Poddar Pigments Ltd Directors Report.

Dear Members,

Your Board of Directors are pleased to present the Twenty Ninth Annual Report and the Audited Financial Statements for the year ended 31st March, 2020.

FINANCIAL RESULTS (Summary of key data)

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

(Rs. in Lakhs)

Particulars 2019-2020 2018-2019
Revenue Receipts ( Gross ) 40197 40404
Other Income 440 438
Total Revenue Receipts including other income 40637 40842
Less: GST 4530 4696
Revenue Receipts including other income (Net) 36107 36146
Profit before Finance Cost, 3204 2720
Depreciation & Tax
Less: Finance Cost 30 47
Depreciation 292 312
Profit before tax 2882 2361
Less: Current Tax 776 740
Deferred Tax (73) (33)
Adjustment of tax relating to earlier periods 54 0
Profit after tax 2125 1654
Balance brought forward from previous year 428 1045
Other Comprehensive income/(loss) (42) (20)
(Net of Tax) realized / paid
Profit available for appropriations 2511 2679
APPROPRIATION
Final Dividend on Equity Shares 318 371
Tax on Final Dividend 66 76
General Reserve 1804 1804
Balance Carried to Balance Sheet 323 428

RESULTS OF OPERATIONS AND THE STATE OF COMPANYS AFFAIRS

The highlights of the Companys performance as compared to previous year are as under: -

Revenue from operations (Gross) marginally decreased to Rs. 40197 lakhs as against Rs. 40404 lakhs

Profit Before Tax has increased to Rs. 2882 lakhs as against Rs. 2361 lakhs in the previous year.

Profit After Tax has increased to Rs. 2125 lakhs as against Rs. 1654 lakhs in the previous year.

Net Worth of the company has increased by 10.10% to Rs. 18519 lakhs excluding OCI.

REVIEW OF OPERATIONS

Your Companys Total Revenue Receipts (Gross) including other income during the year under review was Rs. 40637 lakhs.

IMPACT OF COVID-19 PANDEMIC ON FINANCIAL STATMENTS

The global outbreak of coronavirus (COVID-19) is an unprecedented event that has led to several lockdown and unexpected restrictions on the public as well as the corporate sector across the world. To control its spread, the Government of India (GoI) ordered all establishments, except organizations providing essential goods and services, to temporarily close their physical offices.

A total lockdown was enforced on March 23, 2020, which was further extended from time to time, over the next few months. In line with government directive, Your Company temporarily shut down its business operations from March 23, 2020. Manufacturing activities were re-started from 7th May, 2020. As a result of these circumstances beyond control, the operations of Your Company have been disrupted with consequent impact on performance. Your Company has already started partial functioning and expects to regain normalcy in the last quarter of this financial year.

EXPORT

Your Company achieved a direct export turnover (inclusive of export benefits) of Rs. 10750 lakhs as compared to last year of Rs. 9901 lakhs, an increase of 8.57%. International buyers show preference to your Companys product mainly because of its quality, technical support and R & D capabilities. The international market is expected to grow further, which will enable Your Company to achieve higher export turnover in the years to come. Your Company has been honoured by the Plastic Export Promotion Council (PLEXCONCIL) with the Export Excellence Award as Second Best Exporter of Masterbatches for the year 2017-18 and 2018-19, considered to be the highest recognition for exports.

DIVIDEND

Your directors have not recommended a Dividend for the year ended March 31, 2020 to conserve the financial resources required in 2020-21 on account of COVID-19 as well as for utilization of ongoing capital expenditure in the new unit at Chaksu.

NEW PROJECT

Your Company acquired land at Brijpura, Rajasthan to set up a new manufacturing unit. The development work is under progress. With this expansion the production capacity is expected to increase by approximately 25%.

MARKETING

Through consistent efforts towards achieving international quality standards, Your Company has created a good demand for its products. This has helped in facing price competition in both domestic and international markets. With sustained efforts, we expect further improvements in our performance in the current year. Your Company will continue to seek new markets while consolidating its hold over existing customers.

RESEARCH AND DEVELOPMENT

Your Company has, over the years, invested significantly in its Research & Development (R&D) facility, as a key source of sustainable competitive advantage. The in-house R & D division of Your Company, located at Sitapura plant, is recognized by the Department of Science and Industrial Research (DSIR), Government of India. Details appended in Annexure I to this Report.

Your Company considers R&D as an essential tool in maintaining its technical advantage over competitors and to develop innovative products. R&D is central to achieving excellence in product quality with improved processes and optimization of available resources.

