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PBM Polytex Ltd.

BSE: 514087 Sector: Industrials
NSE: N.A. ISIN Code: INE501F01018
BSE 13:21 | 30 Nov 115.55 2.85
(2.53%)
OPEN

115.80

HIGH

118.95

LOW

111.45

NSE 05:30 | 01 Jan PBM Polytex Ltd
OPEN 115.80
PREVIOUS CLOSE 112.70
VOLUME 2013
52-Week high 199.00
52-Week low 100.10
P/E 6.35
Mkt Cap.(Rs cr) 80
Buy Price 115.55
Buy Qty 11.00
Sell Price 116.00
Sell Qty 1215.00
OPEN 115.80
CLOSE 112.70
VOLUME 2013
52-Week high 199.00
52-Week low 100.10
P/E 6.35
Mkt Cap.(Rs cr) 80
Buy Price 115.55
Buy Qty 11.00
Sell Price 116.00
Sell Qty 1215.00

PBM Polytex Ltd. (PBMPOLYTEX) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting the Hundred and SecondAnnual Report of the Company together with the Audited Standalone and ConsolidatedStatements of Accounts for the financial year ended 31st March 2021.

1. FINANCIAL PERFORMANCE :

(Rs. in Lakhs)

Particulars 2020-21 2019-20
Earnings Before Interest Depreciation and Tax (EBIDITA) 846.69 262.49
Less:- Interest and Financial Charges 60.47 65.30
Gross Profit 786.22 197.19
Less:- Depreciation 352.97 356.48
Profit Before Tax 433.25 (159.29)
Less:- Provision for Taxation (Net) 146.74 41.02
286.51 (200.31)
Add:- Deferred Tax Assets 27.80 173.65
Profit After Tax (PAT) 314.31 (26.66)
Add:- Other Comprehensive Income 22.46 46.97
Total Comprehensive Income for the year 336.77 20.31
Add:- Surplus brought forward (net after Buy back of shares) 2564.37 2593.85
Amount available for Appropriation 2901.14 2614.16
Less Appropriation:-
General Reserve 200.00 -
Dividend& Dividend Tax* - 49.76
Total Appropriation 49.76
Balance carried to Balance Sheet* 2701.14 2564.37

• Dividend Declared and paid in FY 2019-2020 for FY 2018-2019

2. DIVIDEND

Your directors have pleasure to recommend dividend @ of15% (i.e Rupee One and Paise Fifty) per equity share for the Financial Year 2020-21 onthis account Rs 103.19 Lacs will be appropriated from Reserves and Surplus. Payment ofdividend shall be subject to Income tax deduction at source wherever applicable.

3. TRANSFER TO RESERVES

Your directors have decided to transfer Rs. 20000000/- ( Rs TwoCrores) to General Reserve from profits.

4. CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business of the Company during thefinancial year 2020-21.

5. BUSINESS OPERATIONS / STATE OF COMPANY'S AFFAIRS

Crash down of economy of the country during the year under report iswell known to everyone. The GDP of the country fell down drastically because most of theindustries could not run at their full capacity on account of lockdown imposed by theCentral and State Governments right from the last week of March 2020 which continued atleast upto the middle of F.Y. 2020-21 more or less from one state to other. Our companycould not be an exception to this global as well as countrywide disaster. The Company'stwo units set up at Petlad (Gujarat) and Borgaon (M.P.) had to close down their productioncompletely for many days since last week of March 2020 on account of enforcing the lock:down (total shut down) by the Governments as an unavoidable measure to control COVID-19epidemic.

Not bowing down even before the worst adversities the managementpartially started production at its Petlad and Borgaon units from middle of April andmiddle of May 2020 respectively. Even after the best efforts by the management the twoyarn manufacturing units of the company could not run at their full capacity even uptomiddle of October 2020 because of heavy absenteeism of workers (labour shortage) lack ofpublic transport and other essential facilities.

The demand of Company's product i.e. cotton yarn drastically went downin local as well as foreign markets. The prices of yarn went down heavily because of nodemand. Thereafter somewhere from October onwards the situation gradually startedimproving but by then huge losses had occurred. The shortage of labour which preventedthe manufacturing unit to run at its full capacity though continued but the managementsomehow managed under adverse situation without letting its employees to suffer.

