Your Directors have pleasure in presenting the 32nd AnnualReport on your business and operations together with the Audited Financial Statements forthe year ended March 312020.
The Company's financial performance for the year ended March 312020 issummarized 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) |
Revenue from Operations for the financial year 2019 -20 was Rs. 346.86Crore as against Rs. 453.73 Crore in the previous year showing a de-growth of 23% overthe previous year coming majorly from zinc oxide segment. The reduction in zinc oxidesales was due to slow down in automobile sector coupled with company's strategy to doaway with less profitable orders. Our export sales for the year 2019-20 was Rs. 114.42Crore as against Rs. 152.00 Crore in the previous year.
The Operating Profit (EBITDA) for the year stood at Rs. 712.80 Lakhs asagainst Rs. 477.41 Lakhs in the previous financial year. Until Q3 of 2019-20 the Companyregistered a Profit after tax of Rs. 241.02 Lakhs after which the company profitabilitywas badly hit due to drastic fall in the commodities market. Due to the outbreak of theCoVID 19 pandemic the commodity markets tumbled with both lead and zinc prices fallingapproximately by USD 300/MT between February and March 2020. The Company had accounted forMark to Market (MTM) loss of Rs. 213.11 Lakhs in the month of March 2020 and with thisthe 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 ofCoronavirus Disease (COVID-19) a global pandemic on March 112020. Consequent to thisGovernment of India declared lockdown on March 23 2020 and the Company temporarilysuspended the operations in all the units in compliance with the lockdown instructionsissued by the Central and State Governments. COVID-19 has impacted the normal businessoperations of the Company by way of interruption in production supply chain disruptionunavailability of personnel closure/lock down of production facilities etc. during thelockdown period which has been extended till May 17 2020. The production and supply ofgoods has commenced during the month of May 2020 on
various dates at all the manufacturing locations of the Company withadherence to the standard operating procedures as issued by the Ministry of Health andFamily Welfare from time to time.
IMPACT: Due to the outbreak of the Pandemic the commoditymarkets tumbled with lead prices falling from USD 1939/MT to low of USD 1589/MT & zincprices falling from USD 2018/MT to low of USD 1773/MT from the end of February 2020 toMarch 2020. The Company had accounted for Mark to Market (MTM) loss of Rs. 213.11 Lakhs inthe month of March 2020. The interest cost during the lock down period poor debtor'scollection payment of detention charges due to delay in clearing the raw material fromcontainer freight stations and payment of full salaries & wages in spite of lowerproduction levels will have a major bearing on the Company's profitability of Q1 of2020-21.
The Board of Directors of your company after considering holisticallythe relevant circumstances and the loss for the year has decided not to recommend anydividend for the year under review.
TRANSFER TO RESERVES
The Company has made no transfers to reserves during the Financial Year2019 - 20.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTIONFUND
As per the provisions of Section 124(5) of the Companies Act 2013dividend which remained unclaimed for a period of seven years from the date of transfer tounpaid dividend account are required to be credited to IEPF Account.
Pursuant to Section 124 of the Companies Act 2013 unclaimed dividenddue 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. 93837/- ||September 4 2015 ||October 9 2022 |
|2015- 16 ||Rs. 78180/- ||September 2 2016 ||October 7 2023 |
|2017- 18 ||Rs. 102749/- ||September 12018 ||October 8 2025 |
Members who are yet to claim their dividend amount may write to theCompany Secretary or Company's Registrar and Share Transfer Agent M/s. Cameo CorporateServices Limited. The details of unclaimed dividend for the said years are also availableon the website of the Company.
MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY
There have been no material changes and commitments affecting thefinancial position of the Company between the end of the financial year and the date ofthis report except for the impact arising out of COVID- 19 which is detailed elsewherein this Annual Report.
During the year under review keeping in mind the operationalrequirements the Registered Office of the Company was shifted from its present locationto Willingdon Crescent 1st Floor No. 6/2 Pycrofts Garden Road NungambakkamChennai - 600 006 with effect from November 12019.
