Flexituff International Limited
The Board of Directors hereby presents its 25th Director's Report onbusiness & operations of your Company (the Company' or FIL') alongwithAudited Financial Statements (Standalone & Consolidated) for the financial year ended31st March 2018.
The Company's Financial Performance for the year ended 31st March 2018 issummarized below:
FINANCIAL RESULTS AND APPROPRIATION
Rs. (In Millions)
|_ ||Standalone ||Consolidated |
|Particulars ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Sales & other Incomes ||11866.09 ||13418.48 ||12622.82 ||14679.13 |
|Profit before Interest Depreciation & Tax ||1861.38 ||1844.35 ||1859.43 ||1842.11 |
|Profit before Tax ||9.07 ||75.64 ||(14.07) ||49.83 |
|Profit for the year / Balance available for Appropriation ||(23.44) ||73.98 ||(43.32) ||41.64 |
|Other Comprehensive Income ||4.46 ||2.51 ||4.46 ||2.51 |
|Total Other Comprehensive Income ||(18.98) ||76.49 ||(38.86) ||44.15 |
STATE OF COMPANY'S AFFAIRS
During the year under review the company has achieved consolidated total revenue andprofit before interest depreciation and tax of Rs. 12622.82 Millions and Rs. 1859.43Millions respectively as against total revenue and profit before interest depreciationand tax of Rs. 14679.13 Millions and Rs.1842.11 Millions respectively during theprevious financial year.
Further the company has achieved standalone total revenue and profit before interestdepreciation and tax of Rs. 11548.48 Millions and Rs. 1861.38 Millions respectively asagainst total revenue and profit before interest depreciation and tax of Rs. 13329.75Millions and Rs. 1844.35 Millions respectively during the previous financial year.
During the year under review Directors deem it proper to plough back the resources ofthe Company for its activities and therefore do not propose any dividend for theFinancial Year ended 31st March 2018.
The paid up Equity Share Capital as on 31st March 2018 was Rs. 248.8Millions divided into 24882806 shares of Rs. 10/- each.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review forms part of theAnnual Report.
AWARDS & CERTIFICATIONS
Company is certified for British Retail Consortium Certificate (BRC) ISO 9001:2015(for Quality Management System) ISO 14001:2015 (for Environmental Management) ISO22000:2005 (for Food and Safety Management) and OHSAS 18001:2007 (for Industrial Healthand Safety).
During the year under review Company achieved A Grade under Global Standard forPackaging & Packaging Material and the Company was inspected by a Qualified AIBInspector under requirements of AIB International and was announced to be on 925/1000.
The Company has received the Country's Highest Exporter Award for FIBC throughPLEXCOUNCIL Ministry of Commerce for 13 years in a row. The Company has also achievedrecognition from all its foreign buyers for its delivery and services. In geo-textilesector the Company has received appreciation for its unique products and new technologiesbeing introduced to solve the problems of the country especially related to floodprotection & water cleaning.
The credit rating assigned by ICRA Limited as on 31st March 2018 was "BBB+''rating for the Long term loan and "A2" for Short term Non-Fund BasedLimits which indicates "stable" outlook.
During the year under review the company has two new joint ventures namely FlexituffSailendra Kalita JV and Flexituff Pulin Borgohain JV.
Further a new wholly owned subsidiary has been incorporated during the year underreview namely Flexituff FIBC Limited. The Company has 3 Direct Subsidiaries 1 IndirectSubsidiary 6 Joint Ventures and 5 LLPs as on 31st March 2018. There are noassociate companies within the meaning of Section 2(6) of the Companies Act 2013("Act"). There has been no material change in the nature of the business of thesubsidiaries and Joint Ventures.
