Your Directors have pleasure in presenting the Ninety Seventh Annual Report of theCompany together with the Audited Statements of Accounts for the year ended 31stMarch 2016.
1. FINANCIAL RESULTS:
(Rs. in Lacs)
|Particulars ||2015 16 ||2014 15 |
|Earnings Before Interest Depreciation and Tax (EBIDITA) ||1746.27 ||2390.32 |
|Less: Interest and Financial Charges ||259.45 ||324.23 |
|Gross Profit ||1486.82 ||2066.09 |
|Less: Depreciation ||384.36 ||388.80 |
|Profit Before Tax ||1102.46 ||1677.29 |
|Less: Provision for Taxation ||440.00 ||616.26 |
| ||662.46 ||1061.03 |
|(Add) / Less: Deferred Tax Liability / (Asset) ||(13.38) ||1.82 |
|Profit After Tax (PAT) ||675.84 ||1059.21 |
|Add: Surplus brought forward ||2028.56 ||3019.33 |
|Less: Transitional effect of depreciation of assets as on 01.04.2014 ||0.00 ||62.95 |
| ||2028.56 ||2956.38 |
|Amount available for Appropriation ||2704.40 ||4015.59 |
|Appropriation: || || |
|General Reserve ||250.00 ||1400.00 |
|Proposed Dividend ||243.87 ||487.74 |
|Corporate Dividend Tax ||49.65 ||99.29 |
| ||543.52 ||1987.03 |
|Balance carried to Balance Sheet ||2160.88 ||2028.56 |
Your Directors are pleased to recommend a Dividend @ 30% (i. e. Rs. 3/- per EquityShare) on the paid up equity share capital of the Company for the Financial Year ended 31stMarch 2016 which will absorb Rs. 29351675/- including dividend distribution tax ofRs. 4964615/-.
3. TRANSFER TO RESERVES
Your Directors propose to transfer Rs. 25000000/- to General Reserve out of theprofits of the Company for the financial year 2015-16.
4. CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of business of the Company during the Financial Year2015-16.
5. STATE OF COMPANYS AFFAIRS
Both the units of the Company established in Gujarat and Madhya Pradesh manufacture100% cotton yarn. About 40% of the Companys product is exported every year tovarious countries. During the year there was fall in Global prices and glut supply in theinternational market which hit not only our Company but the Textile Industry in thecountry as a whole. This heavy reduction in export sales not only affected theinternational yarn prices but in Indian market also the price of cotton yarn came down byabout 30 35% during the year. More so there is drastic increase in spinningcapacity over the past few years. Such spinning units gain many incentives under differentschemes reducing their net cost of production whereas such benefit is not available toother old Spinning Units like us.
Inspite of all the adverse effects under the prevailing circumstances the Company couldstand and achieve satisfactory financial results by keeping all costs under control.Realisation from electricity sales which though not so significant was just marginallyhigher than the previous year.
6. INDEPENDENT DIRECTORS DECLARATION
All Independent Directors of the Company have given the declaration that they meet thecriteria of Independence as prescribed under section 149 (6) of the Companies Act 2013("the Act").
In accordance with the provisions of Section 152 of the Companies Act 2013 Shri MohanKumar Patodia retires by rotation at the ensuing 97th Annual General Meetingof the Company and being eligible offers himself for re-appointment.
None of the Directors are disqualified under Section 164(2) of the Act.
8. KEY MANAGERIAL PERSONNEL
Pursuant to provisions of Sections 2(51) and 203 of Companies Act 2013 read with Rule8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014following persons are acting as Key Managerial Personnel of the Company as on 31stMarch 2016;
1. Shri Gopal Patodia
2. Shri Mohan Kumar Patodia
3. Shri Amit Patodia
4. Shri Mukesh Prajapat (w.e.f 08.02.2016)
9. FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance Board Committees as well as Directorsindividually including performance of Independent Directors after seeking inputs from allthe Directors/Committee members. The result of the evaluation is satisfactory adequateand meets the requirement of the Company.
10. BOARD MEETINGS
The details of Board Meetings are disclosed in Corporate Governance Report appended toDirectors Report. The Board of Directors have met four times during the financialyear ended 31st March 2016.
11. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the Provisions of Section 134(3)(c) of the Act your Directors confirm that
1. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures; 2. theaccounting policies adopted are consistently applied and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year and of the profit of the company for the saidperiod; 3. proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities; 4.annual accounts have been prepared on a going concern basis; 5. internal financialcontrols (as required by explanation to section 134(5)(e) of the Act) is being followed bythe Company and that such internal financial controls are adequate and were operatingeffectively; 6. proper systems have been devised to ensure compliance with the provisionsof applicable laws and that such systems are adequate and operating effectively.
