The Members of
PRECISION CAMSHAFTS LIMITED
Your Directors are pleased to present the TWENTY EIGHTH ANNUAL REPORT and theAudited Standalone and Consolidated Financial Statements for the year ended 31st March2020.
1. FINANCIAL RESULTS
The Company's financial performance for the year under review along with previousyear's figures is given hereunder:
(Rs. in Lakhs)
|Financial Results || |
| ||For the Year ended 31st March 2020 ||For the Year ended 31st March 2019 ||For the Year ended 31st March 2020 ||For the Year ended 31st March 2019 |
|Total Revenue (I) ||45836.37 ||43154.07 ||76365.48 ||70472.76 |
|Total Expenses (II) ||34324.12 ||32506.40 ||63415.25 ||56910.18 |
|Earnings before interest tax depreciation and amortisation (EBITDA) ||11512.75 ||10647.67 ||12950.23 ||13562.58 |
|Profit Before Tax & Exceptional Items ||6697.48 ||6571.45 ||3801.96 ||5672.07 |
|Exceptional items ||1867.66 ||0.00 ||(215.63) ||(2734.59) |
|Profit before tax ||8565.14 ||6571.45 ||3586.33 ||2937.48 |
|Total Tax Expenses ||1359.82 ||2280.16 ||984.47 ||2117.05 |
|Profit for the year ||7205.32 ||4291.30 ||2563.33 ||707.39 |
|EPS (Basic) ||7.59 ||4.52 ||3.68 ||1.21 |
|EPS (Diluted) ||7.58 ||4.52 ||3.68 ||1.21 |
The above-mentioned figures are extracted from financial statements prepared inaccordance with the Indian accounting Standards (IND AS).
2. COMPANY'S FINANCIAL PERFORMANCE
During the Financial Year under review on Standalone basis your Company registered atotal revenue of 45836.37 Lakhs as against 43154.07 Lakhs in the previous year. Theprofit after tax for the year stood at 7205.32 Lakhs as against 4291.29 Lakhs in theprevious year. Your Company reported increase in top-line by 6.22 % over the previousyear.
On Consolidated basis total revenue was 76365.48 Lakhs as against 70472.76 Lakhs inthe previous year. The profit after tax for the year stood at 2563.33 Lakhs as against707.39 Lakhs in the previous year. Your Company reported increase in top-line by approx8.36 % over the previous year.
During the period ended 31st March 2019 the Directors of the Companyconfirmed their intention to sell the shares of investment in its Joint Ventures NingboShenglong PCL Camshafts Co. Ltd. and PCL Shenglong (Huzhou) Specialised Casting Co. Ltd.collectively referred to as the "Disposal Group" as a result the Company hadclassified the "Disposal Group" as held for sale in accordance with Ind AS 105 Non Current Assets held for sale and discontinued operations. The sale is completedfor above mentioned entities and the proceeds are realised on 18th June 2020.
There was no change in the nature of the Business of Company or any of its subsidiaryCompanies.
3. TRANSFER TO RESERVES
TheclosingbalanceoftheretainedearningsoftheholdingCompanyforFY2019-20after allappropriation and adjustments was 33229.62 Lakhs
The Board of Directors has declared Interim Dividend of 0.95/- (9.5%) per Equity Shareof Face Value of 10/- each in the board meeting held on the 5th March 2020.Interim Dividend Payment was paid online on 26th March2020
Based on Company's performance and Due to Covid 19 pandemic the Directors recommendInterim Dividend as Final Dividend for the Financial year ended 31st March2020.
In accordance with Regulation 43A of the SEBI (LODR) Regulations 2015 the Company hasformulated a Dividend Distribution Policy. The Dividend Distribution Policy of the Companyis also hosted on the website of the Company and can be viewed at www.pclindia.in.
5. SHARE CAPITAL
During the year under review your Company has not allotted any Equity Shares under theexercise of stock options under Precision Camshafts Limited Employee Stock Option Scheme2015 ("PCL ESOS 2015"). Therefore there was no change in the Capital Structureof the Company. Consequently the issued subscribed and paid-up equity share capital ofthe Company is 9498.58 Lakhs divided into 94985835 Equity Shares of 10/- each.
