Kanpur Plastipack Ltd

DEAR MEMBERS,

Your Directors take pleasure to present this 53^rd Annual Report of Kanpur Plastipack Limited together with Standalone and Consolidated Audited Financial Statements for the financial year ended 31^st March, 2024.

FINANCIAL HIGHLIGHTS:

(Rs in Lacs)

REVIEW OF OPERATIONS AND OUTLOOK:

Fiscal 2023-24 witnessed to be one of the most challenging years for your Company and the Company was impacted by the volatility in the global market, increased competition from within the country and an affected geopolitical environment. During the year the margins were badly affected largely due to the following reasons:

1. Lower realization on sales of fabric to South America;

2. Highly competitive market environment from within the country on exports;

3. Higher ocean freight due to Red Sea crises and, consequently, re-routing the consignments which put additional cost of freight and increased time of delivery.

4. The CPP division has been witnessing losses due to adverse market conditions.

The entire FIBC industry continues to be adversely impacted due to geopolitical reasons. Despite this, it is heartening to note that the operational performance of the Company has improved and your Company was able to record an increase in production and sales in volume terms. During the year, the production and Sales of Rafia division in quantity terms recorded a growth of about 20% and 23%, respectively.

The year witnessed the diversification and establishment of new vertical of the Company in the form of Cast Polypropylene Film (CPP). However, due to over capacity in the CPP market the performance in the CPP division was sluggish leading to lower than expected realization and underutilization of the capacity.

With a continued emphasis on export of value added products and expanding its geographical footprints, your company has penetrated three new export markets which has opened up new avenues for the products of the Company. The Company participated in various exhibitions viz. Arabplast, Dubai, Techtextil, Germany, Propack, Kenya and Tanzania Exhibition at Tanzania. The responses received during these participations will surely help the Company to further expand its global footprints.

Solar Power:

Sustainability is deeply ingrained in everything we do. Your Company is continuously making an endeavor to opt for renewal sources of power which has enabled the Company, during the year, to consume approximately 45% of its power needs through 'Solar Power' enabling not only cost savings to the Company but also reducing the carbon emission in the environment.

Trading Activities:

The performance of Dealer Operated Polymer Warehouse activity of Indian Oil Corporation Limited was improved during the year under review. The Company recorded a growth of about 20% in this sphere in comparison to previous year. Further, the company also opened an additional warehouse in Bareilly in May, 2024 to cater the requirements of nearby regions. This will contribute further to the bottom line from the current financial year.

Outlook:

With India standing at the cusp of multi-decade growth and Europe being the flag bearer of universal sustainability, your Company, having state of art manufacturing facilities and a legacy of five decades, is well positioned and well prepared to capitalize on this long-term opportunity.

We are fully committed to cater to the aspirations of our valued customers, engage our people, attract promising talent and build meaningful partnerships to grow our business. By consciously and energetically driving meaningful change, we are bringing the promise of a better tomorrow closer. We wish to be an active participant in the India's growth story and work towards transformation.

We are on track to regain profitability during the current year and are hopeful for better results in the years to come. Sales realizations in FIBC's have begun to rise upwards as the Global Economy stabilizes. Initiatives taken to enter the Japanese market have begun to bear fruit as shipments have started. Japan is the world's third largest importer of FIBC's and a market so far not being catered to by India. Recent trends in CPP too have seen a rise in selling price and higher demand as the initial market penetration activity has helped.

CREDIT RATING:

We have Credit Rating from Acuite Rating & Research Limited which has provided following credit ratings to the various credit facilities of the Company:

SHARE CAPITAL:

As on 31.03.2024 your Company has total shares capital of Rs 21,46,67,580.00 divided into 2,14,66,758 equity shares of Rs 10/- each. Which is listed with both stock exchanges viz. BSE Limited and National Stock Exchange.

SUBSIDIARY COMPANIES

As on March 31, 2024, your Company has three subsidiary Companies. During the year, there has been no material change

in the nature of the business of the subsidiaries. As required under Section 129(3) of the Act, the report on the performance and financial position of each subsidiary company and salient features of their Financial Statements are attached in the prescribed form AOC-1 with the financial statements which forms part of this Annual Report.

In accordance with the provisions of Section 136 of the Act and the amendments thereto, read with the SEBI Listing Regulations, the audited financial statements, including the consolidated financial statements and related information of the Company and financial statements of the subsidiary companies are available on our website at www.kanplas.com.

There is no Company which became or ceased to be subsidiary, joint venture and associate during the year under review. There is no material subsidiary Company in terms of regulation nos. 16(1)(c) and 24 of the SEBI( Listing Obligation and Disclosure Requirements) Regulations, 2015.

Your Company funds its subsidiaries, from time to time, in the ordinary course of business and as per the funding requirements, through capital, loan and/or other means to meet working capital requirements.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (The 'Listing Regulations') and Section 129(3) of the Act, the consolidated financial statements have been prepared by the Company, as per the Indian Accounting Standards (Ind AS), and form part of this Annual Report. The Consolidated Financial Statements shall also be laid at the ensuing Annual General Meeting of the Company.

