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Directors Report of Fairdeal Filaments Ltd.

Mar 31, 2014

Dear members,

The Directors are pleased to present 24th Annual Report and audited accounts for the year ended 31st March, 2014.

Financial Results (Rs. in Lacs) Particulars 2013-14 2012-13

Total Revenue 16681.44 15754.33

Profit before interest and depreciation 832.47 843.63

Less : Interest 435.78 437.13

Depreciation 220.36 245.52

Profit before Tax 176.33 160.98

Less : Provision for Current Taxation 84.11 56.61

Provision for Deferred Taxation (18.12) 5.57

Profit after Tax adjustment 110.34 98.80

Excess/(Short) provision for taxation in earlier year (0.95) (16.80)

Net Profit 109.39 82.00

Add : Balance brought forward from previous year 404.47 377.74

Amount available for Appropriation 513.86 459.74

Less : Transfer to General Reserve 2.80 2.10

Proposed Dividend 45.75 45.75

Tax on Dividend 7.78 7.42

Balance Carried to Balance Sheet 457.54 404.47

Dividend

Your Directors recommend dividend at the rate of 12.50% i.e. Rs. 1.25 per share on the Paid-up Equity Share Capital of company for the year ended on 31st March, 2014, subject to the approval of members at the forthcoming Annual General Meeting of Company.

Operational Performance

Your Company has achieved turnover of Rs. 16681.44 lacs during the year under review as compared to Rs. 15754.33 lacs for the previous year.

Earnings before Interest, Depreciation and Tax (EBIDTA), during the year under review are Rs. 832.47 lacs as compared to Rs. 843.63 lacs for the previous year. Profit before tax for the financial year under review has accelerated by 9.53% to Rs. 176.33 during the year under review from Rs. 160.98 lacs for the previous year. Your Company has achieved Net Profit after tax of Rs. 109.39 lacs, an increase by 33.40% from Rs. 82.00 lacs during the previous year.

Fixed Deposits

Your company has not accepted any deposits from the public during the year under review.

Directors

Shri Manubhai J. Shah resigned from the directorship of the Company w.e.f. March 26, 2014. Board of Directors has taken on record the same in their meeting held on May 28, 2014. The Board placed on record its appreciation for the contribution made by them during their tenure of directorship.

Shri Rajendra K. Desai and Shri Nandish S. Vin were appointed as Non-Executive directors of the Company w.e.f. June 7, 2001 and April 25, 2011 respectively. Both Directors should be appointed as an Independent Director in pursuance of Companies Act, 2013.

The Company has received requisite notice together with deposit of Rupees One Lakh each, as provided under section 160 of the Companies Act, 2013, from the shareholders proposing the appointment of Shri Rajendra K. Desai and Shri Nandish S. Vin as Independent directors not liable to retire by rotation.

Pursuant to the provisions of section 152 ofthe Companies Act, 2013 and in accordance with provisions of Articles of Association of the Company, Shri Jayantilal R. Shah, Director of the company retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.

Brief particulars ofthe Director retiring by rotation and proposed to be re-appointed at the forthcoming AGM have been given in the Annexure to Notice of Annual General Meeting.

Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo

Information pursuant to clause (e) of sub-section (1) of Section 217 ofthe Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to total energy consumption and energy consumption per unit of production is given in Annexure-A of this Report. Particulars with respect to Technology Absorption, Research and Development are Nil.

Foreign Exchange Earnings and Outgo (Rs. in Lacs)

2013-14 2012-13

I) Foreign Exchange Earnings 896.70 575.22

II) Foreign Exchange Outgo :

a) Raw Material 0.00 0.00

b) Capital Goods 0.00 76.95

c) Consumable Spares 18.75 23.76

d) Foreign Traveling 0.00 2.54

e) Commission Expenses on Export 9.87 11.88

Particulars of Employees

None of the employees of the company was in receipt of remuneration exceeding the limits specified under sub-section (2A) of Section 217 ofthe Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) ofthe Companies Act, 1956, the Directors based on the representation received from the Operating Management, confirm that:

i) in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to all material departures;

ii) they have, in selection of accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view ofthe state of affairs ofthe company at the end of financial year and ofthe profit of the company for that period;

iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions ofthe Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

iv) they have prepared the annual accounts ofthe company on a ''Going Concern'' basis.

