Your Directors are pleased to present the Twelfth Annual Report on the business and
operations of the Company alongwith the audited financial statements (Standalone &
Consolidated) for the financial year ended 31st March, 2023 and Auditors' Report thereon
on behalf of the Board of Directors.
FINANCIAL RESULTS
'Rs. Lakhs
The summarised financial results are: |
Standalone |
Consolidated |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
|
(Restated) |
(Restated) |
Net Sales & Services |
|
|
|
|
- Domestic |
1,73,440.69 |
1,34,992.83 |
1,74,774.02 |
1,35,736.09 |
- Export |
13,751.12 |
12,880.30 |
15,509.10 |
14,270.79 |
Revenue from Operations |
1,87,191.81 |
1,47,873.13 |
1,90,283.12 |
1,50,006.88 |
Other Operating Revenue |
5,572.95 |
4,462.41 |
5,572.95 |
4,462.41 |
Other Income |
402.36 |
698.83 |
458.53 |
882.06 |
Total Income |
1,93,167.12 |
1,53,034.37 |
1,96,314.60 |
1,55,351.35 |
Profit from Operations before Finance Cost, |
|
|
|
|
Depreciation and Amortisation Expense, |
|
|
|
|
Exceptional Items & Tax |
21,593.24 |
17,777.94 |
23,306.03 |
18,940.07 |
Less : Finance Costs |
1,827.36 |
2,675.23 |
1,828.25 |
2,728.23 |
: Depreciation and Amortisation Expenses |
7,615.88 |
8,054.70 |
7,790.78 |
8,183.90 |
Profit / (Loss) before Exceptional Items & Tax |
12,150.00 |
7,048.01 |
13,687.00 |
8,027.94 |
Add : Exceptional Item |
975.00 |
|
975.00 |
|
Profit / (Loss) Before Tax |
13,125.00 |
7,048.01 |
14,662.00 |
8,027.94 |
Less : Tax Expense |
|
|
|
|
Current Tax |
3,313.86 |
2,950.00 |
3,620.32 |
3,090.33 |
Deferred Tax |
(1,446.75) |
(240.70) |
(1,426.85) |
(173.23) |
Earlier years (Net) |
|
|
|
1.47 |
Profit / (Loss) for the year (A) |
11,257.89 |
4,338.71 |
12,468.53 |
5,109.37 |
Other Comprehensive Income for the year before tax |
(310.57) |
(89.23) |
273.92 |
167.05 |
Income tax relating to these items |
78.16 |
31.30 |
67.58 |
27.87 |
Other Comprehensive Income for the year after tax (B) |
(232.41) |
(57.93) |
341.50 |
194.92 |
Total Comprehensive Income for the year (C) = (A) + (B) |
11,025.48 |
4,280.78 |
12,810.03 |
5,304.29 |
DIVIDEND & RESERVES
As the current year profit after setting off the losses of the previous years is
inadequate to declare dividend, your Directors do not recommend any dividend and not
transferred any amount to general reserves for the year 2022-23.
AUTO INDUSTRY
During the year, the Auto Industry's domestic sales grew by 20 % and exports by (15) %.
The overall Auto Industry's production grew by 12.5 % as against 1.2 % in the previous
financial year.
Segment |
Vehicle Production* |
Pricol Sale to OEM |
2022-23 |
2021-22 |
Growth % |
Growth % |
2 Wheeler / 3 Wheeler |
2,03,17,602 |
1,85,83,841 |
9.33 % |
26.04 % |
Commercial Vehicle |
10,35,626 |
8,05,527 |
28.57 % |
54.12 % |
Tractors |
9,38,500 |
8,30,500 |
13.00 % |
(1.25) % |
4 Wheeler |
45,78,639 |
36,50,698 |
25.42 % |
39.43 % |
Total |
2,68,70,367 |
2,38,70,566 |
12.57 % |
28.72 % |
*As per Society of Indian Automobile Manufacturers (SIAM)
OPERATIONS
In domestic market, Company primarily caters to 2 wheelers, Commercial Vehicles,
Tractors, 4 wheelers and Off-road vehicles.
STANDALONE FINANCIALS
The Company's domestic sales was up by 28.48% and overall Company's sales by 26.59% as
compared to the previous year. The profit from operations before Finance Cost,
Depreciation, Amortisation expenses, Exceptional items & Tax is ' 21,593.24 Lakhs as
compared to ' 17,777.94 Lakhs during the previous year. Profit before Exceptional items
& Tax has increased from ' 7,048.01 Lakhs to ' 12,150.00 Lakhs, due to increase in
sales volume and better control on costs.
