pg electroplast ltd share price Directors report

DEAR SHAREHOLDERS,

The Board of Directors have pleasure in presenting the Annual Report of your Company along with Audited Financial Statements (Standalone and Consolidated), for the financial year ended March 31, 2023.

1. FINANCIAL RESULTS:

(Rupees in Lakh)

Particulars	Standalone		Consolidated
	FY 2022-23	FY 2021-22	FY 2022-23	FY 2021-22
Revenue from Operations	1,33,114.65	1,03,585.48	2,15,994.75	1,11,163.50
Other Income	472.70	568.57	438.57	432.38
Total Income	1,33,587.35	104,154.05	2,16,433.32	1,11,595.88
Finance costs	2,087.32	1,912.65	4,793.17	2,312.63
Depreciation and amortisation expenses	2,054.96	1,956.87	3,495.07	2,211.27
Total Expenses	1,27,899.10	99,806.38	2,06,679.00	1,06,784.72
Profit before Tax	5,688.25	4,356.35	9,754.32	4,904.22
Total Tax Expenses	1,268.26	1,059.57	2,007.46	1,162.66
Profit for the year	4,419.99	3,296.78	7,746.86	3,741.56
Other Comprehensive Income	4.28	64.02	(3.04)	47.09
Total Comprehensive Income	4,424.27	3,360.80	7,743.82	3,788.65
EPS (Basis)	20.42	15.93	35.78	18.08
EPS (Diluted)	19.27	15.00	33.77	17.03

2. PERFORMANCE OVERVIEW:

During the year under review on a consolidated basis, our total income increased by 93.94% to Rs. 2,16,433.32 lakh for FY 2022-23 from Rs.1,11,595.88 lakh for FY 2021-22.

Our revenue from operations increased by 94.30% to

Rs. 2,15,994.75 lakh for FY 2022-23 from Rs.1,11,163.50 lakh for FY 2021-22, primarily due to growth in our sales of the product business driven by growth in sales of RACs and washing machines. Other income increased by 1.43% to Rs.438.57 lakh for FY 2022-23 from Rs. 432.38 lakh for FY 2021-22, primarily due to increase in the interest income on deposits with banks and others. Our total expenses increased by 93.55% to Rs. 2,06,679.00 lakh for FY 2022-23 from H 1,06,784.72 lakh for FY 2021-22, on account of the factors like Cost of materials consumed, Purchase of traded goods, Employee Benefit Expense, Finance Costs etc. Our finance costs increased by 107.26% to Rs. 4,793.17

lakh for FY 2022-23 from Rs. 2,312.63 lakh for FY 2021-22, primarily due to increase in the gross borrowings and the interest rates on these borrowings. As a result, our profit for the year increased by 107.05% to Rs. 7,746.86 lakh for FY 2022-23 from Rs. 3,741.56 lakh for FY 2021-22. Other comprehensive income for the year decreased to Rs. (3.04) lakh for FY 2022-23 from Rs. 47.09 lakh for FY 2021-22 due to difference in the actuarial liabilities on account of change in the interest rate. On account of the above, our total comprehensive income increased by 104.40% to Rs. 7,743.82 lakh for FY 2022-23 from Rs.3,788.65 lakh for FY 2021-22. FY 2022-23 had been a strong growth period for your Company. The detailed operational performance of your Company is provided in the Management Discussion and Analysis Report forming part of this report.

3. INCREASE IN ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL OF THE COMPANY:

a) During the period under review, the Company on August 12, 2022 allotted 53,200 Equity shares to ‘PG Electroplast Limited Employees Welfare Trust under the PG Electroplast Employees Stock Options Scheme - 2020. Following is the summary of allotment of shares:

Date of members approval	February 28, 2021 & March 28, 2022
Date of allotment	August 12, 2022
Method of allotment	Allotment of equity shares pursuant to PG Electroplast Stock Option Scheme – 2020.
Issue price, basis of computation of issue price	Issue price of Rs. 250/- as determined by Nomination & Remuneration Committee pursuant to PG Electroplast Stock
	Option Scheme – 2020.
Particulars of person to whom shares have been issued	The equity shares were allotted to the PG Electroplast Limited Employees Welfare Trust.
Shareholding of promoters and promoter group prior to allotment	65.71%
No. of share allotted	53,200 Equity Shares of H 10/- each
Shareholding of promoters and promoter group post allotment	65.55%
Post Issue Public Shareholding	34.20%
Post Issue Employees Welfare Trust Shareholding	0.25%
Consideration details	The company received consideration in cash of Rs. 1,33,00,000/- pursuant to issue of 53,200 Equity Shares at an issue price of Rs. 250/- each.
Date of listing and trading approval of NSE & BSE	September 23, 2022

b) Further, during the year, the Company on September 27, 2022 allotted 1,00,000 Equity Shares of face value of Rs. 10/- each pursuant to conversion of 1,00,000 Fully Convertible Warrants at an issue price of Rs. 150/- each, by way of preferential allotment to the following persons belonging to "Non-Promoter" category.

