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Shakti Pumps (India) Ltd.

BSE: 531431 Sector: Engineering
NSE: SHAKTIPUMP ISIN Code: INE908D01010
BSE 00:00 | 25 May 431.55 -17.70
(-3.94%)
OPEN

457.70

HIGH

457.75

LOW

428.00

NSE 00:00 | 25 May 431.20 -17.95
(-4.00%)
OPEN

451.05

HIGH

457.75

LOW

428.00

OPEN 457.70
PREVIOUS CLOSE 449.25
VOLUME 4779
52-Week high 910.00
52-Week low 415.10
P/E 14.27
Mkt Cap.(Rs cr) 793
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 457.70
CLOSE 449.25
VOLUME 4779
52-Week high 910.00
52-Week low 415.10
P/E 14.27
Mkt Cap.(Rs cr) 793
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 26th Annual Report and theCompany's Audited Financial Statement for the financial year ended 31st March 2021.

1. FINANCIAL HIGHLIGHTS

The financial Summary: -

(' In Lakhs)

Particulars 2020-21 2019-20 2020-21 2019-20

Standalone

Consolidated

Sales & Other Income 89029.05 36073.50 93343.26 38691.14
Profit before Finance Cost Depreciation & Tax 12427.85 582.13 14582.23 1633.85
Finance Cost 1403.90 1865.59 1621.14 2079.23
Depreciation & Amortisation Expenses 1702.95 1645.68 1836.46 1719.69
Profit/(Loss) before Tax 9321.00 (2928.14) 11124.63 (2165.07)
Less:-Current Tax 2202.95 148.74 2491.92 333.42
Less:-Deferred Tax 1001.08 (1035.71) 1074.07 (1090.85)
Profit/(Loss) after Tax 6116.97 (2041.71) 7558.64 (1407.64)

2. FINANCIAL PERFORMANCE

During the year your Company has registered sales and other income ' 93343.26 Lakhsas compared to ' 38691.14 Lakhs of previous year. Company was able to register a domesticsale of ' 73102.91 Lakhs and export sale of ' 18001.59 Lakhs in the current year.

3. KEY FINANCIAL RATIOS: -

Particulars 2018-19 2019-20 2020-21
Return on Net Worth (%) 15.52% -5.31% 22.19%
Return on Capital Employed (%) 16.72% -0.19% 29.27%
Basic EPS (after exceptional items) (?) 24.52 -7.66 41.12
Debtors turnover 3.28 2.42 4.67
Inventory turnover 3.06 2.21 5.12
Interest coverage ratio 4.38 -0.04 7.86
Current ratio 1.61 1.53 1.71
Debt equity ratio 0.61 0.73 0.29
Operating profit margin (%) 17.52% 4.42% 16.01%
Net profit margin (%) 8.19% -3.64% 8.10%

*Interest coverage ratio has dropped because of accounting impact of Ind AS 116.

There is significant change (i.e. change of 25% or more as compared to the immediatelyprevious financial year) in the key financial ratios except current ratio.

4. DETAILED EXPLANATION OF RATIOS

(i) Return on Net Worth

Return on Net Worth (RONW) is a measure of profitability of a Company expressed inpercentage. It is calculated by dividing total comprehensive income for the year byaverage capital employed during the year.

(ii) Return on Capital Employed

Return on Capital Employed (ROCE) is a financial ratio that measures a Company’sprofitability and the efficiency with which its capital is used. In other words the ratiomeasures how well a Company is generating profits from its capital.

It is calculated by dividing profit before exceptional items and tax by average capitalemployed during the year.

(iii) Basic EPS

Earnings Per Share (EPS) is the portion of a Company’s profit allocated to eachshare. 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 in collecting itsreceivables or money owed by customers. The ratio shows how well a Company uses andmanages the credit it extends to customers and how quickly that short-term debt iscollected or is paid. It is calculated by dividing turnover by average trade receivables.

(v) Inventory Turnover

Inventory Turnover is the number of times a Company sells and replaces its inventoryduring a period. It is calculated by dividing turnover by average inventory.

(vi) Interest Coverage Ratio

The Interest Coverage Ratio measures how many times a Company can cover its currentinterest payment with its available earnings. It is calculated by dividing PBIT by financecost.

