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Directors Report of Jindal Poly Films Ltd.

Mar 31, 2014

To the Members,

The Directors have pleasure in presenting the 40th Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2014.

The Financial results of the year under review are as given below:- FINANCIAL RESULTS (Rs./Crores) 2013-14 2012-13

Profit from Operations (EBITDA) 311.54 162.25

Less/(Add) exceptional items 26.76 21.60

Less: Finance Cost 51.17 35.12

Profit Before Depreciation and Tax 233.61 105.53

Less: Depreciation 94.39 88.92

Profit before Tax 139.22 16.61

Less: Income Tax for the year 55.53 (0.41)

Deferred Tax 0.40 8.56

Profit After Tax 83.29 8.46

Add: Balance brought forward 466.28 487.75

Less: Taxes for the earlier years NIL NIL

Balance available for appropriation 549.58 496.21

APPROPRIATIONS

Dividend on Equity Shares 4.20 4.20

Tax on Dividend 0.71 0.71

Transfer to General Reserve 25.00 25.00

Balance carried forward 519.66 466.29

PERFORMANCE HIGHLIGHTS

- Gross sales/turnover increased to Rs.2848.50 crore in financial year 2013-14 i.e. up 18.17% from Rs. 2410.55 crore in year before

- The operating profit before exceptional item of the Company was Rs. 311.54 crore as against Rs. 162.25 crore last year given a growth of 92 %

The Company is taking various measures to retain its market share and as also to improve margins.

DIVIDEND

Your Directors are pleased to recommend a dividend of Re.1/- per equity share (10%) (previous year Re.1/ per equity share) for the Financial Year 2013-14 for approval of the Members.

The total dividend would absorb a sum of Rs.4.20 crore and tax thereon of Rs. 0.71 crore. The dividend will be free of tax in the hands of recipients.

ACQUISITION OF GLOBAL BOPP BUSINESS OF EXXONMOBIL

During the year, the company has successfully completed the acquisition of Entire Global BOPP Films business of ExxonMobil, USA with the change of control from 1st October, 2013. The acquired business is interalia consisting of five manufacturing facilities, two located in USA and three are in Europe. Further details are given in note no. 30.19 to the notes to Accounts.

ExxonMobil was globally well-known reupted manufacturer of BOPP Films for food packaging and for labels. They were the leading suppliers of specialty BOPP Films and top coated BOPP Films to the leading global brand owners in food beverage and confectionary industry. With this acquisition, the company has become world''s largest producer of BOPP Films with a combined capacity of 4,45,000 TPA.

MANAGEMENT DISCUSSION AND ANALYSIS

The MD&A has been included in the annual report as a separate section.

DIRECTORS

- During the year Mr. Samir Banerjee and Mr. Hemant Sharma resigned from Directorship due to their preoccupation. The Directors wish to place on record their appreciation of the valuable service rendered by these Director during their tenure of Director of your Company. Mr. Hemant Sharma was re-appointed on 19th July, 2014 subject to further approval of shareholders in this Annual General Meeting.

- Mr. Sanjay Mittal has been appointed as Whole Time Director of the Company for a period of 5 (Five) years w.e.f. 25th September, 2013. The terms and condition of his appointment and remuneration are subject to approval of the members.

- Ms. Sumita Dhingra has been appointed as Whole Time Director of the Company for a period of 5 (Five) years w.e.f. 19th July, 2014. The terms and condition of her appointment and remuneration are subject to approval of the members.

- Mr. I. Chandrakantha Rao has resigned w.e.f. 6th June, 2014 Mr. Rathi Binod Pal and Mr. Jogesh Bansal has resigned w.e.f. 19th July, 2014. Directors wish to place on record their appreciation of the valuable service rendered by Mr. Rao, Mr. Pal and Mr. Bansal during their tenure of Director of your Company.

