Dear Members

Your Directors have pleasure in presenting 41^st Annual Report of Pasupati Acrylon Limited ("the Company") together with the Audited Financial Statements for the financial year ended 31^st March, 2024.

In compliance with the applicable provisions of Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("SEBI Listing Regulation") this report covers the financial results and other developments during the financial year ended 31^st March, 2024 and upto the date of the Board meeting held on 17^th May, 2024 to approve this report, in respect of the Company.

FINANCIAL HIGHLIGHTS

A brief on the financial performance during the year under review as compared to the previous year is given below:-

The financial statements for year ended 31^st March, 2024 have been prepared in accordance with applicable Indian Accounting Standards (Ind AS), notified under Companies (Indian Accounting Standards) Rules, 2015, read with Section 133 and other relevant provisions of Companies Act, 2013. In accordance with the provisions of Section 136 of the Companies Act, 2013, the audited financial statements of the Company are available on website of the Company www.pasupatiacrylon.com.

RESULTS OF OPERATIONS AND STATE OF COMPANY'S AFFAIRS

During the year, the key highlights of the Company's performance during the Financial Year 2023-24 are as under:

• Revenue from Operations was Rs. 575.23 Crores as against Rs. 827.96 Crores in the previous financial year.

• EBIDTA was Rs. 26.85 Crores as against Rs. 58.20 Crores in the previous financial year.

• Net Profit was Rs. 13.19 Crores as against Rs. 35.91 Crores in the previous financial year.

Revenue and Net profit during the year declined due to lower demand of acrylic fibre and negative return on CPP Segment caused by persistent fall in selling prices on account of excessive production capacity added in the market. Despite various challenges such as volatility in crude prices and raw material prices, dumping of acrylic fibre by China, Thailand and Belarus, foreign exchange fluctuations, the Company is focused on improvement in its revenue and net profit.

During the year, the Company's exports were 3,044 MT as compared to last year's exports 4,551 MT. The Company has exported to Dubai, Peru, Thailand, Morrocco, Tunisia, Ukraine, Turkey, Algeria, Kenya, Brazil, Poland, Ethopia etc. and is exploring possibilities of increasing exports and it is hopeful to achieve better exports in the coming years. The Company has also exported CPP product to Nepal.

DIVIDEND

As the Company's internal accruals is being utilized to set-up Ethanol Plant, the Board of Directors decided not to recommend any dividend for the financial year 2023-24.

DEPOSITS

During the year under review, your Company has neither accepted nor renewed any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Further, there are no outstanding and/or overdue deposits as at 31^st March, 2024.

TRANSFER OF RESERVES

The Board of Directors of your company, has decided not to transfer any amount to the Reserves for the year under review.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2)(e) read with Schedule V of the SEBI Listing Regulations is given as under:

Acrylic Fibre

Acrylic Fibre is an integral part of the total textile fibre mix which satisfies clothing and other needs of an increasing population. Acrylic fibres are being extensively used for manufacturing various apparel such as sweaters, sportswear, socks, home furnishing, and industrial cloth due to their lightweight, flexibility, and low cost. With the rapid growth of the apparel & textile industry and increasing usage of acrylic fibres for making apparel, the overall acrylic fibre market is projected to rise at 3.9% CAGR between 2023 and 2033. Factors such as a rapidly growing population, changing lifestyle, increasing disposable income, and flourishing fashion industry are expected to indirectly influence the growth of acrylic fibre during the next ten years. The demand for acrylic fibers is anticipated to rise in the coming years, particularly due to the macroeconomic development of end-use sectors which is supported by regional GDP and population growth.

CPP Film

Packaging industry is an enormous economic generator on a global scale and is one of the largest & highest growth sectors of the Indian economy. Cast Polypropylene or CPP packaging films have several beneficial properties from industrial perspective such as transparency, high impact strength, heat sustainability, dimensional stability, printability and are manufactured using high grade raw materials, and laminating aspects. The global market for CPP packaging films is expected to reach US$ 8,742.2 Mn by 2033, growing at a 4.2% CAGR from 2023 to 2033. CPP packaging films are readily used to increase the shelf life of the products in the industries such as food, beverages, apparel, cosmetics, and healthcare products. With the rising requirement for packaging across sectors, with traditional businesses preferring to package products, and the retail and e-commerce growing rapidly, the CPP films industry is projected to expand at a robust rate.

b) OPPORTUNITIES AND THREAT

The usage of acrylic fibers in blends with other materials like wool, cotton, polyester, etc. is growing in popularity as a result of their favorable physical, chemical, and thermo-biological properties. This will provide a strong thrust to the growth of the acrylic fiber market. The rapid growth of end-use sectors including apparel, home furnishing, and industrial will therefore continue to propel the sales of acrylic fibres in the upcoming years.

