pricol ltd Directors report

Your Directors are pleased to present the Twelfth Annual Report on the business and operations of the Company alongwith the audited financial statements (Standalone & Consolidated) for the financial year ended 31st March, 2023 and Auditors Report thereon on behalf of the Board of Directors.

FINANCIAL RESULTS

Rs. Lakhs

The summarised financial results are:	Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
	(Restated)		(Restated)
Net Sales & Services
- Domestic	1,73,440.69	1,34,992.83	1,74,774.02	1,35,736.09
- Export	13,751.12	12,880.30	15,509.10	14,270.79
Revenue from Operations	1,87,191.81	1,47,873.13	1,90,283.12	1,50,006.88
Other Operating Revenue	5,572.95	4,462.41	5,572.95	4,462.41
Other Income	402.36	698.83	458.53	882.06
Total Income	1,93,167.12	1,53,034.37	1,96,314.60	1,55,351.35
Profit from Operations before Finance Cost,
Depreciation and Amortisation Expense,
Exceptional Items & Tax	21,593.24	17,777.94	23,306.03	18,940.07
Less : Finance Costs	1,827.36	2,675.23	1,828.25	2,728.23
: Depreciation and Amortisation Expenses	7,615.88	8,054.70	7,790.78	8,183.90
Profit / (Loss) before Exceptional Items & Tax	12,150.00	7,048.01	13,687.00	8,027.94
Add : Exceptional Item	975.00	—	975.00	—
Profit / (Loss) Before Tax	13,125.00	7,048.01	14,662.00	8,027.94
Less : Tax Expense
Current Tax	3,313.86	2,950.00	3,620.32	3,090.33
Deferred Tax	(1,446.75)	(240.70)	(1,426.85)	(173.23)
Earlier years (Net)	—	—	—	1.47
Profit / (Loss) for the year (A)	11,257.89	4,338.71	12,468.53	5,109.37
Other Comprehensive Income for the year before tax	(310.57)	(89.23)	273.92	167.05
Income tax relating to these items	78.16	31.30	67.58	27.87
Other Comprehensive Income for the year after tax (B)	(232.41)	(57.93)	341.50	194.92
Total Comprehensive Income for the year (C) = (A) + (B)	11,025.48	4,280.78	12,810.03	5,304.29

DIVIDEND & RESERVES

As the current year profit after setting off the losses of the previous years is inadequate to declare dividend, your Directors do not recommend any dividend and not transferred any amount to general reserves for the year 2022-23.

AUTO INDUSTRY

During the year, the Auto Industrys domestic sales grew by 20 % and exports by (15) %. The overall Auto Industrys production grew by 12.5 % as against 1.2 % in the previous financial year.

Segment	Vehicle Production*		Pricol Sale to OEM
	2022-23	2021-22	Growth %	Growth %
2 Wheeler / 3 Wheeler	2,03,17,602	1,85,83,841	9.33 %	26.04 %
Commercial Vehicle	10,35,626	8,05,527	28.57 %	54.12 %
Tractors	9,38,500	8,30,500	13.00 %	(1.25) %
4 Wheeler	45,78,639	36,50,698	25.42 %	39.43 %
Total	2,68,70,367	2,38,70,566	12.57 %	28.72 %

*As per Society of Indian Automobile Manufacturers (SIAM)

OPERATIONS

In domestic market, Company primarily caters to 2 wheelers, Commercial Vehicles, Tractors, 4 wheelers and Off-road vehicles.

STANDALONE FINANCIALS

The Companys domestic sales was up by 28.48% and overall Companys sales by 26.59% as compared to the previous year. The profit from operations before Finance Cost, Depreciation, Amortisation expenses, Exceptional items & Tax is 21,593.24 Lakhs as compared to 17,777.94 Lakhs during the previous year. Profit before Exceptional items & Tax has increased from 7,048.01 Lakhs to 12,150.00 Lakhs, due to increase in sales volume and better control on costs.

CONSOLIDATED FINANCIALS

The profit from operations before Finance Cost, Depreciation, Amortisation expenses and Exceptional items & Tax has increased from 18,940.07 Lakhs to 23,306.03 Lakhs. The operational performance has improved due to increase in sales volume and better control on costs. Profit before Exceptional items & Tax is 13,687.00 Lakhs as compared to 8,027.94 Lakhs, in the previous year.