PARTICULARS OF SUBSIDIARY COMPANY ASSOCIATE COMPANY AND JOINT VENTURECOMPANY
The Company is neither a holding company nor a subsidiary of any othercompany as at March 312020. The Company has no associate company or joint venture companywithin the meaning of Section 2(6) of the Companies Act 2013.
Your Board is currently constituted with ten Directors comprising offour Independent Directors five Executive Directors and one Non-Executive Director.
In terms of Section 152 of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Sunil Kumar Bansal Managing Director and Mr. Y V RamanWhole Time Director who have been longest in the office retire by rotation at theensuing 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 constitutionof the Board of Directors. The Directors on the Board are Mr. Devakar Bansal Mr. SunilKumar Bansal Mr. Y V. Raman Dr. Padam C Bansal Mr. D. P. Venkataraman Mr. Harish KumarLohia 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 2013and Regulation 16(1)(b) read with Regulation 25(8) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 all the Independent Directors have furnished adeclaration to the Company stating that they fulfill the criteria of Independence asprescribed under Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) readwith Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
The Board took on record the declaration and confirmation submitted bythe independent directors regarding their meeting the prescribed criteria of independenceafter undertaking due assessment of the veracity of the same as required under Regulation25 of the Listing Regulations 2015.
The Ministry of Corporate Affairs vide its circular dated October 222019 further amended the Companies (Appointment and Qualification of Directors) Rules2014 by requiring an independent director to apply within ten months to the IndianInstitute of Corporate Affairs for inclusion of his/her name in the data bank for suchperiod till he/she continues to hold office of an independent director in any Company. Theindependent directors were also required to submit a declaration of compliance in thisregard. All the independent directors of the Company have submitted the declaration withrespect to the same.
Further the Independent Directors have also confirmed that:
They have complied with the Code of Independent Directors asprescribed in Schedule IV to the Companies Act 2013;
They have complied with POEL Code of Conduct for Directors andSenior Management Personnel;
They are not disqualified to act as an Independent Director.
Furthermore Board is of the opinion that Independent directors of thecompany 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 andDisclosure Requirements) Regulations 2015 ("SEBI Listing Regulations") theBoard has adopted a policy on familiarisation programme for Independent Directors of theCompany. The policy familiarizes the Independent Directors with the nature of industry inwhich the Company operates business model of the Company their roles rights andresponsibilities 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 designatedas Key Managerial Personnel (KMP) of the Company by the Board of Directors in terms ofprovisions 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 thefinancial year 2019 - 20.
MEETINGS OF THE BOARD
The Board of Directors met five (5) times during the financial year2019-20. The details of the Board Meetings with regard to their dates and attendance ofeach Director thereat have been provided in the Corporate Governance Report. The Companyhas complied with the applicable Secretarial Standards as issued by the Institute ofCompany Secretaries of India in compliance with Section 118 (10) of the Companies Act2013 read with para 9 of the revised Secretarial Standards on Board Meetings.
In compliance to the provisions of Companies Act 2013 and SEBI ListingRegulations the Company has constituted various committees of the Board. Details ofscope constitution terms of reference number of meetings held during the year underreview along with attendance of Committee Members therein forms part of the Report onCorporate Governance which is annexed to this report. Details of the constitution ofthese 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 readwith Regulation 19 of SEBI Listing Regulations a policy relating to remuneration for theDirectors Key Managerial Personnel and other employees has been adopted by the Board ofDirectors thereby analyzing the criteria for determining qualifications positiveattributes and independence of a Director. The said policy is available on the website ofthe Company at http://poel.in/pdf/Remuneration%20Policy.pdf. There has been nochange in the policy during the year.
RECOMMENDATION OF THE AUDIT COMMITTEE
During the year under review all the recommendations made by the AuditCommittee were accepted by the Board.
