To,
The Members,
Your Directors have pleasure in presenting the Hundred and Fourth
Annual Report of the Company together with the Audited Standalone and Consolidated
Statements of Accounts for the financial year ended 31st March, 2023.
1. FINANCIAL PERFORMANCE
(Rs. in Lakhs)
| Particulars |
2022-23 |
2021-22 |
| Earnings Before Interest, Tax, Depreciation and Amortization
(EBITDA) |
459.92 |
3508.11 |
| Less:- Interest and Financial Charges |
57.00 |
91.78 |
| Profit before depreciation and tax |
402.92 |
3416.33 |
| Less:- Depreciation and Amortization |
346.83 |
328.54 |
| Profit Before Tax |
56.09 |
3087.78 |
| Less:- Provision for Taxation (Net) |
23.93 |
814.37 |
|
32.16 |
2273.41 |
| Add:- Deferred Tax Assets |
2.44 |
26.15 |
| Profit After Tax (PAT) |
29.73 |
2299.56 |
| Add:- Other Comprehensive Income |
91.97 |
40.09 |
| Total Comprehensive Income for the year |
121.70 |
2339.65 |
| Add:- Surplus brought forward |
1737.62 |
2701.16 |
| Amount available for Appropriation |
1859.32 |
5040.81 |
| Less :- Appropriation:- |
|
|
| General Reserve |
200.00 |
3200.00 |
| Dividend |
275.16 |
103.19 |
| Total Appropriation |
475.16 |
3303.19 |
| Balance carried to Balance Sheet |
1384.16 |
1737.62 |
• Dividend Declared and paid in FY 2022-23 for FY 2021-22.
2. DIVIDEND
Your Directors have decided not to declare any dividend for the
financial year 2022-23.
3. TRANSFER TO RESERVES
Your directors have decided to transfer Rs. 2,00,00,000/- (Rs. Two
Crores Only) 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 the
financial year 2022-23.
5. BUSINESS OPERATIONS / STATE OF COMPANYS AFFAIRS
During the financial year 2022-23, the performance of our Company has
been poor. Even though cotton prices have fallen steeply from its peak, simultaneously,
yarn prices also fell down steeply causing turmoil in the whole value chain. Export of
cotton yarn fell down by around 50%, creating a situation of surplus cotton yarn in the
Industry. Also because of such high volatility, demand by local consumers also steeply
declined. Due to high inflation in the last two years, discretionary buying by the
consumers at large has reduced. Fabrics and garments buying has also reduced. This in
effect has made surplus in cotton yarn supply, causing yarn prices to sharply decline.
Absenteeism at Petlad unit continues to be high. All-out efforts by H.R. department to
recruit and train new apprentices continues. Comparatively Borgaon Unit capacity
utilization is better around 85% to 90%, mainly because of accumulation of unsold
inventory and poor demand. The modernization work taken up at Borgaon unit is fully
completed successfully. Electricity charges at Petlad unit has sharply increased which we
are not able to pass on causing further losses. During the current year, the outlook still
appears very bleak. Export continues to be very dull around 50 % of previous year,
resulting in Surplus unsold inventories in the hand of the manufacturers due to poor
domestic demand. Besides which for the new cotton season, the Government of India has
announced 10% increase in minimum support prices of Kapas. It will be difficult to pass on
the increased raw material cost to the consumer. Immediate future appears to be bleak.
Only hope is export yarn may pick up and domestic demand may get restored. The Company is
taking all the steps to cut cost, whenever possible, to minimize our losses. During the
current year, in order to reduce cost of power, the Company proposes to set up 2-3 MW
Solar Power Plant costing between Rs. 3-4 Crores, which is envisaged to be put up in
Petlad Unit Mill premises, for which evaluation work is in progress, after which Company
proposes to proceed with this investment. Beside that one yarn conducting machine and its
building is proposed to be put up at Petlad at a cost of Rs. 60-70 Lakhs. The old machine
is more than 25 years old and needs to be replaced.
