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Pitti Engineering Ltd.

BSE: 513519 Sector: Engineering
BSE 00:00 | 19 Oct 173.40 -4.75






NSE 00:00 | 19 Oct 173.30 -4.90






OPEN 176.00
VOLUME 81736
52-Week high 215.10
52-Week low 32.10
P/E 12.09
Mkt Cap.(Rs cr) 556
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 176.00
CLOSE 178.15
VOLUME 81736
52-Week high 215.10
52-Week low 32.10
P/E 12.09
Mkt Cap.(Rs cr) 556
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Pitti Engineering Ltd. (PITTIENG) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 36th Annual Report on the business andoperations of the Company together with the Audited Financial Statements for the yearended 31st March 2020.


Pitti Engineering Limited formerly known as Pitti Laminations Limited is engaged inthe manufacturer of specialised sheet metal components its sub-assemblies for rotatingelectrical equipment and various machined components. The Company supplies a range ofengineering product to vastly diversified segments like hydro and thermal generationwindmill mining cement steel sugar construction lift irrigation freight railpassenger rail mass urban transport E-mobility appliances medical equipment oil &gas and several other Industrial applications. Our products finding suitable applicationin almost all engineering application.


The financial performance of your Company for the year ended 31st March2020 is summarised below:

Rs. in lakhs
Particulars 2019-20 2018-19
Net Revenue from Operations 52506.29 62221.47
Other Income 367.45 226.67
Profit before Finance Costs Depreciation Amortisation and Tax 8139.09 9236.59
Less: Finance costs 3411.54 2961.40
Profit before Depreciation Amortisation and Tax 4727.55 6275.19
Less: Depreciation & Amortisation 2742.00 2241.38
Profit before Tax 1985.55 4033.81
Less: Tax expenses 276.05 1661.85
Profit after Tax 1709.50 2371.96
Add: Other comprehensive income (25.83) (85.07)
Total comprehensive income for the year 1683.67 2286.89
Add: Surplus at the beginning of the year. 8636.53 6496.54
Less: Dividend - -
Less: Transferred to General reserve - -
Surplus carried to Balance sheet 10320.20 8636.53


After the historical year of 2018-19 in the life cycle of the Company the year 2020was a year of consolidation after the giant leap but the year got characterized by theslowing global economy NBFC crisis and Covid-19. The spade work of the previous few yearsto spread in geographies products and applications helped the Company to navigate andcome out with a reasonably satisfactory performance.

The Net revenue from operations for the financial year 2019-20 was Rs.525.06 crores asagainst Rs.622.21 crores in the previous year and the total comprehensive income for theperiod was Rs.16.84 crores as against Rs.22.87 crores in the previous year.

The total debt as on 31st March 2020 was Rs.219.45 crore which includesRs.43.86 crores long-term debt and Rs.175.59 crore of short term debt. Cash and cashequivalents at the year end was Rs.14.86 crore resulting in a net debt position ofRs.204.59 crore. We continued to maintain a conservative leverage profile with a totaldebt to equity ratio of 1.06x.


During March quarter the novel corona virus started spreading and WHO declared it as aglobal pandemic as it severely affected public health. In response Governments across theglobe imposed lockdowns which disrupted worldwide economic activity including India. Incompliance with the Central & State Governments directives for lockdown themanufacturing operations of the Company were suspended from 23rd March 2020.The operations at the Aurangabad plant resumed on 25th April 2020 and theoperations at the Hyderabad plants resumed on 2nd May 2020 in compliance withthe prescribed norms for social distancing workplace sanitization safety and hygiene.

The impact on the sales of the Company products was primarily due to lockdown measuresprescribed by various Government authorities. Considering the line of business of theCompany the long-term customer agreements and customized products for the customers itis anticipated that normalcy would be restored once the strict measures are relaxedeverywhere. Already we are seeing a good demand in the market post unlocking measuresannounced in May and June 2020. However we understand that the situation is exceptionaland changing dynamically therefore the Company is not able to anticipate with certaintythe future impact on its operations.

