Pentagon Rubber Ltd Directors Report

Dear Members,

Your Directors have pleasure in presenting the Annual Report together with the Audited Statement of Accounts of the Company for the Financial Year ended 31st March 2023 ("the period").

FINANCIAL RESULTS:

Management Discussion and Analysis of Financial Conditions and State of Company Affairs.

The Companys financial performance during the period is as under:

(In Thousands)

Particulars	Year ended 31st March 2023	Year ended 31st March 2022
	(INR)	(INR)
Turnover	431789	350265
Other Income	422	894
Total Expenses	386745	320944
Profit/(Loss) Before Tax	45466	30215
Current Tax	13346	-
Deferred Tax	1150	(351)
MAT Tax	-	5646
MAT Credit Entitlement	-	(4810)
Profit/(Loss) For The Year	30970	29730

1. FINANCIAL PERFORMANCE:

Your Companys directors are pleased to inform you that, company has earned a profit of Rs. 30970 thousand as compared to previous years profit Rs. 29,730 thousand. Company has managed to increase the turnover from Rs. 350265 thousand to Rs. 431789 thousand. This jump in profits is due to growing sales and better performance of the company.

2. LEGAL AND REGULATORY:

Compliance with laws and regulations is an essential part of your Companys business operations.

We are subject to laws and regulations in diverse areas as product safety, product claims, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes. Frequent changes in legal and regulatory regime and introduction of newer regulations with multiple authorities regulating same areas lead to complexity in compliance. We closely monitor and review our practices to ensure that we remain complaint with relevant laws and legal obligations.

3. DIVIDEND:

Considering future growth projects of the company, the board has decided not to declare any dividend to the shareholders for the financial year 2022-23.

4. SHARE CAPITAL:

The Authorised Share Capital was increased from Rs. 4,00,00,000 to Rs. 8,00,00,000 during the year under review.

The issued share capital of the company as on 31st March, 2023 was Rs, 5,40,00,000/- (Rupees Five Crore Forty lakhs only).

During the year under review, we have issued 14,00,000 (Fourteen Lakhs only) bonus shares at a face value of Rs. 10 each.

5. MATERIAL CHANGES:

Our Company was incorporated under the class of Private Company on 26^th April, 2004 under Companies Act 1956. Acknowledging the growth opportunities and in need of raising finance for the same, the company on 15^th December, 2022 has passed special resolution approving conversion from private company to public company and on 28^th December 2022 has successfully converted the status from Private Company to Public Company.

Further company planned to expand its capital base, so on 07^th January, 2023, the Board of Directors proposed to issue and list the shares of the Company on National Stock Exchange Limited (NSE)- SME Platform. On 11^th January, 2023, the members of the company had passed a resolution and agreed with Board of Directors to list the securities. The company then commenced with issue process and took necessary steps like appointing lead merchant banker, share transfer agent, market maker etc. All the material contracts, material documents along with final prospectus copy has been filed with the Registrar of Companies, Chandigarh vide E- form GNL-2. On 07^th July 2023 successfully got listed on the SME platform of National Stock Exchange Limited (NSE)- NSE Emerge. The company had made a fresh issue up to 23,10,000 Equity shares which were oversubscribed by nearly 100 times.

The Company expresses immense gratitude to all parties to issue for making this an affluent issue.

6. TRANSFER TO GENERAL RESERVE:

As permitted under the provisions of the Companies Act, 2013 (the Act), the Board does not propose to transfer any amount to general reserve.

7. PUBLIC DEPOSITS:

During the year under review, your Company has neither accepted nor renewed any deposits from the public within the meaning of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

8. SIGNIFICANT AND MATERIAL ORDERS:

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

9. COMPLIANCE WITH SECRETARIAL STANDARDS:

Your directors confirm that Secretarial Standards issued by the Institute of Company Secretaries of India, have been complied with.

10. HOLDING, SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES:

As on 31st March 2023, the Company does not have any Holding, Subsidiary, Associate or Joint Ventures.