Details w.r.t. allotment of equity shares on preferential basis pursuant to conversion of warrants are mentioned below:

Date of Members approval through Postal Ballot	February 28, 2021
Date of allotment	September 27, 2022
Method of allotment	Allotment of equity shares to the person belonging to
	Promoter & Non-Promoter Category on preferential basis due to conversion of Fully Convertible Warrants.
Issue price, basis of computation of issue price	Issue price of Rs. 150/-
	The price of the Equity Shares was determined in accordance with the Regulation 164 of (ICDR) Regulations, 2018.
Particulars of person to whom shares have been issued	The equity shares were allotted to the person belonging to Non- Promoter Category of the Company viz. Mr. Nikhil Vishnuprasad Bagla and Mrs. Urmila Nikhil Bagla, respectively.
Shareholding of promoters and promoter group prior to allotment	65.55%
No. of share allotted	1,00,000 Equity Shares of H 10/- each
Shareholding of promoter and promoter group post allotment	65.24%
Post Issue Public Shareholding	34.51%
Post Issue Employees Welfare Trust Shareholding	0.25%
Consideration details	The company has received consideration in cash pursuant to the issue of Fully Convertible Warrants converted into 1,00,000
	Equity Shares at an issue price of H 150/- each which were allotted as following:
	Allottees Equity shares allotted
	Nikhil Vishnuprasad Bagla 50,000
	Urmila Nikhil Bagla 50,000
	1,00,000
Date of listing approval of NSE & BSE	October 18, 2022.

c) During the year 2022-23, the Company allotted 13,64,551 Equity Shares of Face Value of H 10/- each upon conversion of

1,076,904 Compulsorily Convertible Debentures ("CCDs") and interest @ 17.96% accrued thereon; issued on preferential basis to the person belonging to the Public Category.

Details w.r.t. allotment of equity shares on preferential basis pursuant to conversion of CCDs and interest accrued thereon are mentioned below:

Date of Members approval EGM	June 19, 2021
Date of allotment	December 31, 2022
Method of allotment	Allotment of Equity Shares upon conversion of 1,076,904 Compulsorily Convertible Debentures ("CCDs") and interest @ 17.96% accrued thereon to the person belonging to the Public Category on preferential basis.
Issue price, basis of computation of issue price	Issue price of Rs. 337/-
	The minimum issue price of CCDs, has been calculated on the basis of trading at NSE, being the Exchange with higher trading volume.
Particulars of person to whom shares have been issued	The Equity shares pursuant to conversion of CCDs were allotted to the persons belonging to the Public Category viz.
	Baring Private Equity India AIF, Famy Care Pvt. Ltd., Ashok Kumar Sobhamal Patni and Rajnikanta Gajendrakumar Patni, respectively.
Shareholding of promoters and promoter group prior to allotment	65.24%
No. of shares allotted pursuant to conversion of	13,64,551 Equity Shares of H 10/- each
CCDs and interest accrued
Shareholding of promoter and promoter group post allotment	61.33%
Post Issue Public Shareholding	38.66%
Post Issue Employees Welfare Trust Shareholding	0.01%
Consideration details	The company has received the consideration in cash pursuant to issue of 10,76,904 CCDs at an issue price of H 337/- each pursuant to which Equity shares were allotted upon conversion of CCDs and interest accrued as following:
	Allottees Equity shares allotted
	Baring Private Equity India AIF	10,05,740
	Famy Care Pvt. Ltd.	2,44,121
	Ashok Kumar Sobhamal Patni	76,458
	Rajnikanta Gajendrakumar Patni	38,232
		13,64,551
Date of listing approval of NSE & BSE	February 03, 2023 and February 07, 2023, respectively.

At the end of the year, the Companys issued, subscribed and paid-up capital was 2,27,42,617 Equity Shares of H 10/- each.

4. TRANSFER TO RESERVE:

The Board of Directors of your company has decided not to transfer any amount to the Reserves for the year under review.

