Polyplex Corporation Ltd Directors Report.

Your Directors have pleasure in submitting the Thirty-sixth Annual Report together with Audited Standalone and Consolidated Financial Statements for the year ended March 31, 2021.

Financial Highlights and Operations

During the year working results of the Company were as under:

a) Standalone Working Results:

(H in Lacs)

Particulars 2020-21 2019-20
Total Income (Revenue from operations and other income) 163,754 149,287
Profit before Finance Cost, Depreciation and Amortization, Tax and Exceptional Items 55,914 37,032
Less : Finance Costs 287 276
Less : Depreciation and Amortization 5739 5,451
Profit before Tax and Exceptional Item 49,888 31,305
Add: Exceptional Item Gain/ (Loss) - -
Profit before Tax but after Exceptional Items 49,888 31,305
Less/(Add):Tax expense and prior period adjustment 4,549 8,323
Profit after Tax (PAT) 45,339 22,982
Other Comprehensive Income (19) (274)
Total Comprehensive Income for the period 45,320 22,708

b) Consolidated Working Results:

(H in Lacs)

Particulars 2020-21 2019-20
Total Income (Revenue from operations and other income) 497,732 454,851
Profit before Finance Cost, Depreciation and Amortization, Tax and Exceptional Items 127,590 84,212
Less : Finance Costs 1,758 1,802
Less : Depreciation and Amortization 27,980 25,333
Profit before Tax and Exceptional Item 97,852 57,077
Add: Exceptional Item Gain/(Loss) - 6,941
Profit before tax but after Exceptional Items 97,852 64,018
Less/(Add):Tax expense and prior period adjustment 11,655 14,636
Profit after Tax (PAT) 86,197 49,382
Total Other Comprehensive Income 5,219 22,320
Total Comprehensive Income 91,416 71,702
Total Comprehensive Income attributable to owner of the parent 53,677 42,434
Total Comprehensive Income attributable to Non-Controlling Interest 37,739 29,268
Earnings Per Share (of H10/- Each) (H) (Basic & Diluted) 162.57 88.18

Year in Retrospect

During the year under review, Company earned total income of H 163,754 Lacs as compared to H 149,287 Lacs during the preceding year on Standalone basis, including income by way of dividend from subsidiary(ies) amounting to H 32,183 Lacs (Previous Year H 19,185 Lacs). Profit before Tax improved to H 49,888 Lacs as compared to H 31,305 Lacs during the preceding year. Profit after Tax for the year was atH 45,339 Lacs as compared to H 22,982 Lacs during the preceding year. During the year under review, Company earned total income of H 497,732 Lacs as compared to H 454,851 Lacs during the preceding year on Consolidated basis. Profit before Tax and exceptional item improved to H 97,852 Lacs as compared to H 57,077 Lacs during the preceding year. Profit after Tax was H 86,197 Lacs as compared to H 49,382 Lacs during the preceding year.

Dividend

Board of Directors have declared and paid following Dividends during the year:

- 1st Interim dividend at the rate of H 32/- per share of the Face Value of H 10 each (@320%) (Record Date: August 26, 2020),

- 2nd Interim dividend at the rate of H 15/- per share of the Face Value of H 10 each (@ 150%) (Record Date: November 20, 2020); and

- 3nd Interim dividend (Special) at the rate of H 100/- per share of the Face Value of H 10 each (@ 1000%) (Record Date: February 19, 2021).

Your Board of Directors have also proposed payment of Final Dividend at the rate of H 17/- per share of the Face Value of H 10 each (@170%), which would be paid after its declaration by the Members at the ensuing Annual General Meeting. Cumulatively, the Board of Directors of the Company have declared / proposed total dividend of H 164 /- per share (@ 1640 %) for the year under review.

For the Previous Year 2019-20 Company has paid interim dividend @ H11/- per share, and final dividend @H 6/- per share. Cumulatively total dividend of H 17/- per share (@ 170 %).

Dividend Distribution Policy

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 ("SEBI (LODR) Regulations") the Board of Directors of the Company has formulated and adopted the Dividend Distribution Policy. As per the Dividend Distribution Policy, the Board of Director of your Company endeavours to ensure transparency in deciding the quantum of dividend and commit a dividend pay-out ratio, upto 20% of profits after tax (PAT) on consolidated financials of the Company. The Board of Directors while taking decision for recommendation of the dividend will take guidance from this policy and would ensure to maintain a consistent approach to dividend pay-out plans. The Dividend Distribution Policy is available on the Company’s website www.polyplex.com.