Auditors and Auditor''s Report

M/s. Natvarlal Vepari & Co., Chartered Accountants, Surat, Statutory Auditors of your Company, will retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment as Statutory Auditors for the financial year 2014-15.

Under section 139 ofthe Companies Act, 2013, Statutory Auditors of every listed Company who have completed a term of 10 years or more will not be eligible for re-appointment as Statutory Auditors. However, the existing companies have been allowed to comply with the new requirements of this Section within 3 years from the date of commencement of the Companies Act, 2013.

The existing Statutory Auditors ofthe Company have already completed a term of more than 10 years.

The Company has received a letter from the auditors confirming that they are eligible for appointment as auditors of the Company under section 139 of Companies Act, 2013 and meet the criteria for appointment specified in section 141 of the Companies Act, 2013.

Based on the recommendations of the Audit Committee, the Board of Directors of the Company proposes the reappointment of M/s. Natvarlal Vepari & Co., Chartered Accountants, Surat, as the Statutory Auditors of the Company for a period of 3 years from the financial years 2014-15 to 2016-17.

The notes to the accounts referred to in the Auditors'' Report are self explanatory and therefore do not call for any further comments.

Cost Auditors

The Central Government has notified Companies (cost records and audit) Rules, 2014 as on June 30,2014. As per these rules the companies engaged in the Textiles business shall not be required to include cost records in their books of account and also shall not be required to get its cost records audited. Hence the company has not appointed Cost Auditors for financial year 2014-15.

However, the Cost Audit Report for the year ended on 31st March, 2014 will be submitted by M/s. A. Goyal & Co., Cost Accountants, Jaipur, to the Central Government after approval of the Board of Directors of your company.

Corporate Governance and Compliance Certificate

A separate section on Corporate Governance and a certificate from the Auditors of the company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the stock exchange, forms part of the Annual Report.

Acknowledgment

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Banks, Financial Institutions, Government Authorities, Customers, Suppliers and Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for committed services of employees of company at all the levels.

For and on behalf of the Board of Directors

Place : Surat Jayantilal R. Shah

Date : 13th August, 2014 Chairman


Mar 31, 2013

The Directors are pleased to present 23rd Annual Report and audited accounts for the year ended 3st March, 2013.

Financial Results (Rs. in Lacs)

Particulars 2012-13 2011-12

Total Revenue 15754.33 14624.26

Profit before interest and depreciation 843.63 862.04

Less : Interest 437.13 513.80

Depreciation 245.52 215.60

Profit before Tax 160.98 132.64

Less : Provision for Current Taxation 56.61 63.94

Provision for Deferred Taxation 5.57 14.57

Profit after Tax adjustment 98.80 54.13

(Excess) Short provision for taxation in earlier year (16.80) (0.32)

Net Profit 82.00 53.81

Add : Balance brought forward from previous year 377.74 378.45

Amount available for Appropriation 459.74 432.26

Less : Transfer to General Reserve 2.10 1.35

Proposed Dividend 45.75 45.75

Tax on Dividend 7.42 7.42

Balance Carried to Balance Sheet 404.47 377.74

Dividend

Your Directors recommend dividend at the rate of 12.50% i.e. Rs. 1.25 per share on the Paid-up Equity Share Capital of company for the year ended on 31 st March, 2013, subject to the approval of members at the forthcoming Annual General Meeting of Company.

Operational Performance

Your Company has achieved turnover of Rs. 15754.33 lacs during the year under review as compared to Rs. 14624.26 lacs for the previous year.