AMALGAMATION

Amalgamation of Pricol Wiping Systems India Limited ("PWSIL"), a Wholly Owned Subsidiary company with its Holding Company, Pricol Limited with appointed date as 1st April 2021, by way of Scheme of Amalgamation, became effective from 21st December 2022 .

By this amalgamation the Wiping Business of PWSIL had been integrated with Pricol Limited. As part of the said amalgamation all assets and liabilities of PWSIL was transferred and vested with Pricol Limited. In this amalgamation there is no cash consideration involved being, PWSIL is a wholly-owned subsidiary of Pricol

Limited and the entire share capital of the PWSIL is held by Pricol Limited. Therefore, all shares held by the Pricol Limited in the share capital of the PWSIL stood cancelled.

As the appointed date of the said amalgamation is 1st April 2021, the financial statements for the financial year 2021-22 of the Company has been restated, in line with Ind AS 103 - Business Combination.

SHARE CAPITAL

Authorised & Issued, Subscribed Paid up

During the year 2022-23, based on the scheme of amalgamation of Pricol Wiping Systems India Limited, the authorised capital of the said company Rs21,25,00,000 was added to Pricol Limiteds authorised capital, which resulted the increase of authorised share capital of the Company from Rs 58,20,00,000 to Rs 79,45,00,000 as on 31 st March 2023 comprising of Rs 79,45,00,000 equity shares of Rs 1/- each.

The issued, subscribed and paid-up equity share capital of the Company as on 31st March 2023 was 12,18,81,498/- comprising of Rs12,18,81,498 equity shares of Rs 1/- each, without any change from the 31st March 2022.

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.

During the financial year 2022-23, the Company achieved sales of USD Rs 545.20 Lakhs (Rs 43,017.70 Lakhs) as against the previous year sales of USD 376.94 Lakhs ( 28,084.77 Lakhs). The Company made a profit of USD 10,38,306 (Rs 819.26 Lakhs) during the year 2022-23 as against USD Rs 7,04,769 ( 525.11 Lakhs) in 2021-22.

PT Pricol Surya Indonesia

The Company is supplying Instrument clusters to the 2 Wheeler manufacturers in Indonesia & Thailand.

In the financial year 2022-23, the Company has achieved a sales of IDR Rs6,59,014 Lakhs (INR Rs 3,545.50 Lakhs) as against the previous year sales of IDR Rs6,10,700 Lakhs (INR Rs 3,154.26 Lakhs) an increase of 7.91% in IDR & 12.40 % in INR terms.

The Company had a profit before tax of IDR Rs 1,33,416 Lakhs ( Rs 717.78 Lakhs) as against the profit before tax of IDR 94,685 Lakhs ( Rs 489.05 Lakhs) of previous year.

PT Sripri Wiring Systems, Indonesia

Due to business reasons, the operations of the Company have been closed during the financial year.

Pricol Asia Exim DMCC, Dubai

The Company, a Wholly Owned Subsidiary Company of Pricol Asia Pte. Limited, Singapore, was incorporated on 18th August 2022. This purchasing arm of our Company mainly assists in global procurement of raw materials and components to our Company.

During the financial year 2022-23, the Companys sale is USD 577 (Rs 0.46 Lakhs) (Previous year-Nil). The Company made a loss of USD 31,185 (Rs 24.61 Lakhs) during the year 2022-23 (Previous year -Nil)

OUTLOOK, OPPORTUNITIES, CHALLENGES, RISKS & CONCERNS

Global Economy:

In 2022, the global economy experienced several turbulent challenges. Inflation was seen higher than usual in several decades resulted in tightening financial conditions in most regions, Russias invasion of Ukraine continue to weigh on economic activity, and the rapid spread of COVID-19 in China dampened growth in 2022, but the recent reopening has paved the way for a faster- than-expected recovery.

Various initiatives taken by global governing bodies are expected to moderate the pertaining economical risks. Monetary policies are expected to restore price stability, and fiscal policies expected to aim to alleviate cost pressures while maintaining a sufficiently tight stance. Structural reforms can further support lower inflation by improving productivity and easing supply side constraints.

As per the latest IMF estimates published in Jan-23, the global economy is projected to grow at 2.9 % in 2023

(vs estimated 3.4 % in 2022) and 3.1 % in 2024. In 2022, Middle East and Central Asia have been the highest contributor to the global real GDP, while Emerging and Developing Asia are expected to be the highest contributors in 2024. Euro area is estimated to grow at 1.6 % in 2024, whereas United States and Latin America are expected to grow at 1.0 % and 2.1 % respectively in 2024.

