relatives of
KMP are
interested
Total
Balance as at 30 Sept - - - 11.75 - - - 11.75
b) Long Term Loans and
Advances
Balance as at 1 April - - - - - - - -
Given during the period/
year
- - 2,248.82 - - - - 2,248.82
Repaid during the
period /year
- - 789.78 - - - - 789.78
Balance as at 30 Sept - - 1,459.04 - - - - 1,459.04
c) Short Term Loans and
Advances
Balance as at 1 April - 0.01 120.49 - - - - 120.50
Given during the period/
year
- - 357.88 - - - - 357.88
Repaid/Adjusted during
the period/year
- - 237.20 - - - - 237.20
Provision made during
the period/year
- - 54.59 - - - - 54.59
Balance as at 30 Sept - 0.01 186.58 - - - - 186.59
d) Non-Current
Investments
Balance as at 1 April - - 39.00 92.38 - - - 131.38
Invested during the
period/ year
- - - - - - - -
Redeemed /
Transferred/Provided
during the period/year
- - 0.04 - - - - 0.04
Provided during the
period/year
- - 37.10 - - - - 37.10
Balance as at 30 Sept - - 1.86 92.38 - - - 94.24
e) Trade Receivables
Balance as at 30 Sept - - 151.50 0.09 - - - 151.59
f) Trade payables
Balance as at 30 Sept - - 2.99 20.11 - - 0.07 23.17
g) Other Current
Liabilities
Balance as at 30 Sept - - 310.40 - - - - 310.40
h) Sale of product
Sales of Goods
(Including job work
- - 311.64 0.30 - - - 311.94
xxviii
Transaction Associ
ate
Comp
anies
Entities
under
common
control
Subsidi
aries
Joint
Venture
Compa
nies
KMP Relatives
of KMP Firms in
which
Relatives of
KMP are
interested
Total
charges)
i) Expenditure
Purchase of goods / Job
Charges
- - 1.88 24.08 - - - 25.96
Purchase of Fixed
Assets
- - 146.82 - - - - 146.82
Rent - - 1.74 - - - 1.74
Repairs & Maintenance - - 0.55 - - - - 0.55
Consultancy Charges - - - - - - 1.03 1.03
Marketing Service
Charges
- - 34.75 - - - - 34.75
Remuneration - - - - 6.10 0.10 - 6.20
j) Dividend Paid - - - - 1.88 - - 1.88
k) Income
Dividend - - - 1.93 - - - 1.93
Rent - 0.11 0.17 - - - - 0.28
l) Guarantee given - - 1,002.30 - - - - 1,002.30
Our Company has, on a consolidated basis, entered into the following transactions as at and for the half year
ended September 30, 2012, with related parties that include our Promoters and Promoter Group and entities
affiliated with our Promoters and Promoter Group:
(` in crore)
Transaction
Associates Entities
under
common
control
Joint
Venture
Compani
es
KMP Relat
ives
of
KMP
Firms in
which
relatives of
KMP are
interested
Total
a) Advance Share Application Money
Balance as at 1st April - 350.00 - - - - 350.00
Balance as at 30th September - 350.00 - - - - 350.00
(b) Long term borrowings
Balance as at 1st April - 613.88 - - - - 613.88
Reclassified to short term borrowings - 358.10 - - - - 358.10
Translation difference during the period - 7.71 - - - - 7.71
Balance as at 30th September - 263.49 - - - - 263.49
(c) Short term borrowings
Balance as at 1st April - 196.95 5.99 - - - 202.94
xxix
Received during the period/ reclassified
from long term borrowings
- 358.10 - - - - 358.10
Translation difference during the period - 16.71 - - - - 16.71
Balance as at 30th September - 571.76 5.99 - - - 577.75
(d) Short term loans and Advances
Balance as at 1st April 0.63 8.59 - - - - 9.22
Granted during period - 7.99 - - - - 7.99
Converted / Repaid during the period 0.41 7.67 - - - - 8.08
Translation difference during the period - 0.27 - - - - 0.27
Balance as at 30th September 0.22 9.18 - - - - 9.40
(e) Investments
Balance as at 1st April 88.78 3.84 - - - - 92.62
Translation difference during the period - 0.10 - - - - 0.10
Balance as at 30th September 88.78 3.94 - - - - 92.72
(f) Long Term Loans & Advances
Balance as at 1st April - - - - - - -
Given/ (Received) during the period
(net)
0.02 0.02 0.04
Balance as at 30th September 0.02 - - - - 0.02 0.04
(g) Trade Receivables
Balance as at 30th September 21.47 - 0.04 - - - 21.51
(h) Trade Payables
Balance as at 30th September 1.31 - 10.26 - - 0.07 11.64
(i) Other current liabilities
Balance as at 30th September - 90.71 - - - - 90.71
Occupation: Retired – currently on Expert Panel of
the Technical Development Board of Government of
India as Finance Expert.
Term: As decided by IFCI Limited
Nationality: Indian
66 Indian Companies
1. IFCI Financial Services Limited
2. Parijatha Business Solution Private Limited
Ms. Maya Chakravorty
(D/o Mr. Nripendra Kumar Chakravorty)
A/32, Twin Towers,
V.S. Marg, Prabhadevi,
Mumbai – 400 025,
Maharashtra, India
Designation: Independent Director (Nominee
Director of IDBI Bank Limited)
DIN: 03577159
Occupation: General Manager (Retail Banking –
Front Office) of IDBI Bank Limited
47 Nil
40
Particulars Age
(years)
Other directorships
Term: As decided by IDBI Bank Limited
Nationality: Indian
*Appointed as additional director till ratification at the next AGM.
Further, none of our Directors were directors on the board of listed companies that have been delisted from the Stock
Exchanges.
None of our Directors hold any current and past directorship(s) during the preceeding five years in listed companies whose
shares have been or were suspended from being traded on BSE or NSE.
Relationship between Directors
None of the Directors are related to each other, except Mr. Ashok Jiwrajka, Mr. Dilip Jiwrajka and Mr. Surendra Jiwrajka,
who are brothers.
Profile of Directors
Mr. Ashok Jiwrajka is the Executive Chairman of the Company. He completed his schooling and college from Mumbai.
Immediately after his graduation, in commerce from Mumbai University, he joined the family partnership firm and
subsequently incorporated our Company in 1986. Mr. Jiwrajka has been a Director on the Board of our Company since its
incorporation and has over three decades of experience in the textiles industry. His functions as the Executive Chairman
include envisioning our Company's strategic initiatives and overseeing the home textiles business.
Mr. Dilip Jiwrajka is the Managing Director of our Company. He completed his schooling and college from Mumbai.
Subsequently, he completed his post-graduation in Business Entrepreneurship and Management. He began his career as a
management trainee and thereafter he started the business of trading in textiles as sole selling agent for Bombay Dyeing for
the Readymade Garment Sector. Starting with a partnership firm, he incorporated our Company in 1986 and has been a
Director on the Board of our Company since its incorporation. His functions as the Managing Director include envisioning
our Company's growth strategy, responsibility for the apparel fabric and garment divisions and overseeing the finance,
administration and overall working of our Company and its group companies.
Mr. Surendra Jiwrajka is the Joint Managing Director of our Company. He completed his schooling and college from
Mumbai. Immediately after his graduation, he joined the family partnership firm and subsequently incorporated Alok
Industries Limited in 1986. Mr. Jiwrajka has been a Director on the Board of our Company since its incorporation and has
over two decades of experience in the Textile Industry. His functions as the joint managing director include envisioning
our Company‟s growth strategy, overseeing the manufacturing, marketing functions of the polyester and spinning
businesses and project implementation of our Company.
Mr. Chandrakumar Bubna is the Executive Director of our Company. He is a commerce graduate and has been
associated with the textile industry in the field of marketing for more than two decades. He has been a Director on the
Board of our Company since 1993 and manages our Company‟s marketing operations for the northern region and is also
actively involved in planning and executing our Company's marketing strategies.
Mr. Sunil O. Khandelwal has been appointed as an Additional Director designated as the Executive Director and Chief
Financial Officer of our Company. He is a qualified a bachelor of commerce in 1984 from the University of Bombay and is
also a qualified Chartered Accountant. He has been associated with the Company from 23 years and is currently also
working as the Chief Finance Officer. He is responsible for overall Corporate Finance, Operations, Accounts &Tax,
Internal Controls, Investments, Risk Management and Strategic Planning. He has wide experience in raising funds for
41
project financing, working capital, acquisition funding from international and national lenders, equity raising in domestic
and international markets, private equity, financial planning and budgeting, treasury, corporate accounts and taxation.
Mr. K. H. Gopal has been appointed as an Additional Director designated as an Executive Director. He has obtained his
associate membership with the Institute of Company Secretaries of India in the year 1994 and has passed Second LL.B.
Examination from the Mumbai University in the year 1994. He also holds a Diploma in Music (Percussion) from the Fine
Arts Society, Chembur, Mumbai. He is also currently the Secretary of the Company. He started his career with Rohit Pulp
& Paper Mills Limited in 1987. Thereafter, he moved on to the Hinditron Group in 1992 before joining the Company in
mid-1994. His responsibilities at Alok include overseeing the legal & secretarial, forex management, information
technology, human resource and administration functions. He is a part of the core management team for envisioning the
Group‟s strategy and growth plans. His forte is a strong legal background with a penchant for human resource
management.
Mr. Ashok Rajani is a B.Com Graduate. He is the Founder Chairman of the M/s Midas Touch Group and Midas Touch
Apparel Private Limited, an Indian garment exporting company. He is experienced in the field of garment manufacturing
and exports and is associated with various garment and textile organizations. He was the Chairman of the Export
Promotion Committee of the Apparel Export Promotion Council and is a member on its executive committee. He was the
President of The Clothing Manufacturers Association of India and has also been on the Board of Governors of the National
Institute of Fashion Technology.
Mr. Kandarp Modi is an Advocate and Solicitor by profession with over 40 years experience. His academic qualifications
include a Bachelor Degree in Arts and Law from Mumbai University. He was enrolled as a attorney with the High Court of
Bombay and was a Senior Partner with M/s. Kanga & Company, a firm of Advocates & Solicitors in Mumbai and is an
independent director on our Board.
Mr. Timothy Ingram is the Chief Executive of Collins Stewart Hawkpoint Plc. He completed his Masters in Arts in
Economics from Cambridge University, an MBA from INSEAD Business School and is a Fellow of the Chartered Institute
of Bankers. He was appointed as Chief Executive of Caledonia Investments plc in June 2002. Caledonia Investments is a
FTSE-250 investment company taking large stakes in other businesses, both in the UK and internationally. He began his
career in banking with Grindlays Bank (now part of ANZ Bank and Standard Chartered Bank subsequently) in 1969 and
had his first CEO experience running a bank in the Congo (then called Zaire) in the mid 1970s. He was then put in charge
of a number of banks in various parts of the world and in 1989 took charge of ANZ‟s corporate bank in Australia. He
returned to the UK in 1991 to run First National Finance Corporation which was taken over by Abbey National in 1995. He
joined the Abbey National Board in 1996 and left Abbey National in 2002, and become the CEO of Caledonia Investments
and retired in 2010.
Mr. Samuel Joseph Jebaraj has been nominated as an Independent Director by Export- Import Bank of India. He has
completed his BE (Hons) and MBA. He has about 20 years of experience in Project and Trade Finance. He is a regular
speaker on Banking, Trade Finance, Project Finance, SME Banking etc. He is also a member of FICCI‟s sectoral
committees on Pharmaceuticals and Defence as well as of Task Force on “Financial solutions for R&D in pharmaceutical
sector” set up by the Ministry of Commerce and Industry, Government of India. He is presently Chief General Manager
and in charge of Corporate Banking including SME and Agri Financing in head office at Mumbai.
Mrs. Thankom Mathew has been nominated as an Independent Director by Life Insurance Corporation of India. She has
completed her M.SC. She is working in LIC as an Executive Director (New Projects) / CPIO.
Mr. M. V. Muthu has been nominated as an Independent Director by IFCI Limited. He has completed his BSc, ANSI –
Sugar Technology, Programme in Investment Appraisal and Management from Harvard. He joined IFCI Limited as
Assistant Technical Officer and served in various capacities. He retired as CEO from IFCI Limited. He was Chairman of
IFCI Venture Capital. He has also served on boards of ITC Limited and Andhra Pradesh Paper Mills Limited. He is also on
the Expert Panel of the Technical Development Board of the Government of India as a Finance Expert.
42
Ms. Maya Chakravorty has been nominated as an Independent Director by IDBI Bank Limited. She has completed her
B.E. (Chemical), MBA and CFA. She joined SAIL as a Management Trainee and worked with ONGC as Assistant
Executive Engineer (Production) for 3 years. She joined IDBI Bank Limited as Manager and is presently the General
Manager (Retail Banking), where she is in charge of liquidity/fund management, resource mobilisation, statutory
compliances like CRR / SLR, and PD operation.
Borrowing Powers of our Board of Directors
Pursuant to a resolution dated September 29, 2011, passed by the shareholders of our Company the Annual General
Meeting of the Company our Board has been authorised to borrow sums of money for and on behalf of our Company,
provided that the money so borrowed (apart from temporary loans obtained from time to time by our Company in the
ordinary course of business) shall not exceed `150,000,000,000.
Pursuant to various financing arrangements entered into by our Company, the following persons have been
nominated as directors on our Board:
Sr. No. Name of Director Nominating Entity
1. Mrs. Thankom Mathew Life Insurance Corporation of India
2. Mr. M. V. Muthu IFCI Limited
3. Ms. Maya Chakravorty IDBI Bank Limited
4. Mr. Samuel Joseph Jebaraj EXIM Bank
Executive Chairman
The significant terms of Mr. Ashok Jiwrajka‟s employment as the Executive Chairman, as per the agreement with our
Company dated March 10, 2013, are as follows:
Tenure of
Appointment
5 years with effect from March 10, 2013
Annual
Remuneration:
` 1,80,00,000
Perquisites Would include:
i) accommodation or house rent allowance in lieu thereof; house maintenance allowance together with
reimbursement of expenses/or allowances for utilization of gas, electricity, water, furnishing and
repair, medical reimbursement; leave travel concession for self and his family including dependents;
ii) club fees, credit card payment, Life Insurance Premium, medical insurance and such other
perquisites and/ or
iii) other allowances, subject to overall ceiling of remuneration stipulated in Section 198 and 309 of
the Companies Act.
The said perquisites and allowances shall be evaluated, wherever applicable, as per the Income Tax
Act or any rules thereunder (including any statutory modification(s) or re-enactment thereof, for the
time being in force).
Commission Not more than 1% of the net profit, subject to the provisions of relevant sections of the Companies
Act.
Managing Director
The significant terms of Mr. Dilip Jiwrajka‟s employment as the Managing Director, as per the agreement with our
Company dated March 10, 2013, are as follows:
43
Tenure of
Appointment
5 years with effect from March 10, 2013
Annual
Remuneration:
` 1,80,00,000/-
Perquisites Would include:
i) accommodation (furnished or otherwise) or house rent allowance in lieu thereof; house maintenance
allowance together with reimbursement of expenses/or allowances for utilization of gas, electricity,
water, furnishing and repair, medical reimbursement; leave travel concession for self and his family
including dependents;
ii) club fees, credit card payment, Life Insurance Premium, medical insurance and such other
perquisites and/ or
iii) other allowances, subject to overall ceiling of remuneration stipulated in Section 198 and 309 of
the Companies Act.
The said perquisites and allowances shall be evaluated, wherever applicable, as per the Income Tax
Act, 1961 or any rules thereunder (including any statutory modification(s) or re-enactment thereof, for
the time being in force).
Commission Not more than 1% of the net profit, subject to the provisions of relevant sections of the Companies
Act.
Joint Managing Director
The significant terms of Mr. Surendra Jiwrajka‟s employment as the Joint Managing Director, as per the agreement with
our Company dated March 10, 2013, are as follows:
Tenure of
Appointment
5 years with effect from March 10, 2013
Annual
Remuneration:
` 1,80,00,000/-
Perquisites Would include:
i) accommodation (furnished or otherwise) or house rent allowance in lieu thereof; house maintenance
allowance together with reimbursement of expenses/or allowances for utilization of gas, electricity,
water, furnishing and repair, medical reimbursement; leave travel concession for self and his family
including dependents;
ii) club fees, credit card payment, Life Insurance Premium, medical insurance and such other
perquisites and/ or
iii) other allowances, subject to overall ceiling of remuneration stipulated in Section 198 and 309 of
the Companies Act.
The said perquisites and allowances shall be evaluated, wherever applicable, as per the Income Tax
Act, 1961 or any rules thereunder (including any statutory modification(s) or re-enactment thereof, for
the time being in force).
Commission Not more than 1% of the net profit, subject to the provisions of relevant sections of the Companies
Act.
Executive Director
The significant terms of Mr. Chandrakumar Bubna‟s employment as an Executive Director, as per the agreement with our
Company dated May 1, 2009, are as follows:
44
Tenure of
Appointment
5 years with effect from May 1, 2009
Annual
Remuneration:
` 1,80,00,000/-
Perquisites Would include:
i) accommodation (furnished or otherwise) or house rent allowance in lieu thereof; house maintenance
allowance together with reimbursement of expenses/or allowances for utilization of gas, electricity,
water, furnishing and repair, medical reimbursement; leave travel concession for self and his family
including dependents;
ii) club fees, credit card payment, Life Insurance Premium, medical insurance and such other perquisites
and/ or
iii) other allowances, subject to overall ceiling of remuneration stipulated in Sections 198 and 309 of the
Companies Act.
The said perquisites and allowances shall be evaluated, wherever applicable, as per the Income Tax Act,
1961 or any rules thereunder (including any statutory modification(s) or re-enactment thereof, for the
time being in force).
Commission Not more than 1% of the Net Profit, subject to the provisions of relevant sections of the Companies Act.
Executive Director
The significant terms of Mr. Sunil O. Khandelwal‟s employment as an Executive Director, as per the agreement with our
Company dated November 10, 2012, are as follows:
Tenure of
Appointment
5 years with effect from November 10, 2012
Annual
Remuneration:
Upto ` 92,10,384/- inclusive of all allowances with annual increments as may be decided by the Board
Perquisites Benefits and perquisites as may be determined/decided by the Board from time to time and as per the
policy of the Company from time to time.
Commission N.A
Executive Director
The significant terms of Mr. K.H.Gopal‟s employment as an Executive Director, as per the agreement with our Company
dated November 10, 2012, are as follows:
Tenure of
Appointment
5 years with effect from November 10, 2012
Annual
Remuneration:
Upto ` 89,07,384/- inclusive of all allowances with annual increments as may be decided by the Board
Perquisites Benefits and perquisites as may be determined/decided by the Board from time to time and as per the
policy of the Company from time to time.
Commission N.A
Compensation to Independent Directors
All the Independent Directors of our Company are paid sitting fees as per resolution dated July 31, 2007, to the extent of `
20,000 for every Board meeting attended by them. There are no sitting fees paid for attending any of the committee
meetings.
45
SECTION VI – FINANCIAL INFORMATION
Sr. No. Particulars Page Nos.
1 Limited Review Statements on standalone basis for the half year ended
September 30, 2012
F – 1
2 Limited Review Statements on consolidated basis for the half year ended
September 30, 2012
F – 22
3 Standalone audited financial statements as at and for the year ended FY 2012 F – 40
4 Consolidated audited financial statements as at and for the year ended FY 2012 F – 84
F - 1
Report on Review of Interim Financial Statements
To the Board of Directors of Alok Industries Limited
Introduction
We have reviewed the accompanying condensed interim balance sheet of Alok Industries Limited (“the Company”), as of September 30, 2012, the related statement of profit and loss and cash flow statement for the six months period then ended and explanatory notes (“Interim financial statements”). Management is responsible for the preparation and presentation of these interim financial statements in accordance with Accounting Standard 25 (Interim Financial Reporting), as notified by the Companies (Accounting Standards) Rules, 2006 (“AS 25”) and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on these interim financial statements based on our review.
Scope of Review
We conducted our review in accordance with Standard on Review Engagements (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India (ICAI). This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the interim financial statements are free of material misstatements. A review is limited primarily to inquiries of Company personnel and analytical procedures applied to financial data and thus provide less assurance than an audit. We have not performed an audit and, accordingly, we do not express an opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial statements are not prepared, in all material respects, in accordance with Accounting Standard 25 (Interim Financial Reporting), as notified by the Companies (Accounting Standards) Rules, 2006 (“AS 25”) and other accounting principles generally accepted in India.
Other Matter
We draw attention to note no 1 to the interim financial statements regarding non-presentation of comparative figures / information in respect of the comparable previous periods, as required in terms of AS 25 “Interim Financial reporting” for the reasons stated in the said note. Our conclusion is not qualified in respect of this matter.
For Deloitte Haskins & SellsChartered Accountants
(Firm Registration No. 117366W)
R. D. KamatPartner
MUMBAI, December 31, 2012 (Membership No. 36822)
F - 2
(Rs. Crore)AS AT
PARTICULARS NOTES 30-Sep-12
I EQUITY AND LIABILITIES
(1) Shareholders' FundsShare Capital 2 826.28 Reserves and Surplus 3 3,167.93
CONDENSED STATEMENT OF PROFIT AND LOSS FOR THE SIX MONTHS ENEDED 30 SEPTEMBER 2012
Changes in inventories of finished goods, work-in-progress and stock-in-trade
Profit before exceptional items and tax
(Includes MAT adjustment Rs. 66.27 crore)- Short provision for income tax in respect of earlier years
F - 4
(Rs. Crore) 1-Apr-12 to
PARTICULARS 30-Sep-12
A. Net cash used in operating activities (873.13)
B. Net cash generated from Investing Activities 130.90
C. Net cash generated from Financing Activities 398.85
Net Decrease in Cash and Cash equivalents (A+B+C) (343.38)
Cash and Cash equivalents at the beginning of the period 542.76
Cash and Cash equivalents at the end of the period 199.38
Net Increase in Cash and Cash equivalents (343.39)
NOTES TO CASH FLOW STATEMENT
1 Cash and Cash equivalents includes : 30-Sep-12(Rs. Crore)
Cash and Bank Balances 368.61 Less : Earmarked balances / deposits with bank* 145.66 Less : Deposit with maturity period of more than 3 months ** 23.57
Total Cash and Cash equivalents 199.38
In terms of our report attached For and on behalf of the Board
For Deloitte Haskins & Sells Ashok B. JiwrajkaChartered Accountants (Executive Chairman)
Dilip B. Jiwrajka(Managing Director)
R. D. Kamat Surendra B. JiwrajkaPartner (Joint Managing Director)
Sunil O. Khandelwal(Executive Director & Chief Financial Officer)K. H. Gopal(Executive Director & Secretary)
CONDENSED CASH FLOW STATEMENT FOR SIX MONTHS ENDED 30 SEPTEMBER 2012
* Earmarked balances / deposits with bank includes balances / deposits held as margin money orsecurity against borrowings, guarantees and other commitments, which being, restricted for its use,have been excluded from cash and cash equivalent and grouped under the investing activity.
** Fixed Deposits with maturity period of more than three months have been excluded from cashand cash equivalent and grouped under the investing activity.
F - 5
1. Background
(Rs. Crore)PARTICULARS AS AT
30-Sep-12-
2. SHARE CAPITAL
(a) Authorised Shares1,000,000,000 Equity shares of Rs.10/- each 1,000.00
1,000.00
(b) Issued and Subscribed and fully paid-up shares
826,269,357 Equity shares of Rs.10/- each fully paid up 826.27
(c) Forfeited Shares (Amount originally paid-up)0.01
TOTAL 826.28
PARTICULARS AS AT30-Sep-12
-
3. RESERVES AND SURPLUS
Capital ReserveBalance as per last Balance Sheet 11.72
Capital Redemption ReserveBalance as per last Balance Sheet 9.10
Securities Premium AccountBalance as per last Balance Sheet 993.65
Debenture Redemption ReserveBalance as per last Balance Sheet 168.48 Less: Transferred to Statement of Profit and Loss (102.47) 66.01
General ReserveBalance as per last Balance Sheet 280.62
Cash Flow Hedging ReserveBalance as per last Balance Sheet (16.78) Add : created during the period 17.86
1.08
Surplus in the Statement of Profit and LossBalance brought forward from previous year 1,380.16 Profit for the period 319.69 Less : Appropriations
Transferred from Debenture Redemption Reserve 102.47 Excess provision of dividend and tax thereon 0.05
1,802.37
TOTAL 3,167.93
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
These condensed interim financial statements are prepared for the use by the Board of Directors solely in connection with theproposed Rights issue of the Company and have been prepared using the same basis / accounting policies as those used for theaudited financial statements for the year ended 31 March 2012. The Management has prepared these financial statements inaccordance with the recognition and measurement principles as laid down in AS 25 on "Interim Financial reporting". Comparativefigures / information for the previous comparable periods i.e. period 1 April 2011 to 30 September 2011 in respect of statement ofProfit & Loss and Cash flow statement and as at 31 March 2012 in respect of Balance sheet, have not been presented as in theopinion of the Board of Directors, the same is not required for the purpose of the proposed rights issue.
Mark to Market loss on Derivative Contract 66.29Share issue expenses 2.80Employee benefit provision 7.77Provision for doubtful debts, advances and investment 60.37
137.23Deferred Tax Liability (Net) TOTAL 592.16
6. LONG-TERM PROVISIONS
Provision for employee benefits 16.70 Mark to Market provision on derivative instruments 188.59
TOTAL 205.29
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
ALOK INDUSTRIES LIMITED
F - 7
(Rs. Crore)PARTICULARS AS AT
30-Sep-12-
7. SHORT-TERM BORROWINGS
Working capital loans :Cash Credit accounts, working capital demand loan etc. (Secured)
3,964.63 144.75
Cash Credit accounts, working capital demand loan etc. (Unsecured)From Banks 100.00
Commercial Paper (Unsecured)From Banks 153.00 From Financial Institutions 225.00
378.00
Inter Corporate Deposit (Unsecured) 11.75
Deposits (Unsecured)Deposit from Public 1.35
Short term loan Secured
Rupee LoansFrom Banks 169.65 From Financial Institutions 85.00
254.65
TOTAL 4,855.13
8. TRADE PAYABLE
Total outstanding due to :- Micro, Small and Medium Enterprises* - - Others 1,278.45
1,278.45
TOTAL 1,278.45 * As per information available with the company
9. OTHER CURRENT LIABILITIES
Current maturities of long-term debt 2,061.54 Interest accrued but not due on borrowings 9.94 Unclaimed dividends 17.44 Other payables
Advance from customers 67.35 Creditors for Capital Goods 120.17 Towards statutory liabilities 8.16 Advance from Related parties (Refer note no 27) 310.40 Temporary overdrawn bank balance (see note below) 1.85
TOTAL 2,596.85
NOTE(i)
10. SHORT-TERM PROVISIONS
Provision for employee benefits 7.24 Mark to Market provision on derivative instruments 15.71 Provision for taxation (Net of Advance Tax) 103.34
TOTAL 126.29
From Financial Institutions (Includes Rs. 45.96 crore loan in foreign currency)
Temporary overdrawn bank balances are as per books consequent to issue of cheques at the period end, though the banks have positive balances as on that date.
