Home  »  Company  »  Garware Poly.  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Garware Polyester Ltd.

Mar 31, 2015

TO THE MEMBERS,

The Directors present the 58th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2015.

1. Financial Results (Rs. in Crores) 2014 - 2015

Operating Profit before Interest & Depreciation 85.23

Less : Finance Cost 43.64

Depreciation 15.08 58.72

Profit for the year before Exceptional Item 26.51

Exceptional items 0.00

Provision for Income Tax 9.17

Profit After Tax 17.34

Add : Balance brought forward from previous year 308.26

Balance available for Appropriation 325.60

Appropriation:

Transferred from Assets whose balance useful life is Nil as per Schedule II of the Companies Act, 2013. 2.28 (Net of deferred tax of Rs.117.50 Lakhs)

Transferred to Capital Redemption Reserve on Redemption of Preference Shares. 54.46

Dividend on Cumulative Redeemable Preference Shares (CRPS) 0.00 (*Rs. 54,460/-)

Tax on Dividend (Rs. 9,255/- on CRPS) 0.00

Balance carried to Balance Sheet 268.86

Total 325.60

1. Financial Results (Rs. in Crores) 2013 - 2014

Operating Profit before Interest & Depreciation 78.88

Less : Finance Cost 36.95

Depreciation 33.47 70.42

Profit for the year before Exceptional Item 8.46

Exceptional items 6.22

Provision for Income Tax 3.30

Profit After Tax 11.38

Add : Balance brought forward from previous year 296.88

Balance available for Appropriation 308.26

Appropriation:

Transferred from Assets whose balance useful life is Nil as per Schedule II of the Companies Act, 2013. 0.00 (Net of deferred tax of Rs.117.50 Lakhs)

Transferred to Capital Redemption Reserve on Redemption of Preference Shares. 0.00

Dividend on Cumulative Redeemable Preference Shares (CRPS) 0.01 (*Rs. 54,460/-)

Tax on Dividend (Rs. 9,255/- on CRPS) 0.00

Balance carried to Balance Sheet 308.25

Total 308.26

2. Dividend

Your Directors have not recommended any dividend on the equity share capital for the year under review with a view to conserve resources and to plough back profits to strengthen the net working capital.

3. Transfer to Reserves

The Company proposes to transfer Rs. 54.46 Crores to the Capital Redemption Reserve out of the amount available for appropriation and an amount of Rs. 268.85 Crores is proposed to be retained in the profit and loss account.

4. Company's Performance

On consolidated basis, revenue from operations for the financial year 2014-15 at Rs. 923.17 Crores was higher by Rs.70.24 Crores over last year (Rs. 852.93 Crores in 2013-14). Earnings before interest, tax, depreciation and amortization (EBITDA) was Rs. 86.56 Crores registering a growth of 10 % over EBITDA of Rs. 78.60 Crores in 2013-14. Profit after tax (PAT) for the year was Rs. 17.81 Crores registering growth of 73 % over the PAT of Rs.10.29 Crores in 2013-14.

On standalone basis, revenue from operations for the financial year 2014-15 at Rs. 913.37 Crores, was higher by 8% over last year (Rs. 846.82 Crores in 2013-14). Earnings before interest, tax, depreciation and amortisation (EBITDA) was Rs. 85.23 Crores registering a growth of 8% over the EBITDA of Rs. 78.88 Crores in 2013-14. Profit After Tax (PAT) for the year was Rs. 17.34 Crores recording a growth of 52% over the PAT of Rs. 11.38 Crores in 2013-14.

5. Operations

The year 2014-15 has ended with marginal improvement over the year 2013-14 with increase in sales by about 8% due to higher sales volume of Industrial Products. The average sales realization was better due to reduction in the raw material cost and an increase in the sale of specialty products which has helped the Company in achieving 8% Growth in EBITDA.

6. Future Outlook

The overcapacity situation persists in the Polyester Film manufacturing industry in Indian market as well as in the international market, the prices remain under pressure due to competition and oversupply situation. The Company has shifted its focus to the specialty films and already developed some new products for the market such as Digital Printable Films, films for Solar PV application, films for Lidding application, Coated Films for Label, Medium Shrink Films for Label and films with High Infrared heat rejection for automobiles. These films will mainly cater to the export market.

7. Research & Development

Your company is continuously in development of new products and new applications in the fields of Polyester Film and Solar Control Window Film. Apart from development of new products, R&D Department is also focusing on cost reduction measures by developing cost effective alternative raw materials and processes.

Company's R&D Centre is accredited by the Department of Scientific and Industrial Research, Ministry of Science and

Technology, Government of India. R&D team works hand-in-hand with production team to establish new products at the plant and to improve the product quality and plant efficiencies.

All the manufacturing plants / pilot plants and laboratories are upgraded with latest equipment to upgrade the product quality and to achieve the stringent quality requirements of demanding customers.

8. Functioning of R & D Department

R&D activities are carried out as an independent activity.

In this center various pilot plants are installed for development of Polymers, film extrusion and different types of coating.

