BOARDS REPORT
To Shareholder
Dear Members,
Your Directors take pleasure in presenting their 32nd Annual Report together with the
annual audited consolidated and standalone financial statements for the financial year
ended 31st March 2023.
| Financial Highlights |
|
|
|
*(In lacs) |
|
Standalone Results |
Consolidated Results |
| Particulars |
2023 |
2022 |
2023 |
2022 |
| Total Income (Operational and Other Income) |
6419.67 |
7030.40 |
73932.03 |
65680.36 |
| Less: Total Expenses |
6396.41 |
6993.43 |
64839.75 |
55491.12 |
| Profit before tax and Exceptional Items |
23.26 |
36.97 |
9092.28 |
10189.24 |
| Less: Tax expenses (including deferred tax) |
51.19 |
28.58 |
2511.19 |
2359.24 |
| Profit for the Period |
74.45 |
8.39 |
6581.09 |
7830.00 |
Overview and The State of the Company Affairs
During the reporting period, the granite mining industry encountered significant
challenges, primarily due to a notable slowdown in demand from China. This decline in
demand had a visible impact on our export volumes and overall revenue. Additionally, the
State governments implemented measures, such as heightened taxes and fees, which had
adverse effects on the industry. The unexpected and substantial increase in financial
burdens placed a strain on our operational costs and profitability, further complicating
the challenges posed by the demand slowdown. As we navigate through these difficulties, we
maintain a cautious outlook for the prospects of our granite mining business. Our
Companys apparel manufacturing has been undergoing a scaling down over a period of time.
This well-considered decision was aimed at reducing losses and reinforcing our overall
financial standing of the Company. As we look ahead, we remain cautious for the prospects
of our apparel business. We will take necessary actions as and when required.
FY 23 marked a significant milestone for Pokarna Engineered Stone Limited (PESL), as it
completed its first full year of operation for Unit 2, a state-of-the-art quartz
manufacturing facility and a wholly-owned subsidiary of our Company. PESL effectively
tackled the challenges that come with stabilizing a new plant, including building a
skilled workforce, implementing efficient processes, optimizing engineering procedures,
and overcoming various obstacles. As a result, the facility is now fully stabilized and
functioning smoothly.PESLs dedication to innovation has been instrumental in its recent
accomplishments. Embracing advanced robotics technologies, it has introduced a range of
exciting new designs in its product lineup. These cutting-edge advancements not only
enhance its manufacturing capabilities but also offer customers a wider selection of
top-quality products to choose from. With a firm focus on staying at the forefront of
technology and continuous improvement, PESL remains confident in the potential of its new
state-of-the-art facility and commitment to innovation to drive success in meeting the
evolving demands of the market. As we move forward, we believe that PESLs prowess in both
manufacturing excellence and innovation will play a pivotal role in shaping its position
as a leading player in the industry.
The countertop industry is currently facing a cyclical downturn, primarily attributed
to higher interest rates, ongoing inflation, and decreased consumer confidence. Accurately
forecasting the extent and duration of economic cycles presents challenges due to the
intricate nature of global conditions. As we look to the future, PESL foresees lower sales
in FY 2024, with the effects on new home construction and remodelling anticipated to
persist until macroeconomic conditions improve. Despite these challenges, we firmly
believe that the demand for our industrys products remains resilient even during economic
downturns; it is merely deferred to more favourable times. Our commitment to quality,
innovation, and customer satisfaction positions us well to navigate through these cyclical
fluctuations and emerge stronger once market conditions stabilize.
Dividend
The Directors are pleased to recommend the dividend of Rs 0.60 per equity share for the
financial year ended 31st March2023. The dividend is subject to the approval of the
Members at the Annual General Meeting ("AGM") scheduled on 18th September, 2023.
The Register of Members and Share Transfer Books will remain closed from 12th day of
September,2023 to 18th day of September, 2023 (both days inclusive) for the purpose of
payment of the dividend for the financial year ended 31st March, 2023 and the AGM.
