Directors Report of Texplast Industries Ltd.

Mar 31, 2013

The Members

The Directors are pleased to present the 42nd Annual Report and the audited accounts for the financial year ended March 31, 2013.

FINANCIAL HIGHLIGHTS:

Rs. in lacs

Year Ended Year Ended Particulars 31.03.2013 31.03.2012

Sales & Others Income 9,993.13 7528.89

Profit before Financial Charges, Depreciation, Taxation and Prior Period Expenses. 918.75 739.26

Less: Financial Charges 562.75 371.49

Profit/(Loss) before Depreciation and Prior Period Expen. 355.99 367.77

Less: Depreciation 201.22 216.33

Profit/(Loss) before Prior Period Expenses. 154.77 151.44

Less: Prior Period Expenses 0.70 0.65

Profit/(Loss) for the Year Before Tax 154.07 150.79

Less : Provision for Income Tax 54.20 57.06

: Provision for Income Tax Relating of earlier years 2.19 (0.67)

: Provision for Deferred Tax (2.39) (4.88)

Net Profit / (Loss) After Tax 100.07 99.28

BUSINESS PERFORMANCE

The financial year 2012-13 proved to be a challenging year amidst global economic uncertainties and disturbances in many parts of the world. Despite these constraints and challenging environment, the Company performed reasonably well and the highlights of the performance are as under:

- Revenue from operations increased by 31.24% to Rs. 89.45 crores

- Exports decreased by 2.48% to Rs. 20.84 crores

- ProfitBeforeTaxroseby2.17%toRs.l.54crores

- Profit After Tax rose by 0.80% to Rs. 1.00 crore

DIVIDEND

In order to conserve profits, your Directors do not recommend any dividend.

FIXED DEPOSITS

The Company neither invited nor accepted any deposits from public during the year under review.

DIRECTORS

Mr. Amit Bothra, director, resigned during the year. Mr. Amit Bothra, an independent director, was also Chairman of the Audit Committee. The Board expresses its deep appreciation to the invaluable services rendered by him during his association with the Company.

Mr. P.V. Narayan, Director, retires by rotation at the ensuing annual general meeting. Being eligible, Mr. P.V. Narayan has desired of getting reappointed for another term. Members are requested to reappoint Mr. P.V. Narayan as director. Mr. Rajesh Bohra was appointed as an Additional Director at the Board Meeting held on 30th May 2013. In terms of his appointment, he holds Office upto the date of conclusion of the ensuing annual general meeting. The Company has received a notice u/s 257 of the Companies Act, 1956 from a member of Company proposing the candidature of Mr. Rajesh Bohra for the Office of director of Company. Members are requested to appoint Mr. Rajesh Bohra as a director of Company. The terms of appointment of Mr. Sukumar N. Shah and Mr. Rahul Shah are due for renewal at the ensuing Annual General Meeting. Members are requested to renew the terms of their appointment.

DIRECTORS''RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the directors hereby confirm that:-

a In the preparation of the annual accounts, the applicable accounting standards have been followed.

b Appropriate accounting policies have been selected and applied consistently (except as stated herein after) and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and the profit of the Company for that period.

c Proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities have been taken to the best of their knowledge and ability.

d The annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement, detailed report on Corporate Governance is annexed and forms part of this report.

CONSERVATION OF ENERGY, ETC.

As required under the provisions of Section, 217 (1) (e) of the Companies Act, 1956, information relating to conservation of energy, technical absorptions, foreign exchange earning and outgo is given in the Annexure'' A'' forming part of this report.

RISK MANAGEMENT

All the assets of the Company are adequately insured. The Company is taking adequate steps in minimizing risk in each transaction of exports either by taking ECGC cover and / or Letter of Credit etc.

INDUSTRIALRELATIONS

Industrial relations continued to be cordial. The Directors place on record their deep appreciation for the sincere and dedicated teamwork of all employees at all levels to meet the quality, cost and delivery requirements of the customers.

EMPLOYEES

Information in pursuance to Section 217(2A) of the Companies Act, 1956 regarding remuneration exceeding Rs. 5,00,000/- per month is given in the annexure forming part of this Report.

AUDITORS

The term of Office of M/s. R. Soni & Co., the Statutory Auditors of the Company, would expire at the ensuing Annual General Meeting. Members are requested to appoint auditors and also fix their remuneration.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the assistance and support extended by all the government authorities, Indian Overseas Bank, customers and suppliers of the Company. The Directors also express their appreciation for the dedicated and sincere services rendered by employees of the Company and confidence reposed by the shareholders.

Place Mumbai For and onbehalf of the Board

Date 30,h May, 2013

Regd.Office GutNo.39/40

Village :Nehroli,

Tal: Wada,

Dist: Thane. Sukumar N Shah

Chairman & Managing Director

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Mar 31, 2011

It gives immense pleasure to your Directors in presenting their 40th Annual Report on the working of the Company together with the audited statements of accounts for the year ended 31st March, 2011.

