HCP Plastene Bulkpack Ltd Directors Report

2. BUSINESS SEGMENT:

The Company mainly operate in two division viz Woven Sack Division and Woven Label Division in which Company derives its sales through manufacturing PP Febric, PP webbing, PP Yarn and small and jumbo bags, Jaquard Labels. The Company has strong global presence and also cater the need of international market by doing job work.

3. BUSINESS PERFORMANCE: STANDALONE:

During the current period, your Company has total revenue of 4554.91 Lakhs as against 4839.53 Lakhs in the previous year. The Company has Loss of -276.38 Lakhs as compared to the Loss of -535.00 Lakhs in the previous year. The Company will continue to pursue expansion in domestic market and international market by utilizing the resources effectively and thereby expect to achieve profitability.

CONSOLIDATED:

During the current period, your Company has total revenue of

29455.55 Lakhs as against 35151.97 Lakhs in the previous year. The Company has profit of 30.81 Lakhs as compared to the profit of 76.14 Lakhs in the previous year. In the near future, the Company expects to achieve more growth.

4. FUTURE OUTLOOK

Though the base of the operations your Company is low as we are largely doing job work as against the direct sales, we are continuously working on achieving better capacity utilizations and generating direct sales in the Company as against job work model thereby improving top line as well as bottom line. For this, we are in the process of taking all the necessary steps including arranging required working capital. Further, we are also exploring new sales geography and working on opportunities of expanding product portfolio. We are optimistic about the overall demand of our products.

5. MATERIAL EVENTS DURING THE YEAR UNDER REVIEW

• During the year under review, being immediate relative of Promoter, Mrs. Vanitha Parasmull had acquired 60,000 Equity Shares of the Company from Mrs. Madhu Parekh, Promoter of the Company on 06^th April, 2023 without consideration i.e. by way of executing a Deed of Gift. By virtue of this Inter-Se transfer Mrs. Vanitha Parasmull became Promoter Group of the Company.

All the necessary compliances/submissions/intimations related to this Inter-se Transfer had been made by the Transferor, Transferee and Company to the Stock Exchange and Board from time to time as per SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and SEBI (Prohibition of Insider Trading), Regulations, 2015.

• The Company has floated a Limited Liability Partnership (LLP) in Malaysia in the name of "HCP Plastene Bulkpack PLT" on 12^th July, 2023 with 60% stake with an investment of INR 5.51 Lakhs (RM 30,000). The object of floating an LLP in Malaysia is to explore FIBC and other related product markets in Malaysia and other Asia-Pacific Countries.

• The Company has complied with the Minimum Public Shareholding (MPS) requirements mandated under Rule 19(2)(b) and 19A of the Securities Contracts (Regulation) Rules, 1957 ("SCRR") read with regulation 38 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations") via using various method(s) i.e. Offer for Sale (OFS) mentioned in the SEBI Circular No. SEBI/HO/CFD/PoD2/P/CIR/2023/18 "Manner of achieving Minimum Public Shareholding" dated 03^rd February 2023 on Thursday, 25^th January 2024 and it was undertaken in accordance with the circular bearing reference number SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/10 dated 10^th January, 2023 regarding the "Comprehensive Framework on Offer for Sale (OFS) of Shares through Stock Exchange Mechanism" issued by the Securities and Exchange Board of India, through the separate designated window of BSE Limited.

The Shareholding of the Promoter and Promoter Group in the Company has reduced to 75.00% of the total Issued, Subscribed and Paid-up Equity Share Capital of the Company. All the necessary compliances/submissions/intimations had been made by the Company to the Stock Exchange from time to time.

• The Company has entered into "Memorandum of Understanding" (MOU) on 02^nd July, 2024 with Saeed Ghodran Group, a Company incorporated under the laws of Saudi Arabia, having its registered office at Prince Turki Street, Al Kurnaish Dist. 2193, Al Khobar 34413, Saudi Arabia at Al Khobar–KSA to establish a Joint Venture Company in form of a Limited Liability Company to invest in setting up a Factory to Manufacture Bopp Woven Bags and Jumbo Woven Bags.