Global Acrylic Fibre consumption is impacted due to volatility in prices of raw material, energy, coal and other key inputs. The raw material to produce the Company's products is crude derived. The fluctuation in crude affects the raw material prices to some extent and during the year under the review, the crude prices remained volatile due to conflict in Israel-Hamas War & Russia-Ukraine War. Additionally, since the Company is dependent upon imports, the fluctuation in foreign exchange i.e. USD vs. INR has also a bearing on the margin of the Company.

The market for CPP Films is primarily driven by the rapidly expanding demand from the food and beverage sector and the rising use of bags and pouches in end-use industries. The market for CPP Films is expected to increase in the near future due to the rise in the consumption of convenience foods and the high need for packaging solutions. The development of consumer goods packaging has shown to be a major possibility for CPP film growth.

However, the market for CPP Film Market is moderately competitive owing to the presence of multiple vendors in the market. On the other hand, stringent regulations concerning packaging, changing consumer preferences and environmental pressures may restrain the growth to some extent.

Acrylic Fibre

The Company's Acrylic Fibre plant was set up in technical collaboration with SNIA BPD Italy, part of the famed FIAT group - a proven world leader in the manufacture of acrylic fiber. Advanced technology, automation, computerized process control systems and captive power, make the operations of your Company extremely efficient and reliable. The production capacity to produce Acrylic products of the Company is 42,000 MT PA.

During the year under review, the Company has recorded production of 31,534 MT and Sale of 31,685 MT, as against production of 36,425 MT and Sale of 35,260 MT respectively during the previous year. During the FY 2023-24 due to lower demand, production was declined around by 14% as compared to previous year.

Revenue of Acrylic Fibre during the year under review was Rs. 497.44 Crore as against revenue of Rs. 719.28 Crore in the previous year. Profit before tax, exceptional items and interest was Rs. 25.10 Cores as compared to Rs. 59.12 Cores in the previous year.

CPP FILM

The Company installed European machinery which ensures quality product giving edge over other producers. The Company's production capacity to produce CPP film is 10000 MT PA.

During the year under review, the production and sale of CPP film was 6,463 MT and 6,476 MT respectively as against production of 7,663 MT and sale of 7,640 MT respectively during the previous year.

Revenue of CPP Films during the year under review was Rs. 77.79 Crore as against revenue of 108.68 Crore in the previous year. Loss before tax, exceptional items and interest was Rs. 4.12 Cores as compared to loss of Rs. 7.06 Cores in the previous year. Loss of CPP segment is incurred during the year caused by persistent fall in selling prices on account of excessive production capacity added in the market.

Your company is covering both domestic and export markets and the Company's products are well accepted. During the year, the sale and production was declined due to lower demand but in the last quarter of FY 2023-24, it was improved due to better sentiments in the market and it is expected to improve in the coming years.

ETHANOL PROJECT

Board of Directors, at its meeting held on 18^th May, 2022, had accorded its approval to the Company to set-up Ethanol Project with a production capacity of 150 KLPD to align with GOI's Ethanol Blending Programme (E20), subject to clearance and approvals from the concerned statutory authorities. The setting-up of Ethanol Plant is under process. The Company has obtained Environment Clearance for the proposed project. The total Project cost is Rs. 167.58 crores. Indian Bank had sanctioned Term Loan of Rs. 108 Crores and as per stipulations of sanction letter, the remaining project cost of Rs. 59.58 would be met out of the Company's internal accruals. However, the Company has already spent around Rs. 92.17 Crore so far which includes Rs. 44.08 Crores of Term Loan and balance amount out of internal accruals. Civil work is going on at the site and major order for Plant & Machinery has been placed. Delivery of machines has been started.

d) OUTLOOK

India's economic activity and GDP growth are expected to remain resilient despite ongoing geopolitical uncertainties. As a result, India is poised to become one of the major economies in the world with a promising growth outlook. Your Company anticipates sustained demand growth across segments.

