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PBM Polytex Ltd.

BSE: 514087 Sector: Industrials
NSE: N.A. ISIN Code: INE501F01018
BSE 00:00 | 19 Jul 82.45 -0.55
(-0.66%)
OPEN

86.80

HIGH

86.95

LOW

82.00

NSE 05:30 | 01 Jan PBM Polytex Ltd
OPEN 86.80
PREVIOUS CLOSE 83.00
VOLUME 1993
52-Week high 123.80
52-Week low 76.10
P/E 9.39
Mkt Cap.(Rs cr) 67
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 86.80
CLOSE 83.00
VOLUME 1993
52-Week high 123.80
52-Week low 76.10
P/E 9.39
Mkt Cap.(Rs cr) 67
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

PBM Polytex Ltd. (PBMPOLYTEX) - Director Report

Company director report

To

The Members

PBM Polytex Limited

Your Directors have pleasure in presenting the Ninety Eighth Annual Report of theCompany with the Audited Statements of Accounts for the year ended 31st March2017.

1. FINANCIAL RESULTS:

(Rs. in Lakhs)

2016 - 17 2015 - 16
Earning Before Interest Depreciation and Tax (EBIDITA) 1440.73 1746.27
Less: Interest and Financial Charges 135.01 259.45
Gross Profit 1305.72 1486.82
Less: Depreciation 352.10 384.36
Profit before Tax 953.62 1102.46
Less: Provision for Taxation 350.00 440.00
603.62 662.46
Add / (Less): Deferred Tax Liability / (Asset) (54.33) (13.38)
Profit for the year (PAT) 657.95 675.84
Add: Surplus brought forward 2160.88 2028.56
Amount available for Appropriation 2818.83 2704.40
Appropriation:
General Reserve 500.00 250.00
Proposed Dividend -- 243.87
Corporate Dividend Tax -- 49.65
500.00 543.52
Balance carried to Balance Sheet 2318.83 2160.88

2. DIVIDEND

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 ended31st March 2017 which will absorb Rs. 29351675/- including dividend distribution taxof Rs. 4964615/-.

3. TRANSFER TO RESERVES

Your Directors propose to transfer Rs. 50000000/- to General Reserve out of theprofits of the Company for the financial year 2016 - 17.

4. CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business of the Company during the financial year2016-17.

5. STATE OF COMPANY'S AFFAIRS

During the year under review the Company has earned Net Profit of Rs. 603.62 lakhsafter provision for Depreciation and Income Tax. Though this profit is not varying muchfrom the previous year the Company had a serious set-back on account of illegal strike bythe workers of the Petlad Unit of the Company for about three and half months during theperiod May 2016 to August 2016.

Since both the manufacturing units of the Company set up at Petlad (Gujarat) andBorgaon (Madhya Pradesh) are Spinning Cotton Yarn Units the financial results of theCompany were further adversely affected on account of continuous rise in cotton prices andweak exports from October 2016 and onwards.

The company's management however with its best possible efforts could overcome thelabour problem and also by keeping other cost of production in control could succeed inearning profits even in totally adverse situation. But since the beginning of the currentyear the situation of textile industry throughout the country is not satisfactory.

6. INDEPENDENT DIRECTORS' DECLARATION

All Independent Directors of the Company have given their declarations that they meetthe criteria of Independence as prescribed under section 149 (6) of the Companies Act2013 ("the Act").

7. DIRECTORS

In accordance with the provisions of Section 152 of the Act Shri Krishan Kumar Patodiaand Shri Gopal Patodia retire by rotation at the ensuing 98th Annual General Meeting ofthe Company and being eligible offer themselves for re-appointment.

None of these Directors are disqualified under Section 164(2) of the Act. Yourdirectors recommend their re-appointment at the ensuing Annual General Meeting.

8. KEY MANAGERIAL PERSONNEL

Pursuant to provisions of Sections 2(51) and 203 of the Act read with Rule 8 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 followingpersons are acting as Key Managerial Personnel of the Company as on 31st March 2017;

1. Shri Gopal Patodia

2. Shri Mohan Kumar Patodia

3. Shri Amit Patodia

4. Shri Mukesh Prajapat

9. FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board has carried out an annual performanceevaluation of its own performance Board Committees as well as Directors individuallyincluding performance of Independent Directors after seeking inputs from all theDirectors/Committee members. The result of the evaluation is satisfactory adequate andmeets 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 six times during the financial yearended 31st March 2017.

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 annual accounts the applicable accounting standards have beenfollowed along with proper explanation relating to material departures;

2. the accounting policies adopted are consistently applied 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 profit of thecompany for the said period;

3. proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities;

4. annual accounts have been prepared on a going concern basis;

5. internal financial controls (as required by explanation to section 134(5)(e) of theAct) is being followed by the Company and that such internal financial controls areadequate and were operating effectively;

6. proper systems have been devised to ensure compliance with the provisions ofapplicable laws and that such systems are adequate and operating effectively.

