Presenting Partner

Life Insurance Corporation of India

Moneycontrol

Budget 2022

Associate Partners:

  • Kotak Mutual Fund
  • Pharmeasy
  • Indiabulls
  • SBI

Presenting Partner

Life Insurance Corporation of India

Moneycontrol

Budget 2022

Technology Partner

Dell Technologies

Associate Partners

Kotak Mutual Fund
Pharmeasy
Indiabulls
SBI
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Spentex Industries Ltd.

BSE: 521082 | NSE: SPENTEX | Series: BZ | ISIN: INE376C01020 | SECTOR: Textiles - Spinning - Cotton Blended

BSE Live

Jan 27, 15:40
2.42 -0.12 (-4.72%)
Volume
AVERAGE VOLUME
5-Day
16,451
10-Day
82,223
30-Day
149,056
9,000
  • Prev. Close

    2.54

  • Open Price

    2.42

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    2.42 (68161)

NSE Live

Jan 27, 15:31
2.40 -0.10 (-4.00%)
Volume
AVERAGE VOLUME
5-Day
6,205
10-Day
22,492
30-Day
49,780
7,470
  • Prev. Close

    2.50

  • Open Price

    2.40

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

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Director’s Report

The Directors have pleasure in presenting the 15th Annual Report on the business and operations of the Company together with the Audited Annual Accounts for the year ended 31st March 2007. FINANCIAL RESULTS The highlights of the financial results are as under: Particulars 2006-07 2005-06 Consolidate Standalone Standalone Net Sales (Turnover) 897.50 737.79 352.25 Other Income 45.64 40.35 10.51 EBITDA 113.57 88.06 29.00 Financial charges 49.74 46.18 8.15 Depreciation 54.03 35.70 7.55 Prior period adjustment 0.71 0.00 0.00 Profit before tax (PBT) 10.51 6.18 13.30 Provision for current tax 0.70 0.70 1.12 Provision for deferred tax (4.77) 0.89 1.97 Fringe benefit tax 0.41 0.39 0.15 Profit after tax (PAT) but before Minority Int. 14.17 4.20 10.06 Minority Interest 1.58 0.00 0.00 Net Profit 12.58 4.20 10.06 PERFORMANCE The year under review was marked with mergers and acquisitions. During the year the Company acquired two Companies viz. Amit Spinning Industries Ltd. and Indo Rama Textiles Ltd. Subsequently indo Rama Textiles Ltd. was amalgamated with the Company in December 2006 vide order of the Honble High Court of Delhi dated 20th December 2006. In August 2006 Spentex Industries Limited, through its subsidiary, Spentex Tashkent Toytepa LLC has entered into an Asset Sale & Purchase Agreement with Tashkent-Toyetpa Tekstil Limited, a state controlled company in Uzbekistan and acquired its textiles business with a capacity of 220,000 spindles and 236 Air jet looms at USD 81 million to be paid in installments through Companys subsidiaries. During the year under review, the Company has achieved 154.79% increase in its consolidated revenues which stood at Rs. 897.50 crores compared to Rs. 352.25 crores in the previous year. The Companys consolidated Earning Before Interest, Depreciation and Tax (EBITDA) 3.9x times to Rs.113.57 crores over Rs 29.00 crores in the previous year. The Company has recorded a consolidated Profit after Tax of Rs. 12.58 Crores, an increase of 25.05 % over the previous year. The segment wise reporting of various business segments are provided in Note XXI of Notes to Accounts to the Audited Balance Sheet and also in Management Discussion & Analysis. DIVIDEND Considering the very large opportunity available and the Companys significant expansion and acquisition plans, the Directors do not recommend any dividend in the best interests of the company. FUTURE OUTLOOK AND STRATEGIES: While there are challenges to address, overall the prospects for the Indian textile industry are bright. India is the worlds second biggest textile manufacturer, right after China. India ranks just after China and the USA in the production and consumption of cotton. The Indian textiles industry has established its supremacy in cotton based products, especially in the readymade garments and home furnishings segment. Export of readymade garments from India amounted to US$ 8 bn in FY06 and are likely to amount to US$ 16 bn by the end of 2010, assuming a conservative growth of 15% per annum. According to estimates, investments in textiles are expected to touch USS 31 bn by 2010. This presents a large opportunity for the company given that yarn forms the backbone of the entire textile industry. The Companys strategy is to achieve global scale rapidly through value accretive acquisitions. The Companys endeavor is to acquire or build high quality manufacturing facilities in strategic regions across the world, where it can access raw materials at competitive costs, benefit from competitive energy costs, and avail of high quality infrastructure to access the most remunerative markets for its products. The Company believes that besides ensuring faster scaling up, this strategy will enable lower capital costs, high operating margins and within a reasonable period higher and sustainable return on the Companys capital ISSUE OF SHARES/DEBENTURES AND LISTING During the year under