DIVIDEND:

The Dividend Distribution Policy of the Company has been duly uploaded on the website of the Company at www.kanplas.com.

In view of affected profitability and to retain the resources, your Directors did not recommend any dividend for the financial year 2023-24.

DIRECTORS:

Your Directors have appointed Shri Sanjeev Singhal as Independent Director of the Company w.e.f. 08/02/2024 which was later on confirmed by the shareholders through postal ballot for a consecutive period of five years.

Shri Prem Singh Khamesra has retired from the Board of Directors on 31^st March, 2024 after serving two consecutive terms as Independent Director. The Board appreciated and took on record the splendid contribution of Shri Prem Singh Khamesra during his tenure.

Shri Subodh Kumar, Independent Director unfortunately passed away on the 27^th October, 2023. The Board placed on record their appreciation for the valuable contribution made by him during his association with the Company.

The Board has re-appointed Shri Shashank Agarwal as Deputy Managing Director and Shri Sunil Mehta as Executive Director w.e.f. 01^st September, 2024 on fresh terms of appointment as recommended by the Nomination and Remuneration Committee, subject to the approval of the shareholders at the ensuing Annual General Meeting.

Also, Shri Sunil Mehta is retiring by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. In view of the valuable services, guidance and support received from him, your Directors recommend his re-appointment.

The Board of Directors of the Company is having optimum combination of Independent and Promoter Directors as required under Section 149(4) read with Regulation 17 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, as amended.

MEETINGS OF THE BOARD OF DIRECTORS:

During the year your Company has conducted 4 meetings of the Board of Directors. The details of the meeting of the Board & Committees thereof including attendance therein are given under Corporate Governance Report.

Your company has digitalized the Board Process and adopted paper less Board meetings platform.

KEY MANAGERIAL PERSONNEL:

Following are the Key Managerial Personnel of your Company:

*Shri Shobit Agarwal was appointed as CFO w.e.f 10/06/2024 consequent to the resignation of earlier CFO Shri Vishal Jain w.e.f 31/05/2024.

DECLARATION OF INDEPENDENT DIRECTORS:

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

DEPOSITS:

In view of Section 73 to 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 your Company did not accept any deposit during the year under review.

CORPORATE GOVERNANCE:

The Certificates certifying that :

(i) the Company has complied with the requirements of Corporate Governance in terms of SEBI (LODR) Regulations, 2015; and

(ii) none of the Directors on the Board of the company have been debarred or disqualified from being appointed or continuing as Directors of Companies by the SEBI/ MCA or any such authority. are attached and form part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information as per Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo for the financial year 2023- 24 are annexed as Annexure 'B' which forms part of this Report.

PARTICULARS OF EMPLOYEES:

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure 'C' which forms part of this Report.

I. STATUTORY AUDITORS AND THEIR REPORT

M/s Rajiv Mehrotra & Associates (FRN: 002253C), Chartered Accountants, were appointed as Statutory Auditors of your Company for a period of 5 years in the Annual General Meeting held on 02/09/2022 till the conclusion of 56^th Annual General Meeting to be held in the year 2027.

The Audit Report from the Statutory Auditors forms part of this Annual Report. The said report does not contain any qualification, reservation or adverse remark.

II. COST AUDITORS

As per Section 148 of the Act read with Companies (Audit and Auditors) Rules, 2014, the Company, is required to maintain and audit its cost records conducted by a Cost Accountant. The Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/s Rakesh Misra & Company, Cost Accountants as the Cost Auditors of the Company to conduct cost audits for relevant products prescribed under the Companies (Cost Records and Audit) Rules, 2014 for the year ending March 31, 2025. Under Section 139(1) of the Act and the Rules framed thereunder M/s Rakesh Misra & Company have furnished a certificate of their eligibility and consent for appointment.

The Board on recommendations of the Audit Committee have approved the remuneration payable to the Cost Auditor, subject to ratification of their remuneration by the members at the ensuing AGM. The resolution approving the above proposal is being placed for approval of the members at the ensuring Annual General Meeting.

The cost audit report for the financial year 2023-24 will be filed within the stipulated time.

III. SECRETARIAL AUDITORS

The Secretarial Audit Report for the financial year 2023- 24, as placed by the Auditor, is annexed with this Report as Annexure 'D'. There was no qualification, reservation or adverse remark made by the Auditor in their respective report. The Company has, on the recommendation of the Audit Committee, re-appointed M/s Adesh Tandon & Associates, Practicing Company Secretaries as the Secretarial Auditors of the Company for the year 2024-25

IV. INTERNAL AUDITORS

During the year under review M/s S N Saraogi & Associates, Chartered Accountants were the Internal Auditors of the Company. Their reports were placed before the Audit Committee of the Company from time to time.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has adequate system of internal control with reference to the financial statements. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company.

Company ensures proper and adequate systems and procedures commensurate with its size and nature of its business.

