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Precision Camshafts Ltd.

BSE: 539636 Sector: Auto
NSE: PRECAM ISIN Code: INE484I01029
BSE 00:00 | 24 Jun 94.05 4.35
(4.85%)
OPEN

91.90

HIGH

95.50

LOW

90.75

NSE 00:00 | 24 Jun 94.35
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OPEN

91.00

HIGH

95.90

LOW

90.70

OPEN 91.90
PREVIOUS CLOSE 89.70
VOLUME 8458
52-Week high 189.50
52-Week low 69.25
P/E 15.86
Mkt Cap.(Rs cr) 893
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 91.90
CLOSE 89.70
VOLUME 8458
52-Week high 189.50
52-Week low 69.25
P/E 15.86
Mkt Cap.(Rs cr) 893
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Precision Camshafts Ltd. (PRECAM) - Director Report

Company director report

To

The Members

PRECISION CAMSHAFTS LIMITED (COMPANY)

The Board of Directors (Board) are pleased to present their TWENTYNINTH ANNUAL REPORT on the business and operations of the Company together with theAudited Standalone and Consolidated Financial Statements for the year ended 31stMarch 2021.

1. FINANCIAL RESULTS

The Company's financial performance for the Financial Year under reviewalong with previous year's figures is given hereunder:

Particulars Standalone Consolidated
For the Year ended 31st March 2021 For the Year ended 31st March 2020 For the Year ended 31st March 2021 For the Year ended 31st March 2020
Total Revenue (I) 40360.24 45836.87 73204.42 76365.48
Total Expenses (II) 30631.81 34324.12 64753.44 63415.25
Earnings before interest tax depreciation and amortisation (EBITDA) 9728.43 11512.75 8450.98 12950.93
Profit before Tax & Exceptional Items 6578.42 6697.48 38.10 3801.96
Exceptional Items 1509.78 1867.66 1509.78 (215.63)
Profit before tax 8088.20 8565.14 1547.88 3586.33
Total Tax Expenses 1918.74 1359.82 1625.73 984.47
Profit for the year 6169.46 7205.32 (77.85) 2563.33
EPS (Basic) 6.50 7.59 0.24 3.68
EPS (Diluted) 6.50 7.58 0.24 3.68

The above mentioned figures are extracted from Financial Statementsprepared in accordance with the Indian accounting standards (IND AS).

The Consolidated Financial Statements are prepared in accordance withthe Companies Act 2013 and applicable Indian Accounting Standards. The performance of theCompany on consolidated basis is discussed at length in the Management Discussion andAnalysis.

2. COMPANY'S FINANCIAL PERFORMANCE AND OUTLOOK

During the Financial Year under review on standalone basis yourCompany registered a total revenue of RS.40360.24 Lakhs as against Rs. 45836.87 Lakhs inthe previous year. The profit after tax for the year stood at Rs. 6169.46 Lakhs asagainst RS.7205.32 Lakhs in the previous year. Your Company reported decrease in top-lineby 11.95% as compared to previous year.

On consolidated basis the total revenue was Rs. 73204.42 Lakhs asagainst Rs. 76365.48 Lakhs in the previous year. The Loss after tax for the year stood atRs. 77.85 Lakhs as against profit of Rs. 2563.33 Lakhs in the previous year. Your Companyreported decrease in top-line by 4.14% over the previous year.

Outlook of the business has been discussed in detail in the ManagementDiscussion and Analysis which forms part of this Annual Report.

3. CHANGE IN NATURE OF BUSINESS IF ANY

During the Financial Year under review there has been no change in thenature of business of the Company.

4. TRANSFER TO RESERVES

The closing balance of retained earnings as on 31st March2021 after all appropriation and adjustments was Rs. 39500.03 Lakhs.

5. DIVIDEND

Your Directors are pleased to recommend final dividend of Rs.1/- perequity share (10%) for the Financial Year ended 31st March 2021. If thedividend so recommended is declared by the members at the ensuing 29th AnnualGeneral Meeting the total cash outflow towards dividend would be Rs. 949.85/- Lakhs andFY 2020-21 Section 10(34) has been Withdrawn-Exempting dividend Income from taxation.Taxation of Dividend is charged in hands of shareholders-

In accordance with Regulation 43A of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (SEBI LODR) the Company has formulated aDividend Distribution Policy. The Dividend Distribution Policy of the Company is alsohosted on the website of the Company and can be viewed athttp://pdindia.in/wp-content/uploads/2020/02/Dividend-Policv.pdf

6. SHARE CAPITAL

During the year under review your Company has not allotted any EquityShares under the exercise of stock options under Precision Camshafts Limited EmployeeStock Option Scheme 2015 ("PCL ESOS 2015"). Therefore there was no change inthe capital structure of the Company. Consequently the issued subscribed and paid-upequity share capital of the Company is Rs. 9498.58 Lakhs divided into 94985835 EquityShares of Rs. 10/- each.

