Directors’ Report
Dear Members,
Your Directors have pleasure in presenting 33rd Annual Report of the Company along with the Audited Financial Statements for the
financial year ended March 31, 2023.
FINANCIAL RESULTS
|
Particulars
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2022-23
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2021-22
|
|
Total revenue (Turnover)
|
4,30,387
|
3,82,809
|
|
Other income
|
1,814
|
2,523
|
|
Total Income
|
4,32,201
|
3,85,332
|
|
Profit before Finance Cost, Depreciation and Tax
|
25,012
|
55,633
|
|
Finance Cost
|
5,938
|
3,600
|
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Depreciation & amortization expense
|
6,866
|
6,338
|
|
Profit/(Loss) before exceptional items & tax
|
12,208
|
45,695
|
|
Exceptional Items-Profit
|
-
|
164
|
|
Profit before tax
|
12,208
|
45,859
|
|
Tax expense
|
|
|
|
- Current
|
3,556
|
14,010
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|
- Deferred
|
(338)
|
1,576
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Total Tax
|
3,218
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15,586
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Net Profit/(Loss) after tax
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8,990
|
30,273
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Other comprehensive losses
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24
|
30
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Total comprehensive income
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9,014
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30,243
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DIVIDEND
The Board of Directors of the Company ('the Board') has
recommended final dividend of ' 0.15 (Fifteen Paisa) per equity
share of the Company for the year ended March 31, 2023.
The dividend on equity shares is subject to the approval of the
Shareholders at the ensuing Annual General Meeting of the
Company scheduled to be held on September 27, 2023. The
dividend once approved by Shareholders will be paid within the
statutory time limit.
As per section 194 of Income Tax Act, a Company is required to
deduct TDS @ 10% on dividend payment if it exceed ' 5000/-.
However, no TDS shall be deducted in the case of any dividend
payment to, Life Insurance Corporation, General Insurance
Corporation of India, any other insurer and Mutual Funds
specified u/s 10(23D) of Income Tax Act. Moreover, as per section
195 of the Act TDS is required to deduct @ 20% plus surcharge on
payment of Dividend to Non-Resident.
DIVIDEND DISTRIBUTION POLICY
In terms of Regulation 43A of the Securities and Exchange Board
of India (Listing Obligations and Disclosures Requirements)
Regulations, 2015 ("Listing Regulations"), the Dividend
Distribution Policy of the Company is available on the Company's
website www.filatex.com.
TRANSFER TO RESERVES
During the year under review, no amount has been transferred to
the Reserves and the entire amount of profits has been retained
in the profit and loss account.
OPERATIONS & EXPANSION
This has been a difficult year for the Company due to various
macro factors such as the Ukraine-Russia war, global economic
slowdown and a prolonged COVID lockdown in China. All these
factors have adversely affected the market demand and selling
prices. The Indian polyester industry has been facing intense
competition from cheaper Chinese imports in the domestic
market. High volumes of Chinese imports have led to a price war
in the domestic market forcing all Indian manufacturers to sell at
lower prices to match import prices to maintain market share,
which has adversely affected the margins.
Despite the challenging market environment, the Company
has achieved 97% capacity utilization on an annual basis. The
Company achieved its highest production and sales quantities of
3,80,197 MT and 3,82,133 MT respectively in FY23.
The Company commissioned and started commercial production
of its project for debottlenecking melt capacity of 50 MT per day
and manufacturing lines of 120 MT per day POY at Dahej Plant in
September 2022.
The Company continues to be engaged in R & D activities to
develop process parameters for chemical recycling of Polyester
waste. It has set up a 1500 Kgs per day pilot plant to revalidate
the process conditions and operating costs. The Company has
taken trials of spinning the recycled chips and converted the
yarn into cloth to test the parameters. The results are positive
and encouraging.
SUBSIDIARY COMPANY
During the year ended March 31, 2023, the Company doesn't
have any subsidiary. Therefore, Statement containing salient
features of the Financial Statement of the said Subsidiary
Company is not required to be attached as required under the
first proviso to sub-section (3) of section 129 read with rule 5 of
Companies (Accounts) Rules, 2014.