The Company is continuously monitoring the situation and taking necessary actions inresponse to the developments to minimize the impact and safeguard its assets and people.The Company has evaluated the prevailing situation to assess the impact on the financialstatements for the year ended 31st March 2020 and is confident ofrecoverability of the assets including receivables investments property plant andequipment intangible assets assets held for sale and estimates no material impact.However due to uncertainties surrounding Covid-19 the actual impact may be differentfrom the estimates.


There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year of the Company to which the financialstatements relate and the date of this report. Further it is hereby confirmed that therehas been no change in the nature of business of the Company .


The Company does not propose to transfer any amount to the General Reserve out of theamount available for appropriation.


In view of the increased operations and requirement of higher working capital for thepurpose of business of the Company your Directors express their inability to recommenddividend for the financial year 2019-20. The Board of Directors of the Company has adopteda dividend distribution policy. The policy is also available on the website of the


During the year under review there has been no change in the authorised share capitalof the Company however the paid-up share capital of the Company has increased from Rs.14.91 crores to Rs. 16.03 crores pursuant to the conversion of 2222222 share warrantsinto fully paid-up equity shares on 24th June 2019 at a price of Rs. 90/- eachon preferential basis to the persons belonging to Promoter/ Promoter Group. The amountraised through the preferential issue has been used for the objects of the preferentialissue as stated in the 33rd AGM notice and there has been no deviation from the intendeduse of funds.


During the year under review your Company has not accepted any deposit within themeaning of Section 73 and 74- of the Companies Act 2013 read with Companies (Acceptanceof Deposits] Rules 2014 (including any statutory modification(s) or re-enactment for thetime being in force.


The information on conservation of energy technology absorption and foreign exchangeearnings and outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with theRule 8(3) of the Companies (Accounts) Rules 2014 is annexed as an Annexure-1 and forms anintegral part of this report.


There are no significant and material orders passed by the regulators / courts thatwould impact the going concern status of the Company and its future operations.


In accordance with the provisions of Section 152 of the Companies Act 2013 Shri AkshayS Pitti Vice-Chairman & Managing Director retires by rotation and being eligibleoffers himself for re-appointment.

All the Independent Director of the Company were re-appointed for a second consecutiveterm of 5 years by the members at the AGM held on 19th September 2019.

The Independent Directors of the Company have submitted a declaration confirming thatthey meet the criteria of independence as provided in Section 149(6) of the Companies Act2013 and Regulation 16 (1) (b) of the Listing Regulations and that they are not aware ofany circumstance or situation which exist or may be reasonably anticipated that couldimpair or impact their ability to discharge duties with an objective independent judgmentand without any external influence. In the opinion of the Board all Independent Directorsare independent of the management.

There has been no change in the Key Managerial Personnel during the year. Shri Sharad BPitti Chairman & Managing Director; Shri Akshay S Pitti Vice- Chairman &Managing Director; Shri N K Khandelwal President Corporate Resources & CFO and Ms.Mary Monica Braganza Company Secretary & Compliance Officerare the Key ManagerialPersonnel of the Company as on the date of this report.

Meetings of the Board

Five meetings of the Board were held during the year. The details of composition of theBoard particulars of meetings held and attended by each Director are detailed in theCorporate Governance Report which forms part of this Report.

Committees of the Board

Detailed composition of the mandatory Board committees namely Audit CommitteeNomination and Remuneration Committee Stakeholders Relationship Committee and CorporateSocial Responsibility Committee number of meetings held during the year under review andother related details are set out in the Corporate Governance Report which forms a part ofthis Report.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and SEBI Listing Regulations theBoard has carried out the annual evaluation of the Directors as well as the evaluation ofthe Board and its Committees. The performance evaluation of the Independent Directors wascarried out by the entire Board except the Director being evaluated. The performanceevaluation of the Chairman & Managing Director and the Vice-Chairman & ManagingDirector was carried out by the Independent Directors. The process was carried out bycirculating questionnaires on the functioning of the Board its Committees and IndividualDirectors on parameters approved by the Nomination and Remuneration Committee.