No other material changes and commitments have occurred after the close of the financial year till the date of this report, which affect or is likely to affect the financial position of the Company.

6. DIVIDEND

With a view to loss during the year under review, the Directors are not recommending any dividend for the year (Previous year Nil).

The Company on voluntary basis has adopted the Dividend Distribution Policy and the said policy is available on the website of the Company at www.hpbl.in/investor. There is no unclaimed/unpaid Dividend with the meaning of the provisions of Section 125 of the Companies Act, 2013.

7. TRANSFER TO RESERVES

For the financial year ended 31^st March, 2024, the Company had not transferred any sum to the reserve.

8. CHANGE IN NATURE OF BUSINESS

The Company continue to operate in mainly two segments viz Woven Sack Division and Woven Label Division and there has been no change in the nature of Business of Company.

9. SHARE CAPITAL

Currently, the Company has two classes of shares: (A) Equity Shares of face value of 10 each (B) Preference Share capital of 100 each

The authorized share capital of the Company is 21,00,00,000/- divided into 1,60,00,000 equity shares of 10/- each. and 5,00,000 0.01% Cumulative Redeemable Preference shares of 100/- each. The Paid-up Share capital of the Company consist of only Equity share capital of 10,67,48,370/- divided into 1,06,74,837 equity shares of 10/- each.

There has been no change in the authorised, issued, subscribed and paid-up Share Capital of the Company during the year under review.

10. DEMATERIALIZATION OF SHARES

99.98% of the Companys paid up Equity Share Capital is in dematerialized form as on 31^st March, 2024 and balance 0.02% is in physical form. The Companys Registrar is M/s. Bigshare Services Pvt Ltd. having office at A-802, Samudra Complex, Near Girish Cold Drinks, Off C. G. Road, Navrangpura, Ahmedabad - 380009.

11. PUBLIC DEPOSITS

There was no outstanding deposit within the meaning of Section 73 and 74 of the Act read with rules made thereunder at the end of the financial year 2023-24 or the previous financial years. Your Company did not accept any deposit during the year under review.

12. PARTICULARS OF LOANS, GURANTEES OR INVESTMENTS

Particulars of Loans/Guarantees/Investments made by the Company are provided in Note Nos. 4, 9 and 12 of the Notes to the Standalone Financial Statements.

13. SUBSIDIARIES, JOINT VENTURES, ASSOCIATE COMPANIES AND LLPS

During the year under review, The Company has floated a Limited Liability Partnership (LLP) in Malaysia in the name of

"HCP Plastene Bulkpack PLT" on 12^th July, 2023 with 60% stake with an investment of INR 5.51 Lakhs (RM 30,000). Further, the Company is planning to expand the business by incorporating subsidiary in United Arab Emirates.

The Company has formulated the policy for determining material subsidiaries. The policy is available on companys website www.hpbl.in/investor.

Pursuant to Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statement of the Companys Subsidiary/Joint Ventures/ Associate Companies of the Company, bringing out the highlights of their performance, appears in Form AOC-1 at Annexure - A to this report.

The Board of HCP Plastene Bulkpack Limited or its duly constituted committees also have oversight at the affairs of subsidiary and regularly review various information w.r.t. the subsidiary companies that inter-alia includes:

• Review the financial statements;

• Review of material developments, financial and operating performance and strategies;

• Review of significant transactions or arrangements entered into by the unlisted subsidiaries;

• Review of utilisation of funds and details of investment and advances by the subsidiary;

• Prior recommendation on strategic/ long-term investments, loans, guarantees, acquisitions or disinvestment by subsidiary;

• Noting of minutes of the board meeting and;

• Noting of key internal audit findings.

14. TRANSFER OF UNDERTAKING BY WAY OF A SLUMP SALE ON A GOING CONCERN BASIS

During the year under review, there was no any transfer of undertaking by way of a slump sale on a going concern basis.