Indian Economy:

The Indian economy, has staged a full recovery, ahead of many nations and has positioned itself to ascend to the pre-pandemic growth path in FY23. However, India must also cope with the challenge of controlling inflation. Fortunately, actions taken by the government and RBI along with decline in global commodity prices has led retail inflation levels reaching to 5.72 % in November22 and 5.88 % in December22, which are within the RBI upper tolerance target of 6 % .

As per IMF, Indias Real GDP grew at 6.8 % in 2022 (estimates) and expected to grow at 6.1 % in 2023 and 6.8 % in 2024, with resilient domestic demand despite external headwinds. Industrial production increased supported by persistent demand conditions. For the first half of FY23, the Industrial Sectors overall Gross Value Added (GVA) increased by 3.7 %, above the 2.8 % average growth seen in the first half of the previous decade.

In 2023, nearly 15 % of the worlds growth is forecasted to come from India. These growth projections are partially based on the economys resiliency, which can be observed in how quickly private consumption rebounded, while, the governments capital expenditure, which surged by 63.4 % in the first eight months of FY23 was also a major contributor. India will also be able to maintain a positive growth-interest rate differential owing to the governments policy of capital expenditure led growth, which will result in a sustainable debt to GDP over the long term.

In order to connect India to international supply chains, the Production Linked Incentive (PLI) programmes were created with an expected investment of INR 4 lakh crore during FY22-27. As per the Indian Brand Equity Foundation (IBEF) In FY22, investments under PLI programmes totalled INR 47,500 crore, which reached 106 % of the years set objective. Due to PLI initiatives, production / sales of INR 3.85 lakh crore and the creation of 3 lakh jobs have been registered. The Indian economy has also begun to prosper from more formalisation, greater financial inclusion and economic possibilities brought forth by technologically driven economic reforms.

The Indian Automotive Sector

India has become the fastest-growing economy in the world in recent years. This fast growth, coupled with rising incomes, boost in infrastructure spending and increased manufacturing incentives, has accelerated the automobile industry. The two-wheeler segment dominated the automobile industry because of the Indian middle class. India aims to double its auto industry size to INR 15 lakh crores by end of year 2024. There has been an FDI inflow of $ 33.77 billion in the industry from April 2000 till September 2022 which is around 5.48 % of the total FDI inflows in India during the same period.

The Indian automobile industry, is presently the fifth largest in the world and is expected to become third largest by 2030. The industry contributes around 7.1 % of Indias Gross Domestic Product (GDP) and 49 % of its manufacturing GDP. While the automotive sector is valued at $ 222 billion, the net worth of the EV market in the country is expected to be just $2 billion by 2023 and $ 7.09 billion by 2025.

Auto demand momentum has gone through unforeseen roadblocks in FY23 like the semiconductor shortages, steep raw material prices, supply chain constraints, to name a few. The sector is expected to continue to grow due to various demand drivers namely, greater replacement demand, new products, buoyant business / economic activity, policy push and ample finance availability. There has been a significant rise in investments in the research and development (R&D) of the autonomous vehicle. The fast paced technological advancements in the recent years has further opened up opportunities for the auto makers to explore new arenas.

In the two-wheeler industry, share of scooters and executive / premium motorcycles has been increasing due to strong demand from mid/higher income customers and this trend is expected to persist. EV penetration stands at 5 % in FY23E, and it is expected to further increase to 9 % in FY25E, with more model options and favourable cost of ownership in comparison with ICEs. The share of scooters / premium-bikes is expected to rise from 31 % / 13 % to 38 % / 15 % driven by urbanization, premiumisation and electrification.

In fiscal 2024, the overall CV domestic sales volumes is expected to breach the pre pandemic peak and will be driven by improving fleet utilisation and transporter profitability levels, higher replacement demand and expectations of robust economic growth.

The Indian Auto Ancillaries Sector

Significant demand for automobiles also led to the emergence of more original equipment and auto components manufacturers. As a result, India developed expertise in automobiles and auto components, which helped boost international demand for Indian automobiles and auto components.

Indias auto component industry is an important sector driving macroeconomic growth and employment. The industry comprises players of all sizes, from large corporations to micro entities, spread across clusters throughout the country. The auto components industry accounted for 2.3 % of Indias GDP and provided direct employment to 1.5 million people. By 2026, the automobile component sector will contribute 5-7 % of Indias GDP.