5. DIVIDEND:

The Board of Directors of your company has not recommended any dividend for the year under review.

The Dividend Distribution Policy of the Company is available at web-link https://www.pgel.in/pdf/codes-policies/DDPolicy.pdf

6. STATE OF THE COMPANYS AFFAIRS:

Business and its operations:

PG Electroplast Limited, an established original design manufacturer ("ODM") and contract manufacturer ("CM"), for the consumer durables industry in India, with primary focus on manufacture of room air conditioners ("RACs"), washing machines and plastic moulding. The Company provide end – to – end solutions across the entire value chain of the products we supply to our customers, which include more than 50 leading domestic and international brands. This includes product conceptualization, designing and prototyping, tool design and manufacturing, supply chain development and final assemblies for products like RACs, washing machines, LED TVs and air coolers. The Company considers its ability to evolve and address the needs of our marquee customer base as a key factor in the growth of our revenue from operations which grew at a CAGR of 75.26% from FY 2021 to FY 2023. The Company is the fastest growing B2C focused ODM players in India, having recorded the highest revenue CAGR amongst listed peers over FY 2022-23.

The Company, including its wholly owned subsidiary, operates seven manufacturing units located in Greater Noida, Uttar Pradesh; Roorkee, Uttarakhand; and Ahmednagar, Maharashtra. We also operate a unit at Ahmednagar, Maharashtra, where we operate incoming and outgoing quality control of products, storage of raw materials and finished goods and dispatch operations for our other manufacturing units in the location.

The manufacturing units are equipped with high quality machinery, assembly lines and full power backup that enable us to meet the quality requirements of our customers in a timely manner.

The Company has continuously evolved our product portfolio to meet the needs of our customers and cater to the prevailing industry technologies. Post incorporation in 2003, the Company started manufacturing plastic moulded components. Thereafter, in 2014, the

Company started focusing on the products business and commenced manufacturing air coolers. We set up an in house tool room for our tool manufacturing business vertical in 2016 and thereafter started manufacturing semi – automatic washing machines in 2017. In 2018, we started manufacturing RAC IDUs and subsequently RACs ODUs in 2021. Additionally, in 2021, we commenced manufacturing FATL and subsequently LED TVs in 2022.

Presently, our product portfolio includes complete RAC sets, washing machines, and televisions, all of which today contribute significantly to our revenue.

The Company has been manufacturing RAC IDUs since 2018 and RAC ODUs since 2021. We offer RACs CBU in the capacity ranging from 1.0T to 2.0T in both fixed speed and invertor categories for various star ratings. We are the second largest player in terms of RAC finished goods sales to the OEMs / brands, basis Fiscal 2023 data. The Company is a largest manufacturer of plastic moulding for consumer durables and consumer electronics industry, in terms of revenue in India, as on March 31, 2023. Through the plastic moulding business, we offer a wide range of products including small, medium and large sized, high – precision, surface critical injection moulded components for consumer durables and the consumer electronics industry.

The Company is the second largest ODM player for washing machines in India in terms of volume of units sold as of March 31, 2023, which provides end to end assembly solutions for final products. The Company commenced manufacturing semi – automatic washing machines in 2017 and presently offer semi – automatic and fully automatic washing machines in capacities ranging from 6 – 14 kg and 6.5 – 7.5 kg, respectively.

The Company is an end – to – end solutions provider across the entire value chain of the products we supply to our customers. We serve across varied industries such as air conditioners, washing machines, LED TVs, air coolers, automotive components, bathroom fittings and consumer electronics.

Key business developments:

The Companys 100% subsidiary PG Technoplast

Private Limited (PGTL), has in its Supa plant expanded the capacity to 100,000 Outdoor Units per month and over 150,000 Indoor Units per month during the financial year.

The RAC business clocked 255% growth over FY2022 and had H 1,04,127.31 lakh in Sales. The outlook for the segment remains robust as the Company plans to put new manufacturing plant for RAC manufacturing in North India and also work on improving the value addition further by adding more component manufacturing in-house.

In FY2023, the Company commissioned its new Washing Machine (WM) manufacturing line in

Greater Noida. The expanded capacity for Washing machines stands at 100,000 Units per month for SEMI-Automatic category. In FY2023, company supplied WM to 22 brands across customers and clocked over H 25,885.02/- lakh with 56% growth over FY2022. The outlook for the segment remains robust as company is seeing increased order flow from new and existing customers.