Dividend Distribution Policy
In accordance with Regulation 43A of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, your
Company has adopted a Dividend Distribution Policy formulated by the Board specifying the
financial parameters, factors and circumstances to be considered in determining the
distribution of dividend to shareholders and/or retaining profits earned by the Company.
The policy aims to protect the interest of investors by ensuring transparency.
The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations
2015, as amended, is available on the Companys website on www.pokarna.com
Transfer to Reserves
No amount is proposed for transfer to the general reserve.
Directors Responsibility Statement
Based on the framework of internal financial controls and compliance systems
established and maintained by the Company, work performed by the internal, statutory, cost
and secretarial auditors and the reviews performed by the relevant Board Committees,
including the Audit Committee, the Board is of the opinion that the Companys internal
financial controls were adequate and effective during the financial year under review.
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of
Directors, to the best of their knowledge and ability, confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards have
been followed and that there are no material departures;
(b) that they have, in the selection of the accounting policies, consulted the
Statutory Auditors and have applied their recommendations 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 at the end of financial year and of the profit of the
Company for that period;
(c) they have taken proper and sufficient care to the best of their knowledge and
ability, 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 have prepared the annual accounts on a going concern basis;
(e) they have 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) a proper system has been devised to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
Subsidiaries, Associates and Joint Venture Companies
As on March 31, 2023, your Company had 2 subsidiaries out of which One is wholly owned
subsidiary and One is subsidiary company which is Non Profit Organization.
Consolidated Financial Statements presented by the Company include the financial
information of Pokarna Engineered Stone Limited ("PESL"), the wholly owned
subsidiary company. There has been no material change in the nature of the business of
PESL. As per the requirement of Section 129(3) of the Companies Act, 2013, a separate
statement containing the salient features of the financial statements of the subsidiary in
prescribed Form AOC-1 is attached to the financial statements of the Company. The Audited
Accounts of PESL will be available on the website of the Company - www.pokarna.com.
During the financial year under review, PESL registered revenue of Rs 67836.78 lakhs as
against Rs 58708.07 Lakhs in the previous year, thereby registering a growth of 15%.
EBITDA for the year under review was Rs 17080.81 Lakhs as against Rs 16837.61 Lakhs in the
previous year. The Comprehensive Income for the year 31st March 2023 decreased to Rs
6780.31 lakhs, showing a decline of 14%.
Pokarna Engineered Stone Limited ("PESL") was selected by the U.S. Department
of Commerce ("USDOC") as a "mandatory respondent" first administrative
review of the Antidumping duty ("ADD") Order on the imports of quartz surface
products from India and as a result, PESLs ADD assessment rate for the first review
period has reduced to 0% from 0.33% and also the ADD cash deposit has reduced to 0% with
effect from January 9, 2023.
The second administrative ADD review is ongoing whose preliminary results are expected
in June 2023. With regard to CVD review, all parties have withdrawn the review request of
the first as well as second CVD review, hence the CVD duty of 2.34% as determined in
investigation period is final CVD assessment rate for entries of the first as well as
second review period.
There is no impact on the financials of the company.
The Company does not have any Associate or Joint Venture Companies. Further, the
Companys policy on determining the material subsidiaries, as approved by the Board is
uploaded on the on the website of the Company - www.pokarna.com
Corporate Governance
The Directors reaffirm their commitment to good corporate governance practices. During
the year under review, the Company was in compliance with the provisions relating to
corporate governance as provided under the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing
Regulations"). A detailed report on corporate governance as required under the
Listing Regulations is provided in a separate section and forms part of the Annual Report.
The certificate on compliance with the conditions of corporate governance of the
Listing Regulations is given in Annexure, to this Report. In terms of the Listing
Regulations, the certificate, as prescribed in Part B of Schedule II of the said
Regulations, has been obtained from Mr. Gautam Chand Jain, Chairman & Managing
Director and Mr. M. Vishwanatha Reddy, Chief Financial Officer, for the financial year
2022-23 with regard to the financial statements and other matters. The said certificate
forms part of the report on Corporate Governance.