Earnings before Interest, Depreciation and Tax(EBIDTA), during the year under review is Rs. 843.63 lacs as compared to Rs. 862.04 lacs for the previous year. Profit before tax for the financial year under review has accelerated by 21.37% to Rs. 160.98 during the year under review from Rs. 132.64 lacs for the previous year. Your Company has achieved Net Profit after tax of Rs. 82.00 lacs, an increase by 52.39% from Rs. 53.81 lacs during the previous year.

Fixed Deposits

Your company has not accepted any deposits from the public during the year under review. Directors

- In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the company, Shri Manubhai J. Shah, Director and Shri Nandish S. Vin, Director of the company retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

- Brief particulars of the Directors retiring by rotation and proposed to be re-appointed at the forthcoming AGM have been given in the Annexure to Notice of Annual General Meeting.

Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo

Information pursuant to clause (e) of sub-section (1) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to total energy consumption and energy consumption per unit of production is given in Annexure-A of this Report. Particulars with respect to Technology Absorption, Research and Development are Nil.

Foreign Exchange Earnings and Outgo (Rs. in Lacs)

2012-13 2011-12

I) Foreign Exchange Earnings 575.22 845.83

II) Foreign Exchange Outgo :

a) Raw Material 0.00 0.00

b) Capital Goods 76.95 21.41

c) Consumable Spares 23.76 9.53

d) Foreign Traveling 2.54 1.38

e) Commission Expenses on Export 11.88 23.73

Particulars of Employees

None of the employees of the company was in receipt of remuneration exceeding the limits specified under sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA)of the Companies Act, 1956, the Directors based on the representation received from the Operating Management, confirm that:

i) in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to all material departures;

ii) they have, in selection of accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of thecompanyattheendoffinancialyearandoftheprofitofthecompanyforthat period;

iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

iv) they have prepared the annual accounts of the company on a ''Going Concern'' basis.

Auditors and Auditor''s Report

M/s. Natvarlal Vepari & Co., Chartered Accountants, Surat, Statutory Auditors of the company, holds office until the conclusion of the forthcoming Annual General Meeting and is eligible for re-appointment. The company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under sub-section (1B) of Section 224 of the Companies Act, 1956 and also that they are not otherwise disqualified within the meaning of Sub- section (3) of Section 226 of the Companies Act, 1956, for such appointment. The notes to the accounts referred to in the Auditors'' Report are self explanatory and therefore do Not call for any further comments.

Cost Auditors

The Central Government had directed an audit of cost accounts maintained by the company in respect of Textiles business. The Board of Directors, subject to the approval of Central Government, have appointed M/s. A. Goyal & Co., Cost Accountants, Jaipur as Cost Auditors of the company for conducting the cost audit for financial year 2013-14. The CostAudit Report for the year ended on 31st March, 2013 will be submitted by M/s. M. Goyal & Co., Cost Accountants, Jaipur, to the Central Government after approval of the Board of Directors of your company.

Corporate Governance and Compliance Certificate

Separate section on Corporate Governance and a certificate from the Auditors of the company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the stock exchange, forms part of the Annual Report.

Acknowledgment

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Banks, Financial Institutions, Government Authorities, Customers, Suppliers and Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for committed services of employees of company at all the levels.

For and on behalf of the Board of Directors

Place : Surat Jayantilal R. Shah

Date : 7th August, 2013 Chairman


Mar 31, 2010

The Directors are pleased to present the 20* Annual Report and the audited accounts for the year ended 31st March, 2010.