According to Future Market Insights (FMI), India is expected to account for a substantial share of the global acrylic fibre market, owing to the rapid expansion of the textiles industry and the rise in the export of yarns and fibres. The rise in the number of textile industries in India is favoring the growth of the acrylic fibre market and the trend is likely to continue in the upcoming years. India is probably going to be the new development engine of the region's acrylic fibre market, propelled by a rising population, increasing disposable income, and changing lifestyle.

Demand for packaged foods is at an all-time high due to growing world population. Additionally, due to concerns about sanitation and health, consumers themselves prefer packaged meals. CPP films are also widely used in the pharmaceutical industry for packing pharmaceuticals to control the damage and contamination during transport. The global CPP Film Market is anticipated to rise at a considerable rate during the forecast period, between 2022 and 2027.

e) RISK AND CONCERN

Geo-political tensions including supply chain disruption, subdued global economic conditions, changes in government policies and trade sanctions and restrictions, intense competition from local and global players, regulatory changes and cyber security threats are key risks which expose the Company to potential challenges and uncertainties. Furthermore, persistent volatility in input costs and foreign exchange risks remains on the radar. These factors can pose risks to the company's plans, operations, supply chains, cash flows and market access potentially dampening its export business.

Further, since the Company is dependent upon imported raw materials, movement in USD and increase in crude oil prices due to ongoing Israel-Hamas war and Russia-Ukraine war may affect the margin. The Company is giving thrust on increasing the exports so that effect can be mitigated. Global economy is likely to be hit by inflation, continuing high energy cost, logistics issues and costs in international trade. Tightening of monetary policies by Central banks to curb inflation may have necessary impact which will impact consumption in general including Acrylic Fiber & CPP Films Industry.

Since raw material is crude derived as such movement either side shall affect the raw material price. To mitigate the effect, the Company has entered into long term contracts with suppliers in films division.

The Company fully dedicates itself to quality and implements robust quality processes and systems at its manufacturing unit to ensure the safety and quality of its product. The Company consistently invests in equipment, processes, and systems to ensure full compliance with manufacturing and audit norms.

f) INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company maintains an adequate and effective Internal Control System commensurate with its size and complexity. It believes that these systems provide, among other things, a reasonable assurance that transactions are executed with management authorization. It also ensures that they are recorded in all material respects to permit preparation of financial statements in conformity with established accounting principles, along with the assets of the Company being adequately safeguarded against significant misuse or loss. An independent Internal Audit function is an important element of the Company's Internal Control System. The internal control is supplemented by an extensive programe of internal, external audits and periodic review by the Management. This system is designed to adequately ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets.

g) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, the Company registered Revenue from Operations of Rs. 575.23 Crores as compared to Rs. 827.96 Crores for previous year with decline in revenue of 30.52 %. Profit before Tax was Rs. 18.40 Crore as compared to Rs. 48.45 Crore. Net Profit in financial year 2023-24 was Rs. 13.19 Crores as against Rs. Rs. 35.91 Crores in the previous financial year 2022-23. Revenue and Net profit during the year declined due to lower demand of acrylic fibre and negative return on CPP Segment caused by persistent fall in selling prices on account of excessive production capacity added in the market.

h) MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company believes that their workforce is an invaluable asset for the Company and Company endeavors to ensure the well-being of all its employees. The safety, health and work life balance of employees are extremely important. Company made all the required efforts to ensure safety of all workforce and employees.

Development and Training of team has always been a focus area of management. The Human Resource Development continues to be focused on improving employee productivity, reducing employee cost and building necessary skillsets whilst building employee motivation through varied employee engagement initiatives. To augment technical strength in existing business areas, various technical trainings covering existing business are being conducted on a regular interval. Regular safety training is imparted to all personnel at factory and regular review of safety incidents is done by top management.

The Company employed on an average 433 persons during the year.

i) DETAILS OF SIGNIFICANT CHANGES (i.e. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR

In accordance with the SEBI Listing Regulations, the Company is required to give details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios including the following ratios.

# DebtorsTurnover Ratio and Inventory Turnover Ratio are declined due to fall in turnover caused by low demand.

^Operating Profit Margin, Net Profit Margin and Return on Net Worth are declined as cost of production was relatively high as compared to previous year.