7. UTILIZATION OF IPO PROCEEDS

The proceeds of the IPO have been used for setting up of machine shopfor machining of camshafts and offer related expenses and general corporate purposes ofRs. 240 Crores. There is no deviation in use of proceeds from objects stated in the offerdocuments. The summary of utilisation of IPO proceeds as on 31st March 2021 isstated in Note No. 41 of Notes to Accounts.

The Company has utilised IPO Proceeds and last Statement of Deviationis submitted to Stock Exchange on 7th June 2019 and is also available on thewebsite of the Company.

8. CREDIT RATING

Credit ratings on standalone basis is: -

Facilities Amount (Rs in Crores) Previous Rating Rating action
Long-term Bank Facilities 2.05 CARE A; STABLE Reaffirmed
Long / Short Term Bank Facilities 10.00 CARE A; STABLE Reaffirmed
Short-term Bank Facilities 57.50 CAREA1 Reaffirmed
Total Facilities 69.55

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Changes in the Composition of Board of Directors of the Company:

Duringthe Financial year under review there was no change incomposition of Board of Directors of the Company. Appointment of Mrs. Savani A. Laddha asIndependent Woman Director was approved by the members in the 28th AnnualGeneral Meeting held on 30th July 2020.

Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnels (KMPs) of your Company as on 31st March 2021 are asmentioned below:-

Sr. Name Designation
1. Mr. YatinS. Shah Chairman and Managing Director
2. Mr. Ravindra R. Joshi Whole-time Director and Chief Financial Officer
3. Mr. Karan Y. Shah Whole-time Director - Business Development
4. Mrs. Mayuri I. Kulkarni Company Secretary & Compliance Officer

As on 31st March 2021 Non- Executive Directors on the Boardare as mentioned below: -

Sr. Name Designation
1. Dr. Suhasini Y. Shah Non- Executive Non Independent Director
2. Mr. Sarvesh N. Joshi Independent Director
3. Mr. Pramod H. Mehendale Independent Director
4. Mr. Vedant V. Pujari Independent Director
5. Mr. Vaibhav S. Mahajani Independent Director
6. Mrs. Savani A. Laddha Independent Woman Director

10. DECLARATION FROM INDEPENDENT DIRECTORS

The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criterion of Independence asprescribed under Section 149 (6) of the Companies Act 2013 and Regulation 16 (1) (b) ofSEBI LODR.

In terms of Regulation 25(8) of the SEBI LODR the IndependentDirectors have confirmed that they are not aware of any circumstance or situation whichexists or may be reasonably anticipated that could impair or impact their ability todischarge their duties with an objective independent judgement and without any externalinfluence.

The Independent Directors have complied with the Code for IndependentDirectors prescribed in Schedule IV to the Act as well as the Code of Conduct forDirectors and Senior Management Personnel.

During the year Independent Directors of the Company had no pecuniaryrelationship or transactions with the Company other than commission and reimbursement ofexpenses incurred by them for the purpose of attending meetings of the Board of Directorand its Committee. The details of remunerations and/or other benefits of the IndependentDirectors are mentioned in the Corporate Governance Report.

11. BOARD MEETINGS

The Board meets at regular intervals to discuss and decide on Company /business policy and strategy apart from other Board business. The notice of Board meetingis given well in advance to all the Directors. The Agenda of the Board / Committeemeetings is set by the Company Secretary in consultation with the Chairman and ManagingDirector and Chief Financial Officer of the Company. The Agenda for the Board andCommittee meetings covers items set out as per regulations in SEBI LODR 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 Financial Year under review 5 (Five) Board Meetings wereconvened and held on 23rd June 2020 18th AugusRs.202010tdNovember 202013td January 2021 and 10m February 2021 respectively.

The maximum interval between any two meetings was well within themaximum allowed gap oRs.120 days.

12. MEETING OF INDEPENDENT DIRECTORS

In compliance with the provisions of Schedule IV of the Companies Act2013 and Regulation 25(3) of SEBI LODR a meeting of Independent Directors was held on 13thMarch 2021 to review the performance as per Regulation 25(4) of SEBI LODR and Schedule IVof the Companies Act 2013.

