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Directors Report of Xpro India Ltd.

Mar 31, 2015

TO THE SHAREHOLDERS

We present herewith our Annual Report together with the Audited Accounts of your Company for the year ended March 31, 2015.

FINANCIAL RESULTS

(Rs. Lacs)

FY 2015 FY 2014

Revenue from Operations 288,05.56 271,55.11 yielded a

Profit before Depreciation and Tax ( 4,87.69 ) ( 3,87.63 )

Less : Depreciation 14,04.81 11,22.25

Profit / (Loss) Before Tax ( 18,92.50 ) ( 15,09.88 )

Less : Provisions for

- Income & Wealth Tax - -

- Deferred Tax ( 5,01.00 ) ( 4,65.00 )

Profit / (Loss) After Tax ( 13,91.50 ) ( 10,44.88 )

Add : Surplus brought forward 48,61.35 59,06.23

Less: Transition adjustments 1,56.41 -

Balance available for appropriation 33,13.44 48,61.35

Which is appropriated as :

- Surplus carried forward 33,13.44 48,61.35

In view of the above, with regret, the Directors find it prudent not to recommend any Dividend.

REVIEW OF KEY BUSINESS MATTERS

The Indian macro-economic outlook is turning positive with a marked decline in inflation and a comfortable external position helped by positive government policies and fall in global crude oil prices. Changes adopted in GDP reporting based on an updated base year, wider coverage of goods and services and the inclusion of tax data showed a more robust economic performance than projected earlier, with initial estimates for 2014-15 showing growth accelerated to 7.4% as industry and service sectors expanded. GDP growth is projected at 7.8% in 2015-16 and expected to further rise to 8.2% by 2016-17. Government efforts towards regulating general inflation, a pro- investment attitude, improvement in fiscal and current account deficit, and movement on resolving structural bottlenecks are steps in the right direction. A global economic slowdown, barring some positive signs in U.S.A., does however create stresses and increases complexities in our economic environment. Challenges to economic prospects include possible rise in oil prices, uncertain monsoons, and slow revival of customer confidence.

Despite improving fundamentals in, and continuing strong potential, of our economy, much of the financial year saw poor customer sentiment across many sectors. The end-markets for many of the Company''s products were no exception and showed low growth on the back of decline in consumer durables production. Volatility in petro- product prices added further negative dimensions to profitability. The company did turn in marginally higher (but less than targeted) aggregate production volumes at 19,634 MT, and gross sales 6% higher at Rs.288 Crores against Rs.272 Crores last year. The loss before depreciation and tax was Rs.4.88 Crores against a loss of Rs.3.88 crores in the previous year. Performance is dealt with in greater detail in the Managements'' Discussion & Analysis Report.

A careful analysis however confirms that such loss-making conditions arise principally out of much less-than- expected physical levels of activity, leaving gaps in utilization of our capacities. Given the true size of the market and end-product capacities on the ground, such conditions are reasonably viewed by us as temporary. The Management is confident of the competitiveness and quality of product offerings and the robustness of its business model. The year witnessed material progress towards realising the strategic direction of the Company, with the commencement of production of intended Dielectric Films at the state-of-the-art Dielectric (capacitor) Film project. The new unit (called Biax Division Barjora Unit II) represents the largest investment in the Company''s history. Following it''s capitalisation with effect from March 1, 2015 it was to be expected that interest and deprecation burdens will exert significant pressure on the bottom line for some time. We continue to be satisfied that the unit is capable of generating due returns under foreseeable market and economic conditions, subject of course to normal business risks. It may be noted no fresh capital was raised and the Company''s contribution for the project was met from internal accruals.

This high technology plant reflects our faith in India''s growth through manufacturing and the Make-in-India movement. However, this facility is presently suffering on account of anomalies arising out of an inverted duty structure, for which representations have been made to the Government who have appreciated our concern. Such representations could be made only after commencing production and we look forward to early actions from the government in line with a true need and its own policies for correction of inverted duties.

Reflecting specialization in niche polymer films (e.g. thin, dielectric and metalized films), the plants at Barjora and Pithampur are the only indigenous producers of thin BOPP Films for special applications. For general applications areas, Indian BOPP Films industry continues to have significant over-supply resulting in about 70% capacity utilisation and price-based competition. In the circumstances, the existing products of Biax Division reported marginally higher sales volumes but seriously impacted financial results. BOPP Films do see domestic demand growing at around 15% but supply imbalances have amplified due to short term export market pressures and a quantum - even perhaps irrational - jump in domestic capacity.