CONSOLIDATED FINANCIALS
The profit from operations before Finance Cost, Depreciation, Amortisation expenses and
Exceptional items & Tax has increased from ' 18,940.07 Lakhs to ' 23,306.03 Lakhs. The
operational performance has improved due to increase in sales volume and better control on
costs. Profit before Exceptional items & Tax is '13,687.00 Lakhs as compared to '
8,027.94 Lakhs, in the previous year.
AMALGAMATION
Amalgamation of Pricol Wiping Systems India Limited ("PWSIL"), a Wholly Owned
Subsidiary company with its Holding Company, Pricol Limited with appointed date as 1st
April 2021, by way of Scheme of Amalgamation, became effective from 21st December 2022 .
By this amalgamation the Wiping Business of PWSIL had been integrated with Pricol
Limited. As part of the said amalgamation all assets and liabilities of PWSIL was
transferred and vested with Pricol Limited. In this amalgamation there is no cash
consideration involved being, PWSIL is a wholly-owned subsidiary of Pricol
Limited and the entire share capital of the PWSIL is held by Pricol Limited. Therefore,
all shares held by the Pricol Limited in the share capital of the PWSIL stood cancelled.
As the appointed date of the said amalgamation is 1st April 2021, the financial
statements for the financial year 2021-22 of the Company has been restated, in line with
Ind AS 103 - Business Combination.
SHARE CAPITAL
Authorised & Issued, Subscribed Paid up
During the year 2022-23, based on the scheme of amalgamation of Pricol Wiping Systems
India Limited, the authorised capital of the said company Rs'21,25,00,000 was added to
Pricol Limited's authorised capital, which resulted the increase of authorised share
capital of the Company from ' Rs' 58,20,00,000 to Rs'' 79,45,00,000 as on 31 st March 2023
comprising of Rs'' 79,45,00,000 equity shares of Rs'' 1/- each.
The issued, subscribed and paid-up equity share capital of the Company as on 31st March
2023 was ' 12,18,81,498/- comprising of Rs'12,18,81,498 equity shares of ' Rs' 1/- each,
without any change from the 31st March 2022.
SUBSIDIARY COMPANIES Pricol Asia Pte Limited, Singapore
This purchasing arm of our Company mainly assists in global procurement of raw
materials and components to our Company.
During the financial year 2022-23, the Company achieved sales of USD Rs' 545.20 Lakhs
(Rs'' 43,017.70 Lakhs) as against the previous year sales of USD 376.94 Lakhs (' 28,084.77
Lakhs). The Company made a profit of USD 10,38,306 (Rs'' 819.26 Lakhs) during the year
2022-23 as against USD Rs' 7,04,769 (' 525.11 Lakhs) in 2021-22.
PT Pricol Surya Indonesia
The Company is supplying Instrument clusters to the 2 Wheeler manufacturers in
Indonesia & Thailand.
In the financial year 2022-23, the Company has achieved a sales of IDR Rs'6,59,014
Lakhs (INR Rs' 3,545.50 Lakhs) as against the previous year sales of IDR Rs'6,10,700 Lakhs
(INR Rs' 3,154.26 Lakhs) an increase of 7.91% in IDR & 12.40 % in INR terms.
The Company had a profit before tax of IDR Rs' 1,33,416 Lakhs (' Rs' 717.78 Lakhs) as
against the profit before tax of IDR 94,685 Lakhs (' Rs' 489.05 Lakhs) of previous year.
PT Sripri Wiring Systems, Indonesia
Due to business reasons, the operations of the Company have been closed during the
financial year.
Pricol Asia Exim DMCC, Dubai
The Company, a Wholly Owned Subsidiary Company of Pricol Asia Pte. Limited, Singapore,
was incorporated on 18th August 2022. This purchasing arm of our Company mainly assists in
global procurement of raw materials and components to our Company.
During the financial year 2022-23, the Company's sale is USD 577 (Rs'' 0.46 Lakhs)
(Previous year-Nil). The Company made a loss of USD 31,185 (Rs'' 24.61 Lakhs) during the
year 2022-23 (Previous year -Nil)
OUTLOOK, OPPORTUNITIES, CHALLENGES, RISKS & CONCERNS
Global Economy:
In 2022, the global economy experienced several turbulent challenges. Inflation was
seen higher than usual in several decades resulted in tightening financial conditions in
most regions, Russia's invasion of Ukraine continue to weigh on economic activity, and the
rapid spread of COVID-19 in China dampened growth in 2022, but the recent reopening has
paved the way for a faster- than-expected recovery.
Various initiatives taken by global governing bodies are expected to moderate the
pertaining economical risks. Monetary policies are expected to restore price stability,
and fiscal policies expected to aim to alleviate cost pressures while maintaining a
sufficiently tight stance. Structural reforms can further support lower inflation by
improving productivity and easing supply side constraints.