(vii) Current Ratio

The Current Ratio is a liquidity ratio that measures a Company’s ability to payshort-term obligations or those due within one year. It is calculated by dividing thecurrent assets by current liabilities.

(viii) Debt Equity Ratio

The ratio is used to evaluate a Company’s financial leverage. It is a measure ofthe degree to which a Company is financing its operations through debt versus wholly ownedfunds. It is calculated by dividing a Company’s total liabilities by itsshareholder’s equity.

(ix) Operating Profit Margin (%)

Operating Profit Margin is a profitability or performance ratio used to calculate thepercentage of profit a Company produces from its operations. It is calculated by dividingthe EBIT by turnover.

(x) Net Profit Margin (%)

The net profit margin is equal to how much net income or profit is generated as apercentage of revenue. It is calculated by dividing the profit for the year by turnover.

5. TRANSFER OF RESERVE

The Company has not transferred any amount to the General Reserves for the year ended31st March 2021.

6. LISTING INFORMATION

The Company Shares are listed as follows: -

Name of Stock Exchanges Stock Code/Symbol
BSE Limited (BSE) PJ. Towers Dalal Street Mumbai-400001 531431
National Stock Exchange of India Limited (NSE) "Exchange Plaza" Bandra Kurla Complex Bandra (E) Mumbai - 400 051. SHAKTIPUMP

7. SHARE CAPITAL

There is no change in the authorised share capital of the Company and the authorisedshare capital of the Company as on 31st March 2021 is ' 40.00 Crs.

The Company has not allotted any Shares during the year. The paid up share capital ofthe Company as on 31st March 2021 is ' 183801560/-.

8. SUSBSIDIARIES JOINT VENTURES AND ASSOCIATES COMPANIES

As on 31st March 2021 your Company is having following Subsidiaries: -

1. Shakti Pumps USA LLC

2. Shakti Pumps FZE UAE

3. Shakti Pumps (Shanghai) Limited- China

4. Shakti Pumps (Bangladesh) Limited

5. Shakti Energy Solutions Private Limited.

There has been no material change in the nature of the business of the Company and itsSubsidiary. During the year the Company has close its subsidiary Shakti Pumps Pty. Ltd.incorporated at Australia.

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

The Consolidated Financial Statement of the Company prepared as per the AccountingIND-AS Consolidated Financial Statement of the Company with its Subsidiaries have alsobeen included as part of this Annual Report.

9. DIRECTORS RESPONSIBILITY STATEMENT

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

Your Directors state that: -

a) In the preparation of the annual accounts for the year ended 31st March 2021 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2021 and of the profitof the Company for the year ended on that date;

c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors have prepared the annual accounts on a 'going concern’ basis;

e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

10. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis forms an integral part of this Report and givesdetail of the overall industry structure developments performance and state of affairsof the Company’s various businesses viz.

a) the decorative business international operations

b) industrial and home improvement business

c) internal controls and their adequacy risk management systems and other materialdevelopments during the financial year.

11. CORPORATE GOVERNANCE

Corporate Governance is an ethically driven business process that is committed tovalues aimed at enhancing an organisations brand and reputation. The Companies Act 2013and SEBI (Listing obligation and Disclosure Requirements) Regulation 2015 havestrengthened the governance regime in the country. The Company is in compliance with thegovernance requirements and had proactively adopted many provisions of ahead of time. TheCompany is committed to maintain the highest standards of corporate governance and adhereto the corporate governance requirements set out by SEBI.

A separate report on Corporate Governance is provided together with a Certificate fromthe Statutory Auditors of the Company regarding compliance of conditions of CorporateGovernance. A Certificate of the MD and CFO of the Company inter alia confirming thecorrectness of the financial statements and cash flow statements adequacy of the internalcontrol measures and reporting of matters to the Audit Committee is also annexed.

12. DEPOSITS

During 2020-21 the Company has not accepted any deposit within the meaning of Sections73 and 74 of the Companies Act 2013 read together with the Companies (Acceptance ofDeposits) Rules 2014.