Consumer durables, including refrigerators (a significant client base for Coex Division) witnessed grudging and marginal growth. Despite like-for-like volume reduction due to downgauging of product specifications, the Company was able to maintain production volume levels. However value additions fell significantly due to cost pressures in a fiercely competitive end-market. Nevertheless, this segment holds good and long term potential and has attracted significant global manufacturers to India, which will help expand our customer base. The Company has also identified specialised cast film products to widen markets. The Management continuously takes measures to improve operations, trim overheads, control discretionary spend and manage liquidity.

DIRECTORS AND KEY MANAGEMENT PERSONNEL

Smt. Madhushree Birla retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers herself for re-appointment in terms of Section 149, 152 and other applicable provisions of the Companies Act, 2013 (hereinafter "the Act").

Sri Amitabha Guha, Sri Ashok Kumar Jha, Sri Haigreve Khaitan, Sri P.Murari, Sri Utsav Parekh, and Sri S.Ragothaman were appointed as Independent Directors in terms of Section 149 and other applicable provisions of the Act at the Seventeenth Annual General Meeting held on July 31, 2014, to hold office until the conclusion of the fifth consecutive Annual General Meeting of the Company therefrom i.e. until the conclusion of the Twenty Second Annual General Meeting of the Company. All Independent Directors have given declarations that they meet the criteria of independence as laid down u/s 149(6) of the Act. Sri Haigreve Khaitan has shared with the Board the demands of his increasing professional commitments and subsequently resigned from the Board of Directors w.e.f. January 30, 2015. The Board places on record its deepest appreciation for the contribution made by Sr Khaitan during his long tenure. The Board of Directors has, on the recommendation of the Remuneration and Nomination Committee, appointed Ms. Nandini Khaitan as an Additional Director of the Company, in the category of Independent Directors, with effect from March 21, 2015. She holds Office until the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment. A notice has been received from a member proposing Ms.Khaitan as a candidate for the office of Director.

Sri C. Bhaskar was re-appointed by the Board as Managing Director & Chief Executive Officer, for a period of three years w.e.f. January 1, 2015, on the recommendation of the Remuneration & Nomination Committee (subject to necessary approval of the shareholders). Sri Vinay Kumar Agarwal was appointed during the year as the Chief Financial Officer of the Company under the provisions of the Act.

During the year, six Board Meetings were convened and held as per details in the annexed Corporate Governance Report. The Independent Directors met separately on January 31, 2015 as required.

STATUTORY AND OTHER MATTERS

Information as per the requirements of the Companies Act, 2013, our report on Corporate Governance and the Managements'' Discussion & Analysis Report form a part of this Report and are annexed hereto.

The extract of the Annual Return in Form MGT-9 is annexed herewith.

The Board has, on the recommendation of the Remuneration and Nominations Committee, framed a Policy for appointment and remuneration of Directors and Senior Managerial Personnel as well as criteria for determining independence and other relevant matters (policy and criteria annexed herewith). Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board carried out annual evaluation of its performance, and of individual directors (including independent) as well as the evaluation of its Audit, Remuneration and Nominations, and Stake Holders Relationship Committees. The concerned Director did not participate in the meeting while being evaluated. A questionnaire was circulated to all the Directors. The Remuneration and Nominations Committee also evaluated the performance of every Director. The evaluation of the Chairman of the Board and the non- independent Directors was also carried out at the separate meeting of the Independent Directors.

Information on Conservation of Energy, Technology absorption & foreign exchange earnings and outgo is furnished in annexure hereto.

The Company has formulated a Policy for determining material subsidiaries as required under Clause 49(V) of the Listing Agreement (weblink: www.xproindia.com/data/XILPolMatSubs.pdf). The Company has two wholly owned subsidiaries viz. Xpro Global Limited and Xpro Global Pte. Ltd., Singapore. Performance and Financial Position of the said Subsidiaries is annexed herewith in Form AOC-1 as required.

The Company has a system of reviewing business risks by Senior Executives at plants. The Audit Committee and the Board are informed about the identified risks, assessment thereof and minimization procedures and identification of risk elements which in the opinion of the Board may threaten existence of the Company.

The Company has an internal control system commensurate with its size of operations. The internal audit function is carried out by external agencies which report to the Chairman of the Audit Committee. During the course of internal audit the efficacy and adequacy of internal control systems of the Company is also evaluated. Based on the reports, corrective actions are taken and the controls strengthened.

