pasupati acrylon ltd share price Directors report


Dear Members

Your Directors have pleasure in presenting 40th Annual Report of Pasupati Acrylon Limited ("the Company") together with the Audited Financial Statements for the financial year ended March 31, 2023.

In compliance with the applicable provisions of Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this report covers the financial results and other developments during the financial year ended March 31, 2023 and upto the date of the Board meeting held on May 09, 2023 to approve this report, in respect of the Company.

FINANCIAL HIGHLIGHTS

A brief on the financial performance during the year under review as compared to the previous year is given below:-

Particulars 2022-23 2021-22
Revenue from Operations 827.96 775.11
Other Income 8.42 8.73
Profit before Depreciation, Interest & Tax 58.21 71.21
Finance Cost 3.61 3.17
Depreciation 6.15 6.21
Profit before Taxes 48.45 61.83
Tax Expenses for the year 12.54 15.94
Profit after Taxes 35.91 45.89
Total Comprehensive Income 36.17 46.05

The financial statements for year ended March 31, 2023 have been prepared in accordance with Indian Accounting Standards (Ind AS), notified under Companies (Indian Accounting Standards) Rules, 2015, read with Section 133 and other relevent provisions of e Companies Act, 2013. In accordance with the provisions of Section 136 of the Companies Act, 2013, the audited financial statements of the Company are available on website of the Company www.pasupatiacrylon.com.

RESULTS OF OPERATIONS AND STATE OF COMPANYS AFFAIRS

During the year under review, the Company has achieved Revenue from Operations of Rs. 827.96 Crores with revenue growth of 6.82 % as compared to Rs. 775.11 Crores for previous year. e Company reported EBIDTA and Net Profit in financial year 2022-23 as Rs. 58.21 Crores and Rs. 35.91 Crores respectively as against Rs. 71.21 Crores and Rs. 45.89 Crores respectively in the previous financial year 2021-22. Net profit during the year declined due to negative return on CPP Segment caused by persistent fall in selling prices on account of excessive production capacity added in the market.

Despite various challenges such as volatility in crude prices and abnormal rise in raw material prices, dumping of acrylic _bre by Turkey, China, ailand and Belarus, foreign exchange fluctuations, the Company is focused on improvement in its growth and in a position to achieve a better turnover as compared to previous year.

ACRYLIC FIBRE

The production capacity to produce Acrylic products of the Company is 45,000 MT PA. During the year under review, the Company has recorded production of 36,425 MT and Sale of 35,260 MT, as against production of 29,652 MT and Sale of 30,918 MT respectively during the previous year.

CPP FILM

The production capacity to produce CPP _lm is 10000 MT PA. During the year under review, the production and sale of CPP _lm increased to 7,663 MT and 7,640 MT respectively as against production of 6,348 MT and sale of 6,210 MT respectively during the previous year.

ETHANOL PROJECT

Further, the Company is looking forward to diversify its business in Ethanol Product and accordingly, the Board of Directors, at its meeting held on May 18, 2022, accorded its approval to the Company to set-up Ethanol Project with a production capacity of 150 KLPD to align with GOIs Ethanol Blending Programme (E20), subject to clearance and approvals from the concerned statutory authorities. e total Project cost is Rs. 167.58 crores. Indian Bank has principally sanctioned Term Loan of Rs. 108 Crores for setting up of 150 KLPD Grain

Based Ethanol Plant, however, till the date of this report, the loan has not been availed as the loan documents are to be executed with Indian Bank. e remaining project cost of Rs. 59.58 will be met out of the Companys internal accruals. e Company has initiated steps to set up Ethanol Plant adjoining to its existing manufacturing unit – akurdwara, Dist. Moradabad (Uttar Pradesh). e Company has obtained Environment Clearance for the proposed project and company is under process to finalize various vendors/ suppliers / consultants for the projects and releasing advances to them as per contract out of its Internal Accruals.

DIVIDEND

The Board of Directors decided to plough back the earnings to strengthen the financials of the Company and not to recommend dividend for the year under review.

