Pondy Oxides & Chemicals Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the 25th Annual Report on the Operations of your Company along with the Audited financial statements for the financial year ended March 31,2020 together with Auditors Report thereon.

FINANCIAL HIGHLIGHTS

The Companys financial performance for the year ended March 31,2020 and the comparative figures for the previous year are summarized below:

( Rs In Lakhs )

For the year ended March 31,2020 For the year ended March 31, 2019
Revenue from Operations 1,21,987.10 1,04,888.55
Other income 354.28 398.93
TOTALREVENUE 1,22,341.38 1,05,287.48
Profit Before Depreciation, Interest and Tax (PBDIT) 3904.01 6,829.41
Depreciation and Interest 1781.23 1,641.60
PROFIT BEFORE TAX(PBT) 2122.78 5,187.81
Tax 488.22 1,814.98
Profit for the year 1634.56 3,372.83
Other comprehensive income 9.59 4.13
TOTALCOMPREHENSIVEINCOME 1644.15 3,376.96

PERFORMANCE OVERVIEW

Your Company delivered outstanding performance during the year in the challenging economic environment. The highlights of the Companys performance for the year ended March 31,2020 are as under-

• The total net sales of the Company increased by 16% to Rs 1,21,987 lakhs (PY Net Sales: Rs 1,04,888 lakhs)

• Exports increased by 24% to Rs 68068 lakhs for the year 2019-20 from Rs 54930 lakhs in the previous year.

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 in the Business performance.

BUSINESS PERFORMANCE

Towards the end of the financial year 2019-20, the Company, in compliance with the directions issued by the Government of India, stopped its operations at its manufacturing locations and at the registered office with effect from 24th March, 2020 to ensure the safety of our employees and their families and to contain the spread of COVID -19.

Subsequently the company was granted permission to partially run its plant located at Andhra Pradesh and resumed partial operations from 20th April, 2020.The company has also resumed its maintenance operations in its Tamil Nadu unit from 20th April 2020 and resumed the manufacturing operation from 06th May 2020 in accordance with the general permissions from concerned government authorities. The Company had also adopted the work from home policy during the initial lockdown period and on receipt of e-pass, resumed its operations partially in its registered office on 06th May 2020 and again discontinued its operations from 18th June 2020 and again resumed its operations from 6th July 2020.

PRESENT SITUATION AND THE ROAD FORWARD

Due to COVID 19 our supply to indigenous customers reduced for the first quarter and it has restored its position from the second quarter onwards. Though there has been a slight disruption in the manufacturing facilities during the initial period of lockdown, the same partially normalized in the second quarter and we expect total normalcy from third quarter of 2020-21.

DIVIDEND

The Company has already paid an Interim Dividend of Rs 3.00 (i.e.30%) per equity share of Rs 10/- each for the financial year ended March 31,2020. The Interim dividend was approved by the Board in its meeting dated 13th March 2020 and was paid to the members whose name appeared in the Register of Members as on March 21,2020. In order to conserve resources during a period of uncertainty your Directors have not recommended any Final Dividend for the year 2019-20.

The total cash flow on account of dividend, including the Dividend Distribution Tax was Rs 201 lakhs. Further, the Company has transferred Rs 160.00 lakhs to the General Reserve.

UNPAID/UNCLAIMEDDIVIDEND

In accordance with the provisions of Section 125 of Companies Act, 2013 read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has transferred unpaid and unclaimed dividends amounting to Rs 1.85 Lakhs to the Investor Education and Protection Fund during the year.

MERGER

During the year, the Company has obtained the approval from the National Company Law Tribunal, Chennai Bench for the merger of Meloy Metals Private Limited with Pondy Oxides and Chemicals Limited with effect from 1st April 2019. The order has been pronounced by the NCLT, Chennai Bench on 21st February 2020.

Based on the NCLT approval the Company has allotted 2,36,397 fully paid up Equity shares of j.10/- each to the shareholders of Meloy Metals Private Limited and the same has been credited to the Share capital account of the Company.

The effective date of the scheme of amalgamation is 02nd March 2020, being the date on which the certified true copy of the NCLT order was filed with the Registrar of Companies.