The Company has not granted any loan or issued any guarantee or made any investment to which the provisions of Section 186 of the Act apply, except an inter-corporate deposit to Digjam Limited. Closing balance: Rs.50 lacs; previous year Rs.4.25 Crores; maximum outstanding at any point of time during the year: Rs.5.13 Crores; previous year: Rs.5.12 Crores. Further, the Company has not invited/accepted any Fixed Deposits under Chapter V of the Act and there are none outstanding as on March 31, 2015.

There are no Related Party transactions entered into by the Company which may have a potential conflict of interest with that of the Company and to which Section 188(1) of the Act applies. Accordingly Form AOC-2 is not required to be annexed. As required under provisions of the Act and Clause 49 of the Listing Agreement, all Related Party Transactions are placed before the Audit Committee for approval or for omnibus approval as necessary. The Statement of all such transactions entered into is placed before the said Committee for review. The Policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website (http://www.xproindia.com/data/XILPolRelPartyTrans.pdf).

There are no significant material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.

The Audit Committee meets requirements of Section 177 of the Act and Clause 49 of the Listing Agreement; details of its composition are furnished in the Corporate Governance Report. There was no instance during the year where the Board did not accept any recommendation of the Audit Committee.

The Company has a vigil mechanism for directors and employees to report genuine concerns in accordance with the Whistle Blower Policy; no employee is denied access to the Audit Committee in this regard. The said Policy provides for safe guards through Protected Disclosures against victimization of persons who use such mechanism, and is displayed on the Company''s website. The details of the whistle blower policy are also annexed herewith.

Information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is annexed.

The Company has set up a Committee to look into the complaints under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013; no complaint relating to sexual harassment at the work place has been received during the year.

The Company had, before the Act came into force, already constituted a Committee on Corporate Social Responsibility (CSR), the details of which are furnished in the Corporate Governance Report. While the statutory requirements on spending are not applicable to the Company in view of loss/inadequate profit, small steps have always been taken by the Company for social and inclusive development in its local areas; however given the relatively small size of the units and their geographical spread, it has not been practical to yet undertake any significant projects beyond these. The CSR Policy of the Company is annexed herewith.

Employees Stock Option ("ESOP") Schemes are implemented in accordance with SEBI Guidelines. Details of options granted and outstanding along with other particulars, as required, are annexed hereto.

DIRECTORS'' RESPONSIBILITY STATEMENT

The CEO and CFO have certified the Financial Statements as per requirements of Clause 49(IX) of the Listing Agreement which has been reviewed by the Audit Committee and taken on record by the Board. Having taken reasonable and bonafide care, pursuant to Section 134 (3)(c) of the Act, the Directors indicate that (i) in the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanations relating to material departures; (ii) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year; (iii) the Directors had 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; (iv) the Directors had prepared the annual accounts on a going concern basis; (v) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and (vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS'' OBSERVATIONS

The observations of the Statutory Auditors and Secretarial Auditors are routine and in the nature of general disclosures.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, had been appointed as the Statutory Auditors of the Company at the Seventeenth Annual General Meeting held on July 31, 2014 to hold office until the conclusion of the Twentieth Annual General Meeting of the Company i.e. for a term of three years. As provided in Section 139 of the Act, the said appointment is being placed for ratification at the forthcoming Annual General Meeting.

Pursuant to the provisions of Section 204 of the Act, the Company had appointed Sri K. C. Khowala, Practising Company Secretary, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditors is annexed herewith.

The Board of Directors of the Company on the recommendation of the Audit Committee, has appointed M/s Sushil Kumar Mantri & Associates, Cost Accountants, to conduct the audit of the cost records of the Company for the financial year ending March 31, 2016. In terms of Section 148 (3) of the Act, the remuneration payable to them is required to be approved at the forthcoming Annual General meeting.

ACKNOWLEDGEMENTS

We place on record our sincere appreciation of the valuable cooperation and support received at all times by the Company from all its Bankers, particularly the lead bank, State Bank of India, all concerned Government and other authorities and Shareholders. Relations with employees were generally cordial; we record our appreciation of contributions made by employees during the year.

For and on behalf of the Board

New Delhi Sidharth Birla

May 29, 2015 Chairman


Mar 31, 2013

TO THE SHAREHOLDERS

The present herewith our Annual Report together with the Audited Accounts of your Company for the year ended March 31, 2013.