Management Discussion & Analysis Report
Managements Discussion & Analysis Report for the year under review is presented in
a separate section forming part of the Annual Report.
Business Responsibility and Sustainability Report
The Business Responsibility and Sustainability Report (BRSR) ofyour Company for the
financial year 2022-23 forms part of this Annual Report as required under Regulation
34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Corporate Social Responsibility
The Company has a Policy on Corporate Social Responsibility and the same has been
posted on the website of the Company - www. pokarna.com. The Annual Report on CSR
activities in terms of the requirements of Companies (Corporate Social Responsibility
Policy) Rules, 2014 is annexed as Annexure-I, which forms part of this Report.
However,during the year under review, the provisions of Corporate Social Responsibility
were not applicable to the Company in pursuance to Section 135(1) of the Companies Act,
2013.
Board of Directors and Key Managerial Personnel
Your Company is managed and controlled by a Board comprising an optimum blend of
Executive and Non-Executive Directors. As on 31st March2023, the Board of Directors
consists of eight (8) Directors consisting of Chairman & Managing Director, Managing
Director, Executive Director and five (5) Non-executive Directors, out of which four (4)
are Independent Directors. The composition of the Board is in conformity with Regulation
17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
(Listing Regulations) and the relevant provisions of the Companies Act, 2013.
Retirement by rotation and subsequent re-appointment.
In accordance with the provisions of Section 152 of the Act and the Articles of
Association of the Company, Mr. Prakash Chand Jain (DIN: 00084490), Director of the
Company, retires by rotation at this Annual General Meeting of the Company and being
eligible, has offered himself for re-appointment. Brief details of Mr. Prakash Chand Jain
(DIN: 00084490) are given in the notice of annual general meeting.
Re-appointment of Executive Director
Ms. Apurva Jain was appointed as Executive Director of the Company for the period of 3
years commencing from 09th August,2019. The Board on the recommendation of NRC, at its
meeting held on 25th May ,2023, re-appointed Mrs. Apurva Jain as Executive Director of the
Company for a period of 5 years commencing from 09th August,2024 to 08th August,2029,
subject to the approval of shareholders. A resolution seeking Members approval for her
re-appointment forms part of the Notice of the ensuing Annual General Meeting.
Appointment of Company Secretary
During the year under review, Mrs. Babita Chandrakar resigned as Company Secretary of
the Company wef 23.05.2022 and Mr. Piyush Khandelwal was appointed as Company Secretary
wef 03.08.2022. Further, Mr. Piyush Khandelwal also resigned from the post of company
secretary w.e.f 28th February,2023. The Board places on record its appreciation for
services provided by Mrs. Babita Chandrakar and Mr. Piyush Khandelwal during their stint
with the Company as Company Secretary.
Further during the Financial Year 2023-24, Ms. Disha Jindal is appointed as Company
secretary and compliance officer of the Company w.e.f 25th May, 2023
There was no other change in the Directors and Key Managerial Personnel during the year
under review since the last report.
All the Independent Directors of the Company have given their declarations to the
Company under Section 149(7) of the Act that they meet the criteria of independence as
provided under Section 149(6) of the Act read with Regulation 16(1)(b) ‘the Listing
Regulations. There has been no change in the circumstances affecting their status as
Independent Directors of the Company.
During the year under review, the Non-Executive Directors of the Company had no
pecuniary relationship or transactions with the Company, other than sitting fees.
Mr. Gautam Chand Jain, Chairman & Managing Director, Mr. Rahul Jain, Managing
Director, Mr. M Vishwanatha Reddy, Chief Financial Officer and Mr. Piyush Khandelwal
Company Secretary are the Key Managerial Personnel (KMP) within the meaning of Section
2(51) read with Section 203(1) of the Act.