The financial results which are on your hand are mainly on account ofManagement's continuous and watchful efforts even under such adverse situation.

Our processed mercerized yarn (value added) was mainly consumed by thehandloom sector of Varanasi silk sarees. During the last lock down the handloom sectoralso suffered heavily and majority of the silk handlooms in Varanasi closed downpermanently. Thus the demand of our mercerized yarn has gone down drastically. Themercerized department of Petlad unit of the company is now running at very low capacity of10-15%. The running of this department at this capacity does not look viable andtherefore the Board of Directors has decided to close down the yarn processing andmercerized department and also the related Reeling Department.

The recent spread up of second wave of COVID-19 since April 2021 hascaused worry and gives gloomy picture of future. Fortunately lock down has not beenenforced and things do not look so dangerous. It is hoped that financial results will notbe affected much adversely. The management is determined to face any situation and willleave no step to come out of any problem.

The Company has been got registered and achieved Status under theMicro Small and Medium Enterprises Development Act with a view to achieve possiblebenefits.

6. INDEPENDENT DIRECTORS' DECLARATION

All the Independent Directors of the Company have given theirdeclarations that they meet the criteria of Independence as prescribed under section 149{6) of the Companies Act 2013 ("the Act").

7. DIRECTORS

In accordance with the provisions of Section 152 of the Act andArticles of Association of the Company Shri Krishan Kumar Patodia (DIN:00027335) and ShriGopal Patodia (DIN:00014247)Directors of the Company retire by rotation at the ensuingAnnual General Meeting ("AGM") of the Company and being eligible offerthemselves for re-appointment.

Neither of these two Directors are disqualified under Section 164(2) ofthe Act. Your directors recommend their appointment / re-appointment as such.

8. KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Sections 2(51) and 203 of the Act readwith Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the following persons are acting as Key Managerial Personnel of the Company:-

i. Shri Gopal Patodia : Managing Director
ii. Shri Mohan Kumar Patodia Managing Director cum Chief Financial Officer
iii. Shri Amit Patodia : Senior President cum Chief Executive Officer
iv. Ms. Swati Sharda : Company Secretary cum Compliance Officer

9. FORMAL ANN UAL EVALUATION

Pursuant to the provisions of Section 134(3)(p) the Act and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance Board's Committees as wellas Directors individually including performance of Independent Directors after seekinginputs from all the Directors/Committee members and finds it satisfactory.

10. BOARD MEETINGS

The Board of Directors have met four times during the financial year2020-21.

The details of Board Meetings held are disclosed in CorporateGovernance Report appended to Directors'

Report.

11. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the Provisions of Section 134(3)(c) of the Act yourDirectors confirm that -

1. in the preparation of annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures;

2. the accounting policies adopted are consistently applied andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit of the company for the said period;

3. proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the Company and for preventing & detecting errors&frauds and other irregularities;

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

5. internal financial controls {as required by explanation to section134(5)(e) of the Act) is being followed by the Company and that such internal financialcontrols are adequate and were operating effectively;

6. proper systems have been devised to ensure compliance with all otherapplicable laws and that such systems are adequate and operating effectively.

12. SHARE CAPITAL

There was no change in the authorized/issued or paid up share capitalof the company during the year.

13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186OF THE ACT

The Company has not given any loans or guarantees to any party.Investments in mutual funds made during the year have all been encashed. Short Termdeposits with banks have however been made- the details of which are given under Notepertaining to Cash and Bank Balances. All these investments including long terminvestments are within the limits prescribed under Section 186 of the Act.

The Company is holding 4600000 Preference Shares of Rs. 10/- eachaggregating to Rs. 4.60 Crores in M/s. Eurotex Industries & Exports Limited. The saidCompany since last more than three years due to inadequate profit/loss has not declaredDividend on Preference Shares.

14. INDUSTRIAL RELATIONS

During the year under review the Industrial relations remained cordialat both the Petlad and Borgaon Units of the Company.

15. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti-Sexual Harassment Policy in linewith the requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013. Internal Complaints Committee("Committee") has been set up to redress the complaints received regardingsexual harassment. During the year no complaints of this nature were received by theCommittee.

16. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required pursuant to section 197 (12) of the Act 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 is given in Annexure"A".

There is no Employee in the company who was / is drawing remunerationmore than managerial personnel nor there is any employee who has drawn remuneration morethan Rs. 102.00 Lakhs p.a. or 8.50 Lakhs p.m. as described under Rules Rule 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

17. SUBSIDIARY AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary Company. However the Companyholds 2231980 Equity Shares of Rs. 10/- per share and also 4600000; 6% Non-CumulativeNon-Convertible Redeemable Preference Shares of Rs. 10/- per share 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 at Kolhapur. Form AOC - 1 asrequired under section 129(3) of the Act is attached as Annexure "A(l)".

Accordingly the said M/s. Eurotex Industries and Exports Limited is anAssociate Company of our Company as defined under section 2(6) of the Act by virtue of thefact that our Company holds 25.5087% equity share of that Associate Company.

In pursuance of section 129 of the Act Consolidation of FinancialStatements of our Company and the associate company has been done and accordingly theshare of our Company in Reserves and Surplus of the Associate Company upto the period31.03.2014 has been accounted and exhibited under the head "Reserves andSurplus" as Capital Reserves and the financial results for the financial years2018-19 and 2019 - 20 and the results from the F.Y. 2014-15 to 2020-21 have beenincorporated in Consolidated Statement of Profit and Loss (of relevant years). Thecorresponding effect of the above has been given in the value of shares of the AssociateCompany held by us and has been shown under Note No. 4 of Balance Sheet of theConsolidated Balance Sheet under Investments (Non - Current). The working of the Mill ofthe said Company is at grinding halt due to the continuous illegal strike by the workerssince long and the company is suffering huge losses. The loans and dues of Banks andfinancial institutions have been fully paid. The portion of our company's share inprofit/losses of the associate company has been shown in Form AOC-1 as required under theAct.

18. RELATED PARTY TRANSACTIONS

All Related Party Transactions as entered into during the financialyear were at Arm's Length basis and were in ordinary course of business. No materiallysignificant related party transactions were done by the Company with Promoters DirectorsKey Managerial Personnel other designated persons or other related parties which mayhave potential conflict with the interest of the Company at large.

All related party transactions were approved by the Audit Committee aswell as the Board of Directors.

The summary of such transactions is given in Note No. 38 of 'Notesforming part of Accounts'.

The Policy on Related Party Transactions has been uploaded on theCompany's Website web-link of which is https://pbmpolytex.com/upload/investorrelations/8-policy-of-related-party-transactions-final.pdf.

Form AOC - 2 as required under section 134 (3) (h) of the Act read withrule 8(2) of the Companies (Accounts) Rules 2014 is attached as Annexure"A(2)".

19. DISCLOSURE ON CONSERVATION OF ENERGY TECHNOLOGY ABSORPTIONFOREIGN EXCHANGE EARNINGS AND OUTGO

In terms of Sub-section 3(m) of Section 134 of the Act 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. ANNUAL RETURN AND EXTRACT OF ANNUAL RETURN

As per provisions of Section 92 of the Companies Act 2013read withRules made thereunder a draft

Annual Return of the Company for the financial year 2020-21 isavailable on the website of the Company web-link of which ishttps://pbmpolytex.com/upload/investor relations/form-mgt-7-2020-21.pdf

21. CORPORATE SOCIAL RESPONSIBILITY ("CSR") POLICY

The Board of directors has amended the applicable Policies to bringthem in accordance with The SEBI regulation and keeping in view better corporategovernance

The CSR Policy has been placed on the Company's websitewww.pbmpolytex.com.The details in respect of CSR activities and expenditure forming partof the Directors' Report is attached as Annexure "C". Pursuant to MCANotification dated 22.01.2021 the CSR Committee is no longer required.

22. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has a well-defined Whistle Blower Policy and hasestablished Vigil Mechanism which provides adequate safeguards against victimisation ofReporting persons who follow such mechanism and also make provisions for direct access tothe Chairman of Audit Committee in appropriate cases. The Vigil Mechanism / Whistle BlowerPolicy has been placed on the Company's website www.pbmpolvtex.com.

