Pochiraju Industries Ltd Directors Report.

Dear Shareholders,

Yours Directors have pleasure in placing before you the 24th Annual Report on the working and progress of the Company along with audited accounts of the company for the financial year ended 31st March, 2019 and the report of the auditors thereon.

FINANCIAL RESULTS

Key aspects of the companys financial performance for the year 2018-19 are tabulated below:

2018-19 2017-18
Particulars (Rs. in Lakhs) (Rs. in Lakhs)
Gross Revenue - -
Total Expenditure 15.82 744.15
Profit before Depreciation and taxation (15.82) (744.15)
Depreciation 360.48 360.48
Profit/(Loss) before tax(PBT) (376.29) (1104.63)
Less: Provision for Current tax - -
Profit/(Loss) after tax (376.29) (1104.63)
Prior Period Items - -
Profit / (Loss) after Prior Period Items (376.29) (1140.63)
Profit Brought Forward from previous year (1304.50) (199.86)
Adjustment on account of Change in Depreciation accounting policy - -
Net Profit / (Loss) carried to Balance Sheet (1680.79) (1304.50)

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

The Companys bankers PNB has taken action under SARFEASI act and taken possession of the Companys properties resulting total stoppage of Companys operations. The biotech unit of the company situated at M. N. Biotech Park (formerly Alexandria Knowledge park) was sold by PNB in a public auction in March 2018 against which the Company has filed a Writ petition in the High Court of Telangana.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

During the financial year 2018-2019, the company has not changed the nature of business.

DIVIDEND:

Keeping the Companys expansion and growth plans in mind, your Directors have decided not to recommend dividend for the year.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The management discussion and analysis of the financial condition and results of operations of the company for the period under review as required under clause 49 of the listing agreement of the stock exchange, is given as a separate statement forming part of this Annual report.

BUSINESS INNOVATION, EXPANSION AND DIVERSIFICATION:

The Companys operations were affected and become nil as the Companys bankers issued notice under SARFEASI act and taken possessions of the properties of the Company.

PNB over the last two years is continuously resorting to a series of serious violation of the provisions of SARFEASI act, initially in collusion with the sole single bidder (the neighboring company to our biotech unit) sold at a throw away price of Rs. 17.25 crores, (initially valued at a distress reserve price of Rs. 50.00 crores) whose sale was set aside two times by Honorable High Court and third time with vengeance sold at Rs. 22.5 crores to cover up their misdeeds, despite strong objections and representation of the Company to give a fair opportunity to resolve the issue. The authorized officer in covvinance and support of his superiors at Circle office and Zonal Office resorted to all possible unlawful actions to cover up their misdeeds. Despite the struck down (second time) by Honorable High Court of July 2017 auction PNB , even before the receipt of the copy of the Judgement again issued auction of our Biotech unit at Hyderabad fixing the reserve price at Rs. 21.00 crores and auctioned at R. 22.5 crores , this time with 5 bidders. All along the whole 2017 during which two auctions were held at reserve price of Rs. 17.25 crores to sole single bidder with an argument that there are no bidders. This itself shows the malfide intentions and misdeeds of the PNB officials. During 2017 to 2018 PNB has cooked up several valuation reports to suit them. The Company has no option but to approach Honorable High Court for the third time and the matter is presently under subjudice.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Details of re-appointment /appointment of the director:

Name of the Director Dr. A. Ramaiah
Date of Birth 14.09.1934
Date of Appointment 20-03-2006
Qualifications Phd. In Biochemistry
No. of Shares held in the Company Nil
Directorships held in other companies (excluding private limited and foreign companies) Nil
Positions held in mandatory committees of other companies Nil

Details of re-appointment /appointment of the director:

Name of the Director Dr. K. S. R. Siva Sai
Date of Birth 02-12-1963
Date of Appointment 21-09-2007
Qualifications Post-Doctoral In Immunology
No. of Shares held in the Company Nil
Directorships held in other companies (excluding private limited and foreign companies) Nil
Positions held in mandatory committees of other companies Nil

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received necessary declaration from Dr. A. Ramaiah and , Sri Dr. K S R Siva and Sri Dr. S S N Murthy Independent Directors of the Company under Section 149(7) of the Companies Act, 2013 that they as Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).(Format Annexure II)

VIGIL MECHANISM:

Vigil Mechanism Policy has been established by the Company for directors and employees to report genuine concerns pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013. The same has been placed on the website of the Company.

DIRECTORS RESPONSIBILITY STATEMENT:

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that:

(7) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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 and of the profit and loss of the company for that period;

(c) 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) The Directors had prepared the annual accounts on a going concern basis; and

(e) 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) 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.

APPOINTMENT OF AUDITORS:

M/s. M. M. Reddy & Co., Statutory Auditors of the company retires at the ensuing annual general meeting. As M.M.Reddy & Co completed ten years as statutory auditors the company proposes to appoint M/S. V. Ravi & Co as statutory auditor of the Company. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has received a written consent from the auditors to their appointment and a certificate to the effect that their -appointment, if made, would be in accordance with the Companies Act, 2013 and the rules framed there under and that they have satisfied the criteria provided in Section 141 of the Companies Act, 2013.

The Board recommends the appointment of M/s. V. Ravi & Co, as the statutory auditors of the Company from the conclusion of this Annual General meeting till the conclusion of the next Annual General Meeting.