Your Company makes continuous efforts to adopt and implement new technologies and to improve the product-mix/process, to create higher value items at lower costs, to widen its range of new generation masterbatches and to facilitate the production of customized products. It strives to leverage modern advances in science and technology and blend the same with classical concepts of product development.

QUALITY INITIATIVES

Your Company has established various quality initiatives to meet or exceed the expectations of its customers. It has invested in various pilot plants and state-of-the-art testing equipments to carry out all relevant tests for masterbatches, which support the smooth running at the customers production processes.

Your Company receives continuous feedback through close interaction with your Companys customers and independent laboratories, which it takes on board for the continued optimization of its products and processes.

STAR EXPORT HOUSE STATUS AND CRISIL RATING

Sustained exports have enabled your Company to maintain its Two Star Export House Status under the Foreign Trade Policy 2015-2020.

Your Companys Credit Rating is A/Stable/A1, assigned/ reaffirmed by CRISIL for its working capital borrowings, which signifies a strong degree of safety with regard to timely payments.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As per the provisions of the Act and the Articles of Association of the Company, Smt. Mahima P. Agarwal retires by rotation at the ensuing 29th Annual General Meeting and being eligible, has offered herself for re-appointment.

During the year Shri M. K. Sonthalia (DIN: 00021297) and Shri N. Gopalaswamy (DIN: 00017659) have been re-appointed as non-executive independent director of the company w.e.f. 01.04.2019.

During the year Shri Gaurav Goenka (DIN: 00375811) has been appointed as Joint Managing Director of the Company w.e.f. 01.04.2019.

Your Company has received declarations from all the Independent Directors of the company confirming that they meet the criteria of independent directorship as prescribed under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Disclosure relating to remuneration and other details as required under section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and marked as Annexure II to this Report.

MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, Four Board Meetings and Four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. For further details, please refer report on Corporate Governance of this Annual Report.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Your Company is in compliance with all the applicable provisions of Corporate Governance as stipulated under Chapter IV of the Listing Regulations. A detailed report on Corporate Governance and the Management Discussion and Analysis Report as required under the Listing Regulations is provided in a separate section and forms part of the Annual Report. The requisite Certificate from the Auditors of the company confirming compliance with the conditions of Corporate Governance is attached to the report of the Corporate Governance.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions that were entered during the financial year under review were at an arms length basis, in the ordinary course of business and in compliance with the applicable provisions of the Act and the Listing Regulations. There were no materially significant Related Party Transactions made by your Company during the year that required shareholders approval under Regulation 23 of the Listing Regulations.

All Related Party Transactions are placed before the Audit Committee for prior approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive or when the need for them cannot be foreseen in advance.

None of the transactions entered with related parties falls under the scope of Section 188(1) of the Act. Details of transactions with related parties as required under Section 134 (3) (h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are provided in Note no. 34 to the Financial Statement and forms part of this Report. Your Company has adopted a Policy for dealing with Related Party Transactions. The Policy as approved by the Board may be viewed on the Companys website at the web link: www. poddarpigmentsltd.com.

Further, the Company has not entered into any material related party transaction during the year under review. Accordingly, the disclosure of related party transactions as required under Section 134 (3) (h) of the Act, in form AOC-2 is not applicable to your Company.

COMPLIANCE WITH THE CODE OF CONDUCT

The Directors and Senior Management Personnel have reaffirmed their compliance with the code of conduct.

FIXED DEPOSITS

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

EMPLOYEES

The information required under Section 197 (12) of the Companies Act, 2013 read with Rules 5 (2) & 5 (3) of the Companys (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in the Annexure III hereto forming part of the Report.

SUCCESSION PLANNING

Your Company has put in place a policy on succession planning to assess, develop and retain a talent pool of associates, in order to ensure a continuity of leadership for all critical positions.

MECHANISM FOR EVALUATION OF BOARD

Evaluation of all Board members is done on an annual basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.

The criteria covers various aspects for evaluation of Independent Directors and including participation at the Board/Committee meetings, effective use of knowledge and expertise, management of relationship with stakeholders, integrity and maintaining of confidentiality, unbiased behaviour and judgement, the exercise of objective independent judgement in the best interest of the Company, ability to contribute to and monitor corporate governance practice and adherence to the code of conduct for independent directors.

For evaluation of the Board aspects such as the development of suitable strategies and business plans, implementation of robust policies and procedures, size, structure and expertise of the Board are considered.

For evaluation of the Executive Directors aspects such as achievement of financial health and driving overall progress balanced with the needs of shareholders, clients, employees and other stakeholders, in alignment with the vision and mission of Company are considered.

