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Vinayak Polycon International Ltd.

BSE: 534639 Sector: Industrials
NSE: N.A. ISIN Code: INE581M01016
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OPEN 7.01
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VOLUME 381
52-Week high 10.93
52-Week low 7.01
P/E
Mkt Cap.(Rs cr) 2
Buy Price 7.01
Buy Qty 3.00
Sell Price 7.13
Sell Qty 381.00

Vinayak Polycon International Ltd. (VINAYAKPOLYCON) - Director Report

Company director report

To

The Members

Vinayak Polycon International Limited

Your Directors have pleasure to present their Tenth (10th) Annual Report on thebusiness and operations of the Company along with the Audited Financial Statements for thefinancial year ended on 31st March 2019 and Auditor's Report thereon.

1. FINANCIAL SUMMARY/ HIGHLIGHTS:

The financial performance of the company for the year ended 31st March 2019 issummarized below:

(Amount in Lak s)

Particulars Year ended 31.03.2019 Year ended 31.03.2018
Sales
Domestic 2327.31 1892.98
Export 0.00 0.00
Other Revenue 1.54 1.52
Total Reve nue 2328.85 1894.50
Total Expen ses 2308.80 1889.47
Profit Before Interest Depreciation & Tax 148.15 128.83
Less: Financial Cost 37.28 37.61
Profit Before depreciat i on & Tax 110.87 91.22
Less: Depreciation 90.82 86.19
Profit/(loss) Before exceptional item 20.05 5.03
Exceptional item 35.69 0.00
Profit after Exceptional item but Before Tax 55.74 5.03
Less: Tax Liability (including deferred tax) 14.63 -6.19
Profit After Tax 41.11 11.22

2. PERFORMANCE REVIEW

Financial information is presented in accordance with the Indian Accounting Standards(Ind-AS). Our reporting currency is Indian Rupees (INR). The Company continued its focuson growing its business faster than market while protecting product quality &profitability.

Briefly during the year under report the Company's total income increased to Rs.2328.85 Lakhs from Rs. 1894.50 Lakhs in the previous year registering an increase of22.93%. Earnings before Interest Depreciation and Tax increased to Rs. 148.15 Lakhs asfrom Rs. 128.83 Lakhs in the preceding year which translates into an increase of 15%.Profit after Tax (PAT) is Rs. 41.11 Lakhs as against Rs. 11.22 Lakhs in previous yearthis increase is mainly due to exceptional item which arose due to liability created bydemerger approved by Hon'ble Rajasthan High Court no longer required to be paid.

3. DIVIDEND

In view of future working and expansion projects of the Company your Directors do notrecommend payment of any dividend for the year ended 31st March 2019.

4. RESERVES

The Board has not proposed transfer of any amount to General Reserve. Profits of theCompany during the year i.e. Rs. 41.11 Lakhs is transferred to the Profit & LossAccount for the Financial Year 2018-19 in compliance with the relevant provisions of theCompanies Act 2013.

5. CORPORATE SOCIAL RESPONSIBILITY

Company's net worth is below than Rs. 500 Crore Turnover is less than Rs.1000 Croreand Net profit (Before Tax) is less than Rs. 5 Crore hence provisions of section 135 ofthe Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014 arenot applicable on the Company.

6. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT

There are no material changes affecting the financial position of the company whichhave occurred between the end of the financial year to which the financial statementsrelate and the date of the report.

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

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.

8. FIXED DEPOSITS

During the Financial Year 2018-19 your Company has not invited accepted or renewedany deposits from the public within the meaning of the Companies Act 2013 read togetherwith the Companies (Acceptance of Deposits) Rules 2014.

9. AUDITORS AND AUDITORS' REPORT

A. Statutory Auditors

M/s A. Natani & Co. Chartered Accountants (FRN: 007347C) Jaipur were reappointedas Statutory Auditors of the Company in 5th Annual General Meeting (AGM) held on 6thSeptember 2014 to hold office till the conclusion of 10th AGM of the Company subject toratification of appointment by the members at every consequent AGM. However in theCompanies [Amendment] Act 2017 aforesaid requirement of ratification is omitted witheffect from 7th May 2018.