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
From Banks (Includes Rs. 783.84 crore loan in foreign currency)
F - 8
11
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F - 9
(Rs. Crore)PARTICULARS AS AT
30-Sep-12-
12. NON CURRENT INVESTMENTS (Trade)
In Subsidiary Companies - UnquotedAlok International Inc. (Rs. 43,225/-) 0.00 [1,000 Equity Shares of USD 1/- each]Alok Apparel Private Limited 1.00 [10,00,000 Equity Shares of Rs.10/- each]Less : Provision for diminution in value of investment (Refer note no 33) (1.00) -
Alok Retail (India) Limited 0.05 [50,000 Equity Shares of Rs.10/- each]Less : Provision for diminution in value of investment (Refer note no 33) (0.05) -
Alok Land Holdings Private Limited 0.50 [5,00,000 Equity Shares of Rs.10/- each](1,50,000 shares pledged against finance availed by Alok Infrastructure Limited)Alok Infrastructure Limited 0.05 [50,000 Equity Shares of Rs.10/- each](Pledged against finance availed by Alok Realtors Private Limited)Alok H & A Limited 36.05 [3,60,50,000 Equity Shares of Rs.10/- each]Less : Provision for diminution in value of investment (Refer note no 33) (36.05) -
Alok Singapore Pte. Ltd. (Rs. 49/-) 0.00 [1 Equity share of USD 1 each](Pledged against finance availed by Alok Singapore Pte. Ltd.)Alok International (Middle East) FZE 1.31 (1 Equity share of UAE Dirhams One Million)
1.86 In Joint Venture - Unquoted
Aurangabad Textiles & Apparel Parks Limited 17.25 [10,19,200 Equity Shares of Rs.10/- each]New City Of Bombay Mfg. Mills Limited 75.13 [44,93,300 Equity Shares of Rs.10/- each]
92.38
Others - UnquotedTriumphant Victory Holdings Limited (Rs. 90.14/-) 0.00 [2 Equity share of USD 1 each]Dombivali Nagri Sahakari Bank Limited 0.05 [10,000 Equity Shares of Rs. 50/- each]Kalyan Janata Sahakari Bank Limited 0.03 [10,000 Equity Shares of Rs. 25/- each]Saraswat Bank Limited (Rs. 25,000/-) 0.00 [2,500 Equity Shares of Rs. 10/- each](Pledged against finance availed by company)Interest in Alok Benefit Trust 35.33 [1,94,59,382 Equity Shares of Rs.10/- each ]Wel-Treat Environ Management Organisation (Rs. 36,500/-) 0.01 [3,650 Equity Shares of 10 each]
35.42
TOTAL 129.66
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
F - 10
(Rs. Crore)PARTICULARS AS AT
30-Sep-12-
13. LONG TERM LOANS & ADVANCES (Unsecured)
Considered goodCapital advances 85.59 Lease & Security deposits 9.10 Loan to Alok Infrastructure Limited, a subsidiary company 1,459.04 Foreign Currency Monetary Item Translation Difference Account 1.26 Other Loans & advances
Prepaid Expenses 38.16 Advance Tax (Net of provision for tax) 2.01
1,595.16
Considered DoubtfulCapital advances 11.46 Less : Provision 11.46
-
TOTAL 1,595.16
14. CURRENT INVESTMENTS (at cost)
Investments in debentures or bondsBonds
Laxmi Vilas Bank Tier II Bonds 2.00 [20 Bonds of Rs. 10,00,000 each]
2.00 Investments in Mutual funds - Unquoted
Axis Infrastructure Fund 1 0.65 [6,464 units of Rs. 1000/- each]
0.65
TOTAL 2.65
15. INVENTORIES
Raw Materials 442.01 (includes material in transit Rs. 28.29 crore)Work-in-progress 2,452.97 Finished Goods 486.05
3,381.03
Stores & Spares 54.99 Packing Material 12.45
TOTAL 3,448.47
16. TRADE RECEIVABLES (Unsecured)
Debts Outstanding for a period exceeding six months from due date 11.30 Less : Provision 6.54
4.76
Other Debts 2,764.51 Less : Provision 50.35
2,714.16
TOTAL 2,718.92
UnsecuredConsidered Good 2,718.92 Considered Doubtful 56.89
TOTAL 2,775.81
NOTE :(i)(ii) Refer note no 27 for related party balances.
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
Sundry Debtors includes Rs. 60.11 crore towards contractual obligations on account of Export Incentives Receivables.
F - 11
(Rs. Crore)PARTICULARS AS AT
30-Sep-12-
17. CASH AND BANK BALANCES
Cash on hand 0.45
Balance with BankIn current accounts 186.03 In deposit accounts 36.47 In earmarked accounts
- Unclaimed dividend accounts 17.45 - Balances / Deposits held as margin money or security against borrowings, guarantees and other commitments
128.21
TOTAL 368.61
18. SHORT-TERM LOANS AND ADVANCES (Unsecured)
Considered GoodLoans & advances to related parties (Refer note no 27) 186.58 Others
Loans to vendors 1,919.33 Advance to Vendors 110.85 Advance to Staff 7.55 Balance with Central Excise, Customs and Sales Tax authorities 280.08 Prepaid Expenses 39.45 Inter Corporate Deposits 3.34
2,547.18
Considered DoubtfulLoans & advances to subsidiary companies 54.59 Less : Provision (Refer note no 33) 54.59
-
TOTAL 2,547.18
19. OTHER CURRENT ASSETS (Unsecured)
Considered GoodInterest Subsidy Receivable 64.26 Unutilised DEPB Licence 1.16 Insurance Claim Receivable 1.11 Balance with Central Excise Authorities 0.05 Foreign Currency Monetary Item Translation Difference Account 0.86
67.44
Considered DoubtfulInterest Subsidy Receivable 26.06 Less : Provision 26.06
-
TOTAL 67.44
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
F - 12
(Rs. Crore)PARTICULARS 1-Apr-12 to
30-Sep-12-
20. REVENUE FROM OPERATIONS
a) Sale of productSales - Local 4,223.66 Sales - Export 1,669.61
5,893.27 b) Sale of services
Job work charges collected 12.08
c) Sale of Scrap 4.22
TOTAL 5,909.56
21. OTHER INCOME
Interest IncomeOn Current Investments 11.26
11.26 Dividend Income :
On Non Current Investments 1.94 1.94
Gain from sale of fixed Assets (Net) 0.84 Rent Received 0.38Other non operating income 0.05
TOTAL 14.47
22. CHANGE IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
F - 13
(Rs. Crore)PARTICULARS 1-Apr-12 to
30-Sep-12-
23. EMPLOYEE BENEFIT EXPENSES
Salaries, Wages and Bonus 135.27 Contribution to Provident Fund and Other Funds 6.40 Employee Stock Option Compensation Expenses 1.11 Employees Welfare Expenses 3.27
146.05
24. FINANCE COSTS
Interest expense 591.31 (Net of interest subsidy Rs. 64.60 crore and recovery of Rs. 134.75 crore)Interest on late payment of taxes 0.53 Other borrowing costs 59.52
TOTAL 651.36
25. OTHER EXPENSES
Stores and Spares Consumed 41.39 Packing Materials Consumed 75.33 Power and Fuel 375.64 Processing Charges 35.94 Labour Charges 35.56 Excise Duty 6.38 Donation 0.91 Marketing Service Charges 34.75 Freight, Coolie and Cartage 69.06 Legal and Professional Fees 16.49 Rent 7.00 Rates and Taxes 3.68 Repairs and Maintenance 11.50 Commission on Sales 21.15 Loss on exchange rate difference / derivative (net) 150.01 Provision for Doubtful Debts 35.75 Provision for Doubtful Advances 24.45 Directors Remuneration 3.42 Directors Fees and Commission 2.52 Auditors Remuneration 0.65 Insurance 8.96 Miscellaneous Expenses 62.86 (Miscellaneous Expenses includes Bank Charges, Agency and clearing charges, security expenses etc.)
TOTAL 1,023.40
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
ALOK INDUSTRIES LIMITED
F - 14
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
26 Contingent Liabilities in respect of :
(Rs. Crore) Sr. No. Particulars Current Period
A Customs duty on shortfall in export obligation in accordance with EXIM Policy (The company is hopeful of meeting the export obligation within the stipulated period)
Amount Unascertained
B Pending Litigation 0.05 C Guarantees given by banks on behalf of the Company 55.97 D Corporate Guarantees given to bank for loans taken by
Subsidiary Companies 1002.30
E Bills discounted 268.24 F Taxation Matters : a) Demand on account of alleged short deduction of taxes. The
Company has filed appeal with higher authorities and is hopeful of favourable order.
0.23
b) Demands of Works Contract Tax contested not acknowledged as debts as the company is hopeful of favourable decision.
0.59
c) Income tax amounting to Rs 11.29 crore, mainly on account of disallowance of interest and expenditure incurred towards exempt income.
-
27 Related Party Disclosure
A)
Name and Transaction / balances with related parties
I. Name of related parties and nature of relationship
As per Accounting Standard 18 (AS-18) “Related Party Disclosures”, Company's related parties disclosed as below:
(i) Associate companies Alspun Infrastructure Limited Next Creation Holdings LLC Ashford Infotech Private Limited Nirvan Builders Private Limited* (ii) Entities under common control Alok Denims (India) Private Limited Green Park Enterprises Alok Finance Private Limited Jiwrajka Associates Private Limited Alok Knit Exports Limited Jiwrajka Investment Private Limited Alok Textile Traders Niraj Realtors & Shares Private Limited Ashok Realtors Private Limited Nirvan Exports Buds Clothing Co. Nirvan Holdings Private Limited D. Surendra& Co. Pramatex Enterprises Gogri Properties Private Limited Pramita Creation Private Limited GrabalAlokImpex Limited Triumphant Victory Holdings Limited. (iii) Subsidiaries Alok Inc. # Alok Apparels Private Limited Alok Industries International Ltd. Alok New City Infratex Private Limited* Alok Infrastructure Limited Alok Realtors Private Limited Alok Retail (India) Limited Alok HB Hotels Private Limited* Alok Land Holdings Private Limited Alok HB Properties Private Limited* Alok Aurangabad Infratex Private Limited* Springdale Information and Technologies Private Limited Alok H&A Limited Kesham Developers &Infotech Private Limited Alok International, Inc. Alok Singapore Pte Ltd. Alok European Retail, s.r.o.# (Incorporated on 28 December 2011) Alok International (Middle East) FZE GrabalAlok (UK) Limited (incorporated on 01 August 2011) GrabalAlok International Limited Mileta, a.s.
* All these are liquidated during FY 2011-12 # liquidated during the current period
F - 15
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(iv) Joint Venture Aurangabad Textiles & Apparel Parks Limited New City Of Bombay Mfg. Mills Limited (v) Key Management Personnel Ashok B. Jiwrajka Chandrakumar Bubna Directors Dilip B. Jiwrajka Surendra B. Jiwrajka
(vi) Relatives of Key Management Alok A. Jiwrajka Personnel Suryaprakash Bubna (vii) Firms in which relatives of Key
Management Personnel are interested AVAN Packaging and Boards
II. Transactions with related parties. (Rs. Crore)
Transaction Associate Companies
Entities under
common control
Subsidiaries Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Firms in which
Relatives of Key
Management Personnel
are interested
Total
a) Unsecured Short Term Borrowing
Balance as at 1 April - - - 11.75 - - - 11.75
Balance as at 30 Sept - - - 11.75 - - - 11.75
b) Long Term Loans and
Advances
Balance as at 1 April - - - - - - - -
Given during the period/ year
- - 2,248.82 - - - - 2,248.82
Repaid during the period / year
- - 789.78 - - - - 789.78
Balance as at 30 Sept - - 1,459.04 - - - - 1,459.04
c) Short Term Loans and Advances
Balance as at 1 April - 0.01 120.49 - - - - 120.50
Given during the period/ year
- - 357.88 - - - - 357.88
Repaid/Adjusted during the period/year
- - 237.20 - - - - 237.20
Provision made during the period/year
- - 54.59 - - - - 54.59
Balance as at 30 Sept - 0.01 186.58 - - - - 186.59
d) Non Current Investments Balance as at 1 April - - 39.00 92.38 - - - 131.38
F - 16
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
Transaction Associate
Companies Entities under
common control
Subsidiaries Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Firms in which
Relatives of Key
Management Personnel
are interested
Total
Invested during the period/ year
- - - - - - - -
Redeemed / Transferred/ Provided during the period/year
- - 0.04 - - - - 0.04
Provided during the period/year
- - 37.10 - - - - 37.10
Balance as at 30 Sept - - 1.86 92.38 - - - 94.24
e) Trade Receivables Balance as at 30 Sept - - 151.50 0.09 - - - 151.59
f) Trade payables Balance as at 30 Sept - - 2.99 20.11 - - 0.07 23.17
g) Other Current Liabilities Balance as at 30 Sept - - 310.40 - - - - 310.40
III. Out of the above items, transaction in excess of 10% of the total Related Party transactions
are as under:
F - 17
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)
Transaction Current Period a) Long term Loans and advances Granted during the period/year Subsidiary- Alok Infrastructure Limited 2,248.82 2,248.82 Repaid during the period/year Subsidiary- Alok Infrastructure Limited 789.78 789.78 b) Short term Loans and advances Given during the period/year Subsidiary- Alok Infrastructure Limited - Alok H&A Limited 238.23 Alok Apparels Private Limited 35.16 Alok International Inc. 47.78 321.17 Repaid during the period/year Subsidiary- Alok Infrastructure Limited 40.34 Alok Apparels Private Limited 32.95 Alok Retail (India) Limited 25.60 Alok H&A Limited 114.60 213.49 Provision made during the period Subsidiary- Alok Apparels Private Limited 17.00 Alok Retail (India) Limited 21.59 Alok H&A Limited 16.00 54.59 c) Investment Invested during the period/year Subsidiary- GrabalAlok International Limited - Joint Venture- Aurangabad Textiles & Apparel Parks Limited - Redeemed during the period/year Subsidiary- GrabalAlok International Limited - Alok Inc. 0.04 Provision made during the period Subsidiary- AlokH&A Limited 36.05 Alok Retail Iindia) Limited 0.05 Alok Apparels Private Limited 1.00 37.10 d) Turnover (including job work charges)
Subsidiary- Alok International Inc. 92.93 Alok Singapore Pte. Ltd. 203.31 296.24 Joint Venture Company New City of Bombay Mfg. Mills Limited 0.28
F - 18
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
Transaction Current Period
e) Expenditure
Purchase of Goods: Joint Venture Company New City of Bombay Mfg. Mills Limited 24.08 Subsidiary- Alok Retails (India) Limited 1.33 Mileta. A.s. 0.40 Repairs &Maint.-Factory & Building Subsidiary- Alok Infrastructure Limited 0.55
Consultancy Charges Firms in which relatives of Key Management Personnel are
interested-
AVAN Packaging. 1.03
Marketing Service Charges Subsidiary - Alok International Inc. 11.63 Alok Singapore Limited 21.99
33.62 Remuneration: Key Management Personnel- Ashok B. Jiwrajka 1.53 Surendra B. Jiwrajka 1.53 Dilip B. Jiwrajka 1.53 ChandrakumarBubna 1.53 6.12 f) Dividend Paid
Key Management Personnel- Ashok B. Jiwrajka 0.61 Dilip B. Jiwrajka 0.62 Surendra B. Jiwrajka 0.64 1.87
g) Income Dividend: Joint Venture Company New City of Bombay Mfg. Mills Limited 1.57 Aurangabad Textiles & Apparel Parks Limited 0.36 1.93 Rent received: Entities under common control- Alok Denim (India) Limited 0.09 Alok Knit Export Limited 0.02 Subsidiary- Alok Retail (India) Limited 0.11 Alok H&A Limited 0.05 0.27
F - 19
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
Transaction Current Period
h) Guarantee Given Subsidiary- Alok Industries International Limited 685.06 AlokInfrastructure Limited 200.00 GrabalAlok (UK) Limited 102.85
28 Earnings per share (EPS)
(Rs. Crore) Current Period a. Nominal value of equity shares per share ( In Rupees) 10
b. Basic and Diluted EPS Net Profit available for equity shareholders 319.69 Weighted average number of equity shares - Basic 826,269,357 Basic EPS 3.87 Add: Effect of dilutive stock options (Nos.) - Weighted average number of equity shares - Diluted (Nos.) 826,269,357 Diluted EPS 3.87*
* Potential equity shares on account of stock options are ignored in the calculation of the diluted earnings per share since it is antidilutive.
29 Segment Reporting a) Primary Segment: Geographical Segment
The company is in the business of manufacturing of Textile products. Considering its high level of international operations and present internal financial reporting based on geographical location of customer, the company has identified geographical segment as primary segment.
The geographic segment consists of:
a) Domestic (Sales to Customers located in India) b) International (Sales to Customers located outside India)
Revenue directly attributable to segments is reported based on items that are individually identifiable to that segment. The company believes that it is not practical to allocate segment expenses, segment results, assets used, except debtors, in the company’s business or liabilities contracted since the resources / services / assets are used interchangeably within the segments. Accordingly, no disclosure relating to same is made. All fixed assets are located in India.
(Rs. Crore)
Particulars Current Period
Segment Revenue
Operating Revenue – Sales & Job Charges
Domestic [Net of Excise duty of Rs. 162.05crore] 4,077.91
International 1,669.61
Total segment revenue 5,747.52 Segment Assets Sundry Debtors
Domestic 2,478.85 International 240.07
2,718.92
F - 20
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
b) Secondary Segment: Business Segment
The company is operating in a single business segment i.e. Textile and as such all business activities revolve around this segment. Hence, there is no separate secondary segment to be reported considering the requirements of AS 17 on “Segment Reporting”
30 (i) Value of raw materials, stores and spares consumed during the year
(Rs. Crore) Current Period Imported Indigenous
Value % of Total Consumption
Value % of Total Consumption
Raw Materials 603.49 20.27% 2373.88 79.73%
Stores and Spares 26.03 62.88% 15.36 37.12%
Packing Materials 4.58 6.08% 70.75 93.92%
(ii) Expenditure in Foreign Currency
(Rs. Crore)
Nature of Expenses Current Period
Commission on sales 9.42
Interest on Fixed Loan 25.99
Legal and Professional Fees 1.39
Marketing service charges 34.75
Employee Benefit Expenses 0.30
Sales Promotion Expenses 0.76
Claim for damaged goods 1.50
Travelling expenses 0.05
Bank Charges 1.91
Miscellaneous Expenses 1.52
Total 77.59
31 Addition information
(i) Raw Material Consumption for the period in broad heads
(Rs. Crore) Division Current Period
Cotton & Cotton yarn Raw Cotton 388.86 Cotton Yarn 265.88
654.74 Apparel Fabric
Woven Fabric 944.09 Knitted Fabric 6.74
950.83 Polyester Yarn
PTA and MEG 1,307.05 Chips 21.68 POY 3.06 Melt 19.90 1,351.69
Others Packing Material 20.11
Total 2,977.37
F - 21
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(ii) Purchase of Traded Goods for the period in broad heads (Rs. Crore)
Division Current Period Cotton & Cotton yarn
Raw Cotton 2.95 Cotton Yarn 5.17
8.12 Apparel Fabric
Woven Fabric 30.50 Garment
Accessories 2.16
Total 40.79 32 Exceptional items include :
i) Exchange loss/ gain arising out of a) restatement of foreign currency liabilities/ assets and
b) Mark to market (MTM) losses on foreign exchange derivatives taken by the Company, considering the unusual fluctuation in the Indian Rupee (INR) against US Dollar (USD)
ii) Provision for diminution in the value of investments and impairment of loans to
subsidiaries in the retail business of Rs. 91.69crore for period ended 30 September 2012. Considering the business plan for retail operations, such diminution/impairment is not regarded as temporary.
Signatures to Schedules 1 to 34 In terms of our report attached For and on behalf of the Board For Deloitte Haskins & Sells Ashok B. Jiwrajka Chartered Accountants (Executive Chairman) Dilip B. Jiwrajka (Managing Director) R. D. Kamat Partner Surendra B. Jiwrajka (Joint Managing Director) Sunil O. Khandelwal (Chief Financial Officer)
K. H. Gopal (President (Corporate Affairs) & Company Secretary)
Mumbai: Mumbai:
F - 22
Report on Review of Interim Consolidated Financial StatementsTo the Board of Directors of Alok Industries LimitedIntroduction1. We have reviewed the accompanying condensed consolidated interim balance sheet of Alok Industries
Limited (“the Company”), its subsidiaries and jointly controlled entities (collectively referred to as “the Group”) as of September 30, 2012, the related statement of profit and loss and cash flow statement for the six months period then ended and explanatory notes (“Interim consolidated financial statements”). Management is responsible for the preparation and presentation of these interim consolidated financial statements in accordance with Accounting Standard 25 (Interim Financial Reporting), as notified by the Companies (Accounting Standards) Rules, 2006 (“AS 25”) and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on these interim consolidated financial statements based on our review.
Scope of Review2. We conducted our review in accordance with Standard on Review Engagements (SRE) 2410, “Review
of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by Institute of Chartered Accountants of India (ICAI). This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the interim consolidated financial statements are free of material misstatements. A review is limited primarily to inquiries of Company personnel and analytical procedures applied to financial data and thus provide less assurance than an audit. We have not performed an audit and, accordingly, we do not express an opinion.
3. We did not review the condensed interim financial statements of certain Subsidiaries and Joint venture companies, whose financial statements reflect total assets of Rs. 3,294.24 crores as at September 30, 2012, total revenue of Rs. 445.85 crores and net cash outflows amounting to Rs. 1,638.11 crores for the period ended on that date and condensed interim financial statements of an Associate company in which share of loss of the Group for the half year ended September 30, 2012 is Rs. 0.01 crores, as considered in the interim consolidated financial statements. These financial statements have been reviewed by other auditors whose reports have been furnished to us and our conclusion in so far as it relates to the amounts included in respect of these Subsidiaries, Joint venture companies and an Associate company is based solely on the reports of such other auditors.
Basis for Qualified Conclusion4. The condensed interim financial statements of Associate companies in which the Group’s share of loss
for the half year ended September 30, 2012 is Rs. 0.11 crores, as considered in the interim consolidated financial statements have not been reviewed by their auditors.
Qualified Conclusion5. Based on our review, with the exception of the matter described in the Basis for Qualified Conclusion
paragraph, nothing has come to our attention that causes us to believe that the accompanying interim consolidated financial statements are not prepared, in all material respects, in accordance with Accounting Standard 25 (Interim Financial Reporting), as notified by the Companies (Accounting Standards) Rules, 2006 (“AS 25”) and other accounting principles generally accepted in India.
Emphasis of Matter6. We draw attention to note no. 34 to the interim consolidated financial statements which refers to the
key source of estimation uncertainty as at September 30, 2012 relating to carrying value of goodwill recognised on the consolidation of Grabal Alok (UK) Limited. Our conclusion is not qualified in respect of this matter.
Other Matter7. We draw attention to note no 1 to the interim financial statements regarding non-presentation of
comparative figures / information in respect of the comparable previous periods, as required in terms of AS 25 “Interim Financial reporting” for the reasons stated in the said note. Our conclusion is not qualified in respect of this matter.
For Deloitte Haskins & SellsChartered Accountants
(Firm Registration No. 117366W)R. D. Kamat
PartnerMUMBAI, December 31, 2012 (Membership No. 36822)
F - 23
ALOK INDUSTRIES LIMITED
CONDENSED CONSOLIDATED BALANCE SHEET AS AT 30 SEPTEMBER 2012(Rs. Crore)
PARTICULARS NOTES AS AT30-Sep-12
I EQUITY AND LIABILITIES
Shareholders' FundsShare Capital 2 826.28 Reserves and Surplus 3 2,261.82
III. Profit before exceptional items and tax 402.45IV. Exceptional items (Refer note no.35) 18.64V. Profit before tax 421.09VI. Tax Expenses
- Current tax 198.54
13.47- Deferred tax (34.80)
Total Tax expenses 177.21
VII. Profit for the year before share of profit from associates 243.88Share of profit from Associates (0.12)
VIII. Net Profit for the period 243.76
IX. EARNINGS PER SHARE (in Rs.) 32Basic 2.95*Diluted 2.95** Not annualised
III Significant notes forming part of the condensed financial statements 1 to 35
In terms of our report attached. For and on behalf of the Board
For Deloitte Haskins & Sells Sunil O. KhandelwalChartered Accountants (Executive Director & Chief Financial Officer)
R. D. Kamat K. H. GopalPartner (Executive Director & Secretary)
Place: Mumbai Place: MumbaiDate: 31 December 2012 Date: 31 December 2012
Changes in inventories of finished goods, work-in-progress and stock-in-trade
Includes MAT adjustment Rs. 66.27 crore - Short provision for income tax in respect of earlier years
F - 25
(Rs. Crore) (Rs. Crore) 1-Apr-12 to Year Ended
30-Sep-12 31-Mar-12
A Net cash generated from Operating Activities 721.87 (450.46)
B Net cash used in Investing Activities (711.48) (1,439.16)
C Net cash used in Financing Activities (390.88) 2,160.48
Net decrease in Cash and Cash equivalents (A + B + C) (380.49) 270.86Cash and Cash equivalents at the beginning of the period 595.45 165.98
Cash and Cash equivalents at the end of the period 214.96 595.44
Notes1
2 Cash and Cash equivalents includes : 30-Sep-12 31-Mar-12(Rs. Crore) (Rs. Crore)
Cash and Bank Balances (Refer note no 17) 423.07 1,397.80Less : Earmarked balances/deposits with bank* 145.83 715.19Less : Deposit with maturity period of more than 3 months ** 58.07 87.16Less : Unrealised foreign exchange variations on cash & cash equivalents 4.21 -
Total Cash and Cash equivalents 214.96 595.45
3
In terms of our report attached For and on behalf of the Board
For Deloitte Haskins & Sells Sunil O. KhandelwalChartered Accountants
R. D. Kamat K. H. GopalPartner (Executive Director & Secretary)
Place: Mumbai Place: MumbaiDate: 31 December 2012 Date: 31 December 2012
ALOK INDUSTRIES LIMITED
CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
PARTICULARS
Purchase of fixed assets are stated inclusive of movements of Capital Work in Progress between the commencement and end of the period and is considered as part of investing activity.
(Executive Director & Chief Financial Officer)
* Earmarked balances/deposits with bank includes unpaid dividend accounts and balances/deposits held as marginmoney or security against borrowings, guarantees and other commitments, which being restricted for its use, havebeen excluded from cash and cash equivalent and grouped under the investing activity.
** Fixed Deposits with maturity period of more than three months have been excluded from cash and cashequivalent and grouped under the investing activity.
The Cash Flow Statement has been prepared in accordance with the requirements of Accounting Standard 'AS-3' Cash Flow Statements".
F - 26
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
1 BACKGROUND
(Rs. Crore)PARTICULARS AS AT
30-Sep-122 SHARE CAPITAL
Authorised1,00,00,00,000 Equity shares of Rs. 10/- each 1,000.00
1,000.00 Issued, Subscribed and fully paid-upEquity Share Capital
82,62,69,357 Equity shares of Rs.10/- each fully paid up 826.27
Forfeited Shares (Amount originally paid-up) 0.01
826.28
3 RESERVES AND SURPLUSCapital ReserveBalance as per last Balance Sheet 26.95 Add: Reclassified from securities premium as per contra 1.78
28.73 Revaluation reserveBalance as per last Balance Sheet 3.86
3.86 Capital Redemption ReserveBalance as per last Balance Sheet 9.10
9.10 Securities premium accountBalance as per last Balance Sheet 993.65 Less : Reclassified to capital reserve as per contra (1.78)
991.87 General ReserveBalance as per last Balance Sheet 281.19 Add: Transferred from statement of Profit and Loss 0.27
281.46 Debenture Redemption ReserveBalance as per last Balance Sheet 168.48 Add: Transferred to statement of Profit and Loss (102.47)
66.01 Foreign Currency Translation ReserveBalance as per last Balance Sheet (64.27) Add: Created during the period (34.69)
(98.96) Cash flow hedging ReserveBalance as per last Balance Sheet (16.78) Add: Created during the period 17.86
1.08 Employee Stock Options OutstandingOptions granted during the period 4.67 Less : Deferred Employee Compensation expenses (1.29)
3.38 Surplus in Statement of Profit and Loss Opening balance 629.63 Profit for the period 243.76 Less : Appropriations(i) Transferred to General Reserve (0.27) (ii) Transferred from Debenture Redemption Reserve 102.47 (iii) Short provision of dividend and tax thereon (0.30)
975.29 2,261.82
*Refer note no.37(a)
These condensed consolidated interim financial statements are prepared for the use by the Board of Directors solely in connection with theproposed Rights issue of the Company and have been prepared using the same basis / accounting policies as those used for the auditedfinancial statements for the year ended March 31, 2012. The Management has prepared these financial statements in accordance with therecognition and measurement principles as laid down in AS 25 on "Interim Financial reporting". Comparative figures / information for theprevious comparable periods i.e. period 1 April, 2011 to 30 September 2011 in respect of statement of Profit & Loss and Cash flow statementand as at 31 March 2012 in respect of Balance sheet, have not been presented as in the opinion of the Board of Directors, the same is notrequired for the purpose of the proposed rights issue.