12. SHARE CAPITAL
The Issued Equity Share Capital as on 31st March 2016 was Rs. 81300000/-and Paid Up Equity Share Capital was Rs. 81296080/-. During the year under review theCompany has not issued any shares.
13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The Company has not given any loans or guarantees to any party. Non - currentinvestments amounting to Rs. 54590920/- were made prior to the Financial Year 2015 16. Current investments amounting to Rs. 181715007/- outstanding at the end ofthe year have been made in different mutual funds. These investments are exhibited in Note13 and 16 respectively in the Balance Sheet. These investments are within the limitsprescribed under section 186 of the Act.
14. INDUSTRIAL RELATIONS
Industrial relations continued to be cordial at Borgaon Unit of the Company. Howeverillegal Go Slow tactics were adopted by workers of Petlad Unit of the Company during themonth of January 2016 for few days causing loss of production. The Petlad unit workers areagain on illegal strike since 14th May 2016 causing complete loss ofproduction. The Management is making efforts to educate and convince the workers to avoidto adopt such illegal action and to resume duty. However till the date of this reportthey have not reported on duty inspite of orders of Industrial Courts. It is hoped thatsituation will be normal in short time.
15. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee has been set up to redress complaints receivedregarding sexual harassment. During the year no complaints of sexual harassment werereceived by the Committee.
16. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to section 197 (12) of the Companies Act 2013 readwith Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of the employees of the Company are given in Annexure"A".
17. SUBSIDIARY AND ASSOCIATE COMPANIES
There is no Subsidiary of the Company.
The Company holds 2231980 equity shares of Rs. 10/- each of M/s Eurotex Industriesand Exports Limited (CIN : L70200MH1987PLC042598) having its registered office at 809 Raheja Chambers 8th Floor 213 Nariman Point Mumbai and Spinning Unit atKolhapur. Form AOC 1 as required under section 129(3) of the Act is attached as Annexure"A(1)".
These shares were acquired from the year 1992 93 onwards in different years.Total cost of the shares so acquired is Rs. 54590920/-. The total shareholding of ourCompany in the equity capital of the said M/s Eurotex Industries and Exports Limited is25.5086% and by virtue of this holding in the said company it becomes associate companyas defined under section 2(6) of the Companies Act 2013.
In pursuance of section 129 of the Companies Act 2013 Consolidation of FinancialStatements of the Company is to be done and accordingly the share of our Company inReserves and Surplus of the associate company upto the period 31.03.2014 has been includedunder the head Reserves and Surplus as Capital Reserves and the losses for the financialyears 2014 15 and 2015 16 have been incorporated in Consolidated Statementof Profit and Loss. The corresponding effect of the above has been given in the value ofshares of the associate company acquired under Note 13 of Non Current Investments.
18. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onArms Length basis and were in ordinary course of business. No materially significantrelated party transactions were done by the Company with Promoters Directors KeyManagerial Personnel other designated persons or other related parties which may havepotential conflict with the interest of the Company at large.
All related party transactions were placed before the Audit Committee from time to timeand also before the Board for approval. The Policy on Related Party Transactions asapproved and as adopted by the Board has been uploaded on the Companys Website athttp://www.pbmpolytex.com/attachments/article/47/related%20party.pdf. Form AOC 2 asrequired under section 134 (3) (h) read with rule 8(2) of the Companies (Accounts) Rules2014 is attached as Annexure "A(2)".
19. DISCLOSURE ON CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
In terms of Sub-section 3(m) of Section 134 of the Companies Act 2013 read with Rule12(1) of the Companies (Management and Administration) Rules 2014 particulars relatingto conservation of energy technology absorption foreign exchange earnings and outgo aregiven in Annexure "B" forming part of this report.
20. EXTRACTS OF ANNUAL RETURN
The details forming part of the extract of Annual Return required under Section134(3)(a) of the Companies Act 2013 read with Rule 12(1) the Companies (Management andAdministration) Rules 2014 in Form MGT 9 is annexed herewith as Annexure"C".
21. DIFFERENT POLICIES UNDER THE ACT AND SEBI (LISTING OBLIGATIONS AND DISCLOSURESREQUIREMENTS) REGULATIONS 2015.
The Company has approved the following policies:-i. Corporate Social Responsibility(CSR) Policy; ii. Vigil Mechanism / Whistle Blower Policy; iii. Policy on Nomination andRemuneration; iv. Risk Management Policy; v. Policy on Preservation of Documents; vi.Policy for determination of materiality of events or information.