The Board of Directors of the Company has established a framework forthe evaluation of its own performance its committees and individual Directors of theCompany in consultation with the Nomination & Remuneration Committee. The Board hasset out certain criteria covering the evaluation of the Chairman Executive DirectorsNon-executive Directors and Independent Directors on the basis of which the evaluation isbeing carried out on annual basis in terms of provisions of the Companies Act 2013 andthe SEBI Listing Regulations.
During the year under review the Board of Directors at its meetingheld on February 13 2020 have carried out the evaluation of its own performancecommittees and directors of the Company. The Independent Directors in their separatemeeting held on even date have also evaluated the performance of the Chairman andNonIndependent Director(s) of the Company in accordance with the framework approved by theBoard.
Details of performance evaluation of the Independent Directors asrequired under Schedule IV to the Companies Act 2013 is provided in Corporate GovernanceReport. The Directors have expressed their satisfaction with the evaluation process andits results.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has a proper and adequate system of internal financialcontrols which includes the policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation. During the year such controls were tested and no material weakness in thedesign or operations were observed.
STATUTORY AUDITOR AND AUDIT REPORT
In compliance with the provisions of the Companies Act 2013 read withrules framed thereunder M/s. Raju & Daftary Chartered Accountants Chennai (havingFirm Registration Number: 015535S) has been appointed as the Statutory Auditors of theCompany to hold office till the conclusion of 32nd Annual General Meeting to beheld in the calendar year 2020.
In this regard M/s. Raju & Daftary would be completing their firstterm of five years as the Statutory Auditors of the Company. In accordance with theprovisions of Section 139 of the Companies Act 2013 read with the
Companies (Audit and Auditors) Rules 2014 M/s. Raju & Daftary areeligible for re-appointment for a second term of five years.
The Audit Committee and Board of Directors of the Company respectivelyat their meeting recommended the re-appointment of M/s. Raju & Daftary CharteredAccountants Chennai (having Firm Registration Number: 015535S) as Statutory Auditors ofthe Company to hold office for their second term of five (5) years from the conclusion of32nd Annual General Meeting till the conclusion of 37th AnnualGeneral Meeting to be held in the calendar year 2025 subject to the approval of theshareholders at the forthcoming Annual General Meeting.
Your Directors recommend the appointment of M/s. Raju & DaftaryChartered Accountants as the statutory auditors of the Company for their second term offive years and request the members to authorize the Board of Directors to fix theirremuneration.
There were no qualification reservation or adverse remark in theAuditor's Report for the financial year ended on March 312020.
Your Company is engaged in the production of organic & inorganicchemicals and base metals is required to maintain the cost records as specified by theCentral Government under Section 148(1) of the Companies Act 2013 read with rules madethereunder. Accordingly the Company has made and maintained the cost records for theproduction of the above said products in compliance with the provisions of the said Act.
M/s. K. R. Vivekanandan Cost Accountant (having Firm RegistrationNumber: 102179) has been appointed as the Cost Auditor of the Company for the year 2019-20for conducting audit of the cost accounts maintained by the Company in respect ofinorganic chemicals and base metals.
The Board of Directors on the recommendation of the Audit Committee hasapproved the remuneration of Rs. 40000/- (Rupees Forty Thousand Only) in addition toapplicable taxes and out of pocket expenses. As per the provisions of Section 148 of theCompanies Act 2013 the remuneration of the Cost Auditors is required to be ratified bythe shareholders of the Company. A resolution seeking members' ratification for theremuneration payable to the Cost Auditor forms part of the notice convening this AnnualGeneral Meeting.
In respect of the cost audit for the year 2018-19 the Cost AuditReport does not contain any qualification reservation or adverse remark.
