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Linc Pen & Plastics Ltd.

BSE: 531241 Sector: Services
NSE: LINCPEN ISIN Code: INE802B01019
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NSE 13:14 | 24 Oct 243.00 -0.25
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OPEN 240.00
PREVIOUS CLOSE 244.00
VOLUME 425
52-Week high 338.95
52-Week low 220.00
P/E 26.67
Mkt Cap.(Rs cr) 355
Buy Price 241.65
Buy Qty 26.00
Sell Price 246.55
Sell Qty 9.00
OPEN 240.00
CLOSE 244.00
VOLUME 425
52-Week high 338.95
52-Week low 220.00
P/E 26.67
Mkt Cap.(Rs cr) 355
Buy Price 241.65
Buy Qty 26.00
Sell Price 246.55
Sell Qty 9.00

Linc Pen & Plastics Ltd. (LINCPEN) - Director Report

Company director report

Your Directors have pleasure in presenting their 23rd Annual Report together with theaudited accounts of the Company for the year ended 31st March 2017.

Financial Highlights (H ( H in Lakhs)
2016 – 17 2015 – 16
Sales & Other Operational Income 36091.11 34414.43
Other Income 37.76 73.84
Profit before depreciation interest and taxation 3389.80 3213.08
Finance Cost 216.66 153.04
Depreciation 792.83 596.36
Profit before Tax 2380.31 2463.68
Provision for Taxation - Current 543.00 541.00
- Deferred 120.37 90.68
Profit after Tax 1716.94 1832.00
Add: Credit Balance of the previous year 480.08 381.96
Amount available for Appropriation 2197.02 2213.96
Transfer to General Reserve 1200.00 1200.00
Proposed Dividend 443.58 443.58
Corporate Tax on Dividend 90.30 90.30
Balance carried to Balance Sheet 463.14 480.08

Dividend

Your Directors recommend a Dividend of H3/- per equity share (previous year H3/- perequity share) for the year ended 31st March 2017.

Financial Performance

Sales & Net Profit: During the year under review the Company's Sales (incl.Other Operational Income) increased by 4.9% to H36091.11 Lakhs as compared to H34414.43Lakhs during the preceding year. The Profit after Tax during the year was H1716.94 Lakhsas compared to H1832 Lakhs in the previous year a drop of about 6.3%. The steep declinein the corporate / institutional sale post demonetization pulled down the revenue growthof the Company which together with increase in polymer prices and strengthening of theIndian rupee affected the profitability of the Company. Working Capital: Theyear-end debtors are 40 days of the sales for the year as compared to 51 days in theprevious year. The inventory holding is for 79 days' sales as compared to 82 days in theprevious year. A full analysis and discussion on the performance of the Company as wellbusiness outlook is included in this Annual Report under the heading ‘ManagementDiscussion and Analysis' as Annexure to this Report.

New Facility at Umbergaon Gujarat

The Company inaugurated its new manufacturing facility at Umbergaon Gujarat on 1st

May 2017. The commercial production from this facility is expected to start aftersuccessful trial run.

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the Directors hereby confirmthat:-(a) in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures; (b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitand loss of the company for that period; (c) the directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities; (d) the directors had prepared the annual accounts on agoing concern basis; (e) the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively; and (f) the directors had devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.

Corporate Governance

The Company had complied with the requirements of Corporate Governance in terms of SEBI(Listing Obligations and

Disclosure Requirements) Regulations 2015. A separate report each on CorporateGovernance (Annexure-B along with Auditors' Certificate on its due compliance) andManagement Discussion and Analysis is attached to this report.

Listing

The equity shares of the Company are listed on BSE Limited (BSE) The Calcutta StockExchange Limited (CSE) and National Stock Exchange of India Limited (NSE).

Directors and Key Managerial Personnel

In accordance with the Articles of Association of the Company Shri Deepak JalanManaging Director of the Company retire by rotation at the ensuing Annual General Meetingand being eligible offer himself for re-appointment.

The following persons were appointed as Key Managerial Personnel of the Company inCompliance with provisions of section 203 of the Companies Act 2013: Shri Deepak Jalan -Managing Director Shri Aloke Jalan - Whole Time Director Shri N. K. Dujari - ChiefFinancial Officer & Company Secretary

Conservation of Energy Technology Absorption and Foreign Exchange Earnings & Outgo

A statement pursuant to section 134 of the Companies Act 2013 giving details ofmeasures taken towards conservation of energy technology absorption foreign exchangeearnings and outgo in accordance with the Companies (Accounts) Rules 2014 is annexed asAnnexure - C.

Particulars of Employees and related disclosures

Disclosure as required Section 197(12) of the Companies Act 2013 read with Rule 5(1)5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is annexed as Annexure – D.

