Dear Members,
Your Directors with immense pleasure present the Thirteenth Annual Report of Pricol
Limited (''Company) on the business and operations together with the audited
financial statements (Standalone & Consolidated) for the financial year ended 31st
March, 2024 and Auditor's Report thereon.
FINANCIAL RESULTS
The summarised financial results are: |
Standalone |
Consolidated |
2023-24 |
2022-23 |
2023-24 |
2022-23 |
Net Sales & Services |
|
|
|
|
- Domestic |
2,04,950.54 |
1,73,440.69 |
2,05,921.83 |
1,74,774.02 |
- Export |
14,224.80 |
13,751.12 |
14,895.06 |
15,509.10 |
Revenue from Operations |
2,19,175.34 |
1,87,191.81 |
2,20,816.89 |
1,90,283.12 |
Other Operating Revenue |
6,361.34 |
5,572.95 |
6,361.34 |
5,572.95 |
Other Income |
1,047.35 |
402.36 |
1,315.83 |
458.53 |
Total Income |
2,26,584.03 |
1,93,167.12 |
2,28,494.06 |
1,96,314.60 |
Profit from Operations before Finance Cost, |
|
|
|
|
Depreciation and Amortisation Expense, |
|
|
|
|
Exceptional Items & Tax |
27,171.53 |
21,593.24 |
28,621.52 |
23,306.03 |
Less : Finance Costs |
1,820.71 |
1,827.36 |
1,825.00 |
1,828.25 |
: Depreciation and Amortisation Expenses |
8,029.82 |
7,615.88 |
8,206.06 |
7,790.78 |
Profit / (Loss) before Exceptional Items & Tax |
17,321.00 |
12,150.00 |
18,590.46 |
13,687.00 |
Add : Exceptional Item |
|
975.00 |
|
975.00 |
Profit / (Loss) Before Tax |
17,321.00 |
13,125.00 |
18,590.46 |
14,662.00 |
Less : Tax Expense |
|
|
|
|
Current Tax |
4,750.53 |
3,313.86 |
5,045.19 |
3,620.32 |
Deferred Tax |
(451.07) |
(1,446.75) |
(425.48) |
(1,426.85) |
Earlier years (Net) |
(69.95) |
|
(90.40) |
|
Profit / (Loss) for the year (A) |
13,091.49 |
11,257.89 |
14,061.15 |
12,468.53 |
Other Comprehensive Income for the year before tax |
(682.25) |
(310.57) |
(757.36) |
273.92 |
Income tax relating to these items |
171.71 |
78.16 |
167.17 |
67.58 |
Other Comprehensive Income for the year after tax (B) |
(510.54) |
(232.41) |
(590.19) |
341.50 |
Total Comprehensive Income for the year (C) = (A) + (B) |
12,580.95 |
11,025.48 |
13,470.96 |
12,810.03 |
Cash Profit |
20,610.77 |
18,641.36 |
21,677.02 |
20,600.81 |
Earnings per share (EPS) Basic & Diluted (inRs.) |
10.74 |
9.24 |
11.54 |
10.23 |
DIVIDEND & RESERVES
As the current year profit after setting off the losses of the previous years are
inadequate to declare dividend, your Directors do not recommend any dividend and not
transferred any amount to reserves for the year 2023-24.
AUTO INDUSTRY
During the year, the Auto Industry's domestic sales grew by 12.5 % and exports by
(5.5)%. The overall Auto Industry's production grew by 9% as against 12.5% in the previous
financial year.
.
Segment |
Vehicle Production* |
2023-24 |
2022-23 |
Growth % |
2 Wheeler / 3 Wheeler |
2,24,66,469 |
2,03,17,602 |
10.58 % |
Commercial Vehicle |
10,66,429 |
10,35,626 |
2.97 % |
Tractors |
8,74,500 |
9,38,500 |
(6.82) % |
4 Wheeler |
49,01,844 |
45,87,116 |
6.86 % |
Total |
2,93,09,242 |
2,68,78,844 |
9.04 % |
*As per Society of Indian Automobile Manufacturers (SIAM)
COMPANY 'S PERFORMANCE OPERATIONS
In domestic market, Company primarily caters to 2 wheelers, Commercial Vehicles,
Tractors, 4 wheelers and Off-road vehicles.
STANDALONE
The Company's domestic sales was up by 18.17% and overall Company's sales by 17.09%
compared to the previous year. The profit from operations before Finance cost,
Depreciation, Amortisation expenses, Exceptional items & Tax isRs.27,171.53 Lakhs
compared toRs.21,593.24 Lakhs during the previous year. Profit before Exceptional items
& Tax has increased fromRs.12,150 Lakhs toRs.17,321 Lakhs, due to increase in sales
volume and better control on costs.
CONSOLIDATED
The profit from operations before Finance cost, Depreciation, Amortisation expenses and
Exceptional items & Tax has increased fromRs.23,306.03 Lakhs toRs.28,621.52 Lakhs. The
operational performance has improved due to increase in sales volume and better control on
costs. Profit before Exceptional items & Tax isRs.18,590.46 Lakhs compared
toRs.13,687.00 Lakhs.
