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Prakash Industries Ltd.

BSE: 506022 Sector: Metals & Mining
NSE: PRAKASH ISIN Code: INE603A01013
BSE 00:00 | 12 Aug 52.85 0.45
(0.86%)
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NSE 00:00 | 12 Aug 52.80 0.45
(0.86%)
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OPEN 52.55
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VOLUME 149349
52-Week high 87.50
52-Week low 45.35
P/E 5.53
Mkt Cap.(Rs cr) 946
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 52.55
CLOSE 52.40
VOLUME 149349
52-Week high 87.50
52-Week low 45.35
P/E 5.53
Mkt Cap.(Rs cr) 946
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Prakash Industries Ltd. (PRAKASH) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the 40th Annual Report on thebusiness & operations of the Company together with the Audited Statement of FinancialAccounts for the year ended 31st March 2021.

FINANCIAL RESULTS

For the year ended 31st March For the year ended 31st March
2021 2020
Net Sales 3215.86 2973.64
Other Income 8.06 6.95
Total Income 3223.92 2980.59
EBITDA 322.62 355.80
Depreciation 153.77 144.87
Financial Expenses 73.52 92.74
Profit before exceptional item and tax 95.33 118.19
Exceptional Items 103.67 24
Less: Transferred from
General Reserve 103.67 - (24) -
Provision for Taxes - -
Profit after tax 95.33 118.19
Other Comprehensive Income 8.90 (4.14)
Total Comprehensive Income 104.23 114.05

PERFORMANCE

During the year under review the Company achieved Net Sales of Rs.3216 crores asagainst Rs.2974 crores in the previous year. The EBITDA for the year was Rs.323 crores incomparison to Rs.356 crores in the previous year. After providing for interestdepreciation and tax the profit after tax of the Company was Rs.95 crores as againstRs.118 crores in the previous year which resulted in EPS of Rs.5.55 in the current year

OPERATIONAL REVIEW

The performance of the Company during the year was impressive despite massivedisruptions caused by the COVID-19 pandemic in the initial months of the financial year.The Company adopted focussed approach on improving its volumes operational efficienciesand operating facilities at optimum levels. The multipronged strategy has helped theCompany in seizing the opportunity offered by the pick-up in the economic activities inthe country especially the steel intensive sectors like infrastructure construction etc.The steel demand continued to improve in each successive quarter which helped the Companyto achieve highest steel sales volume of 9.55 lakh MT during the year. The Company alsoadded capacity in its Steel Melting Shop by commissioning two new energy efficientInduction Furnaces. The enhanced capacity now stands at 1.25 Mn tonnes per annum. TheCompany's Captive Iron Ore Mining operations at SIrkaguttu Mine Odisha ramped up duringthe year. The Company achieved annual extraction of ~ 4.7 lakh MT which has resulted insignificant cost savings to the Company. .

FUTURE PROSPECTS

The Global steel demand is expected to grow by ~ 6% in the year 2021 as a result ofeconomic recovery post Covid-19 pandemic supported by government spending and stimuluspackages. The Indian steel industry is also expected to remain buoyant amidst strongdomestic demand recovery accommodative government policies and export opportunities.

Further the full scale operations from the captive Iron Ore mine at Sirkaguttu Odishain the current financial year is expected to help the Company to largely insulate itselfagainst the volatility of Iron Ore prices. Further more the Company had received fromChhattisgarh Government the Grant Order for Iron Ore mining lease in District : Kabirdham(Kawardha) Chhattisgarh.

DIVIDEND

After careful assessment of the available profit during the financial year ended 31stMarch 2021 your Directors have not recommended any dividend for the financial yearended 31st March 2021.

ENVIRONMENT

The Environment Management is embedded in the Company's processes and practices and theCompany is committed to improve the environment performance.

The Company has implemented the Environmental Management Systems and formulatedeffective environmental policy outlining guiding principles and implementation proceduresfor effective adoption and implementation of environment management program.

The Company adopts multiple strategies and technologies to ensure clean and healthyenvironment in the plant and also takes pro-active steps to enhance its surroundingenvironment.

The Company always believes in 3 principles i.e. Reduce Reuse and Recycle andimplements the same in all its processes to conserve the natural resources and reducecarbon emission.

In addition to complying with all applicable environmental laws and regulations wecommitted to:

- Adopt the latest environment improvement and management technologies i.e. highefficient emission & effluent control devices for environment conservation.

- Installation of Online Continuous Emission & Effluent Monitoring Systems formonitoring emission on self-monitor-basis.

- Optimum use of the natural resources and minerals by increased efficiency andimplementing the energy conservation and water conservation practices

- Extensive green belt development program implemented in the plant premises &outside area.