The industry is a leader in exports and provides jobs to over 3.7 crore people. From FY16 - FY22, the industry registered a CAGR of 6.35 % and was valued at US$ 56.50 billion in FY22. Due to the high development prospects in all vehicle industry segments, the auto component sector is expected to see double-digit growth in FY22. The industry is expected to stand at US$ 200 billion by FY26.

The turnover of the automotive component industry grew 34.8 % to INR 2.65 lakh crore (US$ 33.8 billion) during April-September 2022 compared to the first half of the previous year. As per the Automobile Component Manufacturers Association (ACMA) forecast, auto component exports from India is expected to reach US$ 30 billion by 2026. Strong international demand and resurgence in the local original equipment and after market segments are predicted to help the auto component industry grow 20-23 % in FY22.

Ancillaries with higher exposure to segments like aluminium casting, wiring harness, lighting, tyres and EV-specific components are likely to benefit from the EV transition, owing to increasing content.

Growth Drivers:

1) Growing income levels and overall employment trends will help increase the consumer base. By 2025 Indian Middle class population will rise to 583 million people which will be almost 41 % of the projected population.

2) The Indian automotive ancillary sector is estimated to grow by 14-16 % for FY23. An increase in production of passenger and commercial vehicles in FY23 could help the demand from OEMs to grow by 18-20 %.

3) The demand growth for after market products is estimated to be 7-8 % this fiscal. This number might seem low due to a higher base for the last fiscal year which was due to an increase in the replacement period on account of the pandemic.

4) The export market witnessed 40 % growth in FY22 and is expected to increase 8 -10 % in FY23 owing to stable demand from the European and US markets.

5) Indias EV markets have also seen strong growth, with electric 2W volumes witnessing exponential growth in recent years. In the case of 2Ws, the narrowing differential between cost of ownership of EVs and ICEVs in 2Ws has helped drive EV 2W adoption in India. In the case of 4Ws, the large viability gap between EVs and ICEVs persists, but there has been strong offtake in EV 4W sales too, with EVs reaching 3 % of the 4W market in India.

6) Allocation of INR 3,000 crore for the Indian Semiconductor Mission will help develop an indigenous semiconductor manufacturing base and reduce the industrys reliance on imports thereby cushioning it from disruptions in the global supply chain.

7) The Government of Indias Automotive Mission Plan (AMP)FY2006-26 has been instrumental in ensuring growth for the sector. The Indian automobile industry is expected to achieve a turnover of US$ 300 billion by 2026 by expanding at a CAGR of 15 % from its current revenue of US$ 74 billion.

8) In November 2020, the Union Cabinet approved a PLI scheme in automobile and auto components with an approved financial outlay over a five-year period of Rs 57,042 crore (US$ 8.1 billion). In September 2021, the Indian government issued notification regarding a PLI scheme for automobile and auto components worth Rs25,938 crore (US$ 3.49 billion). In February 2022, the government received an investment proposal worth Rs 45,016 crore (US$ 6.04 billion) from 20 automotive companies under the PLI Auto scheme. This scheme is expected to create an incremental output of Rs2,31,500 crore (US$ 31.08 billion).

9) Non-Banking Financial Companies (NBFCs) are stepping up the funding of used cars, seeing it as a growth driver over the next two-three years, especially with Electric Vehicles (EVs) gaining traction in the Indian market.

Risk:

1) Real-time driving emission norms (from Apr23) and safety regulations could pose additional challenges to the auto OEMs across segments as it will further increase the cost of acquisition of vehicles.

2) High-interest rates and rising fuel costs may act as headwinds.

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) The extended period of semiconductor shortage has the potential to hamper growth for passenger vehicles in particular.

5) Another pandemic wave and persisting inflation would damage the export business for automotive ancillary players.

RISK MANAGEMENT

Ri sk Manage ment Committee of the Boa rd was constituted in accordance with Regulation 21 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. Risk Management Committee periodically met for identifying, monitoring, evaluating and managing the risks of the Company. At present the Company has not identified any element of risk which may threaten the existence of the Company.

Companys 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.eom/wp-content/uploads/2022/11 /Risk- Management-Policy-2021.pdf

INTERNAL 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 Companys internal control systems have been continuously monitored 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 and procedures.

The Company, through its own Corporate Internal Audit Department, carries out periodic audits at all locations and all functions and brings out any deviation to internal control procedures. The observations arising from audit are periodically reviewed and compliance is being ensured. The summary of the Internal Audit observations are submitted to the Audit Committee. 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 Companys internal financial controls were adequate and effective during FY 2022-23.