Formal Annual Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the
Board has carried out an evaluation of its own performance, Committees, and performance of
individual Directors. The performance of the Board, Committees, and individual directors
was evaluated by seeking inputs from all Directors. The performance of the individual
Directors, including Independent Directors performance and role of the Board / Committees
were also discussed at the Board Meeting.
Committees of The Board
Audit Committee
The Audit Committee comprises of Mr. Meka Yugandhar, Mr. Vinayak Rao Juvvadi and Mr.
Mahender Chand, all Independent Directors. Further, details relating to the Audit
Committee are provided in the Corporate Governance Report forming part of this Annual
Report.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee("NRC") comprises Mr. Mahender Chand
Jain, Mr. Meka Yugandhar, Mr. Vinayak Rao Juvvadi and Mr. Prakash Chand Jain Further,
details relating to the NRC are provided in the Corporate Governance Report forming part
of this Annual Report.
Stakeholder Relationship Committee
The Stakeholder Relationship Committee ("SRC") comprises of Mr. Meka
Yugandhar, Mr. Mahender Chand, Independent Directors (appointed as on 28.01.2022) and Mr.
Rahul Jain, Managing Director. Further, details relating to the SRC are provided in the
Corporate Governance Report forming part of this Annual Report.
Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee ("CSRC") comprises of Mr. Meka
Yugandhar, Mr. Vinayak Rao Juvvadi, Dr. Jayshree Rajesh Sanghani, Independent Directors,
Mr. Gautam Chand Jain, Chairman and Managing Director and Mrs. Apurva Jain, Executive
Director. Further, details relating to the CSRC are provided in the Corporate Governance
Report forming part of this Annual Report.
Risk Management Committee
Pursuant to Regulation 21 of SEBI (Listing Obligation and Disclosure Requirement)
(Second Amendment) Regulation, 2021, the Company constituted Risk Management Committee
Comprising of Mr. Mahender Chand, Mr. Vinayak Rao Juvvadi, Independent Directors and Mr.
Rahul Jain, Managing Director of the Company.
Risk Management Policy
Risk management is integral to your Companys strategy and for the achievement of our
long-term goals. The Risk Management Committee of the Company has been entrusted by the
Board with the responsibility of reviewing the risk management process in the Company and
ensuring that the risks are brought within acceptable limits. The Company has framed and
put in place a Risk Management policy to mitigate the risks, both internal and external,
which the Company is exposed to.
Business Risk Assessment procedures have been set in place for selfassessment of
business risks, operating controls and compliance with the Corporate Policies. The Company
manages, monitors and reports on the principal risks and uncertainties that can impact the
ability to achieve the objectives. This is an ongoing process to track the evaluation of
risks and delivery of mitigating action plans.
There are no risks which in the opinion of the Board threaten the existence of the
Company. However, some of the risks which may pose challenges are set out in the
Management Discussion and Analysis which forms part of this Annual Report.
Related Party Transactions
All related party transactions (RPTs) which were entered into by the Company during the
year under review, were on arms length basis and in the ordinary course of business, did
not attract provisions of section 188 of the Act and were also not material RPTs as per
regulation 23 of the SEBI Listing Regulations.
All RPTs during FY2023 were entered into with the approval of the audit committee. On a
quarterly basis, details of such transactions were placed before the audit committee for
noting/review. Disclosures relating to related party transactions on a half-yearly basis
are filed with the stock exchanges. There were no material transactions entered into with
related parties, during the period under review, which may have had any potential conflict
with the interests of the Company.
The policy on Related Party Transactions as approved by the Board of Directors has been
uploaded on the website of the Company-www.pokarna.com
Your attention is drawn to the Related Party disclosures set out in Note no. 33, of the
Standalone Financial Statements.
Internal Financial Controls
The Company has set up a proper and adequate system of internal control to ensure
protection of assets against disposition or loss on account of unauthorized use and that
all transactions are approved, recorded and rightly reported. Also, the system has been
designed to ensure that financial and other records are accurate for preparing financial
information and other data, and for maintaining accountability for assets and liabilities.