The Independent Directors expressed their satisfaction on the qualityquantity and timeliness of flow of information between the Company Management and theBoard. All other Independent Directors were present at the meeting.

13. COMMITTEES OF BOARD

Details of all the Committees along with their charters compositionsand meetings held during the year are provided in the report on Corporate Governance whichforms part of this Annual Report and is also available on the website of the Companyhttps://pclindia.in/index.php/corporate-governance/.

14. COMPANY'S POLICY ON DIRECTORS KMPS AND EMPLOYEES APPOINTMENTAND REMUNERATION

The Company has in placed a Policy on Directors' appointment andremuneration of the Directors Key Managerial Personnel (KMP) and other employeesincluding criteria for determining qualifications positive attributes independence of aDirector and other matters.

It is available on the website of the Company athttps://pclinclia.in/wp-content/uploads/2021/04/Policv-on-appointment-and-remuneration-of-Directors-KMPs-and-other-employees.pdf

The Company pays remuneration by way of salary perquisitesallowances commission and retirement benefits to its Executive Directors. Theremuneration to the Executive Director(s) is in accordance with the provisions of theCompanies Act 2013 and Rules made thereunder and is within the ceiling limits as providedthereunder and approved by the shareholders.

The Company's policy of remuneration of the senior management isstructured to attract and retain the talent and is in turn dependent on following keyparameters:

1. Complexities and criticality of the jobs

2. Profile of the employee in terms of his / her qualification andexperience

3. General trends in the industry and market for a similar talent

4. Incorporation of an element of motivation by way of remunerationlinked to specific performances wherever applicable.

As a policy of the Company the Non-Executive Directors are paidcommission as a percentage of profit based on the performance evaluation for thatfinancial year under review.

15. PARTICULARS OF EMPLOYEE REMUNERATION

Disclosures with respect to the remuneration of Directors KMPs andemployees as required under Section 197(12) of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 aregiven in Annexure E to this Report.

There were no employee(s) in receipt of remuneration of Rs. 1.02 Croresor more per annum or in receipt of remuneration of Rs. 8.50 Lakhs per month under Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014except employees mentioned in Annexure E of the Annual Report. Industrial relationscontinued to be cordial during the year.

16. COMMISSION OR REMUNERATION FROM SUBSIDIARY

During the Financial Year under review Mr. Karan Y. Shah Whole-timeDirector of the Company has received remuneration of Rs. 2250000/- from MEMCOEngineering Private Limited - Wholly Owned Subsidiary (WOS) of the Company.

17. STATEMENT ON FORMAL ANNUAL EVALUATION OF THE PERFORMANCE OF THEBOARD ITS COMMITTEES AND DIRECTORS

The Board of Directors has carried out an annual evaluation of its ownperformance board committees and individual directors pursuant to the provisions of theCompanies Act 2013 and Regulation 19 read with Schedule II Part D of the SEBI (LODR)Regulations 2015.

The annual evaluation process of the Board of Directors individualDirectors and Committees was conducted in accordance with the provision of the Act and theSEBI LODR.

The performance of the Board was evaluated by the Board after seekinginputs from all the Directors on the basis of criteria such as the board composition andstructure effectiveness of board processes information and functioning etc.

The performance of the Committees was evaluated by the Board afterseeking inputs from the committee members on the basis of criteria such as the compositionof committees effectiveness of committee meetings etc.

The Board and the NRC reviewed the performance of individual Directorson the basis of criteria such as the contribution of the individual Director to the Boardand committee meetings like preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings etc.

In a separate meeting of independent directors performance of Non-Independent Directors and the Board as a whole was evaluated. Additionally they alsoevaluated the Chairman of the Board. The Board also assessed the quality quantity andtimeliness of flow of information between the Company management and the Board that isnecessary for the Board to effectively and reasonably perform their duties.

The Board of Directors expressed their satisfaction with the evaluationprocess.

18. ANNUAL RETURN

Pursuant to Section 92(3) of Companies AcRs.2013 the copy of AnnualReturn for the Financial Year ended 31st March 2021 is placed on theCompany's website athttps://pclindia.in/wp-content/uploads/2021/07/PCL-Annual-Return-FY-20-21-l.pclf.

