PRICOL ANNUAL REPORT 2020
Your Directors have pleasure in presenting the Ninth Annual Report and audited accountsfor the financial year ended 31st March 2020.
The summarised financial results are:
| ||Rs. Lakhs |
| ||2019-20 ||2018-19 |
|Net Sales & Services || || |
|- Domestic ||105782.13 ||122130.04 |
|- Export ||8418.29 ||7593.97 |
|Total Sales & Services ||114200.42 ||129724.01 |
|Other Operating Revenue ||6128.12 ||6825.62 |
|Other Income ||1263.23 ||846.34 |
|Total Revenue excluding || || |
|Sale of Land held as || || |
|Stock-in-Trade ||121591.77 ||137395.97 |
|Profit from Operations before Finance Cost || || |
|Depreciation and || || |
|Amortisation Expense || || |
|Exceptional Items & Tax ||9777.88 ||9074.62 |
|Less : Finance Costs ||3108.45 ||1808.74 |
|: Depreciation and || || |
|Amortisation Expense ||9269.24 ||8019.74 |
|Profit / (Loss) from Operations before || || |
|Exceptional Items & Tax ||(2599.81) ||(753.86) |
|Add : Profit on Sale of Land held as stock-in-trade || ||1010.36 |
|Less : Reversal of Provision for || || |
|Impairment of Land & Building || ||(133.99) |
|Profit / (Loss) before Exceptional || || |
|Items & Tax ||(2599.81) ||390.49 |
|Less : Exceptional Item (Net) ||19072.36 ||23197.75 |
|Profit / (Loss) Before Tax ||(21672.17) ||(22807.26) |
|Less : Tax Expense || || |
|Current Tax || ||95.80 |
|Deferred Tax ||(384.20) ||(14.31) |
|MAT Credit || ||(95.80) |
|Profit / (Loss) for the year ||(21287.97) ||(22792.95) |
|Other Comprehensive Income ||295.08 ||47.79 |
|Income tax relating to these items ||(103.11) ||(16.70) |
|Other Comprehensive Income for the year after tax ||191.97 ||31.09 |
|Total Comprehensive Income for the year ||(21096.00) ||(22761.86) |
# Exceptional Items : Details have been provided under Notes to StandaloneFinancial Statements Note No: 2.45.
DIVIDEND & RESERVES
In view of loss in this financial year your Directors do not recommend any dividendand not transferred any amount to reserves for the year 2019-20.
During the year the Auto Industry's domestic market de-growth by 18 % and exports grewby 3 %. The overall Auto Industry de-growth by 15% as against growth of 6% in the previousfinancial year.
|Segment || ||Vehicle Production * || ||Pricol Sale to OEM |
| ||2019-20 ||2018-19 ||Growth % ||Growth % |
|2 Wheeler / || || || || |
|3 Wheeler ||22170152 ||25771809 ||(14) % ||(8) % |
|Commercial Vehicle ||752022 ||1112176 ||(32) % ||(41) % |
|Tractors ||694600 ||782350 ||(11) % ||(5) % |
|4 Wheeler ||3434015 ||4026047 ||(15) % ||(41) % |
|Total ||27050789 ||31692382 ||(15) % ||(13) % |
* As per Society of Indian Automobile Manufacturers (SIAM)
In domestic market Company primarily caters to Two wheelers Commercial VehiclesTractors and Off-road vehicles.
The Company's domestic sales was down by 13% and overall Company's sales by 12%compared to the previous year.
The profit from operations before Finance cost Depreciation and Amortisation expenseExceptional
Items & tax has increased from Rs. 9075 Lakhs to Rs. 9778
Lakhs. The operational performance of the company has improved due to better control oncosts. Profit before
Exceptional Items & Tax decreased from Rs. 390 Lakhs to
Loss of Rs. 2600 Lakhs mainly due to increase in finance
cost and Depreciation and Amortisation after considering sale of land held asstock-in-trade in previous year.
Pricol Asia Pte Limited Singapore
This purchasing arm of our Company mainly assists in global procurement of rawmaterials and components to supply our Company and associate companies.
In the financial year 2019-20 the Company achieved sales of USD 270.68 Lakhs (Rs.19598.19 Lakhs) as against the previous year sales of USD 313.27 Lakhs (Rs. 21086.83Lakhs). The company made a profit after tax of USD 550585 (Rs. 398.65 Lakhs) during theyear 2019-20 as against USD 515948 (Rs.347.30 Lakhs) in 2018-19.
