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Pritika Auto Industries Ltd.

BSE: 539359 Sector: Auto
NSE: PRITIKAUTO ISIN Code: INE583R01029
BSE 12:35 | 06 Dec 17.00 -0.20
(-1.16%)
OPEN

16.40

HIGH

17.30

LOW

16.40

NSE 12:29 | 06 Dec 17.00 -0.20
(-1.16%)
OPEN

17.45

HIGH

17.45

LOW

16.85

OPEN 16.40
PREVIOUS CLOSE 17.20
VOLUME 13040
52-Week high 23.40
52-Week low 12.10
P/E 12.50
Mkt Cap.(Rs cr) 151
Buy Price 16.90
Buy Qty 4794.00
Sell Price 17.00
Sell Qty 621.00
OPEN 16.40
CLOSE 17.20
VOLUME 13040
52-Week high 23.40
52-Week low 12.10
P/E 12.50
Mkt Cap.(Rs cr) 151
Buy Price 16.90
Buy Qty 4794.00
Sell Price 17.00
Sell Qty 621.00

Pritika Auto Industries Ltd. (PRITIKAUTO) - Director Report

Company director report

Dear Shareholders

The Directors have pleasure in presenting their 40th Annual Report on thebusiness and operations together with the Audited Statement of Accounts of the Company forthe year ended 31st March 2020.

1. FINANCIAL RESULTS

The Financial results are briefly indicated below:

(In Lakhs)

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Revenue from operations (net) 14903.03 19515.93 16795.18 20971.20
Other Income 175.66 194.53 149.51 165.36
Profit before Interest Depreciation and Tax (PBIDT) 2015.77 3032.65 2247.97 3182.51
Interest 587.74 696.49 726.61 785.27
Profit before Depreciation and Tax (PBIT) 1428.03 2336.16 1521.36 2397.24
Depreciation 677.24 582.13 755.42 633.35
Profit before Tax Expenses 750.79 1754.03 765.94 1763.89
Tax Expenses 206.72 349.46 208.09 351.75
Profit after Tax 544.07 1404.57 557.85 1412.14
Other Comprehensive Income 33.12 - 61.24 -
Total Comprehensive Income 577.19 1404.57 619.09 1412.14
EPS- Basic 3.07 7.98 3.15 8.03
Diluted 3.04 7.97 3.12 8.01

The Standalone Revenue from the operations (net) for the Financial Year 2019-20 was Rs.14903.03 (Previous Year Rs.19515.93 lac). The company earned Net Profit of Rs. 544.07 lac(Previous Year Rs. 1404.57 lac).The Total Comprehensive Income for the year was Rs.577.19lac.

The Consolidated Revenue from the operations (net) for the Financial Year 2019-20 wasRs. 16795.18 lac (Previous Year Rs. 20971.20 lac). The company earned Consolidated NetProfit Rs. 557.85 lac (Previous Year Rs.1412.14 lac). The Consolidated Total ComprehensiveIncome for the year was Rs. 619.09 lac.

There was no change in the nature of business of the company during the year.

The previous year figures have been restated rearranged regrouped and consolidatedto enable comparability of the current year figures of accounts with the relative previousyear's figures.

2. INDUSTRIAL SCENARIO

After forging ahead with strong double digit growth for three consecutive years thedomestic tractor industry suddenly lost steam in the financial year 2019-2020 due tosagging rural income unpaid and discontinued subsidies and the simultaneous attack ofcorona virus. The Indian tractor market declined over 10 percent to about 709002 units inthe financial year 2019-2020 even lower than earlier expected drop of 5-7 percent.

In the month of March alone the tractor sales volume in the domestic market plunged to43 percent at 35216 units against 62315 units in the same month year ago. The last monthwas disrupted as business was hugely impacted by the lockdown just before the start offestive days in large parts of the country.

In the last month of FY 2020 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 minimizing disruption to services for all our customers. As the natureof business performed by the Company fell under non-essential category the administrativeoffices manufacturing units and plants were closed temporarily and the switch to workfrom home for employees as far as practicable was carried out. The Company has sinceafter receiving applicable permissions partially commenced

Due to the escalated corona virus cases and extended lockdown the first quarter was acomplete washout.