19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

a) During the Financial Year under review the Company has given loanof Rs 7.2 million (approximately RS.6329.33 Lakhs) to Loan to PCL (International)Holding B. V. Netherlands (100% Subsidiary)

b) The outstanding Corporate Guarantee of the Company to Bank ofBaroda London in respect of Term Loan given by Bank of Baroda to PCL (International)Holding B.V. Netherlands as on 31st March 2021 is Rs.5583.30 Lakhs (€6.55 million).

c) During the year there is no infusion of equity share capital.

d) The Company has given Corporate Guarantee of Rs. 1018.54 Lakhs toCiti Bank NA for Credit Facilities availed by Memco Engineering Private Limited lastyear.

e) Please refer Note No. 5 notes forming part of the financialstatements to the Standalone Financial Statements) for investments under Section 186 ofthe Companies Act 2013.

20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Companyduring Financial year ended 31st March 2021 with related parties were on anarm's length basis and were in the ordinary course of business. There were nomaterial related party transactions (RPTs) undertaken by the Company during the FinancialYear that require Shareholders' approval under Regulation 23(4) of SEBI LODR orSection 188 of the Act.

The approval of the Audit Committee was sought for all RPTs. Certaintransactions which were repetitive in nature were approved through omnibus route. All thetransactions were in compliance with the applicable provisions of the Companies AcRs.2013and SEBI LODR. The details of RPTs form part of the notes to the financial statementsprovided in this Annual Report. (Please refer Note No. 34 to the Standalone FinancialStatements.) Given that the Company does not have any RPTs to report pursuant to Section134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 fordetails refer in Annexure B Form AOC-2.

21. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSEREMARKS OR DISCLAIMERS MADE BY THE STATUTORY AUDITORS SECRETARIAL AUDITORS

There were no qualifications reservations or adverse remarks made bythe Statutory Auditors in the Audit Report on the Standalone and Consolidated FinancialStatements for the Financial year ended 31st March 2021.

The Report of Secretarial Auditors for the Financial Year ended 31stMarch 2021 is also unmodified.

22. MATERIAL CHANGES AFTER CLOSE OF FINANCIAL YEAR

OUTBREAK OF COVID-19 continues

In the month of March of FY 2020-21 the second wave of COVID-19rapidly spread in India Maharshtra was majorly affected state due to second wave. For theCompany the focus continues to ensure the health and well-being of all employees and onminimizing disruption to services for all our customers globally.

The Company consistently continues proactive steps precautionary andpre-emptive measures at their corporate offices at Pune District and manufacturing plantsat Solapur District to ensure safety of all employees since February 2020 due to COVID -19outbreak in Maharashtra.

The Company has also been closely monitoring all advisories from theCentral and State Government followed by respective District Collectors.

Business team with limited number of members works at plant with inorder to manage 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 and State Government.

Also Human Resource department with limited number of members hasreturned to work in order to manage all essential activities including but not limited tosanitisation of Company's office and plants and to manage and administer all otherarrangements suitable for employees and workers during this period.

The Finance Department of the Company also with limited strength hasresumed office at Solapur facility for carrying out accounting and statutory audit work.However majority team members of finance team and corporate secretarial team memberscontinue working from home.

Further the Company has taken all the necessary steps as recommended /stated in the guidelines/advisories issued by the Central/State Government and LocalAuthorities for prevention and containment of COVID-19

Due to COVID-19 Business and Financials of the Company will also beenimpacted management is trying its best to cope up with Business and Financial Loss andget back into operations as soon as possible various step are being taken by theManagement team.

23. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

The information pertaining to conservation of Energy Technologyabsorption Foreign exchange earnings and outgo as required under Section 134(3)(m) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 isfurnished in Annexure - C and is attached to this report.

24. SUBSIDIARIES AND ACQUISITIONS

The Company has 2 (Two) subsidiaries 2 (Two) step down subsidiaries ason 31st March 2021.

A) PCL {International) Holding B.V. ("PCL NL") - Wholly OwnedSubsidiary (WOS)

PCL NL is a WOS of the Company in Netherlands. The existing customerbase of the Company is predominantly located in Europe and hence to facilitatecoordination between Company and customers the WOS was formed. The Company through thisWOS holds 100% stake in EMOSS Mobile Systems B.V. (Netherlands) and MFT Motoren undFahrzeugtechnik GmbH (Germany). Other objective of having PCL (International) Holding B.V.is to monitor the performance and reporting of subsidiaries centrally.