In FY2023, Air Cooler business clocked sales of Rs. 3,824.92/- lakh, which was just 157% growth over FY2022. In FY2022, sharp increases in plastic raw materials prices impacted the Air Cooler business significantly and therefore on low base sales growth looks exaggerated. However, the outlook remains good for next season as we continue to see improved interest from existing and new customers.

On a consolidated basis, the Plastic moulding component segment had a YoY sales growth of about 17% and contributed Rs. 65,410.75 lakh to the topline in FY2023. There are specific segments like specialised plastic components in Sanitaryware and Fans, which are growing at a higher rate and driving sales growth in this segment. The outlook for this segment remains in line with consumer durable industry growth.

However, due to slightly inferior financial metrics (return ratios) in this business, management wants to allocate relatively low capital to this, and therefore growth rates will be muted in comparison to the product business of the Company.

In the Electronics division, the Company assembles printed circuit board assemblies for a wide range of applications on a turnkey basis (including procurement, assembly, testing, packing & shipping) for leading TV manufacturers and also assembles LED TVs. This business contributed 7% to the FY2023 Sales and grew 126% over last year.

During FY2023, the tooling business contributed ~0.5% to the Companys total turnover. This business also acts as an enabler for some of the Companys speciality plastic moulding businesses. In last few years, company has upgraded some of the capabilities of its toolroom and can now manufacture bigger tools. This has, in turn, helped the Companys ODM Projects turn around faster as it can manufacture critical tools internally. The Company is planning further investments to augment capabilities and capacities in this area. The outlook for the business remains sound, given that as more product development happens locally, opportunities for tool manufacturing should grow exponentially.

All our businesses segments have performed well in

FY23, particularly the companys current focus area - the products business that achieved 182% growth over FY2022.

Capital Expenditure Activities:

During the year, the company on a consolidated basis has incurred H 15,456.60/- lakh on capital expenditure primarily for the purchase of plant and equipment. Further, the Company allocated higher capital expenditure for certain identified eligible white good products such as control assemblies for IDU or ODU or remotes, plastic moulding components, sheet metal components, heat exchangers, cross flow fan, and display panels (LCD / LED) and towards our R&D to meet our customer requirements to sustain or enhance our existing products and to develop new technologies and processes that would better allow us to customize products for our clients. Also, the Company has invested in the construction of new building/floors which has increased the covered area.

7. CREDIT RATING:

During the year, the Credit Rating Agency ‘Crisil Ratings Limited has assigned to your Company a Long-Term rating "CRISIL A-/Stable" on December 07, 2021. Further, on January 23, 2023 CRISIL Ratings Limited reaffirmed your Companys Long-Term Rating at "CRISIL A-/Stable (Reaffirmed)".

8. INVESTOR EDUCATION AND PROTECTION FUND:

Your Company did not have any outstanding amount of unclaimed/unpaid dividend and the corresponding shares.

9. MANAGEMENT:

Board of Directors:

a) The Board of Directors in their meeting held on

February 14, 2022 reappointed Mr. Anurag Gupta (DIN: 00184361) as the Whole Time Director of your Company w.e.f. July 15, 2022.

b) Reappointment of Mr. Anurag Gupta as Whole

Time Director was regularised through Postal Ballot Process on March 28, 2022 for a period of three consecutive years w.e.f. July 15, 2022.

c) Mr. Kishore Kumar Kaul (DIN: 07339035) tendered his resignation and ceased to be Non-Executive

Independent Director of your Company w.e.f. December 22, 2022 due to personal reasons.

He also confirmed that there were no material reasons for his resignation as specified above.

d) The Board of Directors appointed Mr. Raman Uberoi (DIN: 03407353) as an Additional Director in capacity of Non-Executive Independent Director w.e.f. March 22, 2023.

e) The appointment of Mr. Raman Uberoi (DIN: 03407353) as Non-Executive Independent

Director of the Company w.e.f. March 22, 2023 was regularised through Postal Ballot Process by the shareholders of the Company on June 21, 2023.

Disclosures under Section II of Part II of Schedule V of the Companies Act, 2013:

(i) All elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc., of all the directors including detail of fixed component is mentioned in Corporate Governance Report as Annexure I.

(ii) Service contracts, notice period, severance fees: N.A.

(iii) Stock option details: N.A.

In accordance with the provisions of the Companies

Act 2013, Mr. Anurag Gupta (DIN:00184361), Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.

None of the Directors have incurred any disqualification on account of non-compliance with any of the provisions of the Act. During the year 2022-23, Non-

Executive Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees for the purpose of attending meetings of the Company.