Several positive factors including a good rabi output opening of procurement centersby the government indication of good crop prices reservoir levels etc. augur well fortractor demand. The relief packages announced by the government will help bring inmomentum for tractor sales after the lockdown ends. Moreover the budget's emphasis ondoubling farmers' income by 2022 loan waivers and finance availability as well as risinguse of tractors in construction and other fields would augur well for the production andsale of tractors going forward.

This year we are hoping for good monsoon weather and therefore expect the demand fortractors will see a spike whenever the situation settles in the second half year. Theagriculture tractor market in India is expected to grow at a CAGR of 6.7% during2019-2024.

3. SHARE CAPITAL

During the year under review there was no change in the Share Capital of the company.As at March 31 2020 the total paid-up share capital of the company stood at Rs 1773.45lacs divided into 17734500 equity shares of Rs 10/- each.

During the previous year the company had issued on preferential basis to non-promoter(public) category 575000 convertible warrants at Rs 200/- per warrant (paid-up Rs 50/-)each warrant convertible into one equity share of Rs 10/- each to be issued at a price ofRs 200/- per share i.e. at a premium of Rs 190/- per share. The last date to exerciseentitlement for conversion of warrant and to apply for allotment of equity shares was20/7/2020. The Allottees failed to apply for allotment of equity shares on conversion andto make the payment of balance amount of Rs. 150/- towards the subscription of each equityshare within prescribed period of 18 months. Hence the entitlement of warrant holders toapply for equity shares of the company along with the rights attached thereto expired andthe amount paid on such warrants stands forfeited pursuant to the provisions of SEBI(ICDR) Regulations 2018.

4. DIVIDEND

Considering the financial results and to plough back surplus of the Company the Boarddid not recommend payment of any dividend for the year ended 31st March 2020.

5. TRANSFER TO RESERVE

During the financial year there was no amount proposed to be transferred to theReserves.

6. AUDITORS & AUDITORS' REPORT

M/s. Sunil Kumar Gupta & Co. Chartered Accountants New Delhi were appointed asstatutory auditors of the company for a period of five years in the 38th AGMi.e. till the conclusion of the 43rd Annual General Meeting to be held for theFY 2022-23.

The Auditors' Report for the fiscal 2020 does not contain any qualificationreservation or adverse remark. Further in terms of section 143 of the Companies Act 2013read with Companies (Audit & Auditors) Rules 2014 as amended no fraud has beenreported by the Auditors of the Company where they have reasons to believe that an offenceinvolving fraud is being or has been committed against the company by officers oremployees of the company.

7. DEPOSITS

The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014. . Hencecompany need not to give details related to deposits. There is no non compliance of theprovisions of Chapter V of the Companies Act 2013.

8. PARTICULARS OF EMPLOYEES

Disclosure pertaining to the remuneration and other details as required under theCompanies Act 2013 read with rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and any amendments thereof is attached as Annexure A.

9. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Board has on the recommendation of the Nomination & Remuneration Committeeadopted a policy for selection and appointment of Directors Key Managerial PersonnelSenior Management and their remuneration.

-The Nomination & Remuneration Committee identifies and ascertains the integrityqualification expertise and experience of the person for appointment as Director andensures that the candidate identified possesses adequate qualification expertise andexperience for the appointment as a Director.

-The Nomination & Remuneration Committee ensures that the candidate proposed forappointment as Director is compliant with the provisions of the Companies Act 2013.

-The candidate's appointment as recommended by the Nomination and RemunerationCommittee requires the approval of the Board.

-In case of appointment of Independent Directors the Nomination and RemunerationCommittee satisfies itself with regard to the independent nature of the Directors vis-a-vis the Company so as to enable the Board to discharge its function and dutieseffectively.

-The Nomination and Remuneration Committee ensures that the candidate identified forappointment as a Director is not disqualified for appointment under Section 164 of theCompanies Act 2013.

