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Linc Pen & Plastics Ltd.

BSE: 531241 Sector: Services
NSE: LINCPEN ISIN Code: INE802B01019
BSE 00:00 | 24 Jun 199.00 0.35
(0.18%)
OPEN

195.45

HIGH

205.45

LOW

195.45

NSE 00:00 | 24 Jun 201.75 2.35
(1.18%)
OPEN

198.00

HIGH

205.80

LOW

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OPEN 195.45
PREVIOUS CLOSE 198.65
VOLUME 245
52-Week high 240.00
52-Week low 137.05
P/E
Mkt Cap.(Rs cr) 296
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 195.45
CLOSE 198.65
VOLUME 245
52-Week high 240.00
52-Week low 137.05
P/E
Mkt Cap.(Rs cr) 296
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company director report

Dear Shareholders

Your Directors have pleasure in presenting their 26th Annual Report together with theaudited accounts of the Company for the year ended 31st March 2020.

( Rs in lakhs)
2019-20 2018-19
Financial Highlights
Revenue from Operations 39995.50 36693.64
Other Income 4.29 243.49
Profit before depreciation interest and taxation 4126.66 2782.91
Finance Cost 546.33 629.38
Depreciation 1254.38 1046.41
Profit before Tax 2325.95 1107.12
Provision for Taxation - Current 562.00 246.00
- Income Tax for earlier years - 206.24
- Deferred (160.67) 140.19
Profit after Tax 1924.62 514.69
Total Other comprehensive Income (40.04) (17.41)
Total Comprehensive Income of the Year 1884.58 497.28
Statement of Retained Earnings
Balance at the beginning of the year 844.17 1090.45
Add: Total Comprehensive Income of the Year 1884.58 497.28
Less: Dividend (incl. Income Tax thereon) of the previous year paid during the year 243.55 243.55
Transfer to General Reserve 1000.00 500.00
Balance at the end of the year 1485.20 844.17

Dividend

Your Directors recommend a Dividend of RS 1.50 per equity share (previous year RS 1.50per equity share) for the year ended 31st March 2020.

Financial Performance

During the year under review the Company's Revenue from Operations increased by 9% toRS 39996 lakhs as compared to RS 36694 during the preceding year. The Profit after Taxduring the year was RS 1925 lakhs as compared to RS 515 lakhs in the previous year a jumpof about 273.8%. This was primarily on account of better product mix and slight moderationin polymer prices.

The year-end debtors were 40 days of sales for the year as compared to 42 days in theprevious year. The inventory holding as at year end was for 76 days of sales as comparedto 70 days as at the end of previous year.

A full analysis and discussion on the performance of the Company as well businessoutlook is included in this Annual Report under the heading ‘Management Discussionand Analysis' as Annexure to this Report as well as other sections of the Annual Report.

Scheme of Arrangement and

Amalgamation

The Hon'ble NCLT Kolkata Bench vide its order dated 17.01.20 has approved the Schemeof Arrangement and Amalgamation involving demerger of retail division of Linc Writing AidsPvt. Ltd. (LWAPL)(Transferor Company) into Linc Retail Ltd. (Resulting Company) andamalgamation of remaining business of ‘Linc Writing Aids Pvt. Ltd. with Linc Pen andPlastics Ltd. (Company).The

Appointed Date fixed under the Scheme is 01.04.18. Accordingly the assets andliabilities of the Transferor Company (as mentioned in the Scheme) stands transferred toand vests in the Company with effect from the Appointed Date and financial statements ofyour Company for the year reflectsthe same. In terms of the said Scheme your company hadissued 1674806 equity shares of RS 10/- each to the shareholders of LWAPL on 11.03.20as per the approved share exchange ratio and cancelled 1588475 Equity Shares of RS 10/-each held by LWAPL. Hence there is a net increase of 86331 Equity Shares in the paidupcapital of the Company.

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 standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance

of adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and 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 reporteach on Corporate Governance (Annexure-B along with Auditors' Certificate on its duecompliance) and Management Discussion and Analysis is attached to this report.

