Mega Flex Plastics Ltd

To

The Members,

MEGA FLEX PLASTICS LTD

1. INTRODUCTION:

Your Directors have pleasure in presenting their 20th Annual Report along with the Audited Financials Statement for the year ended March 31, 2024.

The Accounting Year of the Company commenced from 1st April 2023 and ended on 31st March, 2024, in respect of which the accounts are being presented to the shareholders. The financial highlights for the period under review are as follows:

2. FINANCIAL HIGHLIGHTS FOR THE COMPANY: (Rupees in Lakhs)

3. COMPANY PERFORMANCE:

During the year, since the demand has been low due to poor potato crop all over the country, some farmers shifted to the jute bags leading to the reduction in the demand of leno bags. Despite that, your company has sold 70.27 million leno bags as against 61.79 million bags sold in the previous year 2022-23, an increase of about 13.72%. We could achieve this by penetrating in newer market territories by adopting aggressive pricing policy and adding new dealers. Your Company hasmadeprofitafter tax of Rs. 136.94 Lakhs for the year under review as against the profit after tax of Rs. 214.91 Lakhs in the previous year.

4. SHARE CAPITAL:

The Authorised Share Capital of the Company as on 31st March, 2024 was Rs.11,00,00,000/- (Eleven Crores Only) comprising of 1,10,00,000 (One Crore and Ten Lakhs only) equity shares of Rs.10/- (Ten) each. Furthermore, the said capital has been changed from Rs.11,00,00,000/- (Eleven Crores Only) comprising of 1,10,00,000 (One Crore and Ten Lakhs only) equity shares of Rs.10/- (Ten) each to Rs.13,00,00,000/- (Thirteen Crores Only) comprising of 1,30,00,000 (One Crore and Thirty Lakh only) equity shares of Rs.10/- (Ten) each vide resolution dated: 14th June, 2024 through Postal The Issued and Paid-up Capital of the Company as on 31st March, 2024 was Rs. 10,74,50,250/- comprising of 1,07,45,025 number of equity shares of face value of Rs.10/- each.

The Company had come up with the issue of ConvertibleEquity Share Warrants ("Warrants") to the Promoters, Promoter Group and Other Public Investors on Preferential Basis by issuing up to 13,86,000 (Thirteen Lakhs Eighty-Six Thousand) Warrants convertible in one or more tranches to equity shares of 10/- each of the Company at a price of 40/- (including premium of 30/-) for each Warrant as per the requisite Shareholders' approval taken on the 14th Day of June 2024, via Postal Ballot. Your Company has allotted 13,86,000 (Thirteen Lakh Eighty Six Thousand) Equity Share Warrants ("Warrants") to the respective allottees at an issue price of 40/- per Warrant including a premium of 30/- per share for each warrant for an aggregate consideration of 1,38,60,000.00 (Rupees One Crore Thirty Eight Lakh Sixty Thousand only) i.e., 25% of the total issue price for 13,86,000 warrants i.e. 5,54,40,000 (Rupees Five Crores Fifty Four Lakhs and Forty Thousands only)with a right to the respective warrant holder(s) to apply for and be allotted 1 (One) Equity Share of the face value of 10/- each of the Company ("Equity Shares") within a period of 18 (Eighteen) months from the date of allotment of the Warrants i.e. 24th Day of June, 2024.

5. SWEAT EQUITY SHARES:

As per the provisions of Section 54(1)(d) of the Companies Act, 2013 and in terms of Rule 8(13) of Companies (Share Capital and Debentures) Rules, 2014, the Company has not issued any Sweat Equity Shares during the year under review.

6. DIFFERENTIAL VOTING RIGHTS:

As per the provisions of Section 43(a)(ii) of the Companies Act, 2013 and in terms of Rule 4(4) of Companies (Share Capital and Debenture Rules, 2014), the Company has not issued any shares with Differential Voting Rights during the year under review.

7. EMPLOYEE STOCK OPTIONS:

As per the provisions of Section 62(1)(b) of the Companies Act, 2013 and in terms of Rule 12(9) of Companies (Share Capital and Debenture Rules, 2014), the Company has not issued any Employee Stock Options during the year under review.

8. DEBENTURES/BONDS/WARRANTS OR ANY NON-CONVERTIBLE SECURITIES:

During the year under review, the Company has not issued any debentures, bonds, warrants or any nonconvertible securities. As on date, the Company does warrants or any non-convertible securities.

9. LISTING & DEPOSITORY FEE:

The Equity Shares of the Company are listed on SME Platform of National Stock Exchange of India Limited (NSE Emerge). The Company has paid Listing fees for the financial year 2023-24 according to the prescribed norms & regulations. Company has also paid Annual Custody Fee to National Securities Depository Limited and Issuer Fee to Central Depository Services (India) Limited for the financial year 2023-24. The Company shall not list the Warrants on the Emerge Platform of the National Stock Exchange of India Limited. All the requisite fees in relation to the Warrant has been paid timely.