13. DETAILS OF SIGNIFICANT AND MATERIALS ORDER PASSED BY THE REGULATORS COURTSTRIBUNAL

No significant and material order has been passed by the regulator courts tribunalsimpacting the going concern status and Company’s operations in future.

14. CORPORATE SOCIAL RESPONSIBILTY

In line with provision of the Companies Act 2013 the Company has framed its CorporateSocial Responsibility (CSR) policy for the development of programs and projects for thebenefit of weaker sections of the Society and the same has been approved by CSR Committeeand the Board of Directors of the Company.

CSR policy has been uploaded on the Company’s website at www.shaktipumps.com.

Pursuant to requirements under section 135 and rules made there under a Report on CSRactivities and initiatives taken during the in prescribed format is given in Annexure IIwhich is annexed hereto and forms part of Director Report.

15. RISK MANAGEMENT

Risk management is the process of identification assessment and prioritisation ofrisk followed by coordinated efforts to minimize monitor and mitigate/ control theprobability and/or impact of unfortunate events or to maximize the realisation ofopportunities. The Company has laid a comprehensive risk assessments and minimisationprocedure which is reviewed by the audit committee and approved by Board.

16. INTERNAL FINANCIAL CONTROL

According to Section 134(5)(e) of the Companies Act 2013 the term Internal FinancialControl (IFC) means the policies and procedures adopted by the Company for ensuring theorderly and efficient conduct of its business including adherence to Company’spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.

17. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All transactions entered with related parties during 202021 were on an arm’slength basis and were in ordinary course of Business and the provisions of section 188 ofthe Companies Act 2013 are not attracted. Further there are no materially significantrelated party transactions during the year made by the Company with promoter DirectorsKey Managerial personnel or other designated persons which may have potential conflictwith the interest of the Company at large.

All related party transactions are placed before the audit committee for approval.Prior omnibus approval of the audit committee is obtained for the transaction which is ofa foreseen and repetitive nature. Transaction entered into pursuant to omnibus approval sogranted along with statements giving details of all related party transaction are placedbefore the audit Committee.

In line with the requirements of the Companies Act 2013 and SEBI Listing Regulation2015 the Board has approved a Policy on Related Party Transactions which is alsoavailable on Company’s website at www.shaktipumps.com.

18. DIRECTORS

Mr. Sunil Manoharlal Patidar Whole-Time Director (DIN:02561763) retires from the Boardby rotation and being eligible offer himself for reappointment which is subject toapproval of the Shareholders in the ensuing Annual General Meeting.

19. APPOINTMENT/RE-APPOINTMENT

(a) The Board at its meeting held on 21st July 2021 pursuant to the recommendation ofNomination and Remuneration Committee and Audit Committee Mr. Dinesh Patidar (DIN00549552) have been re-appointed as Managing Director for a period of 3 years from 01stSeptember 2021 to 31st August 2024 (both days Inclusive).

(b) The Board at its meeting held on 21st July 2021 pursuant to the recommendation ofNomination and Remuneration Committee and Audit Committee Mr. Ramesh Patidar (DIN00931437) have been re-appointed as Whole -Time Director for a period of 5 years from 16thOctober 2021 to 15th October 2026 (both days Inclusive).

(c) The Board at its meeting held on 16th October 2020 pursuant to the recommendationof Nomination and Remuneration Committee and Audit Committee Mr. Sunil Manoharlal Patidar(DIN 002561763) have been re-appointed as Whole -Time Director for a period of 5 yearsfrom 29th January 2021 to 28th January 2026 (both days Inclusive).

20. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Remuneration Policy of the Company is designed to attract motivate and retainmanpower in a competitive and international market. The policy reflects the Company’sobjectives for good corporate governance as well as sustained long-term value creation forshareholders. The Remuneration Policy applies to the Company’s senior managementincluding 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.

21. ANNUAL EVALUATION OF BOARD'S PERFORMANCE

In accordance with the provisions of Schedule IV of the Companies Act 2013 a SeparateMeeting of the Independent Directors was held on 31st March 2021 without the attendanceof Non-Independent Directors and Members of the Management. The Committee has reviewed theperformance and effectiveness of the Board in this meeting as a whole for 2020-21.

22. FINANCE & ACCOUNTS

The agenda for the Finance and Accounts function of your Company is to assist indriving superior performance of the business pioneer-thought leadership and developfuture-ready talent in finance.