The Statutory Auditors of the Company M/s A. Natani & Co. Chartered Accountantsbearing ICAI Registration No. 007347C hold office till the conclusion of the ensuing AGMof the Company.

The Board of Directors in their meeting held on 14th August 2019 on the recommendationof the Audit Committee has proposed to appoint M/s Tambi Ashok & AssociatesChartered Accountants (FRN: 5301C) as Statutory Auditors in place of the retiringauditors who shall hold the office from the conclusion of the 10th AGM for a term of fiveconsecutive years i.e. until the conclusion of the 15th AGM. The proposed Auditors haveconfirmed their willingness and eligibility in terms of provisions of section 141 andother relevant provisions of the Companies Act 2013 the Chartered Accountants Act 1949and the Rules and Regulations made there under.

M/s. A. Natani & Co. Chartered Accountants have in the past handled audit ofcompanies with large scale operations and have maintained high level of governance rigorand quality in audit and audit process. The Board places on record its appreciation forthe services rendered by M/s A. Natani & Co. Chartered Accountants as StatutoryAuditors of the Company.

There is no reservation qualification or adverse remark contained in the StatutoryAuditors' Report attached to Financial Statements for the financial year ended 31st March2019. Information referred in Auditors' Report are self-explanatory and don't call for anyfurther comments.

REPORTING OF FRAUDS BY AUDITORS

There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and/or Board under Section 143(12) ofthe Act and Rules framed thereunder.

B. Secretarial Auditor

As per the provisions of Section 204 of Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 every listed companyis required to annex with its Board's Report a Secretarial Audit Report given by aCompany Secretary in practice. The Board had appointed M/s V.M. & Associates CompanySecretaries Jaipur (FRN: P1984RJ039200) as "Secretarial Auditor" to conductSecretarial Audit for the financial year 2018-19.

The Secretarial Audit Report for the financial year 2018-19 in Form MR-3 is attachedherewith as Annexure 1. There is no reservation qualification or adverse remarkcontained in the Secretarial Auditor Report. Information referred in Secretarial AuditorReport are self-explanatory and do not call for any further comments.

The Company has received consent and certificate of eligibility from M/s V. M. &Associates Company Secretaries Jaipur for the financial year 2019-20 to act asSecretarial Auditors. The Board in their meeting held on August 14 2019 has re-appointedM/s V. M. & Associates Company Secretaries Jaipur (FRN: P1984RJ039200) asSecretarial Auditor of the Company to carry out secretarial audit for the Financial Year2019-20.

C. Internal Auditor

CA Vikram Baid (Membership No.: 077821) Jaipur was appointed as Internal Auditor ofthe Company for conducting Internal Audit for financial year 2018- 19.

The Internal Audit Reports were received quarterly by the Company and the same werereviewed by the Audit Committee and Board of Directors for each quarter.

Further Board of Directors has approved the reappointment of CA Vikram Baid(Membership No.: 077821) Jaipur as Internal Auditor at their meeting held on 14thAugust2019 for conducting the Internal Audit of the Company for financial year 2019- 20.

10. CAPITAL STRUCTURE

During the Financial Year 2018-19 there is no change in capital structure of theCompany and paid up share capital of the Company stands at Rs. 30812950/- (Rupees Threecrore eight lakhs twelve thousand nine hundred and fifty).

11. EXTRACT OF THE ANNUAL RETURN

Extract of the Annual Return in Form MGT-9 containing details as on the financial yearended 31st March 2019 as required under Section 92 (3) of the Companies Act 2013 readwith the Companies (Management and Administration) Rules 2014 is included in the Reportas Annexure 2.

12. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information related to Conservation of Energy Technology Absorption ForeignExchange Earning and Outgo as required under Section 134 (3)(m) of the Companies Act 2013read with Rule 8 (3) of the Companies (Accounts) Rules 2014 is included in the Report as Annexure3.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Changes in Directors and Key Managerial Personnel

Your Company's Board is duly constituted and is in compliance with the requirements ofthe Companies Act 2013 the Listing Regulations and provisions of the Articles ofAssociation of the Company. Your Board has been constituted with requisite diversitywisdom and experience commensurate to the scale of operations of your Company.