For evaluation of Non-Executive Directors aspects such as participation in the Board/Committee meetings, effective deployment of knowledge and expertise, Independence of behaviour and judgement are considered,

For evaluation of the Committees aspects such as discharge of its functions and duties as per its terms of reference, process and procedures followed for discharging its functions & effectiveness of suggestions and recommendations received are considered.

For evaluation of the Chairperson of the Board aspects such as managing relationships with the members of the Board and management, providing ease of raising of issues and concerns by the Board members and promoting constructive debate and effective decision making at the board are considered.

The evaluation process has been explained in the Corporate Governance Report section in this Annual Report. The Board has approved the evaluation results as collated by the Nomination and Remuneration Committee.

AUDITORS AND AUDITORS REPORT

Statutory Auditors

At the 26th Annual General Meeting held on 28th September, 2017, M/s. M. L. Garg & Co., Chartered Accountants were appointed as the Statutory Auditors of the Company to hold office from the conclusion of the 26th Annual General Meeting until the conclusion of the 31st Annual General Meeting.

The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments under Section 134 of the Companies Act, 2013. The Auditors Report does not contain any qualification, reservation or adverse remark.

The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

Cost Auditors

Complying with the provisions of Section 148 of the Companies Act, 2013 and the MCA General Circular No. 15/2011 dated April 11, 2011, (as amended vide General Circular No. 36/2012 dated 6th November, 2012) subject to the approval of the Central Government, the Audit Committee has recommended and the Board of Directors had appointed M/s. K. G. Goyal & Associates, Cost Accountants, Jaipur being eligible and having sought the appointment, as Cost Auditors of the Company to carry out the Cost Audit of all the products manufactured by the Company for the year ended March, 2020. Your Company submits its Cost

Audit Report with the Ministry of Corporate Affairs within the stipulated time.

Secretarial Auditors

Pursuant to provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed Shri B. L. Patni, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2019-20. The Secretarial Audit Report for the financial year ended March 31, 2020 is annexed and marked as Annexure-IV to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

ENVIRONMENT, SAFETY, ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company accords high priority to health, safety and environment, particularly in and around its facilities. The Company considers it is essential to protect the Earth and its limited natural resources as well as the health and well being of every person. Safety awareness is provided through regular safety awareness programs, basic fire safety training, mock drills etc. As a part of safety management system, a comprehensive safety manual has been developed for use by the operating and safety personnel. There havent been any accidents reported during the year under review.

Also, energy conservation is a key priority for your Company and it continuously strives to achieve this through process improvements and through the enhancement of equipment capabilities.

Particulars relating to Energy Conservation (Refer Annexure-V), Technology Absorption (Refer Annexure-VI ) and Foreign Exchange Earnings and Outgo (Refer Annexure-VII ), as required under section 134 of the Companies Act, 2013, are enclosed as a part of this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility is a commitment from the Company to improve the quality of life of the workforce and their families and also the community and society at large. The Company believes in undertaking business in such a way that it leads to overall development of all stakeholders and society.

The Corporate Social Responsibility policy was adopted by the Board of Directors on the recommendation of Corporate Social Responsibility Committee. Report on Corporate Social Responsibility as Per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure - VIII to this Report.

Your Company has spent Rs. 80.62 Lakhs (including unspent amount of Rs. 26.74 lakhs for the previous year).

RISK MANAGEMENT

Under Section 134(3)(n) of the Companies Act, 2013 & under regulations 21 of the SEBI (Listing obligations and disclosure requirements) Regulations, 2015, the Company had formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day to day operations of the Company. The Risk Management Policy of the Company outlines different kinds of risks and risk-mitigating measures that are to be adopted by the Board. The company has adequate internal control systems and procedures to combat the risk. The Risk management procedure is reviewed by the Audit Committee and Board of Directors every quarter at the time of review of Quarterly Financial Results of the Company. This has also been covered in the Management Discussion and Analysis, forming part of this report.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Your Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or Ethics Policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee. The Whistle Blower Policy has been posted on the website of the Company at www.poddarpigmentsltd.com.

PREVENTION OF INSIDER TRADING

Your Company has adopted a Code of Conduct for Prevention of Insider Trading to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information about the Company and during the period when the Trading Window is closed. All the Directors and the designated employees have confirmed compliance with the Code.

INSURANCE

All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured.

INTERNAL FINANCIAL CONTROLS

Our company has well established systems & rules for ensuring the orderly and efficient conduct of its business, including adherence to the 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 statements.

Required systems, to carry out risk assessment for identifying the risks along with its possible mechanisms to mitigate them in each process are in place, along with the necessary internal controls.

Our company has a well tested ERP system with the requisite internal control to ensure financial safety as well as the timely preparation of reliable financial statements.

REPORTING OF FRAUDS:

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made thereunder.

