1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE:
The report on corporate governance forms part of Annual Report. Corporate Governance refers to a combination of laws, regulations, procedures, implicit rules and good corporate practices which ensures that the Company meets its obligations and fulfils its responsibilities to shareholders, employees, government and others. Your Company is committed on adopting the best practices.
The Company's philosophy of corporate governance aims at excellence in every sphere of operations consistent with the highest ethical standards.
2. BOARD OF DIRECTORS
A. Composition of the Board
As per requirement of section 149 of the Companies Act, 2013 ("the Act") and Clause 49 of Listing Agreement, atleast 50% of the Board of Directors should be Independent. Accordingly, there is optimum combination of Executive, Non - Executive and Independent Directors in the Company. The Chairman of the Company is Non-Executive Promoter Director.
BOARD TRAINING AND INDUCTION
At the time of appointing a Director, a formal letter of appointment is given to him, which inter alia explains the role, function, duties and responsibilities expected of him as a Director of the Company. The Director is also explained in detail the compliances required from him under the Companies Act, Clause 49 of the Listing Agreement and other relevant regulations and his affirmation taken with respect to the same.
COMMITTEES OF THE BOARD
With a view to have more focused attention on business and for better governance and accountability, the Board has constituted the mandatory committees viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. The term of reference of these Committees are determined by the Board and their relevance is reviewed from time to time.
3. AUDIT COMMITTEE
(i) Terms of Reference
The Audit Committee acts as a link between the Statutory and Internal Auditors and the Board of Directors. Its purpose is to assist the Board in fulfilling its oversight responsibilities of monitoring financial reporting process, reviewing the Company's established systems and processes for internal financial controls, governance and reviewing the Company's Statutory and Internal Audit activities. The Committee is governed by a Charter, which is in line with the regulatory requirements mandated by the Act and Clause 49 of the Listing Agreement.
The Internal Auditors and Statutory Auditors are permanent invitees to the meetings. The terms of reference of Audit Committee are in accordance with the section 177 of the Act and Clause 49 (III) of Listing Agreement entered into with the Stock Exchanges.
The Company has system and procedures in place to ensure that the Audit Committee mandatorily review:
• Management discussion and analysis of financial condition and results of operations;
• Statement of significant related party transactions (as defined by the audit committee), submitted by management;
• Management letters / letters of internal control weaknesses issued by the statutory auditors;
• Internal audit reports relating to internal control weaknesses; and
• The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee
The Chairman of Audit Committee was present at the last Annual General Meeting to answer the shareholders' queries.
4. NOMINATION AND REMUNERATION COMMITTEE (EARLIER KNOWN AS SELECTION AND REMUNERATION COMMITTEE) AND REMUNERATION OF MANAGERIAL PERSONNEL AND SENIOR EXECUTIVES:
(i.) Terms of reference
Remuneration of employees largely consists of basic remuneration and perquisites. The components of total remuneration vary for different cadres and are governed by industry pattern, qualifications and experience of the employee, responsibilities handled individual performance etc. The objectives of the remuneration policy are to motivate employees to excel in their performance, recognize their contribution, and retain talent in the organization and reward merit. The Nomination and Remuneration Committee shall, while formulating the policy, ensure that:-
(a) the Company has
• formulated the criteria for determining qualifications, positive attributes and independence of a director and
• recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnels and other employees.
(b) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;
(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
(c) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals:
The Selection and Remuneration Committee was formed on 29th April 2002, which now consists of three Non-Executive.
Pursuant to section 178 of the Act, the Board has renamed the existing Selection and Remuneration Committee as "Nomination and Remuneration Committee" at its meeting held on 9th February, 2015. The appointment and remuneration of all the Managerial Personnel and top executives is fixed on the recommendation of the Committee.
POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The remuneration of Managing Directors is decided as per the applicable Schedule and sections of the Companies Act, as amended from time to time and subject to approval of the shareholders and other authority (ies), if required and also as recommended by Nomination and Remuneration Committee and Board of Director.
The remuneration of Senior Executives is also decided by the Board of Directors on the recommendation of the Nomination and Remuneration Committee and also subject to the sanction of the shareholders in case of any of the executives holding Place of Profit.
The selection and appointment of the Whole Time Directors, other directors and Top Executives is done on the basis of their experience, qualifications and knowledge of field.