11. RELATED PARTY TRANSACTION:

There are no contracts or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013.

12. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS.

The details of Loans and Investments and guarantees covered under the provisions of Section 186 of the Act are given in the Notes to the Financial Statements forming part of Annual Report.

13. BOARD MEETINGS:

The Board has met 16 times during the financial year 2022-23.

S. No.	Dates	Number of Directors Present
1.	11th April, 2022	4
2.	30th May, 2022	4
3.	30th May, 2022	4
4.	08th August, 2022	4
5.	05th September,2022	4
6.	15th October, 2022	4
7.	20th October, 2022	4
8.	22 th November, 2022	4
9.	23rd November, 2022	4
10.	24th November, 2022	4
11.	24th November, 2022	4
12.	29th December, 2022	4
13.	7th January, 2023	4
14.	16th January, 2023	4
15.	3rd March, 2023	4
16.	17th March, 2023	4

14. EXTRACT OF ANNUAL RETURN:

In accordance with section 134(3)(a) of the Act, the annual return as referred in section 92(3) of the Act, for the financial year under review shall be placed on the website of the Company at www.pentagonrubber.com.

15. DEMATERIALIZATION OF SHARES:

Companys shares are in dematerialization form with National Security Depository Limited

(NSDL).

16. DETAILS OF FRAUD REPORTED BY AUDITORS:

During the year under Review, No details of fraud reported by auditors of the company under Section 143(12) of the Companies Act, 2013.

17. ADEQUACY OF INTERNAL CONTROLS SYSTEM AND THEIR COMPLIANCE:

During the year, the Company has reviewed its Internal Financial Control systems and has continually contributed to the establishment of a more robust and effective internal financial control framework. The control criteria ensure the orderly and efficient conduct of the Companys

Provide an overview of the principles of risk management

Explain approach adopted by the Company for risk management Define the organizational structure for effective risk management

Develop a "risk" culture that encourages all employees to identify risks and associated opportunities and to respond to them with effective actions.

Identify, access and manage existing and new risks in a planned and coordinated manner with minimum disruption and cost, to protect and preserve Companys human, physical and financial assets.

22. APPLICATION MADE UNDER INSOLVENCY AND BANKRUPTCY CODE 2016:

The Company has not initiated any proceedings under Insolvency Bankruptcy Code 2016 during the financial year 2022-2023.

23. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT

WORK PLACE:

Company has zero tolerance for sexual harassment at work place and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line with the provisions of the Sexual Harassment of Women at Work place (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder. The Policy aims to provide protection to employees at work place and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.

24. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN

EXCHANGE EARNINGS AND OUTGO:

A. Conservation of Energy:

As the company is engaged in service sector, the energy consumption is minimal, however our Company is aware of its responsibilities and has at every available opportunity, used and implemented such measures so as to enable energy conservation. The company is constantly thriving to migrate towards renewable source of energy.

B. Technology Absorption:

The Company continues to use the latest information technology for improving the productivity. Absorption of qualitative technology helps to reduce operation costs. The Companys operation does not require any significant import of technology so far.

B. Foreign Exchange Earnings & Out go: (in lakhs)

Total Foreign Exchange Earnings in 2022-23	Total Foreign Exchange outflow 2022-23	Total Foreign Exchange Earnings in 2021-22	Total Foreign Exchange outflow 2021-22
100.79	1135.80	150.02	511.43

25. DIRECTORS RESPONSIBILITY STATEMENT

As required under provisions of Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

i. In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the of the company at the end of the financial year and of the Profit/loss of the Company for that period;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors had prepared the annual accounts on a ‘going concern basis;

v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

26. BOARD EVALUATION

The Company is led by a diverse, experienced and competent Board. The performance evaluation of the individual members of the Board (including the Chairman) for financial year 2022-23, was carried out internally. This was based on a structured questionnaire which cover various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Members strengths and contribution, execution and performance of specific duties, obligations and governance and feedback from each Director.

27. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSON:

The Directors and Key Managerial Personnel of the Company as on date are:

Name	Designation	Address	Date of Appointment
Mr. Ashish Jain	Chairman cum Managing Director	45, Sector-7, Panchkula, Haryana-134109, India	26/04/2004
Mr. Anil Jain	Whole-Time Director	Olive 701, Salcon the Verandas, Golf Course Road, Sector-54, Gurgaon, Haryana-122011, India	26/04/2004
Mr. Saurabh Jain	Whole-Time Director	409, Sector-7, Panchkula, Haryana-134109, India		26/04/2004
Mr. Lalit Jain	Non-Executive Director	Villa-105, Laburnum Sushant Lok, Block-A, Sector-28, Gurgaon, Haryana-122001		26/04/2004
Mr. Manish Verma	Independent Director	322, Lane 9 G, Behind Kisan Bhawan, Sector - 35A, Chandigarh - 160022		11/01/2023
Mrs. Preet Kamal Kaur Bhatia	Independent Director	152, Golden Avenue, Near Har Krishan Public School, Amritsar-143001, Punjab, India.		11/01/2023
Ms. Shubhi Kishore	Company Secretary	Gulabgarh Road, Village Behra Dist. S.A.S. Nagar, Derabassi Mohali, Punjab- 140507, India		16/01/2023
Mr. Varun Jain	Chief Financial Officer	Gulabgarh Road, Village Behra Dist. S.A.S. Nagar, Derabassi Mohali, Punjab- 140507, India		16/01/2023

The designation of Mr. Lalit Jain was changed to Non-executive Director of the company with effect from 07^th January, 2023.

The designation of Mr. Ashish Jain was changed to Managing Director and that of Mr. Saurabh Jain and Mr. Anil Jain, was changed to Whole time directors with effect from 11^th January, 2023.

Further, Mr. Varun Jain was appointed as Chief Financial Officer and CS Shubhi Kishore (Membership No. 63032) was appointed as Company Secretary of the Company with effect from 16^th January, 2023.

Mr. Manish Verma and Mrs. Preet Kamal Kaur were appointed as the Independent Directors of the company on 11^th January, 2023.

28. FORMATION OF COMMITTEE:

For the financial year 2022-23, your company was not required to form committee, but due to virtue of listing on the stock exchange, company in accordance with Section 177 and Section 178 of Companies Act, 2013 read along with Regulation 18, 19 and 20 of SEBI LODR Regulations 2015 has constituted the following committee:

S.NO. Name of the Committee	Chairperson	Member 1	Member 2
1. Audit Committee	Manish Verma	Ashish Jain	Preet Kamal Kaur Bhatia
2. Nomination & Remuneration Committee	Manish Verma	Preet Kamal Kaur Bhatia	Lalit Jain
3. Stakeholders Relationship Committee	Lalit Jain	Ashish Jain	Manish Verma

29. DECLARATION BY INDEPENDENT DIRECTORS:

As on March 31, 2023, the following Directors on your Board were Independent:

1. Mr. Manish Verma - Independent Director

2. Mrs. Preet Kamal Kaur Bhatia Independent Director

Pursuant to the provisions of Section 134(3)(d) of the Companies Act, 2013, disclosure is hereby given that the Company has received declaration / confirmation of independence from all Independent Directors, of the Company pursuant to Section 149(6) of the Companies Act, 2013, as may amended from time to time, after undertaking due assessment of the veracity of the same and the Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013. The certificates of Independence received from all the Independent Directors have been duly noted by the Board.

30. REMUNERATION POLICY:

On virtue of getting listed on the stock exchange on 7^th July, 2023, the Company has formed Nomination and Remuneration Committee. The details are annexed as Annexure-1.

31. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During reporting period, the Company has not exceeded the threshold limit mentioned under Section 135 of the Companies Act, 2013.