FINANCIAL HIGHLIGHTS: Rs. in Lacs

Year Ended Year Ended Particulars

31.03.2011 31.03.2010

Sales & Others Income 3310.21 2903.77

Profit before Financial Charges, Depreciation, Taxation and Prior Period 374.13 341.25 Expenses.

Less: Financial Charges 168.43 124.05

Profit/(Loss) before Depreciation and Prior Period Exps. 205.70 217.20

Less: Depreciation 104.35 76.40

Profit/(Loss) before Prior Period Expenses. 101.35 140.80

Less: Prior Period Expenses 1.52 15.52

Profit/(Loss) for the Period Before Tax 99.83 125.28 Less : Provision for Tax

: Current Tax 19.90 34.64 : Deferred Tax (7.21) 10.66

: Income Tax Relating of earlier years (4.73) 1.24

: MAT Credit Entitlement (0.27) NIL Net Profit / (Loss) After Tax 92.14 78.75

DIVIDEND

Your Directors have not recommended any dividend.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

(a) Industrial Structure & Development

The INR 140 bn. flexible bulk packaging industry that includes woven sacks, leno bags, wrapping fabric and flexible intermediate bulk container (FIBC) is growing at over 20% with FIBC containers expected to grow three fold in the next 5 years riding an increased industrial production and a shift toward higher-value containers offering enhanced performance and supply chain efficiency. In fact, the global slowdown has been an opportunity for the Indian FIBC manufacturers as the production cuts by the companies in Europe and USA has resulted in the sourcing shifting to India adding an important factor to the growth story.

Flexible intermediate Bulk Containers (FIBC) industry is very capable and highly developed. India manufacturers and the present output of the Indian FIBC industry is 125,000 MT per year valued at about Rs.1,350 crores. India has registered growth of 20% over the last lO years. Domestic demand in India is valued at about Rs.30 crores per annum. The country is a large player in the international FIBC business and ranks behind only China in the global supply scenario. The India FIBC industry exports over 95% of its output.

The $500 billion global packaging industry is multi-technology, multi product and multi process industry. Your company is focused on the $5 Billion FIBC segment. The FIBC industry is set to grow at about 10% globally and 13-15% per annum domestically over the next five years basically on account of growing demand for FIBC in end-use industry and growing acceptance of FI BC over other forms of packaging.

The Company manufactures FIBC Bags and woven sacks. More than 80% of the Company's turnover comprises of exports.

Indian Economy:

The Indian economy, on the back of improved agricultural output, strong private consumption, robust investment, and a pick-up in exports, has rebounded strongly with a GDP growth of 8.6 per cent in 2010-11. However, inflation has emerged as a major concern. While the GDP has shown a slight increase during the year 2010-11 as compared to the year 2009-10, the overall expectations of attaining the double digit GDP growth is still eluding India. The Ministry of Finance indicates that a growth of 9% is expected during the year 2011-12. Taking into consideration the continued tightening of monetary policy and further escalation in global oil prices, it is expected that India will be able to achieve a GDP growth rate of 8 to 8.5% during the financial year 2011-12. The Indian manufacturing industry had registered an overall growth of only 7.8% during April-February 2010-11 as against 10% seen during April-February 2009-10. The increase in inflation from 8.31% in February 2011 to 8.98% in March 2011, will affect the performance of most companies. The high interest rate regime is a compromise for high growth and not enough is being done to control inflation through supply side interventions. India needs to go towards a more balanced interest rate regime aligned to sustain the pace of growth.

60% of the domestic FIBC demand is due to the petrochemical and mineral industries. The petrochemical industry is expected to be one of the fastest growing end-use segments for FIBCs.

Packing materials made from textiles include wrapping fabric, polyolefin woven sacks, hessian (commonly known as jute) bags and FIBCs. Industries that predominantly use packaging textiles are increasingly switching to FIBC as it offers benefits over the hessian bags, such as lower cost, better protection of contents, ease in procurement of the required polymer grades and more convenient handling. Further, FIBCs are finding newer applications such as UN bags (for hazardous goods) and clean room bags (used for food products such as milk powder, starch, spices and bulk drugs). These are a small but growing proportion of the total domestic FIBC consumption.

(b) Review of Operations

The Company exports FIBC bags mainly to buyers from European and Scandinavian/American countries. The volatile Euro / Dollar, which remained so for the major part of the year under review and did not stabilize at all, affected the export sales realization. This had an adverse impact on the profit margins. The Company earned a lower pre-tax profit of Rs.99.83 lacs as against Rs.125.28 lacs of the corresponding previous year.

Jumbo Bags being a labour oriented product, It requires more labour and work space for production. During the year under review, your Company imported Multifilament Yarn Plant and successfully commenced production of Multifilament Yarn. Currently, major production is utilized for in-house consumption. As a result of which, purchase at higher rates have stopped. The Company has also started selling in small quantities and we will sell more in second half of 2011.

Export Recognition Award And Certification

It gives immense pleasure to inform our stakeholders that the Company has received an Award from the State Government of Maharashtra for appreciation towards export achievement in respect of plastic products for the year 2009-2010.

