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Directors Report of Filatex India Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Twenty Fifth Annual Report alongwith the Audited Accounts for the year ended March 31, 2015.

FINANCIAL RESULTS: (Rs. in Lacs)

Particulars 2014-2015 2013-2014

Total revenue 157276 176940

Profit before Finance Cost, Depreciation and Tax 8857 5446

Finance Cost 5360 4003

Depreciation & amortization expense 2057 2593

Profit/(Loss) before tax 1440 (1150)

Tax expense

- Current 301 -

- MAT credit entitlement (301) -

- Taxation for earlier years 2 34

- Deferred 478 (375)

Net Profit/(Loss) after tax 960 (809)

Balance brought forward from previous year 4310 5120

Profit available for appropriation 5270 4311

Proposed Dividend on Equity Shares - -

Dividend Distribution Tax - -

Balance carried forward to Balance Sheet 5270 4311

DIVIDEND

In view of the challenging times being faced by the Man Made Fibres Industry and to conserve the resources, the Board has not recommended any dividend on the equity shares for the year 2014-15.

OPERATIONS

During the year under review, the Company achieved turnover of Rs. 157276 lacs as compared to Rs. 176940 lacs in the previous year resulting in decrease of 11%. Decrease in turnover is due to decline in finished goods prices consequent upon decrease in price of raw material and deep fall in crude prices. During the year under review, the Company has earned net profit of Rs. 960 lacs as compared to net loss of Rs. 809 lacs in the previous year.

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

In respect of fire at Company's POY manufacturing unit at Dadra in November, 2012, the claim under fire policy has been received during FY 2013-14 and claim under loss of profit policy amounting to Rs. 536.59 lacs is still under consideration of Insurer.

SHARE CAPITAL

During the financial year 2013-14, the Company had allotted 80,00,000 convertible warrants on preferential basis to the promoters and others to be converted at the option of warrant holders in one or more tranches, within 18 months from the date of allotment viz September 20, 2013 of warrants into equivalent number of fully paid equity shares of the company of the face value of Rs. 10/- per share at an exercise price of Rs. 25/- per share (including premium of Rs. 15/- per share).

The Company, during the financial year 2013-14, had converted 42,40,000 warrants into equivalent number of equity share and balance 37,60,000 warrants were converted during the year under review. Consequently the paid up share capital of the Company increased to Rs. 32.00 crore from Rs. 28.24 crore.

FIXED DEPOSITS

During the year under review, the Company has not accepted any fixed deposits.

DIRECTORS

Mr. Madhav Bhageria (DIN:00021953), Director, retires by rotation and being eligible, offer himself for re- appointment at the ensuing Annual General Meeting.

During the year under review, Shri B.B.Tandon (DIN: 00740511) who, resigned from the Board of Directors w.e.f. 24th September, 2014, has again joined the Board of Directors with effect from 13th February, 2015 as an Additional Independent Director subject to approval of Members at the ensuing Annual General Meeting.

As per provisions of the Companies Act, 2013, Independent Directors may be appointed for a term upto five years and shall not be liable to retire by rotation. Accordingly the Board recommends the appointment of Shri B.B.Tandon as Independent Director for a period of five years at the ensuing Annual General Meeting.

The Board has also reappointed Mr. Ashok Chauhan (DIN: 00253409) as Whole-time Director in their meeting held on 13th February, 2015 for a further period of two year w.e.f. 12.02.2015 at a consolidated Salary of Rs. 3.00 lacs per month subject to the approval of Members in the ensuing annual general meeting.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually and the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been given in the Corporate Governance Report.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination & Remuneration Policy is annexed herewith as Annexure "A".

CORPORATE SOCIAL RESPONSIBILITY

As required under the Companies Act, 2013 ("Act"), the Corporate Social Responsibility ("CSR") Committee was constituted and it consists of Shri Madhu Sudhan Bhageria as the Chairman, Shri Purrshottam Bhaggeria, Shri Madhav Bhageria, Shri B.B.Tandon and Mrs. Pallavi Joshi Bakhru, as members.

During the year under review, the Company introduced a CSR Policy emphasising its focus on community development projects, prioritizing local needs in the area of education, health, livelihood and environment, for ensuring long term sustainable benefits. The said policy is available on the Company's website www.filatex.com.