Share Capital
Authorised & Issued, Subscribed and Paid up Capital
As on 31st March 2024,
a) Authorised share capital of the Company isRs.79,45,00,000/- comprising of
79,45,00,000 Equity Shares ofRs.1 each.
b) Issued, subscribed and paid-up Equity Share capital of the Company
isRs.12,18,81,498/- comprising of 12,18,81,498 Equity Shares ofRs.1 each.
There was no change in Authorised, Issued, Subscribed and Paid up capital during the
financial year 2023-24.
SUBSIDIARY COMPANIES
Pricol Asia Pte Limited, Singapore
This purchasing arm of our Company mainly assists in global procurement of raw
materials and components to our Company and associate companies.
In the financial year 2023-24, Pricol Asia Pte Limited achieved sales of USD 649.46
Lakhs (Rs.53,743.09 Lakhs) as against the previous year sales of USD 545.20 Lakhs
(Rs.43,01 7.70 Lakhs). The Company made a profit of USD 14,99,287 ('1,240.68 Lakhs) during
the year 2023-24 as against USD 10,38,306 (Rs.819.26 Lakhs) in 2022-23.
PT Pricol Surya Indonesia
The company is supplying Instrument Clusters to the 2 Wheeler manufacturers in
Indonesia & Thailand.
In the financial year 2023-24, PT Pricol Surya Indonesia has achieved a sales of IDR
3,71,635 Lakhs (Rs.1,993.82 Lakhs) as against the previous year sales of IDR 6,59,014
Lakhs (Rs.3,545.50 Lakhs) a decrease of 43.61% in IDR & 43.76 % in INR terms. The
Company had a profit before tax of IDR 73,488 Lakhs (Rs.394.26 Lakhs) as against the
profit before tax of IDR 1,33,413 Lakhs (Rs.717.76 Lakhs) of previous year.
PT Sripri Wiring Systems, Indonesia
During the year, PT Sripri Wiring Systems, the wholly owned subsidiary of PT Pricol
Surya Indonesia, was closed.
Pricol Asia Exim DMCC, Dubai
The company, a Wholly Owned Subsidiary of Pricol Asia Pte Limited, Singapore, is a
purchasing arm of our Company mainly assisting in global procurement of raw materials and
components to our Company and associate companies.
During the financial year 2023-24, the company achieved sales of USD 47,60,648
(Rs.3,939.49 Lakhs) as against the previous year sales of USD 577 (Rs.0.46 Lakhs). The
Company made a profit of USD 75,699 (Rs.62.64 Lakhs) during the year 2023-24 as against
the loss of USD 31,185 (Rs.24.61 Lakhs) during the previous year.
Pricol Electronics Private Limited, India
The company, a Wholly Owned Subsidiary of Pricol Asia Pte Limited, Singapore, was
incorporated on 11th April 2023. The Company is yet to commence its business operations.
During the year, the Company had a loss ofRs.1.35 Lakhs (Previous year: Nil).
OUTLOOK, OPPORTUNITIES, CHALLENGES, RISKS &
CONCERNS
Global Economy:
The global economy has proven to be remarkably resilient to the shocks of the last
year. This resilience was mostly due to strong macroeconomic fundamentals in most of the
advanced and emerging market economies and robust consumer and government spending. United
States managed to sidestep recessionary pressures, while Europe exhibited economic
resilience surpassing earlier projections. China faced formidable challenges in regaining
its economic momentum.
Inflation remains above target in many countries however it continues to soften in all
the major economies. Asia is more nuanced, because inflation did not rise as much as in
the west, and it is coming down faster. As a result, interest rates have not risen as
much. Global Inflation is expected to decrease faster than anticipated, reaching 5.8
percent in 2024 and 4.4 percent in 2025, led by easing supply-side issues and tighter
monetary policies.
The recovery in global economic growth is facing challenges due to multiple crises,
including high debt levels, energy crisis and geopolitical tensions. The Red Sea crisis
has disrupted global trade routes, leading to increased transit times, shipping costs,
insurance premiums, etc.
As per the International Monetary Fund (IMF) global economy is projected to grow at
3.1% and 3.2% for 2024 and 2025 respectively. This uptick in growth is attributed to the
resilience of the United States and certain emerging markets, along with expected fiscal
support in China. However, this growth remains below the historical average, primarily due
to elevated central bank policy rates combating inflation, reduced fiscal support, and
sluggish productivity growth.
Indian Economy:
Despite uncertainty from adverse geopolitical developments and expansionary fiscal
measures taken
during the COVID-19 pandemic, the Indian economy has demonstrated resilience and
maintained healthy macroeconomic fundamentals.
Strong domestic demand for consumption and investment, along with Government's
continued emphasis on capital expenditure has been the key economic driver in FY24. India
has registered the highest growth among major advanced and emerging market economies and
is likely to become the third-largest economy in 2027 in USD terms. It is also estimated
that India's contribution to global growth will rise by 200 basis points in the next 5
years.
The IMF forecasts India's GDP to grow at 6.7% in 2024 and 6.5% in 2025, driven by
robust domestic demand and government spending. Economic fundamentals are improving, with
decreasing inflation, robust financial ecosystem, better fiscal management, and rising
foreign reserves.
