polyplex corporation ltd share price Directors report


Your Directors have pleasure in presenting the Thirty- eighth Annual Report together with Audited Standalone and Consolidated Financial Statements for the year ended March 31, 2023.

Financial Highlights and Operations

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

a) Standalone Working Results:

(Rs. in Lakh)

Particulars 2022-23 2021-22
Total Income (Revenue from operations and other income) 1,90,503 2,12,714
Profit before Finance Cost, Depreciation and Amortization, Tax and Exceptional Item 37,011 60,795
Less : Finance Costs 71 221
Less : Depreciation and Amortization 4,792 5,120
Profit before Tax and Exceptional Item 32,149 55,454
Add: Exceptional Item - Gain/ (Loss) - -
Profit before Tax but after Exceptional Item 32,149 55,454
Less: Tax expense and prior period adjustment 2,686 6,307
Profit After Tax (PAT) 29,463 49,147
Other Comprehensive Income 53 (230)
Total Comprehensive Income for the period 29,516 48,917

b) Consolidated Working Results:

(Rs. in Lakh)

Particulars 2022-23 2021-22
Total Income (Revenue from operations and other income) 7,74,746 6,75,238
Profit before Finance Cost, Depreciation, Amortization and Tax and Exceptional Item 1,04,237 1,43,589
Less : Finance Costs 3,526 1,650
Less : Depreciation and Amortization 29,628 27,252
Profit before Tax and Exceptional Item 71,082 1,14,687
Add: Exceptional Item - Gain/(Loss) - -
Profit before tax but after Exceptional Item 71,082 1,14,687
Less/(Add):Tax expense and prior period adjustment 9,528 18,204
Profit after Tax (PAT) 61,554 96,483
Other Comprehensive Income 26,064 348
Total Comprehensive Income 87,618 96,831
Total Comprehensive Income attributable to owner of the parent 49,930 57,713
Total Comprehensive Income attributable to Non-Controlling Interest 37,688 39,118
Earnings Per Share (of 110/- each) (Basic & Diluted) (in Rupees) 110.97 181.19

Year in Retrospect

During the year under review, Company earned total income of Rs. 1,90,503 Lakh as compared to Rs. 2,12,714 Lakh during the previous year on Standalone basis, including income by way of dividend from subsidiary(ies) amounting to Rs. 23,193 Lakh (previous year - Rs. 31,396 Lakh). Profit before Tax declined to Rs. 32,149 Lakh as compared to Rs. 55,454 Lakh during the previous year. Profit after Tax for the year was at Rs. 29,463 Lakh as compared to Rs. 49,147 Lakh during the previous year.

During the year under review, Company earned total income of Rs. 7,74,746 Lakh as compared to Rs. 6,75,238 Lakh during

the previous year on Consolidated basis. Profit before Tax and exceptional item stood at Rs. 71,082 Lakh as compared to Rs. 1,14,687 Lakh during the previous year. Profit after Tax was Rs. 61,554 Lakh as compared to Rs. 96,483 Lakh during the previous year.

Margins were under pressure particularly during the second half of the year due to startup of several new film lines mainly in China and India. There was general increase in certain fixed costs, increase in power and fuel costs resulting from geo political situation and also due to the impact of inflationary pressures across the world. These factors are more elaborately covered under Management Discussion and Analysis Report.

Dividend

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

• Interim dividend (1st) at the rate of Rs. 55/- per share (including special dividend @ Rs. 35/- per share) (Record Date: November 25, 2022); and

• Interim dividend (2nd) at the rate of Rs. 30/- per share (Record Date: February 24, 2023).

Board of Directors have also proposed payment of Final Dividend at the rate of Rs. 3/- per share, which would be paid after its declaration by the Members at the ensuing Annual General Meeting.

Cumulatively, the Board of the Company have declared / proposed total dividend of 188/- per share for the year under review.