F - 27
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
Provision for employee benefits 17.07 Mark to Market provision on derivative instruments 188.59
205.66
AS AT 30-Sep-12
F - 28
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS AS AT
30-Sep-127 SHORT-TERM BORROWINGS
Cash Credit accounts, working capital demand loan etc. (Secured)From Banks (includes Rs. 866.60 crore loan in foreign currency) 4,047.40 From Others (includes Rs.45.96 crore loan in foreign currency) 144.75
Cash Credit accounts, working capital demand loan etc. (Unsecured)From banks 100.00
Commercial Paper (Unsecured)From Banks 153.00 From Financial Institutions 225.00
Short term loanSecured
Rupee LoansFrom Banks 169.64 From Financial Institutions 85.00
UnsecuredForeign currency loans
From Banks 306.15
Deposits (Unsecured)-Deposit from Public 1.34
Inter Corporate Deposit 5.99
5,441.15
8 TRADE PAYABLE
Total outstanding due to :- Micro, Small and Medium Enterprises* - - Others 1,481.88
* As per infromation available with the company 1,481.88
9 OTHER CURRENT LIABILITIES
Current maturities of long-term debt 2,689.24 Interest accrued but not due on borrowings 13.88 Unclaimed dividends 17.44 Share application money received by subsidiary company 350.00 Other payables
Advance from customers 189.68 Creditors for Expenses 47.14 Creditors for Capital Goods 122.99 Creditors for statutory Liabilities 19.27 Advance from Related parties (Refer note no 31) 90.71 Temporary overdrawn bank balance (see note below) 5.31 Advance from Others 4.76
3,550.42
10 SHORT-TERM PROVISIONS
Provision for employee benefits 7.49 Mark to Market provision on derivative instruments 15.71 Provision for taxation (Net of Advance Tax) 115.95 Others 7.65
146.80
NOTE : Temporary overdrawn bank balances are as per books consequent to issue of cheques at the period end, though the banks have positive balances as on that date.
F - 29
ALO
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F - 30
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS AS AT
30-Sep-12
12 NON CURRENT INVESTMENTSInvestment Property :
Property under construction* 1,545.57 Freehold Land 34.18
1,579.75
Investments in Equity Instruments (at cost)In Associate companies - unquoted
Next Creations Holdings LLC, subscription towards 33% membership interest 4.47 Less : share in post acquisition accumulated loss (1.01)
3.46
Alspun Infrastructure Limited 0.10 [25,000 Equity shares of Rs.10 each](Including goodwill on acquisition of stake of associates Rs. 0.04 crore)Less : share in post acquisition accumulated loss (0.08)
0.02
Ashford Infotech Private Limited 2.50 [50,000 Equity Share of Rs.10 each]Less : share in post acquisition accumulated loss 0.12
2.62 Others - Unquoted
Triumphant Victory Holdings Limited 0.00 [2 equity share of USD 1 each Rs. 90.14]Dombivali Nagari Sahakari Bank Limited. 0.05 [10,000 Equity Shares of Rs. 50/- each]Kalyan Janata Sahakari Bank Limited 0.03 [10,000 Equity Shares of Rs. 25/- each]Saraswat Bank Limited (Rs. 25,000/-) 0.00 [2500 Equity Shares of Rs. 10/- each]Wel-Treat Environ Management Organisation (Rs. 36,500/-) 0.00 [3,650 Equity Shares of Rs. 10 each]
6.18
Investment in Preference shares (unquoted)In Associates Company
Triumphant Victory Holdings Limited 3.94 [7,50,000 Shares USD 1 each]Interest in Alok Benefit Trust 35.33 [1,94,59,382 Equity Shares of Rs.10/- each ]
PowerCorSubscription towards 5% Group B Membership interest 39.02 Less: Provision (39.02)
- Aisle 5 LLC
22 senior units of the equity capital 6.90 Less: Provision (6.90)
-
Other Investment 0.01 39.28
1,706.92 * Interest capitalised Rs. 12.06
F - 31
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS AS AT
30-Sep-1213 LONG TERM LOANS & ADVANCES (Unsecured)
Considered goodCapital advances 927.50 Lease & Security deposits 15.52 Loans & advances to Related parties (Refer note no 31) 0.02 Foreign Currency Monetary Item Translation Difference Account 1.26 Advance Tax (Net of Provision for Tax) 2.01 Advance to Staff 0.05 Prepaid Expenses 60.22 Balance with Central Excise, Customs and Sales Tax Authorities 0.46
1,007.04
Considered doubtfulCapital advances 11.46 Less : Provision 11.46
-
TOTAL 1,007.04
14 CURRENT INVESTMENTS (at cost)
Investments in debentures or bondsLaxmi Vilas Bank Tier II Bonds 2.00 [20 Bonds of Rs. 10,00,000 each]
Investments in Mutual funds - UnquotedAxis Infrastructure Fund 1 0.65 [6,464 units of Rs. 1000/- each]UTI Treasury Advantage Fund 1.61 [32,866.896 units of Rs. 1000/- each]
Debts Outstanding for a period exceeding six months from due date 122.75 Less : Provision 10.78
111.97
Other Debts 2,740.42 Less : Provision 50.35
2,690.07
2,802.04
Considered Good 2,802.04 Considered Doubtful 61.13
2,863.17
NOTE :(i)(ii) Refer note no 31 for related party balances.
17 CASH & BANK BALANCES
Cash on hand 0.84 Balance with Bank
In Current Accounts 204.44 EEFC Accounts ( Rs. 4216) 0.00 In Deposit Accounts [Including interest accrued thereon] 71.96 In earmarked accounts
Unclaimed dividend accounts 17.45 Balances / Deposits held as margin money or security against borrowings, 128.38 guarantees and other commitments
423.07
Sundry Debtors includes Rs. 60.11 crore towards contractual obligations on account of Export Incentives Receivables.
F - 32
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS AS AT
30-Sep-1218 SHORT-TERM LOANS AND ADVANCES (Unsecured)
Considered goodLoans & advances to Related parties (Refer note no 31) 9.40 Advance to Vendors 153.88 Advance to Staff 7.73 Balance with Central Excise, Customs and Sales Tax Authorities 282.26 Prepaid Expenses 54.36 Inter Corporate Deposits 3.34 Loans to Vendors 1,919.33 Advance Tax (Net of provision for tax) 10.33 Deposits others 0.56
CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
F - 34
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS 1-Apr-12 to
30-Sep-12
23 EMPLOYEE BENEFIT EXPENSESSalaries, Wages and Bonus 234.90 Contribution to Provident Fund and Other Funds 11.11 Employee Stock Option Compensation Expenses 1.11 Employees Welfare Expenses 6.70
253.82
24 FINANCE COSTSInterest expense (Net of interest subsidy Rs. 64.60 crore and recovery of Rs. 134.75 crore) 639.25 Interest on late payment of taxes 0.78 Other borrowing cost 86.12
726.15
25 OTHER EXPENSES
Stores and Spares Consumed 41.38 Packing Materials Consumed 75.65 Power and Fuel 381.62 Processing Charges 35.94 Labour Charges 37.11 Excise Duty 6.38 Donation 0.91 Freight, Coolie and Cartage 71.53 Legal and Professional Fees 17.33 Rent 115.04 Rates and Taxes 4.09 Repairs and Maintenance 14.11 Commission on Sales 23.97 Loss on exchange rate difference/derivative (Net) 169.99 Provision for Doubtful Debts 35.86 Provision for Doubtful Advances 24.45 Directors Remuneration 3.54 Directors Fees and Commission 2.52 Auditors Remuneration 1.37 Insurance 9.42 Loss on Sale of Investment (net) 0.02 Loss on discarded assets 7.40 Miscellaneous Expenses 101.70
clearing charges, security expenses etc.)
1,181.33
(Miscellaneous Expenses includes Bank Charges, Agency and
F - 35
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
26 The subsidiary companies considered in the consolidated financial statements are:
Name of the subsidiary companies Country of Incorporation Ownership Interest
OwnershipInterest
30-Sep-12 31-Mar-121 Alok Infrastructure Limited India 100% 100%2 Alok Land Holdings Private Limited India 100% 100%3 Alok Realtors Private Limited India 100% 100%4 Alok Retail (India) Limited India 100% 100%5 Alok Apparels Private Limited India 100% 100%6 Alok Industries International Limited British Virgin Island 100% 100%7 Alok International Inc. USA 100% 100%8 Mileta, a. s. Czech Republic 100% 100%9 Alok H&A Limited India 100% 100%
10 Springdale Information and Technologies Private Limited India 100% 100%11 Kesham Developers & Infotech Private Limited India 100% 100%12 Grabal Alok International Limited British Virgin Island 100% 100%13 Grabal Alok (UK) Limited UK 90.43% 90.43%14 Alok Singapore Pte Ltd. (incorporated on 28 December 2011) Singapore 100% 100%15 Alok International (Middle East) FZE (incorporated on 01 August 2011) Dubai 100% 100%
For financial information of subsidiary companies, refer note no 29 below
27 Joint Venture companies considered in the consolidated financial statements are:Name of the associates Country of Incorporation Ownership
InterestOwnership
Interest30-Sep-12 31-Mar-12
1 Aurangabad Textile and Apparel Park Limited India 49.00% 49.00%2 New City of Bombay Mfg. Mills Limited India 49.00% 49.00%
28 The Associate companies considered in the consolidated financial statements are:Name of the associates Country of Incorporation Ownership
InterestOwnership
Interest30-Sep-12 31-Mar-12
1 Ashford Infotech Private Limited India 50.00% 50.00%2 Alspun Infrastructure Limited India 50.00% 50.00%3 Next Creations Holdings LLC * USA 33.00% 33.00%
29 Financial information relating to subsidiary companies for the period ended 30 september 2012
(Rs. Crore)
Sr. No. Name of the subsidiary Profit after tax Current Period
* Translated at average rate of INR 54.7370/USD# Translated at average rate of INR 2.7567/CZK@ Translated at average rate of INR 86.4691/GBP^ Translated at average rate of INR 14.8936/AED
Sr. No.
Sr. No.
Sr. No.
* Not consolidated since no financial statements received from such associate company.The company belives that the impact of such non-consolidation would be immaterial to the financial statements
F - 36
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
30 Contingent Liabilities in respect of:(Rs. Crore) (Rs. Crore)
Sr. No. Particulars Current Period Previous Year
A AmountUnascertained
AmountUnascertained
B Pending Litigation 0.05 0.05C Guarantees given by banks on behalf of the Company 56.20 73.71D Bills discounted 268.24 214.79E Taxation Matters :
a) 0.23 1.92
b) 0.59 0.59
F AmountUnascertained
AmountUnascertained
31 Related Party Disclosure
a. Names of related parties and nature of relationship As per Accounting Standard (AS) 18 “Related Party Disclosures”, Company's related parties disclosed as below:
III Joint VentureAurangabad Textiles & Apparel Parks Limited New City Of Bombay Mfg. Mills Limited
IV Key Management Personnel (KMP)Ashok B. Jiwrajka Surendra B. JiwrajkaDilip B. Jiwrajka Chandra Kumar Bubna
V Relatives of Key Management PersonnelAlok A. Jiwrajka Vidhi S. JiwrajkaPrita D. Jiwrajka Niraj D. JiwrajkaVarun S. Jiwrajka Suryaprakash Bubna
V Firms in which relatives of Key Management Personnel are interestedAVAN Packaging and Boards
Customs duty on shortfall in export obligation in accordance with EXIM Policy(The company is hopeful of meeting the export obligation within the stipulated period)
Demand on account of alleged short deduction of taxes. The Company has filed appeal with higherauthorities and is hopeful of favourable order. Demands of Works Contract Tax contested not acknowledged as debts as the company is hopeful offavourable decision.
Disputed various matters relating to NTC / ATM
F - 37
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
b. Nature of transactions (Rs. Crore)
Transaction Associates
Entitiesunder
commoncontrol
Joint Venture Company
KMP Relatives of KMP
Firms in which
relatives of KMP are
interested
Total
a) Advance Share Application MoneyBalance as at 1st April - 350.00 - - - - 350.00 Balance as at 30th September - 350.00 - - - - 350.00
(b) Long term borrowingsBalance as at 1st April - 613.88 - - - - 613.88 Reclassified to short term borrowings - 358.10 - - - - 358.10 Translation difference during the period - 7.71 - - - - 7.71Balance as at 30th September - 263.49 - - - - 263.49
(c) Short term borrowingsBalance as at 1st April - 196.95 5.99 - - - 202.94 Received During the period / reclassified - 358.10 - - - - 358.10 from long term borrowingsTranslation difference during the period - 16.71 - - - - 16.71Balance as at 30th September - 571.76 5.99 - - - 577.75
(d) Short term loans and AdvancesBalance as at 1st April 0.63 8.59 - - - - 9.22Granted during period - 7.99 - - - - 7.99Converted / Repaid during the period 0.41 7.67 - - - - 8.08
Translation difference during the period - 0.27 - - - - 0.27
Balance as at 30th September 0.22 9.18 - - - - 9.40
(e) InvestmentsBalance as at 1st April 88.78 3.84 - - - - 92.62 Translation difference during the period - 0.10 - - - - 0.10Balance as at 30th September 88.78 3.94 - - - - 92.72
(f) Long Term Loans & AdvancesBalance as at 1st April - - - - - - - Given/(Received) during the period (Net) 0.02 - - - - 0.02 0.04 Balance as at 30th September 0.02 - - - - 0.02 0.04
(g) Trade ReceivablesBalance as at 30th September 21.47 - 0.04 - - - 21.51
(h) Trade PayablesBalance as at 30th September 1.31 - 10.26 - - 0.07 11.64
(i) Other current liabilitiesBalance as at 30th September - 90.71 - - - - 90.71
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
32 Earnings per share (EPS)(Rs. Crore)
Sr. No. Particulars Current Perioda. Nominal value of equity shares per share ( In Rupees) 10
b. Basic & Diluted EPS Net Profit Available for Equity Shareholders 243.76 Weighted average number of Equity Shares - Basic 826,269,357 Basic EPS 2.95 Add : Effect of dilutive stock options (Nos.) - Weighted average number of Equity Shares - Diluted (Nos.) 826,269,357 Diluted EPS 2.95*
* Potential equity shares on account of stock options are ignored in the calculation of the diluted earnings per share since it is antidilutive.
33 Segment Reporting
a) Primary Segment: Geographical Segment
The geographic segment consists of:a) Domestic (Sales to Customers located in India)b) International (Sales to Customers located outside India)
Domestic 2,535.71 1,535.47 International 266.33 668.53
2,802.04 2,204.00
b) Secondary Segment: Business Segment
34
35a) Restatement of foreign currency liabilities/ assets andb)
Signatures to Notes 1 to 35
In terms our report attached For and on behalf of the Board
For Deloitte Haskins & Sells Sunil O. KhandelwalChartered Accountants (Executive Director & Chief Financial Officer)
R. D. Kamat K. H. Gopal Partner (Executive Director & Secretary)
Place: Mumbai Place: MumbaiDate: 31 December 2012 Date: 31 December 2012
The company is in the business of manufacturing of Textile products. Considering its high level of international operations and present internal financial reportingbased on geographical location of customer, the company has identified geographical segment as primary segment.
Revenue directly attributable to segments is reported based on items that are individually identifiable to that segment. The company believes that it is not practical toallocate segment expenses, segment results, assets used, except debtors, in the company’s business or liabilities contracted since the resources / services / assetsare used interchangeably within the segments. Accordingly, no disclosure relating to same is made.
Domestic [Net of Excise duty of Rs. 162.06 Crore]
The Group is operating in a single business segment i.e. Textile and as such all business activities revolve around this segment. Hence, there is no separatesecondary segment to be reported considering the requirement of AS 17 on “Segment Reporting”
Goodwill includes amount of Rs. 448 crores on consolidation of Grabal Alok Uk Ltd (“Grabal Uk”), its subsidiary. The net-worth of Grabal UK was fully eroded as on March 31,2012 and the Company has incurred significant losses during the period resulting in negative net-worth of Rs. 217 crores. The Management believes that the currentperformance, impacted by difficult economic situation in the UK is not indicative of the long term enterprise value of the investment. On the basis of cash flow projections, whichconsider improved economic situation and enhanced level of operations considered achievable by the management of the Parent company – Alok Industries Ltd, no provisionfor impairment of goodwill is considered necessary at this stage
Exceptional items include Exchange loss/ gain arising out of :
Mark to market (MTM) losses on foreign exchange derivatives taken by the Company, considering the unusual fluctuation in the Indian Rupee (INR) against US Dollar (USD)
F - 40F - 1
TO THE MEMBERS OF
ALOK INDUSTRIESLIMITED
1. We have audited the attached Balance Sheet of ALOK INDUSTRIES LIMITED (“the Company”) as at 31st a ch 1 the Statement of o t and oss and the Cash Flo Statement of the Company fo the yea ended on that date oth anne ed the eto. hese nancial statements a e the esponsi ility of the Company s ana ement. u esponsi ility is to e p ess an opinion on these nancial statements ased on our audit.
. We conducted our audit in accordance ith the auditin standards enerally accepted in ndia. hose Standards re uire that e plan and perform the audit to o tain reasona le assurance a out hether the nancial statements are free of material misstatements. n audit includes e aminin on a test asis
evidence supportin the amounts and the disclosures in the nancial statements. n audit also includes assessin the accountin principles used and the si ni cant estimates made y the ana ement as ell as evaluatin the overall nancial statement presentation. We elieve that our audit provides a reasona le basis for our opinion.
3. s re uired by the Companies ( uditor s eport) rder 3 (C ) issued by the Central overnment in terms of Section ( ) of the Companies ct 1 e enclose in the nne ure a statement on the matters speci ed in para raphs and of the said rder.
. Further to our comments in the nne ure referred to in para raph 3 above e report as follo s
(a) e have obtained all the information and e planations hich to the best of our no led e and belief ere necessary for the purposes of our audit
(b) in our opinion proper boo s of account as re uired by la have been ept by the Company so far as it appears from our e amination of those boo s
(c) the Balance Sheet the Statement of ro t and oss and the Cash Flo Statement dealt ith by this report are in a reement ith the boo s of account
(d) in our opinion the Balance Sheet the Statement of ro t and oss ccount and the Cash Flo Statement dealt ith by this report are in compliance ith the ccountin Standards referred to in Section 11(3C) of the Companies ct 1
(e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information re uired by the Companies ct, 1 in the manner so re uired and give a true and fair vie in conformity ith the accounting principles generally accepted in ndia
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st arch, 1
(ii) in the case of the Statement of ro t and oss, of the pro t of the Company for the year ended on that date and
(iii) in the case of the Cash Flo Statement, of the cash o s of the Company for the year ended on that date.
. n the basis of the ritten representations received from the irectors as on 31st arch, 1 and ta en on record by the Board of irectors, none of the irectors is dis uali ed as on31stMarch, 2012 from being appointed as a director in terms of Section 2 (1)(g) of the Companies ct, 1 .
For Deloitte Haskins & SellsChartered ccountantsFirm egistration o 11 3 W
R. D. KamatPartnerMembership o 3 22
For Gandhi & ParekhChartered ccountantsFirm egistration o 12031 W
Devang B. ParekhPartnerMembership o 10
Mumbai, May 1 , 2012 Mumbai, May 1 , 2012
AUDITORS’ REPORT
F - 41F - 2
e lo ndustries imited
Referred to in paragraph 3 of our report of even date
(i) n respect of xed assets
(a) he Company has maintained proper records sho ing full particulars, including uantitative details and situation of xed assets.
(b) ccording to the information and explanations given to us, physical veri cation of ma or portion of xed assets as at 31st March, 2012 as conducted by the management during the year, hich is
reasonable having regard to the size of the company and nature of its business and no material discrepancies ere noticed on such veri cation.
(c) he xed assets disposed off during the year, in our opinion, do not constitute a substantial part of the xed assets of the Company.
(ii) n respect of inventories
(a) s explained to us, inventories (except stoc s lying ith third parties and in-transit, con rmation subse uent receipt have been obtained in respect of such inventory) have been physically veri ed during the year by the management at reasonable intervals.
(b) n our opinion and according to the information and explanations given to us, the procedures of physical veri cation of inventories follo ed by the management ere reasonable and ade uate in relation to the size of the Company and the nature of its business.
(c) n our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies ere noticed on physical veri cation.
(iii) n respect of loans, secured or unsecured, granted or ta en by the Company to from companies, rms or other parties covered in the egister under Section 301 of the Companies ct, 1 , according to the information and explanations given to us
uring the year, the Company has granted and ta en loans to from rabal lo mpex td. rabal lo mpex td as amalgamated ith the Company vide scheme of amalgamation sanctioned by the
Bombay High Court on 3rd February, 2012 and effective from 1stMarch, 2012. The appointed date for such amalgamation as 1st pril, 2011 ( efer note no 3 ) and as such,these transactions have not been considered for reporting under this clause.
(iv) n our opinion and according to the information and explanations given to us, there is an ade uate internal control system commensurate ith the size of the company and the nature of its business ith regard to purchases of inventory and xed assets and sale of goods and services. uring the course of our audit,
e have not observed any ma or ea ness in such internal control system.
(v) n respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies ct, 1
(a) To the best of our no ledge and belief and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the register have been so entered.
(b) Where each of such transaction is in excess of ` la hs in respect of any party, the transactions have been made at prices hich are prima facie reasonable having regard to the prevailing mar et prices at the relevant time.
(vi) n our opinion and according to the information and explanations given to us, the Company has complied ith the provisions of Sections and or any other relevant provisions of the Companies ct,
1 and the Companies ( cceptance of eposits) ules, 1 ith regard to the deposits accepted from the public. ccording to the information and explanations given to us, no order has been passed by the Company a Board or the ational Company a Tribunal or the eserve Ban of ndia or any Court or any other Tribunal.
ANNEXURE TO THE AUDITORS’ REPORT
F - 42F - 3
(vii) n our opinion, the internal audit functions carried out during the year by rms of Chartered ccountants appointed by the Management have been commensurate ith the size of the company and the nature of its business.
(viii) We have broadly revie ed the boo s of account maintained by the Company pursuant to the rules made by the Central overnment for the maintenance of cost records under Section 20 (1) (d) of the Companies
ct, 1 in respect of Textile products manufactured by the Company and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have, ho ever, not made a detailed examination of the records ith a vie to determining hether they are accurate or complete. To the best of our no ledge and according to the information and explanations given to us, the Central overnment has not prescribed the maintenance of cost records for any other product of the Company.
(ix) ccording to the information and explanation given to us in respect of statutory dues
(a) The company has generally been regular in depositing undisputed statutory dues, including Provident Fund, nvestor ducation and Protection Fund, mployees State nsurance, ncome-tax, Sales-tax, Wealth Tax, Custom uty, xcise uty, Cess and other material statutory dues ith the appropriate authorities during the year, except for service tax dues aggregating to ` 1.74 crores including interest of ` 0.21 crores, hich have been deposited subse uent to the year end.
(b) There ere no undisputed amounts payable in respect of ncome-tax, Wealth-tax, Customs uty, xcise uty, Sales Tax, Service Tax, Cess and other statutory dues in arrears as at 31stMarch, 2012
for a period of more than six months from the date they became payable.
(c) There are no dues in respect of Sales Tax, ncome Tax, Wealth tax, Customs duty, Service Tax, xcise duty and Cess that have not been deposited as on 31stMarch , 2012 on account of disputes,
except as follo s
Name of the statute
Nature of dues Amount (` in crores)
Period to which the amount relates
Forum where dispute is pending
ncome Tax ct, 1 1
ncome tax demand (T S dues)
1. 2 200 -07 to 2011-12
Commissioner of ncome Tax ( ppeals)
Wor s Contract Tax ct, 1
Wor s Contract Tax
0. F 2004 0 eputy Commissioner of Sales Tax
(x) The company neither has accumulated losses at the end of the year, nor incurred cash losses during the current and immediately preceding nancial year.
(xi) n our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to ban s, nancial institutions and debenture holders.
(xii) ccording to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by ay of pledge of shares, debentures and any other securities.
ccordingly, clause 4 (xii) of the order is not applicable to the company.
(xiii) n our opinion and according to the information and explanations given to us, the company is not a chit fund or a nidhi mutual bene t fund society. ccordingly clause 4 (xiii) of the order is not applicable to the company.
(xiv) n our opinion and according to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures or investments. ccordingly clause 4 (xiv) of the order is not applicable to the Company.
(xv) n our opinion and according to the explanation given to us, the terms and conditions of the guarantees given by the company for loans ta en by subsidiary company from ban s and nancial institutions are not prima facie pre udicial to the interests of the Company.
ANNEXURE TO THE AUDITORS’ REPORT
F - 43F - 4
(xvi) On the basis of records examined by us, and relying on the information compiled by the Company for co-relating the funds raised to the end use of term loans, e have to state that, the company has, prima-facie, applied the term loansfor the purposes for hich they ere obtained, other than amounts temporarily invested pending utilisation of the funds for the intended use.
(xvii) n our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, e report that funds raised on short-term basis have not been used during the year for long term investment.
(xviii) uring the year, the Company has made allotment of 1. crores e uity shares to i ra a nvestment Private imited ( efer note no 2 (a) (i) to the nancial statement), covered in egister maintained under section 301 of the Companies ct, 1 . n our opinion, the price at hich the shares have been issued is not pre udicial to the interest of the Company.
(xix) Security Charges have been created in respect of debentures issued as detailed in note no 4 to the nancial statements.
(xx) The Company has not raised money by public issue during the year.
(xxi) To the best of our no ledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.
For Deloitte Haskins & SellsChartered ccountantsFirm egistration o 1173 W
R. D. KamatPartnerMembership o 3 22
For Gandhi & ParekhChartered ccountantsFirm egistration o 12031 W
Devang B. ParekhPartnerMembership o 10 7
Mumbai, May 1 , 2012 Mumbai, May 1 , 2012
ANNEXURE TO THE AUDITORS’ REPORT
F - 44F -
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka xecutive ChairmanChartered ccountants Chartered ccountants Dilip B. Jiwrajka Managing irector
Surendra B. Jiwrajka t. Managing irectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate ffairs)
Company SecretaryPlace Mumbai Place Mumbai Place Mumbai
ate 1 May 2012 ate 1 May 2012 ate 1 May 2012
(` Crore)PARTICULARS NOTES AS AT
31-Mar-12 AS AT
31-Mar-11I EQUITIES AND LIABILITIES
(1) Shareholders' Funds Share Capital 2 826.28 7 7.7 eserves and Surplus 3 2,829.22 2,30 . 0
TOTAL 18,238.36 14,267.47III Signi cant accounting policies and
accompanying notes forming part of the nancial statements
1 to 40
BALANCE SHEET AS AT 31 MARCH 2012
F - 45F -
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka xecutive ChairmanChartered ccountants Chartered ccountants Dilip B. Jiwrajka Managing irector
Surendra B. Jiwrajka t. Managing irectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate ffairs)
Company SecretaryPlace Mumbai Place Mumbai Place Mumbai
ate 1 May 2012 ate 1 May 2012 ate 1 May 2012
(` Crore)PARTICULARS NOTES Year Ended
31-Mar-12 Year Ended
31-Mar-11I. REVENUE
evenue from Operations (gross) 20 9,134.81 , 00. 1
ess xcise uty 233.95 112.4
Revenue from Operations (net) 8,900.86 ,3 .43
II. Other ncome 21 65.60 41.0
III. Total Revenue 8,966.46 ,42 . 2
IV EXPENSESCost of Materials consumed 5,748.34 3,224.04
Purchase of Traded oods 161.45 342. 2
Changes in inventories of nished goods,or -in-progress and stoc -in-trade
22 (1,516.66) (222. )
mployee bene ts expense 23 267.28 1 .7
Finance costs 24 1,149.55 73 .27
epreciation and amortisation expense 713.43 1 .7
Other expenses 2 1,681.30 1,00 .