- Effective management of hazardous waste solid waste bio-medical waste & e-wasteand adoption of cleaner technologies to further reduce the consumption of fuel and waterin plant operations.

SAFETY

The Company is committed for the implementation of the best possible practices forensuring the safety of its all stakeholders including employees and contractors. TheCompany strongly believes that providing safe & healthy working environment to itsworkforce is not only a statutory requirement but also its moral responsibility.

The Company has developed safety standards SOPs and safety manual systems andprocedures in accordance with ISO-45001 which addresses employee safety occupationalhealth process safety and emergency preparedness.

The Company has substantially reduced the number of on-site injuries with its strongemphasis on improving health and safety parameters reducing risks through peopleengagement capability building and strengthening health and safety management systems andprocesses.

The Company has a structured system for periodically review policies objectives andtargets for continual improvements through corrective and preventive actions and providessafe and healthy working for all by Implementing "Zero Accident" policy.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting the financial position of theCompany between the end of the financial year of the Company to which the financialstatements relate and the date of the report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the period under review there were no significant and material orders passed bythe Regulators/Courts or Tribunals impacting the going concern status of the Company andits operations in future.

CHANGE IN NATURE OF BUSINESS IF ANY.

During the year under review there is no change in nature of business of the Company.

DETAILS OF SUBSIDIARY COMPANIES JOINT VENTURES AND ASSOCIATE COMPANIES

The Company's policy for determining material subsidiaries is available atwww.prakash.com.

AMOUNT CARRIED TO ANY RESERVE (IF ANY)

The Company had not carried any amount to any reserve from its Profit & Lossaccount for the current financial year.

CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE COMMITTEE

The Company strongly believes that sustainable community development is essential forharmony between the community and the industry. The Company endeavors to make a positivecontribution especially to the underprivileged communities by supporting a wide range ofsocio-economic educational and health initiatives.

The Company is following the Companies (Corporate Social Responsibility Policy) Rules2014 & the Corporate Social Responsibility (CSR) has been an integral part of itsvision and policy. The Company's initiatives towards fulfilling its philosophy ofCorporate Social Responsibility include promoting education facilities primary healthcenters hospitals sports hub and places of worship employment opportunity of the localpeople recreation facilities and plantation etc. The interventions are carried out intandem with local Government bodies to meet the social mandate for the earmarkedcommunities the support from development sector organizations and institutions apart fromimplementation through respective CSR activities.

The CSR is the integral part of the Company policy and all CSR initiatives are beingplanned executed and monitored by the dedicated CSR Team. The CSR Team conductsassessments internally to keep strengthening the interventions. The CSR programmes andinitiatives are aligned with Government mandate of local and State level and as per thespecific needs of the community in Health Education Infrastructure Development andSocial Needs. The projects are directly intended for improving the quality of life ofcommunity with well-designed strategies of better health education and sustainability.

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We incorporated our work in following areas - Water resource management Promotion ofeducation in villages nearby our plant Health care & medical camps Womenempowerment Infrastructure development Environmental awareness Plantation & greenbelt development and contribution on sports & social causes.

A Board level Committee of CSR has been constituted. The details of membership of theCommittee & the meetings held are detailed in the Corporate Governance Report formingpart of this Report. The Corporate Social Responsibility Policy is available on thewebsite of the Company at the link http:// prakash.com/pdfs/ CSR_Policy.pdf

The Annual Report on Corporate Social Responsibility activities is annexed to thisreport as Annexure 1.

BOARD EVALUATION

During the year the annual evaluation of the performance of the Board its Committeesand of individual Directors has been made under the provisions of the Companies Act 2013relevant Rules and the Corporate Governance requirements as prescribed under Regulation 17of Listing Regulations 2015 and the circular issued by SEBI with respect to Guidance Noteon Board Evaluation from time to time.

In a separate meeting of Independent Directors performance of Non IndependentDirectors and performance of the Board as a whole was evaluated. Further they alsoevaluated the performance of the Chairman of the Company taking into account the views ofthe Executive Directors and Non-executive Directors.

NUMBER OF MEETINGS OF THE BOARD

The details of the Board Meetings and other Committee Meetings held during thefinancial year 2020-21 are given in the separate section of Corporate Governance Report.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed undersub-section (6) of Section 149 of the Companies Act 2013 and as per Regulation 16(I)(b)SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of Regulation 25(7) of the Listing Regulations2015 the Company has put in place a Familiarization Programme for the IndependentDirectors to familiarise them with the Company their roles rights responsibilities inthe Company nature of the industry in which the Company operates.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

The following persons are the Key Managerial Personnel of the Company as per theprovisions of Section 203 of the Companies Act 2013.

i) Shri Vikram Agarwal Managing Director ii) Shri P.L. Gupta Chief Financial Officeriii) Shri Ashwini Kumar Company Secretary

In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Shri P.L. Gupta retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for reappointment.