CAUTIONARY STATEMENT

Some of the statements in this Management Discussions & Analysis, describing the Company's objectives, outlook, projections, estimates, expectations and predictions may be ‘forward looking statements' within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied, since the Company's operations are influenced by external or internal factors. Your Company closely monitors all major developments likely to affect the Operations and will respond to meet the potential threats and to gain from any possible opportunities.

SUBSIDIARY COMPANIES

As on 31^st March, 2024, the Company does not have any subsidiary, associate or joint venture company.

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there is no change in the nature of the business of the company.

SHARE CAPITAL

As on 31^st March, 2024, the Company's issued and paid up capital stands Rs. 89,13,31,210/- divided into 8,91,33,121 fully paid up equity shares of Rs. 10/- each. During the year under review, the Company has not issued any share. Further the Company has also not issued any share with differential Voting Rights/Sweat Equity shares/under Stock Option Scheme (ESOS) earlier and during the year. The Company has no scheme or provision of money for purchase of its own shares by employees or by trustees, for the benefit of its employees. Hence the details under rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014 are not required to be disclosed.

DIRECTORS

In accordance with the provisions of section 152(6) of the Companies Act, 2013, not less than two-thirds of total number of directors shall be liable to retire by rotation, out of which one-third directors shall retire by rotation at every Annual General Meeting. However, "total number of directors" shall not include independent directors.

The Company has two Non-Independent Directors - Mr. Vineet Jain (Managing Director) and Mr. Satya Prakash Gupta (Director- Operations). Mr. Vineet Jain, being Managing Director, is not liable to retire by rotation by virtue of Articles of Association of the Company. Accordingly, Mr. Satya Prakash Gupta, Director -Operations will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Further, the present term of Mr. Satya Prakash Gupta as Whole Time Director of the Company is due to expire on 28^th May, 2024. Mr. Gupta is a chemical engineer and is possessing high level of expertise and having industry experience of about 46 years. Based on the recommendation of the Nomination & Remuneration Committee and subject to the approval of the shareholders at the ensuing Annual General Meeting, the Board of Directors, at its meeting held on 17^th May, 2024, has approved the re-appointment of Mr. Satya Prakash Gupta as Whole Time Director designated as Director - Operations of the Company for a period of 3 (three) consecutive years effective from 29^th May, 2024 and his continuance after attaining the age of 70 years till the date of his term of office. Mr. Gupta has submitted his consent for re-appointment as Whole Time Director of the Company.

Mr. Deveshwer Kumar Kapila, Mr. S.C. Malik, Mr. S. Sathyamoorthy and Mrs. Kamlesh Gupta are Independent Directors of the Company.

Mr. S.C. Malik will attain the age of 75 years on 10^th January, 2025 and hence, in terms of Regulation 17(1A) of SEBI Listing Regulations, approval of shareholders by way of special resolution is required for the continuation of his directorship from the day he attains the age of 75 years till the expiry of his current term i.e. till the conclusion of 42^nd Annual General Meeting to be held in the year of 2025.. Mr. S.C. Malik is a Chartered Accountant and he is having good experience in Finance & Accounting, Corporate Restructuring, Risk Management, Audit, Corporate Governance and Corporate Social Responsibility. He has been associated with the company for the last 30 years.

In the opinion of the Board, Mr. Satya Prakash Gupta and Mr. S.C. Malik possess the requisite expertise, skills, integrity and experience for re-appointment/continuance. The Board recommends their re-appointment/continuance and resolutions seeking shareholders' approval for their re- appointment/continuance form part of the AGM Notice.

KEY MANAGERIAL PERSONNEL

During the year under review, there was no change in Key Managerial Personnel (KMPs). As on 31^st March, 2024, the Company had the following KMPs in accordance with the provisions of Section 203 of the Companies Act, 2013:

1. Mr. Vineet Jain- Managing Director

2. Mr. Satya Prakash Gupta-Director (Operations)

3. Mr. Satish Kumar Bansal- Chief Financial Officer

4. Mr. Bharat Kapoor - Company Secretary

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI Listing Regulations stating that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI Listing Regulations. All the independent directors of the Company are registered and are members of Independent Directors Databank maintained by Indian Institute of Corporate Affairs. Further, the Board after taking these declaration/disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committees of the Company.