Mr. Bhanwar Lal Baid (DIN: 00212003) Director of the Company who retired and beingeligible was reappointed at the 9th AGM of the Company. Mr. Bharat Kumar Baid (DIN:00212506) Managing Director and Mr. Vikram Baid (DIN: 00217347) Executive Director werereappointed for a term of 3 years w.e.f 1st April 2019 to 31st March 2022 at the 9th AGMof the Company. Mrs. Anima Bordia (DIN: 06941148) Mr. Niraj Nahata (DIN: 06830067) andMr. Pawan Nahata (DIN: 06945991) Independent Directors were reappointed for their secondterm of 5 years w.e.f 1st April 2019 to 31st March 2024 at the 9th AGM of the Company.There was no change in the composition of Board during the year under review.

Board is deeply saddened to inform you that our visionary Chairman Shri B.L. Baid leftus on his final journey on 16th April 2019. He was the Promoter of the Company sinceinception and the guiding light of the Company. His contribution to the overalldevelopment and nurturing of the company to the level it has arisen was unparallel. He wasa perfect amalgamation of compassion discipline hard work and an epitome of simplicity.

In accordance with the provisions of the Companies Act 2013 and in terms of theArticles of Association of the Company Mr. Vikram Baid (DIN: 00217347) ExecutiveDirector of the Company retire by rotation and being eligible offers himself forre-appointment. The Board recommends his reappointment.

In compliance with Regulation 36(3) of the Listing Regulations read with theSecretarial Standard on General Meetings (SS-2) issued by the Institute of CompanySecretaries of India the required information about the Director proposed to bereappointed has been annexed to the Notice convening the 10th Annual General Meeting.

B. Declaration by an Independent Directors

The Company has received the declarations from all Independent Directors of the Companyviz. Mrs. Anima Bordia Mr. Niraj Nahata and Mr. Pawan Nahata as required under Section149(7) of the Companies Act 2013 stating that they meet the criteria of independence aslaid down under Section 149(6) of the Companies Act 2013 and Regulation 16(1) (b) of theListing Regulations. The terms & conditions for the appointment of IndependentDirectors are available on the website of the Company http://vinayakpolycon.com/node/29.

C. Formal Annual Evaluation

In terms of the requirement of the Companies Act 2013 and the Listing Regulations anannual performance evaluation of the Board is undertaken where the Board formally assessesits own performance with an aim to improve the effectiveness of the Board and theCommittees. During the year Board Evaluation cycle was completed by the Companyinternally which includes the evaluation of the Board as a whole committees independentdirectors and other individual directors. The evaluation process focused on variousaspects of the functioning of the Board and Committees such as composition of the Boardand Committees experience and competencies performance of specific duties andobligations governance issues etc. The guidance note issue by Securities and ExchangeBoard of India on Board Evaluation was duly considered while conducting the evaluationexercise. Separate exercise was carried out to evaluate the performance of individualDirectors on parameters such as attendance contribution and independent judgement.

The process of board evaluation is carried out by Board Nomination and RemunerationCommittee and by Independent Directors in the following manner:

• Board: The Board evaluates the performance of Board as whole Committees of theBoard and Individual Directors and chairperson of the Company.

• Nomination and Remuneration Committee: The Nomination and Remuneration Committeeevaluates the performance of all the individual Directors

• Independent Directors: The Independent directors in their meeting evaluates theperformance of all Non-Independent Directors and Board of Directors as a Whole As anoutcome of the above exercise it was noted that the Board as a whole is functioning as acohesive body which is well engaged with different perspectives. The Board Members fromdifferent backgrounds bring about different complementarities that help Board discussionsto be rich and value adding. It was also noted that the Committees are functioning welland besides the Committee's terms of reference as mandated by law important issues arebrought up and discussed in the Committee Meetings. The evaluation exercise also suggestedthat the Board succession planning exercise has been embedded well in the Board processes.

14. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism / Whistle Blower Policy to deal withinstances of fraud and mismanagement if any. The Policy has a systematic mechanism fordirectors and employees to report concerns about unethical behavior actual or suspectedfraud or violation of the Company's Code of Conduct or policy. Under the said Mechanismthe employees are free to report violations of applicable laws and regulations and theCode of Conduct. It also provides for adequate safeguards against the victimization ofpersons who use such mechanism. During the year under review none of the personnel hasbeen denied access to the Chairman of Audit Committee. The policy is available on theCompany's website at the link: http://www.vinayakpolycon.com/sites/default/files/policies/Pol icy-of-Whistle-Blower-Vigil- Mechanism.pdf

15. LOANS GUARANTEES OR INVESTMENTS

During the year under review the company has not provided any loan to any person orother body corporate; neither it has given any guarantee or provided security inconnection with a loan nor it has acquired by way of subscription purchase or otherwisethe securities of any other body corporate.

16. COMMITTEES OF THE BOARD

Currently the Board has three committees: Audit committee Nomination and Remunerationcommittee and Stakeholders Relationship committee. All committees consist entirely ofindependent directors.

The composition of the committees and compliances as per the applicable provisions ofthe Act and Rules are as follows:

Name of the Committee Composition of the Committee Highlights of duties responsibilities and activities
Audit Committee Mrs. Anima Bordia Chairperson As per Section 177 of the Companies Act 2013 following are the duties of Audit committee: To oversee the financial reporting process and disclosure of financial information.
Mr. Niraj Nahata To review with management quarterly half yearly and annual financial statements and ensure their accuracy and correctness before submission to the Board.
Mr. Pawan Nahata To review with management and internal auditors the adequacy of internal control systems approving the internal audit plans and reviewing the efficacy of their function discussion and review of periodic audit reports including findings of internal investigations.
To recommend the appointment of the internal and statutory auditors and fixing their remuneration.
To hold discussions with the statutory and internal auditors.
Audit committee performed all of its duties during the year.
All recommendations made by the audit committee during the year were accepted by the Board.
In accordance with the requirements of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 the Company has formulated several policies. The policies including the Whistleblower Policy are available on our website http://www.vinayakpolycon.com/policies
Nomination and Remuneration Committee Mrs. Anima Bordia Chairperson The committee oversees and administers executive compensation operating under a written policy adopted by our Board of Directors. As per Section 178 of Companies Act 2013 Following are the duties of Nomination and Remuneration Committee:
Mr. Niraj Nahata Carry out assignments from time to time as prescribed under Schedule V to the Companies Act 2013.
To recommend to the Board compensation terms of the Executive Directors.
Mr. Pawan Nahata To assist the Board in determining and implementing the Company’s Policy on the remuneration of Executive Directors.
The committee has designed and continuously reviews the Nomination and Remuneration Policy for our Directors and senior executives to align both shortterm and long-term remuneration with business objectives and to link remuneration with the achievement of measurable performance goals.
The Nomination and Remuneration Committee has framed the Nomination and Remuneration Policy which is available on the website of the Company.
Stakeholders Relationship Committee Mrs. Anima Bordia Chairperson The committee reviews and ensures redressal of investor grievances.
Mr. Niraj Nahata The committee noted that all the grievances of the investors have been resolved.
Mr. Pawan Nahata

17. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors met five times during the financial year 2018-19 on 30th May2018 14th August 2018 3rd September 2018 14th November 2018 and 14th February 2019.The intervening gap between the meetings frequency and quorum at these meetings were inconformity with the provisions of the Companies Act 2013 Listing Regulations andSecretarial Standards. The

Company has complied with all the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.