15. LISTING WITH STOCK EXCHANGE

The Company confirms that it has paid the Annual Listing Fees for the year 2024-2025 to BSE Limited, Stock Exchange where the Companys shares are listed.

16. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI Listing Regulations, is presented in section forming part of this Annual Report.

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL

As of 31^st March, 2024, Companys Board had Six Directors consisting of One Executive Director, One Non-Executive Director, Four Independent Directors. The Board has One Woman Independent Director. The details of Board and Committee Composition, Tenure of Directors, areas of expertise and other details are available in the Corporate Governance Report which forms part of this Annual Report. In accordance with the provisions of Section 152 of the Act, read with rules made thereunder and Articles of Association of the Company. Mr. Prakash Parekh (DIN: 00158264), Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible offers himself for re-appointment.

During the year, Mr. Judhisthir Behera had resigned from the post of Independent Director of the Company w.e.f. 04^th August, 2023.

During the year, Ms. Khusboo Goyal had been appointed as a Company Secretary and Compliance Officer of the Company w.e.f. 07^th November, 2023.

During the year, Mr. Bhaveshkumar Jain (DIN: 07087023) had resigned from the post of Executive Director and Chief Financial Officer of the Company w.e.f. 16^th December, 2023 and Mr. Dhrumil Shah has been appointed as a Chief Financial Officer of the Company w.e.f. 14^th March, 2024.

Other changes in the Directors and KMPs were already reported in previous Directors Report.

The Board recommends the appointment/re-appointment of above Directors for your approval. Brief details of Directors proposed to be appointed/re-appointed as required under Regulation 36 of the SEBI Listing Regulations provided in the Notice of the ensuing AGM.

18. DECLARATION BY INDEPENDENT DIRECTOR

All Independent Directors have submitted requisite declarations confirming that they (i) continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and are Independent and (ii) continue to comply with the code of conduct laid down under Schedule IV of the Act. Details of the same have also been provided in the report of Corporate Governance, which forms part of this report.

The Directors have further confirmed that they are not debarred from holding the office of Director under any SEBI order or any other such authority.

19. COMMITTEES OF BOARD

As on the date of this report, the Board has the following Committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

• Management Committee

All the recommendations made by the Board Committees including the Audit Committee were accepted by the Board. The mandatory details of Composition, Meetings and the attendance are provided in the Corporate Governance Report which forms part of this Annual Report.

20. NUMBER OF MEETING OF THE BOARD

The Board of Directors met 6 (Six) times during the year under review. The details of Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of this Annual Report.

21. INDEPENDENT DIRECTORS MEETING

The Independent Directors met on 12^th February, 2024 without the attendance of Non-Independent Directors and Members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors, the Committees and the Board as a whole along with the performance of the Chairman of the Company, taking into account the view of Executive Directors and assessed the quality, quantity, and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

22. BOARD EVALUATION

The Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and Individual Directors including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board and Committees, experience and competences, performance of specific duties and obligations, contribution at the meetings and otherwise, Independent Judgement, Governance Issues etc.

At the Board Meeting that followed the above mentioned meeting of the Independent Directors, the performance of the Board, its Committees and Individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Directors being evaluated.

23. NOMINATION, REMUNERATION AND BOARD DIVERSITY POLICY

The Board has, on the recommendation of the NRC, framed a Nomination, Remuneration and Board Diversity Policy (‘NRC Policy) for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Employees and other matters as provided under Section 178(3) of the Act read with Part D of Listing Regulations. The remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company. The Nomination and Remuneration Policy is applicable to all the Directors, Key Managerial Personnel and Senior Management Personnel of the Company.

The Policy provides guidance on:

1. Selection and Nomination of Directors to the Board of the Company;

2. Appointment of the Senior Management Personnel of the Company; and

3. Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel.

The said policy is available on the website of the Company at www.hpbl.in.

24. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, state the following: a. That in the preparation of the Annual Financial Statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. That such accounting policies have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2024 and of the loss of the Company for the year ended on that date; c. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. That the Annual Financial Statements have been prepared on a going concern basis; e. That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; f. That proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

25. EMPLOYEE STOCK OPTION PLAN

There has been no material change in the Plastene Group EmployeeStockOptionPlan-2022duringFinancialYear2023-24.

26. INTERNAL FINANCIAL CONTROLS SYSTEM AND THEIR ADEQUACY

The Company has laid down an adequate system of internal controls, policies and procedures for ensuring orderly and efficient conduct of the business including adherence to the Companys policies, safeguards of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosure.

27. RISK MANAGEMENT

The Board of your Company has adopted Risk Management Plan to create and protect Shareholders value by identifying and mitigating major operating and external business risk. Currently, the Board is responsible for reviewing the risk management plan and ensuring its effectiveness. The Company recognizes that the emerging and identified risks need to be managed and mitigated to (a) protect its Shareholders and other Stakeholders interest (b) achieve its Business Objectives and (c) enable Sustainable Growth. The details of various risks that are being faced by the Company are provided in Management Discussion and Analysis Report which forms part of this Report.

28. BOARD POLICIES

The details of the policies approved and adopted by the Board as required under the Companies Act, 2013 and Securities and Exchange Board of India (SEBI) Regulations are provided in Annexure - B to this report.

29. CORPORATE SOCIAL RESPONSIBILITY _CSR_

The Company has constituted a Corporate Social Responsibility (CSR) Committee and framed a CSR Policy. The brief details of CSR Committee are provided in the Corporate Governance Report which forms part of this Annual Report. The updated CSR Policy is available on the website of the Company at www.hpbl.in.

The Chief Financial Officer of the Company has certified that due to loss reported in the immediate preceding financial year, the amount towards CSR expenditure has not been required to spend for the financial year 2023-2024 as per the provision of Section 135 of the Companies Act, 2013. Hence, your Company has not spent any amount towards CSR expenditure in view of loss.

The Annual Report on CSR activities is annexed to this Report as Annexure -C.

30. CORPORATE GOVERNANCE REPORT

Company is committed to good Corporate Governance practices. The Corporate Governance Report, as stipulated by the SEBI Listing Regulations, form part of this Annual Report along with the required Certificate from Statutory Auditors regarding compliance of the conditions of Corporate Governance.

In compliance with Corporate Governance requirements as per the SEBI Listing Regulations, Company has formulated and implemented a code of Business Conduct for all Board Members and Senior Management Personnel of the Company who have affirmed the compliance thereto. The said code of conduct is available on the website of the Company at www.hpbl.in.

31. ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Act, the draft Annual Return as on 31^st March, 2024, prepared in accordance with Section 92(3) of the Act is made available on the website of the Company and can be assessed using the link www.hpbl.in.

32. BUSINESS RESPONSIBILITY REPORT

As stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is not applicable to your Company as per the exemptions provided under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

33. VIGIL MECHANISM

The Company has a Whistle Blower Policy which lays down the process to convey genuine concerns and seek resolution towards the same without fear of retaliation.

A detailed update on the functioning of the Whistle Blower Policy and weblink of the policy has been provided in the Report on Corporate Governance.

34. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, as amended, is provided as Annexure - D of this Report.

35. RELATED PARTY TRANSACTION

All Contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were in its ordinary course of business and on an arms length basis. The relevant details with regard to the Related Party Transactions are provided in Annexure - E to this report. The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is available on the Companys website and can be accessed at www.hpbl.in.

During the year under review, the policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions was amended to align it with the amendments in the Listing Regulations.

36. PARTICULARS OF EMPLOYEE

Information required under section 197(12) of the Act read with Rule 5(1), 5(2), 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in Annexure -F to this Report.