FILATEX EMPLOYEE STOCK OPTIONS
SCHEME, 2015
The Nomination & Remuneration Committee had, at its
meeting held on May 07, 2018, granted 4,30,000 stock options
("options") of face value of ' 10 each [subsequently sub-divided
into 21,50,000 shares of face value of ' 2 each] to the eligible
Employees of the Company under the Filatex Employee Stock
Option Scheme 2015 (Filatex ESOS -2015) at an exercise price
of ' 211 per option (after sub-division, ' 42.20 per option) (being
the closing price at BSE on February 11, 2016 i.e. immediately
preceding the grant date), each option being convertible into
one Equity Share of the Company upon vesting subject to the
Securities and Exchange Board of India (Share Based Employee
Benefits) Regulations, 2014 and the terms and conditions of the
Filatex ESOS 2015.
On the recommendation of Nomination & Remuneration
Committee in its meeting held on August 28, 2020, Members of
the Company in their Annual General Meeting held on September
30, 2023 approved the repricing of the outstanding employee
stock options granted in 2nd Tranche under Filatex Employee
Stock Option Scheme, 2015 from Exercise price of ' 42.20 per
option to ' 28.85 per option.
The Board of Directors in their meeting held on November 08,
2022 had approved the sub-division of One Equity Shares of the
Company having a face value of ' 2/- (Rupees Two only) each into
2 (Two) Equity Shares having a face value of ' 1/- (Rupee One
only) each. The Members of the Company passed the resolution
for the sub-division of shares through postal ballot on December
14, 2022. Accordingly, the number of stock options and price
thereof were adjusted.
Diluted Earnings per share (EPS) taking the effect of issuance of
options under Filatex ESOS 2015 had been calculated (refer Note
No. 40 of the Financial Statement). Disclosure under SEBI (Share
Based Employees Benefits) Regulations, 2014 regarding details
of the Filatex ESOS, 2015 for the financial year ended March 31,
2023 has been given in Note 50 of the Financial Statement.
SHARE CAPITAL
The Board of Directors in their meeting held on November 08,
2022 had approved the sub-division of One Equity Shares of the
Company having a face value of ' 2/- (Rupees Two only) each into
2 (Two) Equity Shares having a face value of ' 1/- (Rupee One
only) each. The Members of the Company passed the resolution
for the sub-division of shares through postal ballot on December
14, 2022.
The Company allotted 8,44,250 Equity Shares of ' 1 each on
June 08, 2023 at an exercise price of ? 14.425 per share against
exercise of Stock Options to the Employees of the Company
under Filatex Employee Stock Option Scheme 2015 (Filatex
ESOS-2015).
Presently, the Company's Issued & Paid-up Share Capital is
' 44,38,55,500 consisting of 44,38,55,500 Equity shares of
' 1/- each.
DEPOSITS
During the year under review, the Company has not accepted
any deposits.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Shri Purrshottam Bhaggeria (DIN: 00017938), Joint Managing
Director, retires by rotation and being eligible, offer himself for
re-appointment at the ensuing Annual General Meeting.
Shri Swarup Chandra Parija, Shri Suraj Parkash Setia and Smt.
Pallavi Joshi Bakhru and Shri Rajender Mohan Malla, Independent
Directors have confirmed that their names have been enrolled in
the Independent Directors' Databank.
The directors would like to confirm that the Company has received
declaration from all the Independent Directors confirming
their independence as well as confirmation that "he/she is not
aware of any circumstance or situation, which exist or may be
reasonably anticipated, that could impair or impact his/her
ability to discharge his/her duties with an objective independent
judgement and without any external influence" Accordingly,
requirement of Section 149(6) of the Companies Act, 2013 and
Regulation 16(1) (b) & Regulation 25 (8) of the Listing Regulations
are duly complied with. Pursuant to the circular relating to the
"enforcement of SEBI Order regarding appointment of directors
by listed companies" dated June 20, 2018, any director of the
Company, is not debarred from holding the office of director
pursuant to any SEBI order. Your directors would like to confirm
that as per opinion of the Board of Directors, all the Independent
Directors of the Company meet the requirement of integrity,
expertise and experience (including the proficiency) required for
their appointment.