6. INDEPENDENT DIRECTORS DECLARATION
All the Independent Directors of the Company have given their
declarations 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 Companies Act,
2013 and Articles of Association of the Company, Shri Krishan Kumar Patodia (DIN:
00027335) and Shri Gopal Patodia (DIN: 00014247) Directors of the Company are liable to
retire by rotation at the ensuing Annual General Meeting ("AGM") of the Company
and being eligible, offer themselves for re-appointment.
Subject to the approval of members at the ensuing AGM, the Board of
Directors at its meeting held on 12th August, 2023, on recommendations of the Nomination
and Remuneration Committee, has proposed to re- appoint Shri Rakesh Todi (DIN: 08476512)
as Independent Director of the Company w.e.f. 13th August, 2024 for a further period of 5
consecutive years by way of special resolution.
Subject to the approval of members at the ensuing AGM by way of special
Resolution, on recommendations of the Nomination and Remuneration Committee
("NRC") the Board of Directors at its meeting held on 12th August, 2023, has
proposed to re-appoint Shri Gopal Patodia (DIN : 00014247) and Shri Mohan Patodia (DIN :
00035381) as Managing Directors of the Company w.e.f. 01.04.2024 for a further period of
three consecutive years and to approve their Remuneration as recommended and Board hereby
obtains the consent of Shareholders as required under Section 196 of the Act. Since both
of them have attained the age of 70 years since they are quite healthy and able to
discharge their duties very efficiently.
Shri Jugalkishore Todi, Independent Director has submitted his
resignation vide letter dated 20.04.2023, from the office of the Director due to his other
commitments and priority as a result, he could not spare time to contribute and continue
as director w.e.f. 20.04.2023. He was appointed as Director on the Board of Directors of
the Company w.e.f. 31st August, 2006 and reappointed as Independent Director for the
period of five consecutive years i.e. from 2nd August 2019 to 1st August, 2024. Board
appreciated his valuable services rendered to the company during his tenure as director.
Smt. Vinita Devi Modi, Independent Director has submitted her
resignation vide letter dated 14.07.2022, from the office of the Director due to her other
commitments and priority as a result, she could not spare time to contribute and continue
as director w.e.f. 14.07.2022. She was appointed as an Independent Director on the Board
of Directors of the Company w.e.f. 20th September, 2014 for the period of five consecutive
years i.e. upto 19th September, 2019 and was re-appointed as an Independent Women Director
on 30th September 2019 for the second the term of five consecutive years i.e. upto 19th
September 2024. Board appreciated her valuable services rendered to the company during her
tenure as director.
Ms. Amishal Modi (DIN: 09661312), was appointed as an additional
director by the Board in its meeting on 12th August, 2022 and appointed as
Independent Women Director by the shareholders in 103Rd AGM held on 28.09.2022, for the
period of five consecutive years.
The details in respect of qualification, area of expertise etc. of all
the above appointee directors are provided in annexure to the notice. You are therefore in
the interest of the company requested to accord your consent to these resolutions.
Neither of these Directors are disqualified under Section 164(2) of the
Act.
8. KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of Sections 2(51) and 203 of the Act read
with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, 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 ANNUAL EVALUATION
Pursuant to the provisions of Section 134(3)(p) of the Act and SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried
out an annual performance evaluation of its own performance, Boards Committees, as
well as, Directors individually including performance of Independent Directors, after
seeking inputs from all the Directors/Committee members and finds it satisfactory.
10. BOARD MEETINGS
The Board of Directors have met four times during the financial year
2022-23.
The details of Board Meetings held are disclosed in Corporate
Governance Report appended to Directors Report.
11. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the Provisions of Section 134(3)I of the Act, your
Directors confirm that
1. in the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to material
departures; 2. the accounting policies adopted are consistently applied and judgments made
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 said period; 3. proper and sufficient care has been 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 & 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 section
134(5)I of the Act) is being followed by the Company and that such internal financial
controls are adequate and were operating effectively; 6. proper systems have been devised
to ensure compliance with all other applicable 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 capital
of the company during the year.