I. Corporate Social Responsibility (CSR) Policy
The details in respect of terms of reference composition and meeting of CSR Committeeare disclosed in Corporate Governance Report attached with this Report. A separate reporton CSR activities forming part of the Directors Report is attached as Annexure"D". The CSR Policy has been placed on the Companys website.
II. Vigil Mechanism / Whistle Blower Policy
Your Company has a well-defined "Whistle Blower Policy" and has establishedVigil Mechanism to provide for adequate safeguards against victimisation of Directors andemployees who follow such mechanism and also make provisions for direct access to theChairperson of Audit Committee in appropriate cases. The details about this policy aredisclosed in Corporate Governance Report appended with Directors Report. The VigilMechanism / Whistle Blower Policy have been placed on the Companys website.
III. Policy on Nomination and Remuneration
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management Personneland fixing their remuneration. The policy on Nomination and Remuneration has been given inCorporate Governance Report which forms part of this report.
IV. Risk Management Policy
The Company has a structured Risk Management Policy. The Risk management process isdesigned to safeguard the organisation from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventoried and integrated with themanagement process so that they receive the necessary consideration during decisionmaking. It is dealt with in greater details in the management discussion and analysissection.
Review of operation of various Committees:
The Company has already formed the following committees to ensure timely compliances ofall the applicable rules and regulations:
1) Audit Committee 2) Nomination & Remuneration Committee 3) Corporate SocialResponsibility Committee and 4) Stakeholders Relationship Committee. The details aboutthese committees are given in the Corporate Governance Report.
All the properties of the Company including plant and machinery stocks etc. have beenadequately insured. The Company has also taken adequate insurance cover for Loss of Profitand Standing Charges.
A. Statutory Auditors
In compliance with the Companies (Audit and Auditors) Rules 2014 the Members at the96th Annual General Meeting of the Company have appointed M/s. Mahendra N.Shah & Co. Chartered Accountants (FRN 105775W) Ahmedabad as Statutory Auditors of theCompany to hold the office until the conclusion of 98th Annual General Meetingof the Company.
As required under the provisions of Section 139 of the Companies Act 2013 theirappointment as Statutory Auditors is subject to ratification by the Members at everyAnnual General Meeting. Accordingly Members are requested to ratify their saidappointment at the ensuing Annual General Meeting of the Company.
B. Secretarial Auditors
Pursuant to the provisions of section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed M/s. SamdaniShah and Associates a firm of Practicing Company Secretaries Vadodara as SecretarialAuditors for the year 2016 17 to undertake Secretarial Audit of the Company. TheSecretarial Audit Report for the financial year 2015 16 is annexed herewith as Annexure"E".
C. Cost Auditor
Shri B. C. Desai the Cost Accountant (Membership No. M-1077) Ahmedabad has beenappointed as Cost Auditor to audit cost records and statements of the Company for the year2016 17. His remuneration for the said year is to be confirmed by the shareholdersas required under section 148 of the Companies Act 2013.
D. Internal Auditors
M/s. Madanlal Sharma & Co. Chartered Accountants and M/s. Shah Baheti Chandak &Co. Chartered Accountants have been appointed as Internal Auditors for conductinginternal audit of the Company for the year 2016 17.
Explanation or Comments on disqualifications reservations adverse remarks ordisclaimers in the auditors reports; There have been no disqualificationsreservations adverse remarks or disclaimers in the auditors reports requiringexplanation or comments by the Board.
24. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
A Report on Corporate Governance and Management Discussion and Analysis as requiredunder Regulation 4(1) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms part of this Report and is annexed herewith as Annexure"F".
25. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year to which the financial statementsrelate and the date of this Directors Report except the loss suffered by the Companysince middle of May 2016 on account of complete stoppage of production by the workers ofPetlad Unit of the Copmany.
26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING
THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
No significant and/or material orders were passed by any regulator or court or tribunalimpacting the going concern status and the Companys operations in future.
27. INTERNAL CONTROL SYSTEMS
The Company has adequate internal control systems commensurate with the size and scaleof the Company. Internal Auditors have been appointed for Petlad as well as Borgaon unitsof the Company who submit their periodical report to the Board and necessary advices areadopted and needful is done if required for better control.
The Company has not accepted or continued any public deposits as contemplated undersection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014.
The bankers and financial institutions extended their full cooperation support andvaluable assistance to the Company. Your Directors place on record their appreciation forthe same.
| ||For PBM POLYTEX LIMITED |
| ||KRISHAN KUMAR PATODIA |
|Place : Vadodara ||Chairman |
|Date : 1st August 2016 ||(DIN : 00027335) |