The Board has appointed Mrs. Deepa V Ramani Practicing CompanySecretary as Secretarial Auditor for the Financial Year 2019-20 in terms of provisions ofSection 204 of the Companies Act 2013. The Secretarial Audit Report of the Company forthe financial year 2019 - 20 in the prescribed Form MR-3 is enclosed as Annexure - I tothis report. The Secretarial Audit Report does not contain any qualification reservationor 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 orSecretarial Auditor have not reported any fraud to the Audit Committee under Section143(12) of the Companies Act 2013.
A robust and integrated risk management framework is in existence underwhich the common prevailing risks in the Company are identified the risks so identifiedare reviewed by the Audit Committee and the management's actions to mitigate the riskexposure are assessed. The Risk Management Policy can be viewed on the website of theCompany 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. Themechanism has been appropriately communicated within the organization. The Whistle BlowerPolicy provides a framework to promote responsible whistle blowing by employees. Itprotects employees who raise a concern about serious irregularities unethical
behavior actual or suspected fraud within the Company. It is affirmedthat no personnel of the Company have been denied access to the Chairman of the AuditCommittee.
PARTICULARS OF LOANS INVESTMENT GUARANTEE AND SECURITY U/S 186(4) OFTHE COMPANIES ACT 2013
The Company has not given any loans or made investment or provided anysecurity during the financial year under review. The Company has not given any guaranteesother than bank guarantees in the normal course of business to meet contractualobligations.
In terms of the provisions of Section 92(3) of the Companies Act 2013read with Rule 12 of the Companies (Management and Administration) Rules 2014 theextract of the Annual Return of the Company in Form MGT-9 is annexed as Annexure II tothis report. Further in compliance with Section 134(3)(a) of the Companies Act 2013Annual Return for the financial year 2018 - 19 can be view on the website of the Companyat http://poel.in/investors.html#invstr.
TRANSACTIONS WITH RELATED PARTIES
All contracts or arrangements or transactions with related partiesduring the year under review as referred to in Section 188(1) of the Companies Act 2013were in the ordinary course of business and on arms' length basis. There were no materialcontracts/ arrangement/ transactions with related parties which may have potentialconflict with the interest of the Company.
All related party transactions are placed before the audit committeefor review and approval. Prior omnibus approval is also obtained from the Audit Committeefor the related party transactions which are of repetitive nature and which cannot beforeseen and accordingly the required disclosures are made to the audit committee onquarterly basis in terms of the omnibus approval of the committee.
The details of the related party transactions as per Indian AccountingStandards (IND AS) - 24 are set out in Note No. 45 of the Financial Statements. Furtherthe information on transactions with related parties pursuant to section 134(3)(h) of theCompanies Act 2013 read with rule 8(2) of the Companies (Accounts) Rules 2014 in FormNo. AOC - 2 is given as Annexure - III to this report.
The policy on Related Party Transactions can be viewed on the websiteof 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) OFTHE COMPANIES ACT 2013
Details pertaining to remuneration as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended has been provided as an Annexure IV tothis Report.
In order to maximize the shareholders' value on a sustained basis yourCompany has been constantly reassessing and benchmarking itself with well-establishedcorporate governance practices besides strictly complying with the requirements of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 applicable provisionsof Companies Act 2013 and other applicable laws.
The Statutory Auditors of the Company have examined the requirements ofCorporate Governance and certified the compliance as required under SEBI ListingRegulations.
In terms of Schedule V to SEBI Listing Regulations a detailed reporton Corporate Governance along with Compliance Certificate issued by the Statutory Auditorsof the Company is annexed and forms an integral part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of the Company's operations in terms of operationaland financial performance manufacturing activities business outlook risks and areas ofconcerns forms part of the Management Discussion and Analysis
a separate section of this report. Certain Statements in the saidreport may be forward looking. Many factors may affect the actual results which could bedifferent from what the Directors envisage in terms of the future performance and outlook.