13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
OF THE ACT
The Company has given inter corporate loan to Eurotex Industries &
Exports Limited i.e. its Associate Company, of Rs. 3,00,00,000/- (Rupees Three
Crores) at 7% rate of interest, by way of mortgage of land of the borrower company, by
executing loan agreement and equitable mortgage. Investments in mutual funds made during
the year have all been encashed. Short Term deposits with banks have, however, been made
the details of which are given under Note pertaining to Cash and Bank Balances. All these
investments including long term investments are within the limits prescribed under Section
186 of the Act.
There were no investments in equity/preference shares made during the
year under review. The company has not extended any Corporate Guarantee during the year
under review. Details of existing loans and investments covered under the provisions of
Section 186 of the Act are given in the notes to the Financial Statements.
14. INDUSTRIAL RELATIONS
During the year under review, the Industrial relations remained cordial
at 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 line
with the requirements of The Sexual Harassment of Women at the Workplace (Prevention,
Prohibition and Redressal) Act, 2013. Internal Complaints Committee
("Committee") has been set up to redress the complaints received regarding
sexual harassment. During the year, no complaints of this nature were received 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) 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 remuneration
more than managerial personnel nor there is any employee who has drawn remuneration more
than 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 Company
holds 22,31,980 Equity Shares of Rs. 10/- per share and also 46,00,000; 6% Non-Cumulative
Non-Convertible Redeemable Preference Shares of Rs. 10/- per share of Eurotex Industries
and Exports Limited (CIN : L70200MH1987PLC042598) having its registered office at 809
Raheja Chambers, 8th Floor, 213 Nariman Point, Mumbai and Spinning Unit at Kolhapur. Form
AOC 1 as required under section 129(3) of the Act is attached as Annexure "A
(1)".
Accordingly, the said Eurotex Industries and Exports Limited is an
Associate Company of our Company as defined under section 2(6) of the Act by virtue of the
fact that our Company holds 25.5087% equity share of that Associate Company.
In pursuance of section 129 of the Companies Act, 2013 including any
amendment and/or modifications thereof read with other applicable provisions of the
Financial Statements of our Company and the associate company has been consolidated and
accordingly, the share of our Company in Reserves and Surplus of the Associate Company
upto the period 31.03.2014 has been accounted and exhibited under the head "Reserves
and Surplus" as Capital Reserves, and the results from the F.Y. 2014-15 to 2022-23
have been incorporated in Consolidated Statement of Profit and Loss (of relevant years).
The corresponding effect of the above has been given in the value of shares of the
Associate Company held by us and has been shown under Note No. 5 of Balance Sheet of the
Consolidated Balance Sheet under Investments (Non
Current). The working of the Mill of the said Company is at grinding
halt due to the continuous illegal strike by the workers since long and the company is
suffering huge losses. The loans and dues of Banks and financial institutions have been
fully paid. The portion of our companys share in profit/losses of the associate
company has been shown in Form AOC-1 as required under the Act.
Eurotex Industries and Exports Limited, through its Board Meeting
conducted on 4th February, 2023, had decided to delist the Equity Shares of the Company
from BSE Limited. However, the Equity Shares of the Company continues to remain listed at
NSE.
18. RELATED PARTY TRANSACTIONS
All Related Party Transactions as entered into during the financial
year were at Arms Length basis and were in ordinary course of business. No
materially significant related party transactions were entered/effected/undertaken 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 approved by the Audit Committee, as
well as, the Board of Directors. The summary of such transactions is given in Note No. 40
of ‘Notes forming part of Accounts.
The Policy on Related Party Transactions has been uploaded on the
Companys Website, web-link of which is
https://pbmpolytex.com/upload/investor_lodr_reg/policy-on-related-party-transactions.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)".
During the year, the Company has made changes in the policy to bring
them in line with the amendments in the SEBI Listing Regulations, 2015.