The names and categories of the Directors on the Board their attendance at Boardmeetings during the year and at last Annual General Meeting as also the number ofDirectorships and Committee memberships held by them in other companies are shown in thetable:

Name & Designation of Director Category No. of Meeting s Held No. of Meetings Attended Whether Attended Last AGM No. of Outside Director ships of Other Companies No. of Committee Memberships No. of Committee Chairmanships
Mr. Bhanwar Lal Baid Chairman Non-Executive Director & Promoter 5 1 No

-

-

-

Mr. Bharat Kumar Baid Managing Director Executive Director & Promoter 5 5 Yes

-

-

-

Mr. Vikram Baid Whole-time Director Executive Director & Promoter 5 5 Yes 1

-

-

Mr. Pawan Nahata Director Non- Executive Independ ent Director 5 3 No 3
Mr. Niraj Nahata Director Non- Executive Independ ent Director 5 3 No 3
Mrs. Anima Bordia Director Non- Executive Independ ent Director 5 5 Yes 3 3

The draft of the minutes prepared by the Company is circulated among the Directors fortheir comment / suggestion and finally after incorporating their views final minutes arerecorded in the minute's books. Post meeting important decisions taken are communicatedto the concerned officials and departments for the effective implementation of the same

18. RELATED PARTY TRANSACTIONS

The Company has framed the policy on related party transaction and Audit Committee hasreviewed the related party transaction in every meeting. There are no material significantrelated party transactions made by the Company with Promoters Directors KMP or otherdesignated persons and their relatives which may have a potential conflict with theinterest of the Company at large. Particulars of contracts or arrangements with relatedparties referred to Section 188(1) of the Companies Act 2013 in the form AOC 2 is annexedherewith as Annexure 4.

A list of all related party transactions is placed before the Audit Committee as wellas the Board of

Directors. The policy on related party transactions is available on Company's websitei.e. http://www.vinayakpolycon.com/sites/default/files/policies/Policy%20on%20Related%20Party% 20Transactions.pdf .

19. PARTICULAR OF EMPLOYEES

The information as required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and subsequent amendments thereto is annexed to this Board's Report and marked as Annexure5.

A statement containing the information of top ten employees in terms of remunerationdrawn as required under Section 197(12) of the Companies

Act 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and subsequent amendments thereto is annexed to thisBoard's Report and marked as Annexure 5.

20. NOMINATION & REMUNERATION POLICY

The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on 31st March 2019 the Board consists of 6 members one of whom isexecutive or whole-time director one is managing director one is nonexecutive directorand chairman and three are independent directors. The Board periodically evaluates theneed for change in its composition and size.

The policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under Sub-section (3) of Section 178 of the Companies Act2013 adopted by the Board is available on the website of the Company http://vinayakpolycon.com/sites/default/files/Nomination%20and%20Remuneration%20Policy.pdf. We affirm that the remuneration paid to thedirectors is as per the terms laid out in the Nomination and Remuneration Policy of theCompany.

21. INDEPENDENT DIRECTORS' MEETING

As per the requirement of Schedule IV to the Companies Act 2013 the IndependentDirectors of the Company met during the year inter alia to:

1. Review the performance of non - Independent Directors and the Board of Directors asa whole;

2. Review the performance of the Chairperson of the Company taking into account theviews of the Executive and Non - Executive Directors;

3. Assess the quality quantity and timeliness of flow of information between theCompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties.

They expressed satisfaction over the performance of Non-Independent DirectorsChairperson and Board.

22. INTERNAL FINANCIAL CONTROL

The Company has well defined mechanisms in place to establish and maintain adequateinternal controls over all operational and financial functions considering the naturesize and complexity of its business. The Company maintains adequate internal controlsystems that provide among other things reasonable assurance of recording thetransactions of its operations in all material respects and of providing protectionagainst significant misuse or loss of Company's assets. The Company is following all theapplicable Indian Accounting Standards as issued by The Institute of Chartered Accountantsof India for properly maintaining the books of accounts and reporting financialstatements.

Mr. Vikram Baid Internal Auditor of the Company independently evaluate adequacy ofinternal controls and audit the majority of the transactions undertaken by the Company.Post audit reviews are carried out to ensure that audit recommendations have beenimplemented.

The Audit Committee of the Board of Directors which comprises of Independent Directorsinter alia reviews the adequacy and effectiveness of internal Control and monitorsimplementation of Internal Audit observations.