Pricol Espana Sociedad LimitadaSpain
It is an investment arm of Pricol to acquire companies in Europe and the Americas.During the financial year the company has incurred a loss of EURO 420.79 Lakhs (INR33928.03 Lakhs) as against loss of EURO 14.92 Lakhs (INR 1179.86 Lakhs) in 2018-19which is mainly due to disinvestment of its investment in Pricol do Brasil and PricolWiping Systems Mexico amounting to EURO 406.48 Lakhs. The Company's wholly ownedsubsidiary companies are 1) Pricol Wiping Systems Czech s.r.o 2) Pricol do BrasilComponents Automotives LtdA (upto 11th February 2020) and 3) Pricol Wiping Systems MexicoS.A. de C.V. (upto 11th February 2020).
At the Board Meeting held on 29th July 2020 the Board approved the proposed sale of100% shareholding held by Pricol Limited in its Wholly Owned Subsidiary Company PricolEspana Sociedad Limitada Spain' (Pricol Espana) along with its Wholly Owned subsidiarycompany Pricol Wiping Systems Czech s.r.o' (Pricol Czech).
Pricol Wiping Systems Czech s.r.o.
During the financial year 2019-20 Pricol Czech has achieved a sales of CZK 11786.81Lakhs (INR 35790.55 Lakhs) as against sales of CZK 12480.54 Lakhs (INR 38625.67 Lakhs)in 2018-19 and registered losses before taxes of CZK 321.86 Lakhs (INR 977.33 Lakhs) in2019-20 as against loss of CZK 948.68 Lakhs (INR 2936.04 Lakhs) in 2018-19.
Pricol Czech being an unlisted material subsidiary of the Pricol Limited as perRegulation 24 of the SEBI (LODR) Regulation 2015 an Independent Director of PricolLimited is to be appointed in that Board of Pricol Czech. The Board of Directors of PricolLimited at their meeting held on 12th February 2020 recommended the appointment ofMr.K.Ilango Independent Director as a Director of Pricol Wiping Systems Czech s.r.o.Steps were taken for the said appointment but due to COVID
19 outbreak we are unable to complete the appointment.
Pricol Wiping Systems India Limited
During the financial year 2019-20 the company has achieved sales of INR 2851.33 Lakhsas against sales of INR 3142.69 Lakhs in 2018-19. The company incurred losses to theextent of INR 323.73 Lakhs in 2019-20 as against loss of INR 554.47 Lakhs in 2018-19.
PT Pricol Surya Indonesia
The Company is supplying Instrument Clusters to the
2-Wheeler manufacturers in Indonesia & Thailand.
In the financial year 2019-20 the company has achieved a sales of Indonesian Rupiah453879 Lakhs (Rs. 2155.92 Lakhs) as against the previous year sales of IndonesianRupiah 594134 Lakhs (Rs. 2860.75 Lakhs) a decrease of 23.61% in Indonesian Rupiah &24.64% in INR terms.
The decrease in sales is mainly on account of phasing out of vehicle models for whichthe company is supplying. The Company had a loss before tax of Indonesian Rupiah 52367Lakhs (Rs. 248.74 Lakhs) as against the profit before tax of Indonesian Rupiah 55603Lakhs (Rs. 267.73 Lakhs) of previous year.
PT Sripri Wiring Systems Indonesia
The Company a Wholly Owned Subsidiary Company of PT Pricol Surya Indonesia during thefinancial year 2019-20 has achieved sales of IDR 61165 Lakhs (INR 290.53 Lakhs) asagainst sales of IDR 107587 Lakhs (INR 518.03 Lakhs) in 2018-19. The Company
incurred profit before tax of IDR 2951.07 Lakhs (INR
14.02 Lakhs) in 2019-20 as against loss of IDR 32456
Lakhs (INR 156.28 Lakhs) in 2018-19.
Pricol do Brasil Componentes Automotivos LtdA
Pricol do Brasil Componentes Automotivos LtdA (PdB) manufactures and sells Pumps &Mechanical products to wide range of Domestic and International customers such asVolkswagen Fiat Fiat Power train General Motors Mack Trucks etc. The company was soldon 11th February 2020. The details about the sale was given under the heading Saleof step down Subsidiary Company(s)'.