The Board, on the recommendation of CSR Committee, approved Rs. 7.84 lacs being two percent of average net profits of the Company calculated in accordance with the provision of Section 198 of the Companies Act, 2013 during proceeding three financial years to be spent on CSR activities.

During the year under review, the Company has incurred an expenditure of Rs. 4.68 lacs on Education, toilets and medical facilities, which is less than two percent of average net profits of the Company during proceeding three financial years. The Company committed to install more public toilets in association of local administration at Dadra, which could not be made ready by 31st March, 2015. Therefore, the Company was unable to spend the balance of Rs. 3.16 lacs during the year.

Details of the expenditure incurred towards CSR for the financial year 2014-15 is annexed herewith as Annexure "B".

MEETINGS OF THE BOARD

Four (4) meetings of the Board of Directors were held during the year. The details of which are given in the Corporate Governance Report.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, your Directors state that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures therefrom;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. That they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS

The Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement along with the Auditors' Certificate regarding compliance of conditions of Corporate Governance and Management Discussion & Analysis are annexed herewith as Annexure "C".

AUDITORS

M/s Amod Agrawal & Associates, Chartered Accountants (Firm Registration No.005780N), were appointed as Statutory Auditors of the Company at the 24th Annual General Meeting of the Company held on 30th September, 2014 to hold office until the conclusion of this Annual General Meeting (AGM) till the conclusion of the Twenty Seventh AGM of the Company in accordance with the provisions of the Companies Act, 2013. However, this appointment was subject to ratification by the members at every Annual General Meeting held after appointment during their tenure of office.

Certificate from the auditors has been received to the effect that their appointment, if made, would be within the limits prescribed under the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and therefore, their ratification for appointment as Statutory Auditors for the year 2015-16 is being sought from the Members of the Company at the ensuing Annual General Meeting.

AUDITORS' REPORT

The company has received letter dated 26th December, 2014 from National Stock Exchange (NSE) advising the company to restate its Financial Statements for the financial year 2012-13 subsequent to the auditors qualification relating to treatment of foreign exchange difference during FY 2012-13. The detail of which is given in the Note 32 of the Balance Sheet.

The Company has taken up the matter with NSE/SEBI to explain and substantiate that the accounting treatment made by the Company is justified. Considering the Company's request, the Securities and Exchange Board of India (SEBI) has informed the Company for providing an opportunity of being heard and to make submissions/ representations before Qualified Audit Review Committee (QARC). Accordingly, the Company has submitted the written Statement and Representation before Qualified Audit Review Committee (QARC). As the matter is under consideration of SEBI/QARC, any effect, any with respect to restatement of financial statement for FY 2012-13 will be accounted for on receipt of final decision in the matter.

COST AUDITORS

Your Company has appointed M/s Bahadur Murao & Co., (Firm Registration No. 000008) a firm of Cost Auditors, for conducting the audit of cost records for the financial year 2014-15. Subject to the approval of the Central Government and Members at the ensuing Annual General Meeting, M/s Bahadur Murao & Co. has been appointed as the Cost Auditor for the financial year 2015-16 at a remuneration of Rs. 50,000 plus service tax and out of pocket expense.

SECRETARIAL AUDITOR

The Board has appointed M/s Siddiqui & Associate, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith as Annexure "D". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered as material in accordance with the policy of the Company on materiality of related party transactions.

Pursuant to 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014), Form No. AOC-2 is annexed herewith as Annexure "E".

The Policy on related party transactions approved by the Board may be accessed on the Company's website www.filatex.com.

Your Directors draw attention of the members to Note no. 38 to the financial statement which sets out related party disclosure.

STOCK EXCHANGE LISTING

Presently, the Equity Shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange. The Annual Listing Fee for the year 2015-2016 has been paid to the Stock Exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Companies Act, 2013, is annexed herewith as Annexure "F".

PARTICULARS OF EMPLOYEES

During the year, no employees of the Company received remuneration more than Rs. 60.00 lacs per annum or Rs. 5.00 lacs per month if employed for part of the year. Accordingly, no information pursuant to the provisions of Section 197(12) of the Companies Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is required to be given.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed herewith as Annexure "G".