MEETINGS OF THE BOARD

During the year under review, four meetings of the Board of Directors were held. The details of Board Meetings are set out in Corporate Governance Report which forms part of this Annual Report.

NOMINATION AND REMUNERATION POLICY

The Board, on the recommendation of the Nomination & Remuneration Committee, has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy is available on the website of the Company www.pasupatiacrylon.com.

BOARD EVALUATION

The Company has devised a formal process for annual evaluation of performance of the Board, its Committees and Individual Directors ("Performance Evaluation") which include criteria for performance evaluation of non-executive directors and executive directors as laid down by the Nomination and Remuneration Committee and the Board of Directors of the Company. It covers the areas relevant to the functioning as Independent Directors or other directors, member of the Board or Committee of the Board.

In terms of the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations, the Nomination & Remuneration Committee has carried out an annual performance evaluation of Board of Directors, of Board's committees and of each Board Member individually.

The performance of the committees was evaluated by the Nomination & Remuneration Committee after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness, structure & independence of committees, contribution to decisions of the Board etc.

The performance of the Board was evaluated on the basis of various criteria such as the board composition and structure, effectiveness of board processes, information and functioning, role & responsibilities and strategy & performance, Governance & compliance etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of laid down criteria.

Independent Directors of the Company had, in their separate meeting held on 28^th October, 2023, reviewed the performance of nonindependent directors, the Board as a whole and Managing Director of the Company, taking into account the views of Executive and NonExecutive Directors.

Further, the Independent Directors hold unanimous opinion that the Non-Independent Directors as well as the Chairman bring to the Board, abundant knowledge in their respective field and are experts in their areas. Besides, they are insightful, convincing, astute, with a keen sense of observation and have a deep knowledge of industry. They have been performing reasonably well, under the prevailing circumstances.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(3) (c) and 134(5) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according to the information and explanations obtained by them, hereby confirm:

a. That in the preparation of the annual accounts for the financial year ended 31^st March, 2024; the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended 31^st March, 2024 and of the profit of the company for the year ended on that date;

c. That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. That the directors had prepared the annual accounts on a going concern basis;

e. That 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;

f. That 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.

CORPORATE GOVERNANCE

The company has complied with the Corporate Governance code as stipulated under SEBI Listing Regulations. A separate report on Corporate Governance, forming part of the Annual Report of the Company is annexed hereto.

SECRETARIAL STANDARDS

The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

PROCEEDINGS PENDING UNDER THE INSOLVENCY & BANKRUPTCY CODE, 2016

No application has been made or any proceeding is pending under the Insolvency & Bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

There are no instances of one-time settlement with any Bank or Financial Institution, during the year under review.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

In compliance with the provisions of the Companies Act, 2013 and SEBI Listing Regulations, all related party transactions are placed before the Audit Committee for prior approval and also before the Board wherever necessary. Prior omnibus approval from Audit Committee is obtained for the related party transactions which are repetitive in nature.

During the year under review, all Contracts/arrangements/transactions entered into by the Company with related parties were in the ordinary course of business and were on an arm's length basis and in accordance with the provisions of the Companies Act, 2013 and the rules made thereunder, the SEBI Listing Regulations and Company's Policy on Related Party Transactions.

None of the transactions with any of the related parties were in conflict with your company's interest. All related parties transactions are disclosed in Note No. 37 of the Financial Statements forming part of this Annual Report.

Pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of contracts or arrangements with related parties referred to Section 188(1) of the Companies Act, 2013 in the prescribed form AOC-2 is appended as Annexure-I to the Board's Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE DATE OF BOARD'S REPORT AND END OF FINANCIAL YEAR

There is no such material change and commitment affecting the financial position of the Company which have occurred between the end of financial year of the Company to which the financial statements relate and the date of this report.

DISCLOSURE UNDER SEXUAL HARRASSMENT OF WOMEN AT WORK PLACE

The Company has in place a Policy for prevention of sexual harassment at the workplace in line with the requirements of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee has been set up to redress complaints regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints on issues covered by the above act were received during the year.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS/TRIBUNALS

During the year under review, there are no significant or material orders passed by the Regulators / Courts/Tribunals which would impact the going concern status of the Company and its future operations.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the provisions of Section 135 of the Companies Act, 2013, the Board of Directors has constituted the Corporate Social Responsibility Committee (CSR Committee). The said Committee has been entrusted with the responsibility of recommending to the Board about the activities to be undertaken by the Company for CSR purpose, monitoring the implementation of the frame work of the CSR Policy and recommending the amount to be spent on CSR Activities. The CSR policy is available on the Company's website www.pasupatiacrylon.com.