Transfer to Reserves

A sum of H 250.00 Lacs from the Current Year’s profit has been transferred to General Reserves (Previous Year H 250.00 Lacs).

Changes in the nature of business, if any

There is no change in the nature of business of your Company during the year under review.

Management Discussion and Analysis Report

As required by Regulation 34 read with Para B of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 {SEBI (LODR) Regulations, 2015}, a detailed ‘Management Discussion and Analysis Report’ (MDA) is attached in a separate section forming part of the Annual Report.

More details on operations and views on the outlook for the current year are also given in the ‘Management Discussion and Analysis Report’.

Share Capital and Buy Back

The Board of Directors of the Company at its meeting held on April 9, 2020, had approved Buyback of fully paid-up equity shares of face value of H 10/- each of the Company at a price not exceeding H 475/- per Equity Share ("Maximum Buyback Price") and for an amount not exceeding H 5,481.50 Lacs ("Maximum Buyback Size") excluding any expenses incurred or to be incurred for the buyback viz. brokerage costs, fees, charges, taxes such as securities transaction tax and goods and services tax (if any), stamp duty, advisors fees, printing and buyback tax expenses and other incidental and related expenses, taxes and charges ("Transaction Costs") (such maximum amount hereinafter referred to as the "Buyback Offer Size") which represents 9.9924% and 2.3949% of the aggregate of the Companys paid-up capital and free reserves (including securities premium) as on March 31, 2019, on a standalone and consolidated basis respectively, from all the equity shareholders/ beneficial owners of the Equity Shares of the Company, excluding the Promoter(s) and persons in control of the Company ("Promoters") through the "open market mechanism through stock exchange route," as prescribed under the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, as amended (hereinafter referred to as "SEBI Buy-Back Regulations"). Your Directors are pleased to inform that in line with the said approval, the Company had bought back 5,92,138 numbers of equity shares and extinguished the same. Consequently after the said extinguishment of equity shares, the issued & paid-up capital of the Company stands reduced from H 31,98,46,000/- consisting of 3,19,84,600 numbers of equity shares of Nominal Value of H 10/- (Rupees Ten) each to H 31,39,24,620/- consisting paid up capital of 3,13,92,462 numbers of equity shares of Nominal Value of H 10/- (Rupees Ten) each during the financial year ended March 31, 2021.

Subsidiary Companies

During the year Company had following subsidiaries/ step-down subsidiaries whose performance are included in the Consolidated Financial Statements viz. Polyplex (Thailand) Public Company Limited, Thailand, Polyplex Trading (Shenzhen) Co. Ltd., China,(Voluntarily liquidated during the Financial Year 2020-21) EcoBlue Limited, Thailand, Polyplex (Asia) Pte. Ltd., Singapore, Polyplex (Singapore) Pte. Ltd., Singapore, Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi, Turkey, Polyplex Paketleme Cozumleri Sanayi Ve Tickaret Anonim Sirketi, Turkey, Polyplex Europe B.V., Netherlands, PAR LLC., USA, Polyplex America Holdings Inc., USA, Polyplex USA LLC., USA and PT Polyplex Films Indonesia, Indonesia. Highlights of performance of Subsidiary Companies and their contribution to the overall performance of the Company during the period under report are discussed in MDA which forms part of the Annual Report. As required by Section 129 of the Companies Act, 2013, (‘the Act’) and other applicable laws Consolidated Financial Statements of the Company and its subsidiaries are prepared in accordance with applicable Indian Accounting Standards (Ind AS) issued by The Institute of Chartered Accountants of India (ICAI), forms part of the Annual Report. Statement as per provisions of Section 129(3) of the Act, containing the salient features of financialstatements of the Company’s subsidiaries in Form AOC-1 is attached and forms part of this report.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries are available on the Company’s website on https://www.polyplex.com/investors. The Company will make available the annual financial statements of the subsidiary company and the related detailed information to any members of the company on receipt of a written request from them.

The annual financial statements of the subsidiary company will also be kept open for inspection at the Registered Office of the Company on any working day during business hours for a period of twenty-one days before the date of the meeting.