VIGIL MECHANISM

In terms of the Section 177 of the Companies Act, 2013 and Listing Agreement, the Company has formulated the Whistle Blower Policy/Vigil Mechanism. The Protected Disclosures should be reported in writing by the complainant as soon as possible, not later than 30 days after the Whistle Blower becomes aware of the same and should either be typed or written in a legible handwriting in English/Hindi/ Gujarati and the same should be addressed to the Vigilance Officer of the Company or in exceptional cases, to the Chairman of the Audit Committee. The Policy on Vigil Mechanism and Whistle Blower Policy may be accessed on the Company's website www.filatex.com. During the year under review, no complaint was received from any Whistle Blower.

RISK MANAGEMENT POLICY

Pursuant to section 134(3)(n) of the Companies Act, 2013 & Clause 49 of the Listing Agreement, the Company has laid down Risk Management Policy to inform Board members about the risk assessment and minimization procedures which is also given in the Corporate Governance Report.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the financial statement (Please refer to Note 14, 15 & 20 to the financial statement).

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has put in place and practiced an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints regarding sexual harassment. All employees are covered under this policy. During the year under review, the Company has not received any complaint under the said Policy.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith as Annexure "H".

ACKNOWLEDGEMENTS

The Board of Directors is pleased to place on record its sincere appreciation for the assistance, support and cooperation received from its Bankers, Government Authorities, Dealers, Customers and Vendors. Your Directors would like to record their sincere appreciation for the dedicated efforts put in by all employees, their commitment and contribution ensuring smooth operations that your Company has achieved during the year. Your Directors also place on record their sincere appreciation for the confidence reposed by the Members in the Company.

For and on behalf of the Board of Directors

MADHU SUDHAN BHAGERIA PURRSHOTTAM BHAGGERIA

Place : New Delhi Vice Chairman and Managing Director Joint Managing Director

Date : 13th August, 2015 (DIN: 00021934) (DIN: 00017938)


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Twenty Fourth Annual Report alongwith the Audited Accounts for the year ended March 31, 2014.

FINANCIAL RESULTS: (Rs. in Lacs)

Particulars 2013-2014 2012-2013

Total revenue 176940 123180 Profit before Finance Cost,

Depreciation and Tax 5446 4755

Finance Cost 4003 2257

Depreciation & amortization expense 2593 2111

Profit/(Loss) before tax (1150) 387 Tax expense

* Current - 80

* MAT credit entitlement - (80)

* Taxation for earlier years 34 25

* Deferred (375) 126

Net Profit/(Loss) after tax (809) 236

Balance brought forward from previous year 5120 4745

Profit available for appropriation 4311 4981

Proposed Dividend on Equity Shares - (120)

Dividend Distribution Tax - (19)

Balance carried forward to Balance Sheet 4311 5120

DIVIDEND

In view of the loss during the financial year, the Board has not recommended any dividend on the equity shares for the year 2013-14.

OPERATIONS

During the year under review, the Company achieved turnover of Rs. 176940 lacs as compared to Rs. 123180 lacs in the previous year resulting in an increase of 44%. During the year under review, the Company has incurred net loss of Rs. 809 lacs as compared to net profit of Rs. 236 lacs in the previous year. Increase in turnover is due to commissioning of plant for polyester poly condensation and POY at GIDC, Dahej. The decrease in Net Profit is due to sluggish demand on account of slowdown in economy, adverse fluctuation in foreign exchange rates, higher finance cost & depreciation.

CLAIMS OF FIRE

During the previous Financial Year a fire broke at Company''s POY manufacturing unit at Dadra which affected functioning of some of the POY lines. Some lines which suffered partial damages were repaired and put to use again by March 2013. In respect of the lines which had major damages, in view of the substantial amount of expenditure required to be incurred to restore such machines, it is considered prudent to take the insurance claim on depreciated value without reinstating such machines. The company has accounted for claim amount of Rs. 1830.46 lacs (which includes interim claim of Rs. 500.00 Lacs, already received and net of Rs. 146.82 lacs received by disposal of the salvage).

The Company has also accounted for the claim recoverable under loss of profit policy amounting to Rs. 536.59 Lacs (Rs. 411.55 Lacs upto 31st March, 2013), computed on the basis of the best estimate of the Management and the same has been shown under other operating revenue.