As per the latest IMF estimates published in Jan-23, the global economy is projected to
grow at 2.9 % in 2023
(vs estimated 3.4 % in 2022) and 3.1 % in 2024. In 2022, Middle East and Central Asia
have been the highest contributor to the global real GDP, while Emerging and Developing
Asia are expected to be the highest contributors in 2024. Euro area is estimated to grow
at 1.6 % in 2024, whereas United States and Latin America are expected to grow at 1.0 %
and 2.1 % respectively in 2024.
Indian Economy:
The Indian economy, has staged a full recovery, ahead of many nations and has
positioned itself to ascend to the pre-pandemic growth path in FY23. However, India must
also cope with the challenge of controlling inflation. Fortunately, actions taken by the
government and RBI along with decline in global commodity prices has led retail inflation
levels reaching to 5.72 % in November'22 and 5.88 % in December'22, which are within the
RBI upper tolerance target of 6 % .
As per IMF, India's Real GDP grew at 6.8 % in 2022 (estimates) and expected to grow at
6.1 % in 2023 and 6.8 % in 2024, with resilient domestic demand despite external
headwinds. Industrial production increased supported by persistent demand conditions. For
the first half of FY23, the Industrial Sector's overall Gross Value Added (GVA) increased
by 3.7 %, above the 2.8 % average growth seen in the first half of the previous decade.
In 2023, nearly 15 % of the world's growth is forecasted to come from India. These
growth projections are partially based on the economy's resiliency, which can be observed
in how quickly private consumption rebounded, while, the government's capital expenditure,
which surged by 63.4 % in the first eight months of FY23 was also a major contributor.
India will also be able to maintain a positive growth-interest rate differential owing to
the government's policy of capital expenditure led growth, which will result in a
sustainable debt to GDP over the long term.
In order to connect India to international supply chains, the Production Linked
Incentive (PLI) programmes were created with an expected investment of INR 4 lakh crore
during FY22-27. As per the Indian Brand Equity Foundation (IBEF) In FY22, investments
under PLI programmes totalled INR 47,500 crore, which reached 106 % of the year's set
objective. Due to PLI initiatives, production / sales of INR 3.85 lakh crore and the
creation of 3 lakh jobs have been registered. The Indian economy has also begun to prosper
from more formalisation, greater financial inclusion and economic possibilities brought
forth by technologically driven economic reforms.
The Indian Automotive Sector
India has become the fastest-growing economy in the world in recent years. This fast
growth, coupled with rising incomes, boost in infrastructure spending and increased
manufacturing incentives, has accelerated the automobile industry. The two-wheeler segment
dominated the automobile industry because of the Indian middle class. India aims to double
its auto industry size to INR 15 lakh crores by end of year 2024. There has been an FDI
inflow of $ 33.77 billion in the industry from April 2000 till September 2022 which is
around 5.48 % of the total FDI inflows in India during the same period.
The Indian automobile industry, is presently the fifth largest in the world and is
expected to become third largest by 2030. The industry contributes around 7.1 % of India's
Gross Domestic Product (GDP) and 49 % of its manufacturing GDP. While the automotive
sector is valued at $ 222 billion, the net worth of the EV market in the country is
expected to be just $2 billion by 2023 and $ 7.09 billion by 2025.
Auto demand momentum has gone through unforeseen roadblocks in FY23 like the
semiconductor shortages, steep raw material prices, supply chain constraints, to name a
few. The sector is expected to continue to grow due to various demand drivers namely,
greater replacement demand, new products, buoyant business / economic activity, policy
push and ample finance availability. There has been a significant rise in investments in
the research and development (R&D) of the autonomous vehicle. The fast paced
technological advancements in the recent years has further opened up opportunities for the
auto makers to explore new arenas.
In the two-wheeler industry, share of scooters and executive / premium motorcycles has
been increasing due to strong demand from mid/higher income customers and this trend is
expected to persist. EV penetration stands at 5 % in FY23E, and it is expected to further
increase to 9 % in FY25E, with more model options and favourable cost of ownership in
comparison with ICEs. The share of scooters / premium-bikes is expected to rise from 31 %
/ 13 % to 38 % / 15 % driven by urbanization, premiumisation and electrification.
In fiscal 2024, the overall CV domestic sales volumes is expected to breach the pre
pandemic peak and will be driven by improving fleet utilisation and transporter
profitability levels, higher replacement demand and expectations of robust economic
growth.
The Indian Auto Ancillaries Sector
Significant demand for automobiles also led to the emergence of more original equipment
and auto components manufacturers. As a result, India developed expertise in automobiles
and auto components, which helped boost international demand for Indian automobiles and
auto components.
India's auto component industry is an important sector driving macroeconomic growth and
employment. The industry comprises players of all sizes, from large corporations to micro
entities, spread across clusters throughout the country. The auto components industry
accounted for 2.3 % of India's GDP and provided direct employment to 1.5 million people.