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Changes in the Composition of Board of Directors of the Company:
As per Regulation 17(1)(a) of SEBI (LODR) Regulations 2015 the Board of Directors ofthe top 1000 listed entities shall have at least one Independent Woman Director by April1 2020. Mrs. Savani A. Laddha (DIN: 03258295) was appointed as Independent Woman Director(Additional Director) w.e.f. 10th February 2020 in compliance with SEBI (LODR)Regulations 2015 Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel (KMP) of your Company as on 31st March 2020 are asmentioned below:-
|Mr. Yatin S. Shah ||Chairman and Managing Director |
|Mr. Ravindra R. Joshi ||Whole-time Director and Chief Financial Officer |
|Mr. Karan Y. Shah ||Whole-time Director Business Development |
|Mrs. Mayuri I. Kulkarni ||Company Secretary & Compliance Officer |
As on 31stMarch 2020 Non- Executive Directors on the Board are as mentionedbelow: -
|Dr. Suhasini Y. Shah ||Non- Executive Non-Independent Woman Director |
|Mr. Sarvesh N. Joshi ||Independent Director |
|Mr. Pramod H. Mehendale ||Independent Director |
|Mr. Vedant V. Pujari ||Independent Director |
|Mr. Vaibhav S. Mahajani ||Independent Director |
|Mrs. Savani A. Laddha ||Independent Woman Director |
7. DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criterion of Independence as prescribed under Section 149(6) of the Companies Act 2013 and Regulation 16 of SEBI (LODR) Regulations 2015.
The Independent Directors have complied with the Code for Independent Directorsprescribed in Schedule IV to the Act as well as the Code of Conduct for Directors andSenior Management Personnel.
During the year Independent Directors of the Company had no pecuniary relationship ortransactions with the Company other than commission and reimbursement of expensesincurred by them for the purpose of attending meetings of the Board of
Director and its Committees. The details of remunerations and/or other benefits of theIndependent Directors are mentioned in the Corporate Governance Report.
8. BOARD MEETINGS
The Board meets at regular intervals to discuss and decide on Company / business policyand strategy apart from other Board business. The notice of Board meeting is given well inadvance to all the Directors. The Agenda of the Board / Committee meetings is set by theCompany Secretary in consultation with the Chairman and Managing Director and ChiefFinancial Officer of the Company. The Agenda for the Board and Committee meetings coversitems set out as per the regulations in SEBI (LODR) Regulation 2015 and companies Act2013 to the extent it is relevant and applicable. The Agenda for the Board and Committeemeetings include detailed notes on the items to be discussed at the meeting to enable theDirectors to take an informed decision. During the year 5 (Five) Board Meetings wereconvened and held on 27th May 2019 13th August 2019 5thNovember 2019 10th February 2020 and 5th March 2020.
The maximum interval between any two meetings was well within the maximum allowed gapof 120 days.
9. MEETING OF INDEPENDENT DIRECTORS
In compliance with the provisions of Schedule IV of the Companies Act 2013 andRegulation 25(3) of SEBI (LODR) regulation 2020 a meeting of Independent Directors washeld on 10th February 2020 to review the performance as per Regulation 25(4)of SEBI (LODR) regulation 2015 and Schedule IV of the Companies Act 2013. The IndependentDirectors of the Company at their meeting held on 10th February 2020 expressedsatisfaction on the quality quantity and timeliness of flow of information between theCompany Management and the Board. All other Independent Directors were present at themeeting.
Note: Mrs. Savani Arvind Laddha was appointed at the Board Meeting held on 10thFebruary 2020 Board Meeting after Independent Director Meeting was held at the same Dayhence she was not entitled to attend Independent Directors Meeting.
10. CONTRIBUTION OF INDEPENDENT DIRECTORS TO THE GROWTH OF THE COMPANY
The Board of Directors of the Company strategically comprises of Independent Directorsfrom different domains which adds value to the Company. Every Independent Director withhis expertise and integrity has earned a vast experience and reputation in the industry.Our Independent Directors are experts in Finance Company Laws Information TechnologyCommercial Laws and Audit. These domains are integral part of every business and thereforethe collective expertise of these board members ensure that we are up to the mark with theglobal leaders in terms of ethics corporate governance best industry practicestransparency and technology.
The online proficiency self-assessment test of Independent Directors conducted byIndian Institute of Corporate Affairs ensures that the skills and knowledge is appropriateand beneficial to the Company. Few of our Independent Directors have successfully passedthe test. Others are yet to appear for the test since the time limit for the onlineproficiency self- assessment test is one year from the date of inclusion of name inIndependent Director Databank.
11. SUBSIDIARIES AND ACQUISITIONS
The Company has 2 (Two) subsidiaries 2 (Two) step down subsidiaries as on 31stMarch2020.
(a) PCL (INTERNATIONAL) HOLDINGS B.V. ("PCL Netherlands") Wholly OwnedSubsidiary
PCL (International) Holdings B.V. is a Wholly Owned Subsidiary of the Company inNetherlands. The existing customer base of the Company is predominantly located in Europeto facilitate and coordinate between company and customers PCL (International) HoldingsB.V. was formed. Other objective of having PCL (International) Holding B.V. is to monitorthe performance and reporting of subsidiaries centrally.
(b) MEMCO ENGINEERING PRIVATE LIMITED ("MEMCO") Wholly OwnedSubsidiary
MEMCO Engineering Private Limited is a Wholly Owned Subsidiary of the Company. It isengaged in the business of manufacturing fuel injection components for conventional CRDidiesel engines brake components high pressure diesel injector connectors for naval shipsand high precision instrumentation components. MEMCO enjoys long term relationships withmarquee global customers like Bosch Delphi Endress Hauser and Giro. For the financialyear ended 31st March 2020 the revenue from operations stood at 4071 Lakhs asagainst 4722 Lakhs for previous year. The profit after tax stood at 160 Lakhs as against347 Lakhs for previous year.