FINANCIAL RESULTS

(Rs. Lacs)

FY 2013 FY 2012

Revenue from Operations

- Continuing Businesses 252,62.35 270,17.43

- Discontinued Businesses (till Aug 18, 2011) 37,07.05

252,62.35 307,24.48

Continuing Businesses resulted in a

Profit before Depreciation and Tax of 3,60.09 18,57.47

less : Depreciation 10,80.04 11,54.44

(7,19.95) 7,03.03

Discontinued Business (till August 18, 2011) resulted in a Profit before Depreciation and

Tax of 3,41.62

less : Depreciation 88.05 2,53.57 (7,19.95) 9,56.60

add: Exceptional items (profit from slump sale of discontinued business) 34,57.46

Profit / (Loss) Before Tax ( 7,19.95 ) 44,14.06

less : Provisions for

- Income & Wealth Tax 8,86.50

- Deferred Tax (3,11.00) 2,18.00

- Credit for MAT Entitlement ( 70.00 )

- Tax pertaining to earlier years 2.18 18.56

Profit / (Loss) After Tax ( 4,11.13 ) 33,61.00

add : Surplus brought forward 64,53.33 39,31.92 Balance available for appropriation 60,42.20 72,92.92

Which is appropriated as :

- General Reserve 5,00.00

- Proposed Dividend 116.78 2,92.09

- Dividend Tax 19.19 47.50

- Surplus carried forward 59,06.23 64,53.33

The presentation above is a summary of the financial results and it is suggested that due care be exercised by readers in evaluating the businesses, financials and comparisons with earlier periods in view of the standards applicable to financial statements, particularly presentation relating to discontinued business. Though there is no distributable surplus for the year, upon prudent consideration of our conservative dividend policy, available surpluses, and overall stake-holder interest, we recommend for your approval a Dividend of Re.1.00 per share.

REVIEW OF KEY BUSINESS MATTERS

Domestic economic conditions remain stressed. The global economy is struggling to effectively recover. A number of developed economies are in various degrees of recession, and growth in many developing countries is affected by its spill-over. This is impacting consumer entiments and demand. Indian economic growth, decelerated to about 5%, the weakest in a decade, facing challenges from unfavourable global and domestic factors and the slump has spread to both consumption and exports. The manufacturing sector continued a sharp decline in growth from 2.7% in 2011-12 to 1.9% in 2012-13. Industry faced unprecedented headwinds, with domestic demand across many sectors including consumer durables and capital goods remaining muted, a weakening currency, and high inflation and interest rates. Corporate earnings across a wide spectrum appear to be significantly affected.

In the circumstances, the Company''s markets and its operations were subject to many severe challenges, as a result of which the profit performance, particularly in the last 3 quarters of the year under review, has been at its lowest since inception. The Company had to contend with cost increase across the board, including steep increases in power tariff (in some cases with retrospective effect). Sales from continuing businesses were lower at Rs. 252.62 Crores against Rs. 270.17 Crores last year and their gross profits fell to Rs. 3.60 Crores from Rs. 18.57 Crores. Performance is dealt with in greater detail in the Managements'' Discussion & Analysis Report.

These conditions are however reasonably viewed by us as transient. The potential for the Company''s end-markets continues to be robust and Management is confident of the competitiveness and quality of its product offerings. Shareholders can observe from these reports and accounts that the Company is nearing completion of significant investments – actually the largest in its history – to strengthen and expand its core operations through a prudent mix of its own liquidity and by leveraging its sound financial standing. All the new investments are expected to be on line in a few months and after a stabilization period, during which we expect the burden of the interest and deprecation to keep the bottom line under some pressure, the investments should be in a position to generate attractive returns under normal market and economic conditions, subject of course to relevant risks.

The strategic intent of the management is towards specialization in certain types of polymer films (including thin, dielectric and metalized films). The plants at Barjora and Pithampur concentrate on thin BOPP Films for special applications and the Company remains the only indigenous producer of such films. On the general product side, the Indian BOPP Films industry has a situation of significant over-supply resulting in about 52% capacity utilisation and obvious fierce competition and un-remunerative pricing. As a consequence Biax Division reported lower sales, volumes and deeply impacted financial results. The consumer durables industry, particularly refrigerators, (significant client base for Coex Division) had negative growth. The Company however was able to maintain marginally reduced volumes though value additions were lower. The Company has continuously taken measures to improve operations, trim overheads, control discretionary spend and strengthen liquidity.

Employees Stock Option ("ESOP”) Schemes are implemented in accordance with SEBI Guidelines. Details of options granted and outstanding along with other particulars, as required, are annexed hereto.