Particulars of Loans, Guarantees and Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the respective notes to Financial Statements.

Deposits from public

The Company has not accepted any deposits from public during the Financial Year 2020-21. There were no unclaimed deposits as at March 31, 2021.

Directors’ Responsibility Statement

As required under Section 134(3)(c) of the Act, in relation to the Financial Statements for the Financial Year 2020-21, the Board of Directors state that : -

i) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii) The Directors have 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 as on March 31, 2021 and of the Profit of the Company for the year ended on March 31, 2021;

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) Annual accounts have been prepared on a ‘going concern’ basis;

v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Directors and Key Managerial Personnel

Independent Directors and Declaration by Independent Directors

During the year, Mr. Brij Kishore Soni, Mr. Jitender Balakrishnan, Dr. Suresh Inderchand Surana, Ms. Pooja Haldea and Mr. Ranjit Singh served on the Board of the Company. All the Independent Directors have given the requisite declaration that they meet the criteria of independence as prescribed under the Act and SEBI (LODR) Regulations, 2015.

The Board of Directors have noted and taken on record the declaration and confirmation submitted by the Independent Directors after due assessment of the veracity of the same.

Non-Independent Directors and Directors Retiring by Rotation

During the year following Non-Independent Directors (including one Whole Time Director) served on the Board viz. Mr. Sanjiv Saraf, Non-Executive Chairman from Promoter category, Mr. Sanjiv Chadha, Non-Executive Director from Promoter category and Mr. Pranay Kothari, Executive Director from non-promoter category.

Mr. Sanjiv Saraf retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for reappointment.

Mr. Pranay Kothari was appointed as Whole Time Director of the Company, designated as Executive Director for a period of three years and his terms will expire on September 6, 2021. The Board of Directors in their meeting held on August 14, 2021 approved his re-appointment for a further period of three years with effect from September 7, 2021 to September 6, 2024 on the recommendations of Nomination and Remuneration Committee, subject to the approval of the shareholders of the Company. The Board of Directors recommend their re-appointments at the ensuing Annual General Meeting.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act, Mr. Pranay Kothari, Whole Time Director, Mr. Manish Gupta, Chief Financial Officer and Mr. Ashok Kumar Gurnani, Company Secretary are the Key Managerial Personnel of the Company.

Number of meetings of the Board

During the Financial Year 2020-21, eight meetings of the Board were held and the gap between two consecutive meetings was not more than 120 days. Details about the attendance of Directors at these meetings are given in the Corporate Governance Report attached.

A separate meeting of the Independent Directors was held on July 20, 2020, without the attendance of non-independent directors and members of management pursuant to the provisions of Code for Independent Directors prescribed in Schedule IV of the Act.

Policy on Directors Appointment and Remuneration

The Nomination and Remuneration Committee (NRC) constituted by the Board of Directors has laid down the criteria and process of identification/ appointment of Directors and payment of remuneration. These include possession of requisite qualification, experience, ethics, integrity and values, absence of conflict with present or potential business operations of the company, balanced and maturity of judgement, willingness to devote sufficient time and energy, high level of leadership, vision and ability to articulate a clear direction for an organisation. While selecting or recommending appointment of any Director, NRC shall have regard to the total strength of the Board prescribed under the Articles of Association and the Act, composition of the Board with respect to Executive and Non-Executive Directors and Independent and Non-Independent Directors and gender diversity.

Appointment of Independent Directors must satisfy the criteria laid down under the Act, rules made thereunder and SEBI (LODR) Regulations, 2015.

Components of remuneration for Executive Directors would include normal Salary structure including perquisites as applicable to senior employees as per policies / schemes of the Company. The appointment and overall remuneration as far as possible be within the statutory ceilings and subject to requisite approvals of the Members of the Company and Central Government, if required. Non-executive directors would be entitled to payment of sitting fee for attending a meeting of the Board or Committee thereof of such amount as may be approved by the Board of Directors keeping in view the ceiling prescribed under the Act or Rules framed thereunder. Further, Non-executive directors may also be paid commission up to 1% of the Net Profits of the Company subject to requisite approval of the Board and Members. The policy on appointment of Directors and remuneration and other matters provided in Section 178(3) of the Act read with the applicable rules and Regulation 19 of the SEBI (LODR) Regulations, 2015 are available on the Company’s website www. polyplex.com.