23. CODE OF CONDUCT

In Compliance with the Listing Regulations and the Companies Act 2013 the Company hasframed and adopted Code of Conduct for all Board members and senior management personnelof the Company which is available on website of the company https://www.vinayakpolycon.com/sites/default/files/Code-of-Conduct-for-Directors-and-senior- management-personnel.pdf .

24. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has in place a Policy for Prevention of Sexual Harassment at Workplace asper requirement of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and Rules framed thereunder. The Company has ensured organisationwide dissemination of the Policy and the provisions of Prevention of Sexual Harassment ofWomen at Workplace Act by conducting sessions throughout the Company.

Internal Complaint Committee has been set up to redress the complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy. During the financial year 2018-19 no complaint wasreceived by the Company. The Company is committed to providing a safe and conducive workenvironment to all of its employees and associates.

25. RISK MANAGEMENT POLICY

The Company has framed and implemented a Risk Management Policy to identify the variousbusiness risks. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company's competitive advantage. The RiskManagement Policy defines the risk management approach across the enterprise at variouslevels including documentation and reporting.

There are various elements of risk which in the opinion of the Board may threaten theexistence of the company some of which are as follows:

• Economic Environment and Market conditions

• Political Environment

• Competition

• Fluctuations in Foreign Exchange

• Contractual Compliance

• Operational Efficiency

All the Senior Executives under the guidance of Board of Directors has theresponsibility for over viewing management's processes and results in identifyingassessing and monitoring risk associated with Organisation's business operations and theimplementation and maintenance of policies and control procedures to give adequateprotection against key risk. In doing so the Senior Executive considers and assesses theappropriateness and effectiveness of management information and other systems of internalcontrol encompassing review of any external agency in this regards and action taken orproposed resulting from those reports.

26. LISTING FEES

At present the equity shares of the Company are listed on BSE Limited (BSE). Theannual listing fee for Financial Year 2019-20 to BSE has been paid.

27. DEPOSITORY SYSTEM

The ISIN no. allotted to the Company is INE581M01016. The Company has also establishedthe required connectivity with both the NSDL & CDSL through its registrar and sharetransfer agent MAS Services Ltd. New Delhi for both physical and demat segments.

The equity shares of the Company can be held in electronic form with any depositoryparticipant (DP) with whom the Members/Investors have their depository account.

28. PREVENTION OF INSIDER TRADING

Pursuant to the provisions of the Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations 2015 the Company has adopted 'Code of Conduct toregulate monitor and report trading by Designated Persons and immediate relatives ofDesignated Persons' and 'Code of Practices and Procedures for fair disclosure ofUnpublished Price Sensitive Information'.

During the year under review the Company has amended "Code of Conduct toregulate monitor and report trading by Designated Persons and immediate relatives ofDesignated Persons" and "Code of Practices & Procedures for Fair

Disclosure of Unpublished Price Sensitive Information" in line with the SEBI(Prohibition of Insider Trading) (Amendment) Regulations 2018. The key changes includeinter alia maintenance of digital database internal controls Policy on legitimatepurposes policy on leakage of Unpublished Price sensitive Information (UPSI) etc.

The Code of Practices & Procedures for Fair Disclosure of Unpublished PriceSensitive Information is available on the website of the Company https://www.vinayakpolycon.com/sites/default/files/2019-02-14%20Code_Fair%20Disclosure.pdf

29. CORPORATE GOVERNANCE REPORT

As per Regulation 15(2) of the Listing Regulation the compliance with the CorporateGovernance provisions shall not apply in respect of the following class of companies:

a. Listed Entity having paid up equity share capital not exceeding Rs.10 crore and NetWorth not exceeding Rs.25 crore as on the last day of the previous financial year;

b. Listed Entity which has listed its specified securities on the SME Exchange.

Since the Company falls in the ambit of aforesaid exemption (a); hence compliance withthe provisions of Corporate Governance shall not apply to the Company and it also does notform part of the Annual Report for the Financial Year 201819.

However our Company has complied with all the disclosures and requirements which areapplicable under all the rules regulations for the time being in force.