STATUTORY AND OTHER MATTERS

Information as per the requirements of the Companies Act, 1956, our report on Corporate Governance and the Managements'' Discussion & Analysis Report form a part of this Report and are annexed hereto. Section 217(2A) of the Act is not applicable there being no relevant employees during the year. As per General Circular No.2/2011 of February 8, 2011 issued by the Ministry of Corporate Affairs, the Board has consented by resolution not to attach balance sheets and other statements of subsidiary companies, Xpro Global Limited and Xpro Global Pte. Ltd., Singapore. Financial highlights in terms of the said notification are annexed. Shareholders of the holding company may obtain, upon request and free of cost, hard copies of annual accounts and related information of the subsidiaries. A copy of these Annual Accounts shall be kept open for inspection by shareholders at the Registered Office of the Company and of the subsidiary companies.

Relations with employees were generally cordial; we record our appreciation of contributions made by employees during the year.

The Company has received a notice pursuant to Section 257 of the Companies Act, 1956 from a Member, signifying his intention to propose at the ensuing Annual General Meeting, the appointment of Sri Ashok Kumar Jha as a Director of the Company and for that purpose, to move a resolution as mentioned in the notice. It is considered that, as recommended by the Remuneration and Nomination Committee, it would be in the interest of the Company to appoint Sri Ashok Kumar Jha as an Independent Director of the Company. Smt. Madhushree Birla and Sri S. Ragothaman, Directors, retire by rotation and being eligible offer themselves for reappointment.

The Company, having regard to its size and scope, is generally compliant with relevant voluntary guidelines on Corporate Social Responsibility (CSR). The Board has also constituted a committee to mentor and monitor CSR activities. Small steps have been always taken by our plants for social and inclusive development in their local areas; however given their relatively small size and geographical spread it has not been practical to undertake directly any significant projects outside these. The Company has accordingly budgeted for and adopted a policy to support external bodies including relevant bodies, NGOs or Government Relief Funds selected by the Board, including through financial contribution to them, with greater participation in the areas of health and social welfare, efforts toward reducing child mortality, promotion of education & socially responsible behaviour, and employment enhancing vocational skills.

The CEO and CFO have certified as per requirements of Clause 49(V) of the Listing Agreement, which has been reviewed by the Audit Committee and taken on record by the Board. Having taken reasonable and bonafide care, pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors indicate that (i) in the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanations relating to material departures; (ii) the directors had 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 or loss of the Company for the year; (iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and (iv) the directors had prepared the annual accounts on a going concern basis.

AUDITORS'' OBSERVATIONS

The observations of the Auditors are routine and in the nature of general disclosures.

AUDITORS

The Auditors M/s Deloitte, Haskins & Sells, Chartered Accountants, retire, and being eligible offer themselves for reappointment.

The Company had appointed M/s Sanghavi Randeria & Associates, Cost Accountants, Mumbai to audit the Cost Accounts of erstwhile Thermosets Division of the Company for Synthetic Resins for the year ended March 31, 2012 pursuant to Section 233B of the Act. The Cost Audit Report for the year ended March 31, 2012 due for filing by April 15, 2013 (extended due date due to technical issues in MCA-21 system) had been e-filed by that date.

ACKNOWLEDGEMENTS

We place on record our sincere appreciation of the valuable cooperation and support received at all times by the Company from all its Bankers, particularly the lead bank, State Bank of India, all concerned Government and other authorities and Shareholders.

For and on behalf of the Board

New Delhi Sidharth Birla

April 27, 2013 Chairman


Mar 31, 2012

The have pleasure in presenting herewith our Annual Report together with the Audited Accounts of your Company for the year ended March 31, 2012.

FINANCIAL RESULTS

(Rs. Lacs)

FY 2012 FY 2011

Revenue from Operations

- Continuing Businesses 2,70,17.43 2,40,72.45

- Discontinued Businesses (till Aug 18,2011) 37,07.05 97,80.00

3,07,24.48 3,38,52.45

Continuing Businesses resulted in a Profit before Depreciation and Tax of 18,57.47 16,26.68

less : Depreciation 11,54.44 10,82.73

7,03.03 5,43.95

Discontinued Business (till August 18, 2011) resulted in a Profit before Depreciation and Tax of 3,41.62 6,25.39

less : Depreciation 88.05 2,28.32

2,53.57 3,97.07

9,56.60 9,41.02

add: Exceptional items (profit from slump sale 34,57.46 - of discontinued business)

Profit Before Tax 44,14.06 9,41.02

less : Provisions for

- Income & Wealth Tax 8,86.50 1,80.00

- Deferred Tax 2,18.00 (1,63.00)

- Credit for MAT Entitlement (70.00) (1,76.00)

- Tax pertaining to earlier years 18.56 (37.97)

Profit After Tax 33,61.00 11,37.99

add : Surplus brought forward 39,31.92 32,38.44

Balance available for appropriation 72,92.92 43,76.43 Which is appropriated as :

- General Reserve 5,00.00 1,80.90

- Proposed Dividend 2,92.09 2,26.82

- Dividend Tax 47.50 36.79

- Surplus carried forward 64,53.33 39,31.92

The presentation above is a summary of the financial results. In view of newer accounting standards applicable to financial statements, particularly presentation relating to discontinued business, it is suggested that due care be exercised by readers in evaluating the businesses, financials and any comparisons with earlier periods.

