The Members of Prima Agro Limited
Your Directors have pleasure in presenting the 33rdAnnual Report on thebusiness and operations of the Company together with the Audited Statement of Accounts forthe year ended 31stMarch 2020.
India will continue to remain the world's fastest-growing large economy in 2020 as wellas in 2021 much ahead of China a UN report said. "Growth (in India) continues to beunderpinned by robust private consumption a more expansionary fiscal stance and benefitsfrom previous reforms. Yet a more robust and sustained recovery of private investmentremains crucial to lift the medium-term growth" WESP report said. The IMF says"India is one the world's fastest-growing large economies which has carried outseveral key reforms in the last five years but more needs to be done with growth averagingabout 7% over the past five years'' media reports also quoted IMF communications directorGerry Rice as saying at a recent news conference. "Important reforms have beenimplemented and we feel more reforms are needed to sustain this high growth including toharness the demographic dividend opportunity which India has.''
The second term of Prime Minister Narendra Modi's government's promise of universalhealth coverage offered by Ayushman Bharat must be delivered through increased resourcesand redesign to accelerate the country's social and economic development. His ongoingmissions for sanitation clean water clean energy nutrition and pollution control mustbe revved up to protect health while promoting physical activity. Only through suchdemocratic decentralization visualized by Gandhiji at the time of our independence findfulfillment in a healthy India.
The Narendra Modi government "systematically and consistently" introduced themuch needed second generation reforms and several "game-changing decisions"taken over the last five years. The taxation reforms measures to curb black moneyenactment of Insolvency and Bankruptcy Code demonetisation steps to check inflationpromoting cooperative federalism roll out of Ayushman Bharat scheme social sectorinvestment and infrastructure development as the government's game-changing decisions.
Initiatives like Make in India and Digital India played a vital role in driving theIndian economy. Hope that Govt. of India's initiatives in labour reforms anti-corruptionmove governance reforms like Aadhar Unique Identity Number etc will accelerate thedevelopment of the economy further .
1. Financial Highlights
(Statement of Profit and Loss)
|Particulars ||FY-2019-20 (In millions) ||FY-2018-19 (In millions) |
|Revenue from operation ||135.85 ||140.72 |
|Other Income ||0.77 ||0.64 |
|Total Income ||136.62 ||141.36 |
|Less: Depreciation and amortization expense ||8.98 ||6.26 |
|Less: Other expenses ||113.93 ||103.13 |
|Profit before Taxes ||13.71 ||31.97 |
|Exceptional item ||0 ||3.33 |
|Less: Tax expense ||6.78 ||10.11 |
|Net Profit for the Year ||6.93 ||25.19 |
|Paid up equity share capital(No. of shares) (Face value per share Rs.10 each) ||5.195 ||5.195 |
|Earnings per equity share from continuing operations (Basic) ||1.33 ||4.85 |
|Earnings per equity share from continuing operations (Diluted) ||1.33 ||4.85 |
2. State of Company's Affairs and Future Outlook.
During the reporting period the two Animal Feed manufacturing plants situated atKochuveli Thiruvananthapuram and Edayar Ernakulam performed well and was able to produce120271.86MT Animal Feed. We constructed additional wood godown for about 4500 SQFThaving capacity to store 1000 MT Fire wood at Edayar.
As budgeted your Company complete derection of Dust collector system(Cyclone) to reducedust emission. Installation of PLC System to control material mixing is also completed. Asper the direction from the Kerala State Pollution Control Board your Company had alreadycompleted installation of one waste water treatment plant and commissioned the same andobtained PCB License Renewed.
3. Change in the Nature of Business.
There is no material changes and commitments affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report.
4. Changes in Share Capital
There were no changes in the share Capital during the year. Also report that:
a. The Company has not bought back any of its securities during the year under review.
b. The Company has not issued any Sweat Equity Shares during the year under review.
c. No Bonus Shares were issued during the year under review.
d. The Company has not provided any Stock Option Scheme to the employees.
e. The Company has not issued any Equity shares with Differential Rights.
f. The Company had extended the redemption period of Preference shares due forredemption from 3 years to 13 years after obtaining the written consent form thePreference shareholder holding 100 % Preference shares of the Company.