SHARE CAPITAL

During the year under review, the Company had alloted 80,00,000 convertible warrants on preferential basis to the promoters/ others to be converted at the option of warrant holders in one or more tranches, within 18 months from the date of allotment of warrants i.e. 20th September, 2013 into equivalent number of fully paid equity shares of the Company of the face value of Rs. 10/- each at an exercise prce of Rs. 25/- per share (including premium of Rs. 15/- per share).

The Company had received Rs. 500/- lacs as application money being 25% of the issue price from 80,00,000 warrant holders and has further received Rs. 795/- Lacs towards balance amount being 75% of the issue price from the holders of 42,40,000 warrants for which the warrant holders exercised the option to convert them into equity shares. The company had issued 42,40,000 equity shares of Rs. 10/- each at a premium of Rs. 15 per share on preferential basis upon conversion on February 12, 2014, after which the paid up share capital of the company increased to Rs. 28.24 crore from Rs. 24.00 crore.

FIXED DEPOSITS

During the year under review, the Company has not accepted any fixed deposits.

DIRECTORS

Mr. Purrshottam Bhaggeria (DIN:00017938), Director, retires by rotation and being eligible, offer himself for re-appointment at the ensuing Annual General Meeting. During the year under review, the Board of Directors appointed Mrs. Pallavi Joshi Bakhru (DIN:01526618) as an Additional Director as Independent in the meeting held on 20th September, 2013. She holds office upto the conclusion of the ensuing Annual General Meeting.

The Board of Directors had also appointed Mr. Ashok Chauhan (DIN: 00253409) as Additional as well as Whole- time Director in their meeting held on 12th February, 2014 for a period of one year w.e.f. 12.02.2014 at a consolidated Salary of Rs. 3.00 lacs per month subject to the approval of Members in the ensuing Annual General Meeting. Shri Ram Avtar Bhageria (DIN:00021969) has resigned from the Board of Directors w.e.f. 7th November 2013. He was the founder of the Company and his contributions to the deliberation of the Board and its Committee in the two decades have been immense and immeasurable. Your Directors place on record their appreciation for the valuable guidance, support and sagacious advice given by Shri Ram Avtar Bhageria during his tenure as Director of the Company.

As per provisions of the Companies Act, 2013, Independent Directors are required to be appointed for a terms upto five years and shall not be liable to retire by rotation. Accordingly the Board recommends the appointment of Independent Directors, Shri B.B.Tandon, Shri S.C.Parija, Shri S.P.Setia and Smt. Pallavi Joshi at the Annual General Meeting.

CORPORATE SOCIAL RESPONSIBILITY

As required under the Companies Act, 2013 ("Act"), the Board of Directors, in their meeting held on 30th May, 2014, constituted a Corporate Social Responsibility ("CSR") Committee consisting of Shri Madhu Sudhan Bhageria as the Chairman, Shri Purrshottam Bhaggeria, Shri Madhav Bhageria, Shri B.B.Tandon and Mrs. Pallavi Joshi Bakhru, as members. The Committee will work within the parameters of Section 135 of the Act and rules made thereunder to take the Company''s CSR commitment forward.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies Act, 1956, your Directors state as under:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures there from;

ii. that they have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

iii. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS

A separate Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement along with the Auditors'' Certificate regarding compliance of conditions of Corporate Governance and Management Discussion & Analysis are annexed hereto as part of the Annual Report.

AUDITORS

M/s Amod Agrawal & Associates, Chartered Accountants (Firm Registration No.005780N), Statutory Auditors of the Company hold office upto the conclusion of the ensuing Annual General Meeting. Certificate from the auditors has been received to the effect that their appointment, if made, would be within the limits prescribed under the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014. The Audit Committee and the Board of Directors therefore recommend their appointment as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting (AGM) till the conclusion of the Twenty Seventh AGM of the Company.

AUDITORS'' REPORT

The Auditors'' observations contained in their report for the year under review are self-explanatory and do not require any further comments as the same have dealt with in Notes to Financial Statements.