Shri M.L. Pareek resigned as Whole Time Director and Chief Executive Officer witheffect from 30th June 2020.

The Board of Directors has reappointed Shri Vikram Agarwal as Managing Director of theCompany for the term of 3 (Three) consecutive years on the Board of the Company witheffect from 1st April 2021 subject to approval of members of the Company inensuing General Meeting.

The Board of Directors has reappointed Shri P.L. Gupta as Whole Time Director &Chief Financial Officer of the Company for the term of 3 (Three) consecutive years on theBoard of the Company with effect from 1st April 2021 subject to approval ofmembers of the Company in ensuing General Meeting.

BOARD COMMITTEES

All Committees of the Board of Directors are constituted in line with the provisions ofthe Companies Act 2013 and applicable regulations of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

DEPOSITS

Company has not accepted any deposits during the year under review.

TRANSFERS TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to applicable provisions of the Companies Act 2013 ("Act") readwith the Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 ("IEPF Rules") all unpaid or unclaimed dividends arerequired to be transferred by the Company to the Investor Education and Protection Fund("IEPF" or "Fund") established by the Central Government aftercompletion of seven years from the date of dividend becoming unpaid / unclaimed. Furtheraccording to the Rules the shares in respect of which dividend has not been paid orclaimed by the members for seven consecutive years or more shall also be transferred tothe demat account created by the IEPF Authority.

The Company had sent individual notices and also advertised in the newspapers seekingaction from the members who have not claimed their dividends for seven consecutive yearsor more. Accordingly the Company has transferred such unpaid or unclaimed dividends andcorresponding shares to IEPF up to the financial year ended 31st March 2013.

Members/claimants whose shares and/or unclaimed dividend have been transferred to theIEPF Demat Account or the Fund as the case may be may claim the shares or apply forrefund by making an application to the IEPF authority in Form IEPF-5 (available onhttp://www.iepf.gov.in) along with requisite fee as decided by the IEPF authority fromtime to time.

Details of shares/members in respect of which dividend has not been claimed areprovided on our website at www.prakash.com The members are encouraged to verify theirrecords and claim their dividends of all the earlier seven years if not claimed.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act 2013 (Act) the Board of Directorsto the best of their knowledge and ability confirm that:

I. in the preparation of the annual accounts the applicable standards have beenfollowed and there are no material departures

II. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period

III. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities

IV. they have prepared the accounts on a going concern basis

V. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively

VI. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

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STANDALONE ACCOUNTS

The Standalone financial statements for the year ended 31st March 2021 havebeen prepared in accordance with Indian Accounting Standards (Ind AS) notified under theCompanies (Indian Accounting Standards) Rules 2015 together with the comparative perioddata as at 31st March 2021 and for the previous year ended 31st March2020.

AUDITORS & AUDITORS REPORTS

i) Statutory Auditors

The Board of Directors have re-appointed M/s Chaturvedi & Co. CharteredAccountants (FRN:302137E) as Statutory Auditors of the Company for a term of five yearsbeginning from ensuing 40th Annual General Meeting of the Company upto theconclusion of the 45th Annual General Meeting of the Company to be held in2026.

The Auditors in their Report to the members have given two qualified opinions and theexplanations of Board with respect to it in pursuant to section 134(3)(f) of Companies Act2013 is as follows:

Explanations to note on Basis for Qualified opinion of Independent Auditors Report

a) The net deferred tax liability computed in terms of Ind AS-12 "Income Tax"amounting to Rs.3133 Lakhs has been adjusted against Securities Premium Account. This hasbeen in terms of Hon'ble Punjab & Haryana High Court order dated 23rd August2007.

The Company has utilized Minimum Alternate Tax (MAT) credit amounting to Rs.804 Lakhsto settle the Income Tax liabilities of the previous financial year set off against theretained earnings.

b) The Expenditure amounting to Rs.10367 Lakhs in respect of capital expenditureincurred including capital advances given for various projects. The implementation ofthese projects was abandoned and the same has been written off by withdrawing anequivalent amount from General Reserve.

ii) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Shri Bhoopendra Kumar Bohra Practicing Company Secretary to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as

Annexure 2 in prescribed format MR- 3 as per Companies Act 2013 and under SEBI ListingRegulations. The Secretarial Auditor has given observation as mentioned in his report.

iii) Cost Auditors

Pursuant to Section 148(1) of the Companies Act 2013 Company is required to maintaincost records as specified by the Central Government and accordingly such accounts andrecords are made and maintained.