30. MANAGEMENT DISCUSSION AND ANALYSIS

A. Industry Structure & Development

During the period under review there is significant increase in the use of plasticincluding PET Containers throughout the country. Clear Visibility of packed product inprimary and secondary packaging has gained importance. The buyer wants to clearly see theinner contents before buying and wants the container to be unbreakable child safe anddurable. This led to great increase in manufacturing of plastic wares in the countryespecially PET.

Your company is on its way to capitalize on this trend through improved production ofplastic products and through alliances with the suppliers who have specific expertise inthe related field. At the same time there was a significant shortage of Power in TamilNadu where the factory is located which led to higher dependence on Self-generatedElectricity.

B. Opportunity

The consumption of plastic is increasing at the rapid speed as it is easy andconvenient to use and can easily be recycled. It paves a path to the companies to make newdevelopment for the better positioning in the market. The ability to see the contents offthe shelves before buying in a transparent container is always preferred over others.

Vinayak Polycon International Limited continuously striving to increase its productionand aims to provide better quality products to its consumers along with making strongposition in domestic market.

C. Threats

• Temporary decline in the economic activity

• Increased competition in the plastic industry due to entry of new players

• Introduction of new technologies

• Introduction of new taxes

• Introduction of new Tax-Free Zones in India

• Any unfavourable change in Government Policies may affect the profitability ofthe company.

• Threat of substitutes

• Shortage of Electricity in Tamil Nadu

D. Segment Wise Performance

The Company is mainly engaged in the business of manufacturing of Plastic Containers& Closures so the Management considers that there is no need to elaborate segmentwise performance.

E. Outlook

The Outlook of your Company is promising in light of its refreshed mission and visionand clear strategic framework. Vinayak Polycon International Limited leadership team andemployees at all levels are in line with the strategy and working towards making it asuccess. The Company's product development team has developed an exciting range of plasticitems which will fuel our growth in future.

F. Risks and Concerns

Competition is increasing day-by-day in all fields of business. Similarly there iscompetition in plastic industries too. The company is facing various risks and obstacleswhich includes inflation risk credit risk interest rate risk non-availability of raw-material high prices etc.

In order to overcome such situations company is fully aware towards the preparation ofappropriate programs adoption of suitable policies and to take corrective andprecautionary measures for safeguarding the company's market position and further tostrengthening it.

G. Adequacy of Internal Control System

The Company has a comprehensive system of internal controls to safeguard the company'sassets against loss from unauthorized use and ensure proper authorization of financialtransactions.

The company has an exhaustive budgetary control system to monitor all expendituresagainst approved budget on an ongoing basis.

The Company has an internal audit function which is empowered to examine the adequacyand compliance with policies plans and statutory requirement.

The management duly considers and take appropriate actions on the recommendation madeby Audit Committee of the Board of Directors.

H. Discussions on Financial Performance with respect to Operational performance

Financial performance as well as Operational performance of the Company has been gooddespite of an adverse economic environment and your company is doing well on fulfillingits objectives of growth profitability and maximization of shareholders wealth. Duringthe financial year 2018-19 your Company has achieved total revenue on amounting toRs.2328.85 Lakhs as compared to Rs. 1894.50 Lakhs in previous financial year and NetProfit after tax (PAT) has increased from Rs. 11.22 Lakhs to Rs. 41.11 lakhs recording aremarkable increase of 266.40% in financial year 2018-19.

During the year your company expanded its supplies of PET Bottles to localmanufacturers. The quantity of PET & PP (Plastic Raw Material) consumed increased from1441 tons to 1568 tons registering an increase of 8.81 % from previous year.

Particulars of Ratio F.Y. 2018-19 F.Y. 2017-18 Change in % Reason (if change is more than 25%)
Debtors Turnover Ratio 4.01 3.42 17.25 N.A.
Inventory Turnover 29.80 24.93 19.53 N.A.
Interest Coverage Ratio 1.54 1.13 36.28 Company had higher profits than earlier to cover the interest cost which is better for the Company.
Current Ratio 1.17 1.18 (0.85) N.A.
Debt Equity Ratio 1.03 1.25 (1 7.6) N.A.
Operating Profit Margin % 0.86 0.28 207.14 Higher operating profit indicates better efficiency for the Company.
Net Profit Margin % 1.77 0.62 185.48 Increase is due to Exceptional item as mentioned in the Notes to Financial Statements of the Company.