COST AUDITORS

Your Company is required to maintain the Cost records for its products - Man Made Fibre/Yarn and get it audited by qualified Cost Auditors. Your Company has appointed M/s Bahadur Murao & Co., (Firm Registration No. 000008) a firm of Cost Auditors, for conducting the audit of such records for the financial year 2013-14. The Cost audit report for the financial year 2013-14 shall be filed with the Ministry of Corporate Affairs within the prescribed time limit. Subject to the approval of the Central Government, M/s Bahadur Murao & Co. has been appointed as the Cost Auditor for the financial year 2014-15.

STOCK EXCHANGE LISTING

Presently, the Equity Shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange. The Annual Listing Fee for the year 2014-2015 has been paid to the Stock Exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement containing the necessary information as required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed to this Report.

PARTICULARS OF EMPLOYEES

During the year, no employees of the Company received remuneration more than Rs. 60.00 lacs per annum or Rs. 5.00 lacs per month if employed for part of the year. Accordingly, no information pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is given.

ACKNOWLEDGEMENTS

The Board of Directors is pleased to place on record their sincere appreciation for the assistance, support and cooperation received from its Bankers, Government Authorities, Dealers, Customers and Vendors. Your Directors would like to record their sincere appreciation for the dedicated efforts put in by all employees, their commitment and contribution ensuring smooth operations that your Company has achieved during the year. Your Directors also place on record their sincere appreciation for the confidence reposed by the Members in the Company.

For and on behalf of the Board of Directors

Place : New Delhi MADHU SUDHAN BHAGERIA Date : 4th August, 2014 Vice Chairman and Managing Director (DIN: 00021934)

PURRSHOTTAM BHAGGERIA Joint Managing Director (DIN: 00017938)


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Third Annual Report alongwith the Audited Accounts for the year ended March 31, 2013.

FINANCIAL RESULTS: (Rs. in Lacs)

Particulars 2012-2013 2011-2012

Total revenue 123496 47443

Profit before Finance Cost, Depreciation and Tax 4755 3346

Finance Cost 2257 450

Depreciation & amortization expense 2111 952

Profit before tax 387 1944

Tax expense

- Current 80 395

- MAT credit entitlement (80) -

- Taxation for earlier years 25 -

- Deferred 126 179

Net Profit after tax 236 1370

Balance brought forward from previous year 4745 3654

Profit available for appropriation 4981 5024

Proposed Dividend on Equity Shares - 240

Dividend Distribution Tax - 39

Proposed Dividend on Equity Shares for 2011-12 written back 120 -

Dividend Distribution Tax written back 19 -

Balance carried forward to Balance Sheet 5120 4745

DIVIDEND

In view of the challenging times being faced by the industry and to conserve the resources, the Board has not recommended any dividend on the equity shares for the year 2012-13.

Subsidiary and Consolidation of Financial Statements

Filatex Synthetics Private Limited, which was incorporated on 9th March, 2012 as Company''s subsidiary, has had no transaction/business since its incorporation. During the year under review, your Company has sold its shares in the said subsidiary company, consequently it is no more subsidiary of your company. Thus your Company doesn''t have any subsidiary.

OPERATIONS

During the year under review, the Company achieved turnover of Rs. 137890 lacs as compared to Rs. 51934 lacs in the previous year resulting in an increase of 166%. The Net Profit after tax is Rs. 236 lacs as compared to Rs. 1370 lacs in the previous year. Increase in turnover is due to commissioning of plant for polyester Poly condensation and POY at GIDC, Dahej. The decrease in Net Profit is due to sluggish demand on account of slowdown in economy, adverse fluctuation in foreign exchange rates, higher finance cost & depreciation.

During the financial year under review, fire broke at company''s POY manufacturing unit at Dadra which affected functioning of some of the POY lines. The company is adequately insured and the insurers are in the process of assessing the quantum of loss. Some lines having partial damages were repaired and put to use again by March, 2013. Some lines which have major damages are expected to be replaced / restored by December, 2013. The loss caused by the fire is under determination by the insurers, however, the Management is of the opinion that the company would be able to recover the loss as it has obtained insurance covers on reinstatement basis as well as loss of profit policy. However, the loss on repair / replacement, if any, would be accounted for upon settlement of the claim.