The Company's total CSR obligation for the financial year 2023-24 was Rs. 112.54 Lakh. However, an amount of Rs. 16,000/-, which was excess spent in Financial Year 2022-23, was also available for set-off against the Company's CSR obligations for the financial year 2023-24 in terms of 3^rd Proviso to Section 135(5) of the Companies Act, 2013 read with Rule 7(3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, but Board decided not to set-off the said excess amount.

In view of the above, the Company has spent Rs. 113.00 Lakh towards the CSR activities during the financial year 2023-24 and hence, the Company's CSR obligation for FY 2023-24 has been duly met in compliance with Section 135(5) of the Companies Act, 2013.

Further, in terms of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Chief Financial Officer has certified that the funds disbursed for CSR have been used for financial year 2023-24, for the purpose and in the manner approved by the Board.

The disclosures related to CSR activities pursuant to section 134(3) of the Companies Act 2013, read with Rule 9 of Companies (Accounts) Rules, 2014 and Rule 8 of Companies (Corporate Social Responsibility) Rules 2014 are annexed hereto and form part of this report as Annexure- II.

RISK MANAGEMENT

The Board of Directors has constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board to oversee and approve the Companies Risk Management framework and all the risks that the company faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management.

Risk Management Policy enables the Company to proactively manage uncertainties and changes in the internal and external environment to limit negative impacts and capitalize on opportunities. The Company has laid down a Risk Management Policy which is reviewed by the Risk Management Committee and approved by the Board. The Risk Management Policy has also been hosted on the website of the Company www.pasupatiacrylon.com.

Statutory Auditors

M/s B.K. Shroff & Co., Chartered Accountants (ICAI Firm Registration No. 302166E) was appointed as Statutory Auditors of the Company at the 39^th Annual General Meeting ("AGM") of the Company held on 29^th September, 2022 for a period of 5 years commencing from the 39^th AGM till the conclusion of the 44^th AGM. The Auditors have confirmed that they continue to fulfill the eligibility criteria for holding the office as Statutory Auditor of the Company as prescribed under the Act and the Rules framed there under.

The notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. During the year under review, the Statutory Auditors has not found any instance of fraud committed against the Company by its officers or employees and accordingly, reporting to the audit committee or Central Government, under Section 143 (12) of the Companies Act, 2013 is not required. The Auditors' report does not contain any qualification, reservation or adverse remark or disclaimer.

Cost Auditor

Pursuant to Section 148(1) and other applicable provisions of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014, maintenance of cost records is required by the Company and accordingly, such accounts and records are made and maintained.

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, Board of Directors, on the recommendation of the Audit committee, appointed Mr. Satnam Singh Saggu, Cost Accountants as Cost Auditors of your company for the Financial Year 2024-25 to carry out the cost audit for the applicable business on a remuneration of Rs. 50,000/- (Rupees fifty thousand only) plus applicable taxes and reimbursement of out of pocket expenses. A certificate from Mr. Satnam Sigh Saggu, Cost Accountants has been received to the effect that their appointment as Cost Auditors of the Company, if made, would be in accordance with the limits specified under Section 141 of the Companies Act, 2013 and Rules made thereunder. Accordingly, the matter relating to ratification of the remuneration payable to the Cost Auditors for the financial year ending 31^st March, 2025 is being placed at the 41^st Annual General Meeting.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company, at its meeting held on 9^th May, 2023, had appointed M/s. Mehak Gupta & Associates, Practicing Company Secretary (CP No. 15013, Membership No. 10703), to undertake Secretarial Audit for the financial year 2023-24. The Secretarial Audit Report for the Financial Year ended 31^st March, 2024 is annexed herewith to this Report as Annexure - III. The Secretarial Audit Report is self- explanatory and do not call for any further comments. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

Internal Auditor

Pursuant to provisions of Section 138 of the Companies Act, 2013 M/s. Jinender Jain & Company, Chartered Accountants, New Delhi, Internal Auditors of the Company have conducted internal audit of the functions and activities of the Company and effectiveness of Internal Control Systems of the Company during Financial Year 2023-24.

