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Shakti Pumps (India) Ltd.

BSE: 531431 Sector: Engineering
NSE: SHAKTIPUMP ISIN Code: INE908D01010
BSE 00:00 | 03 Dec 613.00 -11.25
(-1.80%)
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634.00

HIGH

634.00

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607.40

NSE 00:00 | 03 Dec 612.65 -11.20
(-1.80%)
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628.00

HIGH

628.00

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OPEN 634.00
PREVIOUS CLOSE 624.25
VOLUME 8282
52-Week high 910.00
52-Week low 246.15
P/E 15.64
Mkt Cap.(Rs cr) 1,127
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 634.00
CLOSE 624.25
VOLUME 8282
52-Week high 910.00
52-Week low 246.15
P/E 15.64
Mkt Cap.(Rs cr) 1,127
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shakti Pumps (India) Ltd. (SHAKTIPUMP) - Director Report

Company director report

 

dear members

Your Directors have great pleasure in presenting the 25th Annual Reportand the Company's Audited Financial Statement for the financial year ended March 312020.

FINANCIAL HIGHLIGHTS

The financial Summary:-

(Rs. In Lacs)

Particulars 2019-20 2018-19 2019-20 2018-19
Standalone Consolidated
Sales & Other Income 36073.50 52591.2 38691.14 54644.99
Profit before Finance Cost Depreciation & Tax 583.13 7692.81 1633.85 9296.80
Finance Cost 1865.59 1673.79 2079.23 1780.66
Depreciation & Amortization Expenses 1645.68 1487.62 1719.69 1504.38
Profit/(Loss) before Tax (2928.14) 4531.40 (2165.07) 6011.76
Less:-Current Tax 148.74 1216.03 333.42 1326.73
Less:-Deferred Tax (1035.71) 172.27 (1090.85) 177.53
Profit/(Loss) after Tax (2041.71) 3143.10 (1407.64) 4507.50

FINANCIAL PERFORMANCE

During the year your Company has register sales and other income Rs.38591.14 Lacs as compared to Rs. 54644.99 lacs of previous year. Company was able toregister domestic sale of Rs. 24158.25 Lacs and export sale of Rs. 12793.64 Lacs in thecurrent year.

Key Financial Ratios: -

Particulars 2019-20 2018-19 2017-18 1
Return on Net Worth (%) -5 31% 15.52% 13.45%
Return on Capital Employed (%) -0.19% 16.72% 18.43%
Basic EPS (after exceptional items) Q -7.66 24.52 18.56
Debtors turnover 2.42 3.28 3.02
Inventory turnover 2.21 3.06 2.65
Interest coverage ratio -0.04 4.38 4.78
Current ratio 1.53 1.61 1.86
Debt equity ratio 0.73 0.61 0.43
Operating profit margin (%) 4.42% 17.52% 19.05%
Net profit margin (%) -3.64% 8.19% 7.75%

interest coverage ratio has dropped because of accounting impact of IndAS 116

There is no significant change (i.e. change of 25% or more as comparedto the immediately previous financial year) in the key financial ratios

Detailed explanation of ratios (i) Return on Net Worth

Return on Net Worth (RONW) is a measure of profitability of a Companyexpressed in percentage. It is calculated by dividing profit after tax for the year by NetWorth during the year.

(ii) Return on Capital Employed

Return on Capital Employed (ROCE) is a financial ratio that measures aCompany's profitability and the efficiency with which its capital is used. In other wordsthe ratio measures how well a Company is generating profits from its capital. It iscalculated by dividing profit before exceptional items and tax by capital employed duringthe year

(iii) Basic EPS

Earnings Per Share (EPS) is the portion of a Company's profit allocatedto each share. It serves as an indicator of a Company's profitability. It is calculated bydividing Profit for the year by Weighted average number of shares outstanding during theyear.

(iv) Debtors Turnover

The above ratio is used to quantify a Company's effectiveness incollecting its receivables or money owed by customers. The ratio shows how well a Companyuses and manages the credit it extends to customers and how quickly that short-term debtis collected or is paid. It is calculated by dividing revenue from operation by averagetrade receivables.

(v) InventoryTurnover

Inventory Turnover is the number of times a Company sells and replacesits inventory during a period. It is calculated by dividing COGS.

(vi) Interest Coverage Ratio

The Interest Coverage Ratio measures how many times a Company can coverits current interest payment with its available earnings. It is calculated by dividingPBIT by finance cost.

(vii) Current Ratio

The Current Ratio is a liquidity ratio that measures a Company'sability to pay short-term obligations or those due within one year. It is calculated bydividing the current assets by current liabilities.