review the Company has issued and allotted the following equity shares: Date of Issue/ Shares Distinctive Numbers Nature of allotment Allotment Number 19.07.06 17,50,000 5,74,59,192 to Conversion of Warrants 5,92,09,191 by CVCI into equity shares 21.08.06 75,00,000 5,92,09,192 to 6,67,09,191 Issue and allotment of equity shares to QIBs under QIP 08.02.07 44,87,844 6,67,09,192 7,11,97,035 Shares allotted pursuant to Scheme of Amalgamation of M/s. Indo Rama Textiles Ltd. with Spentex Industries Ltd. in the ratio of 90 shares of Spentex Industries Ltd. against 100 shares of Indo Rama Textiles Ltd. Consequent upon the allotment of aforesaid shares, the paid-up capital of the Company stands increased to Rs.71,19,70,350/-The shares of ther Company have also been listed on NSE on 20th December 2006. The Company has issued 500 9% Secured Redeemable Nonconvertible Debentures of Rs.10,00,000/- each to UTI Bank Ltd. and the said debentures are listed on BSE. Another 500 9.18% Secured Redeemable Nonconvertible Debentures of Rs.10,00,000/- each were issued and allotted by erstwhile Indo Rama Textiles Ltd. to LIC Mutual Fund. Consequent upon the amalgamation of Indo Rama Textiles Ltd. with the Company, the repayment of the said Debentures has been taken over by the Company which are due for redemption on 19th July 2007. The equity shares of the Company continue to be listed on BSE & NSE. The Equity shares issued and allotted during the year, were also listed on BSE and NSE. There has been no default in paying the annual listing fees. CORPORATE GOVERNANCE A separate report on Corporate Governance is attached as a part of the Annual Report, along with the Certificate on compliance of Corporate Governance issued by a Company Secretary in practice is attached as annexure to this report. MANAGEMENT DISCUSSION AND ANALYSIS A report on management Discussion and Analysis is attached as a part of the Annual Report. DIRECTORS Mr. Pankaj Sharma, Mr. Deepak Diwan and Mr. Sitaram Parthasarathy retire by rotation and are eligible for re-appointment Mr. Amrit Agrawal was co-opted as an Additional Director on 28.04.2007. He holds such office until this Annual General Meeting and is eligible for re-appointment. In terms of Clause 49 of the Listing Agreement, the details of the Directors to be re-appointed are being provided in the Notice of the ensuing Annual General Meeting. AUDITORS M/s. Price Waterhouse, Chartered Accountants, the Statutory Auditors of the Company, retire at this Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be in accordance with section 224(1 B) of the Companies Act, 1956. The Board recommends their re-appointment. AUDITORS REPORT The Auditors Report read together with the Notes to Accounts is self-explanatory and do not call for any further explanation under Section 217(3) of the Companies Act, 1956. The security on the Debentures referred to in the Auditors Report were raised by the erstwhile Indo Rama Textiles Ltd. which merged with the Company pursuant to order of the Honble High Court of Delhi dated 20th December 2006, the maturity date in respect of the said Debentures is 19th July 2007. COST AUDITOR Pursuant to the directions of the Central Government Mr. Rajesh Goyal, Cost Accountant of M/s. K G Goyal & Associates, Cost Accountants appointed as Cost Auditor to conduct the audit of the Cost Accounts of the Company for the financial year ending 31st March, 2007 for the product Textile. MERGER OF INDO RAMA TEXTILES WITH THE COMPANY During the year under review, the Honble High Court, Delhi vide its order dated 20/12/2006 approved the Scheme of Amalgamation of Indo Rama Textiles Ltd. (IRTL) with the Company. As a result, IRTL a profit making listed Company has merged with the Company. Consequent upon that, the business of IRTL together with all its assets, liabilities were transferred to the Company with effect from April 01, 2006. Further, its authorized share capital has also merged with the authorized capital of the company which has now increased to Rs.121 Crores. This merger is bound to strengthen the financials of the Company though economy in scale of operations, creating a long term value for the investors. FIXED DEPOSITS The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under. SUBSIDIARIES The Company has following subsidiary/step-down subsidiary companies during the year under review: A. Subsidiaries 1. Amit Spinning Industries Ltd., India 2. Spentex (Netherlands) B.V., Netherlands 3. Spentex (Mauritius) Pvt. Ltd., Mauritius B. Step-down subsidiaries 1. Spentex Tashkent Toytepa LLC., Uzbekistan 2. Spentex (Cyprus) Pvt. Ltd., Cyprus 3. Spentex (Singapore) Pte. Ltd., Singapore In terms of the approval granted by the Central Government under section 212(8) of the Companies Act, 1956, reports of the Board of directors and Auditors, Balance Sheet and Profit & Loss Account of these subsidiaries/step-down subsidiaries have not been attached to the Balance Sheet of the Company. The Company believes