37. INTERNAL AUDITORS, AUDIT REPORT AND COMPLIANCE

In terms of the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, M/s. BDO India LLP was appointed as Internal Auditors of the Company for the financial year 2023-24, who regularly carries out the Internal Audit of the Company.

All Audit Reports are regularly placed before the Audit Committee at Committees meetings. After providing due explanations, the Company adopts the final suggestions and necessary effects are given in accounting process and system of the Company. There are no qualifications, reservations or adverse remarks or disclaimer made by the Internal Auditors in their Reports.

38. STATUTORY AUDITORS & THEIR REPORT

M/s. Ashok Dhariwal & Co., Chartered Accountants, Ahmedabad (Firm Registration No. 100648W) were reappointed as the Statutory Auditor of the Company at the 38^th AGM held on 26^th September, 2022 to hold the office till the conclusion of the 43^rd AGM to be held in year 2027.

The Statutory Auditors Report does not contain any qualification, reservation, adverse remarks or observations.

39. SECRETARIAL AUDITOR AND THEIR REPORT

M/s. Alpesh Vekariya & Associates, Practicing Company Secretaries, was appointed as the Secretarial Auditor for the financial year ended 31^st March, 2024. The Secretarial Auditor have furnished their report annexed as Annexure - G to this report.

Further, in compliance with Regulation 24A of the Listing Regulations, the Annual Secretarial Compliance Report issued by the Secretarial Auditor was submitted to the Stock Exchange(s) within the statutory timelines.

The Board of Directors has re-appointed M/s. Alpesh Vekariya & Associates, Practicing Company Secretaries to conduct the Secretarial Audit of the Company for the FY 2024-25. They have confirmed their eligibility for the said re-appointment.

40. COST AUDITOR AND THEIR REPORT

Provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 are not applicable to the Company during the financial year under review.

41. PREVENTION OF INSIDER TRADING

The Company has adopted a code of prevention of Insider Trading with a view to regulate trading in Securities by the Directors and the Designated Persons of the Company. The code requires pre-clearance for dealing in the Companys Shares and prohibits the purchase or sale of Companys Shares by the Directors and Designated Persons while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed.

During the period under review, the Company Secretary and Compliance Officer of the Company has given Pre-clearance to the Promoter and Promoter Group to sale of Shares/ Securities of the Company in the Open Market to comply with the Minimum Public Shareholding (MPS) requirements as per Rule 19(2) and Rule 19A of the Securities Contracts (Regulation) Rules, 1957, Regulation 31 of SEBI (ICDR) Regulations, 2018 and Regulation 38 of SEBI (LODR) Regulations, 2015 (as amended from time to time).

42. SIGNIFICANT AND MATERIAL ORDER

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the Companys operation in future.

43. REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors and Secretarial Auditor have not reported any instances of fraud committed against Company by its officers or employees to the Audit Committee or the Board under Section 143(12) of the Act.

44. SECRETARIAL STANDARD

During the year under review, Company has complied with all the applicable provisions of Secretarial Standard-1 and

Secretarial Standard-2 issued by the Institute of Company Secretary of India.

45. INSURANCE

Company has taken appropriate insurance for all assets against foreseeable perils.

46. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and rules made thereunder, Company has constituted Internal Complaints Committees (ICs) at all relevant locations across India to consider and resolve the complaints related to sexual harassment. The ICs includes external members with relevant experience. The ICs presided by senior women, conduct the investigations and make decisions at the respective locations. The ICs also work extensively on creating awareness on relevance of sexual harassment issues, including while working remotely.

During the year under review, there were no complaints pertaining to sexual harassment.

47. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, neither any application was made nor any proceedings were pending under Insolvency and Bankruptcy Code, 2016.

48. ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks to bankers, business associates, consultants, employees and various Government Authorities for their continued support extended to your Companys activities during the year under review. Your Directors also acknowledge gratefully the Shareholders for their relentless support and confidence reposed on the Company.

For and on behalf of the Board of Directors