Details of any change in Return on Net Worth as compared to the immediately previousfinancial year:

Particulars F.Y. 2018-19 F.Y. 2017-18
Share Capital 30812950 30812950
Reserve & Surplus 14214175 10102892
Net Worth 45027125 40915842
Profit After Tax 4111283 1122536
Return on Net Worth 9.13 2.74

I. Human Resources Development/Training

Human Resources are the important asset of any enterprise. Success of any enterprisemainly depends on its human power. In this regard your company has made best efforts toemploy good professionals staff members labourers etc.

Vinayak Polycon International Limited is keen to retain best of the human resources byeffective training and development programs by providing reasonable wages and salary bycreating good working environment etc. Company's human resources are mobilized in order tostrengthen the company internally to face future challenges. Your company is providing a"state of art" working environment to the employees with a view to optimizetheir performance.

As on 31st March 2019 the Company employed a total of 49 employees of which 13 wereOfficers and 36 belong to non-executive cadre.

J. Trade Relations

Vinayak Polycon International Ltd. believes in building teams across the business andfunctions with the aim to share knowledge and experience. Cross functional teams work withclear objectives to solve the issues and create value for the company. The company fostersopen dialogue among the employees with the brief that the people who communicatecontinuously and openly build trust and mutual respect.

The Company maintained healthy cordial and harmonious Industrial relations at alllevels. The Directors wish to place on record their appreciation for the valuablecontribution by the employees of the Company.

K. Cautionary Statement

Statement in the Management Discussion and Analysis and Board's Report describing theCompanies Strengths strategies projection and estimate are forward looking andprogressive within the meaning of all applicable laws and

regulation. Actual results may vary depending upon the various aspects of the economicsuch as Government policies Rules and Regulations economic conditions and otherincidental factors. Important factors that could make a difference to our Company'soperations include raw material availability and prices cyclical demand and pricing inour principal markets changes in government regulations tax regimes economicdevelopments within India and other incidental factors. Management will not be in any wayresponsible for the actions taken based on such statements.

31. DISCLOSURE ON SECRETARIAL STANDARDS

The company complies with all applicable secretarial standards issued by the Instituteof Company Secretaries of India. The Directors have devised proper systems to ensurecompliance with the provisions of all applicable Secretarial Standards and that suchsystems are adequate and operating effectively.

32. DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act 2013 the Directors herebyconfirm that:

a) In the preparation of the annual accounts for the year ended 31st March 2019 theapplicable accounting standards have been followed and there are no material departuresfrom the same

b) The Directors have selected such accounting policies and applied them consistentlyand made judgements 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 have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.

d) The Directors have prepared the annual accounts on a 'Going Concern' basis.

e) The Directors have 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 have devised proper systems to ensure compliance with the provisionsof all

applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

The Board of Directors places on record its deep sense of appreciation to employees atall levels on their hard work dedication and commitment. The Board also thank all theshareholders investors vendors service providers bankers and all other stakeholdersfor their continued and consistent support to the Company during the year.

Your Directors would like to make a special mention of the support extended by thevarious Departments of Government of India the State Governments the Tax Authoritiesthe Ministry of Commerce Reserve Bank of India Ministry of Corporate Affairs Ministryof Finance Securities and Exchange Board of India Stock Exchanges and othergovernmental/ semi-governmental bodies and look forward to their continued support in allfuture endeavors.

Date: 14.08.2019
Place: Jaipur
Registered Office: 312 Navjeevan Complex 29 For and on behalf of the Board of Directors
Station Road Jaipur-302006 (Rajasthan) For Vinayak Polycon International Limited
Tel: 0141-2377007
Fax: 0141-2378830
investor@vinayakpolycon.com
www.vinayakpolycon.com
Sd/- Sd/-
BHARAT KUMAR BAID VIKRAM BAID
MANAGING DIRECTOR DIN: 00212506 WHOLE TIME DIRECTOR & CHIEF FINANCIAL OFFICER
DIN: 00217347

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