During the period from 1st April 2019 to 11th February 2020 PdB has achieved a salesof BRL 501.86 Lakhs (INR 8871.64 Lakhs) as against the previous year sales of BRL 533.56Lakhs (INR 9990.00 Lakhs). PdB incurred a loss of BRL 387.22 Lakhs (INR 6845.20 Lakhs)during the year 2019-20 as against loss of BRL 391.10 Lakhs (INR 7322.74 Lakhs) in2018-19.
Pricol Wiping Systems Mexico S.A. de C.V.
The Company was sold on 11th February 2020. The details about the sale was given underthe heading Sale of step down Subsidiary Companies'.
During the period from 1st April 2019 to 11th February 2020 PWS Mexico had revenue ofMXN 550.27 Lakhs (INR 2102.62 Lakhs) as against revenue of MXN 344.64 Lakhs (INR1234.75Lakhs) in 2018-19 and incurred loss of MXN 282.91 Lakhs (INR 1081.01 Lakhs) as againstloss of MXN 87.78 Lakhs (INR 314.48 Lakhs) in 2018-19.
SALE OF STEP DOWN SUBSIDIARY COMPANIES
As stated in our earlier Directors' Report-2019 with regard to the dilution ofshareholding in the following Wholly Owned Subsidiary Companies a) Sale of 80.5%shareholding held by Pricol Limited in its Wholly Owned Subsidiary Pricol Espana SociedadLimitada (Pricol Espana) which have the following subsidiaries namely (i) Pricol DoBrasil Componentes Automotivos LtdA (PdB) (ii) Pricol Wiping Systems Mexico S.A.de C.V
(iii) Pricol Wiping Systems Czech s.r.o (PWS-C) b) Sale of 74% shareholding held byPricol Limited in its Wholly Owned Subsidiary Pricol Wiping Systems India Limited (PWSIL)to Chroma GP LLC Delaware USA' or its affiliates (Purchaser) and at theconsideration of Euro 100000 net of specified loans.
On 21st June 2019 a Share Purchase Agreement was entered with Chroma GP LLC someamendments were carried out thereto including identifying the designated purchaser entity.However the Conditions Precedent to Closing have not been complied with and time forperformance was extended from time to time. In the
meanwhile the PWS-C operations have shown stability.
After several round of discussions with Chroma GP LLC they have shown inclination totakeover PdB and PWS-M alone to the exclusion of PWS-C & PWSIL with approval of Boardof Directors.
The entire shareholding held by Pricol Espana Sociedad
Limitada Spain in the following Companies:
(a) Pricol do Brasil Componentes Automotivos LtdA (PdB)
(b) Pricol Wiping Systems Mexico S.A.de C.V (PWS-M) shall be sold to 2NDM LLC'and / or NELP FOUR LP' nominated purchaser entity/s of Chroma GP LLCDelaware USA for a Gross Consideration of USD 2000 Net of liabilities. They have alsotaken over PdB and PWS-M along with its liabilities and assets on the date of sale. Theliabilities in PdB was more than the assets transferred which is reflected in ourconsolidated profit and loss account (Refer Note No. 2.42 to the Consolidated FinancialStatement).
Sale of entire shareholding held by Pricol Espana in
(i) Pricol Do Brasil Componentes Automotivos LtdA and
(ii) Pricol Wiping Systems Mexico S.A.de C.V was completed. Further to the abovePWSIL and Pricol Espana along with PWS-C continues as Subsidiary of the company.
SALE OF SUBSIDIARY COMPANIES
Pricol Wiping Systems Czech s.r.o was acquired in September 2017 to develop a fourthvertical of business for the company. Since taking over the business we have undertakenmany operational excellence programs and this resulted in improved efficiencies andcustomer ratings. For over 15 months now the business has been managing its cash flows.Nevertheless the onset of COVID-19 has had a debilitating impact on the operations andoutlook of the business of Pricol Wiping Systems Czech s.r.o. Over 80% of the sales forthe operations in Czech are made to our key customers like Volkswagen Audi Seat andFiat who are located in countries like Germany Italy and Spain. These three countries arebadly affected by the COVID-19 pandemic and vehicle production has contracted verysharply.