The Company has received declarations from each of the Independent Directors confirming that they meet the criteria of independence as prescribed under

Section 149(6) of the Companies Act, 2013 as well as under Regulation 16 of SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015 and there has been no change in the circumstances which may affect their status as independent director during the year. The independent directors have also confirmed that they have complied with the Companys code of conduct.

• Key Managerial Persons:

During the year under review, there was no change in Key Managerial Persons of your Company.

10. MEETINGS OF BOARD OF DIRECTORS & ITS COMMITTEES.

7 (Seven) meetings of the Board of Directors were held during the period under review. For details of the

Composition & Meetings of the Board and its Committees, please refer to the Report on Corporate Governance, which forms part of this Report as Annexure I.

During the year, no such instances occurred where the Board has not accepted any recommendation of the Audit Committee.

11. BOARD EVALUATION AND FAMILIARIZATION PROGRAMME:

The Nomination & Remuneration Committee has carried out a formal annual evaluation of performance of the Board itself through a structured questionnaire after taking into consideration the various aspects of the Boards functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance, of its

Committees and individual Directors, pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015. The evaluation of individual Directors including chairman was done by the Directors other than the one being evaluated by Board & Nomination

Remuneration Committee.

The Nomination & Remuneration Committee evaluated the performance of each and every director of the company and each member of the committee and expressed satisfaction over their performance.

Further, the Independent Directors also, at their separate meeting held on March 31, 2023 reviewed the performance of chairman of the Board, Non-Independent

Directors and the Board as a whole and assessed the quality, quantity and timeliness of flow of information between the company management and the Board. They expressed satisfaction over the said subject matter.

The details of program for familiarization of Independent

Directors of your Company are available at web-link http:// www.pgel.in/pdf/codes-policies/FP_ID.pdf

12. CORPORATE GOVERNANCE REPORT, MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT:

The Corporate Governance Report is presented as

‘Annexure I; Management Discussion & Analysis Report and Business Responsibility & Sustainability Report as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 forms integral part of this report. Compliance certificate on Corporate Governance, issued by M/s Puja Mishra & Co., Practicing Company Secretary also form a part of the said Corporate Governance Report.

13. COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The Company has adopted a Nomination and

Remuneration Policy. Salient features of this policy are attached as ‘Annexure II to this report.

14. REMUNERATION OF DIRECTORS AND EMPLOYEES:

The disclosure pertaining to remuneration and other details of directors and employees as required under section 197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointment and remuneration of Managerial Personal) Rules, 2014 and the amendment thereof have been provided in the ‘Annexure III forming part of this report.

During the period under review, the Managing/Whole time Director of the company were not in receipt of any commission from the company.

15. DIRECTORS RESPONSIBILITY STATEMENT:

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Act:

a) that in the preparation of the Annual Accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date; c) that the Directors have 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) the annual accounts have been prepared on a going concern basis;

e) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

16. INTERNAL FINANCIAL CONTROL SYSTEMS, THEIR ADEQUACY AND RISK MANAGEMENT:

The establishment of an effective corporate governance and internal control system is essential for sustainable growth and long-term improvements in corporate value, and accordingly your Company works to strengthen such structures. Your Company has developed & implemented a Risk Management framework for identification, evaluating and management of risks, including the risks which may threaten the existence of the Company. In line with your Companys commitment to deliver sustainable value, this framework aims to provide an integrated and organized approach for evaluating and managing risks.

Regular exercise has been carried out to identify, evaluate, manage and monitor the risks.

Your Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. The Company has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. The internal controls cover operations, financial reporting, compliance with applicable laws and regulations, safeguarding assets from unauthorized use and ensure compliance of corporate policies. Internal controls are reviewed periodically by the internal auditors and are subject to management reviews with significant audit observations and follow up actions reported to the Audit Committee. The Audit Committee actively reviews the adequacy and effectiveness of internal control systems and suggests improvements for strengthening them in accordance with the changes in the business dynamics, if required.

17. STATUTORY AUDITORS & THEIR REPORT:

M/s S.S. Kothari Mehta & Company, Chartered Accountants, (Firm Registration No. 000756N) were appointed as the Statutory Auditors of the Company from the conclusion of the 19^th AGM till the conclusion of 24^th AGM of the Company.

The Report of Statutory Auditors - M/s S.S. Kothari Mehta & Company, on Financial Statements (Standalone & Consolidated) for the year ended on March 31, 2023 are part of this Annual Report. The Statutory Auditors Report does not contain any qualification, reservation or adverse remarks. No fraud has been reported by the Auditor.