As an outcome of the above exercise it was noted that the Directors come fromdifferent backgrounds with tong and varied experience. They bring together a good blend ofknowledge experience and sound advice. The Board functioned as a cohesive body iteffectively monitors both the progress and quality of work with appropriate riskmanagement measures. It has ensured compliance with tegat regulatory and good governancenorms. It was also noted that the Committees of the Board are functioning wett andsatisfaction was expressed on the performance of Independent Directors and the ExecutiveDirectors of the Company .


The information relating to remuneration and other details as required pursuant toSection 197 of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 as amended is provided as anAnnexure-2 to this report.

There are no employees who draw remuneration in excess of the limits prescribed in Rule5(2)(i) (ii) and (iii) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. Pursuant to the provisions of the first proviso to Section 136(1)of the Act the annual report excluding the remuneration details of top ten employees isbeing sent to the Members of the Company . The said information is available forinspection on all working days during business hours at the Registered Office of theCompany . Any member interested in obtaining such information may write to the CompanySecretary and the same will be furnished on request.


Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors of your Companyconfirm that:

a) in the preparation of the annual accounts for the financial year ended 31stMarch 2020 the applicable Accounting Standards have been followed and there are nomaterial departures from the same.

b) such accounting policies as mentioned in the notes to the financial statements havebeen applied consistently and judgements and estimates that are reasonable and prudenthave been made so as to give a true and fair view of the state of affairs of the Companyas at 31st March 2020 and of the profit of the Company for the year ended onthat date.

c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.

d) the annual accounts have been prepared on a going concern basis.

e) proper internal financial controls laid down by the Directors were followed by yourCompany and that such internal financial controls are adequate and operating effectivelyand

f) proper systems to ensure compliance with the provisions of all applicable taws werein place and that such systems were adequate and operating effectively.


Your Company has always considered its workforce and their skills as its valuable assetand continues to enhance the performance driven environment with emphasis on aligning itwith the changing business requirements.


Your Company has formulated a policy for the prevention of sexual harassment at theworkplace. It ensures prevention and deterrence of acts of sexual harassment andcommunicates procedures for their resolution and settlement. The Company is committed tocreating and maintaining a healthy working environment that enables employees to workwithout fear or prejudice gender bias and sexual harassment. The Company believes thatall employees have a right to be treated with respect and dignity and has zero tolerancetowards violations of its code of conduct in general and its sexual harassment policy inparticular. During the year no complaint under the sexual harassment policy has beenreceived by the Company .

The Company has complied with the provisions relating to the constitution of internalcomplaints committee under the sexual harassment of women at work place (preventionprohibited and redressed) Act 2013.


The Company has adopted a whistle blower policy and has established necessary vigilmechanism as defined under Regulation 22 of the Listing Regulations and section 177 of theCompanies Act 2013 for the Directors and Employees to report their concerns aboutunethical behavior actual or suspected fraud or violation of the Company code of conductor ethical policy. The policy provides for adequate safeguards against victimisation ofemployees who avail of the mechanism.

During the year under review no personnel was denied access to the Audit Committee.The policy is posted on the website of the Company at


Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new / revised standard operating procedures. TheCompany internal control system is commensurate with its size scale and complexities ofits operations. The internal audit is entrusted to M/s. SVD & Associates CharteredAccountants. The main thrust of internal audit is to test and review controls appraisalof risks and business processes besides benchmarking controls with best practices in theindustry.

The Audit Committee actively reviews the adequacy and effectiveness of the internalcontrol systems and suggests improvements to strengthen the same. The Company has a robustManagement Information System which is an integral part of the control mechanism.

Further the Statutory Auditors of the Company have also issued an attestation reporton internal control over financial reporting (as defined in section 143 of Companies Act2013) for the financial year ended 31st March 2020 which forms part to theStatutory Auditors Report.


Risk management is embedded in your Company operating framework. Your Company believesthat managing risks help in maximizing returns. The Company approach to addressingbusiness risks is comprehensive and includes periodic review of such risks and a frameworkfor mitigating controls and reporting mechanism of such risks. The risk managementframework is periodically reviewed by the Board and the Audit Committee.

However some of the risks which may pose challenges are set out in the Management andDiscussion Analysis which forms an integral part of this report.