Pursuant to the provisions of Section 203 of the Act, at present,
the Key Managerial Personnel of the Company are: Shri Madhu
Sudhan Bhageria, Chairman and Managing Director, Shri
Purrshottam Bhaggeria, Joint Managing Director & Shri Madhav
Bhageria, Joint Managing Director & CFO, Shri Ashok Chauhan,
Whole-Time Director and Shri Raman Kumar Jha, Company
Secretary of the Company.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI
Regulations, the Board has carried out an evaluation of its own
performance, the directors individually and the evaluation of the
working of its Audit, Nomination & Remuneration Committees,
Stakeholders Relationship Committee and Finance & Corporate
Affairs Committee. The manner in which the evaluation has been
carried out has been given in the Corporate Governance Report.
REMUNERATION POLICY
The Board has, on the recommendation of the Nomination &
Remuneration Committee has framed a policy for selection
and appointment of Directors, Senior Management and their
remuneration. The Nomination & Remuneration Policy is
available on the Company's website www.filatex.com.
CORPORATE SOCIAL RESPONSIBILITY
As required under the Companies Act, 2013 ("Act"), the Corporate
Social Responsibility ("CSR") Committee consists of Shri Madhu
Sudhan Bhageria as the Chairman, Shri Purrshottam Bhaggeria,
Shri Madhav Bhageria and Smt. Pallavi Joshi Bakhru, as members.
The Board, on the recommendation of CSR Committee, approved
' 550.56 lakhs being two percent of average net profits of
' 27,528.06 lakhs during preceding three financial years of the
Company calculated in accordance with the provision of Section
198 of the Companies Act, 2013 to be spent on CSR activities
during the financial year 2022-23 in accordance with CSR Policy,
which is available at the Company website www.filatex.com.
During the year under review, the Company has incurred an
expenditure of ' 286.18 lakhs (including Interest of ' 6.12 lakhs
accrued on Unspent CSR Bank Accounts) on Education, Swachh
Bharat Abhiyan, Health facilities, Promotion of sports, making
available safe drinking water, environment sustainability, rural
development, women empowerment etc. However, it could not
be spent due to setting up a new Hospital in Jolva Village, Dahej.
The Board of Directors in its meeting held on February 14, 2020
approved to start a 20 Bed Hospital with a causality/emergency
ward at a budgeted cost of the project is ' 600 lakhs which will be
funded from our CSR budget in the coming years. Eventually, over
the years, we will build a 50 Beds Hospital and School (hereinafter
referred as “Ongoing Project”).
Pursuant to Section 135(6) of the Companies Act, 2013, the
Company has transferred an amount of ' 270.50 lakhs in CSR
Unspent Account (FY 2022-23) on April 30, 2023. The said
amount shall be spent within a period of three financial years
from the date of such transfer for above Ongoing Project, failing
which, the Company shall transfer the same to a Fund specified
in Schedule VII, within a period of thirty days from the date of
completion of the third financial year.
During the financial year ended March 31, 2023, the Company/
Lala Govindramjee Charitable Society, an implementing agency,
bought land in Bharuch District, Gujarat for the purpose of
Ongoing Project at a cost of ' 368.81 lakhs. In this regard, the
Company had transferred ' 229.06 lakhs from separate unspent
CSR Bank accounts (FY 2020-21 & FY 2021-22) including
interest accrued thereon to Lala Govindramjee Charitable Society.
Details of the expenditure incurred towards CSR activities for the
financial year 2022-23 is annexed herewith as Annexure "A".