All new polymers and coatings are first produced in these plants and extensively tested in specially developed test facilities before commencing trials on the main plant. All the new product trials are taken under supervision of very senior R&D personnel and test marketing is done before producing them in bulk quantities.

Our laboratories are equipped with state-of-the-art latest testing equipments and many specialty test rigs are used as per the end product applications.

9. Information Technology (IT)

- The Company has implemented CCTV security surveillance system in production.

- The Company is in process to implement SAP HR Payroll to integrate HR process to the existing SAP ERP system.

- The Company is in process to implement SAP BI system to facilitate KPI driven reporting and Dashboard to management by taking advantage of SAP ERP business database.

- The Company has upgraded its existing Windows operating system along with hardware baseline from Windows XP to Windows 8 to mitigate operating system vulnerability on account of Windows XP technical support stopped by Microsoft.

10. Awards and Recognitions

During this year, your Company has been honored with ten Safety Awards at National as well as State Levels by various Authorities, viz. National Safety Council of India (NSCI), and Maharashtra State Chapter of National Safety Council (NSC - MC).

Out of these ten awards, two awards were won by the Company's employees for their contribution in State Level Safety Slogan Competition.

11. Human Resource Development

Company's Human Resources team is running successfully its talent acquisition, retention and development agenda during the year.

Company's senior management team was strengthened through hiring of leaders in various domains. The Company's HR policies and processes are aligned to effectively drive its business and other emerging opportunities.

The focus on employee development through training modules that were created in-house continued. More than 164 training programs were conducted during the year, over 86% of them through in-house trainers and business leaders. The programs added up to over 16,528 man-hours / 2,066 man-days of training. This has been achieved by continuously investing in learning and development programs by arranging target oriented training programs, creating appropriate work environment and maintaining a structured recognition system.

HR has been working to provide an enabling working environment where innovation and performance thrive. Employees are empowered and we believe that it is people who ultimately deliver results.

12. Manufacturing and Quality Initiatives

With innovative approaches in manufacturing techniques and

product optimization, the productivity in the manufacturing segment has significantly gone up. The quality culture of your Company ensures that the products are benchmarked as best in class by the customers. Our quest for excellence both in manufacturing and quality continue as before. Your Company is regarded as best in class for quality and reliability.

In order to keep the plants in excellent running condition the company has upgraded the manufacturing plants with various new equipment to produce quality products.

13. Consolidated Financial Statement

The Consolidated Financial Statements of the Company are prepared in accordance with relevant Accounting Standards AS-21, AS-23 and AS-27 issued by the Institute of Chartered Accountants of India and forms a part of this Annual Report.

14. Subsidiary Companies

Garware Polyester International Limited-UK and Global Pet Films Inc.-USA, continue to be subsidiaries of the Company.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company's Subsidiaries (in Form AOC-1) is attached to the financial statements.

15. Safety, Health & Environmental Protection

Being a responsible corporate citizen, your Company has continued to sustain various initiatives for the continual improvement in Safety, Health and Environment (SHE) at the works and surroundings.

Some of the prominent activities include - Safety audits of Thermic Fluid System and Electrical System by external expertise (M/s Jacobs Engineering), Internal Safety survey of plants, Field Safety rounds after monthly safety review meetings, EMS training and field rounds, periodical SHE inspections and trainings, schemes on the efficient usage of energy and the conservation of natural resources, activities for the enhancement of employee participation in SHE and the support in emergency management operations at public places.

Your Company is a recipient of various safety laurels from the Regulatory Authorities on the State and National level, as stated above during the year. Safety and security system of your company has been upgraded, your company carries out various safety awareness training and emergency execution drills from time to time to prepare its workforce for emergency situations.

16. Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and 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 the Company as at March 31,2015 and of the profit of the Company for the year ended on that date;

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

d) the Directors have prepared the annual accounts on a 'going concern' basis;

e) the Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.

f) the Directors have advised proper systems to ensure compliance with provisions of applicable laws and that such system were adequate and operating effectively.

17. Directors and Key Managerial Personnel

In accordance with the provisions of the Act and the Articles of Association of the Company, Mrs. S. S. Garware and Mr. M. S. Adsul, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

During the year under review: (a) Ms. Sonia Garware became Non-Executive & Non-Independent Director from Executive & Non-Independent Director. (b) The Company appointed Mr. Nilesh R. Doshi as Independent Directors of the Company with effect from November 12, 2014 for a period of five consecutive years.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and under Clause 49 of the Listing Agreement entered with the Bombay Stock Exchange Ltd.

Key Managerial Personnel

The Company has appointed following persons as Key Managerial Personnel

Name of the Person Designation

1. Mr. Gokul D. Naik Chief Financial Officer

2. Mr. S. C. Nanda Company Secretary

3. Mr. Nimesh S. Shah Company Secretary

4. Mr. Sunil Kanojia Chief Executive Officer

Mr. S. C. Nanda resigned as a Company Secretary of the Company w.e.f. 14.03.2015.

$ Mr. Nimesh S. Shah was appointed as a Company Secretary of the Company w.e.f. 30.04.2015.