INTERNAL AUDIT:

The company has not appointed any Internal Auditors for the financial year 2018-19.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 134(3)(f) & Section 204 of the Companies Act, 2013, Secretarial audit report as provided by Sri. Subhas Kishan K Practising Company Secretaries M.N. ACS 32743 is annexed to this Report as annexure.

AUDIT REPORTS:

The Board has duly reviewed the Statutory Auditors Report on the Accounts for the year ended March 31, 2019 and given explanations in Notes to Accounts annexed to Balance Sheet. However, the Board decided to further strengthen the existing system and procedures to meet all kinds of challenges associated with the business.

The Board has duly reviewed the Secretarial Audit Report on the Compliances according to the provisions of section 204 of the Companies Act 2013, and noted is at the same that there is no company secretary, CFO and Internal Auditors appointed during the year in the company but the company considering the present situation of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

The required information as per Sec.134 (3) (m) of the Companies Act 2013 is provided hereunder:

7. Conservation of Energy:

Your Companys operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy efficient equipment.

B. Technology Absorption:
1. Research and Development (R&D): NIL
2. Technology absorption, adoption and innovation: NIL
C. Foreign Exchange Earnings and Out Go:
Foreign Exchange Earnings: NIL
Foreign Exchange Outgo: NIL

PUBLIC DEPOSITS:

Your Company has not accepted any deposits falling within the meaning of Sec. 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules 2014, during the financial year under review.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

Your Company has well established procedures for internal control across its various locations, commensurate with its size and operations. The organization is adequately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment. The internal audit function is adequately resourced commensurate with the operations of the Company and reports to the Audit Committee of the Board.

INSURANCE:

The properties and assets of your Company are adequately insured.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of loans, guarantees or investments made under section 186 of the companies Act, 2013 are given in the notes to the financial statements.

CREDIT & GUARANTEE FACILITIES:

The Company has been availing facilities of Credit and Guarantee as and when required, for the business of the Company, from Punjab National Bank.

RISK MANAGEMENT POLICY:

Your Company follows a comprehensive system of Risk Management. Your Company has adopted a procedure for assessment and minimization of probable risks. It ensures that all the risks are timely defined and mitigated in accordance with the well structured risk management process.

CORPORATE SOCIAL RESPONSIBILTY POLICY:

Since your Company do not have the net worth of Rs. 500 Crore or more, or turnover of Rs. 1000 Crore or more, or a net profit of Rs. 5 Crore or more during the financial year, section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy.

RELATED PARTY TRANSACTIONS:

As required under clause 49(VIII)(A)(2) of the listing agreement, the Company has disclosed the policy on dealing with related party transactions at Companys website.

Your Directors draw attention of the members to Note 33 to the financial statement which sets out related party disclosures.

DISCLOSURE ABOUT COST AUDIT:

Cost Audit is not applicable to your Company.

RATIO OF REMUNERATION TO EACH DIRECTOR:

Under section 197(12) of the Companies Act, 2013, and Rule 5(1)(2) & (3) of the Companies (Appointment & Remuneration) Rules, 2014, the remuneration of Rs. 63,00,000/-p.a. has been provided but not paid to Mr. P. Sudhakar, Managing Director of the Company due to financial crisis.

LISTING WITH STOCK EXCHANGES:

The Company is listed with BSE Limited and National Stock Exchange India Limited (NSE) and the Annual Listing Fees were due where the Companys Shares are listed.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

Directors are happy to report that your Company is compliant with the Corporate Governance requirements as per Clause 49 of the Listing Agreement with the Stock Exchanges. A separate section on Corporate Governance and Management Discussion and Analysis together with a certificate from the Statutory Auditor confirming compliance is set out in the Annexure forming part of this report.

INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING THE COMPANY

The Company is not a NBFC, Housing Companies etc., and hence Industry based disclosures is not required.

SECRETARIAL STANDARDS

EVENT BASED DISCLOSURES

During the year under review, the Company has not taken up any of the following activities:

1. Issue of sweat equity share: NA
2. Issue of shares with differential rights: NA
3. Issue of shares under employees stock option scheme: NA
4. Disclosure on purchase by company or giving of loans by it for purchase of its shares: NA
5. Buy back shares: NA
6. Disclosure about revision: NA
7. Preferential Allotment of Shares: NA

EMPLOYEE RELATIONS:

Your Directors are pleased to record their sincere appreciation of the contribution by the staff at all levels in the improved performance of the Company.

None of the employees is drawing Rs. 5,00,000/- and above per month or Rs.60,00,000/- and above in aggregate per annum, the limits prescribed under Section 134 of the Companies Act, 2013.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy.

The following is the summary of sexual harassment complaints received and disposed during the calendar year.

• No. of complaints received: Nil
• No. of complaints disposed off: Nil

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company. Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders of the Company like SEBI, BSE, NSE, NSDL, CDSL, Punjab National Bank for their continued support for the growth of the Company.

For and on behalf of the Board of
Pochiraju Industries Limited
Sd/-
Place: Tamilnadu P.Sudhakar
Date: 28.08.2019 Managing Director
(DIN 00164844)

ANNEXURE TO THE DIRECTORS REPORT

a) Information as per section 217(2A) of the companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, and other applicable provisions of the Companies Act 2013 and forming part of the Directors Report for the year March 31, 2019.

Employed for part of the year with an average salary above Rs.5 Lakhs per month: NIL