By 2026, the automobile component sector will contribute 5-7 % of India's GDP.
The industry is a leader in exports and provides jobs to over 3.7 crore people. From
FY16 - FY22, the industry registered a CAGR of 6.35 % and was valued at US$ 56.50 billion
in FY22. Due to the high development prospects in all vehicle industry segments, the auto
component sector is expected to see double-digit growth in FY22. The industry is expected
to stand at US$ 200 billion by FY26.
The turnover of the automotive component industry grew 34.8 % to INR 2.65 lakh crore
(US$ 33.8 billion) during April-September 2022 compared to the first half of the previous
year. As per the Automobile Component Manufacturers Association (ACMA) forecast, auto
component exports from India is expected to reach US$ 30 billion by 2026. Strong
international demand and resurgence in the local original equipment and after market
segments are predicted to help the auto component industry grow 20-23 % in FY22.
Ancillaries with higher exposure to segments like aluminium casting, wiring harness,
lighting, tyres and EV-specific components are likely to benefit from the EV transition,
owing to increasing content.
Growth Drivers:
1) Growing income levels and overall employment trends will help increase the consumer
base. By 2025 Indian Middle class population will rise to 583 million people which will be
almost 41 % of the projected population.
2) The Indian automotive ancillary sector is estimated to grow by 14-16 % for FY23. An
increase in production of passenger and commercial vehicles in FY23 could help the demand
from OEMs to grow by 18-20 %.
3) The demand growth for after market products is estimated to be 7-8 % this fiscal.
This number might seem low due to a higher base for the last fiscal year which was due to
an increase in the replacement period on account of the pandemic.
4) The export market witnessed 40 % growth in FY22 and is expected to increase 8 -10 %
in FY23 owing to stable demand from the European and US markets.
5) India's EV markets have also seen strong growth, with electric 2W volumes witnessing
exponential growth in recent years. In the case of 2Ws, the narrowing differential between
cost of ownership of EVs and ICEVs in 2Ws has helped drive EV 2W adoption in India. In the
case of 4Ws, the large viability gap between EVs and ICEVs persists, but there has been
strong offtake in EV 4W sales too, with EVs reaching 3 % of the 4W market in India.
6) Allocation of INR 3,000 crore for the Indian Semiconductor Mission will help develop
an indigenous semiconductor manufacturing base and reduce the industry's reliance on
imports thereby cushioning it from disruptions in the global supply chain.
7) The Government of India's Automotive Mission Plan (AMP)FY2006-26 has been
instrumental in ensuring growth for the sector. The Indian automobile industry is expected
to achieve a turnover of US$ 300 billion by 2026 by expanding at a CAGR of 15 % from its
current revenue of US$ 74 billion.
8) In November 2020, the Union Cabinet approved a PLI scheme in automobile and auto
components with an approved financial outlay over a five-year period of Rs'' 57,042 crore
(US$ 8.1 billion). In September 2021, the Indian government issued notification regarding
a PLI scheme for automobile and auto components worth ' Rs'25,938 crore (US$ 3.49
billion). In February 2022, the government received an investment proposal worth ' Rs'
45,016 crore (US$ 6.04 billion) from 20 automotive companies under the PLI Auto scheme.
This scheme is expected to create an incremental output of ' Rs'2,31,500 crore (US$ 31.08
billion).
9) Non-Banking Financial Companies (NBFCs) are stepping up the funding of used cars,
seeing it as a growth driver over the next two-three years, especially with Electric
Vehicles (EVs) gaining traction in the Indian market.
Risk:
1) Real-time driving emission norms (from Apr'23) and safety regulations could pose
additional challenges to the auto OEMs across segments as it will further increase the
cost of acquisition of vehicles.
2) High-interest rates and rising fuel costs may act as headwinds.
3) If the commodity prices continue to inch higher, the working capital requirement for
the business would go up due to the higher cost of inventory.
4) The extended period of semiconductor shortage has the potential to hamper growth for
passenger vehicles in particular.
5) Another pandemic wave and persisting inflation would damage the export business for
automotive ancillary players.
RISK MANAGEMENT
Ri sk Manage ment Committee of the Boa rd was constituted in accordance with Regulation
21 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. Risk
Management Committee periodically met for identifying, monitoring, evaluating and managing
the risks of the Company. At present the Company has not identified any element of risk
which may threaten the existence of the Company.
Company's Risk Management Policy has been adopted for identifying and managing risk, at
the strategic, operational and tactical level. Our risk management practices are designed
to be responsive to the ever changing Industry dynamics. The Company has also laid down
the procedures to inform Board members about risk assessment and minimisation procedures.