12. SHARE CAPITAL

The Issued Equity Share Capital of the Company as on 31st March 2017 was Rs.81300000/- and Paid Up Equity Share Capital was Rs. 81296080/-. During the yearunder review the Company 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. During the year theCompany had invested Rs. 5 Crore in 6% 5000000 Non-Convertible Non-Cumulative RedeemablePreference Shares of Rs. 10/- each of its Associate Company Ms. Eurotex Industries &Exports Ltd. The Company has also invested in 2231980 Equity Shares of the saidAssociate Company in earlier years. Investments of Rs. 97669190/- have also been madein different Mutual Funds. All the details of the investments are exhibited in Note Nos.13 and 16 of Balance Sheet and the same are within the limits prescribed under section 186of the Act.

14. INDUSTRIAL RELATIONS

The Petlad unit workers of the Company were on illegal strike from 14th May 2016 to22nd August 2016 causing loss of about 35 - 40% production during this period. Theyhowever after being convenienced and perused by the Management resumed their duty from23rd August 2016. The Industrial Relations thereafter are satisfactory. Industrialrelations continued to be cordial at Borgaon Unit of the Company.

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 Act read with Rule 5(2)and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 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 and also 5000000 6%Non-Cumulative Non-Convertible Redeemable Preference Shares of Rs. 10/- of M/s EurotexIndustries and Exports Limited (CIN : L70200MH1987PLC042598) having its registered officeat 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)".

The Equity Shares were acquired from the year 1992 - 93 onwards in different years attotal cost of Rs. 54590920/-. As a result shareholding of our Company in the EquityCapital of the said M/s Eurotex Industries and Exports Limited is 25.5087% and by virtueof this the said company becomes associate company as defined under section 2(6) of theAct.

In pursuance of section 129 of the Act Consolidation of Financial Statements of theCompany has been done and accordingly the share of our Company in Reserves and Surplus ofthe associate company upto the period 31.03.2014 has been exhibited under the head"Reserves and Surplus" as Capital Reserves and the losses for the financialyears 2015 - 16 and 2016 - 17 have been incorporated in Consolidated Statement of Profitand Loss. The corresponding effect of the above has been given in the value of shares ofthe associate company as shown under Note No. 13 of Consolidated Balance Sheet as Non -Current Investments.

18. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were atArm's 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 and approved bythe said Committee and also accorded its consent thereto.

The Policy on Related Party Transactions as approved and as adopted by the Board hasbeen uploaded on the Company's Website at http://www.pbmpolytex.com/attachments/article/47/related%20party.pdf. Form AOC - 2 as required under section 134 (3) (h) of the Act read with rule8(2) of the Companies (Accounts) Rules 2014 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 Act read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 particulars relating toconservation 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 Act read with Rule 12(1) the Companies (Management and Administration)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 and Remuneration;

iv. Risk Management Policy;

v. Policy on Preservation of Documents and Archival of Documents;

vi. Policy for determination of materiality of events or information;

I. Corporate Social Responsibility (CSR) Policy

The details in respect of CSR Committee and separate report on CSR activities formingpart of the Directors' Report is attached as Annexure "D". The CSR Policy hasbeen placed on the Company's 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 Vigil Mechanism / Whistle BlowerPolicy have been placed on the Company's 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 Key Managerial Personnel andSenior Management Personnel and fixing their remuneration. The Policy on Nomination andRemuneration has been given in Corporate Governance Report which forms part of thisreport.

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 and 3) 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.

23. AUDITORS

A. Statutory Auditors

As per the provisions of the section 139(2) & (3) of the Act the tenure ofexisting Auditors M/s. Mahendra N. Shah & Co. Chartered Accountants ends at theensuing Annual General Meeting and the Company requires to appoint another StatutoryAuditors.

Accordingly the Audit Committee and the Board of Directors at their meetings held onSaturday the 5th August 2017 have recommended the Appointment of M/s. Chandulal M. Shah& Co. Chartered Accountants (FRN: 101698W) as Statutory Auditors of the Company fora period of 5 (five) years from the conclusion of this Annual General Meeting till theconclusion of the 103rd Annual General Meeting subject to the ratification by shareholdersat every Annual General Meeting and fixing their remuneration.

M/s. Chandulal M. Shah & Co. Chartered Accountants having Firm RegistrationNumber 101698W has given their consent to act as Statutory Auditors of the Companyconfirming that their appointment if made would be in accordance with the provision ofsection 139 and 140 of the Act read with the Companies (Audit & Auditors) Rules 2014and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

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 Kabra (Erstwhile known as M/s. Samdani Shah and Associates) a firm of PracticingCompany Secretaries Vadodara as Secretarial Auditors for the year 2017 - 18 to undertakeSecretarial Audit of the Company. The Secretarial Audit Report for the financial year 2016- 17 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 year2017 - 18. His proposed remuneration for the said year as stated in the notice of AnnualGeneral Meeting is to be confirmed by the shareholders as required under section 148 ofthe Act.