5. Capital Expenditure
Your Company had incurred an amount of 483595.62 spend on Capital Expenditure andAdditions to Fixed Assets during the FY 2019-20 as detailed below.
|Item ||Amount in Rs. |
|Building || |
|Plant &Equipment ||430337.00 |
|Office Equipment ||53258.62 |
|Total ||483595.62 |
Your Company has not invited any deposit from public and shareholders in accordancewith the provisions of Section 73 and 74 of the Companies Act 2013.
7. Depository System
As the members are aware the Company's shares are compulsorily tradable in electronicform. As on March 31 2020 almost 53.52 %of the Company's total paid up capital are indematerialized form. In view of the numerous advantages offered by the Depository systemas well as to avoid frauds members holding shares in physical mode are advised to availof the facility of dematerialization from either of the depositories. Your Company hadrequested our RTA to send letters to all the shareholders who hold shares in physical formand directed them to demat their holdings and they started turning up.
8. Transfer To Investor Education And Protection Fund
This Company has not declared any dividend during the past or during the current periodand the provisions related to transfer of unclaimed or unpaid dividend or shares on whichdividend remains unpaid or unclaimed to the aforesaid fund is not applicable to thisCompany.
9. Subsidiary/Associate/Joint Venture Companies
Your Company has no subsidiaries joint ventures or associate companies.
10. Particulars of Loan Guarantees and Investments under Section 186 Of The CompaniesAct 2013.
Your company has not given directly or indirectly any loan to any person or other bodycorporate or has given any guarantee or provide security in connection with a loan to anyother body corporate or person; and has not acquired by way of subscription purchase orotherwise the securities of any other body corporate exceeding sixty per cent of itspaid-up share capital free reserves and securities premium account or one hundred percent. of its free reserves and securities premium account whichever is more during thefinancial year 2019-20.
11. Particulars of Contracts or Arrangement with Related Parties under section 188(1)of the Companies Act 2013.
The Related Party Transactions that were entered during the financial year under reviewwere in the ordinary course of business. There were no materially significant RelatedParty Transactions entered into by the Company during the year under review other thanreported in the accounts. The Company has a process in place to periodically review andmonitor Related Party Transactions. All the related party transactions were in theordinary course of business and at arm's length. The Audit Committee has approved allrelated party transactions for the FY 2019-20 and estimated transactions for FY 2020-21.There were no material transactions with related parties during the year other than asshown in the Financial Statements.
With a view to conserve the resources of the Company the Directors are not recommendingany dividend for the year under review.
13. Amounts Transferred to Reserves.
No amount is transferred to General Reserve.
14. Extract of Annual Return
The extract of the Annual Return as provided under sub-section (3) of Section 92 inForm MGT 9 for the Financial Year 2019-20 has been enclosed with this report.
15. Board Meetings
During the Financial year 2019-20four times meetings of the Board of Directors of theCompany were held. The detail of the Board meetings and the attendance of the Directorsare provided in the Corporate Governance Report.
16. Explanation to Auditor's Remarks.
a) Statutory Audit Report - Your Auditors had submitted an unqualified Audit Report forthe Financial Year 2019-20 except a mentioning about few related party transactions in theform of loans which are well within the limit specified in section 186 of the CompaniesAct2013. The comments/observations of Auditors are explained in the Notes to theAccounts forming part of the Balance Sheet as at 31st March 2020 which areself explanatory and therefore; do not call for any further comment under Section 134(5)of the Companies Act 2013.
b) Secretarial Audit Report - The Secretarial Auditors also had submitted anunqualified Audit Report for the Financial Year 2019-20.
17. Material Changes Affecting the Financial Position of the Company.
During the reporting year there were no material changes or events occurred affectingthe financial position of the Company.
18. Conservation of energy technology absorption foreign exchange earnings and outgo
The information of Conservation of Energy as required under Section 134(3)(m) of theCompanies Act 2013 read with Companies (Accounts) Rules 2014 is not applicable to thebusiness segments which your Company operates.
During the year your Company has not earned any Foreign Exchange and there is nooutgoings in Foreign Exchange.
19. Development and implementation of a risk management policy
The Board of Directors has adopted a Risk Management Policy which sets out theframework for the management of risks faced by the Company in the conduct of its businessto ensure that all business risks are identified managed and monitored.
20. Directors and Key Managerial Personnel
The Board of Prima Agro Limited comprises of 5 directors; One Chairman cum ManagingDirector One Non-Executive Director Three Independent Non-Executive Directors.