23. POLICY ON NOMINATION AND REMUNERATION

In compliance with the requirements of Section 178of the Companies Act2013 and Regulation 19 of the SEBI {Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has laid down a Nomination and Remuneration policy whichhas been uploaded on the Company's website. The web-link for Nomination & RemunerationPolicy is https://pbmpolytex.com/upload/investor relations/7-nomination-and-remuneration-policv-final.pdf

The salient features of the NRC Policy are as under:-

a. ) Setting out the objectives of the Policy

b. ) Definitions for the purposes of the Policy

c. ) Policy for appointment and removal of Director KMP and SeniorManagement

d. ) Policy relating to the Remuneration for the Managerial PersonnelKMP

Senior Management Personnel & other employees

During the year the Company has made changes in the policy to bringthem in line with the amendments in the SEBI Listing Regulations 2015.

24. RISK MANAGEMENT POLICY

The Company has a structured Risk Management Policy. The RiskManagement Process is designed to safeguard the organization from various risks throughadequate and timely actions. It is designed to anticipate evaluate and mitigate risks inorder to minimize its impact on the business. The potential risks are inventoried andintegrated with the management process so that they receive the necessary considerationduring decision making. It is dealt with in greater details in the management discussionand analysis section.

25. COMMITTEES OF THE BOARD

The Company has already formed the following committees to ensuretimely compliances and better corporate governance of all the applicable rules andregulations:

1) Audit Committee 2) Nomination & Remuneration Committee and 3)Stakeholders Relationship Committee. The details about these committees are given in theCorporate Governance Report.

26. INSURANCE

All the properties of the Company including plant and machinery stocksetc. have been adequately insured. The Company has also taken adequate insurance cover forloss of profit and Standing Charges.

27. AUDITORS

A. Statutory Auditors

M/s. Rinkesh Shah &Co. Chartered Accountants (FRN: 129690W)Ahmedabad who were appointed as Statutory Auditors of the Company at the 101stAGM will continue as such for the term of five years.

B. Secretarial Auditors

Pursuant to the provisions of section 204 of the Act and the Companies{Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Samdani Shah and Kabra (CP 2863) a firm of Practicing Company SecretariesVadodara as Secretarial Auditors for the financial year 2021-22 to undertake SecretarialAudit of the Company. The Secretarial Audit Report for the financial year 2020-21 isannexed herewith as Annexure "D".

C. Cost Auditor

Shri B.C. Desai Cost Accountant (Membership No. 1077) who wasappointed for auditing cost records of the Company for the financial year 2020-21expressed his inability to conduct the cost audit for the said year and therefore to fillup the casual vacancy M/s. Y.S. Thakar & Co the Cost Accountant (FRN No- 000318)have been appointed as Cost Auditors to audit cost records and statements of the Companyfor the financial year 2020-21. The said M/s. Y. S Thakar & Co. has also beenappointed as Cost Auditor for audit of cost records and statements for the financial year2021-22 also. The proposed remuneration for the said two financial years as stated in thenotice of the ensuing Annual General Meeting is to be confirmed by the shareholders asrequired under section 148 of the Act.

Further the company has made and maintained proper Cost Records asspecified by the Central Government under Section 148 (1) of the Companies Act 2013 forits business activities carried out during the year.

D. Internal Auditors

Shri. Yegasubramaniam Iyer (Membership No-045781) CharteredAccountants Vadodara and M/s. Shah Baheti Chandak & Co (FRN: 109513W) CharteredAccountants Nagpur have been appointed as Internal Auditors for conducting internalaudit of Petlad and Borgaon Units of the Company respectively for the financial year2021-22.

Explanation or Comments on disqualifications reservations adverseremarks or disclaimers in the Auditors' Reports;

No disqualifications reservations adverse remarks or disclaimers havebeen reported in the Auditors' Reports requiring any explanation or comments by the Boardof Directors of the Company.

28. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSIONS&ANALYSIS REPORT

The Company has complied with all the applicable requirements ofCorporate Governance as stipulated in Regulations 17 to 27 and clauses (b) to (i) ofSub-Regulation (2) of Regulation 46of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A Separate Report on Corporate Governance and aCertificate obtained from M/s. Samdani Shah & Kabra Practicing Company Secretariesregarding compliance with the conditions of Corporate Governance and ManagementDiscussions &Analysis Report are annexed herewith with as Annexure "E" whichforms part of this Report.

29. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY

The Board of Directors of the Company has decided to close the YarnMercerizing and Reeling Departments of the Company for the reasons mentioned in clause 5 (Business operation) of this report. This department was running at very low capacity inthe last two -three years the profitability will hardly be affected.

No other material changes and commitments affecting the financialposition of the Company have occurred during the financial year and upto the date of thisReport.

30. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORSOR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS INFUTURE

No significant and/or material orders were passed by any Regulator orCourt or Tribunal impacting the going concern status and the Company's operations infuture.

31. INTERNAL CONTROL SYSTEMS

The Company has adequate internal control systems commensurate withthe size and scale of the Company. However looking to the need of the time it has beendecided to widen the scope of internal audit and accordingly internal auditors have beenappointed for Petlad as well as Borgaon units of the Company who submit their periodicalreports to the Board and their advices are adopted and needful is done if required forbetter control.

32. UNCLAIMED EQUITY SHARES AND DIVIDEND

Pursuant to the provisions of Section 124 of the Companies Act 2013("the said Act") the declared dividends which remained unpaid or unclaimed fora period of seven years have been duly transferred by the Company to the InvestorEducation and Protection Fund ("IEPF") established by the Central Governmentunder Section 125 of the said Act.

The Company has uploaded the details of unpaid and unclaimed amountslying in separate bank accounts named "PBM POLYTEX LIMITED UNPAID DIVIDENDACCOUNT" upto the financial year 2012-13 on the Company's website(www.pbmpolvtex.com) and also on the Ministry of Corporate Affairs' website:www.mca.gov.in.

The dividend for the years mentioned below if remain unclaimed forconsecutive seven years will be transferred by the Company to IEPF:-

Financial Year Date of Declaration of Dividend Unclaimed Dividend as on 31.03.2021 (Rs.)
2013-14 21.08.2014 555972.50
2014-15 24.09.2015 1356108.00
2015-16 24.09.2016 710817.00
2016-17 25.09.2017 758172.00
2017-18 18.09.2018 587482.00
2018-19 30.09.2019 100558.20
2019-20 No dividend declared 0.00
TOTAL 4069109.70

Pursuant to the provision of Section 124 (6) read with Rule 6 ofInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 (the "IEPF Rules") as amended all the shares in respect of whichdividend has/have remained unpaid or unclaimed for consecutive seven years have to betransferred in the name of IEPF Authority.

Accordingly 25634 equity shares against 49 folios corresponding to thedividend for the financial year ended 31st March 2013 which remained unclaimedfor seven consecutive years have been transferred to the IEPF Authority after givingindividual notices to the concerned shareholders and advertisement in Newspapers.

In aggregate 150929 equity shares against 998 folios have beentransferred to IEPF Authority against the dividend unpaid/unclaimed upto the FinancialYear 2012-13.

The Company has uploaded the details of all shares transferred to theIEPF Authority on the Company's website (www.pbmpolvtex.com) and also on the Ministry ofCorporate Affairs' website: www.mca.gov.in.

The shareholders or their legal successors can claim back the dividendand all equity shares so transferred from MCA after following the procedure laid down byMCA.

33. SECRETARIAL STANDARDS

All the applicable Secretarial Standards are being followed by theCompany.

34. DEPOSITS

The Company has not accepted or continued any public deposits ascontemplated under section 73 of the Act and the Companies (Acceptance of Deposits) Rules2014.

35. ACKNOWLEDGEMENTS

The bankers and financial institutions have extended their fullcooperation support and valuable assistance to the Company. Your Directors place onrecord their appreciation forthe same.

For PBM POLYTEX LIMITED For PBM POLYTEX LIMITED
GOPALPATODIA CHIRAYUSH PATEL
Place: Vadodara Managing Director Independent Director
Date: 30.06.2021 (DIN :00014247) (DIN :08690998)

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