Hence, the Company was not required to make any expenditure towards Corporate Social Responsibility.

32. VIGIL MECHANISM:

The Company has a whistle blower mechanism wherein the employees can approach the Management of the Company (Audit Committee in case where the concern involves the Senior

Management) and make protective disclosures to the Management about unethical behaviour, actual or suspected fraud or violation of the Code of Conduct. The Whistle Blower Policy requires every employee to promptly report to the Management any actual or possible violation of these Codes or an event an employee becomes aware of, that could affect the business or reputation of the Company. The disclosures reported are addressed in the manner and within the time frames prescribed in the Policy.

33. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS:

The guiding principle of the Code of Corporate Governance is ‘harmony i.e., balancing the need for transparency with need to protect the interest of the Company, balancing the need for empowerment at all levels with the need for accountability. The Company believes in the highest standards of good and ethical corporate governance practices. Good governance practices stem from the culture and mindset of the organization. It is therefore not merely about enacting policies regulations and procedures but also about establishing an environment of trust and confidence among various shareholders.

The Companys philosophy on the Code of Governance is that the Company should follow contemporary corporate practices and the guiding principle of the Code of Governance of the Company is Harmony i.e.:

(a) Balancing need for transparency with the need to protect the interests of the Company; (b) Balancing the need for empowerment at all levels with the need for accountability;

(c) Interaction with all stakeholders including shareholders, employees, lenders and regulatory authorities.

34. ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation for the support by the employees of the Company at all levels. Your directors also wish to place on record their appreciation for the valuable co-operation and support received from the shareholders.

The Directors look forward to their continued support in future.

ON BEHALF OF THE BOARD OF DIRECTORS PENTAGON RUBBER LIMITED

(Formerly known as PENTAGON RUBBER PRIVATE LIMITED)

SD/-	SD/-
ASHISH JAIN	SAURABH JAIN
MANAGING DIRECTOR	WHOLETIME DIRECTOR
DIN: 00738412	DIN: 00761460
ADD: H NO.45, SECTOR 7,	ADD: #409, SECTOR -7, PANCHKULA
PANCHKULA HARYANA 134109	HARYANA 134109
Place: Derabassi
Date: 01.09.2023

a. uses the services of an external agencies, if required; b. considers candidates from a wide range of backgrounds, having due regard to diversity; and c. considers the time commitments of the candidates.

Formulation of criteria for evaluation of performance of independent directors and the board of directors;

Devising a policy on diversity of board of directors;

Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the board of directors their appointment and removal.

Recommend to the board, all remuneration, in whatever form, payable to senior management.

Such other functions/duties as may be entrusted by the Board from time to time. The Company shall disclose the remuneration policy and the evaluation criteria in its Annual Report.

Functions of Nomination and Remuneration Committee:

The NRC shall, inter-alia, perform the following functions:

Identify persons who are qualified to become Directors in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every directors performance;

Formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees

Determine the criteria for selection, attributes and broad parameters for appointment of KMPs, evaluation and measurement of performance of KMPs and to recommend appointments of KMPs to the Board.

Determine the criteria for selection, compensation structure, evaluation and measurement of performance of Senior Management Personnel.

Ensure that the Board comprises of a balanced combination of Executive Directors and Non-Executive Directors and also the Independent Directors;

Devise framework to ensure that Directors are inducted through suitable familiarization process covering their roles, responsibility and liability;

ON BEHALF OF THE BOARD OF DIRECTORS PENTAGON RUBBER LIMITED

(Formerly known as PENTAGON RUBBER PRIVATE LIMITED)

SD/-	SD/-
ASHISH JAIN	SAURABH JAIN
MANAGING DIRECTOR	WHOLETIME DIRECTOR
DIN: 00738412	DIN: 00761460
ADD: H NO.45, SECTOR 7,	ADD: #409, SECTOR -7, PANCHKULA
PANCHKULA HARYANA 134109	HARYANA 134109
Place: Derabassi
Date: 01.09.2023