23. RISK AND INTERNAL ADEQUACY:

Your Company has an elaborate Risk Management procedure which is based on threepillars: Business Risk Assessment Operational Control Assessment and Policy Complianceprocesses. Major risks identified by the businesses and functions are systematicallyaddressed through mitigating actions on a continuing basis. The Company’s internalcontrol 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 policiesand systems.

24. KEY MANAGERIAL PERSONNEL

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

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

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

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

d) Mr. Dinesh Patel: - Chief Financial Officer

e) Mr. Ravi Patidar: - Company Secretary & Compliance Officer

25. NUMBER OF MEETINGS OF THE BOARD

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

26. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDPARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules is given in Annexure-III .

27. DISCLOSURE BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Regulation25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

28. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company is committed to provide the healthy environment to all its employees theCompany has in place a Prevention of the Sexual Harassment Policy and an Internalcomplaints committee as per the requirements of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 The policy aims at educating employeeson conduct that constitute sexual harassment ways and means to prevent occurrence of anysuch incident and the mechanism for dealing with such incident in the unlikely event ofits occurrence. The Company has also constituted an Internal Committee as required underSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and rules made there under. The Company has zero tolerance on Sexual Harassment atworkplace. During the year under review no complaints were received against the sexualharassment at workplace.

29. SECRETARIAL AUDITOR

The Board has appointed Mr. Manish Maheshwari (FCS 5174) Practicing Company Secretaryto conduct the Secretarial Audit of the Company for 2020-21. The Secretarial Audit Reportis annexed herewith Annexure - IV to this Report.

30. COST AUDITOR

As per the requirement of Central Government and pursuant to the provisions of Section148 of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules2014 as amended from time to time the Company has been carrying out audit of CostRecords.

The Board of Directors on the recommendation of Audit Committee has appointed M/s.M.P. Turakhia & Associates Cost Accountant as Cost Auditor to audit the costaccounts of the Company for 2021-22 at a remuneration of ' 55000 As required under theCompanies Act 2013. A resolution seeking members’ approval for the remunerationpayable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

31. EXTRACT OF ANNUAL RETURN

The Annual Return of the Company as on 31st March 2021 in Form MGT - 9 in accordancewith Section 92(3) of the Act read with the Companies (Management and Administration)Rules 2014 is available on the website of the Company at www.shaktipumps.com.

32. COMPLIANCE OF SECRETARIAL STANDARD

The Company has complied with the Secretarial Standards issued by The Institute ofCompany Secretaries of India and approved by the Central Government as required underSection 118(10) of the Companies Act 2013.

33. VIGIL MECHANISM

The Company has framed a vigil mechanism/whistle blower policy to deal with unethicalbehavior actual or suspected fraud or violation of the Companies Code of Conducts orethics policy if any. The Vigil Mechanism/ whistle blower policy has been uploaded on thewebsite of the Company.

34. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIESPROVIDED.

The Details of loans guarantees or investments covered under the provision of underSection 186 of the Companied Act 2013 are given in the Note to the Financial Statement.

35. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information on conservation of energy techno logy absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is set out herewith as "Annexure V" tothis Report.

36. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report forms a part of this Annual Report. is set outherewith as "Annexure VI" to this Report.

37. APPRECIATION AND ACKNOWLEDGMENTS

Your directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment.

The enthusiasm and unstinting efforts of the employees have enabled the Company toremain as industry leaders.

The board places on record its appreciation for the support and co-operation yourCompany has been receiving from its suppliers retailers dealers and other associatedwith the Company.

Your Company looks upon them as partners in its progress and has shared with them therewards of growth. It will be your Company’s endeavor to build and nurture stronglinks on mutuality of benefits respect for and co-operation with each other consistentwith consumer interests.

The Directors also take the opportunity to thank all shareholders clients vendorsBanks Government and Regulatory authorities and stock exchanges for their continuedsupport.

For and on behalf of the Board of Directors
SHAKTI PUMPS (INDIA) LIMITED
Dinesh Patidar
Place: Pithampur Managing Director
Dated: 21st July 2021 DIN:-00549552

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