The Company has not accepted any deposits from public and as such noamount on account of principal or interest on deposits from public was outstanding as onthe 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 fromDirectors during the year are furnished under the head "related partytransactions" in Note No. 45 of the financial statements.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
(i) Conservation of Energy
Steps taken on conservation of energy:
POEL understands the significance of conservation of energy not only asa method of cost reduction but also because of its global impact. The Company has takenthe following steps for conserving the energy:
S Auto-shutting down of systems when not in use S Utilisation of lightsand air conditioners only when required S Minimal usage of ACs and lights duringweekend S Use of fans post office hours to reduce the power consumption S Replacementwith LED lights to reduce lighting power consumption
Steps taken for utilizing alternate source of energy and capitalinvestment made: NIL
(ii) Research & Development and Technology Absorption
During the year under review the Company continued to improve thequality of products through its normal research and development system. The Company hasnot acquired any imported or indigenous technology. No expenditure was incurred onResearch & Development.
(iii) Foreign Exchange Earnings and Outgo
(a) Foreign Exchange Earnings - Rs. 11442.11 Lakhs (Rs. 15199.64Lakhs)
(b) Foreign Exchange Outgo - Rs. 22496.80 Lakhs (Rs. 34375.56 Lakhs)
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review no significant and material orders werepassed by the regulators courts or tribunals which influences the going concern statusand 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 Harassmentat the Workplace in line with the requirements of the Sexual Harassment of Women at theWorkplace (Prevention Prohibition & Redressal) Act 2013. Internal ComplaintsCommittee (ICC) has been set up to redress complaints received regarding sexualharassment. All employees (permanent contractual temporary trainees) are covered underthis policy.
Pursuant to Para 10(l) of Part C of Schedule V to the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the disclosures with respectto complaints received and disposed off during the year has been provided in the CorporateGovernance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 your Board ofDirectors state and confirm that:
a) in the preparation of the annual accounts for the year ended March312020 the applicable accounting standards read with the requirements set out underSchedule III to the Act have been followed and there are no material departures from thesame;
b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 312020 andof the loss of the Company for that period;
c) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe 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 bythe Company and that such internal financial controls are adequate and were operatingeffectively; and
f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
Based on the framework of internal financial controls maintained by theCompany work performed by the internal and statutory auditors including audit of internalfinancial controls over financial reporting by the statutory auditors the Board is of theopinion that the Company's internal financial controls were adequate and operatingeffectively during financial year 2019-20.
AWARDS AND RECOGNITIONS
Your Company was awarded Top Exporter Award (at National Level) for theyear 2017 - 18 by the Engineering Export Promotion Council (EEPC) and in recognition ofthe same the Company received the Silver Trophy at the 50th EEPC India NationalAward Distribution Function held at New Delhi.
Your Company has also been awarded Special Trophy for Excellence inExport Turnover for the financial year 2017 - 18 (for Southern Region) by the EngineeringExport Promotion Council (EEPC) at the 42nd Southern Regional Export AwardPresentation Function held at Hyderabad.
DISCLOSURES WITH RESPECT TO UNCLAIMED SUSPENSE ACCOUNT
The Company observed that some physical share certificates issuedpursuant to the Scheme of Demerger have been returned undelivered. The details of suchreturned 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 SuspenseAccount" in the name of the company wherein all the unclaimed shares will betransferred into one folio and the voting rights on such shares shall remain frozen untilthe rightful owner claims the shares.
GRATITUDE & ACKNOWLEDGEMENTS
Your Directors take this opportunity to place on record their sincereappreciation for the continued trust and confidence reposed in the Company by the bankersbusiness associates regulatory authorities customers dealers vendors and shareholders.Your Directors recognize and appreciate the value of contributions rendered by everymember of the POEL family at all levels in order to improve the performance of theCompany.
| || ||For POCL ENTERPRISES LIMITED |
| || ||DEVAKAR BANSAL ||SUNIL KUMAR BANSAL |
|Place ||: Chennai ||MANAGING DIRECTOR ||MANAGING DIRECTOR |
|Date ||: July 29 2020 ||DIN:00232565 ||DIN:00232617 |