@Mr. Sunil Kanojia was appointed as CEO w.e.f. 12.05.2015 and has ceased to be CEO w.e.f. 04.08.2015.

18. Number of meetings of the Board

Four meetings of the Board were held during the year. For details of the meetings of the Board, please refer to the corporate governance report, which forms part of this report.

19. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

This performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

20. Policy on Directors' Appointment and Remuneration and Other Details

The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors' report.

21. Internal Financial Control Systems and their Adequacy

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

22. Audit Committee

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this report.

23. Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s. Manubhai & Shah, Chartered Accountants, were appointed as Statutory Auditors of the Company from the conclusion of the 57th Annual General Meeting (AgM) held on September 25, 2014 till the conclusion of the 62nd AGM to be held in the year 2019, subject to ratification of their appointment at every AGM.

However, the Company has received a special notice under Section 115 of the Company's Act, 2013 proposing the name of M/s. Kirtane & Pandit, LLP, Chartered Accountants as Joint Auditors, subject to member's approval at the ensuing Annual General Meeting.

The Auditors, M/s. Manubhai & Shah and M/s. Kirtane & Pandit, have conveyed their eligibility and willingness to act as joint auditors of the Company, if appointed at the ensuing Annual General Meeting. Board recommends that appointment of Joint Auditors shall be commensurate with the nature and size of operation of the Company. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. Manubhai & Shah and M/s. Kirtane & Pandit that their appointment, if made, would be in conformity with the limits specified in the said Section.

Cost Auditor

As per the requirement of central government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your company has been carrying out the audit of cost records.

The Board of Directors, on the recommendations of Audit Committee, has appointed M/s. M. R. Pandit & Co., Cost Accountants, Aurangabad as Cost Auditors to audit the cost accounts of the company for financial year 2015-16. As required under Companies Act, 2013, a resolution seeking member's approval for ratification of remuneration payable to the Cost Auditors forms a part of the notice convening the Annual General Meeting.

24. Auditors' Report and Secretarial Auditors' Report

The observations made in the Auditor's Report and Secretarial Auditor's Report are self-explanatory and therefore, do not call for any comments. The Auditors' Report and Secretarial Auditors' Report does not contain any qualifications, reservations or adverse remarks. Report of the Secretarial Auditor is given as an annexure which forms part of this report.

25. Risk Management

The Board of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Audit Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report.

26. Particulars of Loans, Guarantees and Investments

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

27. Transactions with Related Parties

All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and at an arm's length pricing basis. The Audit Committee granted omnibus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors.

There were no materially significant transactions with related parties during the financial year 2014-15 which were in conflict with the interest of the Company. Your Directors draw attention of the members to take note of Note No. 35 to the financial statement which sets out related party disclosure.

28. Corporate Social Responsibility

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board. The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure I of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.The CSR Policy may be accessed on the Company's website at http://www.garwarepoly.com.

The Company has established Garware Community Centre at Chikalthana, Aurangabad in the year 1994 primarily to cater to the social needs of workmen largely staying in the CIDCO, Aurangabad area and other members of the society as a not-for-profit trust through which the Company could channelize social welfare initiatives. The Society is also registered separately under the Societies Act for carrying out social activity at Garware Bal Bhawan primarily for the children from all strata of the society and to give scope for the talent and to grow the same is doing excellent job and has been recognized by the National Bal Bhawan, New Delhi for expanding various activities.

One more Community Centre has been started in Waluj at Aurangabad in the year 2013 considering the need of the villagers and workmen staying in the village. Over the years, the Community Centre has initiated, guided and conducted several programs in education by way of Study Centre, organizing speeches from renowned guest speakers on career guidance, etc. In addition various other activities are carried out at the center such as sports, judo & karate, bharat natyam, yoga and suryanamaskar, library, reading room etc. and has been successful in bringing about a positive change in the lives of the underprivileged sections of society.

The Company would also undertake other need based initiatives in compliance with Schedule VII to the Act.

During the year, the Company has spent Rs. 60.00 Lakhs (around 2.43% of the average net profits of last three financial years) on CSR activities which does not include the expenses made on the activities carried out by the Garware Community Center and Garware Bal Bhawan.

29. Extract of Annual Return

As provided under Section 92(3) of the Act, the extract of Annual Return of the Company is annexed herewith as Annexure II in the prescribed Form MGT-9, which forms part of this report.

30. Particulars of Employees and related disclosures

Three Whole-time Directors/Employees employed throughout the year were in receipt of remuneration of Rs. 60 Lac per annum or more amounting to Rs. 8.47 Crore and one whole-time director/ employee employed for the part of the FY 2014-15 was in receipt of remuneration of Rs. 5 Lac per month or more amounting to Rs. 0.83 Crore were relative(s) of Shri S. B. Garware Chairman & Managing Director of the Company. During FY 2014-15 the Company had 1169 nos. of permanent employees.

The information required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors' Report for the year ended March 31, 2015 is given in a separate Annexure to the Report.

The above Annexure is not being sent along with this Report to the Members of the Company in line with the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company.

31. Other Laws

During the year under review, there were no cases filed pursuant to the provisions of sexual harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013.