Total Expenses 8,204.69 , 04.
V 761.77 24. 4
VI Exceptional Items (refer note no. 33 (i)) 121.27 41.4
VII 640.50 3.1
VIII Tax expenses Current tax (157.64) (7 .1 )
nclude M T ad ustment of ` 44.12 Crore (` 2 . 3 Crore pertaining to the previous year (preavious year ` 42.42 crores))
eferred tax (102.33) (100. )
Total Tax expenses (259.97) (17 . 3)
IX 380.53 404.3
X EARNINGS PER SHARE (in `) 30
Basic 4.69 .13
iluted 4.69 .13
Signi cant accounting policies and accompanying 1 to 40
notes forming part of the nancial statements
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2012
nterest Paid (net) 1,032.10 1.30(Pro t) oss on sale of xed assets (net) (9.65) 1.74Pro t on sale of Current nvestments (net) (0.12) (1.1 )Operating Pro t before or ing capital changes 2,500.43 1,7 2. 4Adjustments for( ncrease) in nventories (1,331.29) ( 2 .21)( ncrease) in Trade eceivable (356.12) ( 37. 1)( ncrease) ecrease in oans dvances (932.09) 14 . 1ncrease in Current iabiltites and Provisions 136.14 4 .3
Net Increase/(Decrease) in Cash and Cash equivalents (A+B+C) 287.47 ( .11) 108.29 73.40
Cash and Cash equivalents persuant to amalgmation (refer note no. 36) 147.00 –542.76 10 .2
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
F - 47F -
NOTES TO CASH FLOW STATEMENT
1 Purchase of xed assets are stated inclusive of movements of Capital Wor in Progress bet een the commencement and end of the year and is considered as part of investing activity.
2 Cash and Cash e uivalents includes (` Crore)
March 31, 2012 March 31, 2011Cash and Ban Balances 1,294.84 1,13 .
ess armar ed Balalces eposit ith ban s 715.12 7 .32ess eposit ith maturity period of more than 3 months 36.96 3.24
Total Cash and Cash equivalents 542.76 108.29
armar ed balances deposits ith ban includes balances deposits held as margin money or security against borro ings, guarantees and other commitments, hich being, restricted for its use, have been excluded from cash and cash equivalent and grouped under the investment activity.
Fixed eposits ith maturity period of more than three months have been excluded from cash and cash equivalent and grouped under the investment activity.
3 The Cash Flo Statement has been prepared in accordance ith the requirements of ccounting Standard S-3 Cash Flo Statements .
4 Pursuant to scheme of amalgamation bet een lo ndustries td and rabal lo mpex td ith appointed date of 1 pril 2011, the assets and liabilities of rabal lo mpex imited ere ta en over as per the Pooling of nterest method as on 1 pril 2011.
This arrangement of amalgamation is a non-cash transaction and considered as such, in the above cash o statement. ( efer note no 3 of nancial statement)
Previous year s gures have been regrouped restated herever necessary.
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka xecutive ChairmanChartered ccountants Chartered ccountants Dilip B. Jiwrajka Managing irector
Surendra B. Jiwrajka t. Managing irectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate ffairs)
Company SecretaryPlace Mumbai Place Mumbai Place Mumbai
ate 1 May, 2012 ate 1 May, 2012 ate 1 May, 2012
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
F - 48F -
NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Preparation of Financial Statements
These nancial statements have been prepared under the historical cost convention in accordance ith generally accepted accounting principles in ndia, the applicable ccounting Standards and the provisions of the Companies ct, 1 .
b) Use of Estimates
The preparation of nancial statements in conformity ith the generally accepted accounting principles require estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the nancial statements and the reported amounts of revenues and expenses during the reporting period. ifferences bet een, the actual results and estimates are recognised in the period in
hich the results are no n materialise.
c) Revenue Recognition
i) evenue on sale of products is recognised hen the products are dispatched to customers, all signi cant contractual obligations have been satis ed and the collection of the resulting receivable is reasonably expected. Sales are stated net of trade discount, returns and sales tax collected.
ii) evenue in respect of insurance other claims, interest etc. is recognised only hen it is reasonably certain that the ultimate collection ill be made.
d) Fixed Assets
i) Own Assets:
Fixed ssets are stated at cost of acquisition or construction including directly attributable cost. They are stated at historical cost less accumulated depreciation and impairment loss, if any.
ii) Assets taken on lease:
Operating Lease:
ssets ta en on lease under hich, all the ris and re ards of o nership are effectively retained by the lessor are classi ed as operating lease. ease payments under operating leases are recognised as expenses on accrual basis in accordance ith the respective lease agreements.
iii) Assets given on lease
ease rental are recognised as income over the lease term.
e) Investments
nvestments classi ed as ong Term nvestments are stated at cost. Provision is made to recognise a decline, other than temporary, in the value of investments. Current investments are carried at cost or fair value hichever is lo er.
f) Depreciation / Amortisation
i) epreciation on Fixed ssets is provided on Straight ine Method at the rates and in the manner speci ed in Schedule to the Companies ct, 1 . Continuous process plant is classi ed based on technical assessment and depreciation is provided accordingly epreciation on additions to assets or on sale disposal of assets is calculated from the beginning of the month of such addition or up to the month of such sale scrapped, as the case may be. ssets costing less than ` ,000 are fully depreciated in the year of purchase.
ii) Cost of leasehold land is amortised over the period of lease.
iii) Trademar s Brands are amortised over a period of ten years from the date of capitalization
iv) Computer soft are is amortised for a period of ve years from the date of capitalization.
i) Foreign currency transactions are recorded at the exchange rates prevailing on the date of the
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 49F - 10
transaction. xchange differences arising on settlement of foreign currency transactions are recognised in the pro t and loss account
ii) Monetary items denominated in foreign currency are restated using the exchange rate prevailing at the balance sheet date and the resultant exchange differences are recognized in the pro t and loss account. on-monetary items denominated in foreign currency are carried at historical cost.
Ho ever, pursuant to the amended ccounting Standard 11 on The ffects of Changes in Foreign xchange ates, exchange differences arising on restatement of long term monetary items are dealt ith
in the follo ing manner
xchange differences relating to long-term monetary items, arising during the year, in so far as those relate to the acquisition of a depreciable capital asset are added to deducted from the cost of the asset and depreciated over the balance life of the asset.
n other cases such differences are accumulated in a “Foreign Currency Monetary tem Translation ifference ccount” and amortized to the pro t and loss account over the balance life of the long-term
monetary item, ho ever that the period of amortization does not extend beyond 31 March, 2020.
h) Inventories
tems of nventories are valued on the basis given belo
i) a Materials, Pac ing Materials, Stores and Spares and Trading goods at cost determined on First n First Out (F FO) basis or net realisable value, hichever is lo er.
ii) Process stoc and Finished oods t cost or net realisable values hichever is lo er. Cost comprises of cost of purchase (as above), cost of conversion (absorption cost) and other costs incurred in bringing the inventory to their present location and condition.
i)
Company s contribution paid payable for the year to de ned contribution retirement bene t scheme is charged to Pro t and oss account.
ii)
Company s liabilities to ards de ned bene t scheme and other long term bene t plans are determined using the pro ected unit credit method. ctuarial valuation under pro ected unit credit method are carried out at Balance Sheet date, ctuarial gains losses are recognised in Pro t and oss ccount in the period of occurrence of such gains and losses. Past service cost is recognised immediately to the extent bene ts are vested other ise it is amortized on straight line basis over running average periods until the bene ts become vested. The retirement bene t obligation recognised in Balance Sheet represents present value of the de ned bene t obligations as ad usted for unrecognised past service cost and as reduced by fair value of scheme assets. ny asset resulting from this calculation is limited to past service cost the present value is available refunds and reduction in future contribution to the scheme.
iii)
Short term employee bene ts are recognised as an expense at undiscounted amount in pro t loss account of the year in hich the related service is rendered. These bene ts include incentive, bonus.
j) Accounting of CENVAT credit
Cenvat credit available is accounted by recording material purchases net of excise duty. Cenvat credit availed is accounted on ad ustment against excise duty payable on dispatch of nished goods.
k) Government Grants
rants, in the nature of interest subsidy under the Technology pgradation Fund Scheme (T FS), are accounted for hen it is reasonably certain that ultimate collection ill be made. overnment grants not speci cally related to xed assets are recognised in the Pro t and oss ccount in the year of accrual receipt.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 50F - 11
l) Borrowing Costs
Borro ing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. qualifying asset is one that necessarily ta es a substantial period of time to get ready for its intended use or sale. ll other borro ing costs are charged to revenue.
m) Income taxes
Tax expense comprises of current tax and deferred tax. Current tax and deferred tax are accounted for in accordance ith ccounting Standard 22 ( S-22) on “ ccounting for taxes on ncome”. Current tax is measured at the amount expected to be paid recovered from the tax authority using the applicable tax rates. eferred tax liabilities are recognised for future tax consequence attributable to timing difference bet een taxable income and accounting income that are capable of reversing in one or more subsequent periods and are measured at relevant enacted substantively enacted tax rates and in the case of deferred tax asset on consideration of prudence, are recognised and carried for ard to the extent of reasonable virtual certainty as case may be. t each balance sheet date, the Company reassesses unrealised deferred tax assets to the extent they become reasonably certain or virtually certain of realisation, as the case may be. Minimum lternate Tax (M T) credit entitlement is recognised in accordance ith the uidance ote on “ ccounting for credit available in respect of Minimum lternate Tax under the ncome-tax ct, 1 1” issued by C
n) Intangible Assets
ntangible assets are recognised only if it is probable that the future economic bene ts that are attributable to the assets ill o to the enterprise and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated amortisation and accumulated impairment losses, if any.
o) Impairment of Fixed Assets
t the end of each year, the company determines hether a provision should be made for impairment loss on xed assets by considering the indications that an impairment loss may have occurred in accordance
ith ccounting Standard 2 ( S-2 ) mpairment of ssets . n impairment loss is charged to the Pro t and oss ccount in the year in hich, an asset is identi ed as impaired, hen the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.
p) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised hen there is a present obligation as a result of past events and it is probable that there ill be an out o of resources. Contingent liabilities are not recognised but are disclosed in the otes. Contingent ssets are neither recognised nor disclosed in the nancial statements.
q) Accounting for Derivatives
i) The company uses derivative instruments li e foreign currency for ard contracts, foreign currency options and nterest rate s aps to hedge its exposure to movements in foreign exchange rates, interest rates and currency ris s. The ob ective of these derivative instruments is to reduce the ris or cost to the company and is not intended for trading or speculation purposes.
ii) nterest ate S aps, Foreign Currency Options and Currency S aps, entered into by the Company for hedging the ris s of foreign currency exposure (including interest rate ris ) are accounted based on the principles of prudence as enunciated in ccounting Standard 1 ( S-1) “ isclosure of ccounting Policies”. Thus, mar to mar et loses (net) are accounted for by the company, net gains are ignored.
iii) n respect of foreign currency for ard contracts entered into to hedge foreign currency exposure in respect of recognized monetary items, the premium or discount on such contracts is amortized over the life of the contract. The exchange difference measured by the change in exchange rate bet een the inception dates of the contract last reporting date as the case may be and the balance sheet date is recognized in the pro t and loss account. ny gain loss on cancellation of such for ard contracts are recognised as income expense of the period.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 51F - 12
iv) The Company designates foreign currency for ard contracts ta en ith respect to highly probable forecast transactions and rm commitments as hedges and accounts for the same by applying the recognition and measurement principles set out in the ccounting Standard ( S) 30 “Financial nstruments ecognition and Measurement”. ccordingly, the Company records the gain or loss on
effective cash o hedges in the Cash Flo Hedging eserve account until the forecasted transaction materializes. ain or loss on ineffective cash o hedges (if any) is recognized in the pro t and loss account. ( efer ote o. 33(ii)).
2. SHARE CAPITAL
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11(a) Authorised Shares 100,00,00,000 (previous year 0,00,00,000) quity
shares of `10 each 1,000.00 00.00
1,000.00 00.00
2, 2, ,3 7 (previous year 7 ,77, 4,3 7) quity shares of `10 each fully paid up
826.27 7 7.7
dd Forfeited Shares (13, 21 shares of ` 10 each ` paid up)
0.01 0.01
826.28 7 7.7 TOTAL 826.28 7 7.7
NOTES :
a) uring the year 3, 4, ,000 (previous year il) equity shares are issued as under
i 1, 0,00,000 quity shares of `10 each at a permium of ` 41 each alloted on conversion of arrants issued by rabal lo mpex imited, the amalgmating company. Such arrants ere
sold by the original arrant holder to i ara a nvestment Private imited, a promoter group company, hich excercised such arrants.
ii 2,24, ,000 quity shares alloted to the Shareholders of rabal lo mpex imited pursuant to the Scheme of malgamation ( efer ote o 3 ) for consideration other than cash.
b) Of the remaining shares
i 7,4 ,3 equity shares ere allotted as Bonus shares by ay of capitalisation of eneral eserve.
ii 2, 0 equity shares being forfeited shares ere reissued during 2001.
c) Reconciliation of shares outstanding at the begining and end of the reporting period
Particulars AS AT 31-Mar-12
AS AT 31-Mar-11
787,784,357 7 7,7 ,27
llotment of quity shares on conversion of arrants 16,000,000 llotment of quity shares pursuant to the Scheme of malgamation 22,485,000
– (13, 21) 826,269,357 7 7,7 4,3 7
The company has only one class of equity shares having a par value of ` 10 per share. ach holder of equity share is entitled to one vote per share. The company declares and pays dividend in ndian upees. The dividend proposed by the Board of irectors is sub ect to the approval of the sharesholders in the nnual eneral Meeting.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 52F - 13
n the event of liquidation of the company, the holders of equity shares il be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution ill be in proportion to the number of equity shares held by the shareholder.
e) Shares reserved for issue under options (Refer note no 29)
f) rabal lo mpex imited, the amalgamating company, ( efer note no 3 ) had issued and allotted 200 Foreign Currency Convertible Bonds of S 1,00,000 each aggregating to S 20 million outstanding as at the balance sheet date, hich as convertible into shares, at any time on or after 1 pril 2007 and prior to the closure of business on 0 March 2012, unless previously redeemed, converted or purchased and cancelled. Such FCCBs have been redeemed after the balance sheet date, on 0 pril 2012.
g) uring the year ended 31 March 2012, an amount of ` 0.30 per share (previous year ` 0.2 per share) as recognised as proposed dividend to equity share holders.
h) Shareholder holding more than 5 percent of the share capital
Sr.No. Name of the Shareholder AS AT 31-Mar-12
AS AT 31-Mar-11
No of shares Held
% No of shares Held
%
i ira ealtors Shares Private imited 71,637,204.00 8.67 , 42,1 4.00 7. 0
ii Caledonia nvestment P C 36,207,135.00 4.38 47, 2 ,714.00 .07
iii Caledonia nvestment P C (F ) 24,211,903.00 2.93 4 ,1 4,3 4.00 .74
3. RESERVES AND SURPLUS
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Capital ReserveBalance as per last Balance Sheet 10.23 10.23
dd on amalgmation 1.49 11.72 10.23
Capital Redemption ReserveBalance as per last Balance Sheet 2.20 2.20
dd on amalgmation 6.90 9.10 2.20
Securities Premium AccountBalance as per last Balance Sheet 880.39 0.3
dd on amalgmation 60.15 dd eceived during the year ( efer note on arrants in note no 2 above)
65.60
ess Premium on redemption of FCCB (12.49) 993.65 0.3
Debenture Redemption ReserveBalance as per last Balance Sheet 220.38 04.
ess Transferred to Pro t and oss ccount (51.90) (3 4.30) 168.48 220.3
General ReserveBalance as per last Balance Sheet 274.99 24 .
dd on amalgmation 5.63 2 .00 280.62 274.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 53F - 14
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
Options granted during the year 4.67 ess eferred mployee Compensation
expenses (2.40)
2.27 Cash Flow Hedging Reserve ( efer ote o 33(ii))
(16.78)
Balance brought for ard from previous year 921.61 1 0. 1dd on amalgmation 54.85
Pro t for the year 380.53 404.3Less : Appropriations(i) Transfered to eneral eserve – (2 .00)(ii) Transfered from (to) ebenture edemption
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 54F - 1
c) Other loans advances ( efer ote belo )
Secured
ehicle loan from Ban s 2.43 4.03 2.07 . 0
TOTAL 1,632.74 7,013.06 21. 2 ,0 1.40
NOTES :
I. a) ebentures outstanding at the year end are redeemable as follo s
Particulars Nos 31-Mar-12 (` Crore)
31-Mar-11 (` Crore)
Date of Redemption
12.00 edeemable on convertible ebentures 37 37. 0 1-Feb-2012.00 edeemable on convertible ebentures 37 37. 0 1- ug-112.00 edeemable on convertible ebentures 37 37. 0 1-Feb-110.7 edeemable on convertible ebentures 334 33.34 33.34 1 -Oct-112.00 edeemable on convertible ebentures 37 37. 0 1- ug-112.00 edeemable on convertible ebentures 37 37. 0 1-Feb-110.7 edeemable on convertible ebentures 333 33.33 33.33 1 -Oct-1712.00 edeemable on convertible ebentures 37 37. 0 1- ug-1712. 0 edeemable on convertible ebentures 300 30.00 30.00 3-Mar-1712. 0 edeemable on convertible ebentures 3 3 . 3 . 2-Mar-1712.00 edeemable on convertible ebentures 37 37. 0 1-Feb-1710.7 edeemable on convertible ebentures 333 33.33 33.33 1 -Oct-112.00 edeemable on convertible ebentures 37 37. 0 1- ug-111. 0 edeemable on convertible ebentures 00 0.00 0.00 2 - un-112. 0 edeemable on convertible ebentures 3 7 3 . 7 3 . 7 2-Mar-112. 0 edeemable on convertible ebentures 300 30.00 30.00 2-Mar-111. 0 edeemable on convertible ebentures 700 70.00 70.00 2 - un-112. 0 edeemable on convertible ebentures 3 7 3 . 7 3 . 7 3-Mar-112. 0 edeemable on convertible ebentures 300 30.00 30.00 3-Mar-111. 0 edeemable on convertible ebentures 700 70.00 70.00 2 - un-14Total 800.00 500.00
b) ll the debentures in a) above are secured by pari passu charge on the immovable property situated at Mou e rana, Talu a adi, istrict Mehsana in the state of u arat. Further, ebentures of ` 300 crore are secured by rst pari passu charge to be created on xed assets of the company and ebentures of ` 00 crore are secured by subservient charge on xed and current assets of the Company (excluding and and Building).
(` Crore)Banks Financial
InstitutionsTOTAL
xclusive charge on Plant Machinery and speci c assets nanced
1,021.42( 40. )
1,021.42( 40. )
Pari Passu rst charge created to be created on the entire xed assets of the company
2,7 3.2(2,4 7. )
4.02(10 . 3)
2, 37.30(2, 4. 2)
Subservient charge on all movable and current assets of the Company @
3, 20.4(2, 7 .4 )
1 3.(141. )
3,774.3(3,117.3 )
Total 7,395.18 237.90 7,633.08 (6,104.14) (248.79) (6,352.93)
ncludes loans agreegating to ` 21 .47 crore (previous year 21 . crore) hich is further secured by personal guarantees of promotor directors group Companies
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 55F - 1
ncludes Ban loans agreegating to ̀ 0.17 crore (previous year . 0 crore) Financial nstitution loans aggreegation to ` 30.47 crore (previous year 3 . crore) hich is further secured by personal guarantees of promotor directors group Companies
@ ncludes Ban s loans agreegating to ` 237.47 crore (previous year 1 . 0 crore) hich is further secured by personal guarantees of promotor directors group Companies
(` Crore)Particulars Rate of Interest* 1-2 Years 2-3 Years 3-4 Years
YearsTotal
upee Term oan From Ban
12 1 .7(10.2 14.2 )
1, 42.7(70 . 2)
1, .0(1,1 . 0)
20.31(1,17 .17)
1, 37.34(1, 0.4 )
, .4(4, 2.17)
Foreign Currency Term oan From Ban s
2. 3 .34(2. 0 .00 )
34.4(47 . 4)
4 . 1(27.3 )
2.7(3 . )
20 .10(2 .33)
3 0.1( 71. 2)
upee Term oan From Financial nstitutions
.00 12. 0( .00 12.00 )
13.74(13.13)
1 . 3(13.7 )
13. 1(1 . 3)
1 .31(2 .21)
.(71.72)
Foreign Currency Term oan From Financial
nstitutions
2.70 .31(3. 2 .00 )
.(1 . 3)
13 .(7. )
(11 .3 )
14 .22(144. )
Total 1,699.60 1,767.05 897.01 1,758.75 6,122.41(1,216.92) (1,245.60) (1,351.72) (1,636.02) (5,450.26)
ate of interest is hitout considering interest subsidy under T F Scheme
(` Crore)Particulars Rate of Interest 1-2 Years 2-3 Years 3-4 Years
YearsTotal
Foreign Currency Term oan From Ban s
2. 3 3.7 17.32 17.32 17.32 34. . 2
(2. 3.00 ) (17.32) (17.32) (17.32) (43.3 ) ( .34)
(` Crore)Banks
ehicle loans are secured by vehicles under hypothecation ith ban s .4 (7. 7)
Current maturities of long-term debt ( efer note 4 for details) 1,632.74 21. 2nterest accrued but not due on borro ings 9.35 17.npaid dividends (see note i ii belo ) 1.05 0. 4
Foreign Currency Monetary tem Translation ifference ccount – 0.22Other payables dvance from customers 46.14 1.32 Creditors for Capital oods 32.79 1 .71 To ards statutory iabilities 6.09 10.0 Premium on redemption of FCCB 43.14
dvance from elated parties ( efer ote o 2 ) 261.73 Temporary overdra n ban balance (see note iii belo ) 14.28 30.13 For ard Contract Payable 10.89 TOTAL 2,058.20 1,0 0.4
NOTES
(i) This gure doesn t include any amount due and outstanding to be credited to the nvestor ducation and Protection Fund.
(ii) uring the year company has transferred ` 0.03 crore (Previous year ` 0.0 crore) to the nvestor ducation and Protection Fund.
(iii) Temporary overdra n ban balances are as per boo s consequent to issue of cheques at the year end, though the ban s have positive balances as on that date.
10. SHORT-TERM PROVISIONS
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Provision for employee bene ts ( efer note o 31) 7.51 3.07Mar to Mar et provision on derivative instruments ( efer ote o 33(iii)) 36.65 12. 2Proposed dividend 24.79 1 .Corporate dividend tax 4.02 3.27Provision for taxation ( et of dvance Tax) 2.63 1 .24Others ( efer note o 3 ) – 13.
TOTAL 75.60 71. 7
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 59F - 20
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 201211
. FIX
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12. NON CURRENT INVESTMENTS (Trade)
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11
lo nc. 0.04 0.040 quity Shares of S 200 eachlo ndustries nternational imited (refer note no 3 ) – 0.220,000 quity Shares of S 1 eachlo nternational nc. (` 43,22 -) 0.00 0.00
1,000 quity Shares of S 1 eachlo pparel Private imited 1.00 1.00
10,00,000 quity Shares of `10 eachlo etail ( ndia) imited 0.05 0.00,000 quity Shares of ` 10 eachlo and Holdings Private imited 0.50 0. 0,00,000 quity Shares of ` 10 each
(1, 0,000 shares pledged against nance availed by lo nfrastructure imited)lo nfrastructure imited 0.05 0.00,000 quity Shares of `10 each
(Pledged against nance availed by lo ealtors Private imited)lo H imited 36.05 3 .0
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 62F - 23
14. CURRENT INVESTMENTS (at cost) [Others](` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
nvestments in debentures or bonds Bonds axmi ilas Ban Tier Bonds 2.00 2.00 [20 Bonds of ` 10,00,000 each
2.00 2.00nvestments in Mutual funds nquoted
xis nfrastructure Fund 1 1.94 7.20 [1 ,37 (previous year 72,03 ) units of 1000 each SB Magnum nsta Cash Fund – 17.00 [ il (previous year 7 ,0 , 7 .4 ) units of 10 each Peerless iquid Fund collection C – 1.00 [ il (previous year ,3 , 0 .20) units of 10 each FC Money Manager Fund aily ividend – 0.0 [ il (previous year 4 , 2. 3) units of 10 each
1.94 2 .2 TOTAL 3.94 27.2
15. INVENTORIES(` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
a Materials 435.09 7. 3( ncludes material in transit ` 2.0 crore (previous year ` 13 . 2 crore)Wor -in-progress 2,220.77 .77Finished oods 641.86 4 .33Stoc in Trade (Traded oods) 2.72 13.
3,300.44 1, 3 .32Stores Spares 72.45 .40Pac ing Material 7.02 . 0TOTAL 3,379.91 2,002. 2
16. TRADE RECEIVABLES(` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
ebts Outstanding for a period exceeding six months from due date
41.97 2 .7
ess Provision 14.18 27.79 . 1 . 0
Other ebts 2,131.32 1,722. 3ess Provision 6.96 2,124.36 2.44 1,720.3
2,152.15 1,740.1nsecured
Considered ood 2,152.15 1,740.1 Considered oubtful 21.14 .3TOTAL 2,173.29 1,74 .
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 63F - 24
NOTE :
i) Sundry ebtors includes ` 70.72 crore (previous year ` 3 .23 crore) to ards contractual obligations on account of xport ncentives eceivables.
ii) ebtors include dues from parties aggregating to ` 1.22 crore (previous year ` 3.10 crore) in hich a director is a director partner
ii) efer note o. 2 for related party balances
17. CASH AND BANK BALANCES
(` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
Cash on hand 0.50 0.70
Balance ith Ban
(i) n current accounts 515.20 27.2
(ii) n FC accounts 0.98 0.41
(iii) n deposit accounts ( efer ote (i) and (ii) belo ) 61.99 132.30
(iv) n earmar ed accounts
npaid dividend accounts 1.05 0. 4
Balances eposits held as margin money or security against borro ings, guarantees and other commitments ( efer ote (i) and (iii) belo )
715.12 7 .32
TOTAL 1,294.84 1,13 .
NOTE :
(i) Balances ith ban s includes deposits amounting to ` 22. 4 crore (previous year ` 3 .22 crore) and margin monies amounting to ` 77. 3 (previous year ` 71.4 crore) hich have an original maturity of more than 12 months.
Balances ith ban s includes deposits amounting to ` 2.1 crore (previous year ` . 2 crore) and margin monies amounting to ` 2. 1 crore (previous year ` 1 .42 crore) hich have a maturity of more than 12 months from the Balance Sheet date
(ii) ncludes ̀ 33.4 crore (previous year il) ept in ban deposits and ̀ . crore (previous year ̀ 41.2 crore) margin money pending utilisation to ards pro ect
(iii) ncludes ` 437. 7 crore (previous year ` 4 .4 crore) pledged ith ban s to ards loan availed by subsidiary company.
18. SHORT-TERM LOANS AND ADVANCES (Unsecured, considered good)
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11oans advances to elated parties ( efer ote o 2 ) 120.50 . 4
Others
dvance to endors 933.22 110.74
dvance to Staff (see note i belo ) 9.13 10. 0
Balance ith Central xcise, Customs and Sales Tax authorities 279.32 201.07
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 64F - 2
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
Prepaid xpenses 49.18 2 .13
nter Corporate eposits 3.69 4.