Considering improved profits and extraordinary income, and applying prudent discretion particularly in view of investments being undertaken, we recommend for your approval a Dividend of Rs.2.50 per share.

REVIEW OF KEY BUSINESS MATTERS

The optimism of the early part of the year, following a GDP growth @8.4% during previous two years, gave way to revised estimates projecting a lower growth @6.9% primarily due to lower industrial production; the Indian economy battled challenges including but not limited to forex volatility and managing price stability. Additional pressures stemmed from a deteriorating global scene, European debt crises and its possibility of impact on financial markets. Domestic constraints of inflation, rising interest and costs and general negative sentiment affected customer confidence. However, despite this largely negative background the Company's operating results improved and should be considered generally satisfactory. But our optimism remains cautious due to uncertainties arising from volatile markets and sentiment, inflation and high financial costs.

Total Sales were Rs. 307.24 Crores. Gross Profit from continuing businesses improved by 14% to Rs.1857.47 lacs despite marginal fall in volume from 21,887 MT to 20,453 MT. Profits from Discontinued Business were higher on pro-rata basis. Performance is dealt with in greater detail in the Managements' Discussion & Analysis Report.

The year witnessed material progress in strategic initiatives of the Company, particularly completion of sale of the Thermosets Division at Ranjangaon (manufacturing Thermoset Moulding Powders & Synthetic Resins) in an all-cash transaction on a going concern and slump sale basis. Completion of merger of erstwhile subsidiary Biax Specialty Films Private Limited was informed in our last Report. The proceeds from the above sale, after tax and partial reduction of debt, are supplementing finances for growth and expansion of core businesses.

Our strategic intent for BOPP and Cast films is towards specialization in certain types of films (including thin, dielectric, hygiene and metalized films). The plants at Barjora and Pithampur both concentrate on thin BOPP Films for special applications and the Company remains the only indigenous producer of such films; both plants operated at high utilization levels. Considering the sustainable potential in domestic and export markets, and the capabilities of the Company, capacity enhancement had been proposed and implementation is proceeding on schedule.

After years of sustained growth the consumer durables industry - particularly Refrigerators (a significant client base for the Company) turned in a negative growth performance, affecting off-take of sheets and liners. However this seems to be only a phase, as the industry continues to have good prospects going forward; to meet future needs capacities at Greater Noida and Ranjangaon were enhanced. Coex facilities at Ranjangaon are being systematically moved to a neighbouring location, as sale of Thermoset Division included the area where these were operating.

Employees Stock Option ("ESOP") Schemes are implemented in accordance with SEBI Guidelines. Details of options granted and outstanding along with other particulars, as required, are annexed hereto.

STATUTORY AND OTHER MATTERS

Information as per the requirements of the Companies Act, 1956, our report on Corporate Governance and the Managements' Discussion & Analysis Report form a part of this Report and are annexed hereto. Section 217(2A) of the Act is not applicable as there were no relevant employees during the year. As per General Circular No.2/2011 of February 8, 2011 issued by the Ministry of Corporate Affairs, the Board has consented by resolution for not attaching balance sheets and other statements of the subsidiary companies, i.e., Xpro Global Limited and Xpro Global Pte. Ltd., Singapore. Financial highlights in terms of the said notification are annexed. Shareholders of the holding company may obtain, free of cost and upon request, hard copies of annual accounts and related information of subsidiaries. A copy of these annual accounts shall be kept open for inspection by shareholders at the Registered Office of the Company and of the subsidiary companies.

Relations with employees were generally cordial, and we record our appreciation of contributions made by employees during the year. Specific mention is also made of the long and dedicated service by employees of the erstwhile Thermosets Division and whose services transferred with continuity to the buyer company.

Sri Utsav Parekh, Director, retires by rotation and being eligible offers himself for reappointment. Sri Amitabha Ghosh also retires by rotation but is not seeking reappointment due to personal reasons. The Board places on record its deepest appreciation of the valuable guidance and services rendered by Sri Amitabha Ghosh during his association with the Company as an Independent Director almost since inception. The Board re-appointed Sri C Bhaskar, Managing Director & Chief Executive Officer, in the said position for a period of three years from January 1, 2012 (subject to necessary approvals including that of the shareholders).