During the Financial Year under review on Consolidated basis PCL NLregistered a total revenue of Rs.29170.27 Lakhs as against Rs.26481.80 Lakhs in theprevious year. The net loss for the year stood at Rs.6212.37 Lakhs as against net loss ofRs. 4670.43 Lakhs in the previous year.

B) Memco Engineering Private Limited ("MEMCO") - WOS

MEMCO is a WOS of the Company based in Nashik Maharashtra India. Itis engaged in the business of manufacturingfuel injection components for conventional CRDidiesel engines brake components high pressure diesel injector connectors for naval shipsand high precision instrumentation components. MEMCO enjoys longterm relationships withmarquee global customers like Bosch Delphi Endress Hauser and Giro.

During the Financial Year under review on MEMCO registered a totalrevenue of RS.3677.70 Lakhs as against Rs. 4083.35 Lakhs in the previous year. Theprofit after tax for the year stood at Rs.114.41 Lakhs as against Rs. 159.95 Lakhs in theprevious year.

C) MFT Motoren und Fahrzeugtechnik Gmbh ("MFT") - Step DownSubsidiary

Your Company through its Wholly Owned Subsidiary (WOS) PCL(International) Holdings B.V. Netherlands ("PCL Netherlands")] acquired 76%Shares in M/s MFT Motoren und Fahrzeugtechnik GmbH Germany ("MFT") on 23rdMarch 2018 for Rs 2500 Lakhs (EUR 3126018).

During the Financial Year under review your Company through its WOSPCL NL has acquired balance 24 % shareholding in MFT for 6 0.55 million CRs.4.76 Crores)on 23rd July 2020 date making iRs.100% Step Down Subsidiary of the Company.

MFT is engaged in the business of manufacturing Balancer Shafts (i.e.fully machined hardened and balanced vertical and horizontal Balancer shafts) CamshaftsBearing Caps Engine Brackets and Prismatic Components (i.e. brake and chassis componentsmachining of all casting materials). MFT enjoys long term relationship with marquee globalcustomers like Volkswagen Audi Opel Westphalia Hatz Suzuki etc.

D) Emoss Mobile Systems B.V. ("EMOSS") - Step Down Subsidiary

Your Company through its Wholly Owned Subsidiary (WOS) PCL(International) Holdings B.V. acquired 51% Shares of EMOSS Mobile Systems B.V.Netherlands ("EMOSS") on 18th May 2018 for "EUR 7358000 (CircaRS.5878.37 Lakhs).

During the Financial Year under review your Company through its WOSPCL NL has acquired balance 49% shareholding in EMOSS aRs.6 0.6 million CRs.5.19 Crores)on 24th July 2020 date making iRs.100 % Step Down Subsidiary of the Company.

EMOSS is a one-of-a-kind business that designs develops produces andsupplies complete electric powertrains for trucks busses military vehicles and heavyequipment. EMOSS business model includes conversion of diesel trucks into ready to useelectric trucks. The Company also manufactures "ready to assemble modular kits"which are assembled onto the chassis. EMOSS provides an end to end solution to itscustomers which includes research and development engineering production testingcertification delivery and post-sales service. EMOSS also provides real time powermanagement and tracking via an integrated cockpit setup. The trucks powered with ElectricDrivelines can carry a maximum payload oRs.50 tons with a mobility of up to 350 km whichmay be extended beyond 500 km with long range extenders developed by EMOSS. Acquisitionhas paved access to electrical mobility markets such as Europe North America Australiaand New Zealand. EMOSS enjoys customer base of Heineken Meyer & Meyer TEDI etc.

The Company has formulated a policy for determining"material" subsidiaries is available on the Company's websitehttp://pclindia.in/wp-content/uploads/2020/02/Policv for determining MaterialSubsidiaries.pdf

25. STATEMENT CONTAINING THE SALIENT FEATURES OF THE FINANCIALSTATEMENTS OF SUBSIDARIES / ASSOCIATE COMPANIES / JOINT VENTURES

Further a statement containing salient features of the financialstatements of subsidiaries in the prescribed format AOC-1 is appended as Annexure-Ato thisReport. The statement also provides details of performance financial position.

There has not been any material change in the nature of the business ofthe Subsidiaries. As required under SEBI LODR Regulations 2015 and Companies Act 2013the consolidated financials of your Company and Subsidiaries are provided in this annualreport.

26. STATEMENT ON RISK MANAGEMENT POLICY

The Company has in place a mechanism to identify assess monitor andmitigate various risks to the Company. The Company's future growth is linked withgeneral economic conditions prevailing in the market. Management has taken appropriatemeasures for identification of risk elements related to the Industry in which the Companyis engaged and is always trying to reduce the impact of such risks. The Company has alsoformulated Risk Management Policy and Risk Management Systems are evaluated by the AuditCommittee.

