Polychem Ltd Directors Report

To

The Members of POLYCHEM LIMITED

Your Directors present the Sixty Seventh Annual Report and Statement of Accounts for the year ended 31^st March, 2024.

FINANCIAL RESULTS

1. DIVIDEND:

For the year under review, the Directors propose to recommend a Dividend of Rs. 30 per equity share of Rs 10 each i.e. 300% (Rs 20 i.e. 200% for the previous year) on the Equity shares of the Company aggregating to Rs. 1,21,21,350. The dividend payment is subject to approval of the Members at the ensuing Annual General Meeting.

2. STATE OF COMPANYS AFFAIRS:

During the year ended 31st March, 2024, your Company has made a profit of Rs 603.70 lakhs after tax against a profit of Rs. 372.14 lakhs after tax in previous year. The sales of Specialty Chemicals including other operating revenue during the year ended was Rs. 3,686.79 Lakhs compared to Rs. 3,521.88 lakhs during the previous year and for property development Rs. Nil during the current and previous year.

3. RESERVES:

Your Directors do not propose to transfer any amount to the general reserve.

4. SUBSIDIARY COMPANY:

The Company has one subsidiary company i.e. Gujarat Poly Electronics Limited (GPEL).

In accordance with section 129(3) of the Companies Act, 2013, the Company has prepared the consolidated financial statements of the Company, which forms part of this Annual Report. Further a statement containing the salient features of the financial statement of our subsidiary company in the prescribed format AOC-1 also forms part of this Annual Report.

The Company has received 9,81,500 /% Non-Cumulative Redeemable Preference Shares of Rs. 100 each in lieu of the existing 9,81,500 /% Non-Cumulative Redeemable Preference Shares of Rs. 100 each from GPEL on 22^nd December, 2023 by virtue of order of NCLT passed on 24^th November, 2023 since the said preference shares could not be redeemed on due date in order of no divisible profits with GPEL. The existing Preference Shares shall stand redeemed on the issuance of the above mentioned Preference Shares.

The sale of GPEL during the year ended 31^st March, 2024 was Rs. 1,691.39 lakhs as against sale of Rs. 1,596.34 lakhs in the previous year. GPEL has made profit of Rs. 184.33 lakhs during the current year as compared to profit of Rs. 529.87 lakhs in the previous year. GPEL manufactures as wells as outsources ceramic capacitors & marketing the same.

5. NUMBER OF BOARD MEETINGS HELD DURING THE YEAR:

During the year 2023-24, four Board Meetings were held through video conference on the following dates:

(a) 17^th May, 2023; (b) 8^th August, 2023;

(c) 8^th November, 2023; and (d) 9^th February, 2024

More details on the Board Meeting are given under Corporate Governance Report.

6. AUDIT COMMITTEE:

The Audit Committee during the year consisted of 5 members. More details on the committee are given in Corporate Governance Report.

7. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee during the year consisted of 3 members. More details on the committee are given in Corporate Governance Report.

8. NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee consists of 4 members, More details on the committee are given in Corporate Governance Report.

9. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Board has established a vigil mechanism for directors and employees to report genuine concerns to be disclosed, the details of which is placed on the website of the company. The Board has also formulated the whistle blower policy, same has been uploaded on the website of the company http://www.polvchemltd.com/download/Whistle%20Blower%20Policv 14.pdf.

There was no reporting made by any employee for violations of applicable laws and regulations and the Code of Conduct for the F.Y. 2023-24.

10. DIRECTORSRESPONSIBILITY:

Pursuant to Section 134 of the Companies Act, 2013 the Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. Appropriate accounting principles have been selected and applied consistently and have made judgements 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 31^st March, 2024 and of the profit of the Company for the year ended 31^st March, 2024;

c. Proper and sufficient care has been taken 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;

d. The annual accounts have been prepared on a going concern basis;

e. The directors have laid down internal financial controls to be followed by the company;

f. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws.

11. TAXATION:

The Companys Income Tax assessments have been completed up to the year ended 31^st March, 2023.

12. DEPOSITS:

Company has not received any deposits from Public during the year and there are no outstanding deposits.

13. INDUSTRIAL RELATIONS:

Industrial Relations with the employees of the Company were cordial during the year under report.

14. CONSERVATION OF ENERGY:

Report on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo etc. is given in Annexure I forming part of this report.

15. DIRECTORS:

Mr. P. T. Kilachand retires from Office by rotation, but being eligible, offers himself for re-appointment. The same is placed before the Members for their approval in ensuing Annual General Meeting.

16. DECLARATION ABOUT INDEPENDENT DIRECTORS UNDER SUB-SECTION 6 OF SECTION 149:

The Company has received the declarations from Independent Directors that they meet the criteria of independence laid down under section 149(6) of the Companies Act, 2013 and under regulation 16(b) of SEBI (LODR) Regulations, 2015.

17. DISCLOSURE OF REMUNERATION RECEIVED BY MANAGING DIRECTOR OF THE COMPANY FROM ITS SUBSIDIARY/HOLDING COMPANY UNDER SECTION 197(14):

During the year 2023-24, Mr. A. H. Mehta, Dy. Managing Director of the Company has received Rs. 35.50 Lakhs excluding retirement benefits from Gujarat Poly Electronics Limited, subsidiary company in capacity of Managing Director.

18. FORMAL ANNUAL EVALUATION:

As required under the act, evaluation of every directors performance was carried out. An evaluation sheet was given to each director wherein certain criteria were set out for which ratings are to be given.