TOTAL 1,395.04 42 .03
NOTE :
(i) dvance to staff includes ` 0.1 crore (previous year ` 1.27 crore) due from of cers of the Company [maximum amount outstanding during the year ` 1.27 crore (previous year ` 1.3 crore)
Freight, Coolie and Cartage 106.51 .2egal and Professional Fees 35.41 2 .70ent 15.63 12.1ates and Taxes 5.54 4.epairs and Maintenance
Plant and Machinery 16.91 14. 1 Factory Building 2.08 0. Others 5.25 3.
24.24 1 .7Commission on Sales 37.29 21. 3
oss on exchange rate difference derivative ( et) 248.56 34.1Provision for oubtful ebts 12.87 .37Provision for oubtful dvance 3.76 .31Bad debts and advances ritten off 12.07
oss on sale of investment( et) 0.12 irectors emuneration 7.20 7.20irectors Fees and Commission 5.04 .0uditors emuneration
udit Fees 1.46 1.30 Certi cation Fees 0.05 0.03
1.51 1.33oss on sale of assets ( et) – 1.74nsurance 12.11 12. 7Miscellaneous xpenses 129.95 10 .0(Miscellaneous xpenses includes Printing and Stationery, Ban Charges, dvertisement etc.)TOTAL 1,681.30 1,00 .
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 67F - 28
26 Contingent Liabilities in respect of :
(` Crore) Sr. No. Particulars Current Year Previous Year
A Customs duty on shortfall in export obligation in accordance with EXIM Policy
(The company is hopeful of meeting the export obligation within the stipulated period)
Amount Unascertained
Amount Unascertained
B Pending Litigation 0.05 0.05C Guarantees given by banks on behalf of the Company 73.48 24.69D Corporate Guarantees given to bank for loans taken by
Subsidiary Companies977.62 213.35
E Bills discounted 214.79 242.94F Taxation Matters :
a) Income tax demand mainly on account of alleged short deduction of taxes for AY 2010-11 and AY 2011-12 on certain payments. The company has led an appeal with the Commissioner of Income Tax (A) and is hopeful of favourable decision.
1.69 -
b) Income Tax demand during the previous years of ` 5.91 crore mainly on account of alleged short deposition of TDS amounts arising from wrong TAN numbers mentioned while uploading the TDS return and certain payments not considered by the Tax authorities, although duly paid by the company and short deduction of tax in respect of certain payments with respect to AY 2006-07 to 2009-10. The company had led an appeal with the Commissioner of Income Tax (A) and also made application for recti cation u s 154 providing details of amounts paid to the bank. Such recti cation was carried out during the year for majority of the amount and for the balance of ` 0.23 crore mainly pertaining to short deduction of taxes, the company is hopeful of favourable decision.
0.23 5.91
c) Demands of Works Contract Tax contested not acknowledged as debts as the company is hopeful of favourable decision.
0.59 0.59
d) Income tax amounting to ` 11.29 crore, mainly on account of disallowance of interest and expenditure incurred towards exempt income. The company has led an appeal with the Commissioner of Income Tax
(A) and is hopeful of favourable decision.
11.29 -
27 Capital Commitments
(` Crore)
Particulars Current Year Previous YearEstimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of advances)
445.15 464.55
28 Related Party Disclosure
A) Name and Transaction / balances with related parties
I. Name of related parties and nature of relationship
As per Accounting Standard 18 (AS-18) “Related Party Disclosures”, Company’s related parties disclosed as below:
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
(ii) Entities under common controlAlok Denims (India) Private Limited Green Park EnterprisesAlok Finance Private Limited Jiwrajka Associates Private Limited
(iii) SubsidiariesAlok Inc. Alok Infrastructure LimitedAlok Industries International Ltd. (Refer note no 35 on transfer of shares to Alok Infrastructure Limited)
Alok Apparels Private Limited
Alok Retail (India) Limited Alok New City Infratex Private LimitedAlok Land Holdings Private Limited Alok Realtors Private LimitedAlok Aurangabad Infratex Private Limited Alok HB Hotels Private LimitedAlok H&A Limited Alok HB Properties Private LimitedAlok International, Inc. Springdale Information and Technologies Private LimitedAlok European Retail, s.r.o. Kesham Developers & Infotech Private LimitedAlok International (Middle East) FZE(incorporated on 01 August 2011)
Alok Singapore Pte Ltd.(Incorporated on 28 December 2011)
Mileta, a.s. Grabal Alok (UK) Limited (Refer note no 36 on amalgamation)Grabal Alok International Limited (Refer note no 35 on transfer of shares to Alok Infrastructure Limited)
(iv) Joint VentureAurangabad Textiles & Apparel Parks LimitedNew City Of Bombay Mfg. Mills Limited
(v) Key Management Personnel Ashok B. Jiwrajka
DirectorsChandrakumar BubnaDilip B. JiwrajkaSurendra B. Jiwrajka
(vi) Relatives of Key Management Alok A. JiwrajkaPersonnel Suryaprakash Bubna
II. Transactions with related parties.
(` Crore)Transaction Associate
companiesEntities under
common control
Subsidiaries Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Total
a) Unsecured Short Term Borrowing Accepted during the year (on
amalgamation)- - - 11.75 - - 11.75
(-) (-) (-) (-) (-) (-) (-) Balance as at 31 Mar - - - 11.75 - - 11.75
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 69F - 30
Transaction Associate companies
Entities under
common control
Subsidiaries Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Total
(-) (-) (-) (-) (-) (-) (-)b) Short Term Loans and Advances
Balance as at 1 April - 0.03 69.61 - - - 69.64(-) (-) (32.62) (-) (-) (-) (32.62)
Granted during the year - 10.13 3,998.06 - - - 4,008.19(-) (252.25) (1,482.83) (-) (-) (-) (1735.08)
Repaid during the year - 10.15 3,947.18 - - - 3,957.33(-) (252.22) (1,445.84) (-) (-) (-) (1698.06)
Balance as at 31 Mar - 0.01 120.49 - - - 120.50(-) (0.03) (69.61) (-) (-) (-) (69.64)
c) Non Current Investments Balance as at 1 April - - 37.91 88.75 - - 126.66
(-) (-) (117.76) (87.00) (-) (-) (204.76) Invested during the year - - 23.91 3.63 - - 27.54
(-) (-) (-) (1.75) (-) (-) (1.75) Redeemed Transferred during the year
m) Guarantee given - - 763.19 - - - 763.19(-) (-) (-) (-) (-) (-) (-)
Note: Previous year gures are given in brackets
III. Out of the above items, transaction in excess of 10% of the total Related Party transactions are as under:
(` Crore)Transaction Current Year Previous Year
a) Unsecured BorrowingAccepted during the year (on amalgamation)Joint Venture Company New City of Bombay Mfg. Mills Limited 11.75 -
b) Loans and advancesGranted during the yearSubsidiary- Alok Infrastructure Limited 3,539.23 1,090.93 Alok Industries International Limited - 298.50
3,539.23 1,389.43Repaid during the yearSubsidiary- Alok Infrastructure Limited 3,499.01 1,090.84 Alok Industries International Limited - 236.45
3,499.01 1,327.29c) Investment
Invested during the yearSubsidiary- Grabal Alok International Limited 22.60 -Joint Venture- New City of Bombay Mfg. Mills Limited - 1.75 Aurangabad Textiles & Apparel Parks Limited 3.63 -
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 71F - 32
Transaction Current Year Previous YearRedeemed Transferred during the yearSubsidiary- Alok Industries International Limited - 79.15 Grabal Alok International Limited 22.60 -
d) Turnover (including job work charges)Subsidiary- Alok International Inc. 141.77 44.68 Grabal Alok (UK) Ltd. 64.80 79.92 Alok Singapore Pte. Ltd. 25.33 -
231.90 124.60e) Expenditure
Purchase of Goods:Joint Venture Company New City of Bombay Mfg. Mills Limited 60.61 81.71Purchase of Fixed Assets (Under Construction):Subsidiary- Alok Infrastructure Limited 201.66 245.48RentSubsidiary- Kesham Developers Private Limited 2.86 0.59LC ChargesSubsidiary- Grabal Alok (UK) Ltd. - 2.36Sales Promotion ExpensesSubsidiary – Grabal Alok (UK) Ltd. 2.67 2.35Legal & Professional chargesSubsidiary – Grabal Alok (UK) Ltd. 12.08 -Marketing Service ChargesSubsidiary – Alok International Inc. 12.98 8.84Exchange Rate DifferenceSubsidiary- Grabal Alok (UK) Ltd. 68.98 94.37Remuneration:Key Management Personnel- Ashok B. Jiwrajka 3.05 3.05 Surendra B. Jiwrajka 3.05 3.05 Dilip B. Jiwrajka 3.05 3.05 Chandrakumar Bubna 3.05 3.05
12.20 12.20f) Dividend Paid
Key Management Personnel- Ashok B. Jiwrajka 0.50 0.50 Dilip B. Jiwrajka 0.51 0.51 Surendra B. Jiwrajka 0.53 0.53
1.54 1.54
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 72F - 33
Transaction Current Year Previous Yearg) Income
Dividend:Joint Venture Company New City of Bombay Mfg. Mills Limited 1.80 1.80 Aurangabad Textiles & Apparel Parks Limited 0.20 0.41
In compliance with the Accounting Standard 27 on ‘Financial Reporting of interest in Joint Ventures’ as noti ed by the (Companies Accounting Standards) Rules, 2006, the Company has interests in the following jointly controlled entities, which are incorporated in India.
(` Crore)Name of the Companies % of
share holding
Amount of interest based on provisional unaudited Accounts for the year ended 31 March 2012
Assets Liabilities Income Expense Contingent Liability
@ Disputed various matter relating to NTC ATM-Amount unascertainable.
Note : Previous year gures are given in brackets.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 73F - 34
29 Employee Stock Option Scheme(ESOS)
In 2011, the shareholders of the Company approved the Employee Stock Option Scheme (“Alok Industries Limited – ESOS 2010 Scheme”) vide postal ballot, in accordance with the Securities and Exchange Board of India (ESOP & ESOS) Guidelines, 1999. Such scheme provides for grant of options up to 2,50,00,000 options to the eligible employees and or directors of the Company and or its subsidiaries. The exercise price for such options can be up to 50% discount to the market price as per the discretion of the compensation committee. 1,07,99,250 options were granted during the year and 1,05,95,700 options were outstanding as on 31 March 2012. Such options vest over a period of two years, 50% at the end of one year from the date of grant and 50% at the end of two years from the date of grant.
Details of options granted duly approved by the Remuneration and Compensation Committee under the said scheme are as under:
Grant Date No. of Options granted
Options surrendered /
lapsed
Closing Balance
Exercise Price Vesting period
20 April 2011 12,80,000 1,85,550 10,94,450 18.90 Up to 20 April 201320 April 2011 95,19,250 18,000 95,01,250 21.42 Up to 20 April 2013Total 1,07,99,250 2,03,550 1,05,95,700
The Company has followed the Intrinsic Value-based method of accounting for stock options granted, based on Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India, and accordingly, compensation cost of ` 4.67 crore has been recorded during the year on such grant. The compensation cost recognised as a charge during the year was ` 2.27 crore. Had the compensation cost for the Company’s stock based compensation plan been determined in the manner consistent with the fair value approach as described in the Guidance note, the Company’s net income would be lower by ` 4.20 crore and earnings per share as reported would be lower as indicated below:
Particulars Year-2012Basic and Dilutive Earnings per share – As reported (In `) 4.69 – Adjusted (In `) 4.64
The Company has adopted Black Scholes option pricing model to determine the fair value of stock options. The fair value of each option granted in 2012 is estimated on the date of grant based on the following assumptions:
Particulars Year-2012Expected life (years) 1 year from the
date of vestingRisk free interest rate (%) 7.83%Volatility (%) 39%
30 Earnings per share (EPS)
(` Crore)31 March 2012 31 March 2011
a. Nominal value of equity shares per share ( In Rupees) 10 10b. Basic and Diluted EPS
Net Pro t available for equity shareholders 380.53 404.36Weighted average number of equity shares – Basic 811,187,390 787,784,357Basic EPS 4.69 5.13Add: Effect of dilutive stock options (Nos.) 46,286 -Weighted average number of equity shares – Diluted (Nos.) 811,233,676 787,784,357Diluted EPS 4.69 5.13
i) De ned contribution plans:
Amounts recognized as expenses towards contributions to provident fund, superannuation and other similar funds by the Company are ` 10.58 Crore (Previous Year ` 8.08 crore) for the year ended 31 March 2012.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 74F - 35
ii) De ned bene t plans:
a) Gratuity Plan: The Company makes annual contribution to the Employee’s Group Gratuity Assurance Scheme, administered by the Life Insurance Corporation of India (‘LIC’), a funded de ned bene t plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to fteen days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs on completion of ve years of service.
b) Compensated absences: Employees’ entitlement to compensated absences in future periods based on unavailed leave as at balance sheet date, as per the policy of the Company, is expected to be a long term bene t and is actuarially valued.
The following table sets out the status of the gratuity plan for the year ended 31 March 2012 as required under AS 15 (Revised)
(` Crore)Particulars Gratuity
(funded) as on 31 March 2012
Gratuity (funded) as on 31 March 2011
15.08 10.52Current Service Cost 4.15 3.31Interest Cost 1.51 1.11Actuarial (Gain) loss (0.63) 0.46Past Service cost – Vested Bene t - -Bene ts Paid (0.33) (0.32)
19.78 15.08Change in Fair Value of assetsOpening in Fair value of assets 4.49 2.76Expected Return on Plan Assets 0.34 0.22Actuarial gain 0.26 0.08Contribution by Employer 2.32 1.75Bene ts Paid (0.33) (0.32)Closing Fair Value of Plan Assets 7.08 4.49Net Liability 12.70 10.59
Expense to be recognized in statement of Pro t and Loss Account (` Crore)
Particulars Year ended 31 March 2012
Year ended 31 March 2011
Current Service Cost 4.15 3.31Interest on De ned Bene t Obligation 1.51 1.11Expected Return on Plan Assets (0.34) (0.22)Net Actuarial Loss (0.89) 0.38Total Included in Employment Expenses 4.43 4.58Actual Return on Plan Assets 0.60 0.30Category of Assets as on 31 MarchInsurer Managed Fund
7.08 4.49
The assumptions used in accounting for the gratuity are set out below:
Particulars Year ended31 March 2012
Year ended 31 March
2011Discount rate 8.70% 8.05%Rate of increase in compensation levels of covered employees
9.00% 9.00%
Expected Rate of return on plan assets * 7.50% 7.50%
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 75F - 36
* Expected rate of return on plan assets is based on expectation of the average long term rate of return expected to prevail over the estimated term of the obligation on the type of the investments assumed to be held by LIC, since the fund is managed by LIC. The estimates of future salary increases, considered in actuarial valuation, takes into account the in ation, seniority, promotions and other relevant factors.
Experience Adjustments
(` Crore)Particulars Year Ended
31 March2012
31 March2011
31 March2010
31 March 2009
31 March 2008
De ned bene t obligation 19.78 15.08 10.52 6.67 -Plan Assets 7.08 4.49 2.76 2.24 -Surplus (De cit) (12.70) (10.59) (7.76) (4.43) -Experience Adjustments on plan Liabilities
1.09 (0.67) 0.16 - -
Experience Adjustments on plan Assets
0.26 0.08 0.07 - -
Asset Allocations
Since the investments are held in the form of deposit with LIC, these are not volatile and the market value of assets is the cost value of assets and has been accordingly considered for the above disclosure.
32 Segment Reporting
a) Primary Segment: Geographical Segment
The company is in the business of manufacturing of Textile products. Considering its high level of international operations and present internal nancial reporting based on geographical location of customer, the company has identi ed geographical segment as primary segment.
The geographic segment consists of:
a) Domestic (Sales to Customers located in India)
b) International (Sales to Customers located outside India)
Revenue directly attributable to segments is reported based on items that are individually identi able to that segment. The company believes that it is not practical to allocate segment expenses, segment results, assets used, except debtors, in the company’s business or liabilities contracted since the resources services assets are used interchangeably within the segments. Accordingly, no disclosure relating to same is made. All xed assets are located in India.
(` Crore)Particulars Current
YearPrevious
YearSegment RevenueOperating Revenue – Sales Domestic [Net of Excise duty of ` 233.95 crore (Previous year
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 76F - 37
b) Secondary Segment: Business Segment
The company is operating in a single business i.e. Textile and as such all business activities revolve around this segment. Hence, there is no separate secondary segment to be reported considering the requirement of AS 17 on “Segment Reporting”
33 i. Due to unusual depreciation in the value of the Indian Rupee (INR) against US Dollar (USD) during the year, the exchange loss gain arising out of :
(i) Restatement of foreign currency liabilities assets, and
(ii) Mark to Market (MTM) losses on foreign exchange derivatives taken by the Company, has been presented as an exceptional item with corresponding changes for the previous year.
ii. The Company, during the year, based on the announcement of the ICAI (Accounting for derivatives), has accounted for derivative forward exchange contracts taken towards highly probable forecast transactions and rm commitments, at fair values considering the principles of recognition and measurement stated in AS-30 ‘Financial Instruments: Recognition and Measurement‘. Consequent upon such change, the pro t after tax for the year ended March 31, 2012 is higher by `16.78 crore and reserves and surplus are lower by an equivalent amount. Fair value (net loss) of the derivative instruments identi ed as cash ow hedges is ` 16.78 crore as at March 31, 2012, which is expected to be reclassi ed to the pro t and loss account over the next year.
iii. Fair values (Mark to market values) (loss) of Foreign currency options , Interest rate swaps and forward contracts (other than those considered for hedging) as at 31 March 2012 aggregating to ` 179.57 crore (previous year ` 72.96 crore) has been accounted for by the Company. Such fair values are based on the report of counter parties. MTM losses on such derivatives of ` 106.61 crore have been recognised during the year.
iv. Derivative contracts entered into by the company and outstanding as on 31 March 2012 for hedging currency and interest rate related risks. Nominal amounts of derivative contracts entered into by the company and outstanding as on 31 March 2012 amount to ` 3,477.99 Crore (previous year ` 2,841.73 Crore). Category wise break-up is given below.
(` Crore)Sr. No. Particulars 31 March 2012 31 March 2011
34 During the previous year, Deutsche Bank, Singapore Branch subscribed to unsecured oating rate compulsory convertible bonds issued by Alok Industries International Limited (“Alok BVI”) and Grabal Alok (UK) Ltd, a company incorporated in the United kingdom (subsidiary) of the company, of USD 56.5 million each, with a green shoe option of USD 25 million. These bonds are secured by subservient charge on current and movable assets of the company which was created by executing a Deed of Hypothecation on 28 October 2010 in favour of AXIS Trustee Services Limited, Mumbai, India.
35 During the year, the company has transferred investments in the form of equity capital and cumulative redeemable preference shares in Alok Industries International Ltd (“Alok BVI”) & Grabal Alok International Ltd (“Grabal BVI”), its two wholly owned subsidiary companies to Alok Infrastructure Limited (“Alok Infra”), another wholly owned subsidiary as a strategy to consolidate all investible assets under one umbrella. During the previous year, vide a novation agreement, the Company had taken over the obligation of Grabal Alok (UK) Ltd, (then an associate company of Alok BVI & Grabal BVI in the United Kingdom) towards its liability pertaining to a JPY USD foreign currency derivative. Consequent to the sale of shares in Alok BVI and Grabal BVI to Alok Infra, Alok Infra has taken over such obligation of Alok Industries Ltd. during the current year.
36 During the year, the Honourable High Court, Bombay sanctioned the scheme of amalgamation (‘scheme’) between the Company (transferee) and Grabal Alok Impex Limited (transferor) with appointed date of 1 April 2011. Grabal Alok Impex is in the business of manufacturing embroidery textiles. The scheme has been effective from 1 March 2012.
The Company issued 2,24,85,000 equity shares of ` 10 each to shareholders of Grabal Alok Impex Limited (of which 19,00,000 shares were issued to Alok Bene t Trust) considering exchange ratio of 1:1 as per the scheme. There were no signi cant differences in accounting policies of two companies. The Company has accounted for such amalgamation under ‘pooling of interest’ method as under
Particulars ` CroreCarrying value of Fixed assets (including CWIP ` 18.94 crore) 193.51Carrying value of Investments (including ` 31.34 crore in Transferee company through Alok Bene t Trust)
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 78F - 39
Particulars ` CroreCurrent liabilities & Provisions 55.82Long term borrowings 113.15Short Term Borrowings 145.79Deferred Tax Liabilities 16.78Share warrants 20.40Total Liabilities 351.94
Shares issued 22.49Reserves taken over 129.02
Pursuant to the scheme, with effect from the Appointed Date up to and including the Effective Date, the transferor company is deemed to have been carrying on all business and activities in trust for Alok Industries Limited. Pending completion of relevant formalities of transfer of certain assets and liabilities pursuant to the Scheme, such assets and liabilities remain under the name of the Grabal Alok Impex Ltd.
On amalgamation of the Company and Grabal Alok Impex Ltd, Grabal Alok (UK) Ltd, an associate company of both companies, has now become a majority owned subsidiary of Alok Industries Ltd.
Current year gures of the Company include amount of revenue of ` 160.96 crore & pro t before tax of ` 7.58 crore for the year and hence are not strictly comparable.
37 In line with the amended Accounting Standard (AS) 11 – ‘Effect of changes in Foreign Exchange Rates’, the Company has chosen to exercise the option under paragraph 46 inserted in the Standard by the noti cation.
i. Added to xed assets capital work-in-progress ` 114.47 crore (previous year ` 23.48 crore) being exchange difference on long term monetary items relatable to acquisition of xed assets.
ii. Carried forward ` 0.99 crore (previous year ` (0.22) crore) in the ‘Foreign Currency Monetary Item Translation Difference Account’ being the amount remaining to be amortised as at 31 March 2012.
38 Addition information
Sales for the year in broad heads (` Crore)
Division 2011-12 2010-11a) Sale of Product Cotton & Cotton yarn Raw Cotton –Traded 117.48 429.78 Cotton Yarn 200.95 120.54 Cotton Yarn –Traded 3.84 2.85
– FOB Value of Exports 2767.98 2032.34– Interest received on Fixed Deposits 0.18 0.06
(v) Dividend Remitted in Foreign Exchange
Year of Dividend 2011-12 2010-11Equity share
No. of shareholders 10.00 -No. of shares held by them 13,600.00 -Dividend remitted during the year (`) 3,400.00 -Year to which dividend relates F.Y. 2010-11 -
40 The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of nancial statements. This has signi cantly impacted the disclosure and presentation made in the nancial statements. Previous year’s gures have been regrouped reclassi ed wherever necessary to correspond with the current year’s classi cation disclosure.
Signatures to Notes 1 to 40In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive ChairmanChartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director
Surendra B. Jiwrajka Jt. Managing DirectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate Affairs) &
Company SecretaryPlace : Mumbai Place : Mumbai Place : MumbaiMumbai: 18 May 2012 Mumbai: 18 May 2012 Mumbai: 18 May 2012
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 82F - 43
SR
NONA
ME
OF
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OM
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ar to
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Ext
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ate
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F TH
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OM
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1956
RE
LATI
NG
TO
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BS
IDIA
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CO
MP
AN
IES
F - 83
F - 44
Sr.
N
o.N
ame
of th
e su
bsid
iary
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ital
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erve
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l A
sset
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tal
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ilitie
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vest
men
t (O
ther
than
in
vest
men
t in
Sub
sidi
arie
s)
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over
befo
re
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Pro
visi
on
for
tax
afte
r ta
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sed
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iden
d
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lok
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strie
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tern
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nal L
imite
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(174
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– (4
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)–
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lok
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perti
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rivat
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4) –
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4) –
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els
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ate
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– –
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lok
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ltors
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1.7
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ham
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k In
c.@
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k S
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286
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lok
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rnat
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l (m
iddl
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st) F
TZ #
** 1
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(0.3
8) 1
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0.6
6 –
– (0
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– (0
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–19
Gra
bal A
lok
(UK
) Lim
ited
** re
fer n
ote
no
39 (b
) 4
.65
(174
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649
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819
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– 7
59.1
6 (1
51.7
6) –
(151
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–
20G
raba
l Alo
k In
tern
atio
nal L
imite
d re
fer n
ote
no 3
9 (a
)72
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(17.
62)
377
.01
321.
92 3
33.5
3 –
(13.
78)
– (1
3.78
) –
21A
lok
H&
A L
imite
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36.
05 (3
4.73
) 1
24.7
0 1
23.3
8 0
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46.
60 (2
6.37
) –
(26.
37)
–
@ B
alan
ce s
heet
item
s ar
e tra
nsla
ted
at c
losi
ng e
xcha
nge
rate
of I
NR
51.
16U
SD
and
Pro
t(Lo
ss) i
tem
s ar
e tra
nsla
ted
at a
vera
ge c
losi
ng ra
te o
f IN
R 4
7.95
US
D
# B
alan
ce s
heet
item
s ar
e tra
nsla
ted
at c
losi
ng e
xcha
nge
rate
of I
NR
2.7
9C
ZK a
nd P
rot(
Loss
) ite
ms
are
trans
late
d at
ave
rage
clo
sing
rate
of I
NR
2.6
7C
ZK
$ Li
quid
ated
dur
ing
the
year
# B
alan
ce s
heet
item
s ar
e tra
nsla
ted
at c
losi
ng e
xcha
nge
rate
of I
NR
14.
11A
ED
and
Pro
t(Lo
ss) i
tem
s ar
e tra
nsla
ted
at a
vera
ge c
losi
ng ra
te o
f IN
R 1
3.55
AE
D
* In
clud
ing
Sha
re A
pplic
atio
n M
oney
** U
naud
ited
gure
s
FIN
AN
CIA
L IN
FOR
MA
TIO
N R
ELA
TIN
G T
O S
UB
SID
IAR
Y C
OM
PA
NIE
S F
OR
TH
E Y
EA
R E
ND
ED
31S
T M
AR
CH
201
2
F - 84F - 45
TO THE BOARD OF DIRECTORS OFALOK INDUSTRIES LIMITED1. We have audited the attached Consolidated Balance Sheet of ALOK INDUSTRIES LIMITED (“the
Company”) and its subsidiaries (collectively referred to as “the Group”) as at 31st March 2012, the Consolidated Statement of Pro t and Loss and the Consolidated Cash Flow Statement for the year ended on that date, both annexed thereto. These nancial statements are the responsibility of the Company’s Management and have been prepared on the basis of the separate nancial statements and other nancial information regarding components. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and the disclosures in the nancial statements. An audit also includes assessing the accounting principles used and the signi cant estimates made by the Management, as well as evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. Without qualifying our opinion, we draw attention to note no. 39 (b) of the nancial statements regarding goodwill recognised on consolidation of Grabal Alok (UK) Limited during the year. For the reasons stated therein, no provision for impairment is considered necessary at this stage.
4. Financial statements of certain Subsidiaries, which re ect total assets of ` 184.41 crore as at 31st March, 2012, total revenue of `155.98 crore and net cash in ows amounting to ` 254.15 crore for the year then ended, as considered in the Consolidated Financial Statements, have been audited by one of us.
5. We did not audit the nancial statements of certain Subsidiaries, whose nancial statements re ect total assets of ` 1865.17 crore as at 31st March 2012, total revenues of ` 94.93 crore and net cash out ows amounting to ` 42.84 crore for the year ended on that date, as considered in the Consolidated Financial Statements. These nancial statements have been audited by other auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts included in respect of these Subsidiaries is based solely on the reports of the other auditors.
6. We have relied on the unaudited nancial statements of Subsidiaries and Joint Venture companies, whose nancial statements re ect total assets of ` 706.03 crore as at 31st March 2012, total revenue of ` 1085.91
crore and net cash in ows amounting to ` 364.24 crore for the year ended on that date and nancial statements of Associate companies in which the share of pro t of the Group is ̀ 0.08 crore, as considered in the Consolidated Financial Statements. These unaudited nancial statements as approved by the respective Board of Directors of the companies have been furnished to us by the Management and our report in so far as it relates to the amounts included in respect of the Subsidiaries, Joint Venture companies and Associate companies is based solely on such approved unaudited nancial statements.
7. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 (Consolidated Financial Statements), Accounting Standard 23 (Accounting for Investment in Associates in Consolidated Financial Statements) and Accounting Standard 27 (Financial Reporting of Interests in Joint Ventures) as noti ed under the Companies (Accounting Standards) Rules, 2006.
8. Based on our audit and on consideration of the separate audit reports on individual nancial statements of the Company and certain subsidiaries and on the other nancial information of the components and to the best of our information and according to the explanations given to us, in our opinion, the Consolidated Financial Statements, read with para 6 above, give a true and fair view in conformity with the accounting principles generally accepted in India:
a. in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2012;b. in the case of the Consolidated Statement of Pro t and Loss, of the pro t of the Group for the year ended
on that date andc. in the case of the Consolidated Cash Flow Statement, of the cash ows of the Group for the year ended
on that date.For Deloitte Haskins & SellsChartered AccountantsFirm Registration No. 117366W
R. D. KamatPartnerMembership No.36822 Place : Mumbai Date : 18 May 2012
For Gandhi & ParekhChartered Accountants Firms Registration No. 120318W
Devang B. ParekhPartner Membership No. 105789Place : Mumbai Date : 18 May 2012
AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
F - 85F - 46
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive ChairmanChartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director
Surendra B. Jiwrajka Jt. Managing DirectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate Affairs) &
Company SecretaryPlace : Mumbai Place : Mumbai Place : MumbaiDate: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012
TOTAL 21,154.34 16,475.67III Signi cant accounting policies and
accompanying notes forming part of the nancial statements
1 to 44
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2012
F - 86F - 47
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive ChairmanChartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director
Surendra B. Jiwrajka Jt. Managing DirectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate Affairs) &
Company SecretaryPlace : Mumbai Place : Mumbai Place : MumbaiDate: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012
(` Crore) PARTICULARS NOTES Year Ended
31-Mar-12 Year Ended
31-Mar-11REVENUE Revenue from Operations (gross) 20 10,018.67 6,727.38 Less : Excise Duty 233.95 112.48Revenue from Operations (net) 9,784.72 6,614.90 Other Income 21 95.51 67.07Total Revenue 9,880.23 6,681.97EXPENSES Cost of Materials consumed 5,793.09 3,261.84 Purchase of Traded Goods 1,117.20 468.99 Changes in inventories of nished goods, work-in-
progress and stock-in-trade 22 (1,692.18) (267.67)
Employee bene ts expense 23 312.84 244.22 Finance costs 24 1,234.70 782.15 Depreciation and amortisation expense 11 749.14 530.97 Other expenses 25 1,877.36 1,120.36 Total Expenses 9,392.15 6,140.86
488.08 541.11Exceptional items (Refer note no 42(i)) 121.27 39.87
366.81 501.24Tax Expenses– Current tax (172.93) (81.16) Includes MAT adjustment ` 44.12 crore (` 26.53 crore
pertaining to the previous year (previous year ` 42.42 crore))
Share of pro t (loss) from Associates 0.08 (10.89) Minority Interest – (0.31)
92.99 311.54EARNINGS PER SHARE (in `) 34 Basic 1.15 3.95 Diluted 1.15 3.95Signi cant accounting policies and accompanying notes forming part of the nancial statements
1 to 44
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2012
F - 87F - 48
(` Crore)PARTICULARS Year Ended
31-Mar-12 Year Ended
31-Mar-11A] Cash Flow from Operating Activities Net Pro t Before Tax 366.81 501.24 Adjustments for: Depreciation Amortisation 749.14 530.97 Diminution in the value of investment 8.88 16.88 Employee Stock Option outstanding 2.27 – Exchange rate difference 8.99 (6.34) Dividend Income (0.60) (0.36) Interest Expense (net) 1,108.77 668.26 (Pro t) Loss on sale of xed assets (net) (34.88) 0.03 Loss (Pro t) on sale of current investments (net) 0.12 (1.16) Operating Pro t before working capital changes 2,209.50 1,709.52 Adjustments for (Increase) in Inventories (1,381.63) (599.29) (Increase) in Trade Receivables (283.39) (687.74) (Increase) Decrease in Loans and Advances (958.63) 123.87 (Decrease) Increase in Current Liabilities 93.09 478.43 Cash (used) in generated from operations (321.06) 1,024.79 Income Taxes Paid (129.40) (128.45) Net cash (used) in generated from Operating Activities (450.46) 896.34
Purchase of Fixed Assets (1,551.10) (2,340.79) Proceeds from sale of xed assets 49.40 14.05 Purchase of Investments (341.57) (214.13) Proceeds from sale of Investments 135.57 127.24 Fixed Deposits and earmarked balances matured (placed) 236.57 (318.04) Dividends Received 0.60 0.36 Interest Received 35.86 62.04 Share Application money paid – (0.16) Inter Corporate Deposits granted (4.49) (3.44) Net cash (used) in Investing Activities (1,439.16) (2,672.87)
Proceeds from issue of Equity Share Capital (including premium) (Net)
61.19 –
Share Application money received (repaid) (Net) 350.00 (227.57) Proceeds from Term borrowings 2,430.53 4,144.40 Repayment of Term Borrowings (954.59) (2,751.40) Proceeds from short term borrowings (Net) 1,428.24 898.48 Dividend Paid (Including Tax thereon) (24.52) (23.33) Interest Paid (1,130.38) (791.85) Net cash Generated from Financing Activities 2,160.47 1,248.73
270.85 (527.80) 165.98 693.78 158.62 –
(Refer note no 39) 595.45 165.98
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
F - 88F - 49
1 Purchase of xed assets are stated inclusive of movements of Capital Work in Progress between the commencement and end of the year and is considered as part of investing activity.
2 (` Crore)
PARTICULARS 31 March 2012 March 31, 2011Cash and Bank Balances (Refer note no 17) 1,397.80 1,200.91Less : Earmarked balances deposits with bank* 715.19 981.69Less : Deposit with maturity period of more than 3 months ** 87.16 53.24
595.45 165.98
* Earmarked balances deposits with bank includes balances deposits held as margin money or security against borrowings, guarantees and other commitments, which being restricted for its use, have been excluded from cash and cash equivalent and grouped under the investing activity.
** Fixed Deposits with maturity period of more than three months have been excluded from cash and cash equivalent and grouped under the investing activity.
3 The Cash Flow Statement has been prepared in accordance with the requirements of Accounting Standard 'AS-3' “Cash Flow Statements”.
4 Pursuant to scheme of amalgamation between Alok Industries Limited and Grabal Alok Impex Limited with appointed date of 1 April 2011, the assets and liabilities of Grabal Alok Impex Limited were taken over as per Pooling of Interest method as on 1 April 2011.
This arrangement of amalgamation is a non-cash transaction and considered as such, in the above cash ow statement. (Refer note no 39(a) of the nancial statements)
5 Previous year's gures have been regrouped restated wherever necessary.
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive ChairmanChartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director
Surendra B. Jiwrajka Jt. Managing DirectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate Affairs) &
Company SecretaryPlace : Mumbai Place : Mumbai Place : MumbaiDate: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
F - 89F - 50
1 SIGNIFICANT ACCOUNTING POLICIES
i Basis of Preparation of Financial Statements
These consolidated nancial statements of Alok Industries Limited (“the Parent Company”) and its Subsidiaries, Joint Ventures and Associate Companies, (together the “Group” or “the Company”) have been prepared under the historical cost convention in accordance with the requirements of the Companies Act, 1956 and generally accepted accounting principles in India.
ii Principles of Consolidation
The nancial statements of Subsidiary companies, Joint Venture companies and associate companies used in consolidation are drawn up to the same reporting date as that of the Parent Company. The consolidated nancial statements have been prepared on the following basis :
a) The nancial statements of the Parent Company and its subsidiary companies are combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after eliminating intra-group balances, intra-group transactions resulting in unrealised pro t or losses as per Accounting Standard (AS) 21 “Consolidated Financial Statements” as noti ed by the Company (Accounting Standards) Rules 2006. The Financial Statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances.
b) The excess of cost to the Company of its investment in subsidiary companies over its share of equity of the subsidiary companies at the dates, on which the investments in the subsidiary companies are made, is recognised as “Goodwill” being an asset in the consolidated nancial statements. Alternatively, where the share of equity in the subsidiary companies as on the date of investment is in excess of cost of investment of the Company, it is recognised as “Capital Reserve” and shown under the head ‘Reserves & Surplus’, in the consolidated nancial statements.
c) Minority Interest in the net assets of consolidated subsidiaries consist of the amount of equity attributable to the minority shareholders at the dates on which investments are made by the Company in the subsidiary companies and further movements in their share in the equity, subsequent to the dates of investments.
d) The Financial Statements of the Joint Venture entities have been considered on a line by line basis by adding together the book value of like items of assets, liabilities, income and expenses, after eliminating intra-group balances and intra-group transactions resulting in unrealised pro t or losses, by using “proportionate consolidation” method. The investment in Joint Venture entities over the holding company’s portion of equity is recognised as a capital reserve goodwill, as per Accounting Standard 27 on “Financial Reporting of Interest in Joint Venture” as noti ed by the Company (Accounting Standards) Rules 2006.
e) The consolidated nancial statements include the share of pro t loss of associate companies in which the investor has signi cant in uence and which is neither a subsidiary nor a joint venture, which are accounted under the “Equity Method” as per which the share of pro t of the associate Company has been added to the cost of investment, and its share of pre-acquisition pro ts losses is re ected as Capital Reserve Goodwill in the carrying value of Investment in accordance with Accounting Standard 23 on Accounting for Investment in Associates in Consolidated Financial Statement as noti ed by Company (Accounting Standards) Rules 2006.
iii Use of Estimates
The preparation of nancial statements in conformity with the generally accepted accounting principles require estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the nancial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known materialise.
iv Revenue Recognition
a) Revenue on sale of products is recognised when the products are dispatched to customers, all signi cant contractual obligations have been satis ed and the collection of the resulting receivable is reasonably expected. Sales are stated net of trade discount, returns and sales tax collected.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 90F - 51
b) Revenue from construction contracts is recognised by adopting “Percentage Completion Method”. It is stated on the basis of physical measurement of work actually completed at the balance sheet date, taking into account contract price and revision thereto.
c) Revenue in respect of insurance other claims, interest etc. is recognised only when it is reasonably certain that the ultimate collection will be made.
v Fixed Assets
a) Own Assets :
Fixed Assets are stated at cost of acquisition or construction including directly attributable cost. They are stated at historical cost less accumulated depreciation and impairment loss, if any.
b) Assets taken on lease:
Assets taken on lease under which, all the risk and rewards of ownership are effectively retained by the lessor are classi ed as operating lease. Lease rentals under operating leases are recognised as expenses over the lease term in accordance with the respective lease agreements.
c) Assets given on lease:
Lease rentals are recognised as income over the lease term.
vi Investments
Investments classi ed as Long Term Investments are stated at cost. Provision is made to recognise a decline, other than temporary, in the value of investments. Current investments are carried at cost or fair value whichever is lower.
a) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner speci ed in Schedule XIV to the Companies Act, 1956. Continuous process plant is classi ed based on technical assessment and depreciation is provided accordingly. Depreciation on additions to assets or on sale disposal of assets is calculated from the beginning of the month of such addition or up to the month of such sale scrapped, as the case may be. Assets costing less than ` 5,000 – are fully depreciated in the year of purchase.
b) Cost of leasehold land is amortised over the period of lease.
c) Trademarks Brands are amortised over the period of ten years from the date of capitalisation.
d) Computer Software is amortised over the period of ve years from the date of capitalisation.
e) Goodwill on consolidation is not amortised, but is tested for impairment at each balance sheet date and impairment loss, if any, is provided for.
viii Foreign Currency Transactions and Translation
a) Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Exchange differences arising on settlement of foreign currency transactions are recognised in the pro t and loss account.
b) Monetary items denominated in foreign currency are restated using the exchange rate prevailing at the balance sheet date and the resultant exchange differences are recognised in the pro t and loss account. Non-monetary items denominated in foreign currency are carried at historical cost.
However, pursuant to the amended Accounting Standard 11 on The Effects of Changes in Foreign Exchange Rates, exchange differences arising on restatement of long term monetary items are dealt with in the following manner :
i. Exchange differences relating to long-term monetary items, arising during the year, in so far as those relate to the acquisition of a depreciable capital asset are added to deducted from the cost of the asset and depreciated over the balance life of the asset.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 91F - 52
ii. In other cases such differences are accumulated in a “Foreign Currency Monetary Item Translation Difference Account” and amortised to the pro t and loss account over the balance life of the long-term monetary item, however that the period of amortisation does not extend beyond 31 March, 2020.
FOREIGN OPERATIONS :
The translation of the nancial statements of non integral foreign operations is accounted for as under :
a) All Expenses and Revenues are translated at average rate.
b) All monetary and non monetary assets and liabilities are translated at rate prevailing at the balance sheet date.
c) Resulting exchange difference is accumulated in Foreign Currency Translation Reserve account until the disposal of net investment in the said non integral foreign operation.
ix Inventories
Items of Inventories are valued on the basis given below:
a) Raw Materials, Packing Materials, Stores and Spares and Trading goods: at cost determined on First – In – First – Out (FIFO) basis or net realisable value, whichever is lower.
b) Process stock and Finished Goods: At cost or net realisable values whichever is lower. Cost comprises of cost of purchase (as above), cost of conversion (absorption cost) and other costs incurred in bringing the inventory to their present location and condition.
a)
Company’s contribution paid payable for the year to de ne contribution retirement bene t scheme is charged to Pro t and Loss account.
b)
Company’s liabilities towards de ned bene t scheme are determined using the projected unit credit method. Actuarial valuation under projected unit credit method are carried out at Balance Sheet date, Actuarial gains losses are recognised in Pro t and Loss Account in the period of occurrence of such gains and losses. Past service cost is recognised immediately to the extent bene ts are vested otherwise it is amortised on straight line basis over running average periods until the bene ts become vested. The retirement bene t obligation is recognised in Balance Sheet represents present value of the de ned bene t obligations as adjusted for unrecognised past service cost and as reduced by fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, the present value is available refunds and reduction in future contribution to the scheme.
c)
Short term employee bene ts are recognised as an expense at undiscounted amount in pro t and loss account of the year in which the related service is rendered. These bene ts include incentive, bonus.
xi Accounting of CENVAT credit
Cenvat credit available is accounted by recording material purchases net of excise duty. Cenvat credit availed is accounted on adjustment against excise duty payable on dispatch of nished goods.
xii Government Grants
Grants, in the nature of interest capital subsidy under the Technology Upgradation Fund Scheme (TUFS), are accounted for when it is reasonably certain that ultimate collection will be made. Government grants not speci cally related to xed assets are recognised in the Pro t and Loss Account in the year of accrual receipt.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 92F - 53
xiii Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.
xiv Income taxes
Tax expense comprises of current tax and deferred tax. Current tax and deferred tax are accounted for in accordance with Accounting Standard 22 (AS-22) on “Accounting for taxes on Income”. Current tax is measured at the amount expected to be paid recovered from the tax authority using the applicable tax rates. Deferred tax liabilities are recognised for future tax consequence attributable to timing difference between taxable income and accounting income that are capable of reversing in one or more subsequent periods and are measured at relevant enacted substantively enacted tax rates and in the case of deferred tax asset on consideration of prudence, are recognised and carried forward to the extent of reasonable virtual certainty as case may be. At each balance sheet date, the Company reassesses unrealised deferred tax assets to the extent they become reasonably certain or virtually certain of realisation, as the case may be. Minimum Alternate Tax (MAT) credit entitlement is recognised in accordance with the Guidance Note on “Accounting for credit available in respect of Minimum Alternate Tax under the Income-tax Act, 1961” issued by ICAI.
xv Intangible Assets
Intangible assets are recognised only if it is probable that the future economic bene ts that are attributable to the assets will ow to the enterprise and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated amortisation and accumulated impairment losses, if any.
xvi Impairment of Fixed Assets
At the end of each year, the Company determines whether a provision should be made for impairment loss on xed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard (AS) 28 ‘’Impairment of Assets’’. An impairment loss is charged to the Pro t and Loss Account in the year in which, an asset is identi ed as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.
xvii Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an out ow of resources. Contingent liabilities are not recognised but are disclosed in the Notes. Contingent Assets are neither recognised nor disclosed in the nancial statements.
xviii Accounting for Derivatives
a) The company uses derivative instruments like foreign currency forward contracts, foreign currency options and Interest rate swaps to hedge its exposure to movements in foreign exchange rates, interest rates and currency risks. The objective of these derivative instruments is to reduce the risk or cost to the company and is not intended for trading or speculation purposes.
b) Interest Rate Swaps, Foreign Currency Options and Currency Swaps, entered into by the Company for hedging the risks of foreign currency exposure (including interest rate risk) are accounted based on the principles of prudence as enunciated in Accounting Standard 1 (AS-1) “Disclosure of Accounting Policies”. Thus, Mark to Market losses (net) are accounted for by the company, net gains are ignored.
c) In respect of foreign currency forward contracts entered into to hedge foreign currency exposure in respect of recognised monetary items, the premium or discount on such contracts is amortised over the life of the contract. The exchange difference measured by the change in exchange rate between the inception dates of the contract last reporting date as the case may be and the balance sheet date is recognised in the pro t and loss account. Any gain loss on cancellation of such forward contracts are recognised as income expense of the period.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 93F - 54
d) The Company designates foreign currency forward contracts taken with respect to highly probable forecast transactions and rm commitments as hedges and accounts for the same by applying the recognition and measurement principles set out in the Accounting Standard (AS) 30 “Financial Instruments: Recognition and Measurement”. Accordingly, the Company records the gain or loss on effective cash ow hedges in the Cash Flow Hedging Reserve Account until the forecasted transaction materialises. Gain or loss on ineffective cash ow hedges (if any) is recognised in the pro t and loss account. (Refer note no 42(ii)).
2 SHARE CAPITAL
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Authorised100,00,00,000 (Previous Year 90,00,00,000) Equity shares of ` 10 – each 1,000.00 900.00
1,000.00 900.00Issued, Subscribed and fully paid-up
82,62,69,357 (previous year 78,77,84,357) Equity shares of ̀ 10 – each fully paid up
826.27 787.78
Add : Forfeited Share (13,921 shares of ` 10 – each of ` 5 Paid up) 0.01 0.01TOTAL 826.28 787.79
NOTES :
a) During the year 3,84,85,000 (previous year Nil) equity shares were issued as under:
i] 1,60,00,000 Equity shares of ` 10 – each at a premium of ` 41 – each allotted on conversion of warrants issued by Grabal Alok Impex Limited, the amalgamating company. Such warrants were sold by the original warrant holder to Jiwrajka Investment Private Limited, a promoter group company, which exercised such warrants.
ii] 2,24,85,000 Equity shares allotted to the Shareholders of Grabal Alok Impex Limited pursuant to the Scheme of Amalgamation for consideration other than cash (Refer note no 39(a)).
b) Of the remaining shares :
i] 7,45,396 equity shares were allotted as bonus shares by way of capitalisation of General Reserve.
ii] 62,550 equity shares being forfeited shares were reissued during 2001.
c) Reconciliation of shares outstanding at the beginning and end of the reporting period
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11No of shares outstanding at the beginning of the year 787,784,357 787,798,278Add : Shares allotted during the yearAllotment of Equity shares on conversion of warrants 16,000,000 –Allotment of Equity shares pursuant to the Scheme of Amalgamation 22,485,000 –Less: Shares forfeited on account of non payment of call money – (13,921)No of shares outstanding at the end of the year 826,269,357 787,784,357
d)
The company has only one class of equity shares having a par value of ` 10 – per share. Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 94F - 55
e) Shares reserved for issue under options (Refer note no 33)
f) Grabal Alok Impex Limited, the amalgamating company, (Refer note no 39(a)) had issued and allotted 200 Foreign Currency Convertible Bonds of USD 1,00,000 each aggregating to USD 20 million outstanding as at the balance sheet date, which was convertible into shares, at any time on or after 15 April 2007 and prior to the closure of business on 06 March 2012, unless previously redeemed, converted or purchased and cancelled. Such FCCBs have been redeemed after the balance sheet date, on 05 April 2012.
g) During the year ended 31 March 2012, an amount of ` 0.30 per share (previous year ` 0.25 per share) was recognised as proposed dividend to equity share holders.
h) Shareholder holding more than 5 percent of the share capital
31-Mar-11Capital ReserveBalance as per last Balance Sheet 10.23 10.23Add : on amalgamation* 1.49 –Add: Transferred from statement of Pro t and Loss 0.26 –
11.98 10.23Capital Reserve (on Consolidation)Balance as per last Balance Sheet 11.61 10.66Add : Addition on account of additional investment 2.70 –Add : Translation difference on restatement 0.67 0.95
14.98 11.61Revaluation reserveBalance as per last Balance Sheet – –Add : on amalgamation (Refer note no 39(b) 3.86 –
3.86 –Capital Redemption ReserveBalance as per last Balance Sheet 2.20 2.20Add : on amalgamation* 6.90 –
9.10 2.20Securities premium accountBalance as per last Balance Sheet 880.39 880.39Add : on amalgamation* 60.15 –Add : Received during the year (Refer note no 2a(i) above) 65.60 –Less : Premium on redemption of FCCB (12.49) –
993.65 880.39General ReserveBalance as per last Balance Sheet 275.25 250.22Add : on amalgamation* 5.63 –
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 95F - 56
Add: Transferred from statement of Pro t and Loss 0.31 25.03 281.19 275.25
Debenture Redemption ReserveBalance as per last Balance Sheet 220.38 604.68Add: Transferred to statement of Pro t and Loss (51.90) (384.30)
168.48 220.38Foreign Currency Translation ReserveBalance as per last Balance Sheet 9.24 11.24Add: Created during the year (73.51) (2.00)
(64.27) 9.24(Refer note no 42(ii)) (16.78) –
Employee Stock Options Outstanding (Refer note no 33)Options granted during the year 4.67 –Less : Deferred Employee Compensation expenses (2.40) –
2.27 –
Opening balance 594.97 (52.48)Add : on amalgamation* (80.63) –Pro t for the year 92.99 311.54Less : Appropriations(i) Transferred to General Reserve (0.31) (25.03)(ii) Transferred from Debenture Redemption Reserve 51.90 384.30(iii) Transferred to Capital Reserve (0.26) –(iv) Proposed Dividend – Equity Shares (24.79) (19.69)(v) Corporate Dividend Tax thereon (4.02) (3.27)(vi) Short provision of dividend and tax thereon (0.22) (0.40)
629.63 594.97 TOTAL 2,034.09 2,004.27
4 LONG-TERM BORROWINGS
(` Crore)PARTICULARS AS AT 31-Mar-12 AS AT 31-Mar-11
Term Loans (Unsecured) (Refer note V below) From Banks and Financial Institutions - Foreign Currency Loans 119.64 86.62 16.88 95.35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 96F - 57
Other loans & advances (Refer note VI below) Vehicle loan from Banks (Secured) 2.50 4.17 2.11 5.88
2,193.50 8,516.96 1,262.51 7,164.48
NOTES :
I. a) Debentures outstanding at the year end are redeemable as follows
PARTICULARS Nos 31-Mar-12 (` Crore)
31-Mar-11 (` Crore)
Date of Redemption
12.00% Redeemable Non convertible Debentures 375 37.50 – 1-Feb-2012.00% Redeemable Non convertible Debentures 375 37.50 – 1-Aug-1912.00% Redeemable Non convertible Debentures 375 37.50 – 1-Feb-1910.75% Redeemable Non convertible Debentures 334 33.34 33.34 18-Oct-1812.00% Redeemable Non convertible Debentures 375 37.50 – 1-Aug-1812.00% Redeemable Non convertible Debentures 375 37.50 – 1-Feb-1810.75% Redeemable Non convertible Debentures 333 33.33 33.33 18-Oct-1712.00% Redeemable Non convertible Debentures 375 37.50 – 1-Aug-1712.50% Redeemable Non convertible Debentures 300 30.00 30.00 3-Mar-1712.50% Redeemable Non convertible Debentures 366 36.66 36.66 2-Mar-1712.00% Redeemable Non convertible Debentures 375 37.50 – 1-Feb-1710.75% Redeemable Non convertible Debentures 333 33.33 33.33 18-Oct-1612.00% Redeemable Non convertible Debentures 375 37.50 – 1-Aug-1611.50% Redeemable Non convertible Debentures 600 60.00 60.00 29-Jun-1612.50% Redeemable Non convertible Debentures 367 36.67 36.67 2-Mar-1612.50% Redeemable Non convertible Debentures 300 30.00 30.00 2-Mar-1611.50% Redeemable Non convertible Debentures 700 70.00 70.00 28-Jun-1512.50% Redeemable Non convertible Debentures 367 36.67 36.67 3-Mar-1512.50% Redeemable Non convertible Debentures 300 30.00 30.00 3-Mar-1511.50% Redeemable Non convertible Debentures 700 70.00 70.00 28-Jun-14
TOTAL 800.00 500.00
b) All the debentures in a) above are secured by pari passu charge on the immovable property situated at Mouje Irana, Taluka Kadi, District Mehsana in the state of Gujarat. Further, Debentures of ` 300 crore are secured by rst pari passu charge to be created on xed assets of the company and Debentures of ` 500 crore are secured by subservient charge on xed and current assets of the Company (excluding Land and Building).
II. Compulsorily Convertible Debentures are compulsorily convertible redeemable at the option of the issuer after 26 months from the date of the issue i.e. 29 July 2011 and or in twenty equal quarterly instalments or as mutually decided between the issuer and the holder.
III. Disclosure of Security for term loans
(` Crore)Nature of security Banks Financial
InstitutionsTOTAL
Exclusive charge on Plant & Machinery and speci c assets nanced* 1,041.98 – 1,041.98 (646.34) (–) (646.34)
Pari passu rst charge created to be created on the entire xed assets and speci c immovable properties of the company#
3,260.47(2,964.44)
314.13(336.92)
3,574.60(3,301.36)
Subservient charge on all movable and current assets of the Company @
3,820.46(3,175.49)
153.87(144.56)
3,974.33(3,320.05)
Total 8,122.91 468.00 8,590.91 (6,786.27) (481.48) (7,267.75)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 97F - 58
* Includes loans aggregating to ` 218.47 crore (previous year 218.89 crore) which is further secured by personal guarantees of promoter directors group Companies
# Includes Bank loans aggregating to ` 1,060.17 crore (previous year 998.90 crore) & Financial Institution loans aggregating to ` 30.47 crore (previous year 38.59 crore) which is further secured by personal guarantees of promoter directors group Companies
@ Includes Banks loans aggregating to ` 237.47 crore (previous year 159.80 crore) which is further secured by personal guarantees of promotor directors group Companies
IV. Terms of Repayment of Secured Term Loan
(` Crore)Particulars Rate of Interest* 1-2 Years 2-3 Years 3-4 Years Beyond 4
YearsTotal
Rupee Term Loan From Bank
12% – 15.75%(10.25% – 14.25%)
1,907.37(1,145.32)
1,571.73(1,200.58)
824.29(1,183.15)
1,544.69(1,590.25)
5,848.08(5,119.30)
Foreign Currency Term Loan From Banks
2.53% – 5.34%(2.50% – 8.00%)
34.57(479.66)
46.92(27.51)
62.91(38.68)
208.66(28.90)
353.06(574.75)
Rupee Term Loan From Financial Institutions
9.00% – 12.50%(9.00% – 12.00%)
125.21(124.59)
15.63(13.75)
13.91(15.63)
15.30(29.22)
170.05(183.19)
Foreign Currency Term Loan From Financial Institutions
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 98F - 59
5 DEFERRED TAX LIABILITIES (NET)
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11I) Deferred Tax Liability (DTL) Depreciation 702.43 527.97 Share Issue expenses (2.97) (7.35) Mark to Market loss on Derivative Contract (58.26) – Other disallowances (14.13) (12.78)
627.07 507.84II) Deferred Tax Asset (DTA) Gratuity and Compensated Absences 11.54 0.02 Business Depreciation loss as per I. T. Act, 1961 (2.52) 7.52Total 9.02 7.54
* Includes Opening Deferred tax Liability (Net) of Grabal Alok Impex Limited of ` 16.78 crore on account of amalgamation (Refer note no 39(a))
6 LONG-TERM PROVISIONS
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Provision for employee bene ts (Refer note no 35) 17.01 17.83Mark to Market provision on derivative instruments (Refer note no 42(ii) and (iii)) 159.70 60.04Others (Refer note no 37) – 1.77Total 176.71 79.64
7 SHORT-TERM BORROWINGS
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Debenture (Secured) (Refer note a below) – 250.00Cash Credit accounts, working capital demand loan etc. (Secured) (Refer note b below) From Banks (including ̀ 730.00 crore (previous year ̀ 380.34 crore in foreign
currency) 2,740.46 1,725.37
From Financial Institutions (including ` Nil (previous year ` 89.08 crore in foreign currency)
130.74 89.08
Cash Credit accounts, working capital demand loan etc. (Unsecured) From banks 157.53 69.94Compulsorily Convertible Debentures (Unsecured) 196.95 –Commercial Paper (Unsecured) From Banks 103.00 360.00 From Financial Institutions 335.00 360.00Short term loan Secured (Refer note b below) Rupee Loans From Banks 730.00 576.98 From Financial Institutions 85.00 75.00
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 99F - 60
PARTICULARS AS AT31-Mar-12
AS AT31-Mar-11
Foreign currency loans From Banks – 44.65 Unsecured Rupee Loans From Banks 577.90 144.95 Foreign currency loans From Banks 277.44 –Inter Corporate Deposit 5.99 –Total 5,340.01 3,695.97
Note
a) Debentures are secured by pari passu charge on the immovable property situated at Mouje Irana, Taluka Kadi, District Mehsana in the state of Gujarat.
b) Disclosure of security
(` Crore)Nature of security Banks Financial
InstitutionsTOTAL
Working capital loans :(i) Hypothecation of company's current assets and mortgage
of certain immovable properties belonging to the company Guarantor.