Nanofil Technologies Private Limited Flexituff FIBC Limited
Flexiglobal Holdings Limited Cyprus
Flexiglobal (UK) Limited UK
Flexituff Javed Ahmed LLP Flexituff Hi-Tech LLP Flexituff SA Enterprise LLP FlexituffSailendra Kalita LLP Ujjivan LUIT LLP
Budheswar Das Flexituff International Limited JV Sanyug Enterprises FlexituffInternational Limited JV Vishnu Construction Flexituff International Limited JV MayurKartick Barooah Flexituff International Limited JV Flexituff Shailendra Kalita JV
Flexituff Pulin Borgohain JV
Pursuant to the provisions of Section 136 of the Companies Act 2013 the Standalone andConsolidated Financial Statements of the Company along with relevant documents andseparate audited accounts in respect of subsidiaries are put up on the website of theCompany (www.flexituff.com) and shall be made available upon request of any member of theCompany interested in obtaining the same and shall also be kept for inspection on allworking days during business hours at the Registered Office of the Company and that ofthe Subsidiary Companies concerned. Company has formulated a policy for determiningmaterial subsidiaries which can be accessed at the belowlink:-(http://flexituff.com/wp-content/uploads/2016/11/Policies-and-Programme_Determining-Material-Subsidiary.pdf)Further pursuant to provisions of Section 129(3) of the Companies Act 2013 a statementcontaining salient features of the financial data of the Company's Subsidiaries &Joint Ventures is mentioned in Form AOC-1 as Annexure A of the board's report.
The Directors state that applicable Secretarial Standards i.e. SS-1
& SS-2 relating to "Meetings of the Board of Directors" and"General Meetings" respectively have been duly followed by the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that: a.) in the preparation of annual accounts for the yearended 31st March 2018 the applicable accounting standards had been followedalong with proper explanation relating to material departures. b.) the Directors haveselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the loss of the Companyfor that period. c.) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities. d.) the Directors have prepared the annual accounts on a goingconcern basis. e.) the Directors have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and are operatingeffectively; and f.) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
The report on Corporate Governance as stipulated under the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 ("Listing Regulations") forms anintegral part of this Report. The requisite certificate from the Practicing CompanySecretary confirming compliance with the conditions of Corporate Governance is attached tothe report on Corporate Governance.
RELATED PARTY TRANSACTION
There have been no materially significant Related Party Transactions between theCompany & the Directors Management Subsidiaries or relatives except for thosedisclosed in the Financial Statements. Accordingly particulars of Contracts orArrangements with Related Party Transactions referred to in Section 188(1) of the Act inForm AOC-2 does not form part of Directors' Report.
A Policy on Related Party Transactions as approved by the Board can be accessed on theCompany's website at: (http://www.flexituff.com/Investor/Policies%20and%20Programme/Policies%20and%20Programme_Related%20Party%20Transactions%20 Policy.pdf)
CORPORATE SOCIAL RESPONSILBILITY
The Corporate Social Responsibility Committee has formulated and recommended to theBoard a Corporate Social Responsibility Policy (CSR Policy) indicating the activities tobe undertaken by the Company which has been approved by the Board.
The CSR policy can be accessed on the Company's website at:(http://flexituff.com/wp-content/uploads/2018/02/Policies-and-Programmes-CSR.pdf) TheAnnual Report on CSR activities is annexed herewith marked as Annexure C to this Report.
In today's economic environment Risk Management is a very important part of business.The main aim of risk management is to identify monitor & take precautionary measuresin respect of the events that may pose risks for the business. The Board & AuditCommittee is responsible for reviewing the risk management plan and ensuring itseffectiveness. Major risks identified by the businesses and functions are systematicallyaddressed through mitigating actions on a continuing basis by keeping
Risk Management Report before the Board & Audit Committee periodically. The RiskManagement Policy can be accessed on the Company's website at:(http://flexituff.com/wp-content/uploads/2016/11/Policies-and-Programme_Risk-Management-Policy.pdf)
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Company has put in place an adequate system of Internal Financial Controlcommensurate with the size and nature of business which helps in ensuring the orderly andefficient conduct of its business. These systems provide a reasonable assurance in respectof providing financial and operational information complying with applicable statutessafeguarding of assets of the Company prevention & detection of frauds accuracy& completeness of accounting records and ensuring compliance with corporate policies.The Company has an Internal Audit Department with a dedicated Internal Audit Team which iscommensurate with the size nature & complexity of operations of the Company. TheInternal Audit Report is submitted to the Audit Committee on quarterly basis the AuditCommittee reviews the performance of internal audit function. The Audit Committee reviewsadherence to internal control systems and internal audit reports.