(viii) Debt Equity Ratio

The ratio is used to evaluate a Company's financial leverage. It is ameasure of the degree to which a Company is financing its operations through debt versuswholly owned funds. It is calculated by dividing a Company's total borrowing by itsshareholder's equity.

(ix) Operating Profit Margin (%)

Operating Profit Margin is a profitability or performance ratio used tocalculate the percentage of profit a Company produces from its operations. It iscalculated by dividing the EBIT by turnover.

(x) Net Profit Margin (%)

The net profit margin is equal to how much net income or profit isgenerated as a percentage of revenue. It is calculated by dividing the profit for the yearby turnover.

TRANSFER OF RESERVE

The Company has not transferred any amount to the General Reserves forthe year ended 31 st March 2020.

LISTING INFORMATION

The Company Shares are listed as follows:

Name of Stock Exchanges Stock Code/Symbol
BSE Limited (BSE) 531431
P. J. Towers Dalai Street
Mumbai-400001
National Stock Exchange of India SHAKTI PUMP
Limited (NSE) "Exchange Plaza"
Bandra Kurla Complex Bandra(E)
Mumbai-400051.

SHARE CAPITAL

There is no change in the authorized share capital of the company andthe authorized share capital of the Company as on 31st March 2020 is Rs. 40.00 crores.

The Company has not allotted any Shares during the year. The paid upshare capital of the Company as on 31 st March 2020 is Rs. 183801560/-.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATES COMPANIES

As on March 31 2020 your Company is having following Subsidiaries:-

1. Shakti Pumps USA LLC

2. Shakti Pumps FZE UAE

3. Shakti Pumps Pty Ltd Australia

4. Shakti Pumps(Shanghai) Limited-China

5. Shakti Pumps (Bangladesh) Limited

6. Shakti Energy Solutions Private Limited

There has been no material change in the nature of the business of theCompanyand its Subsidiaries

Pursuant to the provisions of Section 129(3) of the Companies Act 2013a statement containing salient features of financial statements of Subsidiaries Companiesin Form AOC-1 in Annexure-I.

The Consolidated Financial Statement of the Company prepared as per theAccounting IND-AS Consolidated Financial Statement of the Company with its Subsidiarieshave also been included as part of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

As required by section 134 (3) (c) of Companies Act 2013.

Your Directors statethat: -

a) In the preparation of the annual accounts for the year ended March31 2020 the applicable accounting standards read with requirements set out underSchedule III to the Act have been followed and there are no material departures from thesame;

b) The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 312020and of the profit of the Company for the year ended on that date;

c) The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) The Directors have prepared the annual accounts on a 'goingconcern'basis;

e) The Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and

f) The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis forms an integral part of thisReport and gives detail of the overall industry structure developments performance andstate of affairs of the Company's business internal controls and their adequacy riskmanagement systems and other material developments during the financial year

CORPORATE GOVERNANCE

Corporate Governance is an ethically driven business process that iscommitted to values aimed at enhancing an organizations brand and reputation. TheCompanies Act 2013 and SEBI (Listing obligation and Disclosure Requirements) Regulation2015 have strengthened the governance regime in the country. The Company is in compliancewith the governance requirements and had probatively adopted many provisions ahead of timeThe Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requ i rements set out by SEBI

A separate report on Corporate Governance is provided together with aCertificate from the Secretarial Auditors of the Company regarding compliance ofconditions of Corporate Governance. A Certificate of the MD and CFO of the Company interalia confirming the correctness of the financial statements and cash flow statementsadequacy of the internal control measures.

DEPOSITS

During the financial year 2019-20 the Company has not accepted anydeposit within the meaning of Sections 73 and 74 of the Companies Act 2013 read togetherwith the Companies (Acceptance of Deposits) Rules 2014.

DETAILS OF SIGNIFICANT AND MATERIALS ORDER PASSED BYTHE REGULATORSCOURTS TRIBUNAL

No significant and material order has been passed by the regulatorcourts tribunals impacting the going concern status and Company's operations in future.

CORPORATE SOCIAL RESPONSIBILITY

In line with provisions of the Companies Act 2013 the Company hasframed its Corporate Social Responsibility (CSR) policy for the development of programsand projects for the benefit of weaker sections of the Society and the same has beenapproved by CSR Committee and the Board of Directors of the Company

CSR policy has been uploaded on the Company's website atwww.shaktipumps.com.

