POCL Enterprises Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the 32nd Annual Report on your business and operations together with the Audited Financial Statements for the year ended March 31,2020.

FINANCIAL RESULTS

The Companys financial performance for the year ended March 31,2020 is summarized below:

PARTICULARS 2019-20 Rs. in Lakhs 2018-19 Rs. in Lakhs
Revenue from Operations 34686.62 45373.04
Other Income 296.03 248.84
Total Expenditure (excluding Finance Cost & Depreciation) 34269.85 45144.47
Profit Before Interest, Depreciation and Taxes (PBIDT) 712.80 477.41
Interest and Finance Charges 688.89 964.58
Depreciation & Amortisation 177.22 155.83
Profit Before Taxation (153.31) (643.00)
Tax Expense (92.81) (0.15)
Profit/ (Loss) after Tax (60.50) (642.85)
Other Comprehensive Income (Net of Taxes) (1.02) 10.73
Total Comprehensive Income (61.52) (632.12)

FINANCIAL PERFORMANCE

Revenue from Operations for the financial year 2019 -20 was Rs. 346.86 Crore as against Rs. 453.73 Crore in the previous year, showing a de-growth of 23% over the previous year, coming majorly from zinc oxide segment. The reduction in zinc oxide sales was due to slow down in automobile sector, coupled with companys strategy to do away with less profitable orders. Our export sales for the year 2019-20 was Rs. 114.42 Crore as against Rs. 152.00 Crore in the previous year.

The Operating Profit (EBITDA) for the year stood at Rs. 712.80 Lakhs as against Rs. 477.41 Lakhs in the previous financial year. Until Q3 of 2019-20, the Company registered a Profit after tax of Rs. 241.02 Lakhs, after which the company profitability was badly hit due to drastic fall in the commodities market. Due to the outbreak of the CoVID 19 pandemic, the commodity markets tumbled with both lead and zinc prices falling approximately by USD 300/MT between February and March 2020. The Company had accounted for Mark to Market (MTM) loss of Rs. 213.11 Lakhs in the month of March 2020 and with this, the company reported a loss of Rs. 60.50 Lakhs for the full year 2019-20.

COVID - 19 PANDEMIC AND ITS IMPACT

OUTBREAK: World Health Organisation (WHO) declared outbreak of Coronavirus Disease (COVID-19) a global pandemic on March 11,2020. Consequent to this, Government of India declared lockdown on March 23, 2020 and the Company temporarily suspended the operations in all the units in compliance with the lockdown instructions issued by the Central and State Governments. COVID-19 has impacted the normal business operations of the Company by way of interruption in production, supply chain disruption, unavailability of personnel, closure/lock down of production facilities etc., during the lockdown period, which has been extended till May 17, 2020. The production and supply of goods has commenced during the month of May, 2020 on

various dates at all the manufacturing locations of the Company with adherence to the standard operating procedures as issued by the Ministry of Health and Family Welfare from time to time.

IMPACT: Due to the outbreak of the Pandemic, the commodity markets tumbled with lead prices falling from USD 1939/MT to low of USD 1589/MT & zinc prices falling from USD 2018/MT to low of USD 1773/MT from the end of February 2020 to March 2020. The Company had accounted for Mark to Market (MTM) loss of Rs. 213.11 Lakhs in the month of March 2020. The interest cost during the lock down period, poor debtors collection, payment of detention charges due to delay in clearing the raw material from container freight stations and payment of full salaries & wages in spite of lower production levels will have a major bearing on the Companys profitability of Q1 of 2020-21.

DIVIDEND

The Board of Directors of your company, after considering holistically the relevant circumstances and the loss for the year, has decided, not to recommend any dividend for the year under review.

TRANSFER TO RESERVES

The Company has made no transfers to reserves during the Financial Year 2019 - 20.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

As per the provisions of Section 124(5) of the Companies Act, 2013 dividend which remained unclaimed for a period of seven years from the date of transfer to unpaid dividend account are required to be credited to IEPF Account.