The Company, having regard to its size and scope, is generally compliant with relevant voluntary guidelines on Corporate Social Responsibility (CSR). The Board has also constituted a committee to mentor and monitor CSR activities. Small steps have been always taken by our plants for social and inclusive development in their local areas; however given their relatively small size and geographical spread it has not been practical to undertake directly any significant projects outside these. The Company has accordingly budgeted for and adopted a policy to support external bodies including relevant bodies, NGOs or Government Relief Funds selected by the Board, including through financial contribution to them.

During the year the Company also established the "Sri S.K. Birla Chair" Professorship at the Birla Institute of Technology & Sciences, Pilani as one of the early Chairs established at this renowned institute, to promote and recognise contribution to teaching and research; an appointment has since been made by the institute.

The CEO and CFO have certified as per requirements of Clause 49(V) of the Listing Agreement, which has been reviewed by the Audit Committee and taken on record by the Board. Having taken reasonable and bonafide care, pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors indicate that (i) in the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanations relating to material departures; (ii) the directors had 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 or loss of the Company for the year; (iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and (iv) the directors had prepared the annual accounts on a going concern basis.

AUDITOR'S OBSERVATIONS

The observations of the Auditors are in the nature of general disclosures which read together with the accounting policies and the relevant notes to the accounts are self-explanatory.

AUDITORS

The Auditors M/s Deloitte, Haskins & Sells, Chartered Accountants, retire, and being eligible offer themselves for reappointment.

ACKNOWLEDGEMENTS

We place on record our sincere appreciation of the valuable cooperation and support received at all times by the Company from all its Bankers, particularly the lead bank, State Bank of India, all concerned Government/other authorities and Shareholders.

For and on behalf of the Board

New Delhi Sidharth Birla

April 26, 2012 Chairman


Mar 31, 2011

We present herewith our Annual Report together with the Audited Accounts of your Company for the year ended March 31, 2011. We also report that the amalgamation of the erstwhile wholly owned subsidiary of the Company Biax Specialty Films Private Limited, with the Company, is now sanctioned and effective from April 1, 2010. This Report and the Accounts appended hereto reflect the same.

FINANCIAL RESULTS

(Rs. Lacs) 2011 2010 Operations resulted in a Profit before Depreciation and Tax of 2,252.07 1,479.97

less : Depreciation 1,311.05 868.59

-------- --------- 941.02 611.38

add: Exceptional items (net) - 90.40

-------- ---------

Profit Before Tax 941.02 701.78 less : Provisions for

- Income & Wealth Tax 180.00 236.00

- Deferred Tax ( 163.00 ) 26.00

- Credit for MAT Entitlement ( 176.00 ) -

- Excess provisions for tax, written back ( 37.97 ) -

-------- ---------

Profit after Tax 1,137.99 439.78

add : Surplus brought forward 3,238.44 3,080.81

-------- ---------

Balance available for appropriation 4,376.43 3,520.59 Which is appropriated as :

- General Reserve 180.90 55.00

- Proposed Dividend 226.82 194.80

- Dividend Tax 36.79 32.35

- Surplus carried forward 3,931.92 3,238.44



We recommend for your approval a Dividend of Rs.2.00 per share.

REVIEW OF KEY BUSINESS MATTERS

The operations and results for the year now include those of the erstwhile subsidiary Biax Specialty Films Private Limited which has amalgamated with the Company. We are happy to report that the operations of the Company turned in strong performances in respect of both revenue and profits. Overall volume at 31,373 MT increased by about 30%; Gross Sales were higher by about 53% over the previous year at Rs.337.93 Crores; Gross Profit improved by 52% to Rs.2252.07 lacs (against Rs.1479.97 lacs in previous year).

The Indian economy continued to achieve amongst the highest growth levels globally. With sustained momentum in agriculture and manufacturing, growth has been estimated at over 8.5% powered by domestic demand. Medium term economic prospects continue to be favorable. Policy intervention to curb inflation including through gradual withdrawal of stimulus, liquidity restraints and interest rates, compounded by volatility in petro-product prices and competitive market conditions globally are relevant dimensions. In this background, the operations and results above were generally satisfactory. We remain optimistic on the future but mindful of uncertainties arising from volatile input prices, market swings, inflation and global and domestic economic cycles.