32. Corporate Governance

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements as set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Practicing Company Secretary, confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

33. Vigil Mechanism

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee.

The Policy on vigil mechanism and whistle blower policy is available on the Company's website at the www.garwarepoly.com.

34. Deposits From Public

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

35. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure III to this Report.

36. Industrial Relations

The relations between the Employees and the Management remained cordial during the year under review. Your Directors wish to place on record their appreciation of the contributions made by the employees at all levels.

37. Acknowledgements

Your Directors take this opportunity to thank the customers, supply chain partners, employees, Financial Institutions, Banks, Central and State Government authorities, Regulatory authorities, Stock Exchange and all the various stakeholders for their continued co- operation and support to the Company.

For and on behalf of the Board of Directors For Garware Polyester Limited

Place : Mumbai S. B. GARWARE Date : August 06, 2015 Chairman & Managing Director


Mar 31, 2014

TO THE MEMBERS,

The Directors present the 57th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2014.

Financial Results (Rs. in Crores)

2013 - 2014 2012 – 2013

Operating Profit before Interest & Depreciation 78.88 75.05

Less : Finance Cost 36.95 29.46

Depreciation 33.47 39.32

70.42 68.78

Profit for the year before Exceptional Item 8.46 6.27

Add : Exceptional items 6.22 5.56

Provision for Income Tax 3.30 (15.87)

Profit After Tax 11.38 27.70

Add : Balance brought forward from previous year 296.88 269.18

Balance available for Appropriation 308.26 296.88

Appropriation:

Dividend on Cumulative Redeemable Preference Shares (CRPS) (*Rs. 54,460/-) *0.01 *0.01

Tax on Dividend (Rs.9,255/- on CRPS) *0.00 *0.00

Balance carried to Balance Sheet 308.25 296.87

Total 308.26 296.88

Dividend

Your Directors have not recommended any dividend on the equity share capital for the year under review with a view to conserve resources to combat the impending liquidity crunch and to plough back profits to strengthen the net working capital. The Company is in investment mode and has decided to conserve cash to recycle into projects that are underway for completion. However, dividend on 54,46,000 cumulative redeemable preference shares of Rs. 100 each @ 0.01% amounting to Rs. 54,460 is recommended by the Board.

Operations

The year 2013-14 has ended with marginal improvement over the year 2012-13 with increase in sales by about 8% due to higher sales volume of Industrial Products. The average sales realization was also better compared to previous year due to better product mix. This was achieved irrespective of increase in Raw material and interest costs for the term loans. The Company is making efforts to divert the spare capacity of Consumer Products Division for exports which capacity has become spare due to the ban on use of Sun control flm on motor car windows in Indian market on account of the order of the Hon''ble Supreme Court of India.

Future Outlook

The overcapacity situation persists in the Polyester flm manufacturing Industry in Indian Market as well as in International Market. The prices remain under pressure due to competition and oversupply situation. The Company has shifted its focus to the Specialty flms and already developed some new products for the market such as digital printable flms, Films for solar back sheet application and flms with high Infrared heat rejection for Automobiles. These flms will cater to the export market.

Research & Development

Your company is a leader in development of new products and new applications in the felds of Polyester flm and Solar control window flm. Apart from development of new products, R&D Department is also focusing on cost reduction measures by developing cost effective alternative raw materials and processes.

Company''s R&D Centre is accredited by the Department of Scientifc and Industrial Research, Ministry of Science and Technology, Government of India. R&D team works hand-in-hand with production team to establish new products at the plant and to improve the product quality and plant efficiencies.

All the manufacturing plants / pilot plants and laboratories are upgraded with latest equipment to upgrade the product quality and achieve the stringent quality requirements of demanding customers.

Functioning of R & D Department

R&D activities are carried out in separate R&D centers for Film and Solar control division.

In these centers various pilot plants are installed for development of Polymers, flm extrusion and different types of coating.

All new polymers and coatings are frst produced in these plants and extensively tested in specially developed test facilities before commencing trials on the main plant. All the new product trials are taken under supervision of very senior R&D personnel and test marketing is done before producing them in bulk quantities.

Our laboratories are equipped with state-of-the-art latest testing equipments and many specialty test rigs are used as per the end product applications.

Information Technology (IT) -

- Company believes that IT is a strategic tool for excellence in customer service and sustainable business growth and with this in view, the Company has implemented SAP for better business integration by replacing legacy standalone systems.

- The company has setup SAP Disaster Recovery (DR) site as a contingency plan for business continuity.

- The Company has setup Domain Server and Active Directory to implement centralized IT security policies and access controls to all the desktop and laptop users.

- The Company has setup completely managed CISCO network to avoid network downtime and implement IT security policies.

- The Company has implemented Data Server virtualization to cut down server infrastructure cost and build server redundancy.

- The Company has setup centralized internet security frewall system to secure internet communication and mitigate internet security threats.

- The Company has developed and implemented Task Reminder System for timely compliances of all the statutory requirements.

- The Company has implemented Bio Metric attendance system across the offices and plants to help HR and Administration for processing of wages and payroll and online attendance records.