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 2017 - 18.

Explanation or Comments on disqualifications reservations adverse remarks ordisclaimers in the auditor's reports;

There have been no disqualifications reservations adverse remarks or disclaimers inthe auditor's reports requiring explanation 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 during the financial year to which the financial statements relate and thedate of this Directors' Report except illegal strike by the workers of Petlad unit of thecompany during the period from May 14 2016 to August 22 2016 which affected the Yarnproduction to great extent.

26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

No significant and/or material orders were passed by any regulator or court or tribunalimpacting the going concern status and the Company's 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 Borgaonunits of the Company who submit their periodical reports to the Board and necessaryadvices are adopted and needful is done if required for better control.

28. DEPOSITS

The Company has not accepted or continued any public deposits as contemplated undersection 73 of the Act and the Companies (Acceptance of Deposits) Rules 2014.

29. ACKNOWLEDGEMENTS

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
Place: Vadodara KRISHAN KUMAR PATODIA
Date : 5th August 2017 Chairman
(DIN : 00027335)

ANNEXURE "B" TO THE DIRECTORS' REPORT

ADDITIONAL INFORMATION AS REQUIRED UNDER SUB-SECTION 3 (M) OF SECTION 134 OF THE ACTAND RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014

(A) CONSERVATION OF ENERGY:

(a) Energy conservation measures taken:

There is always close monitoring of energy consuming equipments. Energy saving deviceshave been installed wherever necessary.

(b) Additional investments and proposals if any being implemented for reduction ofconsumption of energy.

The Company has replaced the existing Tube-lights by LED Tube-lights in the Factory.Energy Audit is being conducted every year with a view to find out the points if there isany loss of energy.

(c) Impact of measures at (a) and (b) for reduction of energy consumption andconsequent impact on the cost of production of goods:

By adopting above measures the Company has been able to maintain power factor atoptimum level.

(d) Total energy consumption and consumption per unit of production:

Details are provided in Form A annexed hereto.

(B) TECHNOLOGY ABSORPTION:

(a) Efforts made in technology absorption:

Details are provided in Form B annexed hereto.

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO:

(a) 1.) Activity relating to Exports:

Cotton Yarn Export.

2.) Initiative taken to increase exports:

Quality of yarn is maintained continuously with a view to keep the Overseas buyerssatisfied. The concerned Officers have been making Foreign Tours to visit the existing andalso new buyers to obtain orders.

3.) Developments of new export markets for products and services:

Efforts are continuously being made to increase export sales by remaining in continuoustouch with the foreign buyers.

4) Export Plan:

The company expects to increase exports.

(b) Total Foreign Exchange used and earned:

(Rs. in Lakhs)

Particulars 2016 - 17 2015 - 16
Foreign Exchange used 134.41 162.82
Foreign Exchange earned 6905.63 8137.37
For PBM POLYTEX LIMITED
Place : Vadodara KRISHAN KUMAR PATODIA
Date : 5th August 2017 Chairman
(DIN : 00027335)

REPORT ON CONSERVATION OF ENERGY ETC.

FORM A

Form for Disclosure of Particulars with respect to Conservation of Energy:-

PARTICULARS 2016 - 17 2015 - 16
(A) POWER AND FUEL CONSUMPTION:-
(1) ELECTRICITY :
(a) Purchased Units 33115878 37643496
Total Amount (Rs) 232920697 247655652
Rate/Unit (Rs) 7.03 6.58
(b) Own Generation
i. Through D. G. Sets - Units 8082 130631
Units per liter of Diesel Oil 3.39 3.36
Fuel Cost per Unit (Rs) Diesel Oil 16.29 18.09
ii. Through Steam Turbine/Generator
Units -- --
Units per Liter of Fuel Oil/Gas -- --
Cost/Unit -- --
(2) AGRO WASTE
Quantity (Tones) 739.37 951.18
Total Cost (Rs) 4205433 5358400
Average Rate Rs. per Tone 5688 5633
(3) L.D.O.(BOILER)
Quantity (Liter) - -
Total Amount (Rs) - -
Average Rate - -
(4) OTHER/INTERNAL GENERATION
Quantity - -
Total Cost - -
Rate/Unit - -
(B) CONSUMPTION PER UNIT OF PRODUCTION:-
1. Electricity (Unit per kg) 4.18 3.92
2. HSD (Per Kg. of Yarn) 0.01 0.01
3. Agro Waste (Kg./per Kg. of Yarn) 0.16 0.15
4. Others -- --
For PBM POLYTEX LIMITED
Place : Vadodara KRISHAN KUMAR PATODIA
Date : 5th August 2017 Chairman
(DIN : 00027335)