18. SECRETARIAL AUDITORS & THEIR REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the

Board of Directors had appointed M/s Puja Mishra & Co., Practicing Company Secretary for conducting Secretarial Audit of Company for the financial year 2022-23. The Secretarial Audit Report of the Company and Material

Subsidiary i.e. PG Technoplast Private Limited is annexed with Board Report as ‘Annexure IV. The Secretarial auditors report does not contain any qualification, reservation or adverse remarks. The auditors have also given a certificate of Non-Disqualification of Directors as on March 31, 2023 annexed with Board Report as ‘Annexure V.

Other parts of this report are self-explanatory and do not call for any further clarifications.

19. COST AUDITORS:

The Board of Directors have re-appointed M/s Amit Singhal

& Associates, Cost Accountants, having Firm Registration Number: 101073, as Cost Auditors to audit the cost records of the financial year 2023-24 and recommended ratification of their remuneration by the shareholders at the ensuing annual general meeting. The Company has maintained cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 w.r.t. the business activities carried out by the Company.

20. DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES:

As on March 31, 2023, the Company has 2 (Two) Wholly

Owned Subsidiaries i.e. M/s PG Technoplast Private

Limited and M/s PG Plastronics Private Limited.

During the year, M/s PG Technoplast Private Limited became the Material Subsidiary of the Company.

Pursuant to the provisions of Section 129 (3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of all the Subsidiaries in form AOC-1 is annexed hereto as ‘Annexure-VI and hence, not repeated here for the sake of brevity.

A copy of the audited financial statements of each of the subsidiary companies and English translation thereof will be kept for inspection for any Member of the Company at Corporate Office during business hours. Further, pursuant to the provisions of Section 136 of the Companies Act, 2013, these financial statements are also placed on the

Companys website www.pgel.in. Copy of these financial statements shall be made available to any member of the Company, on request.

21. DEPOSITS:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

22. PARTICULARS OF LOAN GIVEN, INVESTMENTS MADE, GUARANTEE GIVEN AND SECURITIES PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.

23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of contract or arrangements entered by the Company with related parties referred to in section 134 of the Companies Act, 2013 are disclosed in form AOC-2 as ‘Annexure VII.

During the year, the Company had not entered into any contract/arrangement/ transaction with related parties which could be considered material except for transactions with wholly owned subsidiary in accordance with the Companies Act, 2013, SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 and policy on dealing with Related Party Transactions 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 the Annual Report 2022-23.

All related party transactions entered into by your Company, during the year under review, were approved by the Audit Committee. Prior omnibus approval has been obtained for related party transactions which are repetitive in nature and/or entered in ordinary course of business and at arms length. There are no materially significant related party transactions that may have potential conflict with the interest of the Company at large.

The policy on materiality of Related Party Transactions and policy on dealing with Related Party Transactions are available at web-link http://www.pgel.in/pdf/codes-policies/RelatedPartyTransactionsPolicy.pdf

24. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company has been constantly working towards providing and encouraging medical aid, treatment of poor people, rendering medical care and advice and promoting education and financial assistance to the children and women of weaker sections of society including overall development and upliftment. Your Companys constant endeavor has been to support initiatives in the chosen focus areas of CSR.

Your Company has a duly constituted CSR Committee, which is responsible for fulfilling the CSR objectives of your Company. Details of composition of CSR Committee and Annual Report on CSR Activities of your Company are enclosed as ‘Annexure VIII and form a part of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The CSR Policy of your Company lays down the philosophy and approach of your Company towards its CSR commitment. CSR Policy, adopted by the Company, is available on its website at link http://www.pgel.in/pdf/ codes-policies/CSRPOLICY.pdf

25. EMPLOYEES STOCK OPTION SCHEME:

Your Company has in place a ‘PG Electroplast Employees Stock Option Scheme – 2020 (Scheme) to enhance the employee engagement, reward the employees for their association and performance and to motivate them to contribute to the growth and profitability of the Company.

The Board of Directors in its meeting held on November 05, 2020 and the shareholders of the company through postal ballot on February 28, 2021 approved the Scheme to create, grant, offer, issue and allot Employee Stock

Options ("Options") to the employees of the Company and its subsidiary company(ies) under the Scheme, in one or more tranches, a maximum of 2% of issued and paid-up capital of the Company. Further, approvals of the Board of Directors and Shareholders of the Company at their meetings held on February 14, 2022 and March 28, 2022, respectively, was accorded to increase the existing pool of the Scheme from 3,90,578 Options to 6,09,422 Options. Accordingly, the options reserved under the Scheme are 10,00,000 Options convertible into equal number of Shares of Rs.10/- each.