For the previous FY 21-22 Company paid Interim Dividend (1st) @ 1 33/- per share, Interim Dividend (2nd) @ 1 15/- per share, Interim Dividend (3rd) (Special) @ 1 35/- per share and Final Dividend @ 1 21/- per share. Cumulatively total dividend of 1 104/- per share.

Dividend Distribution Policy

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 (‘the Listing Regulations), the Board of the Company has formulated and adopted a Dividend Distribution Policy. As per the Dividend Distribution Policy, the Board of your Company endeavours to ensure transparency in deciding the quantum of dividend and commit a dividend pay-out upto 20% of Profits After Tax (PAT) on consolidated financials of the Company. The Board while taking decision for recommendation of the dividend takes guidance from this policy and ensure to maintain a consistent approach to dividend pay-out plans. The Dividend Distribution Policy is available at the following link https://www.polyplex. com/investors.

Transfer to Reserves

A sum of 1 250.00 Lakh from the Current Years profit has been transferred to General Reserves (Previous Year - 1 250.00 Lakh).

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 under Regulation 34 read with Para B of Schedule V of The Listing Regulations, 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.

Subsidiary Companies

During the year Company had following subsidiaries/step- down subsidiaries viz.

Polyplex (Thailand) Public Company Limited, Thailand;

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,

Performance/ results of above subsidiaries are included in the Consolidated Financial Statements.

Highlights of performance of subsidiaries 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 Institute of Chartered Accountants of India, form part of the Annual Report.

A Statement as per provisions of Section 129 (3) of the Act, containing the salient features of financial statements of the Companys subsidiaries in Form AOC-1 is attached and forms part of this report.

Further, pursuant to the provisions of Section 136 of the Act read with the Listing Regulations the financial statements of the Company alongwith related information and audited financial statements of subsidiaries are available on the Companys website link at https://www.polyplex.com/investors.

The Company will make available the annual financial statements of the subsidiary company(ies) to any member of the Company on receipt of written request.

The annual financial statements of the subsidiary companies 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 2022-23. There were no unclaimed deposits as at March 31, 2023.

Directors Responsibility Statement

As required under Section 134(3)(c) and 134(5) of the Act, in relation to the financial statements for the Financial Year 2022-23, 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, 2023 and of the Profit of the Company for the year ended on March 31, 2023;

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 ‘going concern basis;

v) The Directors have laid down Internal Financial Controls (IFCs) to be followed by the Company and that such IFCs 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 following Independent Directors viz. Mr. Brij Kishore Soni, Mr. Jitender Balakrishnan, Ms. Pooja Haldea, Mr. Ranjit Singh and Dr. Suresh Inderchand Surana, served on the Board of the Company.

All the Independent Directors have given requisite declaration that they meet the criteria of independence as prescribed under the Act and the Listing Regulations.

The Board of Directors have noted and taken on record the declaration and confirmation submitted by the Independent Directors.

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.

Members of the Company in their Annual General Meeting held on September 29, 2021, had approved re-appointment of Mr. Pranay Kothari as Whole Time Director of the Company, designated as Executive Director (Key Managerial Personnel) for a period of three years commencing from September 7, 2021 to September 6, 2024.

Mr. Sanjiv Saraf, a director liable to retire by rotation, retires at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

The Board recommends his re-appointment 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 designated as Key Managerial Personnel of the Company.

Number of Meetings of the Board

During the Financial Year 2022-23, four 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 which forms part of the Annual Report.

A separate meeting of the Independent Directors was held on March 31, 2023, 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 NonExecutive 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 the Listing Regulations.

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 meetings of the Board or Committees 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.

Details of Remuneration paid to Directors are available in the Corporate Governance Report which forms part of the Annual Report.

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 Listing Regulations are available on the Companys website link www.polyplex.com.

Board, Committees and Directors Evaluation

The Board of Directors have carried out 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 the Listing Regulations.

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 employees 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 forms part of this report marked as "Annexure B".

Board Committees

Pursuant to the requirements under the Act and the Listing Regulations, the Board of Directors have constituted various committees of Board such as Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee. The details of composition and terms of reference of these committees are provided 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 the Corporate Governance Report forms part of this Report.

