Royal Cushion Vinyl Products Ltd Directors Report.

To

The Members of

Royal Cushion Vinyl Products Limited,

Your Directors have pleasure in presenting the 36th Annual Report together with Audited Financial Statements of the Company for the financial year ended 31st March, 2020.

1) Financial Results

( In Lakhs)

Particulars Current year ended 31.03.2020 Previous year Ended 31.03.2019
Revenue from operations (Net) 6248.66 7353.65
Other Income 1012.95 2221.03
Net Income 7261.61 9574.68
Total Expenditure 7372.95 8501.49
Profit / (loss) before interest and depreciation (111.34) 1073.19
Finance Cost 384.66 496.75
Depreciation 192.16 136.34
Profit/(Loss) before Exceptional item (688.16) 440.10
Exceptional item 26.84 7.93
Profit/(Loss) for the year (661.32) 448.03

2. PERFORMANCE OF OPERATIONS AND THE STATE OF COMPANYS AFFAIRS

The Company has achieved Net Income of 7261.61 Lakhs as against 7353.65 Lakhs in the previous year. Net Loss of Rs.661.32 Lakhs as compared to previous years Net Profit of Rs.448.03 Lakhs. Other income includes 874.83 Lakhs received as grant for State Goods & Service Tax .

3. FINANCIAL STATEMENTS

The financial statements are prepared in accordance with the Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

4. COVID -19 PANDEMIC

In the last quarter of the financial year 2019-20, the coronavirus disease emerged as a global pandemic resulting in many governments declaring lockdowns forcing citizens to stay indoors and disruption of economic activities globally.

The Ministry of Home Affairs vide order dated 24th March, 2020 notified first ever nationwide lockdown to contain the outbreak of Covid-19, Covid -19 has made drastic impact throughout the world and has also affected the Company. Due to the Pandemic and the subsequent complete and partial lockdowns, the business of the Company has been affected. The Company has managed to cope with the situation despite the challenges, however the impact assessment of COVID- 19 is a continuous process given the uncertainties associated with its nature and duration

5. DIVIDEND

The Board of Directors is unable to declare any dividend for the year 2019-2020.

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under Listing Agreement and LODR Regulations is disclosed separately in the current Annual Report.

7. FIXED DEPOSITS

During the year under review, your Company has not accepted any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules 2014, as amended from time to time.

8. CORPORATE SOCIAL RESPONSIBILITY

The Companies Act, 2013 mandates that every Company, who meet certain eligibility criteria needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility activities. In view of losses, no amount is required to be spent by the Company.

9. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

Details on conservation of energy, technology absorption, foreign exchange earnings and outgo is given in the Annexure - "A" to this report.

10. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Details of Loans, Guarantees and Investments under Section 186 of the Companies Act, 2015 forms part of notes to financial statements provided in this Annual Report.

11. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of Companys business. The Board has approved a policy for related party transactions which has been uploaded on the website of the Company www.rcvp.in. All the related party transactions are placed before the Audit Committee as well as the Board for approval on a quarterly basis. Omnibus approval was also obtained from the Audit Committee and the Board on an annual basis for repetitive transactions. Resolution of the shareholders is also obtained, wherever necessary, in this regard. Related party transactions are disclosed in the notes to the financial statements. Prescribed Form No. AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 is furnished as Annexure - "B" to this report.

12. DISCLOSURE UNDER RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL), RULES, 2014

The information required pursuant to section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company and Directors is attached as Annexure "C". The Company had no employee drawing remuneration in excess of the amount as mentioned under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. There were no employees who were in receipt of remuneration for which details need to be disclosed.

13. BOARD OF DIRECTORS

Mr. Jayesh Motasha retires as director by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

The Board of Directors comprises of one Executive Director and Three Non-Executive Directors. Mr. Mahesh. K. Shah, Chairman and Managing Director of the Company, Mr. Jayesh Motasha Non Executive Directors and Mrs.

Avani Jolly Pandit and Mrs. Harsha Mukesh Shah - Independent Directors.

All Independent Directors have given declarations to the effect that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 read with Regulation 16 of SEBI (Listing obligations and Disclosures Requirements), Regulations 2015 and there has been no change in the circumstances which may affect their status as independent directors during the year.

None of the directors of the Company are debarred from holding the office of Director by virtue of any SEBI order or order by any other competent authority.

In the opinion of the Board, the independent directors possess appropriate balance of skills, experience and knowledge, as required.

A brief note on Director retiring by rotation and eligible for re-appointment is furnished in the Notice of Annual General Meeting.