TRANSFER OF RESERVES

The Board of Directors of your company, has decided not to transfer any amount to the Reserves for the year under review.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2)(e) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is given as under: a) INDUSTRY STRUCTURE AND DEVELOPMENT

Acrylic Fibre

Global Acrylic Fibre consumption is impacted due to volatility in prices of raw material, energy, coal and other key inputs. During the year under review, Acrylic Fibre consumption has been improved as COVID-19 related concerns were subsided. e Companys Acrylic Fibre plant was set up in technical collaboration with SNIA BPD Italy, part of the famed FIAT group – a proven world leader in the manufacture of acrylic _ber. Advanced technology, automation, computerized process control systems and captive power, make the operations of your Company extremely efficient and reliable. Demand of Acrylic Fibre has risen and the Companys production and sales of Acrylic Fibre was 36,425 MT and 35,260 MT respectively as compared to production of 29,652 MT and sales of 30,918 MT during the previous year. During the year, the Companys exports have grown to 4,551 MT as compared to last years exports 1,415 MT. e Company has exported to Dubai, Egypt, Peru, Ukraine, Turkey, Algeria, Kenya, Nigeria, Brazil, Lebanon etc. and is exploring possibilities of increasing exports and it is hopeful to achieve better exports this year.

CPP Film

Packaging industry is an enormous economic generator on a global scale and is one of the largest & highest growth sectors of the Indian economy. With the rising requirement for packaging across sectors, with traditional businesses preferring to package products, and the retail and e-commerce growing rapidly, the industry is growing at a robust pace. e Company installed European machinery which ensures quality product giving edge over other producers. e global CPP Film Market is anticipated to rise at a considerable rate during the forecast period, between 2022 and 2027. In 2022, the market was growing at a steady rate and with the rising adoption of strategies by key players, the market is expected to rise over the projected horizon. b) OPPORTUNITIES AND THREAT

The raw material to produce the Companys products is crude derived. e fluctuation in crude affects the raw material prices to some extent and during the year under the review, the crude prices remained volatile and witnessed a continued rise due to Russia-Ukraine War. Additionally, since the Company is dependent upon imports, the fluctuation in foreign exchange i.e. USD vs. INR has also a bearing on the margin of the Company. Further, the outbreak of COVID-19 pandemic had slowed down economic activity in the past and the world continued to reel under the threat of the coronavirus. e second wave of the COVID-19 pandemic hit India hard, and as a company, we were faced with several challenges and disruptions. ough there is a considerable improvement in COVID-19 pandemic situation, but there remained uncertainties on the next waves of COVID-19 and that remains a risk for the Company. If such situation arises again the same may have adverse impact on the functioning /operations of the company.

The CPP Film Market is highly competitive owing to the presence of multiple vendors in the market. On the other hand, stringent regulations concerning packaging, changing consumer preferences and environmental pressures may restrain the growth to some extent. c) SEGMENT-WISE / PRODUCT-WISE PERFORMANCE

Acrylic Fibre

During the year under review, the Company has recorded production of 36,425 MT and Sale of 35,260 MT, as against production of 29,652 MT and Sale of 30,918 MT of respectively during the previous year.

Revenue of Acrylic Fibre during the year under review was Rs. 719.28 Crore as against revenue of Rs.675.54 Crore in the previous year. Profit before tax, exceptional items and interest was Rs. 59.12 Cores as compared to Rs. 56.49 Crore in the previous year.

CPP FILM

During the year under review, the production and sale of CPP _lm increased to 7,663 MT and 7,640 MT respectively as against production of 6,348 MT and sale of 6,210 MT respectively during the previous year.

Revenue of CPP Films during the year under review was Rs. 108.68 Crore as against revenue of Rs. 99.57 Crore in the previous year. Profit/ (Loss) before tax, exceptional items and interest was Rs. (7.06) Cores as compared to Rs. 8.52 Crore in the previous year. Loss of CPP segment is incurred during the year caused by persistent fall in selling prices on account of excessive production capacity added in the market.

d) OUTLOOK

It is expected that Covid19 are no longer likely to have an adverse impact on Indian and Global economies, as has been seen in early of 2021 and 2022. Your company is covering both domestic and export markets and the Companys products are well accepted. e sale and production has seen good improvement from previous year and it is expected to improve more in the coming years but it is necessary to carefully watch other factors such as inflation, high energy prices etc. is may put pressure on margins of domestic industry as also your Company.