- The Company is in process of implementing CCTV security surveillance system to control and monitor manufacturing process.

- The Company has implemented centralized email system with CITRIX virtual cluster solution for efficient working.

- The Company has implemented complete software license compliance and adheres not to use any pirated software.

Awards and Recognitions

During this year, your Company has been honoured with eight Safety Awards at National as well as State Levels by various Government Authorities, viz. National Safety Council of India (NSCI), and Maharashtra State Chapter of National Safety Council (NSC - MC). Out of these eight awards, three awards were won by the Company''s employees for their contribution in State Level Safety Slogan Competition.

Human Resource Development

The Company''s HR policies and processes are aligned to effectively drive its business and other emerging opportunities. This has been achieved by continuously investing in learning and development programs by arranging target oriented training programs, creating appropriate work environment and maintaining a structured recognition system. The Company helps employees to build new skills and competencies and promote knowledge sharing and team building. HR has been working to provide an enabling working environment where innovation and performance thrive. Employees are empowered and we believe that it is people who ultimately deliver results.

Manufacturing and Quality Initiatives

With innovative approaches in manufacturing techniques and product optimization, the productivity in the manufacturing segment has significantly gone up. The quality culture of your Company ensures that the products are benchmarked as best in class by the customers. Our quest for excellence both in Manufacturing and Quality continues as before. Your Company is regarded as best in class for Quality and Reliability.

Corporate Social Responsibility

Corporate social responsibility in your Company is aligned with ''Garware'' tradition of creating wealth in the community with focus on Art, Culture, Sports, health, education and safety. The Company is running Garware Community Center having full-fedged branches at Chikalthana and Waluj, Aurangabad and with various activities at various locations. The

Centre is engaged in overall development of the community members of all age group and creating hobbies among them for art, culture, sports, education, social work, music etc. The Company has thus established a very healthy corporate structured system, while sharing the interests and concerns of the community at large.

Corporate Social Responsible Committee

During the year, your directors have constituted the Corporate Social Responsibility Committee (CSR Committee) comprising Mrs. Sarita Garware Ramsay as the Chairman and Mr. B. Moradian and Dr. M. C. Agarwal as other members.

The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.

Subsidiaries Companies and their Financial Statements

Garware Polyester International Limited - UK and Global Pet Films Inc.- USA, continue to be the subsidiaries of the Company. The Ministry of Corporate Affairs, Government of India vide General Circular No: 2/2011 dated 8th February, 2011 has allowed general exemption to Companies from complying with Section 212(8) of the Companies Act, 1956, provided such companies publish audited consolidated financial statements in the Annual report. Your Board has decided to avail the said general exemption from applicability of provisions of Companies Act, 1956 and accordingly, the Annual Accounts of the above Subsidiary Companies for the financial year ended 31st March, 2014 are not being attached with this Annual Report and the specified financial highlights of the said Subsidiaries are disclosed in this Annual Report, as part of the Consolidated Financial Statements. The Audited annual accounts and related information of the subsidiaries will be made available, upon request and also be open for inspection at the Registered office, to any shareholder with suffcient notice and on payment of prescribed fees as per the provisions of the law.

Safety, Health & Environmental Protection

Being a Responsible Corporate Citizen, your Company has continued to sustain various initiatives for the continual improvement in Safety, Health and Environment (SHE) at the works and surroundings. Some of the prominent activities include – Internal Safety Audit of plants (as per Indian Standard on Occupational Safety and Health Audit: IS-14489), Safety audits Thermic Fluid system and Electrical System by external expertise (M/s Jacobs Engineering), periodical SHE inspections and trainings, schemes on the efficient usage of energy and the conservation of natural resources, activities for the enhancement of employee participation in SHE and the support in emergency management operations at public places. Your Company is a recipient of various safety laurels from the Regulatory Authorities on the State and National level as stated above during the year. Security system has been upgraded, like awareness training, evacuation drills to meet the new challenges.

Directors'' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013(erstwhile Section 217(2AA) of the Companies Act, 1956) the Board of Directors of your Company confirm:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) that the Directors have selected such accounting policies and 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 the Company at the end of the financial year and of the profit of the Company for that year;

iii) that the Directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with

the provisions of the Companies Act, 1956 safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

Directors

1. Mrs. Monika Garware Modi and Ms. Sonia Garware, retire by rotation and being eligible, offer themselves for re-appointment.

2. The Board of Directors of your Company has:

a) re-appointed Shri S. B. Garware as Chairman & Managing Director of the Company on revised terms, effective from 1st November,2014 for a period of five years.

b) approved variation in the payment to remuneration payable to Mrs. Monika Garware Modi-Vice Chairperson & Joint Managing Director, Mrs. Sarita Garware Ramsay-Joint Managing Director w.e.f. 1st April, 2014 to 31st October, 2018 and to Ms. Sonia Garware, Joint Managing Director w.e.f. 1st April, 2014 to 31st March, 2015.

c) appointed Mr. T. M. Parikh as an additional Director with effect from 27th December, 2013. According to provisions of Section 260 of the Companies Act, 1956, (corresponding to Section 161(1) of the Companies Act, 2013) an Additional Director holds office as a Director only upto the date of the ensuing Annual General Meeting.

