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Filatex India Ltd.

BSE: 526227 Sector: Industrials
NSE: FILATEX ISIN Code: INE816B01035
BSE 13:44 | 21 Mar 36.94 0.05
(0.14%)
OPEN

36.52

HIGH

37.20

LOW

36.52

NSE 13:34 | 21 Mar 36.95 0.05
(0.14%)
OPEN

37.20

HIGH

37.20

LOW

36.50

OPEN 36.52
PREVIOUS CLOSE 36.89
VOLUME 9896
52-Week high 69.20
52-Week low 36.25
P/E 10.93
Mkt Cap.(Rs cr) 1,636
Buy Price 36.86
Buy Qty 88.00
Sell Price 37.04
Sell Qty 381.00
OPEN 36.52
CLOSE 36.89
VOLUME 9896
52-Week high 69.20
52-Week low 36.25
P/E 10.93
Mkt Cap.(Rs cr) 1,636
Buy Price 36.86
Buy Qty 88.00
Sell Price 37.04
Sell Qty 381.00

Filatex India Ltd. (FILATEX) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting 31st Annual Report of the Companyalong with the Audited Financial Statements for the financial year ended March 31 2021.

FINANCIAL RESULTS:

(Rs. in lakhs)

Particulars 2020-21 2019-20
Total revenue (Turnover) 222715 278207
Other income 946 1242
Total Income 223661 279449
Profit before Finance Cost Depreciation and Tax 35680 23455
Finance Cost 5881 6129
Depreciation & amortization expense 5836 5127
Profit/(Loss) before tax 23963 12199
Tax expense
- Current 6138 2129
- Deferred 1242 (2077)
Total Tax 7380 52
Net Profit/(Loss) after tax 16583 12147
Other comprehensive income / (losses) 30 2
Total comprehensive income 16613 12149

DIVIDEND

The Board of Directors of the Company ('the Board') has recommended final dividend of ?0.40 (Forty Paisa) per equity share on 222465250 equity shares of face value Rs. 2 eachfor the year ended March 31 2021. The dividend on equity shares is subject to theapproval of the Shareholders at the ensuing Annual General Meeting of the Company. Thedividend once approved by Shareholders will be paid within prescribed time limit.

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Board of Directors of the Company in its meeting held on 27^ July2021 has formulated and adopted the Dividend Distribution Policy ('DDP'). The DividendDistribution Policy is annexed to this report as Annexure "A" and is alsoavailable on the Company's website www.filatex.com

As per section 194 of Income Tax Act a company is required to deduct TDS @ 10% ondividend payment if it exceed Rs. 5000/-. However no TDS shall be deducted in the caseof any dividend payment to Life Insurance Corporation General Insurance Corporation ofIndia 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 onpayment of Dividend to Non Resident.

TRANSFER TO RESERVES

During the year under review no amount has been transferred to the Reserves and theentire amount of profits has been retained in the profit and loss account.

OPERATIONS & EXPANSION

The Company went through a roller coaster year during the period in review. The yearstarted with the outbreak of COVID-19 across the globe. Almost 2 months of completelockdown nationwide and restriction of movement of people good and service impacted thebusiness operations of the Company by way of interruption in production supply chaindisruption shortage of skilled and unskilled workers closure / lock down of productionfacilities etc.

However the management took proactive steps to ensure sustainable operations goingforward. Initiatives such as COVID awareness social distancing COVID-19 trainingregular health check-ups and remote working were introduced to ensure the safety andhealth of all employees. With gradual ease of lockdown starting in mid-May the Companyrestarted its operations in the permissible manner with 30% capacity.

After facing a setback in the first half the company started its road to recovery inthe second half. It increased its production in line with demand and labour availabilityand reached optimal capacity utilization in September 2020. The Company experiencedunprecedented demand for yarn due to a quick and steady recovery of the downstream textilesector and sharp recovery of demand. The commencement of additional DTY capacity has alsocontributed to higher margins. The company ended the period in review on a high note withthe prices and margins remaining strong in the domestic market.

In FY21 the Company achieved a turnover of INR 2227.15 crores as compared toINR 2782.07 crores in the previous year.