EXTRACT OF ANNUAL RETURN

An extract of Annual Return pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 in the prescribed Form MGT 9 is provided as Annexure -1 to this report.

ANNUAL RETURN

In terms of section 134(3)(a) of the Companies Act, 2013 as amended by the Companies (Amendment) Act, 2017 effective 31st July 2018, a copy of the annual return in Form MGT-7 is to be placed on the website of the Company. The same is available in the website of the Company www.pocl.co.in.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

In terms of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ashish Bansal, Managing Director, who has been longest in the office is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

During the year under review, Mr. G P Venkateswaran, Non Executive Independent Director has resigned from the Board with effect from 25th January 2020 and Dr. M Ramasubramani has been appointed as Additional Director in the category of Independent Director of the Company, with effect from March 13,2020 who shall hold office till the conclusion of the Annual General Meeting of the Company. To participate in the development of policy and major decision-making process at board meetings, the Board recommends his appointment as Independent Director of the Company.

Mr. Anil Kumar Sachdev resigned from the Board of the company with effect from 29th June 2020. The Board places on record the valuable contribution made by the above Directors during their tenure as Directors of the company.

The Company has received declaration from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under the Act and Listing Regulations.

Brief profile of the Directors seeking appointment/re-appointment along with the disclosures required pursuant to provisions of Listing Regulations and the Companies Act, 2013 are given in the Notice of the Annual General Meeting, forming part ofthe Annual Report.

During the year, seven (7) meetings of the Board of Directors were held. The particulars of the meetings held and attendance by each Director are detailed in the Corporate Governance Report, which forms a part of this report. The Company has complied with the applicable Secretarial Standards as issued by the Institute of Company Secretaries of India in compliance of Section 118 (10) of the Companies Act, 2013 read with revised Secretarial Standard 1 (Para no.9) of the revised Secretarial Standards on Board Meetings.

INDEPENDENT DIRECTORS AND FAMILIRISATION PROGRAMME

In terms of the provisions of Section 149(7) of the Companies Act, 2013, all the Independent Directors of the Company 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 SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and are not disqualified to act as an Independent Director.

In compliance with Regulation 16(10)(b) and 25(8) 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://pocl.co.in/policies/Details-of-Familiarisation-programme.pdf

KEY MANAGERIAL PERSONNEL

Mr.Anil Kumar Bansal Chairman and Whole Time Director, Mr.Ashish Bansal Managing Director, Mr.R.P.Bansal Whole Time Director, Mr.K.Kumaravel GM Finance and Company Secretary and Mrs.Usha Sankar Chief Financial Officer are the Key Managerial Personnel (KMP) of the Company in terms of provisions of Section 203 of the Companies Act 2013 and there has been no change in the Key Managerial Personnel during the financial year 2019 - 20.

BOARD COMMITTEES

In compliance to the provisions of the 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.pocl.co.in

BOARD EVALUATION

As required under the Companies Act, 2013 and the Listing Regulations, an annual performance evaluation of the Board is undertaken where the Board formally assesses its own performance with an aim to improve the effectiveness of the Board and the Committees. The Company has devised a policy for performance evaluation of the Board, Committees and Directors which include criteria for performance evaluation of Non-executive and Executive Directors.

The Company carried out the evaluation process internally which included the evaluation of the Board as a whole, Board Committees and Peer evaluation of the Directors. The evaluation process focused on various aspects of the functioning of the Board and Committees such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues, etc. The report on performance evaluation of the Individual Directors was reviewed by the Chairman of the Board and feedback was given to Directors.

Details of performance evaluation of Independent Directors as required under Schedule IV to the Companies Act, 2013 is provided in Report on Corporate Governance.

The Directors have expressed their satisfaction with the evaluation process and its results.

REMUNERATION POLICYOFTHECOMPANY

In terms of the provisions of Section 178 of the Companies Act, 2013 read with Regulation 19 of SEBI Listing Regulations, a policy relating to remuneration of 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://pocl.co.in/policies/Nomination-and- Remuneration-Policy.pdf.

There has been no change in the policy since the last financial year.

