PBM Polytex Ltd Directors Report

To, The Members,

Your Directors have pleasure in presenting the Hundred and Fifth Annual Report of the Company together with the Audited Standalone and Consolidated Statements of Accounts for the financial year ended 31^st March, 2024.

1. FINANCIAL PERFORMANCE

(Rs. in Lakhs)

Particulars	2023-24	2022-23
Profit/(Loss) Before interest, tax , Depreciation and Amortization(EBITA)	(418.41)	459.92
Less:- Interest and Financial Charges	54.65	57.00
Profit/(Loss) before depreciation and tax	(473.06)	402.92
Less:- Depreciation and Amortization	365.85	346.83
Profit/(Loss) Before Tax	(838.91)	56.09
Less:- Provision for Taxation (Net)	12.55	23.93
	(826.36)	32.16
Add:- Deferred Tax Assets	196.73	2.44
Profit/(Loss) After Tax (PAT)	(629.63)	29.73
Add:- Other Comprehensive Income	35.89	91.97
Total Comprehensive Income for the year	(593.74)	121.70
Add:- Surplus brought forward	1384.16	1737.62
Amount available for Appropriation	790.42	1859.32
Less :- Appropriation:-
General Reserve	NIL	200.00
Dividend	NIL	275.16
Total Appropriation	NIL	475.16
Balance carried to Balance Sheet	790.42	1384.16

Dividend declared and paid in financial year 2022-23 for F.Y. 2021-22

2. DIVIDEND

Your Directors have decided not to declare any dividend for the financial year 2023-24.

3. TRANSFER TO RESERVES

Your directors have decided not to transfer any amount 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 2023-24.

5. BUSINESS OPERATIONS / STATE OF COMPANYS AFFAIRS

During the Financial Year 2023-24, The performance of the Company has been poor even though cotton prices have fallen from the peak. Simultaneously, yarn prices also fell down, putting a squeeze on margins. Because of 11% import duty on cotton & higher MSP on cotton, advantage could not be taken of buying imported cotton, whenever the opportunity was there, this affected overall export volume due to high inflation, discretionary buying by customers at large has also reduced. This effect has made surplus in cotton yarn supply squeezing the margin.

Absenteeism at Petlad unit continue to be high. All our efforts by HR department to recruit and train new apprentices continue. Absenteeism has caused heavy machine utilization loss at Petlad. Comparatively at Borgaon unit, capacity utilization is better around 85% to 90%. During the year 2023-24, we commissioned our solar plant at Mills at cost of approx. Rs. 2 crore, the plant was commissioned in 1st week of February, 2024. It is expected to generate about 8.5 lakh units a year. This will give a saving of around 45 lakhs in our power cost at Petlad.

Since Power is major cost in manufacturing cotton yarn, almost 40% to 45%. In order to reduce our power cost, the company will be looking to set up 3-4 Mega Watt Solar Plant costing between 12 to 16 crores. The saving in power is estimated 43.80 to 58.40 Lacs units. This will save on power by about Rs. 262.80 Lakhs to Rs. 350.40 Lakhs.

The yarn conditioning unit has been commissioned at Petlad at cost of about Rs. 65 Lakhs.

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 Hari Prasad Siotia (DIN: 00015103) and Shri Mohan Kumar Patodia (DIN: 00035381) 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 13^th August, 2024, on recommendations of the Nomination and Remuneration Committee, has proposed to reappoint Shri Chirayush Indrajitbhai Patel (DIN: 08690998) as Independent Director of the Company w.e.f. 14^th February, 2025 for a further period of 5 consecutive years by way of special resolution.

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 upto 21st May, 2024
v. Ms. Kirti Chauhan :	Company Secretary cum Compliance Officer w.e.f. 11th June, 2024

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 2023-24.

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 ended March 2024 was Rs. 6.70 Crores. 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.

The Company is holding 46,00,000 Preference shares of Rs. 10/- each aggregating to Rs. 4.60 Crores in Eurotex Industries & Exports Limited. The said Company since last more than five years due to Inadequate profit/loss has not declared dividend on Preference Shares.

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, 8^th 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 2023-24 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 4^th 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. 41 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 2023-24 is available on the website of the Company, web-link of which is https://pbmpolytex.com/upload/investor_lodr_reg/form-mgt-7-2023-24.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/nomination-and-remuneration-policy.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:

1) 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

A. Statutory Auditors

In compliance with the Companies (Audit and Auditors) Rules, 2014, the Members at the 103^rd Annual General Meeting (AGM) of the Company, have appointed M/s. Mahendra N. Shah & Co., Chartered Accountants (FRN: 105775W), Ahmedabad as Statutory Auditors of the Company, for a consecutive years of five years from the conclusion of 103^rd Annual General Meeting till the conclusion of the 108^th Annual General Meeting.

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 2024-25 to undertake Secretarial Audit of the Company. The Secretarial Audit Report for the financial year 2023-24 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 2024-25 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 and M/s. D. P. Sarda & Co., (FRN: 117227W), Chartered Accountants, Nagpur have been appointed as Internal Auditors for conducting internal audit of Petlad and Borgaon Units of the Company respectively, for the financial year 2024-25.

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 2015-16 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 31.03.2024 (Rs.)
2016-17	25.09.2017	723873.00
2017-18	18.09.2018	545492.00
2018-19	30.09.2019	93180.00
2019-20	No dividend declared	0.00
2020-21	30.09.2021	199607.00
2021-22	28.09.2022	449555.00
2022-23	No dividend declared	0.00
TOTAL		2011707.00

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 8467 equity shares against 69 folios corresponding to the dividend for the financial year ended 31^st March, 2016 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 274455 equity shares against 1208 folios have been transferred to IEPF Authority against the dividend unpaid/unclaimed upto the Financial Year 2015-16.

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	ASHOK PANDIT
Managing Director	Independent Director
(DIN: 00014247)	(DIN: 08132980)

 

Place: Vadodara

Date: 13.08.2024