(c) MFT MOTOREN UND FAHRZEUGTECHNIK GMBH ("MFT") Step Down Subsidiary
Your Company through its Wholly Owned Subsidiary [PCL (International) Holdings B.V.Netherlands ("PCL Netherlands")] acquired 76% Shares in M/s MFT Motoren undFahrzeugtechnik GmbH Germany ("MFT") on 23rd March 2018 for 2500 Lakhs ( EUR3126018). Further the Board at its Board Meeting held on 5th March 2020 hasapproved the fund infusion in PCL Netherlands to acquire the balance 24% of MFT. Postacquisition MFT shall become the Wholly OwnedStep-Down Subsidiary of PCL (PrecisionCamshafts Limited).
MFT is engaged in the business of manufacturing Balancer Shafts (i.e. Fully Machinedhardened and balanced vertical and horizontal Balancer shafts) Camshafts Bearing CapsEngine Brackets and Prismatic Components (i.e. brake and chassis components machining ofall casting materials). MFT enjoys long term relationship with marquee global customerslike Volkswagen Audi Opel Westphalia Hatz Suzuki etc.
(d) EMOSS MOBILE SYSTEMS B.V. ("EMOSS") Step Down Subsidiary
Your Company through its Wholly Owned Subsidiary PCL (International) Holdings B.V.acquired 51% Shares of EMOSS Mobile Systems B.V. Netherlands ("EMOSS") on 18thMay 2018 for "EUR 7358000 (Circa Rs. 5878.37 Lakhs").
Further the Board at its Board Meeting held on 23rd June2020 has approvedthe fund infusion in PCL Netherlands to acquire the balance 49 % of EMOSS. Postacquisition MFT shall become the Wholly Owned Step-Down Subsidiary.
EMOSS is a one-of-a-kind business that designs develops produces and suppliescomplete electric powertrains for trucks busses military vehicles and heavy equipment.EMOSS business model includes conversion of diesel trucks into ready to use electrictrucks. The company also manufactures "ready to assemble modular kits" which areassembled onto the chassis. EMOSS provides an end to end solution to its customers whichincludes research and development engineering production testingcertificationdeliveryand post-sale service. EMOSS also provides real time power management and tracking via anintegrated cockpit setup. The trucks powered with Electric Drivelines can carry a maximumpayload of 50 tons with a mobility of up to 350 km which may be extended beyond 500 kmwith long range extenders developed by EMOSS. Acquisition has paved access to electricalmobility markets such as Europe North America Australia and New Zealand. EMOSS enjoyscustomer base of Heineken Meyer & Meyer TEDI etc. Soon your Company envisages tolaunch EV in India using Emoss Technology on Trial Basis.
The Company has formulated a policy for determining "material" subsidiariesand such policy is also hosted on the website of the Company and can be viewed atwww.pclindia.in.
Further a statement containing salient features of the financial statements ofsubsidiaries in the prescribed format AOC-1 is appended as Annexure-A to this Report. Thestatement also provides details of performance financial position of each of itssubsidiaries.
12. Disinvestment/ liquidation in joint ventures subsidiaries and step-downsubsidiaries
(a) Disinvestment from NINGBO SHENGLONG PCL CAMSHAFTS CO. LTD. "SLPCL"
Precision Camshafts Limited ("PCL India") as a part of its global expansionand assured business of CFMA China had entered into joint venture agreement dated 11thFebruary 2012 with Ningbo Shenglong Powertrain Co. Ltd. ("Shenglong") to set upmachining facility. During the same time ZMM Technology Ltd ("ZMM") wasintroduced into the JV and the capital contribution was restructured as Shenglong (75%)PCL India (22.5%) and ZMM (2.5%). The Company served customers like Geely and CFMA China.
SLPCL supplied Fox Sigma and GTDI type camshafts to CFMA China. These specific typesof camshafts have been phased out from the China market and gradually it has impacted ourbusiness. It had started giving negative impact on PCL India Consolidated Balance Sheetdue to losses incurred in the Joint venture. It was a strategic business decision to exitfrom the aforesaid Joint Venture Company and china market. The sale is completed for abovementioned entity and the proceeds are realised on 18th June 2020.
As on 31st March2020 Company has exited from aforesaid associate Company byselling entire stake in the Company.