Secretarial Standards

The Directors state that applicable Secretarial Standards i.e. SS-1 SS-2 and SS-3relating to ‘Meetings of the Board of Directors' ‘General Meetings' and"Dividend' respectively have been duly followed by the Company.

Listing

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

Directors and Key Managerial Personnel

In accordance with the Articles of Association of the Company Shri Aloke Jalan WholeTime Director of the Company retire by rotation at the ensuing

Annual General Meeting and being eligible offer himself for re-appointment.

Ms. Supriya Newar was appointed as Independent Director of the Company for a period offive consecutive years from 3rd September 2015 and their terms of will cease on 2ndSeptember 2020. The Board of Directors on recommendation of the Nomination andRemuneration Committee has recommended the re-appointment of Ms. Supriya Newar asIndependent Director for a further period of five consecutive years from 3rd

September 2020. The Board of Directors are also of the opinion that Ms. Supriya

Newar fulfills all the criteria specified in the

Companies Act 2013 and rules thereon and all the requirements of SEBI (LODR) makingher eligible to be appointed as Independent Director of the Company for a further term.Ms. Supriya Newar does not hold any shares in the Company. Additional information ismentioned in the Notice convening the ensuing Annual General Meeting of the Company.

The following persons continued as Key Managerial Personnel of the Company incompliance with the provisions of section

203 of the Companies Act 2013:

Shri Deepak Jalan - Managing Director Shri Aloke Jalan - Whole Time Director Shri RohitDeepak Jalan - Whole Time Director

Shri N. K. Dujari - Chief Financial 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 as 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 fromdiversefields.

Policy on Remuneration - Guiding Policy on remuneration of Directors Key ManagerialPersonnel and employees of the Company is –

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

• Remuneration to Key Managerial Personnel Senior Executives Managers Staff andWorkmen (non Unionised) is industry driven in which it is operating taking into accountthe performance leverage and factors such as to attract and retain quality 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

Directors the year. Thus provisions of section 134(3) (h) and 188(1) of the CompaniesAct 2013 are not applicable and therefore Form No. AOC-2 has not been attached. RelatedParty 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.

Credit Rating

The Company's credit ratings ascribed by CRISIL are - Long Term – CRISIL A/Stable;and Short Term – CRISIL A1.

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 were appointed as the Statutory Auditor of the Company in 23rdAnnual General Meeting held on 1st September 2017 for a period of 5 consecutive yearscommencing from the conclusion of the 23rd Annual General Meeting till the conclusion ofthe 28th Annual General Meeting of the Company.

In accordance with the Companies Amendment Act 2017 enforced on 7th May 2018 by theMinistry of Corporate Affairs the appointment of Statutory

Auditors is not required to be ratified at every Annual General Meeting.

The Report given by the Auditors on the financial statement of the Company is part ofthis Report. There has been no qualification reservation adverse remark or disclaimergiven by the Auditors in their Report.

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 2019-

20. The report of the Secretarial Auditor is annexed as Annexure – F. TheSecretarial Auditor has made observation in the report.

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 RS 31.86 lakhsand the company has spent RS 34.97 lakhs during the current financial year.

Further as a responsible corporate citizen the Company had been involved in CSRactivities since its inception. Some of these activities will not fall under 2% CSR spendas per Schedule VII read with Section 135 of the Companies Act 2013. But the Companydecided to continue with them since those activities are integral to the business of theCompany.

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.

Number of complaints received by the

Committee during the financial year: N I L

General

Your Directors state that no disclosure or reporting is required in respect of thefollowing matters as there were no transactions on these items during the year underreview:

• There have been no material changes and commitments affecting the financialposition of the Company between the end of the financial year and date of this report.There has been no change in the nature of business of the Company.

• Details relating to deposits covered under Chapter V of the Act.

• The Company does not have any scheme of provision of money for the purchase ofits own shares by employees or by trustees for the benefit of employees.

No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.

• No fraud has been reported by the Auditors to the Audit Committee or the Board.

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.

For and on behalf of the Board

Deepak Jalan Rohit Deepak Jalan
Place: Kolkata Managing Director Whole Time Director
Dated: 29th June 2020 DIN: 00758600 DIN: 06883731