EXPANSION

The Company''s plant for Polyester Poly condensation having capacity of 216000 TPA and POY with capacity of 108000 TPA at GIDC Dahej has been commissioned and become fully operational during the year 2012-13. The Poly condensation unit brings your Company at par with other manufacturers of POY as your company has also started making POY under Direct Melt Spinning Technology being used worldwide, by using PTA and mEg as raw materials. This will enable the Company to reduce operational costs and increase its profitability in coming years.

FIXED DEPOSITS

During the year under review, the Company has not accepted any fixed deposits.

DIRECTORS

Mr. Ram Avtar Bhageria and Mr. Madhav Bhageria, Directors, retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting. During the year under review, Mr. Vibhu Bakhru has resigned from the Board of Directors w.e.f. 8th April, 2013. Your Directors place on record their appreciation for the valuable guidance and support given by Mr. Vibhu Bakhru during his tenure as Director of the Company.

Mr. Madhu Sudhan Bhageria, Vice Chairman & Managing Director, Mr. Purrshottam Bhaggeria, Joint Managing Director and Mr. Madhav Bhageria, Joint Managing Director are being re-appointed for a further period of 3 years w.e.f. 30.07.2013.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies Act, 1956, your Directors state as under:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures there from;

ii. that they have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement along with the Auditors'' Certificate regarding compliance of conditions of Corporate Governance and Management Discussion & Analysis are annexed hereto as part of the Annual Report.

AUDITORS

M/s Amod Agrawal & Associates, Chartered Accountants, Statutory Auditors of the Company hold office upto the conclusion of the ensuing Annual General Meeting. Certificate from the auditors has been received to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. The Audit Committee and the Board of Directors therefore recommend their re-appointment as statutory auditors of the Company for the financial year 2013-14 for the approval of shareholders.

AUDITORS'' REPORT

The Auditors'' observations contained in their report for the year under review are self-explanatory and do not require any further comments as the same have dealt with in Notes of Accounts.

COST AUDITORS

Your Company is required to maintain the Cost records for its products - Man Made Fibre/yarn and get it audited by qualified Cost Auditors. Your Company has appointed M/s Bahadur Murao & Co., a firm of Cost Auditors, for conducting the audit of such records for the financial year 2012-13. The Cost audit report for the financial year 2012-13 shall be filed with the Ministry of Corporate Affairs within the prescribed time limit. Subject to the approval of the Central Government, M/s Bahadur Murao & Co. has been appointed as the Cost Auditor for the financial year 2013-14.

STOCK EXCHANGE LISTING

Presently, the Equity Shares of the Company are listed on National Stock Exchange and Bombay Stock Exchanges. The Annual Listing Fee for the year 2013-2014 has been paid to the Stock Exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement showing the necessary information as required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed to this Report.

PARTICULARS OF EMPLOYEES

During the year, no employees of the Company received remuneration more than Rs. 60.00 lacs per annum or Rs. 5.00 lacs per month if employed for part of the year. Accordingly, no particulars of employees are given pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

ACKNOWLEDGEMENTS

The Board of Directors is pleased to place on record their sincere appreciation for the assistance, support and cooperation received from its Bankers, Government Authorities, Dealers, Customers and Vendors. Your Directors would like to record their sincere appreciation for the dedicated efforts put in by all employees, their commitment and contribution ensuring smooth operations that your Company has achieved during the year. Your Directors also place on record their sincere appreciation for the confidence reposed by the Shareholders in the Company.

For and on behalf of the Board of Directors

Place : New Delhi RAM AVTAR BHAGERIA

Date :27th July, 2013 Chairman


Mar 31, 2012

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Second Annual Report alongwith the Audited Accounts for the year ended March 31, 2012.

FINANCIAL RESULTS: (Rs. in Lacs)

Particulars 2011-2012 2010-2011

Gross Sales/Income from Operations 51934 53710

Gross Profit before Finance Cost, Depreciation and Tax 3375 4263

Finance Cost 479 541

Depreciation & amortization expense 952 920

Profit before tax 1944 2802 Tax expense

- Current 395 960

- Deferred 179 (59)

Net Profit 1370 1901

Balance brought forward from previous year 3654 1952

Profit available for appropriation 5024 3853

Proposed Dividend on Equity Shares 240 171

Dividend Distribution Tax 39 29

Balance carried forward to Balance Sheet 4745 3653

DIVIDEND

The Board has recommended dividend (proposed) of Rs. 1.00 (One) per equity share of Rs. 10 each subject to approval of Banks and Shareholders of the Company at the ensuing Annual General Meeting for the year 2011-12. The dividend including tax thereon will absorb an amount of Rs.278.93 lacs.