(b) Disinvestment From PCL SHENGLONG (HUZHOU) SPECIALISED CASTING CO. LTD (PCLSL)
In 2013 PCL India entered into joint venture agreement with Ningbo ShenglongPowertrain Co. Ltd. ("Shenglong") and ZMM Technology Ltd ("ZMM") toset up foundry for manufacturing camshafts. The Company supplied camshaft castings toNingbo Shenglong PCL Camshafts Co. Ltd. PCLSL is solely dependent on orders of SLPCL andtherefore the cascading effect of slowdown of business of SLPCL has adversely impactedPCLSL. The operating expenses of the plant were on a higher side and adversely affectingthe cash flows. It had started giving negative impact on PCL India Consolidated BalanceSheet due to losses incurred in Joint Venture. It was a strategic business decision toexit from the aforesaid Joint Venture company and china market. The sale is completed forabove mentioned entity and the proceeds are realised on 18th June 2020.
As on 31st March 2020 Company has exited from aforesaid associate Companyby selling entire stake in the Company
(c) Liquidation PCL (SHANGHAI) CO. LTD
PCL (Shanghai) Co. Ltd. a wholly owned subsidiary was incorporated in February 2011with the purpose of expanding business to the growing OEM base in China. For the first fewyears PCL (Shanghai) was able to onboard new clients and Ford Motor Company was one ofits major customers. The company was supplying camshaft castings to Ford in China. Overthe last few years the particular camshafts got phased out in China which impacted theoperations of PCL (Shanghai) along with its profitability. Coupled with the phase out ofthese Camshafts the overall auto industry faced challenging times in China making itunsustainable for the company to continue with its operations. As a results the Board bymeans of the Circular Resolution No. 1/2019-20 dated April2019 had passed resolution toinitiate liquidation proceedings of PCL (Shanghai) Co. Ltd a wholly owned subsidiarywhich was completed on the 24th day of December 2019.
(d) Liquidation of PCL BRASIL AUTOMOTIVE LTDA
In 2018 PCL Brasil Automotive LTDA was incorporated as a wholly owned subsidiaryof PCL (International) Holding B.V. Netherlands. PCL Brasil Automotive LTDA is step downsubsidiary of PCL India.
PCL Brasil Automotive LTDA has not commenced any business since its incorporation dueto the Economic Conditions Labor Factor Complex Tax Structure due to which it is notviable to have business in Brasil. As on 31st March 2020 PCL BRASIL AUTOMOTIVELTDA stands liquidated.
13. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements are prepared in accordance with the CompaniesAct 2013 and applicable Indian Accounting Standards. The performance of the Company onconsolidated basis is discussed at length in the Management Discussion and Analysis.
14. CREDIT RATING
Credit ratings on standalone basis is:-
|Facilities ||Amount ( Crores) ||Previous Rating ||Rating action |
|Long-term Bank Facilities ||2.05 ||CARE A; STABLE ||Reaffirmed |
|Short-term Bank Facilities ||79.50 ||CARE A1 ||Reaffirmed |
|Long-term/ Short term Bank Facilities ||10.00 ||CARE A; Stable/ ||Reaffirmed |
| || ||CARE A1 || |
|Total Facilities || |
| || |
15. UTILISATION OF IPO PROCEEDS
The proceeds of the IPO have been used for setting up of machine shop for machining ofcamshafts and offer related expenses and general corporate purposes of Rs. 240 Cr. Thereis no deviation in use of proceeds from objects stated in the offer documents.
The summary of utilisation of IPO proceeds as on 31st March 2020 is statedin Note No. 41 of Notes to Accounts. Since Company has utilised IPO Proceed LastStatement of Deviation is submitted to Stock Exchange on 7th June 2019 thesame statement is also posted on the website of the Company.
16. STATEMENT ON FORMAL ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD ITSCOMMITTEES AND DIRECTORS
The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the CompaniesAct 2013 and Regulation 19 read with Schedule II Part D of the SEBI (LODR) Regulations2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of criteria such as the board composition and structureeffectiveness of Board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc.
A structured questionnaire was prepared after taking into consideration the variousaspects of the Board's functioning composition of the Board and its Committees cultureexecution and performance of specificduties obligations and governance disclosures toStakeholder at various aspects. The Board of Directors expressed their satisfaction withthe evaluation process.
17. PCL ESOS 2015 INFORMATION REGARDING ALLOTMENTS DURING THE YEAR
During the year under review in terms of PCL ESOS 2015 the Company has not allottedany Equity Shares on exercise of vested options. During the year under review no freshgrant was made by the Company.