Since raw material is crude derived as such movement either side shall affect the raw material price. To mitigate the effect, the Company has entered into long term contracts with suppliers.

e) RISK AND CONCERN

Though COVID-19 related concerns have been subsided in the world, but the risk from the COVID-19 pandemic continues to be one of the key business risks. COVID-19 had impacted the normal business operations, though the scenario improved significantly. ese risks include risks related to employee safety, supply chain, customers, business development efforts and cash flows of the Company. e onset of multiple waves of COVID-19 in almost all geographies and renewed lockdown and restrictions on movement of people imposed by the government in various parts of the world might prove detrimental to growth estimates.

Further, since the Company is dependent upon imported raw materials, sudden movement in USD and increase in crude oil prices due to Russia-Ukraine war affects the margin. e Company is giving thrust on increasing the exports so that effect can be mitigated. Global economy is likely to be hit by continuing high energy cost, logistics issues and costs in international trade. Tightening of monetary policies by Central banks to curb inflation may have necessary impact which will impact consumption in general including Acrylic Fiber & CPP Films Industry.

f) INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company maintains an adequate and effective Internal Control System commensurate with its size and complexity. It believes that these systems provide, among other things, a reasonable assurance that transactions are executed with management authorization. It also ensures that they are recorded in all material respects to permit preparation of financial statements in conformity with established accounting principles, along with the assets of the Company being adequately safeguarded against significant misuse or loss. An independent Internal Audit function is an important element of the Companys Internal Control System. e internal control is supplemented by an extensive programe of internal, external audits and periodic review by the Management. is system is designed to adequately ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets.

g) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, the Company registered Revenue from Operations of Rs. 827.96 Crores as compared to Rs. 775.11 Crores for previous year with revenue growth of 6.82 %. Profit before Tax was Rs. 48.45 Crore as compared to Rs. 61.83 Crore. Net Profit in financial year 2022-23 was Rs. 35.91 Crores as against Rs. 45.89 Crores in the previous financial year 2021-22. Net profit during the year declined due to negative return on CPP Segment caused by persistent fall in selling prices on account of excessive production capacity added in the market. h) MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company endeavors to ensure the well-being of all its employees. The safety, health and work life balance of employees are extremely important. Company made all the required efforts to ensure safety and well-being of all workforce and employees.

Development and Training of team has always been a focus area of management. The Human Resource Development continues to be focused on improving employee productivity, reducing employee cost and building necessary skillsets whilst building employee motivation through varied employee engagement initiatives. To augment technical strength in existing business areas, various technical trainings covering existing business are being conducted on regular intervals.

The Company employed on an average 424 persons during the year.

i) DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to give details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios including the following ratios.

Particulars Unit FY 2022-23 FY 2021-22 % change
Debtors turnover Ratio Times 12.83 11.67 9.94%
Inventory turnover Ratio Times 13.26 14.50 -8.55%
Interest Coverage Ratio Not Significant
Current Ratio Times 2.82 2.50 12.80%
Debt Equity Ratio Not Significant
Operating Profit Margin (%)* % 5.39 7.67 -29.73%
Net Profit Margin (%)* % 4.29 5.86 _26.79%
Return on Net Worth* % 12.07 17.89 _32.53%

*Operating Profit Margin, Net Profit Margin and Return on Net Worth are declined due to negative return on CPP Segment caused by persistent fall in selling prices on account of excessive production capacity added in the market.

SUBSIDIARY COMPANIES

As on March 31, 2023, the Company does not have any subsidiary, associate or joint venture company.

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there is no change in the nature of the business of the company.

SHARE CAPITAL

As on March 31, 2023, the Companys issued and paid up capital stands Rs. 89,13,31,210/- divided into 8,91,33,121 fully paid up equity shares of Rs. 10/- each. During the year under review, the Company has not issued any share. Further the Company has also not issued any share with differential Voting Rights/Sweat Equity shares/under Stock Option Scheme (ESOS) earlier and during the year. e Company has no scheme or provision of money for purchase of its own shares by employees or by trustees, for the benefit of its employees. Hence the details under rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014 are not required to be disclosed.

DIRECTORS

In accordance with the provisions of section 152(6) of the Companies Act, 2013, not less than two-thirds of total number of directors shall be liable to retire by rotation, out of which one-third directors shall retire by rotation at every Annual General Meeting. However, "total number of directors" shall not include independent directors.