DIRECTORS / KEY MANAGERIAL PERSONNEL (KMPS)
The following changes occurred in the position of Directors/KMPs of the Company from 1stApril 2017 till the date of this report:
|Name of Director/ KMPs ||Date of Appointment/ (Cessation) ||Event |
|1. Mr. Akshay Tanna (DIN: 02967021) ||15/04/2017 ||Appointed as Additonal Director (representative of TPG Growth II SF Pte Ltd.) |
| ||(18/10/2017) ||Ceased to be Investor Nominee Director (representative of TPG Growth II SF Pte Ltd.) due to personal reasons |
|2. Mr. Bhuwan Modi ||30/05/2017 ||Appointed as Additional |
|(DIN: 02855329) || ||Independent Director |
|3 Mr. Akhilesh ||(30/05/2017) ||Ceased to be Whole Time Director due to pre-occupation. |
|Agnihotri || || |
|(DIN: 07637010) || || |
|4. Mr. Sharat Anand ||(30/05/2017) ||Ceased to be Independent Director due to personal and unavoidable circumstances |
|(DIN: 00083237) || || |
|5. Mr. Saurabh Kalani ||30/05/2017 ||Re-appointed asWhole- |
|(DIN: 00699380) || ||Time Director |
|6. Mr. Kevan John ||(13/06/2017) ||Ceased to be Independent Director due to medical reasons |
|Upperdine || || |
|(DIN: 01214264) || || |
|7. Mr. Anand ||24/07/2017 ||Appointed as Additional &Whole time Director |
|Khandelwal || || |
|(DIN: 07889346) || || |
|8. Mr. Parag Gupta ||24/07/2017 ||Appointed as Additional & Independent Director Ceased to be Independent Director due to his other full time commitments |
|(DIN: 06423095) || || |
| ||(13/03/2018) || |
|9. Mr. Ankur Thadani ||18/10/2017 ||Appointed as Bond- holder Nominee Director (representative of TPG Growth II SF Pte Ltd.) |
|(DIN: 03866737) || || |
| ||(27/02/2018) ||Ceased to be Bond- holder Nominee Director (representative of TPG Growth II SF Pte Ltd.) due to conflict of interest |
|10. Mr. Mayank Bajpai ||18/10/2017 ||Appointed as Investor Nominee Director (representative of TPG Growth II SF Pte Ltd.) |
|(DIN: 07713274) || || |
| ||(27/02/2018) ||Ceased to be Investor Nominee Director (representative of TPG Growth II SF Pte Ltd.) due to conflict of interest |
|11. Mr. Vishwarupe ||(18/10/2017) ||Ceased to be Bond- holder Nominee Director (representative of TPG Growth II SF Pte Ltd.) due to resignation from TPG |
|Narain || || |
|(DIN: 03394320) || || |
|12. Ms. Madhuri ||(13/02/2018) ||Ceased to be Company Secretary & Compliance Officer |
|Jethani || || |
|13. Ms. Khushboo ||13/02/2018 ||Appointment as Company Secretary & Compliance Officer |
|Kothari || || |
|14. Mr. Mahesh ||(30/05/2018) ||Ceased to be KMP due to his resignation from the Board |
|Sharma || || |
|(DIN: 07610685) || || |
|15. Mr. Ashish Jamidar ||14/08/2018 ||Appointed as Additional & Whole-Time Director |
|(DIN: 08196328) || || |
The Board placed on record its sincere appreciation for the invaluable contribution andguidance provided by all outgoing directors and Company Secretary during their tenures.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence prescribed under the Act and theListing Regulations.
The following policies can be accessed at website of the Company:-a.) Terms &Conditions for appointment of Independent Director(http://flexituff.com/wp-content/uploads/2017/09/Policies-and-Programe-Terms-Conditions.pdf)b) Nomination & Remuneration Policy(http://flexituff.com/wp-content/uploads/2017/08/Policies-and-Programe-Nomination-Remuneration-Policy.pdf)
DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT
In accordance with the provisions of the Act & Articles of Association of theCompany Mr. Saurabh Kalani (DIN: 00699380) Whole-Time Director of the Company retiresby rotation at the ensuing Annual General Meeting. The Board of Directors has recommendedhis re-appointment.