The massive tripling of the capital expenditure outlay in the past 4 years has resulted
in a huge multiplier impact on economic growth and employment creation. Manufacturing
sector growth is on the rise supported by government policies and initiatives, while the
services sector is adopting new technologies for global competitiveness. Government and
RBI's timely interventions aided India's quick recovery from recent global shocks. Reforms
in taxation, banking, and ease of doing business, along with infrastructure investments
will boost long-term economic growth potential.
The Indian Automotive Sector
The Indian automotive industry is poised for substantial growth, with projections
indicating that it could reach a staggering $1 trillion valuation by 2035, making it the
world's fourth-largest automotive market. The industry has set an ambitious target to
double its size to INR 15 Lakh Crore by the end of 2024. Within the domestic market,
two-wheelers and passenger cars holds significant market share of 76% and 17.4%
respectively. Additionally, the government in its Union Budget 2023 has also increased the
budget allocation for FAME II.
The industry's ambitious expansion plan also includes $400 billion-plus contribution
from design, development, and other technological advancements, signalling India's
transformation into a prominent global automotive hub. However, achieving this milestone
requires industry players to enhance their capabilities significantly, ensuring reliable
and competitive manufacturing on a global scale. The domestic automobile companies are
expected to make substantial investments in the coming years with an objective to
establish a formidable global presence. This influx of private capital will be directed
towards
developing new platforms, facilitating the evolution of these companies into integral
components of global supply chains.
The Indian automotive industry also stood as a global powerhouse and has accomplished
significant achievements across various segments. As India being the largest producer of
tractors, 2nd largest manufacturer of buses and 3rd largest producer of heavy trucks
worldwide, it demonstrated the country's formidable position in the global heavy vehicles
market. Moreover, the sector is categorised into two-wheelers, three-wheelers, passenger
vehicles, and commercial vehicles, exhibited robust growth mainly driven by growth in
passenger cars and two-wheeler vehicles. As the industry evolves, there's a notable shift
towards electric vehicles (EVs) to address emissions concerns, with substantial
investments and initiatives aimed at fostering a vibrant EV ecosystem.
Furthermore, the industry's growth trajectory is underscored by strategic investments
and collaborations, both domestic and internationally. From Tata MotorsRs.acquisition of
Renault Nissan's infrastructure upgrades and Mahindra & Mahindra's partnership with
global investors for electric vehicle expansion, the sector has witnessed significant
developments. The government's supportive policies, coupled with initiatives like the
Bharat NCAP and the Vehicle Scrappage Policy, further reinforce the industry's commitment
to sustainability and safety. As India chalks its plans towards becoming a global
manufacturing and R&D hub, these initiatives are pivotal in making India to lead in
the automotive sector leads in terms of innovation, sustainability, and economic growth.
The Indian Auto AnciNaries Sector
India's economy has surged as the fastest-growing globally, driven by rising incomes,
increased infrastructure investment, and incentives for manufacturing. This growth has
particularly boosted the automobile and auto components sector, with two- wheelers
benefiting the most due to the rising middle class. The country has become a focal point
for original equipment and auto component manufacturers, positioning itself as a hub of
expertise. The Automotive Mission Plan (2016-26) targets a 5-7% GDP contribution and aims
to create 3.2 million direct jobs by 2026.
Furthermore, India's auto component industry, ranging from large corporations to
micro-enterprises, plays a pivotal role in exports and job creation, employing over 37
million people. The sector's robust performance underscores India's growing prowess in
automotive manufacturing and its potential as a global player in the industry. Notably,
key export destinations such as North
America, Europe, and Asia saw significant increase with North America alone accounting
for 32% of total exports. This underscores the industry's strong foothold in international
markets and its ability to capitalize on global demand.
The auto component aftermarket segment in India continue to see notable growth in next
few years and is expected to reach USD 32 billion by 2026 fuelled by strong international
demand and resurgence in the local OEM and Aftermarket segments. The industry is
positioned for further expansion and investment opportunities.
Government initiatives such as the Production Linked Incentive (PLI) scheme and the
extension of schemes like FAME (Faster Adoption and Manufacture of Electric Vehicles) have
been instrumental in driving growth and innovation in the automotive sector. With
significant investments pouring in, particularly in the electric vehicle (EV) segment,
India's automotive industry is on track to achieve ambitious targets, including a
projected turnover of USD 200 billion by FY26 and a substantial contribution of 5-7% to
India's GDP by 2026.
Growth Drivers:
1) India is projected to become the youngest nation by 2025 with average age of 25
years, indicating a vast young population to enter the workforce which will drive
consumption, including the demand for vehicles.
2) The expected rise in vehicle penetration to 72 vehicles per 1000 people by 2025 also
suggests a growing market for automobiles, fuelled by factors such as urbanization,
infrastructure development, and rising disposable incomes.
3) India is gradually becoming an R&D hub as it accounts for 40% of the global
engineering and R&D spend, with 8% dedicated to the automotive sector. This signify
opportunities for innovation, technological advancements, and product development, driving
industry growth.