The Company has two Non-Independent Directors – Mr. Vineet Jain (Managing Director) and Mr. Satya Prakash Gupta (Director- Operations). Mr. Vineet Jain, being Managing Director, is not liable to retire by rotation by virtue of Articles of Association of the Company. Accordingly, Mr. Satya Prakash Gupta, Director –Operations will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Deveshwer Kumar Kapila, Mr. S.C. Malik, Mr. S. Sathyamoorthy and Mrs. Kamlesh Gupta are Independent Directors of the Company.

The present term of Mrs. Kamlesh Gupta as Independent Director would be expiring on November 12, 2023. Based on the recommendation of the Nomination & Remuneration Committee, the Board of Directors, at its meeting held on May 09, 2023, approved the re-appointment of Mrs. Kamlesh Gupta as Independent Woman Director to hold office for a second term of 5 (five) consecutive years effective from November 13, 2023 to November 12, 2028, subject to the approval of the shareholders at the ensuing Annual General Meeting and Mrs. Kamlesh Gupta has submitted her consent for re- appointment as Independent Director of the Company.

In the opinion of the Board, Mr. Satya Prakash Gupta and Mrs. Kamlesh Gupta possess the requisite expertise, integrity and experience for re-appointment. e Board recommends their re-appointment and resolutions seeking shareholders approval for their re- appointment form part of the AGM Notice.

KEY MANAGERIAL PERSONNEL

During the year under review, there was no change in Key Managerial Personnel (KMPs). As on March 31, 2023, the Company had the following KMPs in accordance with the provisions of Section 203 of the Companies Act, 2013:

1. Mr. Vineet Jain– Managing Director

2. Mr. Satya Prakash Gupta–Director (Operations)

3. Mr. Satish Kumar Bansal- Chief Financial Officer

4. Mr. Bharat Kapoor – Company Secretary

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") stating that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI Listing Regulations. All the independent directors of the Company are registered and are members of Independent Directors Databank maintained by Indian Institute of Corporate Affairs. Further, the Board after taking these declaration/disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committees of the Company.

MEETINGS OF THE BOARD

During the year under review, four meetings of the Board of Directors were held. e details of Board Meetings are set out in Corporate Governance Report which forms part of this Annual Report.

NOMINATION AND REMUNERATION POLICY

The Board, on the recommendation of the Nomination & Remuneration Committee, has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. e Nomination and Remuneration Policy is available on the website of the Company www.pasupatiacrylon.com.

BOARD EVALUATION

The Company has devised a formal process for annual evaluation of performance of the Board, its Committees and Individual Directors ("Performance Evaluation") which include criteria for performance evaluation of non-executive directors and executive directors as laid down by the Nomination and Remuneration Committee and the Board of Directors of the Company. It covers the areas relevant to the functioning as Independent Directors or other directors, member of the Board or Committee of the Board.

In terms of the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations, the Nomination & Remuneration Committee has carried out an annual performance evaluation of Board of Directors, of Boards committees and of each Board Member individually. e performance of the committees was evaluated by the Nomination & Remuneration Committee after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness, structure & independence of committees, contribution to decisions of the Board etc.

The performance of the Board was evaluated on the basis of various criteria such as the board composition and structure, effectiveness of board processes, information and functioning, role & responsibilities and strategy & performance, Governance & compliance etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of laid down criteria.

Independent Directors of the Company had, in their separate meeting held on November 12, 2022, reviewed the performance of non-independent directors, the Board as a whole and Managing Director of the Company, taking into account the views of Executive and Non-Executive Directors.

Further, the Independent Directors hold unanimous opinion that the Non-Independent Directors as well as the Chairman bring to the Board, abundant knowledge in their respective field and are experts in their areas. Besides, they are insightful, convincing, astute, with a keen sense of observation and have a deep knowledge of industry. ey have been performing reasonably well, under the prevailing circumstances.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(3) (c) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according to the information and explanations obtained by them, hereby confirm:

a. at in the preparation of the annual accounts for the financial year ended March 31, 2023; the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. at the directors had selected such accounting policies and applied them consistently 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 ended March 31, 2023 and of the profit of the company for the year ended on that date;

c. at the directors had taken proper and sufficient care 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;

d. at the directors had prepared the annual accounts on a going concern basis;

e. at the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

f. at the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE

The company has complied with the Corporate Governance code as stipulated under SEBI Listing Regulations. A separate report on Corporate Governance, forming part of the Annual Report of the Company is annexed hereto.

SECRETARIAL STANDARDS

The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

In compliance with the provisions of the Companes Act, 2013 and SEBI Listing Regulations, all related party transactions are placed before the Audit Committee for prior approval and also before the Board wherever necessary.