-The policy can be viewed at company's website at http://www.pritikaautoindustries.com/investors.html

10. CORPORATE GOVERNANCE

Report on Corporate Governance and Certificate of the Secretarial Auditors of yourCompany regarding compliance of the conditions of Corporate Governance as stipulated inSchedule V read with Regulation 34(3) of the SEBI (LODR) Regulations are provided in aseparate section and forms part of this Report as Annexure B.

11. SUBSIDIARIES

There is one wholly owned subsidiary namely ‘Pritika Engineering Components Pvt.Limited'.

In accordance with the provisions of Section 129(3) of the Act read with the Companies(Accounts) Rules 2014 a report on the performance and financial position of thesubsidiary is attached as Annexure C to this Report.

12. STATEMENTS OF PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE

Information in accordance with the provisions of Section 134 (3)(m) of the Act readwith the Companies (Accounts) Rules 2014 regarding Conservation of Energy TechnologyAbsorption and Foreign Exchange Earnings and Outgo during the reporting period is attachedherewith and marked as Annexure-D.

13. RELATED PARTY TRANSACTIONS

Information on transactions with related parties pursuant to Section 134(3)(h) of theAct read with rule 8(2) of the Companies (Accounts) Rules 2014 are given in Form AOC-2and forms part of this report as Annexure- E.

14. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure F.

15. SECRETARIAL AUDIT REPORT

As required under section 204(1) of the Companies Act 2013 and Rules made there underthe Company has appointed Mr. Sushil K Sikka Prop. S K Sikka & Associates CompanySecretary as Secretarial Auditor of the Company for the Financial Year 2019-20.TheSecretarial Audit Report forms part of the Annual Report.

The Copy of Secretarial Audit Report for the Financial Year 2019-20 issued by Mr.Sushil K Sikka Company Secretary in Practice has been attached and marked as Annexure- G. The Secretarial Auditors' Report for the fiscal 2020 does not contain anyqualification reservation or adverse remark.

16. MANAGEMENT DISCUSSION ANALYSIS REPORT

The details forming part of Management Discussion and Analysis Report is annexedherewith to the Board Report as Annexure H.

17. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

During the year under review there is no significant and material order passed by theRegulators or Courts or Tribunals impacting the going concern status and Company'soperations.

18. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of loan guarantee and investment covered under the provisions of Section 186of the Act read with the Companies (Meetings of Board and its Powers) Rules 2014 aregiven in the Notes to the financial statements.

19. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The details about the policy developed and implemented by the company on CSRinitiatives taken during the year is enclosed at Annexure I. The company has alsodeveloped a policy on Corporate Social Responsibility which can be viewed at the company'swebsite at http://www.pritikaautoindustries.com/investors.html.

20. MEETINGS OF BOARD OF DIRECTORS

The Board met five times during the year the details of which are given in theCorporate Governance Report. The intervening gap between the meetings was within theperiod prescribed under the Companies Act 2013 and the Listing Regulations.

21. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relatetill the date of this report.

22. CORPORATE ACTIONS DURING THE YEAR 2019-20

During the Financial Year 2019-20 the Company made following Corporate Actions:

POSTAL BALLOT

The Company conducted Postal Ballot in order to seek the approval of the Shareholdersfor the following matters vide notice dated 12th February 2020 by OrdinaryResolution.

• To approve material related party transactions to be entered into with PritikaIndustries Ltd. during the year 2020-21 and 2021-22.

• To approve material related party transactions to be entered into with PritikaEngineering Components Pvt. Ltd. during the year 2020-21 and 2021-22.

All the above resolutions were passed with requisite majority.

23. COMPOSITION OF COMMITTEES

The Company has complied with the SEBI (LODR) Regulations along with the Companies Act2013 with respect to the Composition of the Committees as required therein and the detailsof which is given under Corporate Governance Report annexed to this Report.

24. BOARD EVALUATION

The Board of Directors have carried out an annual evaluation of its own performanceits various committees and individual directors pursuant to the provisions of the Act andthe Corporate Governance requirements as prescribed under Regulation 17(10) 25(4) andother applicable provisions of the SEBI (LODR) Regulations. The manner of evaluation isprovided in the Corporate Governance Report.