PARTICULARS OF REMUNERATION OF DIRECTORS AND EMPLOYEES

Details pertaining to remuneration as required under Section197(12) of the 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 II to this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGSAND OUTGO

(A) Conservation of Energy

(I) Steps taken on conservation of energy:

Energy Conservation measures taken:

All efforts for saving energy are being pursued by your company and the major measures taken during the year are:

• The Company has installed furnace oil burner in refining kettles used in all the units and replaced the usage of diesel with furnace oil which has resulted in a energy saving of 20% during the year.

• The Company has installed new LED lamps in all new sheds and has installed adequate transparent sheets to the rooftop. This will reduce the day light requirement considerably.

• To increase the power factor the Company has increased the reactor coil type capacitor bank and Power capacitor bank during the year and has reduced the power consumption.

• The Company proposes to introduce Variable Frequency drive (VFD) for new compressor to reduce the electricityconsumption.

(ii) Steps taken for utilizing alternate source of energy

The company is exploring the possibility of usage of Gas instead of Diesel as a fuel to substantially save the energy cost.

(iii) The capital investment on energy conservation equipments

The company has made sizeable investment in capital equipments mainly energy conservation equipment in all its facilities wherever required.

(B) Technology absorption

The Company has not absorbed any new technology during the year under review. However, the Company continued to improve the quality of products through its normal research and development system and improved the quality of the product and reduced the cost of production.

(C) Foreign Exchange Earnings and Outgo

Foreign Exchange Earnings and Outgo ( Rs In Lakhs ) 2019-20 ( Rs In Lakhs ) 2018-19
Foreign Exchange Earnings 68068.32 54930.56
Foreign Exchange Outgo 89601.43 81382.56

CONTRACTSANDARRANGEMENTSWITHRELATED PARTIES

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in its ordinary course of business and on arms length basis. All Related Party Transactions are placed before the Audit Committee for review and approval. The Audit Committee has provided omnibus approval for transactions which are of repetitive nature and/or entered in the Ordinary Course of business and are at Arms Length and periodically review the transactions on quarterly basis.

During the year, the Company had not entered into any contract / arrangement / transaction with related parties or any person belonging to the Promoter/Promoter group which holds 10% or more shareholding in the listed entity or any other contract / arrangement / transaction which could be considered material in accordance with the policy of the Company on materiality of related party transactions and Listing Regulations.Accordingly, the disclosure required under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2 is not applicable to the Company.

The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board may be accessed on the Companys website at: http://pocl.co.in/policies/Related-Party-Transaction.pdf

PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS

The Company has not given any loans or provided guarantees or securities to any other body corporates as envisaged under Section 186 of the Companies Act, 2013 during the year 2019-20. The details of the investments made by the Company are given under the note no. 8 forming part of the financial statements.

DEPOSITS

During the year, your Company did not accept any deposits under Chapter V of the Companies Act, 2013. The Company has however received loans from Directors and in accordance with the provisions of Rule 2(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014, the details of the Loan received is given under Note 47 of the Notes forming part of the financial statements.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The Company does not have subsidiary or associate Company. The Company is also not a subsidiary of any other Company. As at March 31,2020, the Company has not entered into any joint ventures.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted Corporate Social Responsibility Committee with Mr. Anil Kumar Sachdev as the Chairman of the Committee and Mr. Ashish Bansal and Ms. Shoba Ramakrishnan as Members of the Committee. The CSR policy of the Company is available on the Companys website http://pocl.co.in/policies/CSR_Policy.pdf

As part of its initiatives under “Corporate Social Responsibility” (CSR), the company has contributed funds for the following schemes-

1. Provision of health care service by sponsoring the treatment of Poor and Underprivileged.

2. Rural Development - providing infrastructure in and around the villages surrounding the Plant.

3. Contribution for Charitable activities, Food distribution, Construction of pathway to old age home and Safety cameras in Chennai city

4. Sponsoring education to the poor and destitute students

Detailed Report on CSR activities in the prescribed format are attached in Annexure III.

STATEMENT PURSUANT TO LISTING AGREEMENT

Your Companys shares are listed with the BSE Limited. The Company has paid the Annual Listing fees and there are no arrears.

VIGILMECHANISM

POCL has adopted a Whistle Blower Policy establishing vigil mechanism, 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.