As required under Section 257 of the Companies Act, 1956, (corresponding to Section 160 of the Companies Act, 2013) notices have been received from members signifying their intention to propose the appointment of Mr. T. M. Parikh, as a Director. Resolution proposing his appointment as a Director forms part of agenda of ensuing Annual General Meeting.

3. In terms of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors can hold office for a term of up to five (5) consecutive years on the Board of Directors of your Company and are not liable to retire by rotation. Accordingly, it is proposed to appoint Mr. N. P. Chapalgaonkar, Mr. Ramesh Makhija, Mr. B. Moradian, Dr. M .C. Agarwal and Mr. T. M. Parikh as Independent Directors of your Company for 5 (five) consecutive years up to 31st March, 2019.

Appropriate resolutions for the appointment/re-appointment of Directors are being placed before you for your approval at the ensuing Annual General Meeting. The brief resume of the aforesaid Directors and other information have been detailed in the Notice. Your Directors recommend their appointment/reappointment as Directors of your Company.

4. Mr. A. B. Bhalerao and Mr. Dilip J. Thakkar resigned as Independent Non-Executive Directors of your Company on 31st October, 2013 and 29th May, 2014, respectively. The Board places on record its appreciation for their valuable contribution to your Company as Directors during their association with your Company.

Audit Committee

Besides Mr. M. S. Adsul, the Audit Committee comprises of three independent Directors viz. Mr. B. Moradian, Dr. M. C. Agarwal and Mr. T. M. Parikh.

Mr. B. Moradian, who is an independent non-executive Director, acts as chairman of Audit Committee Meetings.

Corporate Governance

A Report on Management Discussion and Analysis, Corporate Governance as well as Auditor''s Certifcate regarding compliance of Clause 49 of the Listing Agreement forms part of this Report.

Auditors

Subject to approval of the Members, the Board of Directors of Company have decided to appoint M/s. Manubhai & Shah, Chartered Accountants as Statutory Auditors of the Company from the conclusion of this Annual General Meeting until the conclusion of the sixth Annual General Meeting to be held after this meeting, subject to ratifcation at every Annual General Meeting in place of M/s. Shah & Co., Chartered Accountants, the retiring statutory auditors of the Company in compliance with Section 140(4)(i) of the Companies Act, 2013.

Cost Auditors

The Company has appointed M/s. M. R. Pandit & Co., Cost Accountants, Aurangabad as cost auditors for conducting the audit of cost records of the Company for the Financial Year 2013-14.

Other Statutory Information

The information required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 forms part of this report. However, as per the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the Shareholders of the Company excluding the aforesaid information. Any Shareholder interested in obtaining such particulars may inspect the same at the Registered office of the Company or write to the Company Secretary at the Corporate office of the Company. Information as per Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of this Report is annexed.

Industrial Relations

The relations between the Employees and the Management remained cordial during the year under review. Your Directors wish to place on record their appreciation of the contribution made by the Employees at all levels.

Acknowledgements

Your Directors wish to place on record their appreciation of the wholehearted co-operation received by the Company from the various departments of the Central & State Governments, Company''s Bankers and Financial & Investment Institutions during the period under review.

For and on behalf of the Board of Directors

Mumbai S. B. GARWARE

31st July, 2014 Chairman & Managing Director


Mar 31, 2013

TO'' THE MEMBERS

The Directors present the 56th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March'' 2013.

Financial Results

(Rs. in Crores)

2012 - 2013 2011 – 2012

Operating Proft before interest & Depreciation 75.05 103.77

Less : Finance Cost 29.46 28.33

Depreciation 39.32 41.71

68.78 70.04

Proft for the year before Exceptional Item 6.27 33.73

Exceptional items (5.56) (1.34)

Provision for Income Tax (15.87) 0.00

Proft After Tax 27.70 35.07

Add : Balance brought forward from previous year 269.18 239.93

Balance available for Appropriation 296.88 275.00

Appropriation:

Transfer to General Reserve 0.00 1.75

Dividend on Cumulative Redeemable Preference Shares (CRPS)(*Rs.54''460/-) *0.01 *0.01

Proposed Final Dividend on Equity Shares 0.00 3.50

Tax on Dividend (#Rs. 8''840/- on CRPS) #0.00 0.57

Balance carried to Balance Sheet 296.87 269.18

Total 296.88 275.00

Dividend

Your Directors have not recommended any dividend on the equity share capital for the year under review with a view to conserve resources to combat the impending liquidity crunch and to plough back profts to strengthen the net working capital. However'' dividend on 54''46''000 cumulative redeemable preference shares of Rs. 100 each @ 0.01% amounting to Rs. 54''460 is recommended by the Board.