14. KEY MANAGERIAL PERSONNEL

The Company has Mr. Mahesh K. Shah, Chairman & Managing Director. The Company has Ms. Nivedita Juvatkar as a Company Secretary and Compliance Officer and the Company is in search for appointment of Chief Financial Officer (CFO) after resignation of Mr. Urvish Shah to comply with the provision of Section 203 of the Companies Act, 2013, however, the Company unable to get the right candidate for the post of CFO.

15. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed:

a) That in the preparation of the Annual Accounts for the financial year ended 31st March, 2020 the applicable accounting standards/practices had been followed along with proper explanation relating to material departures; if any

b) That 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 and of the loss of the Company for that period;

c) That 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) The annual financial statements have been prepared on a going concern basis.

e) That 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) That 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.

16. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR

No material changes or commitments affecting the financial position of the Company have occurred between the end of the financial year to which financial statements in this report relate and the date of this report.

17. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE.

There are no significant or material orders passed by any regulator, tribunal or court that would impact the going concern status of the Company and its future operations.

18. ADOPTION OF INDIAN ACCOUNTING STANDARDS

The Company has complied with all the applicable Secretarial Standards.

19. DETAILS OF SUBSIDIARIES/JOINT VENTURE/ASSOCIATE COMPANY

The Company has no subsidiaries/Joint venture/Associate Company incorporated or ceased in the year 2019-20.

20. INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

21. STATUTORY AUDITORS

M/s. Bipin & Co, Chartered Accountants, Vadodara (Firm Registration no. 101509W) were appointed as Auditors of the Company for a term of 5 (five) consecutive years, at the Annual General Meeting (AGM) held on 26th September 2017 till the conclusion of 38th AGM.

Auditors Report:

The notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer.

22. PREVENTION OF INSIDER TRADING

The Board at its meeting held on 12th August, 2015 has adopted a revised Code of Prevention of Insider Trading based on the SEBI (Prohibition of Insider Trading) Regulations, 2015. The same has been placed on the website of the Company www.rcvp.in. All the Directors, senior management employees and other employees who have access to the unpublished price sensitive information of the Company are governed by this code. During the year under Report, there has been due compliance with the said code of conduct for prevention of insider trading.

23. COST AUDITORS

In terms of the Companies (Cost Records and Audit) Rules, 2014 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company has maintained cost records for financial year 2019-20 in respect of its polymers products. However, in terms of the said Rules, the requirement of cost audit is not applicable to the Company for the financial year 2019-20 as the turnover of the Company from these services is below the threshold limit prescribed in the said Rules for cost audit.

24. 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, Board has appointed Mrs. Padma Loya, Practicing Company Secretaries of M/s. Loya and Associates (Membership no. 25349, Certificate of Practice No. 14972) to conduct Secretarial Audit of the Company for the financial year 2019-2020.

The Annual Secretarial Compliance Report for the period ended 31st March, 2020 under Regulation 24A issued by Mrs. Padma Loya, Practicing Company Secretaries of M/s. Loya and Associates and submitted to BSE Limited.

The Secretarial Audit Report for the financial year 2019-20 is annexed herewith as Annexure "D" which forms part of the Boards report.

25. LISTING WITH STOCK EXCHANGE

The Company confirms that it has paid the Annual Listing Fees for the year 2019-2020 to BSE Limited (BSE) where the Companys Shares are listed.

26. SHARE CAPITAL

During the financial year there was no change in the Share Capital of the Company.

27. EXTRACT OF THE ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Companies Act, 2013 an extract of the Annual Return in Form No. MGT - 9 is annexed herewith as Annexure "E".

28. REMUNERATION POLICY

The Board of Directors has on recommendations of the Nomination & Remuneration Committee outlined policy for selection & appointment of Directors, Key Managerial Personnel & Senior Management and also to decide their remuneration along with the perks. The Nomination & Remuneration Committee revises the remuneration from time to time depending upon the performance of the Company and the Individual Directors / Key Managerial Personnel and other Senior Management Personnel. The detailed policy is available on the website of the Company www.rcvp.in.

29. POLICY ON DIRECTORS APPOINTMENT, REMUNERATION AND OTHER DETAILS

The Nomination and Remuneration Committee has laid down the criteria for Directors appointment and remuneration including criteria for determining qualifications, positive attributes and independence of a Director. The following attributes/criteria for selection have been laid by the Board on the recommendation of the Committee:

• the candidate should possess the positive attributes such as leadership, entrepreneurship, industrialist, business advisor or such other attributes which in the opinion of the Committee the candidate possess and are in the interest of the Company;

• the candidate should be free from any disqualifications as provided under Sections 164 and 167 of the Companies Act, 2013;

• the candidate should meet the conditions of being independent as stipulated under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 in case of appointment as an independent director; and

• the candidate should possess appropriate educational qualification, skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations, infrastructure, medical, social service, professional teaching or such other areas or disciplines which are relevant for the Companys business.