19. COMPANYS POLICY ON DIRECTORS APPOINTMENT, REMUNERATION ETC.:

The Nomination and Remuneration Committee recommends to the Board the policy relating to remuneration for the Directors, Key Managerial Personnel and other employees, same has been uploaded on the website of the Company http://www.polychemltd. com/download/Criteria%20for%20Appointment%20&%20Evaluation%20of%20Board%20of%20Directors 14.pdf

20. RELATED PARTY TRANSACTIONS:

All Related Party Transactions (RPT) entered into by the Company during the year under review were at arms length and in ordinary course of business. All RPT are placed before Audit Committee for its review and approval. Prior Omnibus approval is obtained from Audit Committee for RPT on Annual basis.

Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014:

1. Details of contracts or arrangements or transactions not at armss length basis: NIL

2. Details of material contracts or arrangement or transactions at arms length basis:

FORM AOC- 2

The Board on recommendation of Audit Committee, adopted a policy on related party transactions to regulate transactions between the Company and its related parties, in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The policy is uploaded and can be viewed on the Companys website

http://www.polychemltd.com/download/Related%20Party%20Transaction%20Policy 14.pdf

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

The Company has not given any loan or guarantee during the year and there is no outstanding loan or guarantee as on 31^st March, 2024 but the company has made an investment of Rs 24.80 Lakhs in Mutual Fund during the year.

22. DONATION:

During the year, the Company has not given donation to any charitable trust.

23. CORPORATE SOCIAL RESPONSIBILITY:

As per criteria mentioned under section 135(1) of the Companies Act, 2013, the Provision of CSR will be applicable to the Company for the Financial year ended 31^st March, 2024. The company will be required to spend approximately Rs 6.91 Lakhs towards CSR during F.Y. 2024-25.

As per section 135(9) of the Companies Act, 2013, the amount to be spent for CSR activities does not exceed Rs. 50 Lakhs, hence the requirement for constitution CSR Committee is not required. The Company has adopted the CSR Policy and can be viewed on the Companys website http://www.polvchemltd.com/Download/Polvchem%20-%20CSR%20Policv.pdf

24. INTERNAL FINANCIAL CONTROL:

The Company has adequate internal financial control system with reference to the financial statements.

25. RISK MANAGEMENT POLICY:

The Company has developed and implemented a risk management policy which identifies major risks which may threaten the existence of the Company. The same has also been adopted by your Board and is also subject to its review from time to time.

26. OTHER DISCLOSURES AS PER SECTION 134 OF THE COMPANIES ACT, 2013:

(a) There are no qualifications, reservations or adverse remark or disclaimer by the Statutory Auditor or by Secretarial Auditor in their respective reports.

(b) There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company, to which the financial statements relate and the date of the report.

(c) Pursuant to Section 92(3) read with section 134(3)(a) of the Act, the Annual Return as on 31^st March, 2024 is available on the Companys Website at http://www.polychemltd.com/Annual%20Return.aspx

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

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The policy is uploaded and can be viewed on the Companys website http://www.polvchemltd.com/Download/AntiSexual%20Harassement%20Policv.pdf

The Company has also formed an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. The Company has also filed Annual Report 2023 with District Collector and District Women and Child Development Officer.

The Company has not received any complaints on sexual harassment during the year.

28. MANAGERIAL REMUNERATION:

i. The ratio of remuneration of Mr. P. T. Kilachand, Managing Director and Mr. A.H. Mehta, Dy. Managing Director with the median remuneration of the employees of the company is 8.07 and 6.73 respectively.

ii. Increase in remuneration of Mr. P.T. Kilachand, Managing Director is 5.28%, Mr. A. H. Mehta, Dy. Managing Director is 25.79%, Ms. K. V. Panchasara, Chief Financial officer is 14.96% and Ms. D. V. Chauhan, Company Secretary and Compliance Officer is 14.34%.

iii. There is an increase of 24.84% in the median remuneration of employees in the financial year.

iv. There are 23 permanent employees in the company.

v. Average increase in the salaries of employees other than the managerial personnel was 7.05%.

vi. It is hereby affiirmed that the remunerations paid is as per the remuneration policy of the company.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of top ten Employees in terms of remuneration drawn and name and other particulars of Employees drawing remuneration in excess of the limits set out in the said Rules are required to be part of the report. However, there are no employees drawing remuneration as mentioned in rule 5(2) (i) (ii) and (iii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The information of the top ten employees in terms of remuneration is not sent along with this report. However, having regards to the provisions of Section 136(1) of the Act the said information is available for inspection. Any member interested in obtaining such information may write to the Company Secretary, at the Registered office or at polychemltd@kilachand.com and the same will be furnished on request.

29. CORPORATE GOVERNANCE:

Pursuant to Regulation 34(3) and Schedule V of SEBI (LODR) Regulations, 2015, a separate report on Corporate Governance and a certificate from M/s. Ragini Chokshi & Co., Company Secretaries, are annexed to this Report.

30. AUDITOR:

In 65^th Annual General Meeting, members of the Company have re-appointed M/s. Nayan Parikh & Co., Chartered Accountants, Mumbai, for a second term of 5 years from the conclusion of 65^th AGM till the conclusion of 70^th Annual General Meeting to be held in the Year 2027.

31. SECRETARIAL AUDITOR:

Complying with the provisions of Section 204 of the Companies Act, 2013, the Audit Committee has recommended and the Board of Directors have appointed M/s. Ragini Chokshi & Co., Company Secretaries, (Membership No.2390 & C.P. No.1436), being eligible and having sought re-appointment, as Secretarial Auditor of the Company to carry out the Secretarial Audit of the Company for the year ending March 2025. The Secretarial Audit Report for F.Y. 2023-24 is enclosed and marked as Annexure II.

32. ACKNOWLEDGEMENT:

The Directors extend their sincere thanks to the State and Central Government Authorities and Members for their co-operation and continued support.

Sincere thanks are also due to the management team and the staff for their valuable contribution.