The Vigil Mechanism is supervised by the Audit Committee and the whistle blower has direct access to the Chairman of the Audit Committee. The vigil mechanism and whistle blower policy is available on the Companys website at http://pocl.co.in/policies/Whistle-Blower-Policy.pdf

RISK MANAGEMENT POLICY

The Board has adopted and implemented a suitable Risk Management Policy for the company which identifies therein different elements of risk which may threaten the existence of the company.

SECRETARIAL STANDARDS

The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and approved by the Central Government under Section 118(10) of the Act.

INTERNAL FINANCIAL CONTROLS

The Company has Internal Control Systems commensurate with the size, scale and complexity of its operations. The Board has devised systems, policies, procedures and frameworks for the internal control which includes adherence to companys policy, safeguarding assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information. In line with best practices, the Audit Committee and the Board reviews these internal control systems to ensure they remain effective and are achieving their intended purpose.

The Auditors of the Company have verified the internal financial control systems prevailing in the organization and confirmed the effectiveness of the same in their report during the year 2019-20.

AUDITORS AND AUDITORS REPORT Statutory Auditors

M/s. L. Mukundan and Associates, Chartered Accountants, were appointed as Statutory Auditors of the Company, for a term of 5 (five) consecutive years, at the 22nd Annual General Meeting held on September 27,2017. They have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Report given by the Auditors on the financial statement of the Company is part of this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Cost Auditor

M/s. K. R. Vivekanandan Unni & Associates, Cost Accountants (having Firm Registration Number: 102179) has been appointed as the Cost Auditors of the Company for the year 2019-20 for conducting audit of the cost accounts maintained by the Company relating to inorganic chemicals and base metals.

The Board of Directors on the recommendation of the Audit Committee has approved the remuneration of S. 30,000/- (Rupees Thirty 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. Aresolution 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 had appointed KSM Associates, Practising Company Secretaries, to conduct Secretarial Audit forthe FY 201920. The Secretarial Audit Report for the financial year ended March 31,2020 is annexed herewith marked as Annexure IV to this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer except for the remark on delay in intimation to BSE about the amended Code of Conduct and Fair Disclosure policy under SEBI(PIT) Regulations.

REPORTING OF FRAUDS BYTHEAUDITORS

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

SIGNIFICANTAND MATERIALORDERS PASSED BYTHE REGULATORSOR COURTS

During the year under review the National Company Law Tribunal, Chennai Bench sanctioned the Scheme forthe merger of Meloy Metals Private Limited with our Company.

Other than the above order, there are no significant material orders passed by the Regulators or Courts which would impact the going concern status of the Company and its future operations.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(3) of the Listing Regulations, is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the Listing Regulations forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

DISCLOSURE UNDER THE SEXUAL HARASSMENT AT WORKPLACE

The Company has in place an Anti Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘POSH Act). Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees of the Company are covered underthis policy.

During the year, there were no complaints received pursuant to the provisions of the POSH Act. DIRECTORSRESPONSIBILITYSTATEMENT

Pursuant to provisions of Section 134 of the Companies Act, 2013, with respect to Directors responsibility statement it is hereby confirmed that:

1. in the preparation of the annual accounts applicable accounting standards has been followed and there is no material departure from the same;

2. the Directors 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 i.e., March 31,2020 and of the profit of the Company for that period;

3. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the Companys assets and for preventing and detecting fraud and other irregularities;

4. the Directors have prepared the annual accounts on a going concern basis;

5. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

AWARDSAND RECOGNITION

During the year, your company has received the following award;

• Gold Trophy for being the top exporter (Medium Enterprise) in the year 2018-19 from Engineering Export Promotion Council (EEPC), Southern Region, Ministry of Commerce and Industry, Government of India.

• The company has obtained London Metal Exchange (LME) Brand Listing certificate from the London Metal Exchange (LME) for its Lead Metal produced in its factory at Sriperumbudur. Tamilnadu, under the brand name POCLPB970R

ACKNOWLEDGEMENT

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 services rendered by the officers, staff and employees of the Company at all levels for their dedicated efforts to improve the performance of the Company.

For and on behalf of the Board of Directors

Anil Kumar Bansal Ashish Bansal
Date : 13th August 2020 Executive Chairman Managing Director
Place : Chennai DIN: 00232223 DIN: 01543967