ANNUAL RETURN:

As per the requirement of Section 134(3)(a) read with Section 92(3) of the Companies Act, 2013, the Annual Return for the year 2023-24 has been placed on the website of the Company. The weblink of the same is https:/www.kanplas.com/en/ corporate-governance.

LISTING:

The Equity Shares of the Company are listed with National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). We confirm that the Annual Listing Fees for the financial year 2024-25 have been paid within the stipulated time to both the Stock Exchanges.

CORPORATE SOCIAL RESPONSIBILITY:

During 2023-24, the provisions of Section 135 and Schedule VII of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014 were not applicable on the Company. However, the Board of Directors of your Company continued to comply with the provisions on voluntary basis.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

During the year, your Company has not made any Loan or given any Guarantees to any parties covered under section 185 except its Subsidiary Companies which have been converted into Capital and the details of investments are given under note 4 and 8 of the Financial Statements. However, the investments made does not exceed the limits as prescribed under Section 186 of the Companies Act, 2013.

VIGIL MECHANISM (WHISTLE BLOWER POLICY):

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014 and Regulations 34 (3) and 53 (f) of SEBI (LODR) Regulations, 2015, a Vigil Mechanism for directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company.

During the year under review no complaint was received by the Audit Committee under the Whistle Blower Policy.

RISK MANAGEMENT:

The Company follows the risk management policy wherein the management keeps an eagle eye view on the markets, both domestic and foreign, related to the products, the Company manufactures and the raw materials required. The management also monitors the socio-economic changes worldwide and the changes in the currency fluctuation to minimize the risks.

The Board members are regularly informed about the potential risks, their assessment and minimization procedures. The Board frames a plan for elimination / minimization of the risk and further lays out the steps for implementing and monitoring of the risk management plan.

There are no risks which in the opinion of the Board are of the nature that can threaten the existence of the Company. However, the risks inter-se that are generally dealt in regular course of business are fluctuations in foreign exchange rates and raw material prices which have to be taken care.

MATERIAL CHANGES AND COMMITMENTS:

No material change or commitment which may affect the financial position of the Company has occurred between the end of the financial year of the Company and the date of this report.

INDIAN ACCOUNTING STANDARDS:

Your Company has adopted Indian Accounting Standards ('Ind- AS') with effect from 1st April, 2017 pursuant to Ministry of Corporate Affairs notification dated 16th February, 2015 notifying the Companies (Indian Accounting Standards) Rules, 2015.

BOARD EVALUATION:

The Board annually evaluates its performance as well as the performances of its Committees and its Directors individually.

For evaluating the performance of the Board as a whole, the Chairman of the Company and the Whole Time Directors are evaluated linking it with the periodical performances of the Company, role of the Board towards achievement of the said performances, the future plans as set out from time to time and their devotion towards implementation and management of the growth parameters of the Company.

The performance of the Non Executive / Independent Directors is evaluated on the basis of their contribution for adopting better corporate governance practices, transparency and disclosures in achieving the goal of the Company.

The performance of the various Committees of the Board is reviewed on the basis of the achievement of the work designated to the specific committee.

RELATED PARTY TRANSACTIONS:

During the year no contracts / arrangements were entered / renewed by the Company with related parties in terms of the provisions of Section 188(1) of the Companies Act, 2013.

All the transactions with the related parties entered during the year 2023-24 were in the ordinary course of business, on arm's length basis and as per the approval of the Audit Committee. Further, no material related party transaction was entered during the year under review.

Disclosure as required under section 134(3)(Rs) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, in form AOC-2, is not applicable as all the contracts entered by the Company during the year are on arms length basis and there was no material contract or arrangement.

The policy to deal with the related party transactions is uploaded on the company's website. The weblink of the same is https://www.kanplas.com/en/policies

COMPANY'S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. The Company has duly constituted the Nomination and Remuneration Committee of the Board and the committee interalia periodically evaluates:

1. The need for change in composition and size of the Board;

2. Recommend/review remuneration of the Managing Director and Whole-time Director(s) based on their performance.

3. Recommend the policy for remuneration of Directors, KMPs & other senior level employees of the Company and review the same in accordance with the performance of the Company and industry trend.

The policy to deal with the selection, appointment and remuneration of the Directors and Key Managerial Personnel and other senior level employees is annexed with this report as Annexure 'E'.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE.

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that: -

i) in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

ii) 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 profit or loss of the Company for that period;

iii) 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;

iv) the Directors had prepared the Annual Accounts of the Company on a going concern basis.

v) 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.

vi) 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.

ACKNOWLEDGEMENT:

Your Directors convey their sincere gratitude towards the Bankers, Government Agencies, esteemed customers and all other stakeholders for their continued support and patronage during the year.

Your Directors also place on record their appreciation for the committed and dedicated contribution of all the officers, staff and workmen for the consistent growth of your Company.

Your Directors also take this opportunity to place on record their gratitude to all the shareholders for their confidence with the Company.