19. DISCLOSURE ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS AND OUTGO.
In terms of Sub-section 3(m) of Section 134 of the Act read with Rule
12(1) of the Companies (Management and Administration) Rules, 2014, particulars relating
to conservation of energy, technology absorption, foreign exchange earnings and outgo are
given 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, 2013 read with
Rules made thereunder, a draft Annual Return of the Company for the financial year 2022-23
is available on the website of the Company, web-link of which is
https://pbmpolytex.com/upload/investor_lodr_reg/form-mgt-7-2022-2023.pdf
21. CORPORATE SOCIAL RESPONSIBILITY ("CSR") POLICY
The Board of directors has amended the applicable Policies to bring
them in accordance with the SEBI regulation and keeping in view better corporate
governance.
The CSR Policy has been placed on the Companys website
www.pbmpolytex.com.The details in respect of CSR activities and expenditure forming part
of the Directors Report is attached as Annexure "C". Pursuant to
MCA Notification 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 has
established Vigil Mechanism which provides adequate safeguards against victimisation of
Reporting persons who follow such mechanism and also make provisions for direct access to
the Chairman of Audit Committee in appropriate cases. The Vigil Mechanism / Whistle Blower
Policy has been placed on the Companys website www.pbmpolytex.com.
23. POLICY ON NOMINATION AND REMUNERATION
In compliance with the requirements of Section 178 of the Companies
Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company has laid down a Nomination and Remuneration policy which
has been uploaded on the Companys website. The web-link for Nomination &
Remuneration Policy is https://pbmpolytex.com/upload/investor_lodr_reg/7-nomination-
and-remuneration-policy-final-13022023.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 Senior Management
d.) Policy relating to the Remuneration for the Managerial Personnel, KMP, Senior
Management Personnel & other employees.
24. RISK MANAGEMENT POLICY
The Company has a structured Risk Management Policy. The Risk
Management Process is designed to safeguard the organization 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 so that they receive the necessary consideration
during decision making. It is dealt with in greater details in the management discussion
and analysis section.
25. COMMITTEES OF THE BOARD
The Company has already formed the following committees to ensure
timely compliances and better corporate governance of all the applicable rules and
regulations:
(i) Audit Committee, 2) Nomination & Remuneration Committee and 3)
Stakeholders Relationship Committee. The details about these committees are given in the
Corporate Governance Report.
26. 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.
27. AUDITORS
(ii) Statutory Auditors
M/s. Mahendra N. Shah & Co., Chartered Accountants (FRN: 105775W),
Ahmedabad, who were appointed as Statutory Auditors of the Company at the 103rd Annual
General Meeting of the Company 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 has
appointed M/s. Samdani Shah and Kabra, (CP No:2863) a firm of Practicing Company
Secretaries, Vadodara, as Secretarial Auditors for the financial year 2023-24 to undertake
Secretarial Audit of the Company. The Secretarial Audit Report for the financial year
2022-23 is annexed herewith as Annexure "D".
C. Cost Auditor
M/s. Y. S Thakar & Co., has been appointed as Cost Auditor for
audit of cost records and statements for the financial year 2023-24 also. The proposed
remuneration for the said financial year, as stated in the notice of the ensuing Annual
General Meeting, is to be confirmed by the shareholders as required under section 148 of
the Act.
Further the company has made and maintained proper Cost Records as
specified by the Central Government under Section 148 (1) of the Companies Act, 2013 for
its business activities carried out during the year.
D. Internal Auditors
Shri. Yegasubramaniam Iyer, (Membership No-045781), Chartered
Accountants, Vadodara have been appointed as Internal Auditors for conducting internal
audit of Petlad Unit of the Company for the financial year 2023-24.
Further, the Directors in their Board Meeting dated 29.05.2023, have
appointed M/s. D. P. Sarda & Co., (FRN: 117227W), Chartered Accountants, Nagpur, as
Internal Auditors of Borgaon Unit of the Company, for the financial year 2023-24 and
onwards.
Explanation or Comments on disqualifications, reservations, adverse
remarks or disclaimers in the Auditors Reports;
No disqualifications, reservations, adverse remarks or disclaimers have
been reported in the Auditors Reports, requiring any explanation or comments by the
Board of Directors of the Company.
28. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSIONS &
ANALYSIS REPORT
The Company has complied with all the applicable requirements of
Corporate Governance as stipulated in Regulations 17 to 27 and clauses (b) to (i) of
Sub-Regulation (2) of Regulation 46 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. A Separate Report on Corporate Governance and a
Certificate obtained from M/s. Samdani Shah & Kabra, Practicing Company Secretaries,
regarding compliance with the conditions of Corporate Governance and Management
Discussions & Analysis Report are annexed herewith with as Annexure "E" which
forms part of this Report.
29. 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 during the financial year and upto the date of this Report.
30. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS 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 Companys operations in
future.
31. INTERNAL CONTROL SYSTEMS
The Company has adequate internal control systems, commensurate with
the size and scale of the Company. However, looking to the need of the time it has been
decided to widen the scope of internal audit and accordingly internal auditors have been
appointed for Petlad, as well as, Borgaon units of the Company who submit their periodical
reports to the Board and their advices are adopted and needful is done, if required for
better 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 for
a period of seven years have been duly transferred by the Company to the Investor
Education and Protection Fund ("IEPF") established by the Central Government
under Section 125 of the said Act.
The Company has uploaded the details of unpaid and unclaimed amounts
lying in separate bank accounts named "PBM POLYTEX LIMITED UNPAID DIVIDEND
ACCOUNT" upto the financial year 2014-15 on the Companys website
(www.pbmpolytex.com) and also on the Ministry of Corporate Affairs website:
www.mca.gov.in.
The dividend for the years mentioned below, if remain unclaimed for
consecutive seven years, will be transferred by the Company to IEPF:-
| Financial Year |
Date of Declaration of
Dividend |
Unclaimed Dividend as on
31.03.2023 (Rs.) |
| 2015-16 |
24.09.2016 |
710217.00 |
| 2016-17 |
25.09.2017 |
757572.00 |
| 2017-18 |
18.09.2018 |
586782.00 |
| 2018-19 |
30.09.2019 |
100438.20 |
| 2019-20 |
No dividend declared |
0.00 |
| 2020-21 |
30.09.2021 |
233277.50 |
| 2021-22 |
28.09.2022 |
459307.00 |
| TOTAL |
|
2847593.70 |
Pursuant to the provision of Section 124 (6) read with Rule 6 of
Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the
"IEPF Rules") as amended, all the shares in respect of which dividend has/have
remained unpaid or unclaimed for consecutive seven years, have to be transferred in the
name of IEPF Authority.
Accordingly 8219 equity shares against 70 folios corresponding to the
dividend for the financial year ended 31st March, 2015 which remained unclaimed for seven
consecutive years have been transferred to the IEPF Authority after giving individual
notices to the concerned shareholders and advertisement in Newspapers.
In aggregate 265988 equity shares against 1139 folios have been
transferred to IEPF Authority against the dividend unpaid/unclaimed upto the Financial
Year 2014-15.
The Company has uploaded the details of all shares transferred to the
IEPF Authority on the Companys website (www.pbmpolytex.com) and also on the Ministry
of Corporate Affairs website: www.mca.gov.in.
The shareholders or their legal successors can claim back the dividend
and all equity shares so transferred, from MCA after following the procedure laid down by
MCA.
33. SECRETARIAL STANDARDS
All the applicable Secretarial Standards are being followed by the
Company.
34. DEPOSITS
The Company has not accepted or continued any public deposits as
contemplated under section 73 of the Act and the Companies (Acceptance of Deposits) Rules,
2014.
35. ACKNOWLEDGEMENTS
The bankers, and financial institutions have 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 |
For PBM POLYTEX LIMITED |
|
GOPAL PATODIA |
CHIRAYUSH PATEL |
| Place: Vadodara |
Managing Director |
Independent Director |
| Date: 12.08.2023 |
(DIN: 00014247) |
(DIN: 08690998) |
+91-9892691696