21. Details of significant & material orders passed by the regulators or courts ortribunal.
No orders were passed by the authorities which impacts the going concern status andcompany's operations in future.
22. Statement in Respect of Adequacy of Internal Financial Control with Reference tothe Financial Statements.
Your Company is having adequate internal financial controls with reference to theFinancial Statements. There was no Internal Auditor as there is having adequate internalfinancial controls. The statutory auditors also suggested appointment of Internal Auditorto comply with the Listing Norms. Your Company is considering appointing one InternalAuditor.
23. Declaration by Independent Director
The Company has received the necessary declaration from each Independent Director inaccordance with Section 149(7) of the Companies Act 2013 that he meets the criteria ofindependence as laid out in sub section (6) of Section 149 of the Companies Act 2013 andClause 49 of the Listing Agreement.
24. Re-appointment of Independent Auditor.
Pursuant to the resolution passed by the members of the Company at its 30thAnnual General Meeting held on 16th September2017 in respect of the appointment of M/s.VBV & Associate Chartered Accountant (Firm Registration No. 013524S) till theconclusion of the 35th Annual General Meeting of the Company your Board proposed aresolution in the AGM Notice for ratifying the appointment of M/s. VBV & AssociateChartered Accountant (Firm Registration No. 013524S) as the Statutory Auditors of theCompany to hold office from the conclusion of the 33rdAnnual General Meetingtill the conclusion of the 34thAnnual General Meeting of the Company. They areeligible for appointment and have given a written certificate as per Section 141 of theCompanies Act 2013 read with Companies (Audit and Auditors) Rules 2014
25. Secretarial Audit Report
Your Board had appointed Mr. CS N Balasubramanian Partner M/s. BVR AssociatesCompany Secretaries (ACS/FCS No.F6439 CP. No.4996) to carry out Secretarial Audit underthe provisions of Section 204 of the Companies Act 2013 for the financial year 2019-20.The report of the Secretarial Auditor is annexed to this report.
26. Corporate Social Responsibility (CSR) Policy
As per the Companies Act 2013 companies having net worth of 500 crore or more orturnover of 1000 crore or more or net profit of 5 crore or more during any financial yearare required to constitute a Corporate Social Responsibility (CSR) Committee of the Boardof Directors comprising three or more directors at least one of whom should be anindependent director and such company shall spend at least 2% of the average net profitsof the company's three immediately preceding financial years.
None of the above criteria become applicable to your company for the reporting year.
27. Audit Committee
The Audit Committee is constituted with Mr. Ladhu Singh as Chairman Mrs. VanshikaRathi and Ms. Vedika Agarwala as members. The committee had convened four meetings duringthe period under report.
28. Statement Indicating the Manner in which Formal Annual Evaluation has been made bythe Board of its own Performance its Directors and that of its Committees.
The overall effectiveness of the Board shall be measured on the basis of the ratingsobtained by each Director and accordingly the Board shall decide the AppointmentsReappointments and Removal of the non-performing Directors of the Company. The Boardreview the various strategies of the Company and accordingly set the performanceobjectives for directors consistent with the varying nature and requirements of Company'sbusiness. The Board as a whole shall discuss and analyze its own performance during theyear together with suggestions for improvement thereon pursuant to the performanceobjectives.
29. Selection of new directors and board membership criteria
The Nomination and Remuneration Committee works with the Board to determine theappropriate characteristics qualification skills and experience for the Board as a wholeand its individual members with the objective of having a Board with diverse backgroundsand experience.
As per the provisions of Section 178(3) of the Companies Act 2013 the Nomination andRemuneration Committee has formulated a "Policy on Remuneration of Director KeyManagerial Personnel Personal & Senior Employees''.
30. Familiarization Programme for Independent Directors
The Company proactively keep its Independent Directors informed of the activities ofthe Company its management and operations and provides an overall industry perspective aswell as issues being faced by the Industry.
31. Disclosure on Establishment of a Vigil Mechanism
In terms of the provisions of Sec 177(9) & (10) of the Companies Act 2013 andpursuant to the provisions of Clause 49 of the Listing Agreement a Vigil Mechanism forStakeholders Employees and Directors of the Company has been established by the Company.
32. Corporate Governance
Your company obtained a certificate from Practicing Company Secretary regardingcompliance with clause 49 of the Listing Agreement and is annexed the certificate withthis Board's Report.
This certificate will also be sent to the Stock Exchanges where the shares of theCompany are listed along with the annual report to be filed by the company.