The Risk Management policy has been placed on the website of the Company and the web
link there to is https://pricol.eom/wp-content/uploads/2022/11 /Risk-
Management-Policy-2021.pdf
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has internal control systems commensurate with the nature of its business,
the size, and complexity of its operations and such internal financial controls with
reference to the Financial Statements are adequate.
The Company's internal control systems have been continuously monitored taking into
account the nature of business and size of operations to provide for:
Reliability and integrity of financial and operational information;
Effectiveness and efficiency of operations and assets;
Compliance with applicable statutes, policies, listing requirements and
management policies and procedures.
The Company, through its own Corporate Internal Audit Department, carries out periodic
audits at all locations and all functions and brings out any deviation to internal control
procedures. The observations arising from audit are periodically reviewed and compliance
is being ensured. The summary of the Internal Audit observations are submitted to the
Audit Committee. The Audit Committee at its meetings regularly reviews the financial,
operating, internal audit & compliance reports to improve performance. The heads of
various monitoring / operating departments are present for the Audit Committee meetings to
answer queries raised by the Audit Committee.
Based on the framework of internal financial controls and compliance system established
and maintained by the Company, work performed by the internal, statutory, cost and
secretarial auditors and external agencies 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 is of the
opinion that the Company's internal financial controls were adequate and effective during
FY 2022-23.
FINANCE
During the year the Company has not accepted / renewed any deposit from public. The
total deposits remained unpaid or unclaimed as at 31st March, 2023 is Nil. There is no
default in repayment of deposits or payment of interest thereon during the year. The
Company undertook several steps to keep a control over borrowings and cost of borrowings.
Credit Rating
Consequent to the good financial performance, your Company was able to improve its
credit rating as follows.
Credit Agency |
Facility |
Present Ratings |
Previous Ratings |
CRISIL |
Long Term - INR 14,500 Lakhs |
CRISIL A- / Stable |
Not applicable |
|
Fund-Based and Non Fund-Based Working Capital Limits - INR 8,000 Lakhs |
IND A- / Stable / IND A2+ |
IND BBB+ / Stable / IND A2 |
India Ratings and |
Long Term Loans - INR 4,560 Lakhs (reduced from INR 15,530 Lakhs) |
IND A- / Stable |
IND BBB+ / Stable |
Research |
Proposed Fund-based and Non Fund - based working capital limits - INR
2,000 Lakhs |
WD - Withdrawn (the company did not proceed with the instrument as
envisaged) |
IND BBB+ / Stable / IND A2 |
ICRA |
Term Loan, Long Term - Fund Based & Long Term - Unallocated
Short Term - Non Fund Based |
Withdrawn on the request of the company. |
BBB (Stable) A3+ |
RELATED PARTY TRANSACTIONS
In line with the requirements of the Act and the SEBI Listing Regulations, the Company
has formulated a Policy on Related Party Transactions. During the financial year under
review, all related party transactions that were entered by the company were approved by
the Audit Committee and were on arm's length basis and were in the ordinary course of the
business.
During the year, there were no materially significant related party transactions made
by the Company with Promoters, Key Managerial Personnel or other designated persons which
may have potential conflict with the interest of the Company.
Details of related party transactions entered into by the Company, in terms of Ind
AS-24 have been disclosed in the notes to the standalone / consolidated financial
statements forming part of this Report & Annual Accounts 2022-23.
DIRECTORS
Independent Director
As per the provisions of Section 149 of the Companies Act, 2013, Regulation 25 of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Members
appointed Independent Directors as mentioned below:
Name of Independent Director |
Period of Appointment |
Mr. P.Shanmugasundaram |
Upto 14th June 2024 |
Mr. K.Ilango |
Upto 14th June 2024 |
Mr. R.Vidhya Shankar |
Upto 31st July 2024 (2nd Term) |
Mr. Navin Paul |
Upto 21st October 2025 |
Mrs. Sriya Chari |
Upto 26th May 2026 (2nd Term) |
Dr. S.K.Sundararaman |
Upto 29th May 2028 (2nd Term) |
EXECUTIVE DIRECTOR / NON INDEPENDENT DIRECTOR
Members appointed Executive Director / Non Independent Director as mentioned below:
Name of Director |
Period of Appointment |
Mrs. Vanitha Mohan |
Upto 31st March 2024 |
Mr. P.M.Ganesh |
Upto 31st March 2024 |
Mr. Vikram Mohan |
Upto 31st March 2025 |
Mrs.Vanitha Mohan, a Non-Independent Director retires by rotation at the ensuing Annual
General Meeting and
is eligible offers herself for re-appointment. Details of Mrs.Vanitha Mohan being
recommended for reappointment is included in the notice of the ensuing Annual General
Meeting.