Financial Results (Rs. in Lacs)

Particulars 2009-10 2008-09

Sales and other operating income 8296.08 7183.10

Profit before interest and depreciation 511.39 649.86

Less: Interest 206.11 280.89

Depreciation 224.76 252.43

Profit before Tax 80.52 116.54

Less: Provision for Current Taxation 29.44 15.07

Provision for Deferred Taxation 2.30 5.65

Profit after Tax adjustment 48.78 95.82

Excess/Short provision for depreciation 3.52 -0.86

Net Profit 52.30 94.96

Add : Balance brought forward from previous year 391.25 362.81

Amount available for Appropriation 443.55 457.77

Transfer to General Reserve 3.00 13.00

Proposed Dividend 45.75 45.75

Tax on Dividend 7.77 7.77

Balance Carried to Balance Sheet 387.03 391.25

Dividend

Your Directors recommend dividend at the rate of 12.50% i.e. Rs. 1.25 per share on the paid-up equity share capital of the company for the year ended 31st March, 2010, subject to the approval by the members at the forthcoming Annual General Meeting.

Operational Performance

Your company has achieved turnover of Rs. 8296.08 lacs during the year under review as compared to Rs. 7183.10 lacs for the previous year. Increase in turnover during the year under review is mainly on account of increase in trading turnover as compared to previous year.

The company has achieved operating profit of Rs. 511.39 lacs as compared to Rs. 649.86 lacs for the previous year. Cash generation for the year under review is Rs. 277.06 lacs as compared to Rs. 347.39 lacs for the previous year. Net Profit after tax reduced to Rs. 52.30 lacs as compared to Rs. 94.96 lacs for the previous year. Profitability has been adversely affected due to demand recession during the year under review.

Fixed Deposits

Your company has not accepted any deposits from the public during the year under review.

Directors

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the company, Shri R. K. Desai, Director and Shri M. J. Shah, Director of the company who retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Brief particulars of the Directors retiring by rotation and proposed to be re-appointed have been given in the Annexure to Notice of Annual General Meeting.

Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo.

Information pursuant to clause (e) of sub-section (1) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to total energy consumption and energy consumption per unit of production is given in Annexure-A of this Report. Particulars with respect to Technology Absorption, Research and Development are Nil.

Foreign Exchange Earnings and Outgo: (Rs in Lacs)

2009-10 2008-09

I) Foreign Exchange Earnings 88.75 Nil

II) Foreign Exchange Outgo :

a) Raw Material 117.22 6.06

b) Capital Goods 5.36 6.98

c) Consumable Spares 1.48 0.29

d) Foreign Traveling Nil 1.67

Particulars of Employees

None of the employee of the company was in receipt of remuneration exceeding the limits specified under sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors based on the representation received from the Operating Management, confirm that:

i) in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to all material departures;

ii) they have, in selection of accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of financial year and of the profit of the company for that period;

iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

iv) they have prepared the annual accounts of the company on a going concern basis.

Auditors and Auditors Report

M/s. Natvarlal Vepari & Co., Chartered Accountants, Surat, Statutory Auditors of the company, holds office until the conclusion of the forthcoming Annual General Meeting and is eligible for re-appointment. The company has received letters from them to the effect that their appointments, if made, would be within the prescribed limits under sub-section (1B) of Section 224 of the Companies Act, 1956 and also that they are not otherwise disqualified within the meaning of sub-section 3 of Section 226 of the Companies Act, 1956, for such appointment. The notes to the accounts referred to in the Auditors Report are self explanatory and therefore do not call for any further comments.

Cost Auditors

The Central Government had directed an audit of cost accounts maintained by the company in respect of Textiles business. The Board of Directors, subject to the approval of the Central Government, has appointed Mr. V. Srinivasan, Cost Accountant, Navsari as the Cost Auditor of the company for conducting the cost audit. The Cost Audit Report for the year ended on 31st March, 2010 will be submitted by Mr. V. Srinivasan to the Central Government after approval of the Board of Directors.

Corporate Governance and Compliance Certificate

Aseparate section on Corporate Governance and a certificate from the Auditors of the company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the stock exchange, form part of the Annual Report.

Acknowledgement

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Banks, Financial Institution, Government authorities, Customers, Suppliers and Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of employees of the company at all levels.

For and on behalf of the Board of Directors

Place: Surat Jayanti R. Shah

Date 30th July, 2010 Chairman