Board, Committees and Directors Evaluation

The Board of Directors have carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the Corporate Governance requirements prescribed under SEBI (LODR) Regulations, 2015. The performance of the Board and Committees was evaluated by the Board after seeking inputs from all the directors on the basis of following criteria:

a) Degree of achievement of key responsibilities.

b) Structure and Composition.

c) Establishment and delineation of responsibilities to Committees.

d) Effectiveness of Board processes, information and functioning.

e) Board culture and dynamics.

f) Quality of relationship between Board and Management.

g) Efficacy of communication with external stakeholders. The performance of individual directors was evaluated on following criteria:

a) Participation at Board/ Committee Meetings.

b) Knowledge and Skill.

c) Managing Relationships.

d) Personal Attributes.

Independent Directors of the Company in a separate meeting reviewed the performance of non-independent directors and the Board as a whole and as also the performance of Chairperson of the Company.

Particulars of employees and remuneration

a) A 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 Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure which forms part of this report marked as "Annexure A".

b) Ratio of the remuneration of each director to the median employee’s remuneration and such other details 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 is provided in a separate annexure which forms part of this report marked as "Annexure B".

Board Committees

Pursuant to the requirements under the Act and SEBI (LODR) Regulations, 2015, the Board of Directors have constituted various committees of Board such as Audit Committee, Nomination and Remuneration Committee, Stakeholder’s Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee. The details of composition and terms of reference of these committees are mentioned in the Corporate Governance Report.

Corporate Social Responsibility (CSR) Initiatives

Corporate Social Responsibility Report pursuant to Section 134(3) (o) of the Act and Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 forms part of this report and is marked as "Annexure C".

Composition and the role of the Corporate Social Responsibility Committee, number of meetings held and attendance of members thereof are provided in detail in the Corporate Governance Report which forms part of this Report.

Corporate Social Responsibility (CSR) Policy as approved by the Board of Directors is available on the website of the Company on https://www.polyplex.com/investors.

Corporate Governance

Corporate Governance Report forms part of this Annual Report. Compliance Certificate from the RSM & Co., Practising Company Secretaries regarding compliance of the conditions of Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015 is annexed to this report.

Business Responsibility Report (BRR)

The Company is pleased to inform that it is among the top 1000 companies as per the market capitalisation criteria at the BSE Limited and/or National Stock Exchange of India Limited as on March 31, 2021. Accordingly, pursuant to Securities and Exchange Board of India (herein after referred as ‘SEBI’) Circular dated November 4, 2015 and Regulation 34(2)(f) of the SEBI (LODR) Regulations, 2015, the Company presents its Business Responsibility Report for the financial year ended on March 31, 2021. BRR forms part of this Report.

Whistle Blower Policy / Vigil Mechanism

The Company has formulated Whistle Blower Policy in line with the provisions of sub-section 9 and 10 of Section 177 of the Act and SEBI (LODR) Regulations, 2015. This Policy establishes a vigil mechanism for Directors and employees to report genuine concerns regarding unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct. A copy of the said Policy is available on the website of the Company at www.polyplex.com.

Auditors

Statutory Auditors

In accordance with the provisions of the Companies Act, 2013 and Rules made thereunder M/s. S.S. Kothari Mehta & Co., Chartered Accountants (Firm Registration No. 000756N) were appointed as Statutory Auditors of the Company for a term of five years from the conclusion of 32nd Annual General Meeting held on September 11, 2017 until the conclusion of 37th Annual General Meeting to be held in the year 2022. The Auditors’ Report on the Financial Statements of the Company for the Financial Year 2020-21 to the Members is part of Annual Report. There are no qualifications, reservations or adverse remarks or disclaimers requiring any explanation in their report.

Internal Auditors

The Board of Directors on the recommendations of the Audit Committee have reappointed M/s. Jain Pramod Jain & Co., Chartered Accountants as the Internal Auditors of the Company for the Financial Year 2021-22.

Cost Auditors

Your Company is required to make and maintain cost records for plastic films as specified by the Central Government section (1) of Section 148 of the Act. Accordingly, your Company has been making and maintaining these records as required. In terms of Section 148 of the Act read with Companies (Cost Records and Audits) Rules, 2014, The Board of Directors on the recommendations of the Audit Committee have reappointed M/s. Sanjay Gupta & Associates, Cost Accountants (Firm Registration No. 000212) as Cost Auditors to audit the Cost Records of the Company for the Financial Year 2021-22. In terms of Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is required to be ratified by the Members. Accordingly, a resolution seeking ratification of the remuneration payable to the said Auditors has been included in the Notice convening the ensuing Annual General Meeting.