During the year under review, all Contracts/arrangements/transactions entered into by the Company with related parties were in the ordinary course of business and were on an arms length basis. None of the transactions with any of the related parties were in conflict with your companys interest. All related parties transactions are disclosed in Note No. 36 of the Financial Statements forming part of this Annual Report.

Pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of contracts or arrangements with related parties referred to Section 188(1) of the Companies Act, 2013 in the prescribed form AOC-2 is appended as Annexure–I to the Boards Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE DATE OF BOARDS REPORT AND END OF FINANCIAL YEAR

There is no such material change and commitment affecting the financial position of the Company which have occurred between the end of financial year of the Company to which the financial statements relate and the date of this report.

DISCLOSURE UNDER SEXUAL HARRASSMENT OF WOMEN AT WORK PLACE

The Company has in place a Policy for prevention of sexual harassment at the workplace in line with the requirements of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee has been set up to redress complaints regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints on issues covered by the above act were received during the year.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS/TRIBUNALS

During the year under review, there are no significant or material orders passed by the Regulators / Courts/Tribunals which would impact the going concern status of the Company and its future operations.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the provisions of Section 135 of the Companies Act, 2013, the Board of Directors has constituted the Corporate Social Responsibility Committee (CSR Committee). e said Committee has been entrusted with the responsibility of recommending to the Board about the activities to be undertaken by the Company for CSR purpose, monitoring the implementation of the frame work of the CSR Policy and recommending the amount to be spent on CSR Activities. e CSR policy is available on the Companys website www.pasupatiacrylon.com.

e Companys total CSR obligation for the financial year 2022-23 was Rs. 93.84 Lakh. However, an amount of Rs. 0.18 Lakh, which was excess spent in Financial Year 2021-22, was also available for set-o_ against the Companys CSR obligations for the financial year 2022-23 in terms of 3rd Proviso to Section 135(5) of the Companies Act, 2013 read with Rule 7(3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, but the Company voluntarily decided not to set-o_ the said amount.

In view of the above, the Company has spent Rs. 94.00 Lakh towards the CSR activities during the financial year 2022-23 and hence, the Companys CSR obligation for FY 2022-23 has been duly met.

Further, in terms of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Chief Financial Officer has certified that the funds disbursed for CSR have been used for financial year 2022-23, for the purpose and in the manner approved by the Board.

e disclosures related to CSR activities pursuant to section 134(3) of the Companies Act 2013, read with Rule 9 of Companies (Accounts) Rules, 2014 and Rule 8 of Companies (Corporate Social Responsibility) Rules 2014 are annexed hereto and form part of this report as

Annexure- II.

RISK MANAGEMENT

The Board of Directors has constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board to oversee and approve the Companies Risk Management framework and all the risks that the company faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management.

Risk Management Policy enables the Company to proactively manage uncertainties and changes in the internal and external environment to limit negative impacts and capitalize on opportunities. The Company has laid down a Risk Management Policy, which is reviewed by the Risk Management Committee, and approved by the Board. e Risk Management Policy has also been hosted on the website of the Company www.pasupatiacrylon.com .

AUDITORS AND AUDITORS REPORT Statutory Auditors

M/s B.K. Shro_ & Co., Chartered Accountants (ICAI Firm Registration No. 302166E) was appointed as Statutory Auditors of the Company at the 39th Annual General Meeting ("AGM") of the Company held on September 29, 2022 for a period of 5 years commencing from the 39th AGM till the conclusion of the 44th AGM. e Auditors have confirmed that they continue to fulfill the eligibility criteria for holding the office as Statutory Auditor of the Company as prescribed under the Act and the Rules framed there under. e notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. During the year under review, the Statutory Auditors has not found any instance of fraud committed against the Company by its officers or employees and accordingly, reporting to the audit committee or Central Government, under Section 143 (12) of the Companies Act, 2013 is not required. e Auditors report does not contain any qualification, reservation or adverse remark or disclaimer.

Cost Auditor

Pursuant to Section 148(1) and other applicable provisions of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014, maintenance of cost records is required by the Company and accordingly, such accounts and records are made and maintained.