Since, all the shares already in dematerialised form therefore there was no request for the dematerialization.

As the Members are aware, your Company's shares are trade-able compulsorily in electronic form and your Company has established connectivity with both the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the depository system, the members are requested to avail the facility of dematerialization of the Company's shares on NSDL & CDSL. The ISIN allotted to the Company's Equity Shares is INE0G1D01014. The ISIN alloted to the Warrants is ISIN : INE0G1D13019

12. WEBSITE: https://megaflex.co.in is the website of the company. All the requisite details including various Policies, Management Team, Financial Results, etc., are placed on this website of the company

It is not proposed to carry any amount to any reserves from the profits of the Company. Hence, disclosure under Section 134 (3) (j) of the Companies Act, 2013 is not required.

In order to conserve resources, the Board does not recommend any final dividend for the financial year ended 31st March, 2024.

The Company continues to be engaged in the manufacturing of Leno Bags, Sutli and Woven Fabrics. To increase the market size of Leno Bags, your Company has made a supply to the: (i) Pepsico Holdings India Private Limited and ITC Limited; (ii) States viz., Jammu & Kashmir, Haryana, Punjab, Uttar Pradesh and Maharashtra through building new network of dealers.

To further expand the horizon of the business, your company has:

(i) Been allotted 6.5 acres land in the district of Khurdha, Orissa from the Odisha Industrial Infrastructure Development Corporation Ltd for setting up of a manufacturing unit of injection and blow moulded plastic containers, Leno Bag, PP Woven Bag, PP Woven Fabrics & Corrugated Box with an annual capacity of 9,600 MT in three phases. In the first phase Company shall set up a manufacturing unit of injection and blow moulded plastic containers.

(ii) Placed order for looms to produce wide width Woven fabric which has a better valued addition. We have also placed order for Leno4P looms on trial basis for producing innovative and specialised leno fabric, which has tremendous market potential. Once the market for such bags develop, we shall add capacity for this fabric. Each loom shall have an annual capacity of 8.55 lakhs vegetable bags. The capacity expansion shall be at its existing facility at Polypark, Howrah, West Bengal.

To finance the above expansion, your Company had made the Issuance of Convertible Equity Share Warrants on a Preferential Basis to the Promoters, Promoter Group and Public and have received 25% i.e. 1,38,60,000 (One Crore Thirty-Eight Lakhs and Sixty Thousands Rupees) of the said Issuance i.e. 5,54,40,000 (Five Crores Fifty-Four Lakhs and Forty Thousands Rupees).

The Board has borrowed loan for an amount of Rs. 124.32 Lakhs in one or more tranches from the Small Industries Development Bank of India (SIDBI) to procure the 400 +/- 20 KW solar power equipment for the Company. The solar power equipment is proposed to be installed at the premises situated in Polypark, Howrah for promoting the Green Power.

Material Changes and Commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relate and the date of the report has been described in point no. 15 of this Report.

During the year under review, your Company did not have any subsidiary, associate and joint venture company.

The company has an optimum combination of the Board of Directors as on the 31st March, 2024 comprising of 6 Directors, out of which 3 are Executive and 3 are Non-Executive Independent Directors, 1 Chief Financial Officer and a Company Secretary & Compliance officer as on the date of the report is:

* In accordance with the provisions of Section 152 of the Act, read with rules made thereunder and Articles of Association of the Company, Mr. Rakesh Sethia (DIN: 00409033) is liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment.

# Due to the prolonged healthissues,Mr.AokKanodiahasresignedfromthedesignationof Independent Director w.e.f. 01/07/2024.

## Pragya Jhunjhunwala was appointed as an AdditionalDirector in the category of the Independent Director by the Board of Directors on the 15th Day of May, 2024. She is later re-designated as the Non-Executive Independent Director w.e.f. the 15th Day of May, 2024 for a term of 5 years upto the 14th Day of June, 2029 subject to the approval sought from the Shareholders via Postal Ballot on the 14th Day of June, 2024. Form DIR-2 duly initialled by Rakesh Sethia has been annexed in ANNEXURE-A (I) Form DIR-2 duly initialled by Pragya Jhunjhunwala has been annexedin ANNEXURE-A (II)

Details have been annexed in ANNEXURE-B 20. DECLARATION OF INDEPENDENT DIRECTORS:

Requisite declarations u/s 149(6) of the Companies Act, 2013 declaring the criteria of Independence for the appointment of the Independent Directors has been received by the company. Furthermore, the directors have also given the declaration under the provisions of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing and Obligations of Disclosure Requirements) Regulations, 2015 and Section 152(5) of the Companies Act, 2013 and rule 8 of Companies (Appointment and Qualification of Director) Rules, 2014 in Form DIR-2.