Pursuant to Section 124 of the Companies Act, 2013, unclaimed dividend due for transfer to the Investor Education and Protection Fund (IEPF) are as follows:

Dividend for the year Unclaimed Dividend Declaration Date Proposed date of Transfer
2014 - 15 Rs. 93,837/- September 4, 2015 October 9, 2022
2015- 16 Rs. 78,180/- September 2, 2016 October 7, 2023
2017- 18 Rs. 1,02,749/- September 1,2018 October 8, 2025

Members who are yet to claim their dividend amount, may write to the Company Secretary or Companys Registrar and Share Transfer Agent M/s. Cameo Corporate Services Limited. The details of unclaimed dividend for the said years are also available on the website of the Company.

MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report, except for the impact arising out of COVID- 19, which is detailed elsewhere in this Annual Report.

REGISTERED OFFICE

During the year under review, keeping in mind the operational requirements, the Registered Office of the Company was shifted from its present location to Willingdon Crescent, 1st Floor, No. 6/2, Pycrofts Garden Road, Nungambakkam, Chennai - 600 006 with effect from November 1,2019.

PARTICULARS OF SUBSIDIARY COMPANY, ASSOCIATE COMPANY AND JOINT VENTURE COMPANY

The Company is neither a holding company nor a subsidiary of any other company as at March 31,2020. The Company has no associate company or joint venture company within the meaning of Section 2(6) of the Companies Act, 2013.

DIRECTORS

Your Board is currently constituted with ten Directors comprising of four Independent Directors, five Executive Directors and one Non-Executive Director.

In terms of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Sunil Kumar Bansal, Managing Director and Mr. Y V Raman, Whole Time Director, who have been longest in the office, retire by rotation at the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment. The Board recommends their re-appointment to the members of the Company.

During the year under review, there was no change in the constitution of the Board of Directors. The Directors on the Board are Mr. Devakar Bansal, Mr. Sunil Kumar Bansal, Mr. Y V. Raman, Dr. Padam C Bansal, Mr. D. P. Venkataraman, Mr. Harish Kumar Lohia, Mrs. Indra Somani, Mr. Jyoti Kumar Chowdhry, Mr. Harsh Bansal and Mr. Amber Bansal.

INDEPENDENT DIRECTORS AND FAMILIRISATION PROGRAMME

In terms of the provisions of Section 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) read with Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all the Independent Directors have furnished a declaration to the Company stating that they fulfill the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) read with Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board took on record the declaration and confirmation submitted by the independent directors regarding their meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same as required under Regulation 25 of the Listing Regulations, 2015.

The Ministry of Corporate Affairs vide its circular dated October 22, 2019 further amended the Companies (Appointment and Qualification of Directors) Rules, 2014 by requiring an independent director to apply, within ten months, to the Indian Institute of Corporate Affairs for inclusion of his/her name in the data bank for such period till he/she continues to hold office of an independent director in any Company. The independent directors were also required to submit a declaration of compliance in this regard. All the independent directors of the Company have submitted the declaration with respect to the same.

Further, the Independent Directors have also confirmed that:

• They have complied with the Code of Independent Directors as prescribed in Schedule IV to the Companies Act, 2013;

• They have complied with POEL Code of Conduct for Directors and Senior Management Personnel;

• They are not disqualified to act as an Independent Director.

Furthermore, Board is of the opinion that Independent directors of the company are persons of high repute, integrity & possess the relevant expertise & experience in their respective fields.

In compliance with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Board has adopted a policy on familiarisation programme for Independent Directors of the Company. The policy familiarizes the Independent Directors with the nature of industry in which the Company operates, business model of the Company, their roles, rights and responsibilities in the Company.

The details of familiarization programme during the financial year 2019 - 20 are available on the website of the Company at http://poel.in/investors.html#invstr.

KEY MANAGERIAL PERSONNEL

The following Directors/Officials of the Company have been designated as Key Managerial Personnel (KMP) of the Company by the Board of Directors in terms of provisions of Section 203 of the Companies Act, 2013 and the SEBI Listing Regulations:

1. Mr. Devakar Bansal : Managing Director
2. Mr. Sunil Kumar Bansal : Managing Director
3. Mr. N. Ravichandran : Chief Financial Officer
4. Mr. Aashish Kumar K Jain : Company Secretary

There has been no change in the Key Managerial Personnel during the financial year 2019 - 20.