(ii) Second charge created to be created on all xed assets (excluding land and building) of the company
2,396.53(450.47)
40.35(20.58)
2,436.88(471.05)
Subservient charge created to be created on all moveable and current assets of the company.
343.93(429.45)
90.39(68.50)
434.32(497.95)
Fixed Deposit placed with the bank. – (845.45)
–(–)
– (845.45)
TOTAL 2,740.46 130.74 2,871.20 (1,725.37) (89.08) (1,814.45)
Short Term LoansSubservient charge on all movable and current assets of the company
537.00 (621.63)
85.00 (75.00)
622.00 (696.63)
Fixed Deposit placed with the bank. 193.00 – 193.00(–) (–) (–)
TOTAL 730.00 85.00 815.00 (621.63) (75.00) (696.63)
Previous year gures are given in brackets
8 TRADE PAYABLE
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Total outstanding due to :– Micro, Small and Medium Enterprises* –– Others 605.23 594.93(Including acceptances ` 2.20 crore (previous year ` 50.94 crore)
605.23 594.93
* As per information available with the company
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 100F - 61
9 OTHER CURRENT LIABILITIES
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Current maturities of long-term debt (Refer Note 4 for details) 2,193.50 1,262.51Interest accrued but not due on borrowings 13.55 21.28Unpaid dividends (Refer note i and ii below) 1.05 0.84Share application money received by subsidiary company (Refer note iv below) 350.00 –Foreign Currency Monetary Item Translation Difference Account – 0.22Other payablesAdvance from customers 68.86 61.62Creditors for Expenses 139.23 8.77Creditors for Capital Goods 35.00 19.12Creditors for statutory Liabilities 9.95 15.93Premium on redemption of FCCB 43.14 –Advance from Related parties (Refer note no 32) 14.75 139.52Temporary overdrawn bank balance (Refer note iii below) 25.12 32.13Forward Contract Payable 10.89 –Advance from Others 3.48 1.26Total 2,908.52 1,563.20
NOTES
(i) This gure doesn’t include any amount due and outstanding to be credited to the Investor Education and Protection Fund.
(ii) During the year company has transferred ` 0.03 crore (previous year ` 0.06 crore) to the Investor Education and Protection Fund.
(iii) Temporary overdrawn bank balances are as per books consequent to issue of cheques at the year end, though the banks have positive balances as on that date.
(iv) The subsidiary company intends to allot shares against the share application money received, which is in excess of the authorised share capital of the subsidiary company. The subsidiary company is taking steps to increase the authorised capital.
10 SHORT-TERM PROVISIONS
PARTICULARS AS AT31-Mar-12
AS AT31-Mar-11
Provision for employee bene ts (Refer note no 35) 7.63 3.23Mark to Market provision on derivative instruments (Refer note no 42(ii) and (iii)) 36.65 12.92Proposed dividend 24.79 19.69Corporate dividend tax 4.02 3.30Provision for taxation (Net of Advance Tax) 10.53 20.09Others (Refer note no 37) 35.85 13.70Total 119.47 72.93
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 101F - 62
11
FIXE
D AS
SETS
SR.
NO.
DES
CRIP
TION
OF
ASSE
TS G
ROSS
BLO
CK D
EPRE
CIAT
ION
NET
BLO
CK A
S AT
01.0
4.20
11 A
CQUI
SITI
ON
THRO
UGH
AMAL
GAM
ATIO
N (s
ee n
ote
4 be
low)
ADD
ITIO
NS A
DJUS
TMEN
TS A
S AT
31.0
3.20
12 A
S AT
01.0
4.20
11 A
CQUI
SITI
ON
THRO
UGH
AMAL
GAM
ATIO
N(s
ee n
ote
4 be
low)
FOR
THE
YEA
RAD
JUST
MEN
TS A
S AT
31.0
3.20
12 A
S AT
31.0
3.20
12 A
S AT
31.0
3.20
11
TAN
GIBL
E AS
SETS
1 F
reeh
old
Land
103
.16
3.4
4 1
9.38
5.2
4 1
20.7
4 –
– –
– –
120
.74
103
.16
2 L
ease
hold
Lan
d 0
.56
0.2
4 2
.61
– 3
.41
0.1
4 0
.04
0.0
9* (0
.06)
0.3
3 3
.08
0.4
23
Fac
tory
Bui
ldin
g 1
,925
.56
83.
67 2
47.2
5 4
.75
2,2
51.7
3 1
94.0
2 6
.08
64.
96 (1
.40)
266
.46
1,9
85.2
7 1
,731
.54
4 O
fce
Pre
mise
s 2
6.60
43.
56 1
0.45
3.6
1 7
7.00
2.7
0 2
8.73
2.2
1 2
.53
31.
11 4
5.89
23.
905
Pla
nt a
nd M
achi
nery
6,8
38.3
6 1
88.9
1 1
,354
.19
(1.8
2) 8
,383
.28
1,4
00.0
6 6
8.94
633
.23
(1.3
2) 2
,103
.55
6,2
79.7
3 5
,438
.30
6 C
ompu
ter a
nd P
erip
hera
ls 3
0.45
1.1
0 2
.94
0.7
3 3
3.76
17.
83 0
.68
2.4
6 0
.56
20.
41 1
3.35
12.
627
Of
ce E
quip
men
t 1
0.51
0.3
5 1
.47
0.1
2 1
2.21
3.1
9 0
.09
0.6
9 0
.04
3.9
3 8
.28
7.3
28
Fur
nitu
re a
nd F
ittin
gs 9
8.39
279
.84
35.
57 3
.39
410
.41
21.
58 1
02.6
1 2
7.26
2.1
4 1
49.3
1 2
61.1
0 7
6.81
9 V
ehicl
es 2
3.64
1.8
1 4
.69
0.5
9 2
9.55
7.7
8 0
.76
2.9
3 0
.36
11.
11 1
8.44
15.
8610
Too
ls an
d Eq
uipm
ent
55.
86 1
.17
16.
14 0
.09
73.
08 1
0.36
0.1
6 5
.43
0.0
1 1
5.94
57.
14 4
5.50
LEA
SED
ASSE
TS1
Bui
ldin
gs 1
5.63
– 3
.70
– 1
9.33
0.7
9 –
0.3
6 –
1.1
5 1
8.18
14.
84 S
ub –
Tot
al 9
,128
.72
604
.09
1,6
98.3
9 1
6.70
11,
414.
50 1
,658
.45
208
.09
739
.62
2.8
6 2
,603
.30
8,8
11.2
0 7
,470
.27
INTA
NGIB
LE A
SSET
S1
Com
pute
r Sof
twar
e 1
9.41
0.1
7 7
.59
0.5
7 2
6.60
9.9
3 0
.15
3.7
7 (0
.01)
13.
86 1
2.74
9.4
82
Tra
dem
arks
Br
ands
55.
04 –
– 0
.10
54.
94 2
0.94
– 5
.75
0.0
1 2
6.68
28.
26 3
4.10
3 D
esig
n Ca
rds
– 0
.08
– –
0.0
8 –
0.0
8 –
– 0
.08
– –
Sub
– T
otal
74.
45 0
.25
7.5
9 0
.67
81.
62 3
0.87
0.2
3 9
.52
– 4
0.62
41.
00 4
3.58
Tot
al 9
,203
.17
604
.34
1,7
05.9
8 1
7.37
11,
496.
12 1
,689
.32
208
.32
749
.14
2.8
6 2
,643
.92
8,8
52.2
0 7
,513
.85
TOT
AL P
REVI
OUS
YEAR
7,4
44.6
5 –
1,7
71.3
2 1
2.80
9,2
03.1
7 1
,157
.20
– 5
30.9
7 (1
.15)
1,6
89.3
2 7
,513
.85
CAPI
TAL
WOR
K-IN
-PRO
GRES
S (In
cludi
ng `
18.
94 c
rore
s on
acc
ount
of a
mal
gam
atio
n (S
ee n
ote
4 be
low)
924
.38
899
.98
Not
es :
1.
Pla
nt &
Mac
hine
ry in
clud
es :
a
E
xcha
nge
diffe
renc
e (n
et) o
f ` 9
7.60
cro
re (p
revi
ous
year
gai
n of
` 1
5.96
cro
re) o
n re
stat
emen
t of l
ong
term
bor
row
ings
pay
able
in fo
reig
n cu
rren
cy.
b
In
tere
st c
apita
lised
` 7
7.92
Cro
re (p
revi
ous
year
` 3
6.08
Cro
re)
2.
Inta
ngib
le a
sset
s co
nsis
ts o
f Tra
de M
arks
B
rand
s ag
greg
atin
g to
` 5
5.04
Cro
re (
prev
ious
yea
r `
55.0
4 cr
ore)
(G
ross
) [W
ritte
n do
wn
valu
e `
28.9
0 cr
ore
(pre
viou
s ye
ar `
34
.41
cror
e)],
whi
ch a
re r
egis
tere
d in
the
nam
e of
a s
ubsi
diar
y co
mpa
ny in
trus
t on
beha
lf of
the
com
pany
. The
Com
pany
has
app
lied
for
regi
ster
ing
thos
e Tr
adem
arks
B
rand
s in
it’s
nam
e w
ith c
once
rned
aut
horit
ies
and
is a
wai
ting
regi
stra
tion.
3.
Cap
ital w
ork
in p
rogr
ess
incl
udes
a
E
xcha
nge
diffe
renc
e (n
et) o
f ` 1
6.87
cro
re (p
revi
ous
year
` 7
.52
cror
e) o
n re
stat
emen
t of l
ong
term
bor
row
ings
pay
able
in fo
reig
n cu
rren
cy.
b
In
tere
st c
apita
lised
` 2
9.14
Cro
re (P
revi
ous
year
` 5
0.73
Cro
re)
c
`
863.
35 c
rore
(pre
viou
s ye
ar `
835
.56
cror
e) o
n ac
coun
t of c
onst
ruct
ion
mat
eria
l and
pla
nt a
nd m
achi
nery
und
er e
rect
ion.
d
P
re-o
pera
tive
expe
nses
agg
rega
ting
to `
4.8
0 cr
ore
(pre
viou
s ye
ar `
12.
74 c
rore
) 4
. In
clud
es a
sset
s of
Gra
bal A
lok
Impe
x Li
mite
d, G
raba
l Alo
k In
tern
atio
nal L
imite
d an
d G
raba
l Alo
k (U
K) L
imite
d (R
efer
not
e no
39)
.*
Am
ount
writ
ten
off i
n re
spec
t of L
ease
hold
Lan
d fo
r the
per
iod
of L
ease
whi
ch h
as e
xpire
d.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 102F - 63
12 NON CURRENT INVESTMENTS
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Investment Property : Property under construction (Refer note no i below) 1,429.05 1,202.75 Freehold Land 33.18 35.68
1,462.23 1,238.43
Triumphant Victory Holdings Limited 0.00 0.00 [2 (previous year 1) equity share of USD 1 each ` 90.14 (previous
year ` 45.14)] Grabal Alok International Limited (` 1,121.25 -) – 0.00 [25 equity shares of USD 1 each] (Refer note no 39(a)) Next Creations Holdings LLC, subscription towards 33%
membership interest 4.47 4.47
Less : share in post acquisition accumulated loss (0.72) (0.80) 3.75 3.67
Nirvan Builders Private Limited – 0.02 Nil (previous year 16,600) Equity Shares of `10 – each] Less : share in post acquisition accumulated loss (previous year `
25,141 -) – (0.00)
– 0.02 Alspun Infrastructure Limited 0.10 0.08 [100,000 (previous year 75,000) Equity shares of `10 each] (Including goodwill on acquisition of stake of associates ` 0.04
crore) Less : share in post acquisition accumulated loss (0.07) (0.06)
0.03 0.02 Grabal Alok (UK) Limited – 310.81 [237,197,008 Ordinary Shares of GBP 0.001 each ] (Refer note no
39(b)) Less : share in post acquisition accumulated loss – (92.17)
– 218.64 Ashford Infotech Private Limited 2.50 2.50 [50,000 Equity Share of `10 each] Less : share in post acquisition accumulated loss (0.06) (0.06)
2.44 2.44
Shirt Company (India) Limited – 0.20 [Nil (previous year 11,333) Equity Shares of `10 – each] Dombivali Nagari Sahakari Bank Limited. 0.05 0.05 [10,000 Equity Shares of ` 50 – each] Kalyan Janata Sahakari Bank Limited 0.03 0.03 [10,000 Equity Shares of ` 25 – each] Saraswat Bank Limited (` 25,000 -) 0.00 0.00 [2,500 Equity Shares (previous year Nil) of ` 10 – each] Wel-Treat Environ Management Organisation (` 36,500 -) 0.00 0.00 [3,650 Equity Shares of ` 10 each]
6.30 225.07
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 103F - 64
Others – Quoted fully paid Grabal Alok Impex Limited – 3.99 [19,00,000 Equity Shares of `10 – each ] (Refer note no 39(a))
– 3.99
In Associates Company Triumphant Victory Holdings Limited 3.84 – [7,50,000 (previous year Nil) Shares USD 1 each] Ashford Infotech Private Limited 65.49 65.49 [5,00,000 Shares ` 10 each] Alspun Infrastructure Limited 16.22 – [5,00,000 (previous year Nil) Shares ` 10 each] Grabal Alok International Limited – 53.45 [11,970,552 of USD 1 – each] (Refer note no 39(a))
Others Interest in Alok Bene t Trust (Refer note no 39(a)) 35.33 – [1,94,59,382 (previous year Nil) Equity Shares of `10 – each ] PowerCor Subscription towards 5% Group B Membership interest 37.88 33.06 Less: Provision (37.88) (24.80)
– 8.26 Aisle 5 LLC 22 senior units of the equity capital 6.70 5.85 Less: Provision (6.70) (5.85)
– – Share Application Money In Associate Company Alspun Infrastructure Limited – 16.16 Other Investment 0.01 0.01
35.34 24.43Total 1,589.42 1,689.981) uoted Investment : Aggregate cost carrying value – 3.99 : Aggregate market value – 6.082) Unquoted Investment : Aggregate cost carrying value 1,589.42 1,685.99
NOTE :
(i) Includes interest capitalised during the year ` 29.89 crore (previous year ` 19.53 crore)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 104F - 65
Prepaid Expenses 65.88 40.51 390.32 440.11
Considered doubtfulCapital advances 3.76 –Less : Provision 3.76 –
– – TOTAL 390.32 440.11
14 CURRENT INVESTMENTS (at cost)
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Investments in debentures or bonds Laxmi Vilas Bank Tier II Bonds 2.00 2.00 [20 Bonds of ` 10,00,000 each]
Taurus Liquid Fund – 0.16 (Nil (previous year 16,57,032) units of ` 10 – each) Axis Infrastructure Fund 1 1.94 7.20 [19,378 (previous year 72,035) units of ` 1000 – each] SBI Magnum Insta Cash Fund – 17.00 [Nil (previous year 78,08,875.48) units of ` 10 – each] Peerless Liquid Fund collection A C – 1.00 [Nil (previous year 9,35,506.20) units of ` 10 – each] IDFC Money Manager Fund Daily Dividend – 0.05 [Nil (previous year 49,652.93) units of ` 10 – each]
TOTAL 3.94 27.41
15 INVENTORIES
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Raw Materials 446.05 604.47(Includes material in transit ` 62.09 crore (previous year ` 138.62 crore)Work-in-progress 2,278.38 900.36Finished Goods 671.11 510.21Stock in Trade (Traded Goods) 221.29 68.03Stores & Spares 73.27 59.48Packing Material 7.02 7.33
TOTAL 3,697.12 2,149.88
16 TRADE RECEIVABLES (Unsecured)(` Crore)
PARTICULARS AS AT31-Mar-12
AS AT31-Mar-11
Debts Outstanding for a period exceeding six months from due date 102.31 64.09Less : Provision 20.70 8.72
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 105F - 66
2,122.39 1,758.83 TOTAL 2,204.00 1,814.20
Considered Good 2,204.00 1,814.20Considered Doubtful 27.66 11.22
TOTAL 2,231.66 1,825.42
NOTE :
(i) Sundry Debtors includes ` 70.72 crore (previous year ` 38.23 crore) towards contractual obligations on account of Export Incentives Receivables.
(ii) Debtors include dues from parties aggregating to ` 1.22 crore (previous year ` 3.10 crore) in which a director is a director partner
(iii) Refer note no 32 for related party balances.
17 CASH & BANK BALANCES
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Cash on hand 0.66 1.37Balance with Bank In Current Accounts 563.38 76.48 In EEFC Accounts 0.98 0.41 In Deposit Accounts [Including interest accrued thereon] (Refer Note
i and ii below) 116.51 140.12
In earmarked accounts Unpaid dividend accounts 1.08 0.84 Balances Deposits held as margin money or security against
borrowings, guarantees and other commitments (Refer Note i to iii below)
715.19 981.69
TOTAL 1,397.80 1,200.91
NOTE :
(i) Balances with banks includes deposits amounting to ` 22.64 crore (previous year ` 39.22 crore) and margin monies amounting to ` 77.63 (previous year ` 71.49 crore) which have an original maturity of more than 12 months.
Balances with banks includes deposits amounting to ` 2.16 crore (previous year ` 9.92 crore) and margin monies amounting to ` 2.81 crore (previous year ` 15.42 crore) which have a maturity of more than 12 months from the Balance Sheet date
(ii) Includes ` 33.49 crore (previous year Nil) kept in bank deposits and ` 8.55 crore (previous year ` 41.29 crore) margin money pending utilisation towards project
(iii) Includes ` 437.57 crore (previous year ` 845.45 crore) pledged with banks towards loan availed by subsidiary company.
18 SHORT-TERM LOANS AND ADVANCES (Unsecured)
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Considered goodLoans & advances to Related parties (Refer note no 32) 9.22 32.86OthersAdvance to Creditors 971.61 124.57Advance to Staff (Refer note i below) 9.36 10.82
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 106F - 67
Balance with Central Excise, Customs and Sales Tax Authorities 282.25 204.33Prepaid Expenses 69.29 30.75Inter Corporate Deposits 3.69 4.95Advance Tax (Net of provision for tax) 9.13 20.60Deposits others 9.51 10.13
TOTAL 1,364.06 439.01Considered doubtfulAdvance to others 20.60 19.27Less : Provision 20.60 19.27
- - TOTAL 1,364.06 439.01
NOTE :
(i) Advance to staff includes ` 0.18 crore (previous year ` 1.27 crore) due from of cers of the Company [maximum amount outstanding during the year ` 1.27 crore (previous year ` 1.35 crore)]
31-Mar-11Sale of product Sales – Local 6,165.75 4,362.34 Sales – Export 3,813.27 2,342.70
9,979.02 6,705.04Sale of services Job work charges collected 31.19 13.16Sale of Scrap 8.46 9.18
TOTAL 10,018.67 6,727.38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 107F - 68
21 OTHER INCOME
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Interest Income On Long Term Investments 5.04 3.78 On Current Investments 31.08 58.67 Interest on income tax refund 1.40 0.07
37.52 62.52Dividend Income : On Long Term Investments 0.02 0.20 On Current Investments 0.58 0.16
0.60 0.36Gain on sale of investments (net) On Long Term Investments – 1.02 On Current Investments – 0.14
– 1.16Pro t on sale of xed assets (net) 34.88 –Provision for doubtful debts written back 2.21 1.54Insurance claim received 12.40 –Rent Received 2.34 0.42Sundry Credit Balances written back 3.40 0.43Other non operating Income 2.16 0.64
57.39 3.03 TOTAL 95.51 67.07
22 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11CLOSING STOCK AS ON 31 MARCH 2012 *Finished Goods 671.11 510.21Work-in-progress 2,278.38 900.36Stock in Trade (Traded Goods) 221.29 68.03
3,170.78 1,478.60LESS : OPENING STOCK AS ON 1 APRIL 2011Finished Goods 510.21 354.69Work-in-progress 900.36 856.24Stock in Trade (Traded Goods) 68.03 –
1,478.60 1,210.93 TOTAL (1,692.18) (267.67)
* Includes inventories taken over on amalgamation (Refer note no 39)
23 EMPLOYEE BENEFIT EXPENSES
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Salaries, Wages and Bonus 279.20 230.70Contribution to Provident Fund and Other Funds 22.27 8.52Employee Stock Option Compensation Expenses 2.27 –Employees Welfare Expenses 9.10 5.00
TOTAL 312.84 244.22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 108F - 69
24 FINANCE COSTS
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Interest expense: 1,144.89 727.71(Net of Interest Subsidy of ` 131.11 crore (previous year ` 131.88 crore) and recovery of ` 140.02 crore (previous year ` 81.47 crore))Interest on late payment of taxes 2.04 3.07Other Borrowing cost 87.77 51.37
TOTAL 1,234.70 782.15
25 OTHER EXPENSES
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Stores and Spares Consumed 98.34 50.93Packing Materials Consumed 130.97 81.17Power and Fuel 667.25 392.40Processing Charges 66.62 49.58Labour Charges 68.22 60.27Excise Duty 6.27 4.15Donation 1.21 0.81Freight, Coolie and Cartage 112.90 100.25Legal and Professional Fees 37.88 30.74Rent 26.57 22.91Rates and Taxes 6.11 6.55Repairs and Maintenance Plant and Machinery 16.91 14.67 Factory Building 2.18 0.67 Others 9.93 5.06Commission on Sales 43.17 23.01Loss on exchange rate difference derivative (Net) 282.51 49.73Provision for Doubtful Debts 17.35 35.00Provision for Doubtful Advances 2.43 –Bad debts and other advances written off 12.18 –Directors Remuneration 7.20 7.20Directors Fees and Commission 5.27 5.06Auditors Remuneration Audit Fees 2.08 1.63 Certi cation Fees 0.04 0.04Insurance 13.04 13.07Loss on Sale of Investment (net) 0.12 –Loss on sale of Assets (Net) – 0.03Diminution in value of investment 8.88 16.88Miscellaneous Expenses 231.73 148.55(Miscellaneous Expenses includes Printing and Stationery, Bank Charges, Advertisement, Bill Discounting Charges etc.)
TOTAL 1,877.36 1,120.36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 109F - 70
Sr. No.
Name of the subsidiary companies Country of Incorporation
Ownership Interest
31-Mar-12
Ownership Interest
31-Mar-111 Alok Infrastructure Limited India 100% 100%2 Alok Land Holdings Private Limited India 100% 100%3 Alok Realtors Private Limited India 100% 100%4 Alok Retail (India) Limited India 100% 100%5 Alok Apparels Private Limited India 100% 100%6 Alok New City Infratex Private Limited** India 100% 100%7 Alok Aurangabad Infratex Private Limited** India 100% 100%8 Alok HB Hotels Private Limited** India 100% 100%9 Alok HB Properties Private Limited** India 100% 100%
10 Alok Industries International Limited British Virgin Island
100% 100%
11 Alok Inc.* USA 100% 100%12 Alok International Inc. USA 100% 100%13 Mileta, a. s.* Czech
Republic100% 93.20%
14 Alok European Retail, s.r.o.* Czech Republic
100% 100%
15 Alok H&A Limited* India 100% 100%16 Springdale Information and Technologies Private Limited India 100% 100%17 Kesham Developers & Infotech Private Limited India 100% 100%18 Grabal Alok International Limited (Refer note no 39(a)) British Virgin
Island100% Nil
19 Grabal Alok (UK) Limited* (Refer note no 39(b)) UK 90.43% Nil20 Alok Singapore Pte Ltd.* (incorporated on 28 December
2011)Singapore 100% Nil
21 Alok International (Middle East) FZE* Dubai 100% Nil(incorporated on 01 August 2011)
* Consolidated based on unaudited nancial statements, as approved by the Board of Directors of the company.
** Pursuant to the plan of exiting real estate business, such companies were liquidated during the year
For nancial information of subsidiary companies, refer note no 29 below
Sr. No.
Name of the associates Country of Incorporation
Ownership Interest
31-Mar-12
Ownership Interest
31-Mar-111 Aurangabad Textile and Apparel Park Limited* India 49.00% 49.00%2 New City of Bombay Mfg. Mills Limited * India 49.00% 49.00%
* Consolidated based on unaudited nancial statements, as approved by the Board of Directors of the company.
The following amounts are included in the Consolidated Financial Statements in respect of Jointly Controlled Entities based on “proportionate consolidation” method, as per Accounting Standard 27 on
“Financial Reporting of Interest in Joint Venture”
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 110F - 71
(` Crore)Particulars Current Year Previous YearASSETSFixed Assets 4.72 2.07 Inventories 0.43 0.49 Sundry Debtors 29.08 18.04 Cash and Bank Balances 4.32 4.69 Loans and Advances 15.59 18.68 LIABILITIESCurrent Liabilities 10.17 2.46 Provision 0.05 0.43 Deferred Tax Liability 0.18 0.18 INCOMESales 95.34 89.71 Other Income 1.93 2.75 Increase in Stock 0.18 0.05 EXPENSESManufacturing and Other Expenses 93.01 87.56 Depreciation 0.19 0.11 Provision for Tax 1.10 1.39
Sr. No.
Name of the associates Country of Incorporation
Ownership Interest
31-Mar-12
Ownership Interest
31-Mar-111 Grabal Alok (UK) Limited (Refer note no 39(b)) United
Kingdom- 41.72%
2 Ashford Infotech Private Limited* India 50.00% 50.00%3 Alspun Infrastructure Limited India 50.00% 50.00%4 Nirvan Builders Private Limited (liquidated
during the year)India - 33.20%
5 Next Creations Holdings LLC * USA 33.00% 33.00%
* Consolidated based on unaudited nancial statements, as approved by the Board of Directors of the company.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 111F - 72
29
FIN
AN
CIA
L IN
FOR
MA
TIO
N R
ELA
TIN
G T
O S
UB
SID
IAR
Y C
OM
PA
NIE
S F
OR
TH
E Y
EA
R E
ND
ED
31
MA
RC
H 2
012
(` C
rore
)S
r.
No.