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, Board of Directors, on the recommendation of the Audit committee, appointed Mr. Satnam Singh Saggu, Cost Accountants as Cost Auditors of your company for the Financial Year 2023-24 to carry out the cost audit for the applicable business on a remuneration of Rs. 50,000/- (Rupees __y thousand only) plus applicable taxes and reimbursement of out of pocket expenses. A certificate from Mr. Satnam Sigh Saggu, Cost Accountants has been received to the effect that their appointment as Cost Auditors of the Company, if made, would be in accordance with the limits specified under Section 141 of the Companies Act, 2013 and Rules made thereunder.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company, at its meeting held on May 18, 2022, appointed M/s. Mehak Gupta & Associates, Practicing Company Secretary (CP No. 15013, Membership No. 10703), to undertake Secretarial Audit for the financial year 2022-23. e Secretarial Audit Report for the Financial Year ended March 31, 2023 is annexed herewith to this Report as Annexure - III. e Secretarial Audit Report is self- explanatory and do not call for any further comments. e Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

Internal Auditor

Pursuant to provisions of Section 138 of the Companies Act, 2013 M/s. Jinender Jain & Company, Chartered Accountants, New Delhi, Internal Auditors of the Company have conducted internal audit of the functions and activities of the Company and effectiveness of Internal Control Systems of the Company during Financial Year 2022-23.

Internal Financial Control

Your Company remains committed to improve the effectiveness of internal financial controls and processes which would help in efficient conduct of its business operations, ensure security to its assets and timely preparation of reliable financial information. e Company has a proper system of internal control to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and transactions are authorized, recorded and reported correctly.

The internal financial controls with reference to the Financial Statements are adequate in the opinion of the Board of Directors.

The Board of Directors has adopted policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, ensuring accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The Audit Committee of the Board actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. e Statutory Auditors and the Internal Auditors are inter alia, invited to attend the Audit Committee Meetings and present their observations on adequacy of internal financial controls and the steps required to bridge gaps, if any.

DISCLOSURES: Audit Committee

Audit Committee of the Board has been constituted as per the SEBI Listing Regulations and section 177 of the Companies Act, 2013. e composition and other details of the Audit Committee are provided in Corporate Governance Report which is part of this Report. All recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has framed and implemented a vigil mechanism named as Whistle Blower Policy to deal with instances of fraud and mismanagement, if any, in terms of Section 177(9) of the Companies Act, 2013 and Regulation 22 of SEBI Listing Regulations. The details of the Whistle Blower Policy are provided in the Corporate Governance Report and also posted on the website of the Company www. pasupatiacrylon.com.

Particulars of Loans , Investments, Guarantees.

Particulars of Loans given/Investments made/Guarantees given/Securities provided as per Section 186 of the Companies Act, 2013 along with the purpose for which the Loan or guarantee or security is proposed to be utilized by the Company, is provided in financial statements.

Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo.

The information as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of e Companies (Accounts) Rules, 2014 is set out in the Annexure – IV to this Report.

Annual Return

Pursuant to the amendments to the provisions of Section 92(3) read with Section 134 (3) (a) of Companies Act, the annual return as on March 31, 2023 is available on the website of the Company at www.pasupatiacrylon.com under Investor Section

Particulars of Employees

The statement containing particulars of employees as required under section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is attached as Annexure - V.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under 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, is provided in a separate annexure forming part of this report. Further, in terms of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. e said annexure is open for inspection at the Registered Office of the Company during business hours on all working days, 21 days before the Annual General Meeting. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

ISO CERTIFICATION

Your Company is an ISO 9001:2015, accredited by Bureau of Indian Standard, Rooid Voor Accreditatie, and Netherland and OKEO TEX STANDARD 100 Class 1 Appendix 6. Furthermore, the Companys CPP Product meets the requirements set out in the BRC Global Standard for Packaging & Packaging Material and is categorized as HIGH HYGINE Grade A by the BRCGS. ese certifications/recognitions are indicative of our commitments in meeting global quality standards and thrust excellence for achieving customer satisfaction.

DEPOSITS

During the year under review, your Company has neither accepted nor renewed any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Further, there are no outstanding and/or overdue deposits as at March 31, 2023.

ACKNOWLEDGEMENT

Your Directors wish to place on record their deep appreciation of the continued support and co-operation received from Financial Institutions, Banks and Shareholders, the State and Central Government.

Your Directors also wish to place on record their appreciation of the devoted services of the Companys employees, who have diligently contributed to the Companys progress.