The management teams in the Czech Republic and India have been in constant touch withthe key customers to understand the business outlook and workout the cash flows but noneof the European customers are willing to commit to any sort of committed productionnumbers. Under these circumstances it is expected to have cash losses in the CzechRepublic which will also result in breaching all the banking covenants and the bank inCzech Republic Unicredit s.r.o have advised us to further infuse capital into thecompany. Under the stiff economic downturn due to the COVID-19 pandemic in India it wouldbe impractical for the parent company Pricol Limited to allocate financial resources tothe operations in Czech Republic. Hence it was decided by the Board of Directors toexplore 100% divestment of the operations in Czech Republic along with its holding companyPricol Espana located in Spain.
After negotiations with multiple potential buyers we have identified a particularPrivate Equity investor "Certina Automotive Solutions AG" a German StockCorporation (Purchaser) with extensive interests in the European automotive industry andhave met the key customers and bankers along with this potential buyer and finalised theterms of the 100% divestment. Purchaser has agreed to take the Pricol Espana along withits subsidiary company Pricol Czech with bank loans amounting to INR 6402 Lakhs and allliabilities and assets as on the date sale and pay a consideration of EURO 50000. Theloan granted by Pricol Limited to Pricol Espana will be converted into equity. The entireinvestment and the loan to be converted into equity has been provided for in the March2020 year ending financials. Based on further discussions the board decided to hive offPricol Espana to stop further cash drain from the parent company.
At the meeting of Board of Directors of Pricol Limited held on 29th July 2020 theBoard has approved the terms of the Share Purchase Agreement for the complete divestmentof Pricol Limited's interest in Pricol Espana along with its subsidiary company PricolWiping Systems Czech s.r.o. The deal will be completed subject to statutory and regulatoryapprovals and is expected to be completed on or before 31st August 2020.
OUTLOOK OPPORTUNITIES CHALLENGES
RISKS & CONCERNS
The automotive industry ended up with degrowth of 15% in 2019-20 compared to 2018-19.The major reason for the degrowth was the outbreak of COVID-19 during Q4 for 2019-20.There was shortage of imported parts from China during Jan Feb followed by lock down inMar in India thus affecting the auto manufacturing during Q4 of 2019-20. However in Q4 allthe manufacturers have transformed all their models from BS-IV to BS-VI emissions.
The outlook for 2020-21 is expected to be negative with a de-growth anticipated at 35%to 45% across various segments of the industry due to COVID-19 impact. The two wheelersare expected to recover faster compared to Commercial vehicle industry.
Pricol has won many new business across various segments in the BS VI platform andaround 40% of the revenue of 2020-21 would be from new business.
2019-20 witnessed a robust growth compared to 2018-19 both in the US and Europemarkets. With Pricol winning new business in export at both US and Europe the outlook for2020-21 is expected to see a positive growth compared to 2019-20.
COVID -19 IMPACT
The outbreak of COVID-19 pandemic is causing significant disturbance and slowdown ofeconomic activities globally. The nationwide lock-down ordered by the Government of Indiahas resulted in significant reduction in economic activities and also the businessoperations of the Company in terms of sales and production. As per current assessmentthere is no significant impact on carrying amounts of inventories trade receivablesinvestments and other financial assets except to the extent for which impairment loss hasbeen provided for. The eventual outcome of the impact of the global health pandemic may bedifferent from those estimated as on date of the approval of the financial results.
Risk Management Policy for identifying and managing risk at the strategic operationaland tactical level has been adopted by the Company. Our risk management practices aredesigned to be responsive to the ever changing Industry dynamics. At present the Companyhas not identified any element of risk which may threaten the existence of the Company.
The Risk Management policy has been placed on the website of the Company and the weblink thereto is https://www.pricol.com/Data/Policy/Risk-Management- Policy_20.pdf.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company's internal control systems have been strengthened taking into account thenature of business and size of operations to provide for:
? Reliability and integrity of financial and operational information;
? Effectiveness and efficiency of operations and assets;
? Compliance with applicable statutes policies listing requirements and managementpolicies and procedures.
The Company through its own Corporate Internal Audit Department carries out periodicaudits at all locations and all functions and brings out any deviation to internal controlprocedures. The observations arising from audit are periodically reviewed and complianceensured. The summary of the Internal Audit observations is submitted to the AuditCommittee. The Audit Committee at its meetings regularly reviews the financial operatinginternal audit & compliance reports to improve performance. The heads of variousmonitoring / operating departments are present for the Audit Committee meetings to answerqueries from the Audit Committee.