Pursuant to requirements under section 135 and rules made there under aReport on CSR activities and initiatives taken during the year in prescribed format isgiven in Annexure II which is annexed hereto and forms part of Di rector Report

RISKMANAGEMENT

Risk management is the process of identification assessment andprioritization of risk followed by coordinated efforts to minimize monitor andmitigate/control the probability and/or impact of unfortunate events or to maximize therealization of opportunities. The Company has laid a comprehensive risk assessments andminimization procedure which is reviewed by the audit committee and approved by Board

INTERNAL FINANCIAL CONTROL

According to Section 134(5)(e) of the Companies Act 2013 the termInternal Financial Control (IFC) means the policies and procedures adopted by the companyfor ensu ring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliablefinancial information

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All transactions entered with related parties during the financia year2019-20 were on an arm's length basis and were in ordinary course of Business and theprovisions of section 188 of the Companies Act 2013 are not attracted. Further there areno materially significant related party transactions during the year made by the Companywith promoter. Directors Key Managerial personnel or other designated persons which mayhave potentia conflict with the i interest of the Company at large

All related party transactions are placed before the audit committeefor approval. Prior omnibus approval of the audit committee is obtained for thetransaction which is of a foreseen and repetitive nature. Transaction entered intopursuant to omnibus approval so granted along with statements giving details of allrelated party transaction are placed before the audit Committee

In line with the requirements of the Companies Act 2013 and SEBIListing Regulation 2015 the Board has approved a Policy on Related Party Transactionswhich is also available on Company's website atwww.shaktipumps.com.

DIRECTORS

Mr. Ramesh Patidar Whole-Time Director (DIN:00931437)

retires from the Board by rotation and being eligible offers himselffor reappointment.

The above is subject to approval of the Shareholders in the ensuingAnnual General Meeting.

Appointment/Re-appointment of independent Directors:

(a) The Board at its meeting held on 14th February 2020 pursuant tothe recommendation of Nomination and Remuneration Committee and taking into account thereport of performance evaluation re-appointed Mrs. Nishtha Neema (DIN 01743710) as anindependent director for a second consecutive term of 5 yearsfor a period of Fiveyearsfrom27th March2020to26th March2025.

(b) The Board at its meeting held on 11th June 2019 pursuant to therecommendation of Nomination and Remuneration Committee appointed Mr. Keyur BipinchandraThaker (DIN 08474827) as additional independent director for a period of 5 years witheffect from 11th June 2020.

The Board opines that the independent directors soappointed/re-appointed are of integrity and possess the requisite expertise and experience(including the proficiency). Necessary details regarding the appointment

 

PUMPING LIFE

and re-appointment as required under the Companies Act 2013 andListing Regulations 2015 are given in the notice of annual general meeting The aforesaidappointments are subject to approval of shareholders at the ensuing annua general meeting

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Remuneration Policy of the Company is designed to attract motivateand retain manpower in a competitive and Internationa market. The policy reflects theCompany's objectives for good corporate governance as well as sustained long-term valuecreation for shareholders The Remuneration Pol icy applies to the Company's seniormanagement including its Key Managerial Person and Board of Directors. The Nomination andRemuneration Policy for the members of Board and Executive Management is available on theCompany's website www.shaktipumps.com.

ANNUAL EVALUATION OF BOARD'S PERFORMANCE

In accordance with the provisions of Schedule IV of the Companies Act2013 a Separate Meeting of the Independent Di rectors was held on November142019.without the attendance of Non-Independent Directors and Members of the ManagementThe Committee has reviewed the performance and effectiveness of the Board in this meetingas a whole for the Financial Year 2019-20.

FI NANCES ACCOUNTS

The agenda for the Finance and Accounts function of your Company is toassist in driving superior performance of the business pioneer-thought leadership anddevelop future-ready talent in finance.

RISKAND INTERNAL ADEQUACY

Your company has an elaborate Risk Management procedure which is basedon three pillars: Business Risk Assessment Operational Control Assessment and PolicyCompliance processes. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. The Company'sinternal control systems are commensurate with the nature of its business and the size andcomplexity of its operations. These are routinely tested and certified by Statutory aswell as Internal Auditors and cover all offices factories and key business areas.Significant audit observations and follow up actions thereon are reported to the AuditCommittee. The Audit Committee reviews adequacy and effectiveness of the Company'sinternal control environment and monitors the implementation of audit recommendationsincluding those relating to strengthening of the Company's risk management policies andsystems.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel (KMP) in the Company as per Section 2(51)and 203 of the Companies Act 2013 are as follows:

Mr. Dinesh Patidar:- Managing Director(DIN: 00549552)

Mr. Sunil Manoharlal Patidar:- Whole Time Director(DIN:02561763)

Mr. Ramesh Patidar:-Whole Time Director (DIN: 00931437)

Mr. Dinesh Patel:-Chief Financial Officer

Mr. Ravi Patidar:-Company Secretary & Compliance Officer

NUMBEROFMEETINGSOF THE BOARD

The details of the number of Board and Audit Committee meetings of theCompany are set out in the Corporate Governance Report which forms part of this Report.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIALPERSONNEL AND PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act2013 read with Rules 5 (2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules is givenin Annexure III.