The Company has adopted a Risk Management Policy in accordance with theprovisions of the Act and Regulation 21 of the Listing Regulations. Risk Management Policyis hosted on website of the Company at http://pclindia.in/wp-content/ uploads/2020/02/RiskManagement Policies.pdf.

There are no risks which in the opinion of your Board threaten theexistence of the Company. COVID19 is an unforeseen risk faced by all the industries of theCountry Company has been impacted due to COVID 19 Management has taken necessary stepsfor resuming operation of the Company with safety of its employees and abiding byGovernment Directives. MDA covers covid related impact and steps taken by Company

Company has also filed with Stock Exchanges Disclosure of materialImpact of Covid 19 and same is hosted on website of the Company.

https://pclindia.in/wp-content/uploads/2020/07/Disclosure-of-material-impact-of-CoVID-19-on-the-Companv.pdf

27. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS ORCOURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION INFUTURE

During the Financial Year under review there were no significant andmaterial orders passed by regulators or courts or tribunals impacting the going concernstatus and Company's operation in future.

28. STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITHREFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place adequate internal financial controls withreference to the Financial Statements. The policies and procedures adopted by the Companycovers orderly and efficient conduct of business including adherence to the Company'spolicies safeguarding of the assets of the Company prevention and detection of fraud anderrors accuracy and completeness of accounting records and the timely preparation ofreliable financial information. The Audit Committee periodically reviews the internalcontrol systems with the Management Internal Auditors and Statutory Auditors test theadequacy of internal audit functions.

During the Financial Year under review these controls were tested andthe observations of the Auditors were addressed by the Company after taking necessarysteps to strengthen the financial controls and improve the systems. Statutory Auditorshave also certified adequacy of internal financial controls systems over financialreporting based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control as stated in theGuidance Note on Audit of Internal financial controls over financial reporting issued bythe Institute of Chartered Accountants of India.

29. DEPOSITS

During the Financial Year under review the Company has not acceptedany deposits.

30. SECRETARIAL AUDIT REPORT AND ANNUAL SECRETARIAL COMPLIANCE REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard appointed M/s. 3 B Bhave & Co. Practicing Company Secretaries Pune as theSecretarial Auditors of the Company for FY 2020-21. There are no qualifications/observations/ remarks in the Secretarial Audit Report. The Secretarial Auditors have notreported any fraud during the Financial Year. The Report of the Secretarial Audit for FY2020-21 in MR-3 is annexed herewith as an Annexure H to the Annual Report.

Pursuant to SEBI Circular CIR/CFD1/27/2019 dated 8thFebruary 2019 all listed entities shall additionally on annual basis submit a report tothe stock exchange(s) on compliance of all applicable SEBI Regulations and circulars /guidelines issued thereunder within 60 days of end of Financial Year. Such report shall besubmitted by Company Secretary in practice to the Company in the prescribed format.

The Company has received such report from M/s 3.B. Bhave & Co.Practicing Company Secretaries Pune for the Financial Year ended 31st March2021 and it has been submitted to the stock exchange(s) within the stipulated time.Certificate forms part this Annual Report as Annexure J.

31. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company's guiding principle for CSR is to build its relationshipwith stakeholders and the community at large and to contribute to their long term socialgood and welfare. Your Company as a matter of duty has been carrying out the CSRactivities since long even when there were no statutory requirements in this regard.

In compliance of Section 135 of the Companies Act 2013 your Companyhas constituted a Corporate Social Responsibility (CSR) Committee comprising of

Sr. Name No. Designation
1. Mr. Yatin S. Shah Chairman
2. Dr. Suhasini Y. Shah Member
3. Mr. Vedant V. Pujari Member
4. Mr. Vaibhav S. Mahajani Member

Detailed Annual Report on CSR Activities during the year is given asAnnexure D and CSR Policy is also disclosed on the website of the Company athttps://pclindia.in/wp-content/uploads/2021/05/Corporate-Social-Responsibilitv-Policy.pdf.

32. PCL ESOS 2015 - INFORMATION REGARDING ALLOTMENTS DURING THE YEAR

During the Financial year under review in terms of PCL ESOS 2015 theCompany has not allotted any Equity Shares on exercise of vested options and no freshgrant was made by the Company.