Declaration by CEO/CFO that the Board Members and Senior Management Personnel havecomplied with the Code of Conduct [Clause 49 II E (2) of LA] is annexed and also formingpart of this report.
33. Managerial Remuneration
Your Company does not have any employee in respect of whom information requiredpursuant to Section 197 (12) of the Companies Act 2013 read with Rule 5(1) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. None of theemployees employed throughout the financial year 2019-20and in receipt of remuneration ofRs.60 lacs or more employees employed for part of the year and in receipt of Rs.5 lac ormore per month pursuant to Rule 5(2) The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 .
34. Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition&Redressal) Act 2013.
Your Company believes in providing a safe and harassment free workplace for everyindividual working in the company premises through various interventions and practices.The Company endeavors to create and provide an environment that is free fromdiscrimination and harassment including sexual harassment. In this light the company hasframed a well-defined policy on Prevention of Sexual Harassment for an employee.
There were no cases reported in the history of your company till date.
35. Fraud Reporting (Required by Companies Amendment Bill 2014)
There were no cases of fraud reported to the Audit Committee / Board in the companytill date.
36. Cost Auditors.
Your Company does not qualify for the eligibility norms of Companies (Cost Records andaudit) Rules 2014 regarding appointment of Cost Auditor for conducting cost audit.Accordingly Cost Audit was not conducted for the Financial Year 2019-20. However thecompany is maintaining adequate cost records as stated under the said rules.
37. Management Discussion and Analysis Report
As required under Clause 49 of the Listing Agreement with Stock Exchanges theManagement Discussion and Analysis Report is enclosed as a part of this report.
38. Director's Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act 2013 yourdirectors confirm that:
a. in the preparation of the annual accounts for the financial year ended 31st March2020 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
b. the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2020 and of the profit/loss of the Company for that period;
c. the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
d. the directors had prepared the annual accounts on a going concern basis;
e. the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
f. the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
39. Statutory Disclosures
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review
1. Deposit from the public falling within the ambit of Section 73 of the Act and rulesmade thereof.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this Report.
4. Neither the Managing Director(s) nor the Whole-time Director(s) of the Companyreceive any remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
40. Industrial Relations
The Company maintained healthy cordial and harmonious industrial relations at alllevels. Despite severe competition the enthusiasm and unstinting efforts of the employeeshave enabled the Company to remain at the forefront of the Industry. It has taken varioussteps to improve productivity across organization.
Your Company continued to receive co-operation and unstinted support from thedistributors retailers stockiest suppliers and others associated with the Company asits trading partners. The Directors wish to place on record their appreciation for thesame and your Company will continue in its endeavor to build and nurture strong links withtrade based on mutuality respect and co-operation with each other and consistent withconsumer interest.
41. Internal Control Systems and their Adequacy
The Company has a proper and adequate internal control system to ensure that all assetsare safeguarded and protected against loss from unauthorized use or disposition and thosetransactions are authorised recorded and reported correctly. The internal control isexercised through documented policies guidelines and procedures. This is periodicallyreviewed by the audit committee to ensure effectiveness of the internal control system.The internal control is designed to ensure that the financial and other records arereliable for preparing financial statements and other data and for maintainingaccountability of persons.
42. Financial and operational performance
The financial statements have been prepared in compliance with the requirements of theCompanies Act 2013 and Generally Accepted Accounting Principles in India. Please referDirectors' Report in this respect
43. Human Resources/Industrial Relations
The Company's HR philosophy is to establish and build a high performing organizationwhere each individual is motivated to perform to the fullest capacity: to contribute todeveloping and achieving individual excellence and departmental objectives andcontinuously improve performance to realize the full potential of our personnel. TheCompany is giving direct employment to about 200 employees.
It is our strong belief that caring for our business constituents has ensured oursuccess in the past and will do so in future. The Board acknowledges with gratitude thecooperation and assistance provided to your company by its bankers Financialinstitutions and government as well as Non-Government agencies. The Board wishes to placeon record its appreciation to the contribution made by employees of the company during theyear under review. The Company has achieved impressive growth through the competence hardwork solidarity cooperation and support of employees at all levels. Your Directorsthanks the customers clients vendors and other business associates for their continuedsupport in the Company's growth.The Board also takes this opportunity to express its deepgratitude for the continued co-operation and support received from its valuedshareholders.