Operations

Compared to the previous year which was good'' there was a decline in the sales by 1.57% due to; (a) ban imposed by the order of Supreme Court of India on usage of Sun Control Film in automotive applications'' (b) ban imposed on usage of polyester flm for ''Gutka’/ ''Pan Masala’ packaging by rules made for environmental protection'' (c) uncertainty in the advanced economies'' (d) continuing Euro debt crisis and (e) over-all slow-down in the industry growth due to slackening of demand'' policy uncertainty and tighter monetary conditions.

Future outlook

Market conditions continue to be competitive and full of challenges'' however our emphasis is on specialty flms. We prefer to concentrate on limited market of specialty flms and to fnd out different path. Our new products under Sun Control brand have received wide acceptance world over and our focus on the Chinese and Russian markets are paying rich dividends'' however in domestic market ban on use of flms in Automotive applications has impacted us adversely. We are trying to salvage the situation however the same continues to be unclear. The Company has however diverted the production into the international markets.

Research & Development

Company’s R&D Center is accredited by the Department of Scientifc and Industrial Research'' Ministry of Science and Technology'' Government of India'' and is engaged in research on new applications as well as development of new products'' improvement of manufacturing processes and debottlenecking activities. Your Company’s thrust on R&D activities has paid rich dividends.

Research & Development Department is functioning over the last 25 years in the Company.

- It plays very vital role in development of new products/process required for future business.

- It is well equipped with various Pilot Plants and Testing facilities required for Product Development.

- Our Research & Development Department have research scholars'' scientists'' technicians and skilled & specialized work force for various developmental areas.

Functioning of R & D Department

- Development of various polymers and co-polymers synthesis for extrusion / co-extrusion and coating.

- Development of various flms by extrusion and co-extrusion.

- Development of various coating chemistries for in-line and off-line coating.

- Development of various additives and master batches for specialty flms.

Information Technology (IT)

Company believes that IT is a strategic tool for excellence in customer service and sustainable business growth and with this view'' the Company has implemented SAP for better business integration by replacing legacy standalone systems.

The Company has implemented centralized email system with cluster solution for effcient working.

Awards and Recognitions

During this year'' your Company has been honoured with ten Safety Awards at National as well as State Levels by various Government Authorities'' viz. Director General of Factory Advice Service & Labour Institutes (DGFASLI'' under the Ministry of Labour & Employment'' Government of India)'' National Safety Council of India (NSCI)'' and Maharashtra State Chapter of National Safety Council (NSC - MC). Out of these ten awards'' one awards were won by the Company’s employees for their contribution in State Level Safety Slogan Competition.

Human Resource Development

The Company’s HR policies and processes are aligned to effectively drive its business and other emerging opportunities. This has been achieved by continuously investing in learning and development programs'' creating appropriate work environment and maintaining a structured recognition system. The Company helps employees to build

new skills and competencies and promote knowledge sharing and team building.

Manufacturing and Quality Initiatives

With innovative approaches in manufacturing techniques and product optimization'' the productivity in the manufacturing segment has signifcantly gone up. The quality culture of your Company ensures that the products are benchmarked as best in class by the customers. Our quest for excellence both in Manufacturing and Quality continues as before. Your Company is regarded as best in class for Quality and Reliability.

Corporate Social Responsibility

Corporate social responsibility in your Company is aligned with ''Garware’ tradition of creating wealth in the community with focus on Art'' Culture'' Sports'' health'' education and safety. The Company is running the Garware Community Center at Aurangabad with various activities at various locations. The Center is engaged in overall development of the community members of all age groups and creating a hobby among them for art'' culture'' sports'' education'' social work'' music etc. The Company has increased its activities in rural areas by way of opening a full- fedged branch at Waluj'' Aurangabad.

Subsidiaries Companies and their Financial Statements

Garware Polyester International Limited - UK and Global Pet Films Inc.- USA'' continue to be the subsidiaries of the Company. The Ministry of Corporate Affairs'' Government of India vide General Circular No: 2/2011 dated 8th February'' 2011 has allowed general exemption to Companies from complying with Section 212(8) of the Companies Act'' 1956'' provided such companies publish audited consolidated fnancial statements in the Annual report. Your Board has decided to avail the said general exemption from applicability of provisions of Companies Act'' 1956 and accordingly'' the Annual Accounts of the above Subsidiary Companies for the fnancial year ended 31st March'' 2013 are not being attached with this Annual Report and the specifed fnancial highlights of the said Subsidiaries are disclosed in this Annual Report'' as part of the Consolidated Financial Statements. The Audited annual accounts and related information of the subsidiaries will be made available'' upon request and also be open for inspection at the Registered Offce'' to any shareholder with suffcient notice and on payment of prescribed fees as per the provisions of the law.

Opening of GPL Branch Offce

The Company with an intention to have smooth export operations in Europe & other CIS Countries has opened a branch offce in London'' U.K.'' which has been fully functional from September 1st'' 2012.

Safety'' Health & Environmental Protection

Being a Responsible Corporate Citizen'' your Company has continued to sustain various initiatives for the continual improvement in Safety'' Environment and Health (SEH) at the works and surroundings. Some of the prominent activities include - Internal Safety Audit of plants (as per Indian Standard on Occupational Safety and Health Audit: IS-14489)'' periodical SEH inspections and trainings'' schemes on the effcient usage of energy and the conservation of natural resources'' activities for the enhancement of employee participation in SEH and the support in emergency management operations at public places. Your Company is a recipient of various safety laurels from the Regulatory Authorities on the State and National level as stated above during the year. Security system has been upgraded'' like awareness training and evacuation drills to meet the new challenges.