The disclosures in compliance with Section 62 of the Companies Act 2013 read with Rule12 of Companies (Share Capital and Debentures) Rules 2014 and SEBI (Share Based EmployeeBenefits) Regulations 2014 are as follows:
|Total No. of Shares covered by ESOS Scheme approved by the Shareholders ||600000 (Six Lakhs) equity Shares || || |
|Grant ||I ||II ||Total |
|Options granted ||Nil ||Nil ||Nil |
|Options vested ||Nil ||Nil ||Nil |
|Options exercised ||Nil ||Nil ||Nil |
|The total number of shares arising as a result of exercise of option ||Nil ||Nil ||Nil |
|Options forfeited ||Nil ||Nil ||Nil |
|Options lapsed ||3350 ||43650 ||47000 |
|Extinguishment or modification of options ||Nil ||Nil ||Nil |
|The exercise price ||10/- ||10/- ||10/- |
|Pricing formula || ||As per the ESOS Scheme approved by the members of the Company. || |
|Variation of terms of options ||NA ||NA ||NA |
|Money realised by exercise of options ||Nil ||Nil ||Nil |
|Total number of options in force (PCL ESOS 2015) || ||21090 || |
|Employee wise details of options granted to: || || || |
|- Key Managerial Personnel & Senior Managerial Personnel ||NA ||NA ||NA |
|- Any other employee who receives a grant of options in any one year of option amounting to 5% or more of options granted during that year Identified employees who were granted option during NA NA any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. ||NA ||NA ||NA |
|Issued Capital (excluding outstanding warrants and conversions of the Company at the time of grant. (Only in case of Listed Companies) ||NA ||NA ||NA |
|Diluted EPS calculated in accordance with International Accounting Standard (IAS) 33 ||NA ||NA || |
18. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
a) The Company has given loans of 6050197 (Rs. 4961.16 Lakhs) to Loan to PCL(International) Holdings B.V. ( 100% Subsidiary)
b) The Company had given Corporate Guarantee of Rs. 14900 Lakhs to Bank of BarodaLondon in respect of Term Loan given by Bank of Baroda to its Wholly Owned SubsidiaryCompany PCL (International) Holdings B.V. Netherlands for strategic acquisitions in FY2017-18. During the year PCL (International) Holdings B.V. has requested Bank of BarodaLondon to cancel the limits sanctioned for Brazil Project and accordingly the sanctionedlimits were reduced by 4.71 Mn. PCL (International) Holding B.V. in FY 2019-20repaid part of the Term Loan. Because of the two reasons the amount of CorporateGuarantee reduced to Rs. 6197.09 Lakhs as at 31st March 2020 (Rs. 14900Lakhs in FY 2018-19). Please refer Note No. 33 of notes forming part of the financialstatements to the Standalone Financial Statements.
c) Company has increased its equity shareholding by Rs. 373.69 Lakhs in PCL(International) Holding B V ( 100% Subsidiary) during the year to the total equity of Rs.3471.34 Lakhs ( 4324800) through infusion of Funds Board resolution for same waspassed on 8th December 2017 & 5th March 2020.
d) The Company has given Corporate Guarantee of 20 Crores to Citi Bank NA for CreditFacilities availed by Memco Engineering Private Limited during the year.
e) Please refer Note No. 5 of notes forming part of the financial statements to theStandalone Financial Statements for investments under Section 186 of the Companies Act2013.
19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered by the Company during the Currentfinancial year 19-20 with related parties were on an arm's length basis and were in theordinary course of business. Such transactions form part of the notes to the financialstatements provided in this Annual Report. (Please refer Note No. 34 to the StandaloneFinancial Statements.) The details of material transactions entered with related partiesduring the year 2019-20 in Form AOC-2 are enclosed herewith as Annexure B
20. STATEMENT ON RISK MANAGEMENT POLICY
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to the Company. The Company's future growth is linked with general economicconditions prevailing in the market. Management has taken appropriate measures foridentificationof risk elements related to the Industry in which the Company is engagedand is always trying to reduce the impact of such risks. The Company has also formulatedRisk Management Policy and Risk Management Systems are evaluated by the Audit Committee.The Company has adopted a Risk Management Policy in accordance with the provisions of theAct and Regulation 21 of the SEBI (LODR) Regulation 2015. Risk Management Policy is hostedon website of the Company (www.pclindia.in). COVID-19 is an unforeseen risk faced by allthe industries of the Country Company has been impacted due to Covid-19 Management hastaken necessary steps for resuming operations of the Company with safety of its employeesand abiding by Government Directives.
21. EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Act and Rule 12(1) of the Companies (Management andAdministration) Rules 2014 the Extract of Annual Return in the prescribed form i.e. FormMGT-9 is annexed herewith as Annexure C which forms part of this Report and alsohosted on website of the Company (www.pclindia.in)
22. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to Conservation of Energy Technology Absorption ForeignExchange Earnings and Outgo as required under Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure Dand is attached to this report.
23. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company's guiding principle for CSR is to build its relationship with stakeholdersand the community at large and to contribute to their long term social good and welfare.Your company as a matter of duty has been carrying out the CSR activities since longeven when there were no statutory requirements in this regard.
In compliance of Section 135 of the Companies Act 2013 your Company has constituted aCorporate Social Responsibility (CSR) Committee comprising of:
|Mr. Yatin S. Shah ||Chairman |
|Dr. Suhasini Y. Shah ||Member |
|Mr. Vedant V. Pujari ||Member |
|Mr. Vaibhav Mahajani ||Member |
Detailed Annual Report on CSR Activities during the year is given as Annexure Eand CSR Policy is also disclosed on the website of the Company (www.pclindia.in).