It achieved an EBIDTA of INR 347.35 crores in FY21 as compared to INR 222.13crores in FY20 an increase of 56%. During the year under review the Company earned a netprofit after comprehensive income of INR 166.13 crores as compared to INR 121.49crores in the previous year resulting in an increase of 37%.

The Company commenced production of Drawn Textured Yarn (DTY) expansion in August 2020.This increase in texturizing has helped improve the overall margins of the Company onaccount of being a value-added product with global demand.

The Company also successfully completed and commenced commercial operation of itscaptive rooftop solar power generation of 1.0 MW at Dahej and 0.4 MW at Dadra in December2020.

Currently the Company is in the process of setting up a 30 MW Captive coal-basedThermal Power plant at Dahej. Upon completion of the project it will ensure that theDahej plant gets stable power along with savings in energy costs of around 40 croresannually.

With view of further scope for improvement in performance the company has decided toincrease its CP melt capacity by 50 TPD. This additional melt along with surplus chipsvolume will be utilized for manufacturing around 120 TPD of Polyester Partially OrientedYarn at Dahej plant. The company also plans to replace two existing POY lines (144 ends)with two new POY lines (192 ends) at the Dadra plant increasing the POY capacity of theplant by 5 TPD as well as further improving the quality of the yarn produced.

SUBSIDIARY COMPANY

During the year ended 31st March 2021 the Company doesn't have anysubsidiary. Therefore Statement containing salient features of the Financial Statement ofthe said Subsidiary Company is not required to be attached as required under the firstproviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules2014.

FILATEX EMPLOYEE STOCK OPTIONS SCHEME 2015

The Nomination & Remuneration Committee had at its meeting held on February 122016 granted 950000 stock options ("options") of face value of Rs. 10 each[subsequently sub-divided into 4750000 shares of face value of Rs. 2 each] to theeligible Employees of the Company under the Filatex Employee Stock Option Scheme 2015(Filatex ESOS-2015) at an exercise price of Rs. 37 per option (after sub-division Rs.7.40 per option) (being the closing price at BSE on February 11 2016 i.e. immediatelypreceding the grant date) each option being convertible into one Equity Share of theCompany upon vesting subject to the Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 and the terms and conditions of the Filatex ESOS2015.

Further the Nomination & Remuneration Committee had at its meeting held on May07 2018 granted 430000 stock options ("options") of face value of Rs. 10each [subsequently sub-divided into 2150000 shares of face value of Rs. 2 each] to theeligible

Employees of the Company under the Filatex Employee Stock Option Scheme 2015 (FilatexESOS-2015) at an exercise price of Rs. 211 per option (after sub-division ? 42.20 peroption) (being the closing price at BSE on February 11 2016 i.e. immediately precedingthe grant date) each option being convertible into one Equity Share of the Company uponvesting subject to the Securities and Exchange Board of India (Share Based EmployeeBenefits) Regulations 2014 and the terms and conditions of the Filatex ESOS 2015.

On the recommendation of Nomination & Remuneration Committee in its meeting held on28th August 2020 Members of the Company in their Annual General Meeting heldon 30th September 2020 approved the repricing of the outstanding employeestock options granted in 2nd Tranche under Filatex Employee Stock OptionScheme 2015 from Exercise price of ? 42.20 per option to Rs. 28.85 per option.

Diluted Earnings per share (EPS) taking the effect of issuance of options under FilatexESOS 2015 had been calculated (refer Note No. 42 of the Financial Statement). Disclosureunder SEBI (Share Based Employees Benefits) Regulations 2014 regarding details of theFilatex ESOS 2015 for the financial year ended March 31 2021 has been given in Note 52of the Financial Statement.

SHARE CAPITAL

During the financial year 2021-22 the Company on 12th April 2021allotted 804500 Equity Shares of Rs. 2 each at an exercise price of Rs. 7.40 per shareagainst exercise of Stock Options to the Employees of the Company under Filatex EmployeeStock Option Scheme 2015 (Filatex ESOS-2015). Further the Company on 8th July 2021allotted 842750 Equity Shares of Rs. 2 each at an exercise price of Rs. 28.85 per shareagainst exercise of Stock Options to the Employees of the Company under Filatex EmployeeStock Option Scheme 2015 (Filatex ESOS-2015).