Internal Financial Control

Your Company remains committed to improve the effectiveness of internal financial controls and processes which would help in efficient conduct of its business operations, ensure security to its assets and timely preparation of reliable financial information. The Company has a proper system of internal control to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and transactions are authorized, recorded and reported correctly.

The internal financial controls with reference to the Financial Statements are adequate in the opinion of the Board of Directors.

The Board of Directors has adopted policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, ensuring accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The Audit Committee of the Board actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Statutory Auditors and the Internal Auditors are inter alia, invited to attend the Audit Committee Meetings and present their observations on adequacy of internal financial controls and the steps required to bridge gaps, if any.

Audit Committee

Audit Committee of the Board has been constituted as per the SEBI Listing Regulations and section 177 of the Companies Act, 2013. The composition and other details of the Audit Committee are provided in Corporate Governance Report which is part of this Report. All recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has framed and implemented a vigil mechanism named as Whistle Blower Policy to deal with instances of fraud and mismanagement, if any, in terms of Section 177(9) of the Companies Act, 2013 and Regulation 22 of SEBI Listing Regulations. The details of the Whistle Blower Policy are provided in the Corporate Governance Report and also posted on the website of the Company www.pasupatiacrylon.com.

Cyber Security

In view of the increased cyberattack scenarios, the cyber security maturity is reviewed periodically and the processes, technology controls are being enhanced in-line with the threat scenarios.

Particulars of Loans , Investments, Guarantees.

During the year under review, the Company has not given any loan or provided any security or guarantee in terms of Section 186 of the Companies Act, 2013. The Company has complied with the provisions of Section 186 of the Companies Act, 2013. Particulars of Loans given/Investments made/Guarantees given/Securities is disclosed in financial statements.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.

The information as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014 is set out in the Annexure - IV to this Report.

Annual Return

Pursuant to the amendments to the provisions of Section 92(3) read with Section 134 (3) (a) of Companies Act, the annual return as on 31^st March, 2024 is available on the website of the Company at www.pasupatiacrylon.com under Investor Section.

Particulars of Employees

The statement containing particulars of employees as required under section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is attached as Annexure - V.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, in terms of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said annexure is open for inspection at the Registered Office of the Company during business hours on all working days, 21 days before the Annual General Meeting. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

RANKING OF THE COMPANY AMONGST BS1000 COMPANIES

Your Company has been covered and ranked by Business Standard among the prestigious BS1000 Companies in March, 2024 Edition as per below ranking:

1. ranked at 54^th in terms of sector performance under "Textile & Garments" sector;

2. ranked at 283^rd based on Financial Sustainability Index (FSI); and

3. ranked at 903^rd in terms of revenue amongst the prestigious BS1000 Companies.

BS 1000 magazine is a comprehensive guide to India's biggest and financially most successful listed and unlisted companies excluding banking, financial services, and insurance (non-BFSI) firms. The Companies are ranked on their Financial Sustainability Index (FSI) based on their past performance and financial stability. The index is based on six financial ratios that together capture a firm's historical earning power, ability to generate internal accruals, debt servicing capability, balance sheet strength, operational efficiency and relative market valuation. A company ranking higher on the FSI index have superior balance sheets, strong cash flows, and higher profitability and has greater staying power to withstand economic turmoil. A company with the best record on these parameters can always be relied upon to grow faster and increase the value of its shareholders.

ISO CERTIFICATION

Your Company is an ISO 9001:2015, accredited by Bureau of Indian Standard, Rooid Voor Accreditatie, and Netherland and OKEO TEX STANDARD 100 Class 1 Appendix 6. Furthermore, the Company's CPP Product meets the requirements set out in the BRC Global Standard for Packaging & Packaging Material and is categorized as HIGH HYGINE Grade A by the BRCGS. These certifications/recognitions are indicative of our commitments in meeting global quality standards and thrust excellence for achieving customer satisfaction.

ACKNOWLED GEMENT

Your Directors wish to place on record their deep appreciation of the continued support and co-operation received from Financial Institutions, Banks and Shareholders, the State and Central Government.

Your Directors also wish to place on record their appreciation of the devoted services of the Company's employees, who have diligently contributed to the Company's progress.