MEETINGS OF THE BOARD

The Board of Directors met five (5) times during the financial year 2019-20. The details of the Board Meetings with regard to their dates and attendance of each Director thereat have been provided in the Corporate Governance Report. The Company has complied with the applicable Secretarial Standards as issued by the Institute of Company Secretaries of India in compliance with Section 118 (10) of the Companies Act, 2013 read with para 9 of the revised Secretarial Standards on Board Meetings.

BOARD COMMITTEES

In compliance to the provisions of Companies Act, 2013 and SEBI Listing Regulations, the Company has constituted various committees of the Board. Details of scope, constitution, terms of reference, number of meetings held during the year under review along with attendance of Committee Members therein forms part of the Report on Corporate Governance, which is annexed to this report. Details of the constitution of these Committees is also available on the website of the Company www.poel.in.

REMUNERATION POLICY OF THE COMPANY

In terms of provisions of Section 178 of the Companies Act, 2013 read with Regulation 19 of SEBI Listing Regulations, a policy relating to remuneration for the Directors, Key Managerial Personnel and other employees has been adopted by the Board of Directors thereby analyzing the criteria for determining qualifications, positive attributes and independence of a Director. The said policy is available on the website of the Company at http://poel.in/pdf/Remuneration%20Policy.pdf. There has been no change in the policy during the year.

RECOMMENDATION OF THE AUDIT COMMITTEE

During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.

BOARD EVALUATION

The Board of Directors of the Company has established a framework for the evaluation of its own performance, its committees and individual Directors of the Company in consultation with the Nomination & Remuneration Committee. The Board has set out certain criteria covering the evaluation of the Chairman, Executive Directors, Non-executive Directors and Independent Directors on the basis of which the evaluation is being carried out on annual basis in terms of provisions of the Companies Act, 2013 and the SEBI Listing Regulations.

During the year under review, the Board of Directors, at its meeting held on February 13, 2020 have carried out the evaluation of its own performance, committees and directors of the Company. The Independent Directors in their separate meeting held on even date have also evaluated the performance of the Chairman and NonIndependent Director(s) of the Company in accordance with the framework approved by the Board.

Details of performance evaluation of the Independent Directors as required under Schedule IV to the Companies Act, 2013 is provided in Corporate Governance Report. The Directors have expressed their satisfaction with the evaluation process and its results.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a proper and adequate system of internal financial controls which includes the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. During the year, such controls were tested and no material weakness in the design or operations were observed.

STATUTORY AUDITOR AND AUDIT REPORT

In compliance with the provisions of the Companies Act, 2013 read with rules framed thereunder, M/s. Raju & Daftary, Chartered Accountants, Chennai (having Firm Registration Number: 015535S) has been appointed as the Statutory Auditors of the Company to hold office till the conclusion of 32nd Annual General Meeting to be held in the calendar year 2020.

In this regard, M/s. Raju & Daftary would be completing their first term of five years as the Statutory Auditors of the Company. In accordance with the provisions of Section 139 of the Companies Act, 2013 read with the

Companies (Audit and Auditors) Rules, 2014, M/s. Raju & Daftary are eligible for re-appointment for a second term of five years.

The Audit Committee and Board of Directors of the Company respectively at their meeting recommended, the re-appointment of M/s. Raju & Daftary, Chartered Accountants, Chennai (having Firm Registration Number: 015535S) as Statutory Auditors of the Company to hold office for their second term of five (5) years from the conclusion of 32nd Annual General Meeting till the conclusion of 37th Annual General Meeting to be held in the calendar year 2025 subject to the approval of the shareholders at the forthcoming Annual General Meeting.

Your Directors recommend the appointment of M/s. Raju & Daftary, Chartered Accountants, as the statutory auditors of the Company for their second term of five years and request the members to authorize the Board of Directors to fix their remuneration.

There were no qualification, reservation or adverse remark in the Auditors Report for the financial year ended on March 31,2020.

COST AUDIT

Your Company is engaged in the production of organic & inorganic chemicals and base metals is required to maintain the cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 read with rules made thereunder. Accordingly, the Company has made and maintained the cost records for the production of the above said products in compliance with the provisions of the said Act.

