Filatex India Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting 31st Annual Report of the Company along 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) 2,22,715 2,78,207
Other income 946 1,242
Total Income 2,23,661 2,79,449
Profit before Finance Cost, Depreciation and Tax 35,680 23,455
Finance Cost 5,881 6,129
Depreciation & amortization expense 5,836 5,127
Profit/(Loss) before tax 23,963 12,199
Tax expense
- Current 6,138 2,129
- Deferred 1,242 (2,077)
Total Tax 7,380 52
Net Profit/(Loss) after tax 16,583 12,147
Other comprehensive income / (losses) 30 2
Total comprehensive income 16,613 12,149

DIVIDEND

The Board of Directors of the Company (the Board) has recommended final dividend of ? 0.40 (Forty Paisa) per equity share on 22,24,65,250 equity shares of face value Rs. 2 each for the year ended March 31, 2021. The dividend on equity shares is subject to the approval of the Shareholders at the ensuing Annual General Meeting of the Company. The dividend 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 (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") the Board of Directors of the Company in its meeting held on 27^ July, 2021 has formulated and adopted the Dividend Distribution Policy (DDP). The Dividend Distribution Policy is annexed to this report as Annexure "A" and is also available on the Companys website www.filatex.com

As per section 194 of Income Tax Act, a company is required to deduct TDS @ 10% on dividend payment if it exceed Rs. 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.

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

The Company went through a roller coaster year during the period in review. The year started with the outbreak of COVID-19 across the globe. Almost 2 months of complete lockdown nationwide and restriction of movement of people, good and service impacted the business operations of the Company, by way of interruption in production, supply chain disruption, shortage of skilled and unskilled workers, closure / lock down of production facilities etc.

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

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

In FY21, the Company achieved a turnover of INR 2,227.15 crores as compared to INR 2,782.07 crores in the previous year.

It achieved an EBIDTA of INR 347.35 crores in FY21 as compared to INR 222.13 crores in FY20, an increase of 56%. During the year under review, the Company earned a net profit after comprehensive income of INR 166.13 crores as compared to INR 121.49 crores 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 on account of being a value-added product with global demand.

The Company also successfully completed and commenced commercial operation of its captive rooftop solar power generation of 1.0 MW at Dahej and 0.4 MW at Dadra in December 2020.

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

With view of further scope for improvement in performance, the company has decided to increase its CP melt capacity by 50 TPD. This additional melt along with surplus chips volume will be utilized for manufacturing around 120 TPD of Polyester Partially Oriented Yarn 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 the plant 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 doesnt 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 February 12, 2016, granted 9,50,000 stock options ("options") of face value of Rs. 10 each [subsequently sub-divided into 47,50,000 shares of face value of Rs. 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 Rs. 37 per option (after sub-division, Rs. 7.40 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.

Further, the Nomination & Remuneration Committee had, at its meeting held on May 07, 2018, granted 4,30,000 stock options ("options") of face value of Rs. 10 each [subsequently sub-divided into 21,50,000 shares of face value of Rs. 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 Rs. 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 28th August, 2020, Members of the Company in their Annual General Meeting held on 30th September, 2020 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 Rs. 28.85 per option.

Diluted Earnings per share (EPS) taking the effect of issuance of options under Filatex ESOS 2015 had been calculated (refer Note No. 42 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, 2021 has been given in Note 52 of the Financial Statement.

SHARE CAPITAL

During the financial year 2021-22, the Company, on 12th April, 2021, allotted 8,04,500 Equity Shares of Rs. 2 each at an exercise price of Rs. 7.40 per share against exercise of Stock Options to the Employees of the Company under Filatex Employee Stock Option Scheme 2015 (Filatex ESOS-2015). Further, the Company, on 8th July, 2021, allotted 8,42,750 Equity Shares of Rs. 2 each at an exercise price of Rs. 28.85 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 Companys Issued & Paid-up Share Capital is Rs. 44,49,30,500 consisting of 22,24,65,250 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 by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting.

Shri Swarup Chandra Parija, Shri Suraj Parkash Setia and Smt. Pallavi Joshi Bakhru and Shri Brij Behari Tandon, 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.

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

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, Wholetime Director and Mr. 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 Companys 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, Shri Brij Behari Tandon and Mrs. Pallavi Joshi Bakhru, as members.

The Board, on the recommendation of CSR Committee, approved Rs. 231.02 Lakh being two percent of average net profits of Rs. 11,551 Lakh 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 2020-21 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 Rs. 120.06 Lakhs on Education, Swachh Bharat Abhiyan, Health facilities, Promotion of sports, making available safe drinking water, environment sustainability etc. However, it could not spend due to setting up a new Hospital in Jolva Village, Dahej. The Board of Directors in its meeting 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 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 Rs. 110.96 Lakh in CSR Unspent Account (FY 2020-21) on 30th April, 2021. 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.

Details of the expenditure incurred towards CSR activities for the financial year 2020-21 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 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 31st March, 2021, 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 Disclosure Requirements) Regulations, 2015 along with Certificate regarding compliance of conditions of Corporate Governance are annexed herewith as Annexure "C".

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 REPORT

In terms of Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements), Regulation, 2015, the Business Responsibility Report is set out in 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 appointed as the Statutory Auditors to hold office for a term of five years commencing from the Companys financial year 2017-18 to hold office from the conclusion of the 27th Annual General Meeting of the Company till the conclusion of the 32nd Annual General Meeting to be held in 2022 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 30th September, 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 Companys 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, 2021. 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 2021-22 as the Cost Auditor at a remuneration of Rs. 60,000 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 2020-21. The Secretarial Audit 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 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 arms 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 "E".

Policy for determining material subsidiaries and the Policy on related party transactions as approved by the Board may be accessed on the Companys website www.filatex.com.

Your Directors draw attention of the members to Note no. 48 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 2021-22 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 "F".

PARTICULARS OF EMPLOYEES

During the year, no employees of the Company received remuneration more than Rs. 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 Directors 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 "G".

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 "G".

VIGIL MECHANISM

In terms of the 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 Companys 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, 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 Board members about the risk assessment and minimization procedures which is also given in the Corporate Governance Report. The Board of Directors dont foresee any elements of risk, which 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 listed entities in terms of market capitalization is required to constitute a Risk Management Committee. Accordingly, the Board of the Directors in their meeting held on 27th July, 2021 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 will be Chairman of the Risk Management Committee.

The policy on Risk Management as approved by the Board is uploaded on the Companys 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 companys 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 & 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 FY2019-20 are available on the website of the Company www.filatex.com.

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 regret the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic. 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

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