During the year the Company has not accepted / renewed any fixed deposit from public.The total deposits remained unpaid or unclaimed as at 31st March 2020 is Nil. There is nodefault in repayment of deposits or payment of interest thereon during the year. TheCompany undertook several steps to keep a control over borrowings and cost of borrowings.ICRA has revised credit rating for Long term fund based facilities to BB+' and forshort term fund based & non fund based facilities to A4+'. Previous year 2018-19credit rating for long term fund based facilities BBB (Negative)' and for short termfund based & non fund based facilities A3+'.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. During the year therewere no materially significant related party transactions made by the Company withPromoters Key Managerial Personnel or other designated persons which may have potentialconflict with the interest of the Company.
As per the provisions of Section 149 of the Companies Act 2013 Regulation 25 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Membersappointed Independent Directors as mentioned below:
|Name of Independent ||Period of |
|Director ||Appointment |
|Mrs.Sriya Chari ||Upto 26th May 2021 |
|Mr.S.K.Sundararaman ||Upto 29th May 2023 |
|Mr.P.Shanmugasundaram ||Upto 14th June 2024 |
|Mr.K.Ilango ||Upto 14th June 2024 |
|Mr. Suresh Jagannathan ||Upto 31st July 2024 |
|Mr. R.Vidhya Shankar ||Upto 31st July 2024 |
During the year 2019-20 Mr.R.Vidhya Shankar and Mr.Suresh Jagannathan IndependentDirectors were re-appointed as Independent Director for the second term of 5 years from1st August 2019 to 31st July 2024 with the approval of shareholders through postalballot. Mr.P.Shanmugasundaram and Mr.K.Ilango were appointed as an Independent Director ofthe Company for a term of 5 (five) consecutive years commencing from 15th June 2019 to14th June 2024 with the approval of shareholder at Annual General Meeting held on 29thAugust 2019.
Mrs.Sriya Chari Independent Director has given her consent for re-appointment asIndependent Director for the second term of 5 years from 27th May 2021 to 26th May 2026.The Board recommends her re-appointment as Independent Director for the aforesaid periodand suitable resolution is included in the AGM notice.
Executive Director / Non Independent Director
Members appointed Executive Director / Non Independent Director as mentioned below :
|Name of Director ||Period of Appointment |
|Mrs.Vanitha Mohan ||Upto 31st March 2021 |
|Mr.Vikram Mohan ||Upto 31st March 2022 |
|Mr.V.Balaji Chinnappan ||Upto 31st March 2022 |
During the year 2019-20 Mr.Vikram Mohan was appointed as Managing Director for aperiod of three years with effect from 1st April 2019 to 31st March 2022. Mr.V.BalajiChinnappan was appointed as Chief Operating Officer (Whole Time Director) for a periodwith effect from 15th June 2019 to 31st March 2022.
Mrs. Vanitha Mohan a Non-Independent Director retires by rotation at the ensuingAnnual General Meeting and is eligible for re-appointment.
EVALUATION BY THE BOARD
The Board has made a formal annual evaluation of its own performance Committees of theBoard Independent Directors and Individual Directors of the Company.
The Board's performance was evaluated based on the criteria like Structure GovernanceDynamics & Functioning Approval & Review of Operations Financials InternalControls etc.
The performance of the Independent Directors as well as Individual Directors includingthe Chairman of the Board were evaluated based on the evaluation criteria laid down underthe Nomination and Remuneration Policy and the Code of Conduct as laid down by the Board.
The Committees of the Board were evaluated individually based on the terms of referencespecified by the Board to the said Committee. The Board of Directors were satisfied withthe evaluation process which ensured that the performance of the Board its CommitteesIndependent Directors and Individual Directors adhered to their applicable criteria.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel of the Company as stipulated under Companies Act 2013 areMr.Vikram Mohan Managing Director Mr.K.Ramesh Chief Financial Officer &Mr.T.G.Thamizhanban Company Secretary.
M/s. VKS Aiyer & Co. Chartered Accountants Coimbatore (ICAI Firm Registration No:000066S) the Statutory Auditors of the Company were appointed as Statutory Auditors ofthe Company for a term of 5 years from the conclusion of 7th Annual General Meetinguntil the conclusion of the 12th Annual General Meeting of the Company to be held in thecalendar year 2023.
