Polyplex Corporation Ltd Directors Report.

Your Directors have pleasure in submitting the Thirty-Fifth Annual Report together with Audited Standalone and Consolidated Financial Statements for the year ended March 31, 2020.

Financial Highlights and Operations

During the year working results of the Company were as under: a) Standalone Working Results:

(Rs in Lacs)
Particulars 2019-20 2018-19
Total Income 1,49,287 1,53,956
Profit before Finance Cost, Depreciation and Amortization and Tax and Exceptional Items 37,032 33,704
Less : Finance Costs 276 485
Less : Depreciation and Amortization 5,451 4,507
Profit before Tax and Exceptional Item 31,305 28,713
Less: Exceptional Item - (Gain)/ Loss 0 0
Profit before Tax but after exceptional item 31,305 28,713
Less/(Add):Tax expense and prior period adjustment 8,323 5,904
Profit after Tax (PAT) 22,982 22,808
Other Comprehensive Income/Loss (274) 15
Total Comprehensive Income for the period 22,708 22,823
b) Consolidated Working Results:
(Rs in Lacs)
Particulars 2019-20 2018-19
Total Income (Previous Year- Net of Excise Duty) 4,54,851 4,73,343
Profit before Finance Cost, Depreciation and Amortization and Tax and Exceptional Items 84,212 89,491
Less : Finance Costs 1,802 2,908
Less : Depreciation and Amortization 25,333 20,910
Profit before Tax and Exceptional Item 57,077 65,673
Less: Exceptional Item - Gain/(Loss) 6,941 0
Profit before tax but after exceptional item 64,018 65,673
Less/(Add):Tax expense and prior period adjustment 14,636 7,307
Profit after Tax (PAT) 49,382 58,366
Total Other Comprehensive Income 22,320 1,197
Total Comprehensive Income 71,702 59,563
Total Comprehensive Income attributable to owner of the parent 42,434 36,695
Total Comprehensive Income attributable to Non-Controlling Interest 29,268 22,868
Earnings Per Share (of Rs 10/- Each) (H) (Basic & Diluted) 88.18 103.18

Year in Retrospect

During the year under review, Company earned total income of Rs 1,49,287 Lacs as compared to Rs 1,53,956 Lacs during the preceding year on Standalone basis, including income by way of dividend from subsidiary(ies) amounting to Rs 19,185 Lacs (Previous Year Rs 16,984 Lacs). Profit before Tax improved to Rs 31,305 Lacs as compared to Rs 28,713 Lacs. Profit after Tax for the year was at Rs 22,982 Lacs as compared to Rs 22,808 Lacs Lacs during the preceding year.

During the year under review, Company earned total income of Rs 4,54,851 Lacs as compared to Rs 4,73,343 Lacs during the preceding year on Consolidated basis. Profit before Tax and exceptional item was Rs 57,055 Lacs as compared to Rs 65,673 Lacs. Profit after Tax was Rs 49,382 Lacs as compared to Rs 58,366 Lacs during the preceding year.

Transfer to Reserves and Dividend

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

Board of Directors have declared and paid Interim dividend at the rate of Rs 11.00 per share of the Face Value of Rs 10 each (@110%) (Record Date: November 22, 2019).

Your Board of Directors have proposed payment of Final Dividend at the rate of Rs 6.00 per share of the Face Value of Rs 10 each (@60%), 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/Recommended the total dividend of Rs 17/- per share (@ 170%) for the year under review.

For the previous year 2018-19 Company paid first interim dividend @ Rs 10/- per share, second interim dividend (special) @ Rs 31/- per share and final dividend @ Rs 10/- per share.

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.

Buy Back

After the Closure of Financial Year, the Board of Directors of your Company have decided to Buy-Back 11,54,000 Equity Shares of Company which represents 9.9924 % of the aggregate of the Companys paid up capital and free reserves (including Securities Premium) as on March 31, 2019 on Standalone basis at a price not exceeding Rs 475 per shares from open market through Stock Exchanges. The buyback was scheduled to start from April 16, 2020 and is expected to be completed latest by October 15, 2020.

Till June 30, 2020 Company has bought back 5,89,225 shares which have since been extinguished.

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,(Wound up 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.

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 Accounting Standard(s) issued by Institute of Chartered Accountants of India (ICAI), form part of the Annual Report.

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 and given in Form AOC-I, which forms part of the Annual Report.

The Financial Statements of the Subsidiary Companies will be posted on Companys website and made available on request.

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 2019-20. There were no unclaimed deposits as at March 31, 2020.

Directors Responsibility Statement

As required under Section 134(3)(c) of the Act, in relation to the Financial Statements for the Financial Year 2019-20, 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, 2020 and of the Profit of the Company for the year ended on March 31, 2020;

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 (w.e.f. July 10, 2019), Ms. Pooja Haldea and Mr. Ranjit Singh served on the Board of the Company.

AH 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, Mr. Sanjiv Chadha and Mr. Pranay Kothari (Whole Time Director).

Mr. Sanjiv Chadha retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

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 2019-20, six 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 10, 2019, 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 and Listing and other 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 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.

Board, Committees and Directors Evaluation

The Board of Directors has 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.

Managerial and Employee Remuneration

Disclosures pertaining to Managerial Remuneration and other details as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in the Annexure A and B and as also in the Corporate Governance Report.

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, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. The details of composition and terms of reference of these committees are mentioned in the Corporate Governance Report.

Corporate Social Responsibility (CSR) Initiatives

Your Company contributes towards Healthcare, Education, Promoting Culture and Language as per details given in the CSR Report.

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 .

The details of the number of meetings held and attendance of members thereof are provided in detail in the Corporate Governance Report attached.

Corporate Governance

Corporate Governance Report forms part of this Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015 is attached.

Business Responsibility Report (BRR)

The Company is pleased to inform that it is among the top 1000 companies as per the market capitalisation as on March 31, 2020. Accordingly, pursuant to Securities and Exchange Board of India (herein after referred as SEBI) circular dated November 4, 2015 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company presents its first Business Responsibility Report for the financial year ended on March 31, 2020. The Report is forming part of the Annual 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 Companys Code of Conduct.

A copy of the 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 2019-20 to the Members is part of Annual Report. There are no qualifications, reservations or adverse remarks or disclaimers in their report requiring any explanation.

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 2020-21.

Cost Auditors

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 202021. 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., Company Secretaries, New Delhi, as Secretarial Auditors of the Company for the Financial Year 2019-20 pursuant to the provisions of Section 204 of the Act and Rules made thereunder. 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/ Extract of Annual Return

In Compliance with the provisions of the Section 134(3)(a) of the Act, the Annual Return of the Company as per Section 92(3) of the Act is available on the Companys Website www.polyplex . com. An extract of the Annual Return in Form MGT-9 is given in Annexure F.

Related Party Transactions

None of the transactions with any of related parties were in conflict with the Companys interest. Prescribed disclosure as required by the IndAs - 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.

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.

The Related Party Transactions Policy as approved by the Board is available on the website of the Company at www.polyplex.com.

Risk Management

A detailed note has been provided under the Management Discussion and Analysis 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 March 31, 2020 and date of this Report.

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013 and the Rules framed thereunder, either to the Company or to the Central Government.

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 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 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.

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
Sd/-
Date : July 20, 2020 Sanjiv Saraf
Place : New York (USA) Chairman