EVALUATION BY THE BOARD, COMMITTEE & INDEPENDENT DIRECTORS
The Board has made a formal annual evaluation of its own performance, Committees of the
Board, Independent Directors and Individual Directors of the Company, pursuant to the
provisions of the Companies Act, 2013 ('Act') and the SEBI Listing Regulations.
The Board's performance was evaluated based on the criteria like Structure, Governance,
Dynamics & Functioning, Approval & Review of Operations, Financials, Internal
Controls etc.
The Committees of the Board were evaluated individually based on the terms of reference
specified by the Board to the said Committee. The Board of Directors were satisfied with
the evaluation process which ensured that the performance of the Board, its Committees,
Independent Directors and Individual Directors adhered to their applicable criteria.
The performance of the Independent Directors as well as Individual Directors including
the Chairman of the Board were evaluated based on the evaluation criteria laid down under
the Nomination and Remuneration Policy and the Code of Conduct as laid down by the Board.
The Nomination and Remuneration at its meeting held on 8th February 2023 evaluated the
performance of the individual directors and the Board as a whole and satisfied with their
performance.
Independent Directors had a separate meeting on 1st February 2023 and evaluated the
performance of the Non-Independent Directors, the Board as a whole and Chairman of the
Company, based on the criteria laid down under Nomination and Remuneration policy, Code of
Conduct & SEBI's guidance note and satisfied with their performance.
KEY MANAGERIAL PERSONNEL
In terms of Section 203 of the Companies Act, the Key Managerial Personnel of the
Company as stipulated under Companies Act, 2013 are Mr.Vikram Mohan, Managing Director,
Mr.Priyadarsi Bastia, Chief Financial Officer & Mr.T.G.Thamizhanban, Company
Secretary. Mr.Priyadarsi Bastia, has been appointed as Chief Financial Officer with effect
from 1st July 2022, in place of Mr. P. Krishnamoorthy.
STATUTORY AUDITORS
M/s. VKS Aiyer & Co., Chartered Accountants, Coimbatore (ICAI Firm Registration No:
000066S) (VKS Aiyer), were appointed as Statutory Auditors of the Company, at the AGM held
on August 22, 2018, for a term of 5 years, from the conclusion of 7th AGM until the
conclusion of the 12th AGM of the Company to be held in the calendar year2023.
In terms of the provisions of the Companies Act, 2013, an audit firm acting as the
statutory auditor of a company is eligible to be appointed as statutory auditors for two
terms of five consecutive years each. The first term of VKS Aiyer as statutory auditors of
the Company expires at the conclusion of the 12th AGM of the Company scheduled to be held
on August 9, 2023.
Considering their performance as Statutory Auditors of the Company during their present
tenure, the Audit Committee of the Company, after due deliberation and discussion,
recommended the re-appointment of VKS Aiyer as Statutory Auditors of the Company for a
second term of five years to hold office from the conclusion of the 12th AGM to be held on
August 9, 2023 till the conclusion of the 17th AGM of the Company to be held in the
calendar year 2028. The remuneration for the tenure of their second term as Statutory
Auditors shall be mutually agreed between the Board of Directors and VKS Aiyer, from time
to time. M/s. VKS Aiyer & Co., Chartered Accountants, have confirmed their eligibility
for continuing as Statutory Auditors of the Company. The above proposal forms part of the
Notice of the AGM for your approval.
The report of the Statutory Auditor forms part of this Report and Annual Accounts
2022-23. The said report does not contain any qualification, reservation, adverse remark
or disclaimer. During the year under review, the Auditors did not report any matter under
Section 143(12) of the Act, therefore no detail is required to be disclosed under Section
134(3)(ca) of the Act.
COST AUDITOR
In terms of Section 148 of the Act, the Company is required to maintain cost records
and have the audit of its cost records conducted by a Cost Accountant. Cost records are
prepared and maintained by the Company as required under Section 148(1) of the Act The
Board of Directors at their meeting held on 10th May 2023, on the recommendation of the
Audit Committee, appointed Mr.G.Sivagurunathan, Cost Accountant,
(ICWAI Membership No.: 23127), as the Cost Auditor for conducting the Cost Audit for
the financial year 2023-24, on the remuneration of ' 2.75 Lakhs in addition to
reimbursement of travel and out-of pocket expense. Mr.G.Sivagurunathan have vast
experience in the field of cost audit and have been conducting the audit of the cost
records of the Company for the past several years.
A resolution seeking members' ratification of the remuneration payable to Cost Auditor
is included in the AGM notice. The Cost Audit Report will be filed within the stipulated
period.
SECRETARIAL AUDITOR
The Board had appointed M/s.P.Eswaramoorthy and Company, (FCS No.: 6510, CP No.: 7069)
Practicing Company Secretaries to conduct Secretarial Audit of the Company for the
financial year 2023-24.