4) The government's initiative to promote self-reliance through a comprehensive
economic package of INR 20 Lakh Crore aims to boost domestic manufacturing, including the
automotive sector, fostering investment, job creation, and industry resilience.
5) Despite its current modest value, the EV market is expected to expand rapidly,
reaching USD 7.09 billion by 2025, mainly driven by rising awareness of environmental
issues and sustainable development goals.
6) Initiatives like the Production-Linked Incentive (PLI) Scheme provide financial
incentives to boost domestic manufacturing and attract investments, fostering industry
growth and competitiveness.
7) Adoption of digital sales channels, such as virtual showrooms, facilitates easier
and more convenient vehicle purchases, catering to changing consumer preferences and
enhancing market accessibility.
Risk:
1) The Covid-19 pandemic has exposed vulnerabilities in the automobile industry's
supply chain, leading to production delays and increased costs due to difficulties in
sourcing critical components.
2) The extended period of semiconductor shortage has the potential to hamper growth for
passenger vehicles in particular.
3) If the commodity prices continue to inch higher, the working capital requirement for
the business would go up due to the higher cost of inventory.
4) Compliance with safety, emissions, and fuel efficiency regulations poses challenges
for automobile manufacturers, particularly smaller companies with limited resources for
research and development.
5) Limited development of electric vehicle infrastructure, including charging stations,
presents a hurdle for the adoption of electric vehicles in India, potentially hindering
market acceptance and sales.
6) High-interest rates and rising fuel costs may act as headwinds.
RISK MANAGEMENT
Risk Management Committee of the Board was constituted in accordance with Regulation 21
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Risk
Management Committee is responsible to frame, implement and monitor the risk management
plan for the Company. The Committee is responsible for development and implementation of a
Risk management Policy for the Company including identification therein elements of risk,
if any, which in the opinion of the Board may threaten the existence of the Company and is
responsible for reviewing the risk management plan and its effectiveness.
Company's Risk Management Policy has been adopted for identifying and managing risk, at
the strategic, operational and tactical level. Our risk management practices are designed
to be responsive to the ever changing Industry dynamics. The Company has also laid down
the procedures to inform Board members about risk assessment and minimisation procedures.
The Risk Management policy has been placed on the website of the Company and the web
link there to is https://pricol.com/wp-content/uploads/2023/01 /Risk-
Management-Policy-2021.pdf
Risk management is an ongoing activity considering the continuous changing business
environment in which Company operates. During the year, Risk Management Committee
periodically met to identify, monitor, evaluate and manage the risks of the Company. At
present, the Company has not identified any element of risk which may threaten the
existence of the Company.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has internal control systems commensurate with the nature of its business,
the size, and complexity of its operations and such internal financial controls with
reference to the Financial Statements are adequate.
The Company also adopted policies and procedures for the governance of the orderly and
efficient conduct of its business including adherence to Company's policies, safeguarding
of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records and the timely preparation of reliable financial
information and its disclosures. The Company has well documented policies and standard
operating procedures covering all financial and operating functions.
The Company's internal control systems have been strengthened taking into account the
nature 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
management policies & procedures.
To further strengthen the internal control system, the Company has a well established
own corporate internal audit team. Internal Audit team periodically reviews compliance of
operations at all locations and all functions, inline with the documented policies and
procedures and assesses the effectiveness & efficacy of the same in terms of effective
internal controls. Internal audit team also monitors the status of management
actions on the previous internal audit findings. The significant audit findings are
reviewed on a quarterly basis at the Audit Committee meetings. The Audit Committee at its
meetings regularly reviews the financial, operating, internal audit & compliance
reports to improve performance. The heads of various monitoring / operating departments
are present for the Audit Committee meetings to answer queries raised by the Audit
Committee.
Based on the framework of internal financial controls and compliance system established
and maintained by the Company, work performed by the internal, statutory, cost, and
secretarial auditors and external agencies including audit of internal financial controls
over financial reporting by the statutory auditors and the reviews performed by Management
and the relevant Board Committees, including the Audit Committee, the Board is of the
opinion that the Company's internal financial controls were adequate and effective during
FY 2023-24.
The Company has adopted accounting policies which are in line with the Indian
Accounting Standards notified under Section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015. Statutory Auditors review the quarterly financial
results at the end of each quarter and audit the annual financial statements at the end of
each financial year.
CODE OF CONDUCT
1) Code of fair disclosure of UPSI
The Company has adopted a Code of Conduct to regulate, monitor and report trading by
Designated Persons. This Code of Conduct is intended to prevent misuse of Unpublished
Price Sensitive Information
("UPSI) by designated persons and their immediate relatives. The said code
lays down guidelines, which advises Designated Persons on the procedures to be followed
and disclosures to be made while dealing with the shares of the Company and cautions them
on consequences of non-compliances. The Company has Code of practices and procedures for
fair disclosures of unpublished price sensitive information by including a policy for
determination of legitimate purposes. Further, the Company has put in place adequate &
effective system of internal controls and standard processes to ensure compliance with the
requirements given under these regulations to prevent insider trading. The same is
available on the website of the Company https://pricol.com/wp- content/uploads/2023/01 /
Code-of-Fair- Disclosure.pdf.