DISCLOSURE BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet thecriteria of independence as laid down under section 149(6) of the Companies Act 2013 andRegulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company is committed to provide the healthy environment to all itsemployees the company has in place a Prevention of the Sexual Harassment Policy and anInternal complaints committee as per the requirements of Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 The policy aims at educatingemployees on conduct that constitute sexual harassment ways and means to preventoccurrence of any such incident and the mechanism for dealing with such incident and themechanism for dealing with such incident in the unlikely event of its occurrence. TheCompany has also constituted an Internal Committee as required under Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and rules made thereunder. The Company has zero tolerance on Sexual Harassment at workplace. During the yearunder review no complaints were received against the sexual harassment at workplace.

SECRETARIAL AUDITOR

The Board has appointed Mr. Manish Maheshwari (FCS 5174) PracticingCompany Secretary to conduct the Secretarial Audit of the Company for the financial year2019-20. The Secretarial Audit

Report is annexed herewith Annexure IV to this Report. TheSecretarial Audit Report contain adverse remark for non-filling of Form MGT 14 datedNovember 14 2019 for exercising the borrowing power.

Explanation of Adverse Remark: -

Filing of Form MGT -14 was overlooked due other occupancies and thesame has been filed.

COST AUDITOR

As per the requirement of Central Government and pursuant to theprovisions of Section 148 of the Companies Act 2013 read with the Companies (Cost Recordsand Audit) Rules 2014 as amended from time to time the Company has been carrying outaudit of Cost Records.

The Board of Directors on the recommendation of Audit Committee hasappointed M/s. M.P. Turakhia & Associates Cost Accountant as Cost Auditor to auditthe cost accounts of the Company for the Financial Year 2020-21 at a remuneration of Rs.

55000 As required under the Companies Act 2013. A resolution seekingmembers' approval for the remuneration payable to the Cost Auditor forms part of theNotice convening the Annual General Meeting.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return as on March 31 2020 in the prescribedForm No. MGT-9 pursuant to Section 92(3) of the Companies Act 2013 and Rule 12 (1) ofthe Companies (Management and Administration) Rules 2014 is attached herewith as 'AnnexureV' and forms part of this Report.

COMPLIANCE OF SECRETARIAL STANDARD

The Company has complied with the Secretarial Standards issued by TheInstitute of Company Secretaries of India and approved by the Central Government asrequired under Section 118(10) of the Companies Act 2013.

VIGIL MECHANISM

The Company has framed a vigil mechanism/whistle blower policy to dealwith unethical behavior actual or suspected fraud or violation of the Companies Code ofConducts or ethics policy if any. The Vigil Mechanism/ whistle blower policy has beenuploaded on the website of the Company.

PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN ANDSECURITIES PROVIDED.

The Details of loans guarantees or investments covered under theprovision of under Section 186 of the Companies Act 2013 are given in the Note to theFinancial Statement.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

The information on conservation of energy technology absorption andforeign exchange earnings and outgo as stipulated under Section 134 of the Companies Act2013 read with the Companies (Accounts) Rules 2014 is set out herewith as "AnnexureVI to this Report.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report forms a part of this Annual Reportis set out herewith as "Annexure VII" to this Report.

APPRECIATION AND ACKNOWLEDGMENTS

Your Directors place on record their deep appreciation to employees atall levels for their hard work dedication and commitment.

The enthusiasm and unstinting efforts of the employees have enabled theCompany to remain as industry leaders.

The board places on record its appreciation for the support andco-operation your company has been receiving from its suppliers retailers dealers andother associated with the company.

Your company looks upon them as partners in its progress and has sharedwith them the rewards of growth. It will be your Company's endeavor to build and nurturestrong links on mutuality of benefits respect for and co-operation with each other con si stent with consumer interests

The Directors also take the opportunity to thank all shareholdersclients vendors Banks Government and Regulatory authorities and stock exchanges fortheir continued support

.