DETAILS OF REMUNERATION PAID TO EXECUTIVE AND NON-EXECUTIVE DIRECTORS
Remuneration of Executive Directors
Remuneration paid/ accrued to the Executive Directors for the financial year ended March 31, 2015 is as follows (Rs.):
Remuneration of Non-Executive Directors
Non-Executive Directors including Independent Directors were paid sitting fees only for attending the meetings of the Board of Directors within the limits as prescribed under the Companies Act, 2013. Details of remuneration paid to Non-Executive Directors during financial year 2014-15 and their shareholding in the Company as at March 31, 2015 are as follows:
STAKEHOLDERS RELATIONSHIP COMMITTEE (EARLIER KNOWN AS INVESTORS' GRIEVANCE COMMITTEE / SHARH TRANSFER COMMITTEE)
The Company has a Stakeholders Relationship Committee comprising of Shri Hari Prasad Siotia, Shri Krishan Kumar Patodia and Shri Gopal Patodia lead by Shri Hari Prasad Siotia. Shri S. M. Sharma, Vice President (Sec.) and Compliance Officer, acts as the Secretary of the Committee.
Tri - Partite Agreement has been executed between the Company and National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) as required for dematerialization of its securities.
This Committee also looks into the grievances lodged by the Shareholders. No complaints of serious .nature have been received from shareholders.
The meetings of the Committee were held on 7.10.2014, 21.10.2014, 10.11.2014, 27.11.2014, 11.12.2014, 23.01.2015, 09.02.2015 and 13.03.2015.
Pursuant to section 178 of the Act, the Board has renamed the existing Investors' Grievance Committee / Share Transfer Committee as "Stakeholders Relationship Committee" at its meeting held on 9th February, 2015.
6. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
(i) Terms of reference
The terms of reference of the Corporate Social Responsibility (CSR) Committee broadly comprises:
a. to review the existing CSR Policy and to make it more comprehensive so as to indicate the activities to be undertaken by the Company as specified in Schedule VII of the Act and
b. To provide guidance on various CSR activities to be undertaken by the Company and to monitor its implementation and progress.
CSR Committee consists of three Directors. The constitution of CSR Committee meets with the requirements prescribed under Section 135 of the Act. The Board has constituted CSR committees at its meeting held on 11lh November, 2014.
7. INDEPENDENT DIRECTORS' MEETING
During the year under review, all the Independent Directors met on 09.02.2015, to discuss and evaluate :-a.) the performance of non-independent directors and the Board as a whole;
b.) the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors;
c.) the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
All Independent Directors were present at the meeting except Shri M L Bagaria, as he was not intimated about the meeting due to his appointment in the Board Meeting dated 09.02.2015.
The Board has approved familiarisation programmes and it has been uploaded on the Company's Website www.pbmpolytex.com
8. RELATED PARTY TRANSACTIONS
The Board has approved Policy on Related Parties Transactions at their meeting held on 9th February, 2015 and has also been uploaded on the Company's Website at http://www.pbmpolytex.com/attachments/article/47/related%20partv.pdf
A. Disclosure on Materially Significant Related Party Transactions that may have potential conflict with the interests of the company at large:
There are no materially significant related party transactions made by the company with its Promoters, Directors or Management, their subsidiaries or relatives, etc., that may have potential conflict with the interests of the company at large.
The Company has on rent Offices, Godown and Residential Premises at its Offices outside Gujarat which belong to Related Parties namely M/s Sambhu Inv. Pvt. Ltd., M/sTrikon Inv. Pvt. Ltd., M/s Murarilal Mahendrakumar, M/s Eurotex Industries & Exports Ltd., M/s Patodia Syntex Limited, M/s Dharam Chand Kesardev, M/s Brijlal Purushottamdas and M/s B L Patodia Family Trust, to whom rent is paid at reasonable rates (on an Arm's Length Basis).
B. Details of compliances by the Company, penalties and strictures imposed on the Company by Stock Exchange(s) or SEBI or any Statutory Authority, on any matter related to capital markets during the last three years.
The Company has complied with all requirements of the Listing Agreements entered into with the Stock Exchanges as well as the regulations and guidelines of SEBI. Consequently, there were no strictures or penalties imposed by either SEBI or Stock Exchanges or any Statutory Authority for non - compliance of any matter (s) related to the capital markets during the last three years.
C. Whistle Blower Policy / Vigil Mechanism
Pursuant to the provisions of section 177 of the Act and Listing Agreement, Company has framed, adopted and placed on its website which lays down the principles and standards for reporting suspected or actual frauds and embezzlement, illegal, unethical behavior or violation of Company's Code of Business conduct and ethics.
A Vigil Mechanism provide adequate safeguards against victimization of persons who use such mechanism for reporting genuine concerns. It also makes provision for direct access to the Chairman of the Audit Committee.
The Board has approved Whistle Blower Policy at their meeting held on 9th February, 2015 and has also been uploaded on the Company's Website at www.pbmpolytex.com.
D. Disclosure of Accounting Treatment:
In the preparation of the financial statements, the Company has followed the Accounting Standards issued by the Institute of Chartered Accountants of India. The significant accounting policies, which are constantly applied, are set out in the Annexure to Notes on Accounts.