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

Corporate Governance

Corporate Governance Report forms part of this Annual Report. Compliance Certificate from M/s. RSM & Co., Practising Company Secretaries regarding compliance of the conditions of Corporate Governance as stipulated in the Listing Regulations is annexed with this report.

Business Responsibility and Sustainability Report (BRSR)

The Board is pleased to inform that your Company is among the top 1,000 companies as per the market capitalization criteria at the BSE Limited and/or National Stock Exchange of India Limited as on March 31, 2023.

As required by Regulation 34 (2) (f) of the Listing Regulations, Company is required to include in its Annual Report, a Business Responsibility and Sustainability Report (BRSR) with effect from the financial year 2022-23. Accordingly, BRSR 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 Regulation 4(2)(d)(iv) of the Listing Regulations. 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 Companys 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 re-appointed as Statutory Auditors of the Company for a term of five years from the conclusion of 37th Annual General Meeting held on September 26, 2022 until the conclusion of 42nd Annual General Meeting.

There are no qualifications, reservations or adverse remarks or disclaimers requiring any explanation in their reports.

Internal Auditors

The Board of Directors on the recommendations of the Audit Committee have re-appointed M/s. Jain Pramod Jain & Co., Chartered Accountants as the Internal Auditors of the Company for the Financial Year 2023-24.

Cost Auditors

Your Company is required to prepare and maintain cost records for plastic films as specified by the Central Government under sub-section (1) of Section 148 of the Act. Accordingly, your Company has been preparing and maintaining the 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, (Firm Registration No. 000212), Cost Accountants as Cost Auditors to audit the Cost Records of the Company for the Financial Year 2023-24. 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., (Firm Registration No. P1997DL17000) Practicing Company Secretaries, New Delhi, as Secretarial Auditors of the Company for the Financial Year 2022-23 pursuant to the provisions of Section 204 of the Act and Rules made thereunder read with Regulation 24A of the Listing Regulations 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 Companys website https://www.polyplex.com/investors.

Related Party Transactions

None of the transactions with any of related parties were in conflict with the Companys interest. Prescribed disclosures as required by the Ind AS -24 have been made in the Notes to the financial statements. All related party transactions are entered into at arms-length basis and in the ordinary course of business. Therefore, provisions of Section 188(1) of the Act are not applicable to such transactions. Further, 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 2022-23.

Wherever required omnibus approval of the Audit Committee is obtained and such Related Party Transactions are reported to the Audit Committee in subsequent meeting(s) for its review.

During the year, material related party transaction(s) pursuant to the provisions of Regulation 23 of the Listing Regulations had been duly approved by the shareholders of

the Company in the 37th Annual General Meeting held on September 26, 2022.

Policy on Related Party Transactions as approved by the Board of Directors is available on the website of the Company 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 on Risk Management has been provided under the Management Discussion and Analysis, which forms part of this report.

Internal Financial Controls

Your Company has laid down well defined and documented Internal Financial Controls. The Company has an overall framework for managing risk in terms of the 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, 2023 and date of this Boards Report.

There have been no instances of fraud 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.

Certain Promoter Group members, AGP Holdco Limited (the Investor) and the Company have entered into a binding term sheet on May 23, 2023, wherein they have agreed to sell (subject to customary regulatory and other approvals) to the Investor 24.2778% stake in the equity share capital of the Company for an aggregate consideration of 1137,947 Lakh and also agreed to certain put and call option arrangement.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals during the year impacting the going concern status and Companys 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 promote 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 the Company has also laid down Code of Conduct for Directors and Senior Management Personnel and Whistle Blower Policy.

Your 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 Companys equity shares are listed on the BSE Ltd. and the National Stock Exchange of India Ltd.

Your Companys 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.

Acknowledgment

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/-
Sanjiv Saraf
Date : August 10, 2023 Chairman
Place : Phuket DIN: 00003998