M/s. K. R. Vivekanandan, Cost Accountant (having Firm Registration Number: 102179) has been appointed as the Cost Auditor of the Company for the year 2019-20 for conducting audit of the cost accounts maintained by the Company in respect of inorganic chemicals and base metals.

The Board of Directors on the recommendation of the Audit Committee has approved the remuneration of Rs. 40,000/- (Rupees Forty Thousand Only) in addition to applicable taxes and out of pocket expenses. As per the provisions of Section 148 of the Companies Act, 2013, the remuneration of the Cost Auditors is required to be ratified by the shareholders of the Company. A resolution seeking members ratification for the remuneration payable to the Cost Auditor forms part of the notice convening this Annual General Meeting.

In respect of the cost audit for the year 2018-19, the Cost Audit Report does not contain any qualification, reservation or adverse remark.

SECRETARIAL AUDIT

The Board has appointed Mrs. Deepa V Ramani, Practicing Company Secretary as Secretarial Auditor for the Financial Year 2019-20 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report of the Company for the financial year 2019 - 20 in the prescribed Form MR-3 is enclosed as Annexure - I to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark which needs any explanation or comments of the Board.

REPORTING OF FRAUDS BY THE AUDITORS

During the year under review, the Statutory Auditors, Cost Auditor or Secretarial Auditor have not reported any fraud to the Audit Committee under Section 143(12) of the Companies Act, 2013.

RISK MANAGEMENT

A robust and integrated risk management framework is in existence under which the common prevailing risks in the Company are identified, the risks so identified are reviewed by the Audit Committee and the managements actions to mitigate the risk exposure are assessed. The Risk Management Policy can be viewed on the website of the Company at http://poel.in/pdf/POEL%20Policy%20on%20Risk%20Management.pdf.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company is having an established and effective Vigil Mechanism. The mechanism has been appropriately communicated within the organization. The Whistle Blower Policy provides a framework to promote responsible whistle blowing by employees. It protects employees who raise a concern about serious irregularities, unethical

behavior, actual or suspected fraud within the Company. It is affirmed that no personnel of the Company have been denied access to the Chairman of the Audit Committee.

PARTICULARS OF LOANS, INVESTMENT, GUARANTEE AND SECURITY U/S 186(4) OF THE COMPANIES ACT, 2013

The Company has not given any loans or made investment or provided any security during the financial year under review. The Company has not given any guarantees other than bank guarantees in the normal course of business to meet contractual obligations.

ANNUAL RETURN

In terms of the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return of the Company in Form MGT-9 is annexed as Annexure II to this report. Further in compliance with Section 134(3)(a) of the Companies Act, 2013, Annual Return for the financial year 2018 - 19 can be view on the website of the Company at http://poel.in/investors.html#invstr.

TRANSACTIONS WITH RELATED PARTIES

All contracts or arrangements or transactions with related parties during the year under review as referred to in Section 188(1) of the Companies Act, 2013, were in the ordinary course of business and on arms length basis. There were no material contracts/ arrangement/ transactions with related parties which may have potential conflict with the interest of the Company.

All related party transactions are placed before the audit committee for review and approval. Prior omnibus approval is also obtained from the Audit Committee for the related party transactions which are of repetitive nature and which cannot be foreseen and accordingly the required disclosures are made to the audit committee on quarterly basis in terms of the omnibus approval of the committee.

The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note No. 45 of the Financial Statements. Further, the information on transactions with related parties pursuant to section 134(3)(h) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014 in Form No. AOC - 2 is given as Annexure - III to this report.

The policy on Related Party Transactions can be viewed on the website of the Company at http://poel.in/ pdf/P0EL%20Policv%20on%20Related%20Party%20Transactions%20(2).pdf.

PARTICULARS OF REMUNERATION OF DIRECTORS AND EMPLOYEES U/S 197(12) OF THE COMPANIES ACT, 2013

Details pertaining to remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended has been provided as an Annexure IV to this Report.

CORPORATE GOVERNANCE

In order to maximize the shareholders value on a sustained basis, your Company has been constantly reassessing and benchmarking itself with well-established corporate governance practices besides strictly complying with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, applicable provisions of Companies Act, 2013 and other applicable laws.

The Statutory Auditors of the Company have examined the requirements of Corporate Governance and certified the compliance, as required under SEBI Listing Regulations.