The Board in March 2011 approved and announced an agreement with SI Group - India Limited for sale of the Company's Thermo sets Division at Ranjangaon (engaged in the manufacture of Thermo set Molding Powders & Synthetic Resins) in an all-cash sale on a going concern and slump sale basis. Shareholders had already accorded their approval u/s 293(1)(a) through postal ballot; the transaction is subject to other necessary approvals and is expected to be completed in financial year 2011-12. We propose to use a part of the inflow to retire liabilities and earmark the balance towards growth.

The Consumer Durables industry - particularly Refrigerators - a significant client base for the Company, continues to have good growth prospects. To meet growing demand, Thermoforming capacity at Greater Noida was further enhanced and both Sheet and Thermoforming Capacity at Ranjangaon are being enhanced. Proactive steps continue to be taken by management to preserve market standing and competitive edge through development, productivity improvement and cost/financial discipline.

Our strategic intent for BOPP and Cast films is towards specialization in certain types of films (including thin, capacitor, hygiene and metalized films). The amalgamation of the subsidiary is a step in the same direction besides allowing the Company to consolidate its activities in this area while providing meaningful revival and development of the merging entity. It bears mentioning that the subsidiary had positive net worth and that there is no change in the share capital structure of the Company as a result of the merger. The plants at Barjora and Pithampur are both focused on thin BOPP Films for specialized applications, and the Company remains the only indigenous producer of such films; both plants operated at high utilization levels. Considering the growth in domestic and export markets, sustainable opportunities and the capabilities of the Company, capacity enhancement has been proposed and a new manufacturing line has also been ordered.

Employees Stock Option Schemes are implemented in accordance with SEBI Guidelines. Details of options granted and outstanding along with other particulars as required under SEBI Guidelines are annexed hereto.

STATUTORY AND OTHER MATTERS

Information as per the requirements of the Companies Act, 1956, our report on Corporate Governance and the Management Discussion & Analysis Report form a part of this Report and are annexed hereto. In accordance with General Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, the Board has consented by resolution for not attaching balance sheets and other relevant statements of the subsidiary companies, i.e., Xpro Global Limited and Xpro Global Pvt. Ltd., Singapore. Financial Highlights as required in terms of the said notification are annexed. Shareholders of the holding and subsidiary companies may obtain free of cost and upon request, hard copies of the annual accounts of subsidiary companies and related detailed information. A copy of the annual accounts of the subsidiary companies shall be kept open for inspection by shareholders at the Registered Office of the Company and of the subsidiary companies.

Relations with employees were generally cordial and we record our appreciation of contributions made by employees during the year.

As recommended by the Remuneration & Nomination Committee, Sri Amitabha Guha was appointed as an Additional Director with effect from March 24, 2011; he holds office until conclusion of the ensuing Annual General Meeting and is eligible for re-appointment. Sri P.Murari and Sri Haigreve Khaitan, Directors, retire by rotation and, being eligible, offer themselves for reappointment.

The Company, having regard to its size and scope, is generally compliant with relevant voluntary guidelines on Corporate Social Responsibility (CSR). Small steps have been always taken by our units for social and inclusive development in their locales; however, given the relatively small size of units and their geographical spread, it is not practical to undertake any significant projects outside these. The Company has accordingly budgeted for and adopted a policy to support external bodies including relevant NGOs or Government Relief Funds selected by the Board, including through financial contribution to them.

As per our governance practices the management's statement on the integrity and fair presentation of financial statements is provided to the Board as an integral part of the accounts approval process. However, pursuant to Section 217(2AA) of the Companies Act the Directors indicate that they have taken reasonable and bonafide care (a) that in the preparation of the annual accounts the applicable accounting standards had been followed and proper explanations relating to material departures, if any, have been furnished; (b) that such accounting policies were selected and applied consistently and judgments and estimates that are reasonable and prudent made 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; (c) that proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with provisions of the Companies Act for safeguarding the Company's assets and for preventing and detecting fraud and other irregularities; and (d) that these accounts have been prepared on a Going Concern basis.

AUDITOR'S OBSERVATIONS

The observations of the Auditors are in the nature of general disclosures which read together with the accounting policies and the relevant notes to the accounts are self-explanatory.

AUDITORS

The Auditors M/s Deloitte, Haskins & Sells, Chartered Accountants, retire, and being eligible offer themselves for reappointment.

ACKNOWLEDGEMENTS

We place on record our sincere appreciation of the valuable cooperation and support received at all times by the Company from all its Bankers, particularly the lead bank, State Bank of India, all concerned Government/other authorities and Shareholders.

For and on behalf of the Board

New Delhi Sidharth Birla

June 20, 2011 Chairman

 
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