As per the provisions of Section 149 of the Companies Act, 2014 which has come into force with effect from 1st April, 2014, an Independent Director shall hold office for a term up to five consecutive years on the Board of a company and is not liable to retire by rotation. In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of Mr. Rashid Jilani, Mr. R.K. Pandey and Mr. Jagdish Prasad Mohta as Independent Directors is being placed before the Members in General Meeting for their approval. In the opinion of the Board, they fulfil the conditions specified in the Act and the Rules made there under for appointment as Independent Directors and are independent of the management. Members are requested to refer to the Notice of the Annual General Meeting and the Explanatory Statement for details of the qualifications and experience of the Directors and the period of their appointment.

Brief resumes of above directors, names of other company (ies) in which they hold directorship, membership of committees of the Board and their shareholdings are given in the Notice to the Shareholders.

PARTICULAR OF EMPLOYEES UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956

Particular of employees as required under section 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules 1988 is given in Annexure "A" forming part of this report.

CORPORATE GOVERNANCE

The Company has complied with the mandatory provisions of Corporate Governance as prescribed in the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance is included as a part of the Annual Report along with the Auditor''s Report on its compliance.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134 (5) of Companies Act, 2013 (erstwhile Section 217 (2AA) of the Companies Act, 1956) with respect to Director''s Responsibility Statement, it is hereby confirmed;

- That in preparation of the accounts for the financial year ended 31st March, 2014 the applicable accounting standards have been followed along with proper explanations relating to material departures.

- That the Directors 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 the year under review.

- That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

- That the Directors have prepared the accounts for the financial year ended on 31st March, 2014 on a ''going concern'' basis.

- That the Directors had laid down internal financial control to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

- That the Directors had devised proper system to ensure compliance with the provisions of the all applicable laws and that a systems were adequate and were operating effectively.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with applicable accounting

standards issued by the Institute of Chartered Accountants of India, form part of the Annual Report. In terms of the Circular No.2/ 2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors has, at its meeting held on 30th May, 2014 passed a resolution giving consent for not attaching the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies. The required information on subsidiary companies is given in this Annual Report. The said documents/details shall be made available, upon request, to any Member of the Company and will also be made available for inspection by any Member of the Company at the registered office of the Company

STATUTORY AUDITORS

M/s Kanodia Sanyal & Associates, Chartered Accountants retire and being eligible, offer themselves for re-appointment. The auditors have furnished certificate regarding their eligibility for re-appointment as Company''s Auditors, pursuant to Section 139 of the Companies Act, 2013.

COST AUDITORS

The Board has appointed M/s. R.J. Goel & Company, Cost Accountants, New Delhi as Cost Auditors of the Company pursuant to section 233B of the Companies Act, 1956 for the financial year 2013 – 14, The Cost audit report for financial year 2012-13 approved by Board of Directors of the Company on 20th December, 2013 was filed on 24th December, 2013. Pursuant to provision of Section 148 of Companies Act, 2013 M/s. R.J. Goel & Company, Cost Accountants furnish a certificates of consent and independence for their reappointment. The Board of Directors appointed M/s. R.J. Goel & Company, Cost Accountants for audit of cost record of the company for the year ended 31st March, 2015.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EARNING & OUTGO

Information in accordance with the provisions of section 134 (5) of Companies Act, 2013 (erstwhile Section 217 (2AA) of the Companies Act, 1956) regarding conservation of Energy, technology absorption, foreign exchange earnings and outgo is given in the ''Annexure "B" forming part of this report.

ACKNOWLEDGEMENT

Your Directors would like to express their gratitude to financial institutions, Banks and various State and Central Government authorities for the co-operation extended to the Company. Directors also take this opportunity to thanks the shareholders, customers, suppliers, lenders and distributors for the confidence reposed by them in the Company. The employees of the Company contributed significantly in achieving the results. Your Directors take this opportunity of thanking them and hope that they will maintain their commitment to excellence in the years to come.