Policy on Directors' Appointment and Remuneration

Policy on Directors' Appointment is to follow the criteria as laid down under theCompanies Act 2013 and the Listing Regulations 2015 and good corporate practices.Emphasis is given to persons from diverse fields or professions. Policy on Remuneration -Guiding Policy on remuneration of Directors Key Managerial Personnel and employees of theCompany is –

Remuneration to unionised workmen is based on the periodical settlement with theworkmen union.

Remuneration to Key Managerial

Personnel Senior Executives

Managers Staff and Workmen (non Unionised) is industry driven in which it is operatingtaking into account the performance leverage and factors such as to attract and retainquality talent.

For Directors it is based on the shareholders resolutions provisions of the CompaniesAct 2013 and Rules framed therein circulars and guidelines issued by Central Governmentand other authorities from time to time.

Declaration by Independent Directors

Pursuant to Section 149(6) of the Companies Act 2013 Independent Directors of theCompany have made a declaration confirming the compliance of the conditions of theindependence stipulated in the aforesaid section.

Related Party Transactions

All related party transactions that were entered into during the year under report wereon an arm's length basis and in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company during the year. Thusprovisions of sections 134(3)(h) and 188(1) of the Companies Act 2013 are not applicableand therefore Form No. AOC-2 has not been attached. Related

Party Transactions Policy is available on weblink http://www.lincpen.com

Risk Management

The Company has a structured risk management policy. The Risk management process isdesigned to safeguard the organisation from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventorised and integrated with themanagement process such that they receive the necessary consideration during decisionmaking. It is dealt with in greater details in the management discussion and analysissection.

Annual Evaluation by Board

The Board of Directors of the Company has initiated and put in place evaluation of itsown performance its committees and individual directors. The result of the evaluation issatisfactory and adequate and meets the requirement of the Company.

Whistle Blower Mechanism

Your Company has put in place Whistle Blower Mechanism. The detailed mechanism is givenin Corporate Governance Report forming part of this report.

Extract of Annual Return

Extract of Annual Return is annexed as Annexure E.

Meeting of the Board of Directors

Five (5) meeting of the Board of Directors including a meeting of independentDirectors without the attendance of the Non-Independent Directors and members ofmanagement were held during the year. The details of the same are provided in theCorporate Governance Report.

Auditors

M/s Singhi & Co. (FRN: 302049E)

Chartered Accountants are proposed to be appointed as the Statutory Auditors in placeof M/s G. P. Agrawal & Co. whose terms ends at the conclusion of the forthcomingAnnual General Meeting of the Company.

M/s Singhi & Co. will hold office as the Statutory Auditor of the Company for aperiod of 5 years commencing from the conclusion of the 23rd Annual General Meeting tillthe conclusion of the 28th Annual General Meeting of the Company. In terms of theprovisions of section 139 of the Companies Act 2013 such appointment is subject toratification by members at every Annual General Meeting. M/s Singhi & Co. hasconfirmed their eligibility to act as the Auditor of your Company.

Secretarial Audit

The Company had appointed M/s D. C. Sahoo & Co. Practising Company Secretaries asthe Secretarial Auditor of the Company for the financial year 2016-17. The report of theSecretarial Auditor is annexed as Annexure – F. The report does not contain anyqualification.

Internal Finance Control

The Company has put in place adequate system of internal finance controls commensuratewith its size and nature of its operations. During the year no material weakness in itsoperating effectiveness was observed.

Corporate Social Responsibility

With the enactment of the Companies Act 2013 and the Companies (Corporate SocialResponsibility) Rules 2014 read with various clarifications issued by Ministry ofCorporate Affairs the Company has undertaken activities as per the CSR Policy and thedetails are contained in the Annual Report on CSR activities given in Annexure - G formingpart of this report.

The amount required to be spent on CSR activities during the year under review inaccordance with the provisions of Section 135 of the Companies Act 2013 is H38.38 Lakhsand the company has spent H22.83 Lakhs during the current financial year. The spending wasless as the Company wanted to utilize the funds in justifiable sustainable and measurableactivities. The shortfall in the spend during the year under review is intended to beutilized in future on projects within the Company's CSR Policy. Further as a responsiblecorporate citizen the Company had been involved in CSR activities since its inception.Some of these activities will not fall under 2% CSR spend as per Schedule VII read withSection 135 of the Companies Act 2013.

Prevention of Sexual Harassment at workplace

The Company has in place a Policy against Sexual Harassment of Women at Workplace inline with the requirement of Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Internal Complain Committee (ICC) has been setup toredress complaints received regarding sexual harassment. All employees (permanentcontractual temporary and trainees) are covered under this policy. No complaints werereceived by the Committee during the year under review.

Acknowledgement

Your Directors express their appreciation to all the employees for their valuablecontribution. Your directors also wish to express their gratitude for the continuedco-operation support and assistance provided by all the valued Channel PartnersDistributors Suppliers Bankers Shareholders the Central and State Governments.

Place : Kolkata

Dated : 30th May 2017

Deepak Jalan

Managing Director

Din: 00758600

For and on behalf of the Board
Aloke Jalan
Whole Time Director
Din:00758762