The Secretarial Audit Report for the financial year 20222023, as per Section 204 of the
Companies Act and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2005, is annexed herewith as "Annexure A". There are no
qualifications, observations, adverse remarks or disclaimer in the said report. SECRETARIAL
STANDARDS
The Company has in place proper systems to ensure compliance with the provisions of the
applicable secretarial standards issued by The Institute of Company Secretaries of India
and such systems are adequate and operating effectively. The Company had complied with the
applicable Secretarial Standards.
CSR INITIATIVES
Pricol's Corporate Social Responsibility (CSR) activities reflect its philosophy of
enhancing value to the society and the environment around us. CSR activities are carried
out through registered trust (ND Foundation) in addition to the CSR activities directly
undertaken by the Company. The CSR policy is available on the website of the Company at
https://pricol.com/wp- content/uploads/2022/11 /CSR-Policy_21 .pdf. The Annual Report on
CSR activities is annexed herewith as "Annexure B".
DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS
To keep pace with the evolving trends and emerging technologies, employees have
undergone numerous upskilling programs, which resulted in positive business outcomes.
Various employee - employer interactions have improved the employee relations that also
resulted in "zero" hours loss due to industrial relations issues through
Supervisory form meetings, Goodwill meetings, Shop floor meetings and other employee
engagement initiatives. Employees have participated in various external competition to
exhibit their talents such as Poke yoke competition, Kaizen improvements, Quality circle
competitions, sports tournaments, etc., The number of people Employed as on 31st March
2023 is 5,649. Employee Engagement
Employee engagement plays a vital role as it is the foundation of any happy, vibrant
and productive work culture. The management has introduced various opportunities to
improve employee's work-life balance, emotional balance and peace of mind, which has
improved to optimise business results. Accordingly number of initiatives such as several
recreational club activities, factory family connect programs, Rewards and recognition
events, etc, were taken to upkeep the morale of the employee workforce. We believe that a
healthy, inclusive, empathetic, tolerant and respectful business culture is absolutely
essential in today's 21st century.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3) (c) & (ca) of the Companies
Act, 2013, the Directors would like to state that:
a) in the preparation of annual accounts, the applicable accounting standards have been
followed and that there were no material departures;
b) they had selected such accounting policies and applied them consistently and made
judgements and estimates that were 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 and of the
profit and loss of the Company for the year under review;
c) they had taken proper and sufficient care 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) they had prepared the annual accounts on a going concern basis;
e) they had laid down internal financial controls to be followed by the Company and
such internal financial controls are adequate and are operating effectively; and
f) they had devised proper systems to ensure compliance with the provisions of all
applicable laws and such systems were adequate and operating effectively.
DISCLOSURES:
1. Independent Directors have given declarations that they meet the criteria of
independence as provided in Section 149(6) of the Companies Act, 2013 and SEBI (Listing
Obligation and Disclosure Requirements) Regulations, 2015.
2. Salient features of the Nomination and Remuneration Policy is disclosed in the
Report on Corporate Governance.
3. Qualification, reservation or adverse remark or disclaimer made by Statutory Auditor
& Secretarial Auditor in their report: NIL
4. The particulars of Loans, Guarantees and Investments made by the Company under
Section 186 of the Companies Act, 2013 are given in Note.66 to the Standalone Financial
Statements.
5. Disclosure as required under Regulation 34(3) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 is given in Note.67 to the Standalone Financial
Statements.
6. There are no significant and material orders passed by the Regulators / Courts /
Tribunals Which would impact the going concern status and the Company's operations in
future.
7. There is no change in nature of business of your Company during the year.
8. 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 : NIL.
9. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and
Outgo :
The information on conservation of energy, technology absorption and foreign exchange
earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read
with Rule 8 (3) of the Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure
C".
10. Annual Return:
Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of Companies
(Management and Administration) Rules, 2014, Annual Return in Form MGT-7 is available at
the Company's website www.pricol.com and the weblink there: https://pricol.com/wp-
content/uploads/2023/07/Before-AGM.pdf
11. Particulars of Employees:
The information required pursuant to Section 197 read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees
of the Company is annexed herewith as "Annexure D".
12. Disclosures of transactions of the listed entity with any person or entity
belonging to the promoter / promoter group which hold(s) 10% or more shareholding in the
listed entity, in the format prescribed in the relevant accounting standards for annual
results:
Details are given in Note. 65 to the Standalone Financial Statements.
13. Number of other board of directors or committees in which a director is a member
or Chairperson, including separately the names of the listed entities where the person is
a director and the category of directorship:
Disclosed in the Report on Corporate Governance "Annexure E", Point
No: 2.