2) Code of conduct for directors and senior management of the company
The Company has adopted the Code of Conduct for Directors and Senior Management of the
Company. The same is available on the website of the Company
https://pricol.com/wp-content/ uploads/ 2023/04/
Code-of-Conduct-Board-of-Directors-Senior- Management-Personnel.pdf FINANCE
During the year, the Company has not accepted / renewed any deposit from public. The
total deposits remained unpaid or unclaimed as at 31st March, 2024 is Nil. There is no
default in repayment of deposits or payment of interest thereon during the year. The
Company undertook several steps to keep a control over borrowings and cost of borrowings.
CREDIT RATING :
Consequent to the good financial performance, your Company was able to improve its
credit rating as follows.
Credit Agency |
Facility |
Present Ratings |
Previous Ratings |
CRISIL |
Long Term -Rs.14,500 Lakhs |
CRISIL A / Stable - Upgraded |
CRISIL A - / Stable |
India Ratings and
Research |
Fund-Based and Non Fund-Based Working Capital Limits-Rs.8,000 Lakhs |
IND A / Stable / IND A1 - Upgraded |
IND A - / Stable / IND A2+ |
Long Term Loans -Rs.2,772 Lakhs (reduced fromRs.4,560 Lakhs) |
IND A / Stable - Upgraded |
IND A- / Stable |
RELATED PARTY TRANSACTIONS
The Company has formulated a Policy on Related Party Transactions, in line with the
requirements of the Companies Act, 2013 ("Act") and the SEBI Listing
Regulations. During the financial year under review, all related party transactions that
were entered by the Company were approved by the Audit Committee and were on arm's length
basis and in the ordinary course of the business. Prior omnibus approval of the Audit
Committee was obtained for the transactions, which were of a foreseen and repetitive
nature.
All related party transactions that were approved by the Audit Committee were
periodically reported to the Audit Committee. None of the Contracts, Arrangements or
transactions with related parties required approval of the Board / Shareholders under
Section 188(1) of the Act or 23(4) of SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015.
During the year, there were no materially significant related party transactions made
by the Company with Promoters, Key Managerial Personnel or other designated persons which
may have potential conflict with the interest of the Company.
Details of related party transactions entered into by the Company, in terms of Ind
AS-24 have been disclosed in the notes to the Standalone/Consolidated financial statements
forming part of this Report & Annual Accounts 2023-24.
The Company has also adopted the Policy on Related Party Transactions and the same is
available on the website of the Company at https://pricol.com/wp-
content/uploads/2023/04/Policy-on-Related-Party- Transactions.pdf
DIRECTORS
Independent Director
As per the provisions of Section 149 of the Act, Regulation 25 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Members appointed
Independent Directors as mentioned below:
Name of Independent Director |
Period of Appointment |
Mr. P. Shanmugasundaram |
Upto 14th June 2024 (not opted for second term) |
Mr. R.Vidhya Shankar |
Upto 31st July 2024 (Second term of 5 years) |
Mr. Navin Paul |
Upto 21st October 2025 (First term of 5 years) |
Mrs. Sriya Chari |
Upto 26th May 2026 (Second term of 5 years) |
Dr. S. K. Sundararaman |
Upto 29th May 2028 (Second term of 5 years) |
Mr. Vijayraghunath |
Upto 31st January 2029 (First term of 5 years) |
Mr. K. Ilango |
Upto 14th June 2029 (Second term of 5 years) |
Mr.R.Vidhya Shankar, Independent Director completes his second term of 5 years on 31st
July 2024 and as per regulations he cannot continue as an Independent director. Board
places its high appreciation & records his contribution in Board's operations &
Company's performance. Board also appreciates the valuable guidance provided by
Mr.R.Vidhya Shankar during his 19 years of service as Independent director.
Mr.P.Shanmugasundaram, Independent Director completes his first term of 5 years on 14th
June 2024. He did not opt for reappointment for the second
term due to his health conditions. Board places its appreciation for the valuable
contributions made by Mr.P.Shanmugasundaram, to the Board & the Company during his
tenure as an Independent Director.
Shareholders, on 3rd April 2024, through postal ballot by way of special resolution,
had approved the following:
a) Re-appointment of Mr.K.Ilango, as an Independent Director for the second term of 5
(five) consecutive years with effect from 15th June 2024 to 14th June 2029.
b) Appointment of Mr.Vijayraghunath, as an Independent Director for the first term of 5
(five) consecutive years commencing from 1st February 2024 to 31st January 2029.
c) Re-appointment & remuneration to Mrs.Vanitha Mohan, Chairman, for a period of
three years commencing from 1st April 2024 to 31st March 2027.
d) Re-appointment & remuneration to Mr. P.M.Ganesh, Chief Executive Officer &
Executive Director, for a period of three years commencing from 1st April 2024 to 31st
March 2027.
In the opinion of the Board, the Independent Directors appointed / re-appointed during
the year have the integrity, expertise and experience (including the proficiency) to act
as independent director of the Company.
