DIRECTORS' REPORT To, The Members, PBM Polytex Limited 1. Your Directors have pleasure in presenting the Ninety Sixth Annual Report of the Company with the Audited Statements of Accounts for the year ended 31s' March 2015. 2. DIVIDEND Your Directors are pleased to recommend a Dividend @ 60 % (i. e. Rs. 6/- per share) on the paid up equity share capital of the Company for the year ended 31s' March 2015, which will absorb Rs. 587.03 lac including dividend distribution tax of Rs. 99.29 lac. 3. TRANSFER TO RESERVES Your directors propose to transfer Rs. 14 Crore to General Reserve out of the profits of the Company. 4. CHANGE IN THE NATURE OF BUSINESS There was no change in the nature of business of the Company during the Financial Year 2014-15. 5. STATE OF COMPANY'S AFFAIRS The prices of cotton, the main raw material, had gone up steeply during the greater part of the year. However, on the contrary, the prices of cotton yarn came down on account of fall in exports which put pressure on domestic prices also. The Company exports about 40 % of its production and the rupee getting stronger in terms of US Dollar also resulted in lower realisation of export yarn. The power cost also went up during the year mainly because of denial of permission by the Gujarat State Electricity Board for buying power from open market. All these factors, which were beyond the control of the management, were responsible for lower profitability during the year. The working results of the Company during the first quarter of the current year are satisfactory. 6. DIRECTORS / KEY MANAGERIAL PERSONNEL The Board of Directors has appointed Smt. Vinitadevi Modi and Shri M L Bagaria as additional directors of the Company in the category of Independent Directors with effect from 20.09.2014 and 09.02.2015 respectively. Proposals have been received from the shareholders for appointment of these directors as such at the ensuing Annual General Meeting for a period of consecutive five years. All Independent Directors have given declarations that they meet the criteria of Independence as laid down under section 149 (6) of the Companies Act, 2013 ("the Act") and Clause 49 of the Listing Agreement. The Board of Directors has, on the recommendation of the Nomination and Remuneration Committee, redesignated Shri Mohan Kumar Patodia as Managing Director cum Chief Financial Officer and Shri Amit Patodia as Senior President cum Chief Executive Officer. Shri Hari Prasad Siotia, retire by rotation at the 96th Annual General Meeting of the Company and being eligible, offers himself for reappointment. The directors recommend their re-appointment as proposed in the notice of the Meeting. None of the Directors is disqualified under Section 164(2) of the Companies Act, 2013. 7. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance as well as the directors individually including Independent Directors, the Audit Committee, Nomination and Remuneration Committee, CSR Committee and Stakeholders Relationship Committee. The result of the evaluation is satisfactory, adequate and meets the requirement of the Company. 8. NUMBER OF BOARD MEETINGS The details of Board Meetings are disclosed in Corporate Governance Report appended to Directors' Report. The Board of Directors have met five times and Independent Directors have met once during the year ended 31st March 2015. 9. 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 had been followed along with proper explanation relating to material departures; 2. the accounting policies adopted are consistently applied and made judgments and estimates 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 of the company for the year; 3. proper and sufficient care is being taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 financial controls (as required by explanation to section 134(5)(e) of the Act) is being followed by the Company and that such internal financial controls are adequate and were operating effectively; 6. proper systems are being devised to ensure compliance with the provisions of applicable laws and that such systems are adequate and operating effectively. 10. SHARE CAPITAL The paid up Equity Share Capital as on 31st March 2015 was Rs. 8,12,96,080/-. During the year under review, the Company has not issued any shares. 11. 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 - current investments amounting to Rs. 545.91 lac were made prior to the year 2014 - 15. Current investments amounting to Rs. 1899.37 Lac outstanding at the end of the year have been made in different mutual funds. These investments are exhibited in Note no. 13 and 15 respectively in the Balance Sheet. These investments are within the limits prescribed under section 186 of the Act. 12. INDUSTRIAL RELATIONS Industrial relations continued to be cordial during the year under review at both the manufacturing units of the Company except due to workers' strike at Petlad Unit, there was interruption in production for about 10 days during the month of May, 2014. 13. 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 line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. During the year, no complaints of sexual harassment were received. 14. PARTICULARS OF EMPLOYEES (ANALYSIS OF REMUNERATION) The information required pursuant to section 197 (12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of the employees of the Company are given in Annexure "A". 15. SUBSIDIARY AND ASSOCIATE COMPANIES There is no Subsidiary of the Company. However, M/s Eurotex Industries and Exports Limited (CIN : L70200MH1987PLC042598) is its Associate Company in the meaning of section 2(6) of the Act. Form AOC-1 as required under section 129(3) of the Act is attached as Annexure "A(1)". 16. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on Arm's Length Basis and were in the ordinary course of business. No materially significant related party transactions were made by the Company with Promoters, Directors, Key Managerial Personnel, other designated persons or other related parties, which may have potential conflict with the interest of the Company at large. All related party transactions were placed before the Audit Committee from time to time and also before the Board for approval. The Policy on Related Party Transactions as approved and as adopted by the Board has been uploaded on the Company's Website at http://www.pbmpolvtex.com/attachments/article/47/related%20party.pdf. Form AOC-2 as required under section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) rules, 2014 is attached as Annexure "A(2)". 17. DISCLOSURE ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO In terms of Sub-section 3 (m) of Section 134 of Companies Act, 2013, particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure "B" forming part of this report. 18. EXTRACT OF ANNUAL RETURN The details forming part of the extract of Annual Report in Form MGT - 9 is annexed herewith as Annexure "C". 19. DIFFERENT POLICIES UNDER COMPANIES ACT, 2013 AND LISTING AGREEMENT The Company has approved the following policies and the same have been placed on the Company's website: A. Corporate Social Responsibility (CSR) Policy The details in respect of terms of reference, composition and meeting of CSR Committee is disclosed in Corporate Governance Report attached with Annual Report. A report on CSR activities, forming part of the Directors' Report, is attached as Annexure "D". B. Vigil Mechanism / Whistle Blower Policy The details about this policy are disclosed in Corporate Governance Report appended with Annual Report. C. Policy on Director's Appointment and Remuneration The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management Personnel and fixing their remuneration. The policy on Director's appointment and remuneration has been given in Corporate Governance Report which forms part of this report. D. Risk Management Policy The Company has a structured Risk Management Policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making. It is dealt with in greater details in the management discussion and analysis section. E. Review of operation of various Committees: The Company has already formed the following committees to ensure timely compliances of all the applicable rules and regulations: 1) Audit Committee, 2) Nomination & Remuneration Committee, 3) Corporate Social Responsibility Committee, and 4) Stakeholders Relationship Committee . The details about these committees are given in the Corporate Governance Report. 20. INSURANCE All the properties of the Company including plant and machinery, stocks etc. have been adequately insured. The Company has also taken adequate insurance cover for Loss of Profit and Standing Charges. 21. AUDITORS A. Statutory Auditors M/s. Mahendra N. Shah & Co., Chartered Accountants (FRN 105775W) Ahmedabad, the retiring Auditors, are eligible for reappointment as such for the said period of two years (i. e. for the financial year 2015 - 16 and 2016 - 17) as per section 139 (2) of the Act. They have given their consent and certificate of eligibility for appointment as such for the said period of two years. The Board of Directors request you to re-appoint them for the said period of two years and fix their remuneration. The observation of the Auditors in their report, together with the notes on Accounts, are self-explanatory and therefore, in the opinion of the Directors, do not call for any further explanation. 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 has appointed M/s Samdani Shah and Associates, a firm of Practicing Company Secretaries, Vadodara, as Secretarial Auditors for the year 2014-15 and also for the year 2015-16 to undertake Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure "E". The Company has appointed all the Key Managerial Personnel except Company Secretary. However, the Company has recruited one qualified member of the ICSI. C. Cost Auditor Shri B. C. Desai, the Cost Accountant (Membership No. M-1077), Ahmedabad has been appointed as Cost Auditor to audit cost records and statements of the Company for the year 2015-16. 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 to conduct the internal audit of the Company for the year 2015-16. 22. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT A Report on Corporate Governance and Management Discussion and Analysis as required under Clause 49 of the Listing Agreement and forms part of this Report, is annexed herewith as Annexure "F". 23. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements relate and the date of this Directors' Report. 24. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS 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 tribunal impacting the going concern status and the Company's operations in future. 25. INTERNAL CONTROL SYSTEMS The Company has adequate internal control systems, commensurate with the size and scale of the Company. Internal Auditors have been appointed for Petlad as well as Borgaon units of the Company who submit their periodical report to the Board and necessary advises are adopted and needful is done, if required for better control. 26. DEPOSITS The Company has not accepted or continued any public deposits as contemplated under Chapter V of the Act. 27. ACKNOWLEDGEMENTS All the employees of the Company, the bankers and financial institutions extended their full cooperation, support and valuable assistance to the Company. Your Directors place on record their appreciation for the same. For PBM POLYTEX LIMITED KRISHAN KUMAR PATODIA Chairman (DIN : 00027335) Place: Vadodara Date : 6th August 2015 |