For and on behalf of the Board

Place : New Delhi (Sanjay Mittal) (Sumita Dhingra) Dated : 19th July, 2014 Whole Time Director Whole Time Director DIN:– 01327274 DIN:– 06929317


Mar 31, 2013

To the Members''

The Directors have pleasure in presenting the 39th Annual Report of the Company together with Audited Accounts for the year ended 31st March'' 2013.

The Financial results of the year under review are as given below:-

FINANCIAL RESULTS

(Rs./ Crores)

2012-13 2011-12

Profit from Operations (EBITDA) 186.89 364.60

Less / (Add) exceptional items 21.60 74.33

Less: Interest 35.12 26.14

Profit Before Depreciation and Tax 130.17 264.13

Less: Depreciation 88.92 88.09

Profit before Tax 41.25 176.04

Less: Income Tax for the year 0.11 54.91

Deferred Tax 8.56 (15.94)

Profit After Tax 32.58 137.08

Add: Balance brought forward 487.75 412.89

Balance available for appropriation 520.33 549.97

APPROPRIATIONS

Dividend on Equity Shares 4.20 10.51

Tax on Dividend 0.71 1.71

Transfer to General Reserve 25.00 50.00

Balance carried forward 490.42 487.75

PERFORMANCE HIGHLIGHTS

During the year under review your Company has achieved a gross turnover of Rs. 2410.55 crore as compared to Rs. 2492.92 crore during the previous year and operating profit before exceptional item Rs. 186.89 crore as against Rs. 364.60 crore during the previous year . During the year'' company experienced pressure on its margin due to increased competition caused by lower demand. The Company is taking various measures to retain its market share and as also to improve margins.

DIVIDEND

Your Directors are pleased to recommend a dividend of Re.1/- per equity share (10%) (previous year Rs. 2.50 per equity share) for the Financial Year 2013 for approval of the Members.

The total dividend would absorb a sum of Rs.4.20 crore and tax thereon of Rs. 0.71 crore. The dividend will be free of tax in the hands of recipients.

ACQUISITION OF GLOBAL BOPP BUSINESS OF EXXONMOBIL

The Company has signed a Sales Purchase Agreement on 03rd May'' 2013'' for acquiring the Global BOPP Film business of ExxonMobil Chemical Company (USA) at a consideration of approximately USD 235 Million'' which is subject to customary price adjustments. The transaction is expected to close by the end of August 2013.

The acquisition transaction covers five BOPP production locations in the U.S. and Europe. The manufacturing sites are in Georgia and Oklahoma in the U.S. and in Italy'' the Netherlands'' and Belgium in Europe. The transaction also includes a technology center and sales office in Rochester'' New York'' and an office in Luxembourg. Approximately 14500 people work in those operations. This acquisition will make JPFL one of the leading manufacturers of flexible packaging films globally with a combined capacity of approximately 445''000 tons/annum for BOPP films.

MANAGEMENT DISCUSSION AND ANALYSIS

The MD&A has been included in the annual report as a separate section.

DIRECTORS

- Mr. Rathi Binod Pal'' retire by rotation at the ensuing Annual General Meeting'' and being eligible'' offer himself for re- appointment.

- Mr. Samir Banerjee has been reappointed as Whole Time Director of the Company for a further period of 3 (three) years w.e.f. 25th August'' 2013. The terms and condition of his appointment and remuneration are subject to approval of the members.

Brief resumes of above directors'' names of other company (ies) in which they hold directorship''membership of committees of the Board and their shareholdings are given in the Notice to the Shareholders.

PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A) OF THE COMPANIES ACT'' 1956.

Particulars of employees as required under section 217(2A) of the Companies Act'' 1956'' read with the Companies (particular of Employees) Rules 1988 is given in Annexure "A" forming part of this Report.

CORPORATE GOVERNANCE

The Company has complied with the mandatory provisions of Corporate Governance as prescribed in the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance is included as a part of the Annual Report along with the Auditor''s Report on its compliance.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217 (2AA) of the Companies Act'' 1956'' with respect to Director''s Responsibility Statement'' it is hereby confirmed;

- That in preparation of the accounts for the financial year ended 31st March'' 2013 the applicable accounting standards have been followed along with proper explanations relating to material departures.