E. Risk Management:
Business risk evaluation and management is an ongoing process within the company. During the year under review a detailed exercise of, 'Risk Assessment and Management' was carried out covering the entire gamut of business operations and the Board was informed of the same.
F. Non-mandatory requirements
Adoption of non-mandatory requirements of Clause 49 of the Listing Agreement are being reviewed by the Board from time to time.
The Company also complies with all the mandatory requirements of Clause 49 of the Listing Agreement of Code of Governance.
11. MEANS OF COMMUNICATION
The Company generally publishes the quarterly, half yearly, nine months and Annual Audited Financial Results in one english daily newspaper (i.e. The Financial Express) published from Bombay (National) and one daily newspaper (i.e. The Financial Express) published from Ahmedabad (Regional - Gujarati).
All periodical compliance like Announcements, Shareholding Pattern, Corporate Governance Report, Book Closure Dates, etc. are electronically filed with and BSE Limited through 'BSE LISTING CENTRE'. All material information about the Company is promptly sent through facsimile to Stock Exchanges where the Company's shares are listed and released to the press.
12. General Shareholder Information:
1. 96lh Annual General Meeting will be held at 11. 00 AM on Thursday, the 24th September 2015, at the Registered Office of the Company situated at Opp. Railway Station, Petlad, Dist. Anand, Gujarat - 388 450.
from 01.04.2014 to 31.03.2015.
Date of Book Closure:
From 19th September, 2015 to 24th September, 2015 (both days inclusive).
Dividend Payment Date will be paid on or after 1st October 2015.
Listing of Shares:
The Company's shares are listed on the following Stock Exchanges, which are given below:
Name of Stock Exchange Scrip Code / Stock Exchange Code
BSE Limited 514087
Ahmedabad Stock Exchange Limited 44610
6. Stock Market Data (Bombay Stock Exchange) (2014 - 15):
ISIN No. :INE501F01018
Registrars & Share Transfer Agents:
(Share transfers, Demat, communications regarding Share Certificates, Dividends and change of address) Mr. Nitin Joshi
M/s. Sharepro Services (India) Pvt. Ltd., Unit:- M/s PBM Polytex Limited
416-420, 4"1 Floor, Devnandan Mall, Opp. Sanyas Ashram, Ellisbridge, Ahmedabad - 380 006.
Tel Nos. 079-26582381 to 84 Fax No. 079-26582385 E-mail: sharepro@ shareproservices.com
Share Transfer System:
Presently, the share transfers which are received in physical form are processed and share certificates are returned within fifteen days from the date of receipt after doing the needful, subject to the documents being valid and complete in all respect.
10. Dematerialization of shares:
About 93.66% of Company's paid up equity share capital has been dematerialized up to 31s1 March, 2015. The shareholders wishing to demat the shares may approach Depository Participants.
12. Outstanding GDRs/Warrants:
(A) Yarn Manufacturing Plants of the Company are situated at -
(i) Opp. Station, Petlad - 388450, Dist, Anand, Gujarat
(ii) Plot No. 16 to 19, Sector B, AKVN Industrial Area, Borgaon, Kheritaigaon, Dist. Chhindwara (M.P)
(B) Four Windmills are located in Gujarat at -
Four Windmills are located in Gujarat at -
(i) Vill: Suthari, Revenue Survey No. 870/P, Mouje Suthri of Abdasa Taluka, Dist. Kutch (Gujarat)
(ii) Vill: Okha Madhi, Survey No. 24 Part, Taluka Dwarka, District Jamnagar (Gujarat)
(iii) Vill: Methan, Survey No. 284, Taluka Jamjodhpur, Dist. Jamnagar (Gujarat)
(iv) Vill: Methan, Survey No. 284/3/Paiki, Taluka Jamjodhpur, Dist. Jamnagar (Gujarat)
(i) Vill: Suthari, Revenue Survey No. 870/P, Mouje Suthri of Abdasa Taluka, Dist. Kutch (Gujarat) Vill: Okha Madhi, Survey No. 24 Part, Taluka Dwarka, District Jamnagar (Gujarat)
13. Address for correspondence
PBM Polytex Limited, Opp. Railway Station, Petlad - 388 450, Dist. Anand, Gujarat Telephone: (02697) 224001,224003, Fax No. (02697) 224009, E-Mail pbmmills @patodiaqroup.com
The Managing Director and the Senior President cum Chief Executive Officer of the Company give Annual Certification on Financial Reporting and Internal Control to the Board in terms of Clause 49 of the Listing Agreement. The Chairman and the Managing Director also give quarterly certification on Financial Results while placing the Financial Results before the Board in terms of Clause 41 of the Listing Agreement.
For PBM POLYTEX LIMITED
KRISHAN KUMAR PATODIA
Chairman (DIN : 00027335)
Date : 6th August 2015