Statutory Auditors M/s. VKS Aiyer & Co. Chartered Accountants have confirmedtheir eligibility for continuing as Statutory Auditors of the Company.
The Board of Directors at their meeting held on 29th June 2020 appointedMr.G.Sivagurunathan Cost Accountant as the Cost Auditor for conducting the Cost Auditfor the financial year 2020-21. A resolution seeking members' ratification of theremuneration payable to Cost Auditor is included in the AGM notice. The Cost Audit Reportwill be filed within the stipulated period. The Company is maintaining the Cost Records asper Section 148(1) of the Companies Act 2013.
The Company appointed M/s.P.Eswaramoorthy and Company Company Secretaries to undertakethe Secretarial Audit of the Company for the financial year 2020-21. The Secretarial AuditReport for the financial year 2019-20 as per regulation 24 A of SEBI LODR is annexedherewith as "Annexure A".
The company had complied with the applicable Secretarial Standards.
Pricol's Corporate Social Responsibility (CSR) activities reflect its philosophy ofenhancing value to the society and the environment around us. CSR activities are carriedout through registered trust (ND Foundation) and a Section 8 Company (Yashaswi Academy forSkills) in addition to the CSR activities directly undertaken by the
Company. The Annual Report on CSR activities is annexed herewith as "Annexure B".
DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS
Continuous interactions with the line operators had resulted in cordial and conduciveIndustrial Relations atmosphere. A long-term wage agreement was signed with the workmen ofPlant-I and Plant-III for a period of five years from July 2019. About 90% of the workmenhave agreed for this settlement. Similarly a long-term wage agreement was signed with theworkmen of Plant -II for a period of five years from Jan 2020. 100% of the workmen haveagreed for this settlement. Periodical interactions with the Union Office bearers ispaving way for smooth operations inside the Plants. Monthly Goodwill Meeting with theoperators are continuing to redress the shop floor issues. The number of people employedas on 31st March 2020 is 5185.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3)(c) & (ca) of the Companies Act2013 the Directors would like to state that :
a) in the preparation of annual accounts for the financial year ended 31st March 2020the applicable accounting standards have been followed;
b) they had selected such accounting policies and applied them consistently and madejudgements and estimates that were reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit and loss of the Company for the year under review;
c) they had taken proper and sufficient care 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) they had prepared the annual accounts for the financial year ended 31st March 2020on a going concern basis;
e) they had laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and were operating effectively and f) theyhad devised proper systems to ensure compliance with the provisions of all applicable lawsand such systems were adequate and operating effectively.
1. Independent Directors have given declarations that they meet the criteria ofindependence as provided in Section 149(6) of the Companies Act 2013 and SEBI (ListingObligation and Disclosure Requirements) Regulations 2015.
2. Salient features of the Nomination and Remuneration Policy is disclosed in theReport on Corporate Governance.
3. Qualification reservation or adverse remark or disclaimer made by Statutory Auditor& Secretarial Auditor in their report : NIL
4. The particulars of Loans Guarantees and Investments made by the Company underSection186 of the Companies Act 2013 are given in Note No. 2.69 to the StandaloneFinancial Statements.
5. Particulars of contracts / arrangements entered into by the company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013including certain arm's length transactions under third proviso thereto:
All the related party transactions entered by the Company during the financial year2019-20 are in the ordinary course of business and at arm's length. There is no materialcontract or arrangement.
6. There are no significant and material orders passed by the Regulators / Courts /Tribunals which would impact the going concern status and the Company's operations infuture.
7. Material changes and commitments affecting the financial position of the companywhich have occurred between the end of the financial year of the company to which thefinancial statements relate and the date of the report :
Details are provided in the Directors' Report under the heading "Sale of step downSubsidiary Company(s)".
8. Conservation of Energy Technology Absorption and Foreign Exchange Earningsand Outgo :
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 (3) of the Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureC".
9. Extract of the Annual Return :
The extract of the Annual Return in Form No.: MGT-9 is annexed herewith as "AnnexureD" and available at the Company's website www.pricol.com.
10. Particulars of Employees :
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is annexed herewith as "Annexure E".