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, 2023 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 - INR 14,500 Lakhs	CRISIL A- / Stable	Not applicable
	Fund-Based and Non Fund-Based Working Capital Limits - INR 8,000 Lakhs	IND A- / Stable / IND A2+	IND BBB+ / Stable / IND A2
India Ratings and	Long Term Loans - INR 4,560 Lakhs (reduced from INR 15,530 Lakhs)	IND A- / Stable	IND BBB+ / Stable
Research	Proposed Fund-based and Non Fund - based working capital limits - INR 2,000 Lakhs	WD - Withdrawn (the company did not proceed with the instrument as envisaged)	IND BBB+ / Stable / IND A2
ICRA	Term Loan, Long Term - Fund Based & Long Term - Unallocated Short Term - Non Fund Based	Withdrawn on the request of the company.	BBB (Stable) A3+

RELATED PARTY TRANSACTIONS

In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions. 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 arms length basis and were in the ordinary course of the business.

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 2022-23.

DIRECTORS

Independent Director

As per the provisions of Section 149 of the Companies Act, 2013, 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
Mr. K.Ilango	Upto 14th June 2024
Mr. R.Vidhya Shankar	Upto 31st July 2024 (2nd Term)
Mr. Navin Paul	Upto 21st October 2025
Mrs. Sriya Chari	Upto 26th May 2026 (2nd Term)
Dr. S.K.Sundararaman	Upto 29th May 2028 (2nd Term)

EXECUTIVE DIRECTOR / NON INDEPENDENT DIRECTOR

Members appointed Executive Director / Non Independent Director as mentioned below:

Name of Director	Period of Appointment
Mrs. Vanitha Mohan	Upto 31st March 2024
Mr. P.M.Ganesh	Upto 31st March 2024
Mr. Vikram Mohan	Upto 31st March 2025

Mrs.Vanitha Mohan, a Non-Independent Director retires by rotation at the ensuing Annual General Meeting and

is eligible offers herself for re-appointment. Details of Mrs.Vanitha Mohan being recommended for reappointment is included in the notice of the ensuing Annual General Meeting.

EVALUATION BY THE BOARD, COMMITTEE & INDEPENDENT DIRECTORS

The Board has made a formal annual evaluation of its own performance, Committees of the Board, Independent Directors and Individual Directors of the Company, pursuant to the provisions of the Companies Act, 2013 (Act) and the SEBI Listing Regulations.

The Boards performance was evaluated based on the criteria like Structure, Governance, Dynamics & Functioning, Approval & Review of Operations, Financials, Internal Controls etc.

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.

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 Nomination and Remuneration at its meeting held on 8th February 2023 evaluated the performance of the individual directors and the Board as a whole and satisfied with their performance.

Independent Directors had a separate meeting on 1st February 2023 and 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 & SEBIs guidance note 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. Mr.Priyadarsi Bastia, has been appointed as Chief Financial Officer with effect from 1st July 2022, in place of Mr. P. Krishnamoorthy.

STATUTORY AUDITORS

M/s. VKS Aiyer & Co., Chartered Accountants, Coimbatore (ICAI Firm Registration No: 000066S) (VKS Aiyer), were appointed as Statutory Auditors of the Company, at the AGM held on August 22, 2018, for a term of 5 years, from the conclusion of 7th AGM until the conclusion of the 12th AGM of the Company to be held in the calendar year2023.

In terms of the provisions of the Companies Act, 2013, an audit firm acting as the statutory auditor of a company is eligible to be appointed as statutory auditors for two terms of five consecutive years each. The first term of VKS Aiyer as statutory auditors of the Company expires at the conclusion of the 12th AGM of the Company scheduled to be held on August 9, 2023.

Considering their performance as Statutory Auditors of the Company during their present tenure, the Audit Committee of the Company, after due deliberation and discussion, recommended the re-appointment of VKS Aiyer as Statutory Auditors of the Company for a second term of five years to hold office from the conclusion of the 12th AGM to be held on August 9, 2023 till the conclusion of the 17th AGM of the Company to be held in the calendar year 2028. The remuneration for the tenure of their second term as Statutory Auditors shall be mutually agreed between the Board of Directors and VKS Aiyer, from time to time. M/s. VKS Aiyer & Co., Chartered Accountants, have confirmed their eligibility for continuing as Statutory Auditors of the Company. The above proposal forms part of the Notice of the AGM for your approval.