EXECUTIVE DIRECTOR / NON INDEPENDENT DIRECTOR
Members appointed Executive Directors / Non Independent Directors as mentioned below:
Name of Director |
Period of Appointment |
Mr. Vikram Mohan |
Upto 31st March 2025 |
Mrs. Vanitha Mohan |
Upto 31st March 2027 |
Mr. P.M. Ganesh |
Upto 31st March 2027 |
The Board of Directors, at their meeting held on 15th May 2024 re-appointed Mr.Vikram
Mohan as Managing Director for a period of three years with effect from 1st April 2025 to
31st March 2028 and fixed the remuneration payable to him as set out in the AGM notice,
subject to the approval of the shareholders. The Board recommends the re-appointment &
remuneration payable to him.
Mr.P.M.Ganesh, a Non-Independent Director retires by rotation at the ensuing Annual
General Meeting and being eligible offers himself for re-appointment. Details of
Mr.P.M.Ganesh being recommended by the Board for re-appointment is included in the notice
of the ensuing Annual General Meeting.
EVALUATION BY THE BOARD, COMMITTEE & INDEPENDENT DIRECTORS
In accordance with applicable provisions of the Companies Act, 2013 (Act') and
SEBI Listing regulations, the Board has made a formal annual evaluation of its own
performance, Committees of the Board, Independent Directors and Individual Directors of
the Company. The Board's performance was evaluated based on the criteria like Structure,
Governance, Dynamics & Functioning, Approval & Review of Operations, Financials,
Internal Controls etc.
The performance of the Independent Directors as well as Individual Directors including
the Chairman of the Board were evaluated based on the evaluation criteria laid down under
the 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 reference
specified by the Board to the said Committee. The Board of Directors were satisfied with
the evaluation process which ensured that the performance of the Board, its Committees,
Independent Directors and Individual Directors adhered to their applicable criteria.
On 25th January 2024, Independent Directors had a separate meeting in which they
evaluated the performance of the Non-Independent Directors, the Board as a whole and
Chairman of the Company, based on the criteria laid down under Nomination and Remuneration
policy, Code of Conduct & SEBI's guidance note and satisfied with their performance.
The Nomination and Remuneration at its meeting held on 22nd January 2024 evaluated the
performance of the individual directors and the Board as a whole and satisfied with their
performance.
KEY MANAGERIAL PERSONNEL
In terms of Section 203 of the Companies Act, the Key Managerial Personnel of the
Company as stipulated under Companies Act, 2013 are Mr.Vikram Mohan, Managing Director,
Mr.Priyadarsi Bastia, Chief Financial Officer & Mr.T.G.Thamizhanban, Company
Secretary.
STATUTORY AUDITORS
M/s. VKS Aiyer & Co., Chartered Accountants, Coimbatore (ICAI Firm Registration No:
000066S), were reappointed as Statutory Auditors of the Company, at the AGM held on 9th
August, 2023, for the second term of five
(5) years, from the conclusion of 12th Annual General Meeting until the conclusion of
the 17th Annual General Meeting of the Company to be held in the calendar year 2028.
M/s. VKS Aiyer & Co., Chartered Accountants have furnished a certificate to the
Board confirming that they are not disqualified from continuing as Auditors of the
Company.
The report of the Statutory Auditor forms part of this Report and Annual Accounts
2023-24. The said report does not contain any qualification, reservation, adverse remark
or disclaimer. During the year under review, the Auditors did not report any matter under
Section 143(12) of the Act, therefore no detail is required to be disclosed under Section
134(3)(ca) of the Act.
COST AUDITOR
In terms of Section 148 of the Act, the Company is required to maintain cost records
and have the audit of its cost records conducted by a Cost Accountant. Cost records are
prepared and maintained by the Company as required under Section 148(1) of the Act .
The Board of Directors at their meeting held on 15th May 2024, on the recommendation of
the Audit Committee, appointed Mr.G.Sivagurunathan, Cost Accountant, (ICWAI Membership No:
23127), as the Cost Auditor for conducting the Cost Audit for the financial year 2024-25,
at a remuneration ofRs.3.00 Lakhs in addition to reimbursement of travel and out-of pocket
expense. Mr.G.Sivagurunathan have vast experience in the field of cost audit and have been
conducting the audit of the cost records of the Company for the past several years.
A resolution seeking membersRs.ratification of the remuneration payable to Cost Auditor
is included in the AGM Notice. The Cost Audit Report will be filed within the stipulated
period.
SECRETARIAL AUDITOR
The Board has appointed M/s.P.Eswaramoorthy and Company, (FCS No.: 6510, CP No.: 7069)
Practicing Company Secretaries to conduct Secretarial Audit of the Company for the
financial year 2024-25.
The Secretarial Audit Report for the financial year 20232024, as per Section 204 of the
Companies Act and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, is annexed herewith as "Annexure A". There are no
qualifications, observations, adverse remarks or disclaimer in the said report.
SECRETARIAL STANDARDS
The Company has in place proper systems to ensure compliance with the provisions of the
applicable secretarial standards issued by The Institute of Company Secretaries of India
and such systems are adequate and operating effectively. The Company had complied with the
applicable Secretarial Standards.