The Scheme was in compliance with erstwhile Securities and Exchange Board of India (Share Based Employee Benefit) Regulations, 2014 (hereinafter referred as SEBI (SBEB) Regulations). During FY 2021-22, the Scheme was amended to align with the Securities and Exchange Board of India (Share Based Employee Benefit and Sweat Equity)

Regulations, 2021 (hereinafter referred as SEBI (SBEB & SE) Regulations) which were notified on August 13, 2021.

During the year, your Company granted 1,60,000 (One Lakh Sixty Thousand Only) Options to the employees of the Company and its subsidiary company under the Scheme.

Further, your company allotted 53,200 (Fifty-Three Thousand Two Hundred Only) Equity Shares of face value of Rs. 10/- each to the ‘PG Electroplast Limited Employees Welfare Trust under the PG Electroplast Employees Stock Options Scheme – 2020.

In compliance with the requirements of the SEBI (SBEB & SE) Regulations), a certificate from auditors confirming implementation of the Scheme in accordance with the said regulations and shareholders resolution, will be available electronically for inspection by the members during the annual general meeting of the Company. Further the disclosure pursuant to the provisions of the SEBI (SBEB & SE) Regulations) can be accessed at the companys website at https://www.pgel.in/pdf/Disclosure_SBEB_31032023.pdf

26. VIGIL MECHANISM:

The Company has established a Vigil Mechanism / Whistle Blower Policy for dealing with instances of fraud & mismanagement. All Employees of the Company and various stakeholders of the company can make protected disclosures in writing or through mail in relation to matters concerning the Company/unethical behavior/ actual or suspected fraud/ violation of codes & policies of the Company.

Your Company hereby confirm that no directors/employee have been denied access to the chairman of the Audit

Committee. There were no complaints received through the said mechanism during the financial year 2022-23.

The Vigil Mechanism or whistle blower policy may be accessed at web-link http://www.pgel.in/pdf/codes-policies/VigilMechanismWhistleBlowerPolicy.pdf

27. ANNUAL RETURN:

Pursuant to Section 92(3) read with section 134(3)(a) of the Companies Act, 2013, copies of the Annual Returns of the Company prepared in accordance with Section 92(1) of the Act read with Rule 11 of the Companies (Management and Administration) Rules, 2014 are placed on the website of the Company and is accessible at the http://www.pgel. in/pdf/Annual_Return_2022-23.pdf

28. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING & OUTGO:

(A) Conservation of Energy:

The key focus area in our operations is conservation of energy. We endeavor to conserve energy and continuously make efforts to optimize use of fuels, power & water. The following steps have been taken for conservation of energy: a) The company, in an effort towards reducing the carbon footprint, has begun sourcing some of its required electricity from renewable sources.

In FY 2022-23, your Company have entered into a power purchase agreement with a company to obtain at least 3.1 MW of solar energy for our manufacturing unit at Uttar Pradesh for a period of 25 years. Also have installed a 1.4 MW rooftop grid system solar panel at our Unit 2 Subsidiary in Maharashtra, and a 0.65 MW solar plant at our Unit – 4 in Maharashtra. These initiatives are expected to help the company lower energy costs and reiterate the companys commitment to sustainable development philosophy.

b) Shop floors which run manufacturing process have been transitioned to LED highbay lights which have further reduced the energy costs by about 60%.

c) The Company purchased several Injection Moulding Machines that use Servo-Hybrid Technologies which use 60% less power than older Injection Moulding Machines.

d) A turbo ventilation system has been installed on all roofs which has reduced the use of exhaust fans.

e) The Company is also maintaining a power factor of about close to 1.

f) All streetlights & main machine flow highbay lights have been substituted for greener LED alternatives.

g) The Company has installed variable frequency drivers in all electric motors which have helped sustain a lower power factor.

h) Using invertor technology to control the speed of the compressors motor in the AC plant better temperature regulation has been achieved and has hence reduced energy consumption.

i) The Company continuously evaluate new technologies and techniques to make infrastructure more energy efficient.

The main goal behind all the initiatives is to promote a safe, healthy and green work environment by adopting efficient technologies.