The disclosures in compliance with Section 62 of the Companies Act2013 read with Rule 12 of Companies (Share Capital and Debentures) Rules 2014 SEBI(Share Based Employee Benefits) Regulations 2014 are as follows:

Total No. of Shares covered by ESOP 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 2120 2120
Options lapsed NIL 6740 6740
Extinguishment or modification of options NIL NIL NIL
The exercise price Rs.10/- Rs.10/- RS.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 12230
Lmployee wise details of options granted to:
i. Key Managerial Personnel & Senior Managerial Personnel NA NA NA
ii. 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 NA NA NA
iii. Identified employees who were granted option during 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 NA

Disclosure under SEBI (Shared Based Employee Benefits) Regulation 2014is available on the website of the Company athttps://pdindia.in/wp-content/uploacls/2021/07/ESQP-Disdosure-2020-21.pdf

33. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company believes in the conduct of the affairs of its constituentsin a fair and transparent manner by adopting the highest standards of professionalismhonesty integrity and ethical behaviour. The Company has adopted a Whistle Blower Policy(Vigil mechanism) to provide a formal mechanism to the Directors and employees to reporttheir concerns about unethical behaviour actual or suspected fraud irregularities orviolation of the Company's Code of Conduct. The Policy provides for adequate safeguardsagainst victimisation of employees who avail of the mechanism and also provides for directaccess to the Chairman of the Audit Committee.

The detailed policy on Vigil mechanism is disclosed on the website ofthe Company (http://pclindia.in/wp-content/ uploads/2020/02/Vigil Mechanism Policy.pdf).

34. CORPORATE GOVERNANCE REPORT

Report on Corporate Governance is about maximizing shareholder valuelegally ethically and sustainably. Corporate Governance Report is set out in this AnnualReport as Annexure F.

A certificate from M/s J. B. Bhave & Co. Practicing CompanySecretaries Pune regarding compliance with conditions of corporate governance as requiredunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 also formspart of this Annual Report as Annexure G.

A certificate from M/s J. B. Bhave & Co. Practicing CompanySecretaries Pune regarding compliance with sub regulation 10(i) of regulation 34(3) ofschedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015also forms part of this Annual Report as Annexure I.

35. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has in place a policy for Prevention of Sexual Harassment(PoSH) at workplace. This inter alia provides a mechanism for the resolution settlementor prosecution of acts or instances of Sexual Harassment at work and ensures that allemployees are treated with respect and dignity. The Company has also complied with theprovisions relating to the constitution of Internal Complaints Committee under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

During the year under review No complaint was reported to the Committeeduring the year ended on 31st March 2021 in connection with the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013

ICC Committee details are provided in Posh Policy The PoSH Policy isavailable on website of the Company https://pclindia.in/wp-content/upLoads/2020/02/Posh-PoLicy.pdf

36. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION143(12) OF THE COMPANIES ACT 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRALGOVERNMENT

During the Financial Year under review there were no instances offraud which were reported by the Statutory Auditors to the Audit Committee/ Board.

37. AUDITORS

(a) STATUTORY AUDITOR

The members at the 27th AGM of the Company appointed M/sMSKA & Associates Chartered Accountants (Firm Reg. No. 105047W) as the StatutoryAuditors of the Company for a period oRs.5 (Five) years to conduct the Statutory Auditfrom FY 2019-20 to FY 2023-24 and to hold office from the conclusion oRs.27thAGM till the conclusion of AGM held for FY 2023-24.

(b) COST AUDITORS

The Board of Directors on the recommendation of Audit Committee hasappointed M/s. S. V. Vhatte and Associates Cost Accountants Solapur [Firm RegistrationNo.: 100280] as Cost Auditors to audit the cost accounts of the Company for the FinancialYear ended 31st March 2022. The Board on recommendations of the Audit Committeehave approved the remuneration payable to the Cost Auditors subject to ratification oftheir remuneration by the Members at the ensuing AGM. The cost accounts and records of theCompany are duly prepared and maintained as required under Section 148(1) of Act.

The Cost Audit report for the Financial Year 2020-21 will be filed withthe Ministry of Corporate Affairs on or before the due date. The Company pursuant to theprovisions of Section 148 of the Companies Act 2013 and applicable rules made thereundermakes and maintains cost records.