Presently the Company's Issued & Paid-up Share Capital is Rs. 444930500consisting of 222465250 Equity shares of Rs. 2/- each.

DEPOSITS

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

DIRECTORS & KEY MANAGERIAL PERSONNEL

Shri Madhav Bhageria (DIN: 00021953) Joint Managing Director & CFO retires byrotation and being eligible offers himself for reappointment at the ensuing AnnualGeneral Meeting.

Shri Swarup Chandra Parija Shri Suraj Parkash Setia and Smt. Pallavi Joshi Bakhru andShri Brij Behari Tandon Independent Directors have confirmed that their names have beenenrolled in the Independent Directors' Databank.

The directors would like to confirm that the Company has received declaration from allthe Independent Directors confirming their independence as well as confirmation that"he / she is not aware of any circumstance or situation which exist or may bereasonably anticipated that could impair or impact his / her ability to discharge his /her duties with an objective independent judgement and without any externalinfluence". Accordingly requirement of Section 149(6) of the Companies Act 2013 andRegulation 16(1) (b) & Regulation 25 (8) of the Listing Regulations are duly compliedwith. Pursuant to the circular relating to the "enforcement of SEBI Order regardingappointment of directors by listed companies" dated June 20 2018 any director ofthe Company is not debarred from holding the office of director pursuant to any SEBIorder. Your directors would like to confirm that as per opinion of the Board of Directorsall the Independent Directors of the Company meet the requirement of integrity expertiseand experience (including the proficiency) required for their appointment.

Shri Madhav Bhageria Joint Managing Director has been appointed as a whole time ChiefFinancial Officer (CFO) w.e.f. 7th November 2020.

Pursuant to the provisions of Section 203 of the Act at present the Key ManagerialPersonnel of the Company are: Shri Madhu Sudhan Bhageria Chairman and Managing DirectorShri Purrshottam Bhaggeria Joint Managing Director & Shri Madhav Bhageria JointManaging Director & CFO Shri Ashok Chauhan Wholetime Director and Mr. Raman KumarJha Company Secretary of the Company.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI Regulations the Boardhas carried out an evaluation of its own performance the directors individually and theevaluation of the working of its Audit Nomination & Remuneration CommitteesStakeholders Relationship Committee and Finance & Corporate Affairs Committee. Themanner in which the evaluation has been carried out has been given in the CorporateGovernance Report.

REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committee hasframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Nomination & Remuneration Policy is available on the Company'swebsite www.filatex.com.

CORPORATE SOCIAL RESPONSIBILITY

As required under the Companies Act 2013 ("Act") the Corporate SocialResponsibility ("CSR") Committee consists of Shri Madhu Sudhan Bhageria as theChairman Shri Purrshottam Bhaggeria Shri Madhav Bhageria Shri Brij Behari Tandon andMrs. Pallavi Joshi Bakhru as members.

The Board on the recommendation of CSR Committee approved Rs. 231.02 Lakh being twopercent of average net profits of Rs. 11551 Lakh during preceding three financial yearsof the Company calculated in accordance with the provision of Section 198 of the CompaniesAct 2013 to be spent on CSR activities during the financial year 2020-21 in accordancewith CSR Policy which is available at the Company website www.filatex.com.

During the year under review the Company has incurred an expenditure of Rs. 120.06Lakhs on Education Swachh Bharat Abhiyan Health facilities Promotion of sports makingavailable safe drinking water environment sustainability etc. However it could not spenddue to setting up a new Hospital in Jolva Village Dahej. The Board of Directors in itsmeeting held on 14th February 2020 approved to start a 20 Bed Hospital with a causality/emergency ward at a budgeted cost of the project of Rs. 600 Lakhs which will be fundedfrom our CSR budget in the coming years. Eventually over the years we will build a 50Beds Hospital and School ("hereinafter referred as Ongoing Project").Pursuant to Section 135(6) of the Companies Act 2013 the Company has transferred anamount of Rs. 110.96 Lakh in CSR Unspent Account (FY 2020-21) on 30th April 2021. Thesaid amount shall be spent within a period of three financial years from the date of suchtransfer for above Ongoing Project failing which the Company shall transfer the same toa Fund specified in Schedule VII within a period of thirty days from the date ofcompletion of the third financial year.