In terms of Schedule V to SEBI Listing Regulations, a detailed report on Corporate Governance along with Compliance Certificate issued by the Statutory Auditors of the Company is annexed and forms an integral part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of the Companys operations in terms of operational and financial performance, manufacturing activities, business outlook, risks and areas of concerns forms part of the Management Discussion and Analysis,

a separate section of this report. Certain Statements in the said report may be forward looking. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook.

DEPOSITS

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Details as required under proviso to Rule 2(c)(viii) of Companies (Acceptance of Deposits) Rules, 2014, as amended, relating to monies accepted from Directors during the year are furnished under the head "related party transactions" in Note No. 45 of the financial statements.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

(i) Conservation of Energy

Steps taken on conservation of energy:

POEL understands the significance of conservation of energy not only as a method of cost reduction but also because of its global impact. The Company has taken the following steps for conserving the energy:

S Auto-shutting down of systems when not in use S Utilisation of lights and air conditioners only when required S Minimal usage of AC‘s and lights during weekend S Use of fans, post office hours to reduce the power consumption S Replacement with LED lights to reduce lighting power consumption

Steps taken for utilizing alternate source of energy and capital investment made: NIL

(ii) Research & Development and Technology Absorption

During the year under review, the Company continued to improve the quality of products through its normal research and development system. The Company has not acquired any imported or indigenous technology. No expenditure was incurred on Research & Development.

(iii) Foreign Exchange Earnings and Outgo

(a) Foreign Exchange Earnings - Rs. 11,442.11 Lakhs (Rs. 15,199.64 Lakhs)

(b) Foreign Exchange Outgo - Rs. 22,496.80 Lakhs (Rs. 34,375.56 Lakhs)

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the year under review, no significant and material orders were passed by the regulators, courts, or tribunals, which influences the going concern status and future operations of the Company.

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

The Company has in place a Policy for prevention of Sexual Harassment at the Workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Pursuant to Para 10(l) of Part C of Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the disclosures with respect to complaints received and disposed off during the year has been provided in the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Board of Directors, state and confirm that:

a) in the preparation of the annual accounts for the year ended March 31,2020, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) they have 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 as at March 31,2020 and of the loss of the Company for that period;

c) they have 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;

d) they have prepared the annual accounts on a ‘going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls maintained by the Company, work performed by the internal and statutory auditors including audit of internal financial controls over financial reporting by the statutory auditors, the Board is of the opinion that the Companys internal financial controls were adequate and operating effectively during financial year 2019-20.

AWARDS AND RECOGNITIONS

Your Company was awarded Top Exporter Award (at National Level) for the year 2017 - 18 by the Engineering Export Promotion Council (EEPC) and in recognition of the same the Company received the Silver Trophy at the 50th EEPC India National Award Distribution Function held at New Delhi.

Your Company has also been awarded Special Trophy for Excellence in Export Turnover for the financial year 2017 - 18 (for Southern Region) by the Engineering Export Promotion Council (EEPC) at the 42nd Southern Regional Export Award Presentation Function held at Hyderabad.

DISCLOSURES WITH RESPECT TO UNCLAIMED SUSPENSE ACCOUNT

The Company observed that some physical share certificates issued pursuant to the Scheme of Demerger have been returned undelivered. The details of such returned share certificates are available on the website of the Company (www.poel.in). The Company has sent three reminders to the shareholders for claiming their shares.

The Company is in the process of opening "Unclaimed Suspense Account" in the name of the company wherein all the unclaimed shares will be transferred into one folio and the voting rights on such shares shall remain frozen until the rightful owner claims the shares.

GRATITUDE & ACKNOWLEDGEMENTS

Your Directors take this opportunity to place on record their sincere appreciation for the continued trust and confidence reposed in the Company by the bankers, business associates, regulatory authorities, customers, dealers, vendors and shareholders. Your Directors recognize and appreciate the value of contributions rendered by every member of the POEL family at all levels in order to improve the performance of the Company.

For POCL ENTERPRISES LIMITED
DEVAKAR BANSAL SUNIL KUMAR BANSAL
Place : Chennai MANAGING DIRECTOR MANAGING DIRECTOR
Date : July 29, 2020 DIN:00232565 DIN:00232617