On the Export performance of past three years the Director General of Foreign Trade (DGFT) issued a certificate of recognition, status holder as " EXPORT HOUSE " in the month of November, 2010.

c) Future Prospects

The Company has successfully established its position in the export market, particularly in the European and Scandinavian / American countries. All out efforts are being made to penetrate more to the American market. The Company presently also exports to North America, but in smaller quantities.

The Company has already taken certain initiatives to induct newer cost-effective technology, thereby setting- up a level field to fight inundated competition.

The product mix the backdrop of better economic environment, is expected to result in augmenting sale revenue and enhancing market share.

(d) Opportunities, Threats & Challenges

India's FIBC is an emerging market, projected growth is about 20%. FIBCs are used to pack variety of material but now in western countries, Building material and fertilizers account for some 60% of FIBC sale. Other materials being transported in FIBC are Plastic resin, Bio Gases cake mixes, Detergents, Bentonite and all powder chemicals.

The per capita consumption of plastics in India is far lower compared to the worldwide figure.

The Indian FIBC is competitive in price compared to other developed countries.

The important challenge for the Company is to remain competitive.



For and on behalf of the Board

Place Mumbai

Date 5th Setember, 2011 Sukumar N Shah

Chairman & Managing Director

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Mar 31, 2010

The Directors hereby present their 39th Annual Report on the working of the Company together with the audited statements of accounts for the year ended 31- March, 2010.

FINANCIAL HIGHLIGHTS:

Rs. in lacs

Particulars Year Ended Year Ended 31.03.2010 31.03.2009

Sales & Others Income 2925.18 3110.78

Profit before Financial Charges, Depreciation,

Taxation and Prior Period Expenses. 350.59 508.65

Less : Financial Charges 133.39 169.08

Profit/(Loss) before Depreciation 217.20 339.57 and Prior Period Expen.

Less : Depreciation 76.40 56.75

Profit/(Loss) before Prior Period Expenses. 140.80 282.82

Less : Prior Period Expensps 15.51 2.62

Profit/f Loss) for the Period Before Tax 125.29 280.20

Less : Provision for Income Tax 35.88 32.82

: MAT Credit Entitlement NIL (32.83)

: Provision for Deferred Tax 10.66 121.22

: Provision for Frine Benefit Tax NIL 2.37

Net Profit/ (Loss) After Tax 78.75 156.62



DIVIDEND

Your Directors have not recommended any dividend.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the directors hereby confirm that:-

a In the preparation of the annual accounts, the applicable accounting standards have been followed.

b Appropriate accounting policies have been selected and applied consistently (except as stated herein after) and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and the profit of the Company for that period.

c Proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities have been taken to the best of their knowledge and ability.

d The annual accounts have been prepared on a going concern basis. DIRECTORS

The Board of Director in its meeting held on 28th October, 2009 have co-opted Mr. Rahul S. Shah as Additional Director. In the same meeting he was appointed as Whole Time Director. In pursuance to the provision of Section 260 of the Company Act, 1956, Mr. Rahul S. Shah will be vacating the office at the ensuring Annual General Meeting. The Company has received notice u/s 257 of the Company Act, 1956 from a member along with refundable deposit signifying herewith to propose the appointment of Mr. Rahul S. Shah as Director. The necessary resolutions for appointment of Mr. Rahul S. Shah as Director/ Whole Time Director shall be placed in the ensuing Annual General Meeting. The Board of Director in its meeting held on 8* May, 2010 has subject to necessary approvals re-appointed Mr. Sukumar N. Shah as Managing Director for a further period of three years.

To comply with the requirement of the Companies Act, 1956 and Articles of Association of the Company. Mr. Amit B. Bothra will retire at the forthcoming Annual General Meeting and being eligible, offer himself for reappointment

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement, detailed report on Corporate Governance is annexed and forms part of this report.

CONSERVATION ENERGY, ETC.

As required under the provisions of Section, 217 (1) (e) of the Companies Act, 1956, information relating to conservation of energy, technical absorptions, foreign exchange earning and outgo is given in the Annexure A forming part of this report.

RISK MANAGEMENT

All the assets of the Company are adequately insured. The Company is taking adequate steps in minimizing risk in each transaction of exports either by taking ECGC cover and / or Letter of Credit etc.

EMPLOYEES

Information in pursuance to Section 217(2A) of the Companies Act, 1956 regarding remuneration exceeding Rs.2,00,000/- per month is given in the annexure forming part of this Report.

AUDITORS

M/s. Lukad & Jain, Chartered Accountants, Auditors of the Company, would retire at the ensuing Annual General Meeting. However they are eligible for reappointment, Members are requested to appoint auditors and fix their remuneration.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the assistance and support extended by all the government authorities, Indian Overseas Bank, customers and suppliers of the Company. The Directors also express their appreciation for the dedicated and sincere services rendered by employees of the Company and confidence reposed by the shareholders.

Place Mumbai For and on behalf of the Board

Date 24th July, 2010

Regd. Office Gut No.39 / 40, Village : Nehroli, Tal : Wada, Dist : Thane. Sukumar N Shah Chairman & Managing Director