MEETINGS OF THE BOARD
Four (4) meetings of the Board of Directors were held during
the year. The details of which are given in the Corporate
Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, your
Directors state that:
i. in the preparation of the annual accounts for the financial
year ended March 31, 2023, the applicable accounting
standards have been followed and that there are no material
departures therefrom;
ii. they have selected such accounting policies and applied
them consistently and made judgments and estimates
that were reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at the end
of the financial year and of the profits of the Company for
that period;
iii. they have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance
with the provisions of Companies Act, 2013, for safeguarding
the assets of the Company and for preventing and detecting
fraud and other irregularities;
iv. they have prepared the annual accounts on a going
concern basis.
v. they have laid down internal financial controls to be followed
by the Company and that such internal financial controls are
adequate and are operating effectively; and
vi. that they have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such
systems are adequate and operating effectively.
SECRETARIAL STANDARDS
Your Directors state that applicable Secretarial Standards, i.e.
SS-1 and SS-2, relating to 'Meetings of the Board of Directors'
and 'General Meetings, respectively, have been duly followed by
the Company.
CORPORATE GOVERNANCE
The Corporate Governance Report and Management Discussion
& Analysis as per Schedule V of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 along with
Certificate regarding compliance of conditions of Corporate
Governance are annexed herewith as Annexure "B".
MANAGEMENT DISCUSSION & ANALYSIS
In terms of Regulation 34 of the SEBI (Listing Obligations and
Disclosure Requirements), Regulation, 2015, the Management
Discussion & Analysis is set out in this Annual report.
BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT
In recent years, the importance of addressing climate change,
promoting inclusive growth, and transitioning to a sustainable
economy has gained significant global attention. Investors
and stakeholders now expect companies to be responsible
and sustainable in their practices, placing equal importance on
reporting their performance on sustainability-related factors
alongside financial and operational performance.
As per the amendment to Regulation 34(2)(f) of the Listing
Regulations, 2015 and the National Guidelines on Responsible
Business Conduct (NGRBC) issued by the Ministry of Corporate
Affairs, Government of India, the top one thousand listed
companies are required to prepare and present a Business
Responsibility and Sustainability Report (BRSR) to stakeholders.
This replaces the previous Business Responsibility Report (BRR)
and follows internationally accepted reporting frameworks such
as GRI, SASB, TCFD, and Integrated Reporting.
Starting from the financial year 2022-23, filing the BRSR has
become mandatory for the top 1000 listed companies based
on market capitalization, replacing the BRR. As of March 31,
2023, Our Company is ranked 834 at NSE and 855 at BSE based
on market capitalization. The BRSR requires listed entities to
disclose their performance against the nine principles of the
NGBRC, with reporting divided into essential and leadership
indicators. Essential indicators are mandatory to report, while
reporting leadership indicators is voluntary.
The Business Responsibility and Sustainability Report for the
financial year ended March 31, 2023 is attached with this
annual report.
AUDITORS
As per the provisions of Section 139 of the Companies Act 2013,
M/s Arun K. Gupta & Associates (Firm Registration No. 000605N)
was re-appointed as the Statutory Auditors to hold office for the
second term of five years commencing financial year 2022-23 to
hold office from the conclusion of the 32nd Annual General Meeting
of the Company till the conclusion of the 37th Annual General
Meeting to be held in 2027 on such remuneration plus GST, out-
of-pocket expenses etc. to be decided by the Board of Directors.
JOINT STATUTORY AUDITOR
In accordance with the provisions of Section 139 of the
Companies Act, 2013 read with Rule 6 of the Companies (Audit
and Auditors) Rules, 2014, Members of the Company in their
Annual General Meeting held on September 30, 2020, appointed
M/s R. N. Marwah & Co. LLP, (Firm Registration no. (001211N/
N500019), Chartered Accountants, as the Joint Statutory Auditor
of the Company for a term of five years commencing from the
Company's financial year 2020-21 to hold office from the
conclusion of the 30th Annual General Meeting of the Company
till the conclusion of the 35th Annual General Meeting to be held
in 2025 on such remuneration plus GST, out-of-pocket expenses
etc. as decided by the Board of Directors.