11. Disclosures of transactions of the listed entity with any person or entitybelonging to the promoter / promoter group which hold(s) 10% or more shareholding in thelisted entity in the format prescribed in the relevant accounting standards for annualresults. :
Details are given in Note No. 2.69 to the Standalone Financial Statements.
12. Number of other board of directors or committees in which a director is a member orChairperson including separately the names of the listed entities where the person is adirector and the category of directorship :
Disclosed in the Report on Corporate Governance "Annexure F" pointno: 2.
13. Detailed reasons for the resignation of an independent director who resigns beforethe expiry of his tenure along with a confirmation by such director that there are noother material reasons other than those provided :
There is no resignation by any of the Independent Directors during the year 2019-20.
14. Business Responsibility Reporting :
Business Responsibility Reporting as required pursuant to Regulation 34 of SEBI(Listing Obligations and Disclosure Requirement) Regulations 2015 read with SEBI CircularNo. CIR/CFD/CMD/10/2015 dated 4th November 2015 is annexed herewith as "AnnexureG".
15. Details in respect of frauds reported by auditors under section 143(12) of theCompanies Act 2013 :
During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board under section 143(12) of the Companies Act 2013.
16. Key Financial Ratios (Explanations for significant change i.e. change of 25% ormore as compared to the immediately previous financial year) :
|Key Financial Ratios ||2019-20 ||2018-19 ||% Change ||Explanations if any |
|i) Debtors Turnover ||6.32 ||6.52 ||(3) ||NA |
|ii) Inventory Turnover ||4.82 ||5.20 ||(7) ||NA |
|iii) Current Ratio ||0.81 ||0.95 ||(14) ||NA |
|iv) Interest Coverage Ratio ||3.15 ||5.65 ||(44) ||i. Due to de-growth in Market coupled with increase in |
|v) Debt Equity Ratio ||0.80 ||0.41 ||97 ||borrowings and finance costs. |
|vi) Operating Profit Margin (%) ||0.11 ||2.23 ||(95) ||ii. Provision for impairment of |
|vii) Net Profit Margin (%) or sector-specific equivalent ratios as applicable. ||(18.64) ||(17.57) ||(6) ||non-current investment and loans. |
17. Details of any change in Return on Net Worth as compared to the immediatelyprevious financial year along with a detailed explanation thereof.:
|Particulars ||2019-20 ||2018-19 ||% Change ||Explanations if any |
|Return on ||(39.81) ||(30.00) ||(33) ||i. Due to de-growth in Market coupled with increase in borrowings and finance costs. |
|Net Worth || || || ||ii. Provision for impairment of non-current investment and loans. |
18. List of all credit ratings obtained by the entity along with any revisions theretoduring the relevant financial year for all debt instruments of such entity or any fixeddeposit programme or any scheme or proposal of the listed entity involving mobilization offunds whether in India or abroad :
Disclosed under the heading "Finance" in the Directors' Report.
Your company reaffirms its commitment to good corporate governance practices. Thecompany complies with corporate governance requirements specified in regulation 17 to 27and regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations2015 whichever applicable.
Pursuant to Schedule V of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Report on Corporate Governance which forms a part of this Reporthas been annexed herewith as "Annexure F".
Managing Director and Chief Financial Officer have certified to the Board with regardto the financial statements and other matters as required under Regulation 17 (8) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Practicing Company Secretary's Certificate regarding compliance of conditions ofCorporate Governance is made a part of this Directors' Report. All the Board Members andSenior Management personnel have affirmed compliance with the code of conduct for the year2019-20.
Management Discussion and Analysis forming part of this Report is in compliance withSEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015 and such statements may be"forward-looking" within the meaning of applicable securities laws andregulations. Actual results could differ materially from those expressed or implied.Important factors that could make a difference to the Company's operations includeeconomic conditions affecting demand / supply and price conditions in the domestic andoverseas markets in which the Company operates changes in the Government regulations taxlaws and other statutes and other incidental factors.
The Board takes this opportunity to place on record appreciation to CustomersDistributors Dealers Suppliers Shareholders Bankers and Government authorities fortheir continued support and cooperation during the year under review. The Directors alsowish to place on record their appreciation to the employees at all levels for theircontinued co-operation and commitment.
| ||For and on behalf of the Board |
| ||Vanitha Mohan |
|Coimbatore ||Chairman |
|29th July 2020 ||DIN: 00002168 |