The report of the Statutory Auditor forms part of this Report and Annual Accounts 2022-23. 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 10th May 2023, 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 2023-24, on the remuneration of 2.75 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 members 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 had 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 2023-24.

The Secretarial Audit Report for the financial year 20222023, as per Section 204 of the Companies Act and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2005, 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

Pricols Corporate Social Responsibility (CSR) activities reflect its philosophy of enhancing value to the society and the environment around us. CSR activities are carried out through registered trust (ND Foundation) in addition to the CSR activities directly undertaken by the Company. The CSR policy is available on the website of the Company at https://pricol.com/wp- content/uploads/2022/11 /CSR-Policy_21 .pdf. The Annual Report on CSR activities is annexed herewith as "Annexure B".

DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

To keep pace with the evolving trends and emerging technologies, employees have undergone numerous upskilling programs, which resulted in positive business outcomes. Various employee - employer interactions have improved the employee relations that also resulted in "zero" hours loss due to industrial relations issues through

Supervisory form meetings, Goodwill meetings, Shop floor meetings and other employee engagement initiatives. Employees have participated in various external competition to exhibit their talents such as Poke yoke competition, Kaizen improvements, Quality circle competitions, sports tournaments, etc., The number of people Employed as on 31st March 2023 is 5,649. Employee Engagement

Employee engagement plays a vital role as it is the foundation of any happy, vibrant and productive work culture. The management has introduced various opportunities to improve employees work-life balance, emotional balance and peace of mind, which has improved to optimise business results. Accordingly number of initiatives such as several recreational club activities, factory family connect programs, Rewards and recognition events, etc, were taken to upkeep the morale of the employee workforce. We believe that a healthy, inclusive, empathetic, tolerant and respectful business culture is absolutely essential in todays 21st century.

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 SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

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.66 to the Standalone Financial Statements.

5. Disclosure as required under Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given in Note.67 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 Companys operations in future.

7. There is no change in nature of business of your 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 (1) of Companies (Management and Administration) Rules, 2014, Annual Return in Form MGT-7 is available at the Companys website www.pricol.com and the weblink there: https://pricol.com/wp- content/uploads/2023/07/Before-AGM.pdf

11. Particulars of Employees:

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is annexed herewith as "Annexure D".

12. Disclosures 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, in the format prescribed in the relevant accounting standards for annual results:

Details are given in Note. 65 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 Requirement) Regulations, 2015 read with SEBI Circular No.

CIR/CFD/CMD/10/2015 dated 4th November 2015, is annexed herewith as "Annexure F".

16. Details of Subsidiary Companies, Joint Venture and Associate Companies, and their financial position: 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. 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 arms length transactions under third proviso thereto:

All the related party transaction entered by the Company during the financial year 2022-23 are in the ordinary course of business and at arms length. Details of material contracts / arrangements / transactions entered at arms 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".

18. 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.

19. 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 Indian or abroad:

Disclosed under the heading "Finance" in the Report.

20. 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	2022-23	2021-22	% Change	Explanations, if any
i) Debtors Turnover	7.52	7.05	6.71
ii) Inventory Turnover	7.39	6.23	18.74	Not Applicable
iii) Current Ratio	1.14	1.11	2.34
iv) Interest Coverage Ratio	11.82	6.65	77.74	Reduction in term loans
v) Debt Equity Ratio	0.13	0.23	(41.67)
vi) Operating Profit Margin	7.78	6.36	22.32	Not Applicable
vii) Net Profit Margin (%) or sector-specific equivalent ratios, as applicable.	6.01	2.93	104.97	Increase in sales and improved net profit

21. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

Particulars	2022-23	2021-22	%Change	if anyExplanations,
Return on Net Worth	0.18	0.08	127	Improvement in net profit

22. There is no proceedings pending under the Insolvency and Bankruptcy Code, 2016.

23. There was no instance of one-time settlement with any Bank or Financial Institution.

24. During the year, the Companys security(s) are not suspended from trading.

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 Secretarys Certificate regarding compliance of conditions of Corporate Governance, is made a part of this Directors Report. All the Board members and Senior Management personnel have affirmed compliance with the code of conduct for the year 2022-23.

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 Companys 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

Vikram Mohan

Managing Director (DIN : 00089968)

	P.M.Ganesh
	Chief Executive Officer
Date : 10th May 2023	& Executive Director
Place : Coimbatore	(DIN: 08571325)