AUDITORS' REPORT
There are no qualifications, reservations or adverse remarks
made by M/s Arun K. Gupta & Associates, Statutory Auditors
and M/s R. N. Marwah & Co. LLP, Joint Statutory Auditor, in
their report for the Financial Year ended March 31, 2023. The
Statutory Auditors and Joint Statutory Auditor have not reported
any incident of fraud to the Audit Committee of the Company/
Central Government in the year under review.
COST AUDITORS
Your Company has appointed M/s Bahadur Murao & Co., (Firm
Registration No. 000008) a firm of Cost Auditors, for conducting
the audit of cost records for the financial year 2023-24 as the Cost
Auditor at a remuneration of ' 65,000 plus GST and out of pocket
expense subject to the approval of the Central Government and
Members at the ensuing Annual General Meeting.
SECRETARIAL AUDITOR
The Board has appointed M/s Siddiqui & Associate, Practising
Company Secretary, to conduct Secretarial Audit for the financial
year 2022-23. The Secretarial Audit Report for the financial year
ended March 31, 2023 is annexed herewith as Annexure “C".
The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
CONTRACTS AND ARRANGEMENTS WITH
RELATED PARTIES
All contracts/arrangements/transactions entered by the
Company during the financial year with related parties were in
the ordinary course of business and on an arm's length basis.
During the year, the Company had not entered into any contract/
arrangement/transaction with related parties which may be
considered as material in accordance with the policy of the
Company on materiality of related party transactions.
Pursuant to Section 134(3)(h) of the Companies Act, 2013 and
Rule 8(2) of the Companies (Accounts) Rules, 2014), Form No.
AOC-2 is annexed herewith as Annexure “D".
Policy for determining 'material' subsidiaries and the Policy on
related party transactions as approved by the Board may be
accessed on the Company's website www.filatex.com.
Your Directors draw attention of the members to Note no. 46 to
the financial statement which sets out related party disclosure.
STOCK EXCHANGE LISTING
Presently, the Equity Shares of the Company are listed on National
Stock Exchange and Bombay Stock Exchange. The Annual Listing
Fee for the year 2022-23 has been paid to the Stock Exchanges.
CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO
A statement relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to
be disclosed under the Companies Act, 2013, is annexed herewith
as Annexure “E".
PARTICULARS OF EMPLOYEES
During the year, no Employees of the Company received
remuneration more than ' 102.00 lakhs per annum or ' 8.50
lakhs per month if employed for part of the year except Shri
Madhu Sudhan Bhageria, Chairman & Managing Director, Shri
Purrshottam Bhaggeria & Shri Madhav Bhageria, Joint Managing
Director of the Company. Accordingly, information pursuant to
the provisions of Section 197(12) of the Companies Act read
with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is given in
Annexure “F".
Disclosures pertaining to remuneration and other details as
required under Section 197(12) of the Act read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and name and designation of Top
ten Employees in terms of remuneration drawn are annexed
herewith as Annexure “F".
VIGIL MECHANISM
In terms of Section 177 of the Companies Act, 2013 and SEBI
Regulations, the Company has formulated the Whistle Blower
policy/Vigil Mechanism. The Protected Disclosures should be
reported in writing by the complainant as soon as possible, not
later than 30 days after the Whistle Blower becomes aware
of the same and should either be typed or written in a legible
handwriting in English/Hindi/Gujarati and the same should
be addressed to the Vigilance Officer of the Company or in
exceptional cases, to the Chairman of the Audit Committee. The
Policy on Vigil Mechanism and whistle blower policy may be
accessed on the Company's website www.filatex.com.
During the year under review, no complaint was received from
any Whistle Blower. No personnel of the Company were denied
access to the Audit Committee. In this regard, Shri Ashok Chauhan,
Whole-Time Director is the Vigilance Officer of the Company.
RISK MANAGEMENT POLICY
Pursuant to Section 134(3)(n) of the Companies Act, 2013 & SEBI
Regulations, the Company has laid down Risk Management Policy to
inform Board members about the risk assessment and minimization
procedures which is also given in the Corporate Governance Report.