25. DIRECTORS AND KEY MANAGERIAL PERSONNEL Re-Appointment of Director

Mr. Raminder Singh Nibber (DIN: 00239117) retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment.

Independent Directors

Independent Directors on your Company's Board have submitted declarations ofindependence to the effect that they meet the criteria of independence as provided inSection 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.

Change in Composition of Board

During the Financial Year 2019-20 there was no change in the composition of Board ofDirectors.

The Board has appointed Mr. Subramaniyam Bala (DIN: 00461697) as Additional Director inthe category of Independent Director w.e.f. August 29 2020 for a period of 1 yearsubject to the approval by the Members at the ensuing AGM.

Key Managerial Personnel

The following changes took place in Key Managerial Personnel during the FY 2019-20.

Mr. Ramesh Chander Saini Chief Financial Officer retired from the post w.e.f30.04.2019 & Mr. Narinder Kumar Tyagi was appointed as Chief Financial Officer w.e.f.22.05.2019.

Mr. Vedant Bhatt Company Secretary & Compliance Officer resigned w.e.f. 22.05.2019and Mr. Chander Bhan Gupta was appointed as Company Secretary & Compliance Officerw.e.f. 22.05.2019.

26. DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the Companies Act 2013 withrespect to Directors Responsibilities Statement it is hereby confirmed that:

a. In the preparation of the annual accounts for the financial year ended 31stMarch 2020 the applicable accounting standards had been followed along with properexplanation relating to material departures.

b. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 or loss of the Company for the year under review.

c. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

d. The Directors had prepared the accounts for the financial year ended 31st March2020 on a going concern basis.

e. The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

f. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

27. COST AUDITORS

As per requirement of the Regulation 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 as amended from time to time M/s.Khushwinder Kumar & Co. Cost Accountants (Firm Registration No. 100123) wasappointed as Cost Auditor to audit the Cost Accounts of the company for the Financial Year2019-20.

On the recommendation of Audit Committee the Board has reappointed M/s. KhushwinderKumar & Co. Cost Accountants (Firm Registration No. 100123) as Cost Auditor to auditthe Cost Accounts of the company for the Financial Year 2020-21.

As required under the Act a resolution seeking members' approval for remunerationpayable to the Cost Auditor forms part of the notice convening the Annual General Meetingfor their ratification.

28. INTERNAL AUDITORS

The Company has appointed M/s. PVNS & Co. Chartered Accountants Chandigarh asInternal Auditors of the Company for financial year 2020-21.

29. COST RECORDS

As specified by the Central government under sub section (1) of section 148 of theCompanies Act 2013 the company has been maintaining cost records.

30. INTERNAL FINANCIAL CONTROLS & RISK MANAGEMENT

Pursuant to the provisions of Section 177(4) & Section 134(3)(n) of the CompaniesAct 2013 the Board has developed Internal Finance Control Policy to identify andmitigate risks. The provisions of Regulation 21 of SEBI Listing Regulations 2015pertaining to Risk Management Committee are not applicable to the company.

31. WHISTLE BLOWER POLICY AND VIGIL MECHANISM

To create enduring value for all stakeholders and ensure the highest level of honestyintegrity and ethical behavior in all its operations the Company has formulated VigilMechanism Policy. This policy aspires to encourage all employees to report suspected oractual occurrence of illegal unethical or inappropriate events (behaviors or practices)that affect Company's interest/image.

32. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The company has complied with the provisions of Internal Complaints Committee under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.The details pertaining to complaints are mentioned in the Corporate Governance Reportplaced at Annexure B.

33. ACKNOWLEDGEMENTS

Your Directors wish to express their sincere appreciation to all the Employees fortheir contribution and thanks to our valued clients Bankers and shareholders for theircontinued support.

For and on behalf of the Board of Directors
Sd/-
Date: 29/08/2020 Raminder Singh Nibber
Place: Mohali Chairman

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