(c) INTERNAL AUDITORS

The Company had appointed M/s M. P. Chitale & Co. CharteredAccountants as Internal Auditors of the Company for the Financial Year ended 31stMarch 2021. The scope and authority of the Internal Auditor is as per the terms ofreference approved by the Audit Committee. The Internal Auditors monitor and evaluate theefficiency and adequacy of internal control systems in the Company its compliance withoperating systems accounting procedures and policies of the Company. Significant auditobservations and recommendations along with corrective actions thereon are presented tothe Audit Committee of the Company.

38. REPORT ON MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report as required under SEBILODR forms part of this Annual Report.

39. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors of your Company to the best of their knowledge and ability hereby state andconfirm that:

1. in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;

2. the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of theFinancial Year and of the profit of the Company for that period;

3. the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

4. the Directors had prepared the annual accounts on a going concernbasis; and

5. the Directors had laid down internal financial controls to befollowed by the Company and such internal controls are adequate and were operatingeffectively; and

6. the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

40. CODE OF CONDUCT FOR BOARD AND SENIOR MANAGEMENT

The Company has adopted the Code of Conduct for the Directors andSenior Management and the same is available on the Company's websitehttp://pclindia.in/wp-content/uploads/2020/02/Code of Conduct for Board and SeniorManagement.pdf

All Directors and Senior Management personnel have affirmed theircompliance with the said Code. A declaration pursuant to the Regulation 26 (3) read withpart D of the Schedule V of the SEBI LODR 2015 signed by Managing Director to this effectis annexed as a part of Annual Report as Annexure L.

41. BUSINESS RESPONSIBILITY REPORT

A detailed Business Responsibility Report in terms of the provisions ofRegulation 34 of the SEBI LODR 2015 is available as a separate section in the AnnualReport.

42. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS

The Company is in compliance of applicable secretarial standards issuedby the Institute of Company Secretaries of India from time to time.

43. INVESTOR EDUCATION AND PROTECTION FUND

In accordance with the provisions of Sections 124 and 125 of the Actand Investor Education and Protection Fund (Accounting Audit Transfer and Refund) Rules2016 ("IEPF Rules") dividends of a Company which remain unpaid or unclaimed fora period 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 FinancialYear ended 31st March 2021.

44. CONTRIBUTION OF INDEPENDENT DIRECTORS TO THE GROWTH OF THE COMPANY

The Board of Directors of the Company strategically comprises ofIndependent Directors from different domains which adds value to the Company. EveryIndependent Director with his expertise and integrity has earned a vast experience andreputation in the industry. Our Independent Directors are experts in Finance CompanyLaws Information Technology Commercial Laws and Audit. These domains are integral partof every business and therefore the collective expertise of these board members ensurethat we are up to the mark with the global leaders in terms of ethics corporategovernance best industry practices transparency and technology.

The online proficiency self-assessment test of Independent Directorsconducted by Indian Institute of Corporate Affairs ensures that the skills and knowledgeis appropriate and beneficial to the Company. All the Independent Directors havesuccessfully passed the test

45. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THEINSOLVENCY AND BANKRUPTCY CODE 2016 DURING THE YEAR.

During the year the Company has not made any application nor there isany proceeding pending under the Insolvency and Bankruptcy Code 2016 as at the end of theFinancial Year.

46. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE ATTHE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS ORFINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF.

During the year the Company has not initiated One Time Settlement withthe Banks or Financial Institutions and therefore no details are required to be furnished.

47. CAUTIONARY STATEMENTS

Statements in this report particularly those which relate toManagement Discussion and Analysis describing the Company's objectives estimates andexpectations may constitute 'forward looking statements' within the meaning ofapplicable laws and regulations. Actual results may differ materially from those eitherexpressed or implied.

48. ACKNOWLEDGEMENTS

The Directors would like to place on record their deep appreciation toemployees / workers at all levels for their hard work dedication and commitment. TheBoard places on record its appreciation for the support and co-operation your Company hasbeen receivingfrom its Shareholders Customers Business Associates Bankers Suppliersand all other stakeholders for their continued support and their confidence in itsmanagement.

The Directors also thank the Government of India Governments ofvarious states in India for their co-operation.

The Directors regret the loss of life due to COVID-19 pandemic and aredeeply grateful and have immense respect for every person who risked their life and safetyto fight this pandemic.

For and on behalf of the Board of Directors of Precision Camshafts Limited
Yatin S. Shah Ravindra R. Joshi
DIN: 00318140 DIN:03338134
Chairman and Managing Director Whole-time Director and CFO
Date: 25m May 2021 Date: 25m May 2021
Place: Solapur Place: Solapur

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