Company has paid 50 Lakhs towards Prime Minister Cares Fund for COVID-19 in April2020.
24. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy (Vigil Mechanism) to provide a formalmechanism to the Directors and employees to report their concerns about unethicalbehavior actual or suspected fraud irregularities or violation of the Company's Code ofConduct The Policy provides for adequate safeguards against victimisation of employees whoavail of the mechanism and also provides for direct access to the Chairman of the AuditCommittee.
The detailed policy on Vigil mechanism is also disclosed on the website of the Company(www.pclindia.in). The Vigil Mechanism is overseen by the Audit Committee and provides amechanism for Directors and Employees of the Company to report to the Chairman of theAudit Committee or Chairman of the Company. During the year there have been no complaintsalleging child labour forced labour involuntary labour and discriminatory employment.
25. PARTICULARS OF EMPLOYEES
Disclosures with respect to the Remuneration of Directors KMPs and employees asrequired under Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given in AnnexureF to this Report.
There were no employee(s) in receipt of remuneration of 1.02 Crores or more per annumor in receipt of remuneration of 8.50 Lakhs per month under Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 except employeesmentioned in Annexure F of the Annual Report. Industrial relations continued to be cordialduring the year.
26. Internal complaints committee (Anti- sexual harassment policy)
The Company has in place a policy for prevention of sexual harassment at workplace.This inter alia provides a mechanism for the resolution settlement or prosecution of actsor instances of Sexual Harassment at work and ensures that all employees are treated withrespect and dignity. The Company has also complied with the provisions relating to theconstitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
The composition of the Internal Complaints Committee is as follows
Internal Complaints Committee at MIDC Chincholi Solapur
|Internal Complaints Committee ||Name of Members ||Designation |
|1 Presiding Officer ||Dr. Suhasini Shah ||Non- Executive Director |
|2 Member ||Mrs. Aarohi Deosthali ||Finance Manager |
|3 Member ||Mrs. Maithili Deshmukh ||Manager R & D |
|4 Member ||Mr. Rajkumar Kashid ||HR- General Manager |
|5 Member ||Mr. Sanjeev Malvadkar ||HR- Senior Manager |
|6 External Member ||Dr. Sanjeevani Kelkar ||- |
internal Complaints Committee at Pune Corporate Office
|Internal Complaints Committee ||Name of Members ||Designation |
|1 Presiding Officer ||Dr. Suhasini Shah ||Non- Executive Director |
|2 Member ||Mrs. Aarohi Deosthali ||Finance Manager |
|3 Member ||Mrs. Mayuri Kulkarni ||Company Secretary & Compliance Officer |
|4 Member ||Mr. Rajkumar Kashid ||HR- General Manager |
|5 Member ||Mr. Sanjeev Malvadkar ||HR- Senior Manager |
|6 External Member ||Dr. Sanjeevani Kelkar ||- |
During the year under review no complaint was reported to the Committee in connectionwith the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013.
PoSH Policy is available on website of the Company (www.pclindia.in).
The Company has not accepted any deposits during the year under review.
28. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the yeartherewerenosignificantand material orders passed by regulators orcourts or tribunals impacting the going concern status and Company's operations in future.
29. COMMISSION OR REMUNERATION FROM SUBSIDIARY
Mr. Karan Y. Shah Whole time Director of the Company has received Remunerationfrom Wholly Owned Subsidiary MEMCO Engineering Private Limited Rs. 3000000/- p.a.
(a) STATUTORY AUDITORS
The Board of Directors of the Company at its Board Meeting held on 13thAugust 2019 recommended to appoint M/s MSKA & Associates Chartered Accountants (FirmReg. No: 105047W) as Statutory Auditors of the Company after taking note of consent letterof the M/s MSKA & Associates to act as Statutory Auditors. Considering the Compliancerequirements and expansion of Business in Europe Board was of the view that it would beconvenient to appoint Auditors with Global Presence. It is recommend to appoint M/s MSKA& Associates Chartered Accountants (Firm Reg No: 105047W) one of the Renowned AuditFirms as Statutory Auditors.
The recommendation for the appointment of Statutory Auditor was approved in the AnnualGeneral Meeting held for the Financial Year 2018-19 held on 25th September2019 for holding office till the FY 2023-24.
(b) SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed M/s J. B. Bhave & Co. Company Secretaries Pune to undertake SecretarialAudit of the Company for Financial Year 2019-2020. The Report of the Secretarial Audit forFinancial Year 2019-2020 in MR-3 is annexed herewith as an Annexure i to the AnnualReport.