As a part of its initiative under the Corporate Social Responsibility (CSR) drive theCompany has undertaken projects in the areas of urban and rural development welfareactivities women empowerment eradicating hunger promoting health care and education.These projects are in accordance with Schedule VII of the Companies Act 2013 and theCompany CSR policy. The report on CSR activities as required under the Companies(Corporate Social Responsibility Policy) Rules 2014 is annexed as Annexure-3 and forms anintegral part of this report.


During the year under review the Company has not given any loans provided anyguarantees nor made any investments.


All transactions entered into with related parties for the year under review were onarms length basis and in the ordinary course of business and is in accordance with theprovisions of the Companies Act 2013 and the SEBI Listing Regulations. The materialrelated party transactions entered into by the Company are made with the approval of theMembers. The information on transactions with related parties is given in Annexure-4 inForm No. AOC-2 and the same forms part of this report.

All related party transactions are placed before the Audit Committee and omnibusapproval is obtained for transactions which are of repetitive nature.

Effective from 1st April 2019 a revised policy on related party transactionswas adopted by the Board of Directors.

The policy on related party transactions as approved by the Board of Directors has beenuploaded on the website of the Company


The extract of annual return in form MGT- 9 as required under section 92 of theCompanies Act 2013 and the rules made thereunder is annexed as Annexure-5 and forms anintegral part of this Report. The form is also available on the website of the


During the year under review your Company has complied with all the applicablesecretarial standards. The same has also been confirmed by Secretarial Auditors of theCompany .


The Management Discussion and Analysis Report on the operations of the Company asrequired under SEBI Listing Regulations is provided in a separate section and forms anintegral part of this Report.


As per Regulation 34(3) read with Schedule V of the SEBI Listing Regulations adetailed report on corporate governance together with a certificate from the CompanyAuditors confirming compliance forms an integral part of this Report.


Statutory Auditors

M/s. Laxminiwas & Co Chartered Accountants were appointed as Statutory Auditors ofthe Company at the Annual General Meeting held on 6th September 2017 for a termof five years subject to ratification by the Members at every Annual General Meeting(AGM). Pursuant to the notification dated 7th May 2018 issued by Ministry ofCorporate Affairs the requirement of seeking ratification of appointment of statutoryauditors by Members at each AGM has been done away with. Accordingly no such item hasbeen considered in notice of the 36th AGM.

M/s. Laxminiwas & Co Chartered Accountants have confirmed that they are notdisqualified from continuing as Auditors of the Company .

The Notes on financial statement referred to in the Auditors Report are selfexplanatory and do not call for any further comments. The Auditors Report does not containany qualification reservation adverse remark or disclaimer.

The Statutory Auditors of the Company have not reported any fraud under Section 143(12)of the Companies Act 2013.

Cost Auditors

The Company is required to maintain cost records as specified by the Central Governmentunder section 148(1) of the Companies Act 2013 and accordingly such accounts and recordsare maintained by the Company .

The Board of Directors on the recommendation of Audit Committee has appointed M/s. S SZanwar & Associates Cost Accountants (Firm Registration No.100283) as the CostAuditors to audit the cost accounts of the Company for the financial year 2020-21. Asrequired under the Companies Act 2013 a resolution seeking Members ratification for theremuneration payable to the cost auditor forms part of the notice convening the 36th AGM.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Board has appointed Shri Ajay Kishen Practicing Company Secretary (CP.No. 5146) to conduct Secretarial Audit for the Financial Year 2019-20. The SecretarialAudit Report for the financial year ended 31st March 2020 is annexed to thisReport. The Secretarial Audit Report does not contain any qualification reservationadverse remark or disclaimer.


Statements in this Directors Report and Management Discussion and Analysis describingthe Company objectives projections estimates expectations or predictions may be"forward-looking statements" within the meaning of applicable securities lawsand regulations.

Actual results could differ materially from i those expressed or implied.


Your Directors wish to place on record their appreciation for dedicated service andcontribution made by the employees of the Company at all levels. Your Directors would alsolike to place on record their appreciation for the continued co-operation and supportreceived by the Company during the year from its customers suppliers bankers financialinstitutions government authorities business partners and other I stakeholders.