Details of the expenditure incurred towards CSR activities for the financial year2020-21 is annexed herewith as Annexure "B".

MEETINGS OF THE BOARD

Four (4) meetings of the Board of Directors were held during the year. The details ofwhich 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 31stMarch 2021 the applicable accounting standards have been followed and that there are nomaterial departures therefrom;

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

iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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 andthat such internal financial controls are adequate and are operating effectively; and

vi. That they have devised proper systems to ensure compliance with the provisions ofall 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-2relating to 'Meetings of the Board of Directors' and 'General Meetings' respectivelyhave been duly followed by the Company.

CORPORATE GOVERNANCE

The Corporate Governance Report and Management Discussion & Analysis as perSchedule V of the SEBI (Listing Obligations Disclosure Requirements) Regulations 2015along with Certificate regarding compliance of conditions of Corporate Governance areannexed herewith as Annexure "C".

MANAGEMENT DISCUSSION & ANALYSIS

In terms of Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015 the Management Discussion & Analysis is set out inthis Annual report.

BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34(2)(f) of SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015 the Business Responsibility Report is set out in thisAnnual 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 appointed as the StatutoryAuditors to hold office for a term of five years commencing from the Company's financialyear 2017-18 to hold office from the conclusion of the 27th Annual GeneralMeeting of the Company till the conclusion of the 32nd Annual General Meetingto be held in 2022 on such remuneration plus GST out-of-pocket expenses etc. to bedecided by the Board of Directors.

JOINT STATUTORY AUDITOR

In accordance with the provisions of Section 139 of the Companies Act 2013 read withRule 6 of the Companies (Audit and Auditors) Rules 2014 Members of the Company in theirAnnual General Meeting held on 30th September 2020 appointed M/s R. N. Marwah &Co. LLP (Firm Registration no. (001211N/ N500019) Chartered Accountants as theJoint Statutory Auditor of the Company for a term of five years commencing from theCompany's financial year 2020-21 to hold office from the conclusion of the 30th AnnualGeneral Meeting of the Company till the conclusion of the 35th Annual General Meeting tobe held in 2025 on such remuneration plus GST out-of-pocket expenses etc. as decided bythe 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 StatutoryAuditor in their report for the Financial Year ended March 31 2021. The StatutoryAuditors and Joint Statutory Auditor have not reported any incident of fraud to the AuditCommittee 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 thefinancial year 2021-22 as the Cost Auditor at a remuneration of Rs. 60000 plus GST andout of pocket expense subject to the approval of the Central Government and Members at theensuing Annual General Meeting.

SECRETARIAL AUDITOR

The Board has appointed M/s Siddiqui & Associate Practising CompanySecretary to conduct Secretarial Audit for the financial year 2020-21. The SecretarialAudit Report for the financial year ended March 31 2021 is annexed herewith as Annexure"D".

The Secretarial Audit Report does not contain any qualification reservation or adverseremark.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis.

During the year the Company had not entered into any contract / arrangement /transaction with related parties which may be considered as material in accordance withthe 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 "E".

Policy for determining 'material' subsidiaries and the Policy on related partytransactions as approved by the Board may be accessed on the Company's websitewww.filatex.com.

Your Directors draw attention of the members to Note no. 48 to the financial statementwhich sets out related party disclosure.

STOCK EXCHANGE LISTING

Presently the Equity Shares of the Company are listed on National Stock Exchange andBombay Stock Exchange. The Annual Listing Fee for the year 2021-22 has been paid to theStock Exchanges.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement relating to conservation of energy technology absorption foreign exchangeearnings and outgo as required to be disclosed under the Companies Act 2013 is annexedherewith as Annexure "F".

PARTICULARS OF EMPLOYEES

During the year no employees of the Company received remuneration more than Rs. 102.00Lakhs per annum or ? 8.50 Lakhs per month if employed for part of the year except ShriMadhu Sudhan Bhageria Chairman & Managing Director Shri Purrshottam Bhaggeria &Shri Madhav Bhageria Joint Managing Directors of the Company. Accordingly informationpursuant 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) Rules2014 is given in Annexure "G".