(c) COST AUDITORS
The Board of Directors on the recommendation of Audit Committee had appointed M/s. S.V. Vhatte and Associates Cost Accountants Solapur [Firm Registration No.: 100280] asCost Auditors to audit the cost accounts of the Company for the Financial Year 2019-20. Asrequired under the Companies Act 2013 a resolution seeking Members' approval for theremuneration payable to the Cost Auditors forms part of the notice convening the 28thAnnual General Meeting. The Cost Audit report for the Financial Year 2019-20 will be filedwith the Ministry of Corporate Affairs on or before the due date. The Company pursuant tothe provisions of Section 148 of the Companies Act 2013 and applicable rules madethereunder makes and maintains cost records.
(d) INTERNAL AUDITORS
The Company had appointed M/s M. P. Chitale & Co. Chartered Accountants asInternal Auditor of the Company for FY 19-20 in the Board meeting held on the 7thFebruary 2019. The scope and authority of the Internal Auditor is as per the terms ofreference approved by Audit Committee. The Internal Auditors monitors and evaluates theefficiency and adequacy of internal control system in the Company its compliance withoperating systems accounting procedures and policies of theCompany.Significantauditobservations and recommendations along with corrective actions thereon are presented tothe Audit Committee of the Board.
31. REPORT ON MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report as required under SEBI (LODR)Regulations 2018 forms part of this Annual Report.
32. CORPORATE GOVERNANCE REPORT
Report on Corporate Governance is about maximising shareholder value legally ethicallyand sustainably. Corporate Governance Report is set out in this Annual Report as AnnexureG
A certificate from M/s J. B. Bhave & Co. Practicing Company Secretaries Puneregarding compliance with conditions of corporate governance as required under SEBI (LODR)Regulations 2018 also forms part of this Annual Report as Annexure H. Acertificate from M/s J. B. Bhave & Co. Practicing Company Secretaries Pune regardingcompliance with Sub Regulation 10(i) of Regulation 34(3) of Schedule V of SEBI (LODR)Regulations 2018 also forms part of this Annual Report as Annexure J
33. ANNUAL SECRETARIAL COMPLIANCE REPORT
Pursuant to SEBI Circular CIR/CFD1/27/2019 dated 8th February 2019 alllisted entities shall additionally on annual basis submit a report to the stockexchange(s) on compliance of all applicable SEBI Regulations and circulars/ guidelinesissued thereunder within 60 days of end of financial year. Such report shall be submittedby Company Secretary in practice to the Company in the prescribed format.
The Company has received such report from M/s J.B. Bhave & Co. Practicing CompanySecretaries Pune for the financial year ended 31st March 2020 and it has beensubmitted to the stock exchange(s) within the stipulated time as per SEBI Relaxation.
34. DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard of Directors hereby submits its Responsibility Statement:
1. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
2. the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;
3. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
4. the Directors had prepared the annual accounts on a going concern basis;
5. the Directors had laid down internal financial controls to be followed by theCompany and such internal controls are adequate and were operating effectively; and
6. the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
35. MATERIAL CHANGES AFTER CLOSE OF FINANCIAL YEAR OUTBREAK OF COVID-19
In the last month of FY 2019-20 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lock-downs of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and on minimising disruption to services for all our customers globally.
The Company consistently taking all proactive steps precautionary and pre-emptivemeasures at their corporate offices at Pune District and manufacturing plants at SolapurDistrict to ensure safety of all employees since February 2020 due to COVID - 19 outbreakin Maharashtra. The Company has also been closely monitoring all advisories from theCentral and State Government followed by respective District Collectors.
Hon'ble Prime Minister had ordered National Lock Down since 25th March2020. All the offices and manufacturing plants of the Company had suspended theiroperations to contain the spread of COVID - 19 based on Government directives. Allemployees were requested to continue working from home wherever possible. This was beingdone to ensure safety and well-being of all our employees. The Company has kept itsoperations closed as during the lockdown period and the closure period was dependent onthe Government policy.
In accordance with the permission/guidelines issued by the Central/State Government andLocal Authorities the manufacturing operations of plants situated at Solapur resumed witheffect from 17th May 2020 in phased manner.
Initially Business team with limited number of members had returned to work in order tomanage production cycle of the Company with less number of workers at foundry andworkshops. The same has been in line with latest guidelines issued by the Government ofIndia.
Also Human Resource department with limited number of members has returned to work inorder to manage all essential activities including but not limited to sanitization ofCompany's office and plants and to manage and administer all other arrangements suitablefor employees and workers during this period.
The Finance Department of the Company also with limited strength has resumed office atSolapur facility for carrying out accounting and statutory audit work. However majorityteam members of finance team and corporate secretarial team members continue working fromhome.
Further the Company has taken all the necessary steps as recommended/stated in theguidelines/advisories issued by the Central/State Government and Local Authorities forprevention and containment of COVID-19 Due to COVID-19 Business and Financials of theCompany had also been impacted Management is trying its best to cope up with Business andFinancial Losses and get back into operations as soon as possible and various steps arebeing taken by the Management Team.