Nam
e of
the
subs
idia
ryC
apita
l R
eser
veTo
tal
Ass
ets
Tota
l Li
abili
ties
*In
vest
men
t (O
ther
than
in
vest
men
t in
Sub
sidi
arie
s)
Turn
over
befo
re
Tax
Pro
visi
on
for
tax
afte
r ta
xP
ropo
sed
Div
iden
d
1A
lok
Indu
strie
s In
tern
atio
nal L
imite
d @
0.2
2 (1
74.0
3) 9
57.5
9 1
,131
.40
683
.61
–
(44.
34)
–
(44.
34)
–
2A
lok
Infra
stru
ctur
e Li
mite
d 0
.05
(7.7
3) 1
,247
.41
1,2
55.0
9 1
,050
.28
191
.82
(1.5
4) 1
3.46
(1
5.00
) –
3
Alo
k H
B P
rope
rties
Priv
ate
Lim
ited
$ 0
.05
(0.0
5) –
–
–
–
(0
.04)
–
(0.0
4) –
4
Alo
k H
B H
otel
s P
rivat
e Li
mite
d $
0.0
5 (0
.05)
–
–
–
–
(0.0
4) –
(0
.04)
–
5A
lok
Rea
ltors
Priv
ate
Lim
ited
1.7
5 (0
.39)
1,4
56.8
9 1
,455
.53
–
–
(0.0
6) –
(0
.06)
–
6K
esha
m D
evel
oper
s &
Info
tech
Pvt
. Ltd
2.5
8 5
.89
17.
71
9.2
4 –
–
4
.24
0.9
5 3
.29
–
7S
prin
gdal
e In
form
atio
n &
Tec
hnol
ogy
Pvt
. Lt
d. 0
.60
0.0
3 1
.34
0.7
1 –
–
(0
.17)
–
(0.1
7) –
8A
lok
Land
hol
ding
s P
rivat
e Li
mite
d 0
.50
(0.3
3) 2
4.92
2
4.75
–
–
(0
.11)
–
(0.1
1) –
9
Alo
k N
ew C
ity In
frate
x P
rivat
e Li
mite
d $
0.0
5 (0
.05)
–
–
–
–
(0.0
4) –
(0
.04)
–
10A
lok
Aur
anga
bad
Infra
tex
Priv
ate
Lim
ited
$ 0
.05
(0.0
5) –
–
–
–
(0
.04)
–
(0.0
4) –
11
Mile
ta, a
.s.^
**
64.
54
(5.1
8) 1
46.9
2 8
7.57
–
1
29.6
7 (8
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–
(8.7
7) –
12
Alo
k E
urop
ean
Ret
ail,
s.r.o
.^ *
* 0
.06
(0.6
9) 0
.02
0.6
6 –
–
–
–
–
–
13
Alo
k R
etai
l (In
dia)
Lim
ited
0.0
5 (3
5.39
) 5
4.43
8
9.77
–
2
9.26
(1
0.92
) –
(1
0.92
) –
14
Alo
k A
ppar
els
Priv
ate
Lim
ited
1.0
0 (1
7.80
) 4
2.68
5
9.47
–
1
5.24
(6
.57)
(2.2
1)
(4.3
6) –
15
Alo
k In
tern
atio
nal I
nc.@
(***
` 4
3,22
5-)
– *
**
(0.0
4) 9
0.58
9
0.61
4
.47
142
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(0.2
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(0
.29)
–
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lok
Inc.
@ *
* 0
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0.1
7 0
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0.0
4 –
–
–
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–
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17
Alo
k S
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pore
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Ltd
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286
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(2
.54)
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lok
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iddl
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ast)
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# *
* 1
.31
(0.3
8) 1
.59
0.6
6 –
–
(0
.38)
–
(0.3
8) –
19
Gra
bal A
lok
(UK
) Lim
ited
** (R
efer
not
e no
39
(b))
4.6
5 (1
74.4
9) 6
49.6
2 8
19.4
6 –
7
59.1
6 (1
51.7
6) –
(1
51.7
6) –
20G
raba
l Alo
k In
tern
atio
nal L
imite
d (R
efer
no
te n
o 39
(a))
72.
70
(17.
62)
377
.01
321
.92
333
.53
–
(13.
78)
–
(13.
78)
–
21A
lok
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A L
imite
d **
36.
05
(34.
73)
124
.70
123
.38
0.0
1 4
6.60
(2
6.37
) –
(2
6.37
) –
@ B
alan
ce s
heet
item
s ar
e tra
nsla
ted
at c
losi
ng e
xcha
nge
rate
of I
NR
51.
16U
SD
and
Pro
t(Lo
ss) i
tem
s ar
e tra
nsla
ted
at a
vera
ge c
losi
ng ra
te o
f IN
R 4
7.95
US
D
^ B
alan
ce s
heet
item
s ar
e tra
nsla
ted
at c
losi
ng e
xcha
nge
rate
of I
NR
2.7
9C
ZK a
nd P
rot(
Loss
) ite
ms
are
trans
late
d at
ave
rage
clo
sing
rate
of I
NR
2.6
7C
ZK
# B
alan
ce s
heet
item
s ar
e tra
nsla
ted
at c
losi
ng e
xcha
nge
rate
of I
NR
14.
11A
ED
and
Pro
t(Lo
ss) i
tem
s ar
e tra
nsla
ted
at a
vera
ge c
losi
ng ra
te o
f IN
R 1
3.55
AE
D
$ Li
quid
ated
dur
ing
the
year
* In
clud
ing
Sha
re A
pplic
atio
n M
oney
** U
naud
ited
gure
s
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 112F - 73
30 Contingent Liabilities in respect of:
(` Crore)Sr. No.
Particulars Current Year Previous Year
A Customs duty on shortfall in export obligation in accordance with EXIM Policy(The company is hopeful of meeting the export obligation within the stipulated period)
Amount Unascertained
Amount Unascertained
B Pending Litigation 0.05 0.05
C Guarantees given by banks on behalf of the Company 73.71 28.07
D Bills discounted 214.79 242.94
E Taxation Matters :
a) Income tax demand mainly on account of alleged short deduction of taxes for AY 2010-11 and AY 2011-12 on certain payments. The company has led an appeal with the Commissioner of Income Tax (A) and is hopeful of favourable decision.
1.69 –
b) Income Tax demand during the previous years of ̀ 5.91 crore mainly on account of alleged short deposition of TDS amounts arising from wrong TAN numbers mentioned while uploading the TDS return and certain payments not considered by the Tax authorities, although duly paid by the company and short deduction of tax in respect of certain payments with respect to AY 2006-07 to 2009-10. The company had led an appeal with the Commissioner of Income Tax (A) and also made application for recti cation u s 154 providing details of amounts paid to the bank. Such recti cation was carried out during the year for majority of the amount and for the balance of ` 0.23 crore mainly pertaining to short deduction of taxes, the company is hopeful of favourable decision.
0.23 5.91
c) Demands of Works Contract Tax contested not acknowledged as debts as the company is hopeful of favourable decision.
0.59 0.59
d) Income tax amounting to `11.29 crore, mainly on account of disallowance of interest and expenditure incurred towards exempt income. The company has led an appeal with the Commissioner of Income Tax (A) and is hopeful of favourable decision.
11.29 –
F Disputed various matters relating to NTC ATM* Amount Unascertained
Amount Unascertained
G. Guarantee provided to New City of Bombay Mfg. Mills Limited (Joint Venture company) for loan given to Grabal Alok Impex Limited (51%) (Refer note no 39(a))
– 9.18
* Refer note no 17(i) of provisional nancial statements of Aurangabad Textile and Apparel Park Limited
31 Capital Commitment
(` Crore)Particulars Current Year Previous Year Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of advances)
527.17 694.7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 113F - 74
32 Related Party Disclosure
a. Names of related parties and nature of relationship
As per Accounting Standard (AS) 18 “Related Party Disclosures”, Company’s related parties disclosed
0.23 – k) Guarantee Given on loan given to Grabal Alok Impex
LimitedNew City of Bombay Mfg. Mills Limited – 9.18
Note:
i Previous year gures are given in brackets.
ii Grabal Alok Impex limited was amalgamated with the company w.e.f 1 April 2011 and consequently, Grabal Alok international Limited and Grabal Alok (UK) Limited became subsidiaries of the company from 1 April 2011. Transactions and balances with of such companies for the previous year and as at 31 March 2011 have been considered accordingly in the current year related party disclosure as above. (Refer note no 39)
33 Employee Stock Option Scheme(ESOS)
In 2011, the shareholders of the Company approved the Employee Stock Option Scheme (“Alok Industries Limited – ESOS 2010 Scheme”) vide postal ballot, in accordance with the Securities and Exchange Board of India (ESOP & ESOS) Guidelines, 1999. Such scheme provides for grant of options up to 25,000,000 options to the eligible employees and or directors of the Company and or its subsidiaries. The exercise price for such options can be up to 50% discount to the market price as per the discretion of the compensation committee. 10,799,250 options were granted during the year and 10,595,700 options were outstanding as on 31 March 2012. Such options vest over a period of two years, 50% at the end of one year from the date of grant and 50% at the end of two years from the date of grant.
Details of options granted duly approved by the Remuneration and Compensation Committee under the said scheme are as under:
Grant Date No. of Options granted
Options
lapsed
Closing Balance Exercise Price
Vesting period
20-Apr-11 1,280,000 185,550 1,094,450 18.90 Up to 20 April 2013
20-Apr-11 9,519,250 18,000 9,501,250 21.42 Up to 20 April 2013
TOTAL 10,799,250 203,550 10,595,700
The Company has followed the Intrinsic Value-based method of accounting for stock options granted, based on Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India, and accordingly, compensation cost of ` 4.67 crore has been recorded during the year on such grant. The compensation cost recognised as a charge during the year was ` 2.27 crore. Had the compensation cost for the Company’s stock based compensation plan been determined in the manner consistent with the fair value approach as described in the Guidance note, the Company’s net income would be lower by ` 4.20 crore and earnings per share as reported would be lower as indicated below:
Particulars Year-2012Basic and Dilutive Earnings per share
As reported (In `) 1.15
Adjusted (In `) 1.10
The Company has adopted Black Scholes option pricing model to determine the fair value of stock options. The fair value of each option granted in 2012 is estimated on the date of grant based on the following assumptions:
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 118F - 79
Particulars Year-2012Expected life (years) 1 year from the
date of vestingRisk free interest rate (%) 7.83%Volatility (%) 39%
34 Earnings per share (EPS)(` Crore)
31-Mar-12 31-Mar-11a. Nominal value of equity shares per share ( In Rupees) 10 10 b. Basic & Diluted EPS
Net Pro t Available for Equity Shareholders 92.99 311.54 Weighted average number of Equity Shares – Basic 811,187,390 787,784,357 Basic Earnings per share (Rupees) 1.15 3.95 Add : Shares to be issued in ESOS 46,286 – Weighted average number of Equity Shares – Dilutive 811,233,676 787,784,357 Diluted Earnings per share (Rupees) 1.15 3.95
(a) Amounts recognised as expenses towards contributions to provident fund, superannuation and other similar funds by the Company including for it’s subsidiary companies and joint venture companies in India are ` 10.75 crore (previous year ` 8.13 crore) for the year ended 31 March 2012.
(b) The Company contributed ` 8.17 crore (previous year ` 7.57 crore) towards various other de ned contribution plans of subsidiaries located outside India during year ended March 31, 2012 as per laws of the respective country.
ii.
In respect of holding company, subsidiary companies and joint venture companies in India :
(a) Gratuity Plan:
The Company makes annual contribution to the Employee’s Group Gratuity Assurance Scheme, administered by the Life Insurance Corporation of India (‘LIC’), a funded de ned bene t plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to fteen days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs on completion of ve years of service.
(b) Compensated absences:
Employees’ entitlement to compensated absences in future periods based on unavailed leave as at balance sheet date, as per the policy of the Company, is expected to be a long term bene t and is actuarially valued.
The following table sets out the status of the gratuity plan for the year ended 31 March 2012 as required under AS 15 (Revised)
(` Crore) PARTICULARS Gratuity
(funded) as on 31-Mar-12
Gratuity (funded) as
on 31-Mar-11
15.40 10.77 Current Service Cost 4.34 3.53 Interest Cost 1.55 1.15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 119F - 80
PARTICULARS Gratuity (funded) as
on 31-Mar-12
Gratuity (funded) as
on 31-Mar-11 Actuarial (gain) loss (0.71) 0.27 Past Service cost – Vested Bene t – – Bene ts Paid (0.33) (0.32)
20.25 15.40 Change in Fair Value of assetsOpening Fair value of assets 4.71 2.85 Expected Return on Plan Assets 0.36 0.23 Actuarial Gain 0.26 0.08 Contribution by Employer 2.40 1.87 Bene ts Paid (0.33) (0.32)Closing Fair Value of Plan Assets 7.40 4.71 Net Liability 12.85 10.69
Expense to be recognised in statement of Pro t and Loss Account
PARTICULARS Year ended 31-Mar-12
Year ended 31-Mar-11
Current Service Cost 4.34 3.53 Interest on De ned Bene t Obligation 1.55 1.15 Expected Return on Plan Assets (0.36) (0.23)Net Actuarial (gain) loss (0.97) 0.19 Past Service cost – vested bene t recognised during the year – – Total Included in Employment Expenses 4.56 4.64 Actual Return on Plan Assets 0.60 0.30 Category of Assets as on 31 MarchInsurer Managed Fund 7.40 4.71
The assumptions used in accounting for gratuity are set out below:
PARTICULARS Year ended 31-Mar-12
Year ended 31-Mar-11
Discount rate 8.70% 8.05%Rate of increase in compensation levels of covered employees 9.00% 9.00%Expected Rate of return on plan assets * 7.50% 7.50%
* Expected rate of return on plan assets is based on expectation of the average long term rate of return expected to prevail over the estimated term of the obligation on the type of the investments assumed to be held by LIC, since the fund is managed by LIC. The estimates of future salary increases, considered in actuarial valuation, takes into account the in ation , seniority , promotions and other relevant factors.
Experience Adjustments
PARTICULARS Year ended31-Mar-
1231-Mar-
1131-Mar-
1031-Mar-
0931-Mar-
08De ned bene t obligation 20.25 15.40 10.68 6.67 –Plan Assets 7.40 4.71 2.86 2.24 –Surplus (De cit) (12.74) (10.60) (7.82) (4.43) –Experience Adjustments on plan Liabilities
1.09 0.71 0.16 – –
Experience Adjustments on plan Assets
0.26 0.08 0.07 – –
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 120F - 81
Asset Allocations
Since the investments are held in the form of deposit with LIC, these are not volatile and the market value of assets is the cost value of assets and has been accordingly considered for the above disclosure.
36 Segment Reporting
i) Primary Segment: Geographical Segment
The company is in the business of manufacturing of Textile products. Considering its high level of international operations and present internal nancial reporting based on geographical location of customer, the company has identi ed geographical segment as primary segment.
The geographic segment consists of:
a) Domestic (Sales to Customers located in India)
b) International (Sales to Customers located outside India)
Revenue directly attributable to segments is reported based on items that are individually identi able to that segment. The company believes that it is not practical to allocate segment expenses, segment results, assets used, except debtors, in the company’s business or liabilities contracted since the resources services assets are used interchangeably within the segments. Accordingly, no disclosure relating to same is made. All xed assets are located in India.
(` Crore)Particulars Current
Year Previous
YearSegment RevenueOperating Revenue – SalesDomestic [Net of Excise duty of ` 233.95 crore (Previous year ` 112.48 crore)]
The Group is operating in a single business segment i.e. Textile and as such all business activities revolve around this segment. Hence, there is no separate secondary segment to be reported considering the requirement of AS 17 on “Segment Reporting”
37 During the year, the company has transferred investments in the form of equity capital and cumulative redeemable preference shares in Alok Industries International Limited (“Alok BVI”) & Grabal Alok International Limited (“Grabal BVI”), its two wholly owned subsidiary companies to Alok Infrastructure Limited (“Alok Infra”), another wholly owned subsidiary as a strategy to consolidate all investible assets under one umbrella. During the previous year, vide a novation agreement, the Company had taken over the obligation of Grabal Alok (UK) Limited, (then an associate company of Alok BVI & Grabal BVI, in the United Kingdom) towards its liability pertaining to a JPY USD foreign currency derivative. Consequent to the sale of shares in Alok BVI and Grabal BVI to Alok Infra, Alok Infra has taken over such obligation of Alok Industries Limited during the current year and provided an amount of ` 35.85 crore (previous year ` 15.47 crore) towards such obligation.
38 The company has taken premises for operating stores on operating lease. Lease rentals paid during the year are recognised as an expense as per Accounting Standard 19 (AS-19) “Leases”. Details of lease rentals payable in future are as follows:
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 121F - 82
Sr. No.
Due ` Crore
1 With in one year 12.172 Later than one year and not later than 5 years 44.533 Later than 5 years 70.87
Total 127.57
Lease rentals aggregating to ` 26.57 crore (previous year ` 22.91 crore) recognised during the year in statement of Pro t & Loss
39 a) During the year, the Honourable High Court, Bombay sanctioned the scheme of amalgamation (‘scheme’) between the Company (transferee) and Grabal Alok Impex Limited (transferor) with appointed date of 1 April 2011. Grabal Alok Impex Limited is in the business of manufacturing embroidery textiles. The scheme has been effective from 1 March 2012.
The Company issued 22,485,000 equity shares of ` 10 each to shareholders of Grabal Alok Impex Limited (of which 1,900,000 shares were issued to Alok Bene t Trust) considering exchange ratio of 1:1 as per the scheme. There were no signi cant differences in accounting policies of two companies. The Company has accounted for such amalgamation under ‘pooling of interest’ method as under;
PARTICULARS ` croreCarrying value of Fixed assets (including CWIP ` 18.94 crore) 193.51Carrying value of Investments (including ` 31.34 crore in 62.59Transferee company through Alok Bene t Trust)Inventories 46.00Debtors 37.50Cash & Bank balances 147.00Loans & Advances 16.85Total Assets 503.45Current liabilities & Provisions 55.82Long term borrowings 113.15Short Term Borrowings 145.79Deferred Tax Liabilities 16.78Share warrants 20.40Total Liabilities 351.94Shares issued 22.49Reserves taken over 129.02Total Liabilities 503.45
Current year gures of the Company include amount of revenue of `160.96 crore & pro t before tax of ` 7.58 crore for the year.
On such amalgamation, Grabal Alok International Limited, the wholly owned subsidiary of Grabal Alok Impex Limited, has now become a wholly owned subsidiary.
b) The Company vide Alok Industries International Limited (Alok BVI), held 42% stake in Grabal Alok (UK) Limited, (“GAUK”) and Grabal Alok Impex Limited, vide its wholly owned subsidiary, Grabal Alok International Limited, held 48.71% stake in GAUK. On amalgamation, GAUK, an associate company of both companies until March 31, 2011, has now become a majority owned subsidiary of Alok Industries Limited.
Accordingly, the Company has consolidated the nancial statements of GAUK on a line by line basis and Goodwill aggregating to ` 448.00 crore has been recognised in these nancial statements on consolidation. While Grabal Alok (UK) Limited had embarked upon a plan for revamping its retailing operations in the United Kingdom, the same has not made much headway and the operations have recorded losses eroding the net worth, in view of the current economic downturn in the UK. The Management believes that the current performance, impacted by the dif cult economic situation in the UK as above, is not indicative of the long term economic value of the investment. On the basis of objective assessment made by the management, no provision for impairment of goodwill aggregating to ` 448.00 crore is considered necessary.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 122F - 83
40 During the previous year, Deutsche Bank, Singapore Branch subscribed to unsecured oating rate compulsory convertible bonds issued by Alok Industries International Limited (“Alok BVI”) and Grabal Alok (“GAUK”) Limited, a company incorporated in the United kingdom (subsidiary) of the company, of USD 56.5 million each, with a green shoe option of USD 25 million. Such bonds are convertible into Class A preference shares of Alok Industries International Limited (“Alok BVI”) of USD 1.00 each (USD 56.50 million) and ordinary shares of GAUK of GBP 0.001 each. (USD 56.50 million) at the end of maturity (July 2014). Grabal Alok International Limited (“Grabal BVI”), a subsidiary company and Alok BVI, have agreed to purchase such bonds from the holders on scheduled put option dates between the 33rd month (July 2013) to 42nd month (April 2014) from the issue date. The payment obligations under the put option are inter alia secured by way of pledge of 93.21% of shareholding of Alok BVI in Mileta, a.s. – a step down subsidiary of the Company and 90.43% shareholding of Alok BVI and Grabal BVI in GAUK, an associate of the Company. Further, these bonds are secured by subservient charge on current and movable assets of the company which was created by executing a Deed of Hypothecation on 28th October, 2010 in favour of AXIS Trustee Services Limited, Mumbai, India
41 During the year, Triumphant Victory Holdings limited (“TVHL”) a promoter group company, obtained a loan from Axis Bank. Such loan is secured by all assets of Grabal Alok (UK) Limited, the Company’s majority owned subsidiary company.
42 i Due to unusual depreciation in the value of the Indian Rupee (INR) against US Dollar (USD) during the year, the exchange loss gain arising out of :
a) Restatement of foreign currency liabilities assets, and;
b) Mark to Market (MTM) losses on foreign exchange derivatives taken by the Company, has been presented as an exceptional item with corresponding changes for the previous year.
ii The Company, during the year, based on the announcement of the ICAI (Accounting for derivatives), has accounted for derivative forward exchange contracts taken towards highly probable forecast transactions and rm commitments, at fair values considering the principles of recognition and measurement stated in AS-30 ‘Financial Instruments: Recognition and Measurement’. Consequent upon such change, the pro t after tax for the year ended 31 March 2012 is higher by ` 16.78 crore and reserves and surplus are lower by an equivalent amount. Fair value (net loss) of the derivative instruments identi ed as cash ow hedges is ` 16.78 crore as at 31 March 2012, which is expected to be reclassi ed to the pro t and loss account over the next year.
iii Fair values (Mark to Market values) (loss) of Foreign currency options , Interest rate swaps and forward contracts (other than those considered for hedging) as at 31 March 2012 aggregating to ` 179.57 crore (previous year ` 72.96 crore) has been accounted for by the Company. Such fair values are based on the report of counter parties. MTM losses on such derivatives of ` 106.61 crore have been recognised during the year.
iv Derivative contracts entered into by the company and outstanding as on 31 March 2012 for hedging currency and interest rate related risks. Nominal amounts of derivative contracts entered into by the company and outstanding as on 31 March 2012 amount to ` 3,554.72 crore (previous year ` 2,908.71 crore). Category wise break-up is given below.
43 In line with the amended Accounting Standard (AS) 11 – ‘Effect of changes in Foreign Exchange Rates’, the Company has chosen to exercise the option under paragraph 46 inserted in the Standard by the noti cation.
i) Added to xed assets capital work-in-progress ` 114.47 crore (previous year ` 23.48 crore) being exchange difference on long term monetary items relatable to acquisition of xed assets.
ii) Carried forward ` 0.99 crore (previous year ` (0.22) crore) in the ‘Foreign Currency Monetary Item Translation Difference Account’ being the amount remaining to be amortised as at 31 March 2012.
44 The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of nancial statements. This has signi cantly impacted the disclosure and presentation made in the nancial statements. Previous year’s gures have been regrouped reclassi ed wherever necessary to correspond with the current year’s classi cation disclosure.
Signatures to Notes 1 to 44In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive ChairmanChartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director
Surendra B. Jiwrajka Jt. Managing DirectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate Affairs) &
Company SecretaryPlace : Mumbai Place : Mumbai Place : MumbaiDate: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
46
STOCK MARKET DATA FOR EQUITY SHARES
The Equity Shares of the Company are listed and traded on the BSE and the NSE. The stock market data presented below
is given for BSE and the NSE separately.
As on the date of the Letter of Offer, 826,269,357 Equity Shares were issued and outstanding. As the Equity Shares are
actively traded on the BSE and NSE, the stock market data has been given separately for each of these Stock Exchanges.
The Equity Shares have been listed on the BSE since November, 1993 and on the NSE since April, 1996.
The high and low closing prices recorded on BSE and NSE for the preceding three calendar years and the number of
Equity Shares traded on the days the high and low prices were recorded as stated below.
BSE
Year High^
(`) Date of High
No. of
Shares
traded on
date of
high
Total
Volume
traded on
date of
high
(` in
crore)
Low$
(`) Date of Low
No. of
Shares
traded on
date of low
Total
Volume
traded on
date of low
(` in crore)
Average
price for
the year
(`)*
2012 23.90 February 13, 2012 2,279,723 5.34 10.48 December 13, 2012 1,961,906 2.08 16.40
2011 29.50 January 4, 2011 4,813,251 13.87 15.60 August 19, 2011 4,989,919 8.16 22.31
2010 35.00 November 11, 2010 17,298,671 58.90 17.75 May 25, 2010 15,916,088 28.42 22.75
^High based on daily high prices
$Low based on daily low prices
*Average of daily closing prices
(Source: www.bseindia.com)
NSE
Year High^
(`) Date of High
No. of
Shares
traded on
date of
high
Total
Volume
traded on
date of
high
(` in
crore)
Low$
(`) Date of Low
No. of
Shares
traded on
date of low
Total
Volume of
traded on
date of low
(` in crore)
Average
price for
the year
(`)*
2012 23.85 February 13, 2012 9,159,627 21.47 10.45 December 13, 2012 5,816,365 6.16 16.42
2011 29.25 January 3, 2011 22,278,838 64.35 15.60 August 19, 2011 12,291,022 20.05 22.31
2010 35.00 November 11, 2010 48,192,149 164.02 17.8 June 10, 2010 2,090,543 3.77 22.76
^High based on daily high prices
$Low based on daily low prices
* Average of the daily closing prices.
(Source: www.nseindia.com)
47
The high and low prices and volume of Equity Shares traded on the respective dates during the last six months is as
follows:
BSE
Month Date of High High^
(`)
Volume
(No. of
Shares)
Date of Low Low$
(`)
Volume
(No. of
Shares)
Average
Price for
the Month
(`)*
Total No
of Trading
Days
September,
2012 September 26 12.90 36,31,781 September 13 10.77 23,94,953 11.88 20
October,
2012 October 4 13.55 23,16,979 October 31 11.00 63,08,299 12.24 21
November,
2012 November 2 12.40 24,27,616 November 29 10.68 1,12,54,097 11.54 20
December,
2012 December 19 12.05 1,05,36,607 December 13 10.48 19,61,906 11.04 20
January,
2013 January 10 12.60 21,90,944 January 25 10.62 15,90,359 11.48 23
February,
2013 February 4 11.08 9,67,744 February 28 8.25 18,27,503 9.94 20
(Source: www.bseindia.com)
^High based on daily high prices
$Low based on daily low prices
* Average of the daily closing prices.
NSE
Month Date of High High^
(`)
Volume
(No. of
Shares)
Date of Low Low$
(`)
Volume
(No. of
Shares)
Average
Price for
the
Month
(`)*
Total No
of
Trading
Days
September,
2012 September 18 14.00 55,78,306
September 13 10.75 66,34,256
11.87 20
October,
2012 October 4 13.55 71,23,684
October 16, 11.15 49,89,461
12.24 21
November,
2012 November 2 12.40 1,02,14,386
November 29 10.65 4,65,21,090
11.54 20
December,
2012 December 20 12.05 1,10,69,022
December 13 10.45 58,16,385 11.03 20
January,
2013 January 7 12.60 79,68,324
January 24 10.30 46,96,196
11.48 23
February,
2013
February 04 11.10 37,81,510
February 28 8.25 58,72,795
9.94 20
^High based on daily high prices
$Low based on daily low prices
* Average of the daily closing prices.
(Source: www.nseindia.com)
In the event the high, or low or closing price of the Equity Shares are the same on more than one day, the day on which
there has been higher volume of trading has been considered for the purposes of this section.
48
a) The week-end closing prices of the Equity Shares for the last four weeks on BSE and NSE are provided in the table