30. BOARD OF DIRECTORS MEETING

During the financial year ended 31st March, 2020, the Company held nine (9) Board Meetings and the gap between the two meetings of the Board not more than 120 days as per Companies Act, 2013. The meetings were held on 18th April, 2019, 29th May, 2019, 02nd July, 2019, 14th August, 2019, 23rd August, 2019, 29th August, 2019, 13th November, 2019, 26th December, 2019 and 14th February, 2020.The details of the Board Meetings are provided in the Corporate Governance Report.

31. COMMITTEES OF THE BOARD

The Board has following Committees formed:

• Audit Committee

• Nomination & Remuneration Committee

• Stakeholders Relationship Committee

The details of the composition of committees, its roles and responsibility along with number of meetings held are given in the Report of Corporate Governance.

32. AUDIT COMMITTEE

The Audit Committee of the Board has been constituted as per the Listing Regulations and Section 177 of the Companies Act, 2013. Constitution, meetings, attendance and other details of the Audit Committee are given in corporate governance which forms a part of this Report.

33. VIGIL MECHANISM

The Company has established a vigil mechanism for its Directors and Employees to report genuine concerns relating any violations legal or regulatory requirements or misconduct in the Company through its Whistle Blower Policy. And, to report concerns of unethical behavior, actual or suspected, fraud or violation of the Companys code of conduct and ethics policy, incorrect or misrepresentation of any financial statements and reports thereon.

The protected disclosures will be dealt by the Chairperson of the Audit Committee and the Chairperson should address the same carry out the investigation and take needful action.

The policy on Whistle Blower as approved by the Board of Directors is uploaded on companys website i.e. www.rcvp.in.

34. RISK MANAGEMENT POLICY

The Company has laid down procedures to inform the members of the Board about the risk assessment and minimization procedures and the same is reviewed by the Board periodically.

35. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has adopted Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the workplace, to provide protection to employees at the workplace. The Company has not received any complaints of sexual harassment during the year.

36. CORPORATE GOVERNANCE

As per the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has complied with the requirements of Corporate Governance in all material aspects. A report on Corporate Governance together with a certificate of its compliance from the Auditors of the Company, forms part of this report.

37. CODE OF CONDUCT

The Board has laid down a code of conduct for Board members and senior management personnel of the Company. The code also incorporates the duties of independent directors as laid down in the Companies Act, 2013. The said code of conduct is posted on Companys website www.rcvp.in The Board members and senior management personnel have affirmed compliance with the said code of conduct. A declaration signed by the Managing Director is given in this Report.

38. PERFORMANCE EVALUATION OF BOARD AND INDEPENDENT DIRECTORS

The Nomination and Remuneration Committee lays down the criteria for performance evaluation of independent directors, Board of Directors and Committees of the Board. The criteria for performance evaluation is based on the various parameters like attendance and participation at meetings of the Board and Committees thereof, contribution to strategic decision making, review of risk assessment and risk mitigation, review of financial statements, business performance and contribution to the enhancement of brand image of the Company.

The Board has carried out evaluation of its own performance as well as that of the Committees of the Board and all the Directors.

39. SAFETY, ENVIRONMENT AND HEALTH

The Company considers safety, environment and health as the management responsibility. Regular employee training programs are carried out in the manufacturing facility on safety and environment.

40. PROFICIENCY OF DIRECTORS

All the Independent Directors of the Company have registered their names in the database maintained by Indian Institute of Corporate Affairs. Those of the Independent Directors who are not otherwise exempted shall appear for the common proficiency test conducted by the said institute within the prescribed time.

41. FAMILIARISATION PROGRAMME FOR DIRECTORS

A well informed familiarized Board member can contribute significantly to effectively discharge its role of trusteeship in a manner that fulfils stakeholders aspirations and societal expectations. In pursuit of this, the Directors are updated on a continuing basis on changes / developments in the domestic / global corporate and industry scenario including those pertaining to statutes / legislations and economic environment, to enable them to take well informed and timely decisions.

42. SECRETARIAL STANDARDS

The Company has complied with all the applicable Secretarial Standards.

43. ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation, for the co-operation and support received from Financial Institutions, Banks, Customers and other Government agencies. Your Directors also place on record their appreciation, for the services rendered by Employees during the critical period of the Company.

On Behalf of the Board of Directors For Royal Cushion Vinyl Products Limited

Place: Mumbai Mahesh Shah
Date: 03rd September, 2020 Managing Director
(DIN 00054351)