(B) Technology absorption:

In striving for continuous excellence in technology and best quality product, several initiatives have been taken:

a) The bigger moulding machines on the shop floor have been fitted with an automatic conveyor line, thereby reducing production cost while enhancing product quality.

b) With technology from Hoti (Xiamen) Plumbing Inc, the company has added a PU paint shop and a UF thermoset moulding seat facility, giving it new manufacturing capabilities.

c) New Blow Moulding Equipment has also been installed.

d) Additional PCB & SMT assembly-cum-automation machines have been purchased thereby increasing production capacity.

e) Industrial robots are being installed on injection moulding machines which will reduce manpower cost.

f) Injection moulding machines with servo drive technology have been added to the facilities.

These initiatives will help the Company to manufacture cheaper and more durable products.

(C) Foreign exchange earnings and Outgo:

(Rs. in Lakhs)

Particulars	2022-23	2021-22
Foreign Earnings	201.62	37.73
Foreign Outgo	32,762.77	16,944.45

29. SIGNIFICANT & MATERIAL REGULATORY ORDERS:

During the reporting period, no significant material orders were passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

30. MATERIAL CHANGE AND COMMITMENT OCCURRED BETWEEN END OF FINANCIAL YEAR AND THE DATE OF REPORT:

The Nomination & Remuneration Committee on May 26, 2023 allotted 48,200 (Forty-Eight Thousand Two Hundred only) Equity Shares of Rs. 10/- each to ‘PG Electroplast Limited Employees Welfare Trust under the PG Electroplast Employees Stock Options Scheme - 2020.

The Nomination & Remuneration Committee on May 26, 2023 granted 3,57,000 (Three Lakh Fifty-Seven Thousand only) Employee Stock Options convertible into equal number of Equity Shares of the Company of face value of Rs. 10/- each, to the Employees of the Company and its

Subsidiary Company, under the PG Electroplast Employees Stock Option Scheme – 2020.

The Nomination & Remuneration Committee on August 22, 2023 allotted 28,700 (Twenty Eight Thousand Seven Hundred Only) Equity Shares of Rs. 10/- each to the ‘PG Electroplast Limited Employees Welfare Trust under PG Electroplast Employees Stock Options Scheme - 2020.

The QIP Committee 2022-23 on September 02, 2023, approved the issue and allotment of 32,05,128 Equity Shares, to eligible QIBs at the issue price of Rs. 1,560/- per Equity Share aggregating to Rs. 499,99,99,680/- (Rupees Four Hundred Ninety-Nine Crore Ninety-Nine Lakh Ninety-Nine Thousand Six Hundred Eighty Only), pursuant to the QIP.

The post allotment, paid-up equity Capital of the Company stands increased to Rs. 26,02,46,450/- consisting of 2,60,24,645 Equity Shares of face value of Rs.10/- each.

Your Company on July 13, 2023 entered into a 50-50

Joint Venture (JV) Agreement with Jaina Group [Jaina Marketing & Associates (JMA), Jaina India Private Limited (Jaina India) and Goodworth Electronics Private Limited (Goodworth)] to create a strong and competitive business that can meet the growing demand for high-quality televisions. Further, on July 31, 2023 pursuant to the JV

Agreement, your Company acquired 5,000 (Five Thousand) Equity shares at face value of H 10/- each of Goodworth Electronics Private Limited (JV Company).

Except for the details mentioned above, there is no material change and commitment occurred between March 31, 2023 and the date of this report, which may affect the financial position of the Company.

31. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARD:

During the reporting period, your company has duly complied with all applicable secretarial standards.

32. DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

In order to comply with provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and

Redressal) Act, 2013 and Rules framed thereunder, the Company has formulated and implemented a policy on prevention, prohibition and redressal of complaints related to sexual harassment of women at the workplace. All employees, whether permanent, temporary or contractual are covered under the above policy. The said policy has been uploaded on the internal portal of the Company for information of all employees. An Internal Complaint Committee (ICC) has been set up in compliance with the said Act.

The following is a summary of sexual harassment complaints received and disposed of during the year:

(a) Number of complaints pending at the beginning of the year: NIL

(b) Number of complaints received during the year: NIL (c) Number of complaints disposed off during the year: NIL

(d) Number of cases pending at the end of the year: NIL

ACKNOWLEDGEMENT

The Directors extended their vote of thanks to the Companys employees, customers, vendors, business associates investors and all stakeholders for their continuous support. The Directors also thank the Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation. The

Directors appreciate and value the contribution made by every member of the PG Group.