36. STATEMENT CONTAINING THE SALIENT FEATURES OF THE FINANCIAL STATEMENTS OFSUBSIDARIES / ASSOCIATE COMPANIES / JOINT VENTURES
The details of Subsidiary Joint Ventures and Associate Companies is given in Form AOC- 1 as Annexure A
There has not been any material change in the nature of the business of the Subsidiaryand Joint Ventures. As required under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and Companies Act 2013 the consolidated yourCompany and Subsidiary and Joint Ventures are provided in this annual report.financials
37. CODE OF CONDUCT FOR BOARD AND SENIOR MANAGEMENT
The Company has adopted the Code of Conduct for the Directors and Senior Management andthe same is available on the
Company's website www.pclindia.in. All Directors and Senior Management personnel haveaffirmed their compliance with the said Code. A declaration pursuant to the Regulation 26(3) read with part D of the Schedule V of the SEBI LODR 2015 signed by Managing Directorto this effect is annexed as a part of Directors' Report as Annexure M
38. COMMITTEES OF BOARD
Details of all the Committees along with their charters compositions and meetings heldduring the year are provided in the report on Corporate Governance which forms part ofthis Annual Report and shall also be available on the website of the Company(www.pclindia.in).
39. COMPANY'S POLICY ON DIRECTORS' KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENTPERSONNEL APPOINTMENT AND REMUNERATION
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial PersonnelSenior Management and their remuneration. The Company pays remuneration by way of salaryperquisites allowances commission and retirement benefits to its executiveDirectors. The remuneration to the Executive Director(s) is in accordance with theprovisions of the Companies Act 2013 and Rules made thereunder and is within the ceilinglimits as provided thereunder and approved by the shareholders.
The Company's policy of remuneration of the senior management is structured to attractand retain the talent and is in turn dependent on following key parameters:
1. Complexities and criticality of the jobs
2. Profile of the employee in terms of his / her qualification and experience
3. General trends in the industry and market for a similar talent
4. Incorporation of an element of motivation by way of remuneration linked to specificperformances wherever applicable.
As a policy of the Company the non-executive Directors are paid commission profitbased on the percentage performance evaluation for that financial year under review.
40. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to thefinancial statements. The Audit Committee periodically reviews the internal controlsystems with the Management Internal Auditors and Statutory Auditors test the adequacy ofinternal audit functions. During the year under review these controls were tested and theobservations of the Auditors were addressed by the Company after taking necessary steps tostrengthen the financial controls and improve the systems. Statutory Auditors have alsocertified adequacy of internal financial controls systems over financial reporting basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control as stated in the Guidance Noteon Audit of Internal Financial Controls over financial reporting issued by the Instituteof Chartered Accountants of India.
41. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE STATUTORY AUDITORS SECRETARIAL AUDITORS AND COST AUDITORS INTHEIR REPORTS
There were no qualifications reservations or adverse remarks made by the StatutoryAuditors in the Audit Report on the Standalone and Consolidated Financial Statements forthe year ended 31st March 2020.
The Reports of Secretarial Auditors and Cost Auditors for the year ended 31stMarch 2020 are also unmodified.
42. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THECOMPANIES ACT 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
During the year under review no instances of frauds were reported by the StatutoryAuditors of the Company.
43. BUSINESS RESPONSIBILITY REPORT
A detailed Business Responsibility Report in terms of the provisions of Regulation 34of the Listing Regulations is available as a separate section in the Annual Report.
44. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS
The Company is in compliance of applicable secretarial standards issued by theInstitute of Company Secretaries of India
45. INVESTOR EDUCATION AND PROTECTION FUND
In accordance with the provisions of Sections 124 and 125 of the Act and InvestorEducation and Protection Fund (Accounting Audit Transfer and Refund) Rules 2016("IEPF Rules") dividends of a company which remain unpaid or unclaimed for aperiod of seven years from the date of transfer to the Unpaid Dividend Account shall betransferred by the Company to the Investor Education and Protection Fund("IEPF"). In terms of the foregoing provisions of the Act no dividend amount orshares were required to be transferred to the IEPF by the Company during the year ended 31stMarch 2020.
46. CAUTIONARY STATEMENTS
Statements in this report particularly those which relate to Management Discussion andAnalysis describing the Company's objectives estimates and expectations may constituteforward looking statements' within the meaning of applicable laws and regulations.Actual results may differ materially from those either expressed or implied.
The Directors would like to place on record their deep appreciation to employees/workers at all levels for their hard work dedication and commitment. The Board places onrecord its appreciation for the support and co-operation your Company has been receivingfrom its Shareholders Customers Business Associates Bankers Suppliers and all otherstakeholders for their continued support and their confidence in its management.
The Directors also thank the Government of India Governments of various states inIndia for their co-operation.
The Directors regret the loss of life due to COVID-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to fight thispandemic.
Statement containing the salient features of the Financial Statements of Subsidiaries /Associate Companies / Joint Ventures
Pursuant to Section 129(3) of the Companies Act 2013 read with Rules of the Companies(Accounts) Rules 2014