The control system is also equally aided by rigorous internal audit, guidelines and
procedures.
The Companys internal financial control system comprises inhouse Internal Audit
Division, supplemented by internal audit checks from M. Murali Jaganmohan, Chartered
Accountant, the Internal Auditors. The Companys system of internal audit includes:
covering quarterly verification of inventory, a monthly review of accounts and a quarterly
review of critical business processes. The Internal Auditors also concurrently audit the
majority of the transactions in value term.
Based on the information provided, nothing has come to the attention of the Directors
to indicate that any material breakdown in the function of these controls, procedures or
systems occurred during the year under review. There have been no significant changes in
the Companys internal financial controls during the year that have materially affected or
are reasonably likely to materially affect its internal financial controls.
There are inherent limitations to the effectiveness of any system of disclosure,
controls and procedures, including the possibility of human error and the circumvention or
overriding of the controls
and procedures. Accordingly, even effective disclosure controls and procedures can only
provide reasonable assurance of achieving their objectives. Moreover, in the design and
evaluation of the Companys disclosure controls and procedures, the management was
required to apply its judgment in evaluating the cost-benefit relationship of possible
controls and procedures.
Statutory Auditors
The Members at the 31st Annual General Meeting of the Company held had appointed M/s.
Daga & Co, Chartered Accountant as the Statutory Auditor of the Company in their
place, for term of five (5) consecutive years, from the Conclusion of 31st Annual General
Meeting till the Conclusion of 36th Annual General Meeting.
Cost Auditors
Pursuant to the provisions of Section 148 of the Act read with the Companies (Cost
Records and Audit) Rules, 2014, as amended, Notifications/ Circulars issued by the
Ministry of Corporate Affairs from time to time, the company is not falling under the
limits of cost audit requirements. However, the company is maintaining the cost records as
per the provisions of the Companies Act, 2013.
Secretarial Auditors
During the year, Secretarial Audit was carried out by Mr. K.V. Chalama Reddy Practicing
Company Secretary, the Secretarial Auditor of the Company for the financial year 2022-23.
The detailed report on the Secretarial Audit is appended as an Annexure II to this Report.
The Secretarial Audit Report does not contain any qualifications, reservations,
observation or adverse remark.
Statutory Auditors Qualifications, Reservations or Adverse Remarks or Disclaimers Made
Auditors Report does not contain any qualification, reservation or adverse remark.
Disclosures
Vigil Mechanism / Whistleblower Policy
Your Company has established a robust Vigil Mechanism for reporting of concerns through
the Whistleblower Policy of the Company. Adequate safeguards are provided against
victimization to those who avail of the mechanism and access to the Chairman of the Audit
Committee in exceptional cases is provided to them. The details of the Vigil Mechanism is
also provided in the Corporate Governance Report and the Whistleblower Policy has been
uploaded on the website of the Company https://www.pokarna.
com/wp-content/uploads/2021/05/Whistle-Blower-Policy.pdf.
Meetings of the Board
The Board of Directors of your Company met Five (5) times during the year to deliberate
on various matters. The meetings were held on 21st May, 2022, 03rd August, 2022, 08th
August, 2022, 09th November, 2022 and 14th February, 2023. Further details on the Board of
Directors are provided in the Corporate Governance Report forming part of this Annual
Report.
Particulars of Loans, Guarantees and Investments
During the period under review, the Company has neither provided any loans nor made
investments under provisions of the Section 186 of the Companies Act, 2013.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Information relating to the conservation of energy, technology absorption and foreign
exchange earnings and outgo, as stipulated under Section 134(3)(m) of the Act read with
the Companies (Accounts) Rules, 2014, is given in Annexure- III, to this Report.