PARTICULARS OF LOAN, GUARANTEE AND INVESTMENT

During the year, your Company has not given any long-term inter-corporate deposit. The details of the investments made by company are given in Note no. 4 & 8 to the financial statements.

EXTRACT OF THE ANNUAL RETURN

In accordance with section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT 9 is available on the Companys website at https://www.poddarpigmentsltd.com.

DIRECTORS RESPONSIBILITY STATEMENT

Based on the framework of Internal Financial Controls and compliance systems established and maintained by the company, the work performed by the Internal, Statutory, Cost and Secretarial Auditors including Audit of Internal Financial Controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board believes that the Companys Internal Financial Controls were adequate and effective during the financial year 2019-20.

Accordingly, under Section 134 (3) (c) and 134(5) of the Act, based upon the certification from SMPs, the Board of Directors, to the best of their knowledge and ability, confirm:

a) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) that the Company has selected such accounting policies and applied them consistently and have made judgements and estimates that are reasonable and prudent, to give a true and fair view of the state of affairs of the Company as of 31st March, 2020 and of the profit of the Company for the period ended on that date;

c) that the Company has taken proper and sufficient care to ensure the maintenance of adequate accounting records as per the provisions of the Companies Act, 2013 for safeguarding its assets and for preventing and detecting fraud and other irregularities;

d) that the Annual Accounts have been prepared on a going concern basis;

e) that the Company has laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively and

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

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

1. Transfer of Unclaimed Dividend to IEPF:

As required under Section 124 of the Act, the Unclaimed Final Dividend amount aggregating to Rs 15,87,092/- pertaining to the financial year ended on 31st March, 2012 lying with the company for seven years were transferred during the financial year 2019-20, to the Investor Education and Protection Fund (IEPF) established by the Central Government on 31.10.2019.

2. Transfer of Shares to IEPF:

As required under Section 124 of the Act, the company has transferred 298463 equity shares related to interim dividend, 21223 Equity Shares related to final dividend for FY 2010-11 and 17615 Equity Shares related to final dividend for FY

2011-12, which has not been claimed by the members for seven consecutive years or more, have been transferred by the company to the Investor Education and Protection Fund (IEPF). Out of that 500 equity shares has been claimed by shareholders from IEPF authority. Details of shares transferred have been uploaded on the website of IEPF as well as the Company.

3. Shareholders /claimants whose shares, unclaimed dividend, have been transferred to the aforestated IEPF Suspense Account or the Fund, as the case may be, may claim the shares or apply for refund by making an application to the IEPF Authority in Form IEPF-5 (available on http://www.iepf.gov.in) along with requisite fee as decided by the IEPF Authority from time to time.

4. Further, the Company shall be transferring the unclaimed Dividend for the financial year 2012-2013 to the IEPF Account on or before October 24, 2020. The Company shall also be transferring the shares, on which the dividend has remained unclaimed for seven consecutive years, to the IEPF Account simultaneously on the same date. The Company has sent individual letters to the shareholders for claiming the said dividend and has also advertised the same in the newspapers as per the Rules. Members are therefore requested to ensure that they claim the dividends referred above, before they are transferred to the said Fund.

5. Details of shares/shareholders in respect of which dividend has not been claimed, are provided on our company website at https://www.poddarpigmentsltd.com. The shareholders are therefore encouraged to verify their records and claim their dividends of all the earlier seven years, if not claimed.

SECRETARIAL STANDARDS

The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial

Standards issued by the Institute of Company Secretaries of India and that such systems were adequate and operating effectively.

GENERAL

Your Directors state that no disclosure or reporting is required during the year under review as there were no transaction on the following items:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Any Scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

3. Employees Stock Options Scheme (ESOS).

4. Holding or Subsidiary or Associate Company.

5. Significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

6. Issue of any sweat equity shares.

7. Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.

8. There is no change in nature of business of the Company

Your Directors further state that during the year under review, there was no case filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No material changes and commitments have occurred, after the close of the year till the date of this report, which affect the financial position of the Company.

ACKNOWLEDGEMENT

The Management is grateful to the various government and semi-government authorities, bankers, investors, marketing dealers, suppliers, vendors and customers for their valued support and cooperation.

The Directors also wish to place on record their appreciation for the dedication and excellent contribution of the employees in realizing and achieving the objectives of the Company. The enthusiasm of the executives, staff and workers has enabled the company to remain consistently on its growth path.

For and on behalf of the Board of Directors
PLACE: CHENNAI M. K. Sonthalia S. S. Poddar
DATE : 31 August, 2020 DIRECTOR MANAGING DIRECTOR
(DIN: 00021297) (DIN: 0058025)