Accordingly the Board of Directors in its meeting held on 31st May 2021 hasappointed M/s. Rakshit & Associates (FRN:101951) Cost & Management Accountantson the recommendation of the Audit Committee for auditing the cost records of the Companyfor the Financial Year 2021-22. Appropriate resolution seeking ratification of theremuneration of Cost Auditors is included in the Notice convening the 40th AGM of theCompany.

CHANGES IN CAPITAL STRUCTURE

During the financial year 2020-21 the Company has allotted 317986 Equity Shares onconversion of FCCBs. The Company has also allotted 7500000 Equity Shares of the face valueof Rs.10 per share at a premium of Rs.34.10 per share upon conversion of 7500000Convertible Equity Warrants. Accordingly the paid-up Equity Share Capital of the Companyincreased from Rs.171.26 crores to Rs.179.08 crores.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Particulars of loans guarantees or investments made and securities provided by theCompany pursuant to Section 186 of the Companies Act 2013 if any are given in the notesto the financial statements which form part of the Annual Report.

RELATED PARTY TRANSACTIONS [RPT]

All the Related Party Transactions entered during the year were in the ordinary courseof business and on arm's length basis and in compliance with the applicable provisions ofthe Companies Act 2013 and Listing Regulations. There are no materially significantrelated party transactions made by the Company with its Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict ofinterest with the Company at large. All the related party transactions are presented tothe Audit Committee and the Board. Omnibus approval is obtained for the transactions whichare foreseen and repetitive in nature.

A statement of all related party transactions is presented before the Audit Committeeon quarterly basis specifying the terms & conditions of the transactions.

The Policy on materiality of related party transactions and dealing with related partytransactions are available on the Company's website at the link at http://www.prakash.com/policy- related-party-transactions.

The details of the related party transactions as required under Section 134(3)(h) r/wRule 8 (2) of the Companies (Accounts) Rules 2014 and under Regulation 34(3) & 53(f)Para A of Schedule V of SEBI (LODR) Regulations 2015 are attached as Annexure 3.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

In order to provide a mechanism to all stakeholders of the Company to disclose anyunethical and improper practices or any other alleged wrongful conduct in the Company theCompany has laid down a Vigil Mechanism also known as Whistle Blower Policy to deal withinstances of fraud and mismanagement if any. The details of the Vigil Mechanism andWhistle Blower Policy are available on the website of the Company.

NOMINATION AND REMUNERATION POLICY

The Company has a Nomination and Remuneration Committee of Directors. The members ofsaid Committee are Non- Executive Directors and Independent Directors. The Committee metonce during the year. Details of the role and responsibilities of the Committee theparticulars of meeting(s) held and attendance of the members at such meeting(s) are givenin the Corporate Governance Report.

The Board has framed a Nomination and Remuneration policy which is available on theCompany website at the link http:// www.prakash.com/policies.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided as Annexure 4 to thisReport.

In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rules5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules forms part of this AnnualReport and is attached as Annexure 4A.

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RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has set up a Risk Management Committee. The Committee assessed variousrisks pertaining to Operations & Maintenance of Plants financial and otherorganizational risks are assessed evaluated and continuously monitored for takingeffective step.

The Company has adequate internal controls commensurate with the nature of businesssize and complexity of its operations. Details of internal control system and its adequacyare furnished in "Management Discussion & Analysis Report" forming part ofthis Report. The Board of Company has laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and operatingeffectively.

ANNUAL RETURN

The draft annual return of the Company as required under the Companies Act 2013 isavailable on the website of the Company at www.prakash.com.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has a policy on prohibition prevention and redressal of Sexual Harassmentof women at work place and matters connected therewith. During the year ended 31st March2021 no complaint was received under the policy

DISCLOSURE REQUIREMENTS

As per SEBI Listing Regulations the Corporate Governance Report with the PractisingCompany Secretary's Certificate and Management Discussion and Analysis are attached asAnnexure 5 5A 5B. The Company has devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems are adequate and operating effectively.

BUSINESS RESPONSIBILITY REPORT :

The Business Responsibility Report as required under Regulation 34(2)(f) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 describing theinitiatives taken by the Company from an environmental social and governance perspectiveform an integral part of this Annual Report and annexed hereto as Annexure 6.

CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy technology absorption research& development and foreign exchange earnings and outgo as required to be disclosedunder the Act are annexed as Annexure 7.

ACKNOWLEDGMENTS

Your Directors wish to thank all stakeholders employees and business partners andCompany's bankers for their continued support and valuable co-operation. The Directorsalso wish to express their gratitude to investors for the faith that they continue torepose in the Company.

By Order of the Board
P. L. Gupta Kanha Agarwal
Whole-time Director Jt.Managing Director
DIN:00048868 DIN:06885529

Place : New Delhi

Dated : 31st May 2021

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