Annual Return
The Annual Return of the Company as on 31st March2023 in Form MGT - 7 in accordance
with Section 92(3) of the Act read with the Companies (Management and Administration)
Rules, 2014, is available on the website of the Company at https://www.pokarna.com/agm/.
Material Changes and Commitments affecting the Financial Position of the Company
There have been no material changes and commitments affecting the financial position of
the Company which have occurred between the end of the financial year to which the
financial statements relate and the date of this Report.
Significant and Material Orders
During the financial year 2022-23, there were no significant and material orders passed
by the Regulators or Courts or Tribunals impacting the going concern status and the
Companys operations in future.
No material changes and commitments which could affect the Companys financial position
have occurred between the end of the financial year of the Company and the date of this
Report.
Particulars of Employees
The Disclosure required under Section 197(12) of Companies Act 2013 read with the Rule
5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is
given in Annexure -IV, to this Report.
Prevention of Sexual Harassment at Workplace
As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of
sexual harassment at the workplace with a mechanism of lodging complaints. During the year
under review, no complaints were reported to the Committee.
Compliance of Secretarial Standards
During financial year 2022-23, your Company has complied with the relevant provisions
of Secretarial Standards issued by the Institute of Company Secretaries of India on Board
Meetings and General Meetings.
Reporting of Frauds
There was no instance of fraud during the year under review, which required the
Statutory Auditors to report under Section 143(12) of the Act and the rules made
thereunder.
Share Capital
The Companys paid-up Equity Share Capital continues to stand at H620.08 Lakhs as on
31st March, 2023. During the year, the Company has not issued any shares or shares with
differential voting rights or convertible securities. Also, the Company does not have any
Scheme for issue of shares including sweat equity to the employees or Directors of the
Company.
Revision in Financial Statements
There has been no revision in the financial statements.
Nature of Business
There has been no change in the nature of business of the Company.
Deposits
During the year under review, the Company has not accepted or renewed any amount
falling within the purview of provisions of Section 73 of the Companies Act, 2013 (the
Act) read with the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement
for furnishing details of deposits which are not in compliance with Chapter V of the Act
is not applicable.
Disclosure under Rule 8(5) of Companies (Accounts) Rules, 2014
No application has been made under the Insolvency and Bankruptcy Code; hence the
requirement to disclose the details of application made or any proceeding pending under
the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their
status as at the end of the financial year is not applicable.
The requirement to disclose the details of difference between amount of the valuation
done at the time of onetime settlement and the valuation done while taking loan from the
Banks or Financial Institutions along with the reasons thereof, is not applicable.
Human Resources
The company considers its human resources as the key to achieve its objectives. Keeping
in view, your company takes utmost care to attract and retain quality employees. The
employees are sufficiently empowered and such work environment propels them to achieve
higher levels of performance. The unflinching commitment of the employees is the driving
force behind the companys vision. The company appreciates the spirit of its dedicated
employees.
Green initiative in corporate governance
The Ministry of Corporate Affairs (MCA) has taken a green initiative in corporate
governance by allowing paperless compliance by the companies and permitted the service of
annual reports and documents to the shareholders through electronic mode subject to
certain conditions and the company continues to send annual report and other
communications in electronic mode to the members having email addresses and for the
members who have not registered their email addresses , physical copies are sent through
the permitted mode.
We encourage shareholders to receive their copy of the annual report through electronic
mode. This will also contribute to saving costs and reduce our use of natural resources.
Appreciation
Directors place on record their deep appreciation to employees at all levels for their
hard work, dedication and commitment - our people have been key to our successful
navigation of the challenges we have faced this year. The Board conveys its appreciation
for its customers, shareholders, suppliers as well as vendors, bankers, business
associates, regulatory and government authorities for their continued support.
|
By the order of the board |
|
For Pokarna Limited |
|
Sd/- |
|
Gautam Chand Jain |
| Date : 25th May, 2023 |
Chairman & Managing Director |
| Place: Secunderabad. |
DIN:00004775 |
+91-9892691696