On appointment, the concerned Directors were issued a Letter of appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. Independent Director is taken through an induction and familiarization program including the presentation and interactive session with the Committee Members and other FunctionalHeads on the Company's finance and other important aspects. The details of Familiarization Programme arranged for Independent Directors have been disclosed on the website of the Company and are available at the following link: https://megaflex. co.in/corporate-governance/

The Board of Directors met 5 times during the financial year ended 31st March, 2024 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder, details of which are given below:

Pursuant to Section 134 (3) (c) read with Section 134 (5) of the Companies Act, 2013, your Directors state that:

1. In the preparation of the annual accounts, the applicable accountingstandards have been followed with proper explanation relating to material departures, if any;

2. They have, in the selection of the accounting policies, consulted the Statutory Auditors and have 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 as at 31st March, 2024 and of its Profit/Loss for the year ended on that date;

3. They have taken proper and sufficient care to the best of their knowledge and ability 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; and

4. They have prepared the annual accounts for the year ended 31st March, 2024 on a ‘going concern' basis; and

5. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

24. COMMITTEES OF BOARD:

The Board of Directors has constituted the following Committees, viz.;

(i) AUDIT COMMITTEE:

The Audit Committee was re-constituted on 23.08.2024. The Constitution, compositionand functioning of the Audit Committee also meets with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, All the recommendations of Audit Committee have been accepted by the Board of Directors of the Company The Audit Committee comprises of:

Mrs. Parul Mantri, the Company Secretary and Compliance Officer of the Company had acted as the Secretary and Compliance Officer of the Audit Committee.

25. ROLEOFAUDITCOMMITTEE ee shall include theCommitt following: TheroleoftheAudit

Oversightofthecompany'sfinancialreportingprocess and the disclosure of its financial is correct, ensurethatthefinancial

Recommendation for appointment, remuneration company;

Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval, with particular reference to:

Matters required to be included in the director's responsibility statement to be included in the board's report in terms of clause (c) of sub-section

(ii) STAKEHOLDER'S RELATIONSHIP COMMITTEE:

The Stakeholder's Relationship Committee was constituted on 23.08.2024. The Constitution, composition and functioning of the Stakeholder's Relationship Committee also meets with the requirements of Section 178 of the Companies Act, 2013.TheStakeholder'sRelationshipCommittee comprises of:

Mrs. Parul Mantri, the Company Secretary and Compliance Officer of the Company had acted as the Secretary and Compliance Officer of the Stakeholder's Relationship Committee No complaints was received during the year ended 31/03/2024 from any of the investors.

Resolving the grievances of the security holders of the listed entity including complaints related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc;

Review of measures taken for effective exercise of voting rights by shareholders;

Review of adherence to the service standards adopted by the listed entity in respect of various services being rendered by the Registrar & Share Transfer Agent;

Review of the various measures and initiatives taken by the listed entity for unclaimed dividends and ensuring timelyreceipt of dividend warrants/annual reports/statutory notices by the shareholders of the company; and

To carry out any other function as prescribed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as and when amended from time to time.

(iii) NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee was re-constituted on 01.07.2024. The Constitution, composition functioningof the Nomination & Remuneration Committee also meets with the requirements and of Section 178 of the Companies Act, 2013. All the recommendations of the Nomination and Remuneration Committee have been accepted by the Board of Directors of the Company The Nomination & Remuneration Committee comprises of:

Mrs. Parul Mantri, the Company Secretary and Compliance Officer of the Company had acted as the Secretary and Compliance Officer of the Nomination and Remuneration Committee.

The provisions of Section 178(1) relating to the constitution of Nomination and Remuneration Committee has been constituted by the Board of Director's of the Company at their meeting held on the 8th Day of July, 2022. Accordingly, the policy related to the Director's appointment, payment of Remuneration and discharge of their duties have been updated on the website of the company: https://megaflex.co.in/wp-content/ uploads/2022/07/06_NOMINATION-AND-REMUNERATION-POLICY.pdf

The Shareholding Pattern of the Company as on 31st March, 2024 has been updated on the website of the Company: https://megaflex.co.in/shareholding-patterns/

M/s S. Jaykishan, Practising Chartered Accountants (FRN: 309005E) and Peer Review Certificate No.014338 was appointed as the Statutory Auditors of your Company upto the financial year ended 31st March, 2026 in the Annual General Meeting on the 31st Day of August, 2022 at a remuneration mutually fixed between the Board of Directors of the Company and the Statutory Auditors including the pocket expenses incurred, if any. Mukesh Chaturvedi, Practicing Company Secretary (M.No. FCS11063; CP No. 3390) and Peer Review Certificate No.939/2020 as the Secretarial Auditor of the Company at a Board Meeting by the Board of the Directors on recommendation of the Audit Committee at the Board Meeting held on the 23rd Day of May, 2023 for the Financial Year 2023-24 at remuneration mutually fixed between the Board of Directors of the Company and Secretarial Auditors including the pocket expenses incurred, if any.