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and name and designation of Top ten employees in termsof remuneration drawn are annexed herewith as Annexure "G".

VIGIL MECHANISM

In terms of the Section 177 of the Companies Act 2013 and SEBI Regulations theCompany has formulated the Whistle Blower policy/Vigil Mechanism. The ProtectedDisclosures should be reported in writing by the complainant as soon as possible notlater than 30 days after the Whistle Blower becomes aware of the same and should either betyped or written in a legible handwriting in English/Hindi/ Gujarati and the same shouldbe addressed to the Vigilance Officer of the Company or in exceptional cases to theChairman of the Audit Committee. The Policy on Vigil Mechanism and whistle blower policymay be accessed on the Company's website www.filatex.com.

During the year under review no complaint was received from any Whistle Blower. Nopersonnel of the Company were denied access to the Audit Committee. In this regard ShriAshok Chauhan Wholetime 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 Boardmembers about the risk assessment and minimization procedures which is also given in theCorporate Governance Report. The Board of Directors don't foresee any elements of riskwhich in its opinion may threaten the existence of the Company.

RISK MANAGEMENT COMMITTEE

As per recent amendment in SEBI (LODR) Regulations 2015 every top 1000 listedentities in terms of market capitalization is required to constitute a Risk ManagementCommittee. Accordingly the Board of the Directors in their meeting held on 27thJuly 2021 constituted the Risk Management Committee consists of three Directors namelyShri Madhu Sudhan Bhageria Chairman & Managing Director Smt. Pallavi Joshi BakhruIndependent Director & Shri Ashok Chauhan Executive Director and one seniorexecutive Mr. Rajiv Kumar Kasturia Senior Vice President ( Marketing) of the Company.Shri Madhu Sudhan Bhageria will be Chairman of the Risk Management Committee.

The policy on Risk Management as approved by the Board is uploaded on the Company'swebsite www.filatex.com.

Your company believes that several factors such as advancements in technologyprevalent geo-political environment and stringent regulatory and environmentalrequirements have consequential impacts across the value chain of a business. Theseimpacts are likely to continue and intensify over time and for a business to besustainable it needs to adapt to the environment by managing risks and opportunities in asystematic manner

The Board of Directors of the Company are responsible for risk oversight functions.Risk Management Committee provide guidance for implementing the risk management policyacross the organisation. The operation heads of each business units are primarilyresponsible for implementing the risk management policy of the company and achieving thestated objective of developing a risk intelligent culture that helps to improve thecompany's performance. The responsibility of tacking and monitoring the key risks of thedivision / business unit periodically and implementing suitable mitigation plansproactively is with the senior executives of various functional units. These risk ownersare expected to avoid any undue deviations or adverse events and ultimately help increating 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 providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the financial statement (Please refer to NoteNo(s). 6 & 15 to the financial statement).

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has put in place and practiced an Anti Sexual Harassment Policy in linewith the requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. Internal Complaints Committee (ICC) had been setup to redress complaints regarding sexual harassment.

All employees are covered under this policy. During the year under review the Companyhas not received any complaint under the said Policy.

ANNUAL RETURN

The Annual Return for FY2019-20 are available on the website of the Companywww.filatex.com.

ACKNOWLEDGEMENTS

The Board of Directors is pleased to place on record its sincere appreciation for theassistance support and cooperation received from its Bankers Government AuthoritiesDealers Customers and Vendor. Your Directors would like to record their sincereappreciation for the dedicated efforts put in by all employees their commitment andcontribution ensuring smooth operations that your Company has achieved during the year.The Directors regret the loss of life due to COVID-19 pandemic and are deeply grateful andhave immense respect for every person who risked their life and safety to fight thispandemic. The directors also place on record their sincere appreciation for the confidencereposed by the Members in the Company.

For and on behalf of the Board of Directors

Place: New Delhi Madhu Sudhan Bhageria
Date: 27th July 2021 Chairman and Managing Director
DIN:00021934

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