that the consolidated annual accounts which form part of the annual report present a full and fair view of the state of affairs and the financial candition of the Company and its subsidiaries/step-down subsidiaries. The Company will make available the audited annual accounts and related details upon request by any member of the Company. These documents will also be available for inspection at the registered office of the Company during business hours. CONSOLIDATED FINANCIAL STATEMENT In accordance with the Accounting Standard 21 on consolidated financial statements read with Accounting Standard 23 on accounting for investments in associates, the directors provide the audited consolidated financial statements in the Annual Report. DIRECTORS RESPONSIBILITY STATEMENT: As stipulated under Section 217(2AA) of the Companies Act, 1956, the Directors hereby state and confirm a) That the preparation of the Annual Accounts, the applicable accounting standards have been followed along withproper explanations relating to material departures; b) That the Directors have selectedsuch accounting policies and applied them consistently and made judgment andestimates that are 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 Profit or Loss of the Company for that period; c). That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; d). That the Directors have prepared the annualaccounts on a going concern basis. PARTICULARS OF EMPLOYEES Information relating to employees of the Company, as required under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the employees who are in receipt of remuneration for the full year or part of the year as the case may be which, in aggregate was not less than the amount specified under section 217(2A) of the Companies Act, 1956 is attached herewith as Annexure - I. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure - A which form a part of the report. INDUSTRIAL RELATIONS The industrial relations during the year under review remained harmonious and cordial. The Directors wish to place on record their appreciation for the wholehearted co-operation received from all the employees at various units/divisions of the Company. APPRECIATION The Directors gratefully acknowledge the whole hearted support given by the customers, suppliers, shareholders, employees, central and state governments, financial institutions, banks, and we look forward to their continued cooperation and best wishes in our endeavour to steer the company towards greater heights. Annexure To the Directors Report Information Under Section 217(1)(e)of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and Forming part of the Directors Report for the year ended March 31, 2007. Thus the current year figures are not comparable with that of the previous year as previous year figures are given pre amalgamation of Indo Rama Textiles Ltd. A. CONSERVATION OF ENERGY : During the yearunder review further efforts were made to ensure optimum utilization of fuel and electricity. a. Energy conservation measurestaken : The Company is continuously taking efforts in energyconservation, energy saving tubes and electronic ballasts are continuously to be being installed in a phased maner for this purpose. B. TECHNOLOGY ABSORPTION : RESEARCH & DEVELOPMENT(R&D) 1. Specific areas in which R&D has been carried out by the Company: Identifying improvements to processes through properly documented systems to strengthen yarn quality, improve productivity and effective maintenance. 2. Benefits derived as result of the above R&D Effective utilization of resources and fulfillment of customers requirements. 3. Future plan of action: Widening of product range for improving profitability. 4. Expenditure on R & D. : a) Capital Rs. 259.22 Lacs b) Revenue Rs. 9.67 Lacs c) Total Rs. 269.34 Lacs d) Total R&DExpenditure as percentage of total turnover 36.51 % TECHNOLOGYABSORPTION, ADAPTATION AND INNOVATION : a) Efforts : Continuousimprovement to process through data analysis and tests, b) Benefits: Improvement in productivity and quality c)Technology imported during the last 5 years : None C. FOREIGN EXCHANGEEARNINGS AND OUTGO : a) Efforts : In Spite of Stiff Global Competition and reduced margins, we are continuing to put our best efforts in earning foreign exchange contributing to the national Ex-chequer, b)Earnings and Outgo : Particulars with regard to foreign exchange earnings and outgo appear in Schedule XX of the accounts Annexure I To the Directors Report Information Pursuant to Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules. 1975 and forming part of the directors report of the financial year ended 31st March, 2007. Name Age Qualifiction Date of Designation Gross Joining Remuneration L N Kaushik 40 M.Tech 19/05/2006 President 26,37,096 V K Jain 58 M.Tech 08/02/2007 President 4,37,500 Name Experience Last Employer Designation L N Kaushik 7 Abhishek Ind. Ltd. Vice President V K Jain 24 Alis Industries Ltd. President

Director’s Report