The Board of Directors on recommendation of the Nomination & Remuneration Committeehas appointed Mr. Ashish Jamidar (DIN: 08196328) as Additional & Whole-Time Directorof the Company w.e.f 14th August 2018 subject to the approval of members inthe ensuing Annual General Meeting.
Pursuant to the applicable provisions of the Companies Act 2013 and ListingRegulations the Board has carried out the annual performance evaluation of its ownperformance its Committees the Chairman of the Company and the Directors on the basis ofthe feedback received from all the Directors of the Company. Structured performanceevaluation questionnaire were circulated to the Directors for:
Directors' Self & Peer Level Evaluation;
Board Committees' Evaluation; and
The evaluation questionnaires broadly cover parameters such as their participation inboard meeting/other committee meeting relationship management knowledge & skilladherence to the applicable code of conduct for independent directors and maintenance ofconfidentiality etc.
The summary of rating given by all the directors on the structured performanceevaluation was placed before the Board of Directors.
M/s Kailash Chand Jain & Co. Chartered Accountants and M/s MSKA & Associates(formerly MZSK & Associates) Chartered Accountants were appointed as StatutoryAuditors of the Company for a term of 5 years & 3 years; respectively at the AnnualGeneral Meeting held on 22nd August 2017. They have confirmed that they arenot disqualified to become Auditors of the Company.
The Notes on Financial Statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.
M/s. Ritesh Gupta & Company Company Secretaries were appointed to conduct thesecretarial audit of the Company for the Financial Year 2017-18 as required under Section204 of the Companies Act 2013 and rules made thereunder. The Secretarial Audit Report forthe Financial Year 2017-18 forms part of the Annual Report as Annexure B to the Board'sReport. The Secretarial Audit Report does not contain any qualification reservation oradverse remark.
The Board has appointed M/s. Ritesh Gupta & Company Company Secretaries asSecretarial Auditor of the Company for the Financial Year 2018-19.
NUMBER OF MEETINGS OF THE BOARD
Five meetings of the Board of Directors were held during the year under review. Thedetails of meetings held and attendance of the Directors are detailed in the CorporateGovernance Report which forms part of this report.
The details pertaining to composition meetings and attendance of audit committee areincluded in the Corporate Governance Report which forms part of this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Loans Guarantees and Investments covered under Section 186 of the Companies Act 2013forms part of the Notes to the Financial Statements provided in this Annual Report.
The Company has a whistle blower policy/vigil mechanism to report genuine concerns orgrievances. The Whistle Blower Policy/ vigil mechanism has been posted on the website ofthe Company (http://www.flexituff.com/Investor/Policies%20and%20Programme/Policies%20and%20Programme_Vigil%20 Mechanism%20Policy.pdf).
CODE OF CONDUCT
The Board has laid down a code of conduct for Board members & Senior ManagementPersonnel as per Regulation 17 & 26 (3) of the Listing Regulations & has beenposted on the website of the Company (http://www.flexituff.com/Investor/Policies%20and%20Programme/Policies%20and%20Programme_Director%20 and%20Senior%20Management.pdf). All theBoard members & Senior Management Personnel have affirmed compliance with the saidcode of conduct for the year ended 31st March 2018. A declaration to thiseffect signed by the Whole-Time Director forms part of this Annual Report.
The Board has adopted the Insider Trading Policy in accordance with the requirements ofthe SEBI (Prohibition of Insider Trading) Regulations 2015.The Insider trading Policy ofthe Company covering code of practices and procedures for fair disclosure of UnpublishedPrice Sensitive Information and Code of Conduct for the prevention of Insider Trading hasbeen posted on the website of the Company.(http://www.flexituff.com/Investor/Policies%20and%20Programme/Policies%20and%20Programme_Insider%20 Trading-%20Schedule%20B.pdf). All theBoard members & KMPs have affirmed compliance with the said code of conduct for theyear ended 31st March 2018.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 136(1) of the Companies Act 2013 the Board'sReport is being sent to the shareholders without this annexure. Shareholders interested inobtaining a copy of the said annexure may write to Director or Company Secretary of theCompany.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
In compliance with Section 134 of The Companies Act 2013 read with Rule 8 of TheCompanies (Accounts) Rules 2014 a statement giving information regarding EnergyConservation Technology Absorption and Foreign Exchange earnings and out go is given inAnnexure D forming part of this Annual Report.