- That the Directors 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 the year under review.

- That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act'' 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

- That the Directors have prepared the accounts for the financial year ended on 31st March'' 2013 on a ''going concern'' basis.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements of the Company and its subsidiaries'' prepared in accordance with applicable accounting standards issued by the Institute of Chartered Accountants of India'' form part of the Annual Report. In terms of the Circular No.2/ 2011 dated 8th February'' 2011 issued by the Ministry of Corporate Affairs'' Government of India'' the Board of Directors has'' at its meeting held on 3rd May'' 2013 passed a resolution giving consent for not attaching the Balance Sheet'' Statement of Profit and Loss and other documents of the subsidiary companies. The required information on subsidiary companies is given in this Annual Report. The said documents/details shall be made available'' upon request'' to any Member of the Company and will also be made available for inspection by any Member of the Company at the registered office of the Company

STATUTORY AUDITORS

M/s Kanodia Sanyal & Associates'' Chartered Accountants retire and being eligible'' offer themselves for re-appointment. The auditors have furnished certificate regarding their eligibility for re-appointment as Company''s Auditors'' pursuant to Section 224 (1-B) of the Companies Act'' 1956.

COST AUDITORS

The Board has appointed M/s. R.J. Goel & Company'' Cost Accountants'' New Delhi as Cost Auditors of the Company pursuant to section 233B of the Companies Act'' 1956 for the financial year 2012 – 13'' The Cost audit report for financial year 2011-12 approved by Board of Directors of the Company on 14th November'' 2012 was filed on 31st December'' 2012.

FIXED DEPOSITS

The Company has not accepted any fixed deposits and the provisions of section 58-A of the Companies Act'' 1956 are not applicable to the Company.

DEMERGER OF INVESTMENT DIVISION

The members may be aware that the Company has been implementing a proposal to demerge its Investment Division into Jindal Poly Investment and Finance Company Limited ("Resulting Company"). The demerger shall facilitate the running of the manufacturing business of the Company'' which is the core business of the Company'' with more focused approach. Upon the coming into effect of the Scheme and in consideration of the demerger of the investment division '' the Resulting Company shall allot its 1(one) Equity Share of Rs.10/- each'' fully paid-up'' in lieu of every 4(four) Equity shares held in the Company on the Record Date to be fixed by the Board.

Hon''ble High Court of Judicature at Allahabad'' at its hearing held on May 16'' 2013'' has sanctioned the scheme of demerger of Investment Division of the Company into Jindal Poly Investment and Finance Company Limited. The formal order of the High court is awaited which will be filed with the Registrar of Companies'' U.P. and upon filing'' the Demerger scheme shall become effective.

ENERGY CONSERVATION'' TECHNOLOGY ABSORPTION'' FOREIGN EARNING & OUTGO

Information in accordance with the provisions of section 217 (1) (e) of the Companies Act'' 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules'' 1988 regarding conservation of Energy'' technology absorption'' foreign exchange earnings and outgo is given in the ''Annexure "B" forming part of this report.

ACKNOWLEDGEMENT

Your Directors would like to express their gratitude to financial institutions'' Banks and various State and Central Government authorities for the co-operation extended to the Company. Directors also take this opportunity to thanks the shareholders'' customers'' suppliers'' lenders and distributors for the confidence reposed by them in the Company. The employees of the Company contributed significantly in achieving the results. Your Directors take this opportunity of thanking them and hope that they will maintain their commitment to excellence in the years to come.

For and on behalf of the Board

Place : New Delhi (Rathi Binod Pal) (Samir Banerjee)

Dated : 29th May'' 2013 Whole Time Director Whole Time Director

DIN:– 00092049 DIN:– 00011754

 
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