14. Detailed reasons for the resignation of an independent director who resigns
before the expiry of his tenure along with a confirmation by such director that there are
no other material reasons other than those provided.
Not Applicable
15. Business Responsibility and Sustainability Reporting
Business Responsibility and Sustainability Reporting as required pursuant to Regulation
34 of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 read with
SEBI Circular No.
CIR/CFD/CMD/10/2015 dated 4th November 2015, is annexed herewith as "Annexure
'F".
16. Details of Subsidiary Companies, Joint Venture and Associate Companies, and
their financial position: The information as required under the first proviso to
sub-section (3) of Section 129 in Form AOC-1 is annexed herewith as "Annexure
G".
17. Particulars of contracts / arrangements entered into by the Company with related
parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including
certain arm's length transactions under third proviso thereto:
All the related party transaction entered by the Company during the financial year
2022-23 are in the ordinary course of business and at arm's length. Details of material
contracts / arrangements / transactions entered at arm's length with the related parties
as required under section 134(3) (h) of the Companies Act, 2013, in Form AOC-2 is annexed
herewith as "Annexure H".
18. Details in respect of frauds reported by auditors under section 143(12) of the
Companies Act, 2013: During the year under review, there were no frauds reported by
the auditors to the Audit Committee or the Board under Section 143(12) of the Companies
Act, 2013.
19. List of credit ratings obtained by the entity along with any revisions thereto
during the relevant financial year, for all debt instruments of such entity or any fixed
deposit programme or any scheme or proposal of the listed entity involving mobilisation of
funds, whether in Indian or abroad:
Disclosed under the heading "Finance" in the Report.
20. Key Financial Ratios (Explanations for significant change i.e. change of 25% or
more as compared to the
immediately previous financial year):
Key Financial Ratios |
2022-23 |
2021-22 |
% Change |
Explanations, if any |
i) Debtors Turnover |
7.52 |
7.05 |
6.71 |
|
ii) Inventory Turnover |
7.39 |
6.23 |
18.74 |
Not Applicable |
iii) Current Ratio |
1.14 |
1.11 |
2.34 |
|
iv) Interest Coverage Ratio |
11.82 |
6.65 |
77.74 |
Reduction in term loans |
v) Debt Equity Ratio |
0.13 |
0.23 |
(41.67) |
vi) Operating Profit Margin |
7.78 |
6.36 |
22.32 |
Not Applicable |
vii) Net Profit Margin (%) or sector-specific equivalent ratios, as
applicable. |
6.01 |
2.93 |
104.97 |
Increase in sales and improved net profit |
21. Details of any change in Return on Net Worth as compared to the immediately
previous financial year along with a detailed explanation thereof.
Particulars |
2022-23 |
2021-22 |
%Change |
if anyExplanations, |
Return on Net Worth |
0.18 |
0.08 |
127 |
Improvement in net profit |
22. There is no proceedings pending under the Insolvency and Bankruptcy Code, 2016.
23. There was no instance of one-time settlement with any Bank or Financial
Institution.
24. During the year, the Company's security(s) are not suspended from trading.
CORPORATE GOVERNANCE
Your Company re-affirms its commitment to good corporate governance practices. The
Company complies with corporate governance requirements specified in regulation 17 to 27
and regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, whichever applicable.
Pursuant to Schedule V of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 the Report on Corporate Governance which forms a part of this Report,
has been annexed herewith as "Annexure E".
Chief Executive Officer and Chief Financial Officer have certified to the Board with
regard to the financial statements and other matters as required under Regulation 17 (8)
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Practicing Company Secretary's Certificate regarding compliance of conditions of
Corporate Governance, is made a part of this Directors' Report. All the Board members and
Senior Management personnel have affirmed compliance with the code of conduct for the year
2022-23.
CAUTIONARY STATEMENT
Management Discussion and Analysis forming part of this Report is in compliance with
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and such
statements may be "forward-looking" within the meaning of applicable securities
laws and regulations. Actual results could differ materially from those expressed or
implied, Important factors that could make a difference to the Company's operations
include economic conditions affecting demand / supply and price conditions in the domestic
and overseas markets in which the Company operates, changes in the Government regulations,
tax laws and other statutes and other incidental factors.
ACKNOWLEDGEMENT
Your Directors place on record their sincere thanks and appreciation to Customers,
Distributors, Dealers, Suppliers, Shareholders, Bankers and Government authorities for
their continued support and co-operation. Your Board also wish to place on record their
appreciation to the employees at all levels for their continued co-operation and
commitment.
For and on behalf of the Board
Vikram Mohan
Managing Director (DIN : 00089968)
|
P.M.Ganesh |
|
Chief Executive Officer |
Date : 10th May 2023 |
& Executive Director |
Place : Coimbatore |
(DIN: 08571325) |
|