CSR INITIATIVES
Pricol's Corporate Social Responsibility (CSR) activities reflect its philosophy of
enhancing value to the society and the environment around us. Company is committed to
operate & grow in a socially sustainable manner and continue to give back to the
society. CSR activities of the Company are focused in Environment, Health & Education
of needy sections, which are carried out through implementing agencies in addition to the
CSR activities directly undertaken by the Company. The CSR Policy is available on the
website of the Company https://pricol.com/wp-content/uploads/2023/01/CSR- Policy_21.pdf.
The Annual Report on CSR activities is annexed herewith as "Annexure B".
DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS
With a proactive approach to employee development, we invest significantly in training
programs aimed at upskilling our workforce, ensuring they remain adept in cutting-edge
technologies and industry trends. Through strategic initiatives, the Company has achieved
zero loss of hours due to industrial relations issues, fostering a harmonious work
environment conducive to productivity and innovation. Our commitment to continuous
improvement is evident through our implementation of productivity engagement methodologies
like Kaizen and Poka Yoke, empowering employees to identify and rectify inefficiencies
while enhancing overall operational excellence. The number of people deployed as of 31st
March 2024 is 6,107.
Employee Engagement
Employee engagement thrives on a multitude of enhancement endeavours, ranging from
health camps, marathons, and outbound training to productivity initiatives like
Weekly Kaizen DrivesRs.and awards acknowledging contributions to Kaizen and QCC. Our
recreational clubs offer employees the chance to enhance their hobbies and interests while
fostering social bonds and maintaining a healthy work-life balance. From trekking through
scenic trails to engaging in various sports, our recreational clubs promote a dynamic
organizational culture that prioritizes employee welfare
and collective advancement. A total of 1,604 training programs and 367 engagement
activities were conducted across the plants during the financial year 2023-24.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3) (c) & (ca) of the Companies
Act, 2013, the Directors would like to state that:
a) in the preparation of annual accounts, the applicable accounting standards have been
followed and that there were no material departures;
b) they had selected such accounting policies and applied them consistently and made
judgements and estimates that were reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the financial year and of the
profit and loss of the Company for the year under review;
c) they had taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 2013 for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
d) they had prepared the annual accounts on a going concern basis;
e) they had laid down internal financial controls to be followed by the Company and
such internal financial controls are adequate and are operating effectively; and
f) they had devised proper systems to ensure compliance with the provisions of all
applicable laws and such systems were adequate and operating effectively.
DISCLOSURES:
1. Independent Directors have given declarations that they meet the criteria of
independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16
(1) (b) and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. Further, in terms of Regulation 25(8) of the Listing Regulations, the
Independent Directors have confirmed that they are not aware of any circumstance or
situation, which exist or may be reasonably anticipated, that could impair or impact their
ability to discharge their duties.
2. Salient features of the Nomination and Remuneration Policy is disclosed in the
Report 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 under
Section 186 of the Companies Act, 2013 are given in Note.64 to the Standalone Financial
Statements.
5. Disclosure as required under Schedule V (A) (2) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 is given in Note.65 to the Standalone Financial
Statements.
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 in
future.
7. There is no change in nature of business of the Company during the year.
8. Material changes and commitments, affecting the financial position of the Company
which have occurred between the end of the financial year of the Company to which the
financial statements relate and the date of the report: NIL.
9. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and
Outgo:
The information on conservation of energy, technology absorption and foreign exchange
earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read
with Rule 8 (3) of the Companies (Accounts) Rules, 2014 is annexed herewith as ''Annexure
C".
10. Annual Return:
Pursuant to Section 92 (3) of the Companies Act,
2013 and Rule 12 of Companies (Management and Administration) Rules, 2014, Annual
Return in Form MGT-7 is available at the Company's website at
https://pricol.com/wp-content/uploads/2024/ 06/Before-AGM.pdf.
11. Particulars of Remuneration to Directors and Employees:
The information required pursuant to Section 197 read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules,
2014 is annexed herewith as "Annexure D".
12. Details of transactions of the listed entity with any person or entity belonging
to the promoter / promoter group which hold(s) 10% or more shareholding in the listed
entity:
Details are given in Note.63 to the Standalone Financial Statements.
13. Number of other board of directors or committees in which a director is a member
or Chairperson, including separately the names of the listed entities where the person is
a director and the category of directorship:
Disclosed in the Report on Corporate Governance "Annexure E", point
no: 2.
14. Detailed reasons for the resignation of an independent director who resigns
before the expiry of his tenure along with a confirmation by such director that there are
no other material reasons other than those provided.
Not Applicable
15. Business Responsibility and Sustainability Reporting
Business Responsibility and Sustainability Reporting as required pursuant to Regulation
34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with
SEBI Circular No. SEBI / HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated 12th July 2023, is annexed
herewith as "Annexure F.
16. Details of Subsidiary Companies, Joint Venture and Associate Companies, and
their financial position:
Pursuant to Section 129(3) of the Companies Act,
2013, ("Act) the consolidated financial statements of the Company and its
subsidiaries prepared in accordance with the relevant Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014, forms part of this Annual Report.
The information as required under the first proviso to sub-section (3) of Section 129
in Form AOC-1 is annexed herewith as "Annexure G.