The Board of Directors don't foresee any elements of risk, which in
its opinion, may threaten the existence of the Company.
RISK MANAGEMENT COMMITTEE
The Company constituted the Risk Management Committee
consists of three Directors namely, Shri Madhu Sudhan Bhageria,
Chairman & Managing Director, Smt. Pallavi Joshi Bakhru,
Independent Director & Shri Ashok Chauhan, Executive Director
and one Senior Executive, Mr. Rajiv Kumar Kasturia, Senior Vice
President (Marketing) of the Company. Shri Madhu Sudhan
Bhageria is the Chairman of the Risk Management Committee.
The policy on Risk Management as approved by the Board is
uploaded on the Company's website www.filatex.com.
Your Company believes that several factors such as advancements
in technology, prevalent geo-political environment and stringent
regulatory and environmental requirements have consequential
impacts across the value chain of a business. These impacts are
likely to continue and intensify over time and for a business to be
sustainable, it needs to adapt to the environment by managing
risks and opportunities in a systematic manner.
The Board of Directors of the Company are responsible for risk
oversight functions. Risk Management Committee provide
guidance for implementing the risk management policy across
the organisation. The operation heads of each business units
are primarily responsible for implementing the risk management
policy of the Company and achieving the stated objective of
developing a risk intelligent culture that helps to improve the
Company's performance. The responsibility of tacking and
monitoring the key risks of the division/business unit periodically
and implementing suitable mitigation plans proactively is with
the senior executives of various functional units. These risk
owners are expected to avoid any undue deviations or adverse
events and ultimately help in creating value for the business.
PARTICULARS OF LOANS GIVEN, INVESTMENTS
MADE, GUARANTEES GIVEN AND SECURITIES
PROVIDED
Particulars of loans given, investments made, guarantees given
and securities provided along with the purpose for which the
loan or guarantee or security is proposed to be utilized by the
recipient are provided in the financial statement (Please refer to
Note No(s). 6,11 & 15 to the financial statement).
DISCLOSURE UNDER THE SEXUAL HARASSMENT
OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013
The Company has put in place and practiced an Anti Sexual
Harassment Policy in line with the requirements of The Sexual
Harassment of Women at the Workplace (Prevention, Prohibition
& Redressal) Act, 2013. Internal Complaints Committee (ICC) had
been set up to redress complaints regarding sexual harassment.
All Employees are covered under this policy. During the year
under review, the Company has not received any complaint under
the said Policy.
ANNUAL RETURN
The Annual Return for the financial year 2021-22 is available on
the website of the Company www.filatex.com.
GENERAL DISCLOSURES
Your Directors state that no disclosure or reporting is required
in respect of the following matters as there is no transaction on
these items during the year under review:
(i) Details relating to deposits covered under Chapter V of
the Act.
(ii) Issue of equity shares with differential rights as to dividend,
voting or otherwise.
(iii) Issue of shares (including sweat equity shares) to Employees of
the Company under any scheme save and except Employees'
Stock Options Schemes referred to in this Report.
(iv) The Company does not have any scheme of provision of
money for the purchase of its own shares by Employees or
by trustees for the benefit of Employees.
(v) No significant or material orders were passed by the
Regulators or Courts or Tribunals, which impact the going
concern status and Company's operations in future.
(vi) There is no Corporate Insolvency Resolution Process
initiated under the Insolvency and Bankruptcy Code, 2016
against the Company.
ACKNOWLEDGEMENTS
The Board of Directors is pleased to place on record its sincere
appreciation for the assistance, support and cooperation received
from its Bankers, Government Authorities, Dealers, Customers
and Vendor. Your Directors would like to record their sincere
appreciation for the dedicated efforts put in by all Employees,
their commitment and contribution ensuring smooth operations
that your Company has achieved during the year. The directors
also place on record their sincere appreciation for the confidence
reposed by the Members in the Company.
For and on behalf of the Board of Directors of
Filatex India Limited
MADHU SUDHAN BHAGERIA
Place: New Delhi Chairman & Managing Director
Date: August 04, 2023 D!N: 00021934
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