Subsidiary and Consolidation of Financial Statements

During the year under review, the Company namely 'Filatex Synthetics Private Limited' was incorporated on 9th March, 2012 as its subsidiary Company and no transaction / business has taken place during the financial year 2011-12. Therefore, the subsidiary's financial statement has not been prepared and consolidated with the annual accounts of the Company.

OPERATIONS

During the year the Company achieved turnover of Rs. 51934 lacs as compared to Rs. 53710 lacs for the previous financial year and the Net Profit after tax is Rs. 1370 lacs as compared to Rs. 1901 lacs in the previous year. Decreases in turnover and Net Profit are due to sluggish in demand on account of slowdown in economy and adverse fluctuation in foreign exchange rate.

EXPANSION

Your Company has set up of a Polyester Poly Condensation plant with a capacity of 216000 TPA alongwith expansion of polyester POY capacity by 108000 TPA in the state of Gujarat. The Company's plant for Polyester Poly condensation cum POY at GIDC Dahej has been partly commissioned and production of POY in the month of March, 2012. The Company at present manufacturing POY by using polyester chips as raw material, whereas all other major manufacturers are making POY under Direct Melt Spinning Technology being used worldwide, using PTA and MEG as raw materials. The Poly condensation unit will bring your Company at par with other manufacturers of POY. This will enable the Company to reduce operational costs and increase its profitability.

FIXED DEPOSITS

During the year under review, the Company has not accepted any fixed deposits.

DIRECTORS

Mr. Purrshottam Bhaggeria and Mr. S.P.Setia, Directors, retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies Act, 1956, your Directors state as under:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures there from;

ii. that they have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement along with the Auditors' Certificate regarding compliance of conditions of Corporate Governance and Management Discussion & Analysis are annexed hereto as part of the Annual Report.

AUDITORS

M/s Amod Agrawal & Associates, Chartered Accountants, Statutory Auditors of the Company hold office upto the conclusion of the ensuing Annual General Meeting. Certificate from the auditors has been received to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. The Audit Committee and the Board of Directors therefore recommend their re-appointment as statutory auditors of the Company for the financial year 2012-13 for the approval of shareholders.

AUDITORS' REPORT

The Auditors' Report on the Accounts of the Company for the year under review is self-explanatory and requires no comments.

STOCK EXCHANGE LISTING

During the year under review, the Equity Shares of the Company got listed at the National Stock Exchange of India Limited and the Company has voluntarily obtained approval from Calcutta Stock Exchange for delisting of the Equity Shares in terms of Regulation 6 & 7 of SEBI Delisting of Equity Shares) Regulations, 2009. Presently, the Equity Shares of the Company are listed on National Stock Exchange and Bombay Stock Exchanges. The Annual Listing Fee for the year 2012-2013 has been paid to the Stock Exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement showing the necessary information as required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed to this Report.

PARTICULARS OF EMPLOYEES

During the year, no employees of the Company received a salary of more than Rs. 60.00 lacs per annum or Rs. 5.00 lacs per month. Accordingly, no particulars of employees are given pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

ACKNOWLEDGEMENTS

The Board of Directors is pleased to place on record their sincere appreciation for the assistance, support and cooperation received from its Bankers, Government Authorities, Dealers, Customers and Vendors. Your Directors would like to record their sincere appreciation for the dedicated efforts put in by all employees, their commitment and contribution ensuring sustained operations that your Company has achieved during the year. Your Directors also place on record their sincere appreciation for the confidence reposed by the Shareholders in the Company.

For and on behalf of the Board of Directors

Place : New Delhi PURRSHOTTAM BHAGGERIA MADHU SUDHAN BHAGERIA

Date : 29th May, 2012 Joint Managing Director Vice-Chairman & Managing Director











 
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