17. Names of companies which have become or ceased to be its Subsidiaries, joint
ventures or associate companies during the year;
During the year:
(i) Pricol Electronics Private Limited, a wholly owned subsidiary of Pricol Asia Pte
Limited, was incorporated on 11th April 2023.
(ii) PT Sripri Wiring Systems, a wholly owned subsidiary of PT Pricol Surya Indonesia,
was closed.
18. Particulars of contracts / arrangements entered into by the Company with related
parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including
certain arm's length transactions under third proviso thereto:
All the related party transaction entered by the Company during the financial year
2023-24 are in the ordinary course of business and at arm's length. Details of material
contracts / arrangements / transactions entered at arm's length with the related parties
as required under Section 134 (3) (h) of the Companies Act, 2013, in Form AOC-2 is annexed
herewith as "Annexure H".
19. Details in respect of frauds reported by auditors under Section 143(12) of the
Companies Act, 2013:
During the year under review, there were no frauds reported by the auditors to the
Audit Committee or the Board under Section 143(12) of the Companies Act, 2013.
20. List of credit ratings obtained by the entity along with any revisions thereto
during the relevant financial year, for all debt instruments of such entity or any fixed
deposit programme or any scheme or proposal of the listed entity involving mobilisation of
funds, whether in India or abroad:
Disclosed under the heading "Finance in this Report.
21. Key Financial Ratios (Explanations for significant change i.e. change of 25% or
more as compared to the immediately previous financial year):
Key Financial Ratios |
2023-24 |
2022-23 |
% Change |
Explanations, if any |
i) Debtors Turnover |
8.06 |
7.51 |
7.42 |
Not Applicable |
ii) Inventory Turnover |
7.85 |
7.39 |
6.23 |
iii) Current Ratio |
1.26 |
1.14 |
10.38 |
iv) Interest Coverage Ratio |
14.92 |
11.82 |
26.23 |
Reduction in term loans |
v) Debt Equity Ratio |
0.06 |
0.13 |
(55.91) |
vi) Operating Profit Margin |
8.97 |
7.78 |
15.29 |
Not Applicable |
vii) Net Profit Margin (%) or sector-specific equivalent ratios, as
applicable. |
5.97 |
6.01 |
(0.68) |
22. Details of any change in Return on Net Worth as compared to the immediately
previous financial year along with a detailed explanation thereof.
Particulars |
2023-24 |
2022-23 |
% Change |
Explanations, if any |
Return on Net Worth |
0.18 |
0.18 |
|
Not Applicable |
23. Your company is in receipt of Show Cause Notice from the GST Authorities as to the
classification of Instrument Clusters. While we are classifying the Instrument Clusters
under Chapter 90 attracting a GST rate of @ 18%, the GST Authorities seek to classify the
same under Chapter Heading 8708 which attracts GST @ 28%. As per the legal opinion
obtained in this regard, the classification proposed by the GST Department is incorrect.
We have filed a Writ Petition before the Honourable Madras High Court
challenging the Show Cause Notice. The Honourable Court has granted interim stay,
restraining the Department from passing any order pursuant to the Show Cause Notice.
We understand that similar enquiries have been initiated on various other suppliers of
Instrument Clusters as well thus making it an industry-wide issue. We emphasize that this
challenge is not isolated to our Company but is a pervasive issue affecting
multiple industry participants. In connection with the same, various representations
have been made to the Governmental Authorities by the Company even before the Show Cause
Notice was issued. Also, other auto component manufacturers and industry association have
made representations as well.
24. There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.
25. There was no instance of one-time settlement with any Bank or Financial
Institution.
26. During the year, the Company's security(s) are not suspended from trading.
27. There are no agreements that subsist as on date under clause 5A to para A of part A
of Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015.
CORPORATE GOVERNANCE
Your Company re-affirms its commitment to good corporate governance practices. The
Company complies with corporate governance requirements specified in regulation 17 to 27
and regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, 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 Report,
has been annexed herewith as "Annexure E".
Chief Executive Officer and Chief Financial Officer have certified to the Board with
regard to the financial statements and other matters as required under Regulation 17 (8)
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Practicing Company Secretary's Certificate regarding compliance of conditions of
Corporate Governance, is made a part of this DirectorsRs.Report. All the Board Members and
Senior Management personnel have affirmed compliance with the code of conduct for the year
2023-24.
CAUTIONARY STATEMENT
Management Discussion and Analysis forming part of this Report is in compliance with
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and such
statements may be "forward-looking" within the meaning of applicable securities
laws and regulations. Actual results could differ materially from those expressed or
implied, important factors that could make a difference to the Company's operations
include economic conditions affecting demand / supply and price conditions in the domestic
and overseas markets in which the Company operates, changes in the Government regulations,
tax laws and other statutes and other incidental factors.
ACKNOWLEDGEMENT
Your Directors place on record their sincere thanks and appreciation to Customers,
Distributors, Dealers, Suppliers, Shareholders, Bankers and Government authorities for
their continued support and co-operation. Your Board also wish to place on record their
appreciation to the employees at all levels for their continued co-operation and
commitment.
For and on behalf of the Board
|
Vanitha Mohan |
Date : 15th May 2024 |
Chairman |
Place : Coimbatore |
(DIN : 00002168) |