DEMATERIALISATION AND ELECTRONIC REGISTRAR
The equity shares of your Company are available for dematerialization with both NSDLand CDSL under ISIN INE060J01017. As on 31st March 2018 95.48% equity shareswere in demat form and remaining 4.52% equity shares were in physical form.
Our registrar for electronic connectivity with the National Securities DepositoryLimited (NSDL) and Central Depository Services Limited (CDSL) is Link Intime India PrivateLimited Mumbai.
HUMAN RESOURCE MANAGEMENT & INDUSTRIAL RELATION
Human Resource plays vital role in the Company. If finance is the blood of anyorganization then Human Resource is not less than pulse which keeps running production bytheir hard work day and night. Company focuses on creating best health and safetystandards and also has performance management process to motivate people to give theirbest output and encourages innovation and meritocracy. Personnel relation with allemployees remained cordial and harmonious at all levels throughout the year. Directorswish to place on record their sincere appreciations for the continued sincere and devotedservices rendered by all the employees of the Company.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (Act') and Rules made thereunder the Companyhas Internal Complaints Committees (ICC) who inquire into complaints of sexual harassmentand recommend appropriate action.
During the year under review no compliant was received from any employee of theCompany and hence no complaint was outstanding as on 31st March 2018.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith marked as Annexure Eto this Report.
NAME CHANGE OF THE COMPANY
It is proposed to change the name of the Company from "Flexituff InternationalLimited" to "Flexituff Ventures International Limited".
The proposed change has been approved by the Board of Directors subject to theapproval of members in the ensuing Annual General Meeting (AGM) Stock Exchanges (BSELimited & National Stock Exchange of India Limited) and Registrar of Companies.
The reason for the proposed change has been detailed in Notice of the AGM which formspart of the Annual Report.
MATERIAL CHANGES AFFECTING THE COMPANY
Please find below details of material change affecting the Company between the end ofthe financial year and date of this report:-
"Extension provided by the lender for repayment of FCCBs"
5.44% Foreign Currency Convertible Bonds (the "FCCBs") of USD 25 Millionissued to TPG Growth SF II Pte. Ltd. (TPG) convertible at the option of Bondholder intofully paid up equity shares of the Company at a price of Rs. 218/- per equity share weredue on 26th April 2018. On the request of the Company TPG extended the saidrepayment to 30th June 2018 and thereafter for a period of Forty-Eight (48)Months from 30th June 2018 on revised terms & conditions as mutuallyagreed between Company & TPG subject to due approval from RBI. Authorized Dealer hasapproved the same & approval from RBI is underway.
Board of Directors at its meeting held on 24th July 2017 had approvedseparation of its FIBC business (Pithampur) into a wholly owned subsidiary Company throughprocess of slump sale of FIBC division (Pithampur) of the Company including assetsliabilities/ obligations of whatsoever nature & employees which are specific to theFIBC division (Pithampur) on a going concern basis to a wholly owned subsidiary Company.
Company deals in major products i.e. FIBC & Technical textile / Geo Textile.
The said separation of two product businesses in 2 separate companies will result intounlocking of value of business & raising growth capital. The said process of slumpsale is awaiting approval from the lenders.
Directors state that no disclosure or reporting is required in respect of the followingmatters as there were no transactions on these items during the year under review:
Details relating to deposits covered under Chapter V of the Act.
Issue of Sweat Equity Shares to employees of the Company under any scheme
Details pertaining to Employee Stock Options (ESOPs) as no ESOPs were outstanding as on31st March 2018.
Issue of differential shares with voting rights as to dividend voting or otherwise
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future
No fraud has been reported by the Auditors to the Audit Committee or the Board.
The Board takes this opportunity to express its sincere appreciation for the excellentsupport and cooperation received from company's bankers investors customers suppliersstatutory authorities for their consistent support to the Company.
The Directors also sincerely acknowledge the outstanding support and services of theworkers staff and executives of the Company which have together contributed to theefficient operations and management of the Company.
|For and on behalf of the Board of Directors of || |
| ||Flexituff International Limited |
|Saurabh Kalani ||Anand Khandelwal |
|Whole-Time Director ||Whole-Time Director |
|(DIN: 00699380) ||(DIN: 07889346) |