Directors’ Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act'' 1956 the Board of

Directors of your Company confrm:

i) that in the preparation of the annual accounts'' the applicable accounting standards have been followed;

ii) that the Directors have selected such accounting policies and 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 the Company at the end of the fnancial year and of the proft of the Company for that year;

iii) that the Directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act'' 1956 safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the Directors have prepared the annual accounts on a going concern basis.

Directors

1. Mrs. S. S. Garware'' Mrs. Sarita Garware Ramsay'' Mr. B. Moradian and Dr. M. C. Agarwal'' retire by rotation and being eligible'' offer themselves for re-appointment.

2. The Board of Directors of your Company has:

a) re-appointed Mrs. Monika Garware Modi and Mrs. Sarita Garware Ramsay as Joint Managing Director(s) of the Company on revised terms'' effective from 1st November'' 2013 for a period of fve years .

b) approved the revision in payment of remuneration to Ms. Sonia Garware'' Joint Managing Director of the Company effective from 1st September'' 2013.

c) approved the extension of service period to Mr. M. S. Adsul in order to continue him as Director (Technical) of the Company effective from 1st June'' 2013 for a period of fve years.

Audit Committee

Besides Mr. M. S. Adsul'' the Audit Committee comprises of three independent Directors viz. Mr. B. Moradian'' Dr. M. C. Agarwal and Mr. A. B. Bhalerao.

Mr. B. Moradian'' who is an independent non-executive Director'' acts as Chairman of Audit Committee Meetings.

Corporate Governance

A Report on Management Discussion and Analysis'' Corporate Governance as well as Certifcate from the Practicing Company Secretary confrming the Compliance of Clause 49 of the Listing Agreement form part of this Report.

Auditors and their Report

The retiring auditors'' M/s. Shah & Co.'' Chartered Accounts (Registration No. 109430W) of Mumbai'' being eligible for re-appointment and have indicated their willingness to act as auditors'' if appointed. The Company has received a letter dated August 6'' 2013 from them to the effect that their re-appointment'' if made'' would be within the limits prescribed under Section 224(1B) of the Companies Act'' 1956 and they are not disqualifed for re-appointment within the meaning of Section 226 of the said Act.

M/s. Chaturvedi & Shah'' Chartered Accountants (Registration No. 101720W) of Mumbai'' one of the Joint Statutory Auditors of the Company have tendered their resignation vide their letter dated August 2'' 2013 from offce of Statutory Auditors. The same has been accepted by the Audit Committee and the Board of Directors in their respective meetings held on August 9'' 2013.

The Auditor’s Report is unqualifed. The notes to accounts referred to in the Auditor’s Report are self-explanatory and therefore do not call for any further clarifcations under Section 217(3) of the Companies Act.

Cost Compliance Certifcate

In compliance to Notifcation No. GSR 429(E) dated 03.06.2011 issued by the Ministry of Corporate Affairs with respect to the Companies (Cost Accounting Records) Rules'' 2011'' a Cost Compliance Certifcate for the fnancial year 2011-12 issued by M/s. M.R. Pandit & Co. (Practicing Cost Accountant) (Firm Registration No. 00268) has been fled with Ministry of Corporate Affairs.

Transfer to Investor Education and Protection Fund

Pursuant to provisions of Section 205A(5) and Sec 205C of the Companies Act'' 1956'' an unclaimed / unpaid dividend pertaining to the fnancial year 2004-05 amounting to Rs.4''55''340/- has been transferred to the Investor Education and Protection Fund on November 17'' 2012 vide payment Challan No. SRN B61623716.

Other Statutory Information

The information required under Section 217(2A) of the Companies Act'' 1956 read with Companies (Particulars of Employees) Rules'' 1975 forms part of this report. However'' as per the provisions of Section 219(1)(b)(iv) of the Companies Act'' 1956'' the Report and Accounts are being sent to all the Shareholders of the Company excluding the aforesaid information. Any Shareholder interested in obtaining such particulars may inspect the same at the Registered Offce of the Company or write to the Company Secretary at the Corporate Offce of the Company. Information as per Section 217(1)(e) of the Companies Act'' 1956'' read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules'' 1988 and forming part of this Report is annexed.

Industrial Relations

The relations between the Employees and the Management remained cordial during the year under review. Your Directors wish to place on record their appreciation of the contribution made by the Employees at all levels.

Acknowledgements

Your Directors wish to place on record their appreciation of the wholehearted co-operation received by the Company from the various departments of the Central & State Governments'' Company’s Bankers and Financial & Investment Institutions during the period under review.

For and on behalf of the Board of Directors

Mumbai S. B. GARWARE

9th August'' 2013 Chairman & Managing Director

 
Subscribe now to get personal finance updates in your inbox!