Secretarial Auditors

The Board of Directors on the recommendations of the Audit Committee have reappointed M/s. RSM & Co., Practicing Company Secretaries, New Delhi, as Secretarial Auditors of the Company for the Financial Year 2020-21 pursuant to the provisions of Section 204 of the Act and Rules made thereunder read with Regulation 24A of the SEBI (LODR) Regulations, 2015 and other applicable provisions, if any Secretarial Audit Report received from them is annexed herewith and marked as

Annexure D.

Observations and other remarks in the Secretarial Audit Report are self explanatory.

Other Statutory Information

Details relating to conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under Section 134(3) (m) of the Act read with Companies (Accounts) Rules, 2014 are given in Annexure E.

Annual Return

In Compliance with the provisions of the Section 92 (3) read with Section 134(3) (a) of the Act, the Annual Return (Form No. MGT 7) of the Company is available on the Company’s website on https://www.polyplex.com/investors.

Related Party Transactions

None of the transactions with any of related parties were in conflict with the Company’s interest. Prescribed disclosure as required by the Ind AS -24 has been made in the Notes to the Financial Statements. All related party transactions are negotiated on an arms-length basis and are in the ordinary course of business. Therefore, the provisions of Section 188(1) of the Act are not applicable to such transactions. Further, the disclosure of related party transactions as required under Section 134 (3) (h) of the Act in Form AOC-2 is not applicable to Company for the Financial Year 2020-21.

Wherever required omnibus approval of the Audit Committee is obtained and such Related Party Transactions are reported to the Audit Committee for its review. Further, there were no material Related Party Transactions during the year, requiring approval of the members.

Policy on Related Party Transactions as approved by the Board of Directors is available on the website of the Company on https:// www.polyplex.com/investors.

Risk Management

The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. Composition and terms of reference of Risk Management Committee are mentioned in the Corporate Governance Report. A detailed note has been provided under the Management Discussion and Analysis, which forms part of this report

Internal Financial Control

The Company has laid down well defined and documented Internal Financial Controls. The Company has an overall framework for managing the risks in terms of the Enterprise Risk Management Policy. In the opinion of Board Internal Financial Controls affecting the financial statements are adequate and are operating effectively.

Confirmation

Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI). There have been no other material changes and commitments affecting the financial position of the Company which have occurred between the March 31, 2021 and date of this Board’s Report.

There have been no instances of frauds reported by the Auditors under Section 143 (12) of the Act and the Rules framed thereunder, either to the Company or to the Central Government.

Significant and material orders and material There are orders passed by the no significant regulators or courts or tribunals during the year impacting the going concern status and Company’s operations in future.

Human Resources

Your Company is committed towards creation of opportunities for its employees that help attract, retain and develop a diverse workforce. Your Company lays due importance to conducive work culture for its employees. To reinforce core values and belief of the Company, various policies for employees’ empowerment have been framed to enrich their professional, personal and social life. In addition to above, Company has also laid down Code of Conduct for Directors and Senior Management Personnel and Whistle Blower Policy. Company has also laid down a Policy under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Constituted Internal Complaints Committee to redress the complaints. There were no complaints received during the year (Previous Year: Nil).

Listing of Shares and Depository System

Your Company’s equity shares are listed on the BSE Ltd. and the National Stock Exchange of India Ltd. Your Company’s equity shares are being traded in ‘demat’ form since April 30, 2001. Shareholders of the Company who are still holding shares in physical form are advised to get their physical shares dematerialized by opening an account with one of the Depository Participants.

Acknowledgement

Your Directors wish to place on record their appreciation of the wholehearted and sincere cooperation the Company has received from the various departments of Central/State Governments, Financial Institutions, Bankers and the Auditors of the Company. Your Directors also wish to place on record their appreciation of the dedicated and sincere services rendered by the employees of the Company.

For and on behalf of the Board of Directors
Sd/-
Date : August 14, 2021 Sanjiv Saraf
Place : New Delhi Chairman
DIN: 00003998