The notes on financial statement referred to in the Auditor's Report are self-explanatory and do not call for any further comments. There were no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report for the year ended 31st March, 2024.

During the year under review, Section 186 of the Companies Act,2013 have been duly complied with in terms of loan given, investments made or security provided.

During the financialyearunderreview,thedetailsofthetransactions/contracts/ arrangements entered into with the related party(ies) by the Company have been annexed in the Form AOC-2 in Annexure-C 32. DEPOSITS:

The Company has not accepted any deposits from the public. Hence the directives issued by the Reserve Bank of India & the Provision of Section 73 to 76 of the Company Act 2013 or any other relevant provisions of the Act and the Rules there under are not applicable.

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy and technology absorptionhave been furnishedconsideringthenatureofactivities undertaken by the Company during the year under review. The Statement has been annexed in Annexure-D

During the year under review, the Company had imported 272.25 Metric Tonne of Raw Material i.e. Polypropylene Plastic (PP).

Risk Management is the process of identification, assessment and prioritizationof risks followed by the coordinated efforts to minimize, monitor and mitigate/control the probability and/or impact of unfortunate events or to maximize the realizationof opportunities. The Company has developed and implemented a risk management policy which identifies major risks which may threaten the existence of the Company. The Company has laid down a comprehensive Risk Assessment and Minimization Procedure which is reviewed by the Board from time totime.The major risks have been identified by the Company and its mitigationprocess/ measures have been formulated in the areas such as business, project execution, event, financial, human, environment and statutory compliance.

There are no significant material orders passed by the Regulators / Courts / Tribunal which would impact the going concern status of the Company and its future operations. Hence, disclosure pursuant to Rule 8 (5) (vii) of Companies (Accounts) Rules, 2014 is not required.

Adequate internal control systems commensurate with the nature of the Company's business and size and complexity of its operations. Internal control systems comprising operatingsatisfactorily are placehasbeen of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

The provisions of section 148(1) are not applicable to the Company. Hence the Company is not required to maintain cost accounts and records.

As per the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and rules made thereunder, your Company has constituted Internal Complaints Committees (the ICC) at all relevant locations in West Bengal to consider and resolve the complaints related to sexual harassment. The ICC includes Cs Pragya Jhunjhunwala, external members with relevant experience and three internal members Ms. Sweta Singhi, Mr. Sanjay Kumar Singh and Mr. Raunak Tater. The ICC, is presided over by the Chairwoman Ms. Sweta Singhi. During the year under review, there were no complaints pertaining to sexual harassment. Accordingly, the policy related to the Prevention of Sexual Harassment has been updated on the website of the company: https://megaflex.co.in/wp-content/uploads/2023/01/Policy-on-Prevention-of-Sexual-Harassment. pdf The following is the summary of Sexual Harassment Complaints received and disposed off during the Calendar Year 2023: a. Number of Complaints of Sexual Harassment at the beginning of the Financial year: NIL b. Number of Complaints disposed off during the year: NIL c. Number of Complaints pending as on the end of the Financial year: NIL d. Nature of action taken by the Company: NA The Detailed Report has been annexed in Annexure-E

During the year under review, there have been no frauds reported by the Statutory Auditors of the Company under Section 143(12) of the Act.

Applicable Secretarial Standards, i.e. SS-1 relating to ‘Meetings of the Board of Directors' and SS-2, relating to ‘General Meetings', have been duly followed by the Company during the year under review.

Pursuant to the provisions of Section 204 of the Act and the rules made thereunder, your Company has reappointed Mr. Mukesh Chaturvedi, Practicing Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for FY 2023-24 is provided as Annexure-B of this report. There are no qualifications or reservations or adverse remarks or disclaimer in the said Secretarial Audit Report in Form MR-3. The same has been annexed in Annexure F

Your Company has received Rs.1,38,60,000.00 (One crore Thirty-Eight Lakhs Sixty Thousand Rupees Only) i.e. 25% of the Warrants Issue Amount i.e. Rs. 5,54,40,000/-. Details of the utilization has been mentioned below:

# Issue Related Expenses are made by the Company from internal accruals for the time being till the warrants' conversion amount is received, such amount will be reimbursed or recouped from the proceeds of this preferential issue of warrants.

## Total Issue Amount Rs. 5,54,40,000.00. Amount Received Rs. 1,38,60,000.00. Amount spend Rs. 77,00,000.00. Balance Rs. 61,00,000.00 Fixed Deposit has been created.

Your Directors record their appreciation for the full co-operation received from the banks, other agencies and departments. The Directors are also thankful to staff and workers for their sincere co-operation and performance.