The Members of Prima Agro Limited
Your Directors havepleasure in presenting the30th Annual Report on the business andoperations of the Company together with the Audited Statement of Accounts for the yearended 31st March 2017.
India has emerged as the fastest growing major economy in the world as per the CentralStatistics Organization(CSO) and International MonetaryFund (IMF). According to theEconomicSurvey the Indian economy expected to grow more than 7 percent in 2016-17. TheGovt. of India has unveiled a range of initiatives over the past year that will have a bigimpact on economicgrowth. The two biggest ones have been the passing of the GoodsandService Tax Bill the biggest reform inIndia'sindirect tax structure and the morerecent demonetization move. The latter which saw the Govt. scrap the Rs.1000 and Rs.500notes overnight is one of the most radical economic moves by any country. Demonetizationhad generated long-term benefits in terms of reduced corruption greater digitization ofthe economy increased flow of financial savings and greater formalization of the economyall of which eventually lead to higher GDP growth to Indian economy.Mr. Narendra ModiPrime Minister of India has launched the Make in India initiative with an aim to boostthe manufacturing sector of Indian economy. This initiative is expected to increase thepurchasing power of an average Indian consumer which would further boost demand andhence spur development in addition to benefiting investors.Initiatives like Make in Indiaand Digital India will play a vital role in driving the Indian economy. Hope that Govt. ofIndia's initiatives in labour reforms anti-corruption move governance reforms likeAadhar Unique Identity Number etc will accelerate the development of the economy.
|1.Financial Highlights (Standalone) || || |
|Particulars ||(Rupees in Lakhs) |
| ||For the Year Ended 31-3-2017 ||For the Year Ended 31-3-2016 |
|Net Sales /Income from - ||1186.51 ||1146.94 |
|Business Operations || || |
|Other Income - ||21.76 ||3.27 |
|Total Income - ||1208.26 ||1150.21 |
|Less Interest - ||7.37 ||4.13 |
|Profit before Depreciation - ||307.68 ||191.45 |
|Less Depreciation - ||73.07 ||85.31 |
|Profit after depreciation and Interest - ||234.61 ||103.06 |
|Less Current Income Tax - ||90.00 ||55.00 |
|Less Previous year adjustment of Income Tax - ||5.31 ||0.00 |
|Less Deferred Tax - ||(22.03) ||(15.62) |
|Net Profit after Tax - ||166.65 ||63.68 |
|Dividend (including Interim if any and final ) ||0.00 ||0.00 |
|Net Profit after dividend and Tax - ||166.65 ||63.68 |
|Amount transferred to General Reserve - ||0.00 ||0.00 |
|Balance carried to Balance Sheet - ||166.65 ||63.68 |
|Earnings per share (Basic) - ||2.05 ||1.23 |
|Earnings per Share(Diluted) - ||2.05 ||1.23 |
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 produce107850 MT
Animal Feed for KSE LTD. As planned your Company had installed a 100MT weighbridge atits site at Edayar with a Capital Expenditure of Rs.35 Lacs and the same was operative inthe month of Sept 2015. This increased the material handling facility.
Your Company is planning to construct additional godown facility ofabout 6000SQFTduring the next Financial year. It also has plan to erect one jumbo Pellet Mill toincrease the production capacity at Edayar Plant. Your Company also exploring thepossibility of installing Solar Panels on the roof of the Factory Building to produce gridbase power to save power cost.
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. TheCompany has not bought back any of its securities during the year under review. b. TheCompany has not issued any Sweat Equity Shares during the year under review. c. No BonusShares were issued during the year under review. d. The Company has not provided any STOCKOPTION Scheme to the employees. e. The Company has not issued any Equity shares withDifferential Rights. f. The Company had extended the redemption period of Preferenceshares due for redemption from 3 years to 13 years after obtaining the written consentform the Preference shareholder holding 100% Preference shares of the Company.
Your Company had incurred an amount of Rs.104.96Lakhs Spend on Capital Expenditure andAdditions to Fixed Assets during the FY 2016-17 as detailed below.
|Item ||Amount in Rs. |
|Buildings ||29.09 Lakhs |
|Plantand Equipments ||38.95 Lakhs |
|Office Equipments ||3.14 Lakhs |
|Computer ||0.14 Lakhs |
|Vehicle ||33.63 Lakhs |
Your Company has not invited any deposit from public and shareholders in accordancewith the provisions of Section 73 and 74 of the Companies Act2013.
As the members are aware the Company's shares are compulsorily tradable in electronicform. As on March 31 201734% ofthe Company's total paid up capital are in dematerializedform. In view of the numerous advantages offered by the Depository system as well as toavoid frauds members holding shares in physical mode are advised to avail of the facilityof dematerialization from either of the depositories.
8. TRANSFERTO INVESTOR EDUCATION AND PROTECTION FUND
This Companyhas 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 theCompanies Act 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 bodycorporate exceeding sixty percent of itspaid-up share capital free reserves and securities premium account or one hundredpercent. of its free reserves and securities premium account whichever is more during thefinancial year2016-17.
11.Particulars of Contracts or Arrangement with Related Parties under section 188(1) ofthe 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 2015 16 and estimated transactions for FY 2016 17.There were no material transactions with related parties during the year.
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 2016-17 has been enclosed with this report.
During the Financial year 2016-17 6(Six) times meetings of the Board of Directors ofthe Company were held. The detail of the Board meetings and the attendance of theDirectors are provided in the Corporate Governance Report.
16. Explanationto Auditor's Remarks.
a) Statutory Audit Report.
Your Auditors had submitted an unqualified Audit Reportfor the Financial Year 2016-17except a mentioning about few related party transactions in the form of loans which arewell within the limit specified in section 186 of the CompaniesAct2013.Thecomments/observations of Auditors are explained in the Notes to the Accountsforming part of the Balance Sheet as at 31st March 2017 which are self explanatory andtherefore; do not call for any further comment under Section 134(5) of the Companies Act2013.
b) Secretarial Audit Report
(i)The Secretarial Auditors also had submitted an unqualified Audit Report for theFinancial Year 2016-17. However they pointed out that the Company being a listed Companyis required to appoint a Chief Financial Officer as per the Section 203 of the CompaniesAct 2013 and the Company has been advised to comply with this provision and your Companyis in the process of Complying with the said provisions. Your Company had one Whole TimeDirector who is designated as Deputy Managing Director who can be re-designated as theChief Financial Officer.
(ii)The Secretarial Auditor pointed out that the Company had availed a Vehicle Loanfrom the ICICI Bank Ltd during the year and no charge had been created and filed with theROC. In this regard it may be noted that normally creation of charge for Vehicle Loan isbeing insisted by the Financial Institutions as it is in the nature of Hypothecation onVehicle itself the endorsement of which is being made in the Registration Certificateitself through the Motor Vehicle Department.
(iii) It is pointed out that the Company had not comply with the provision of 100%dematerialization of the promoter's share holdings and it is to report that your Companyis trying to comply with this provision and requested the Stock Exchange to give some moretime to complete this process.
(iv) It was pointed out that the Website of the Company needs to be updated withdetails of Board Composition and Code of Conduct whenever there is a change. It wasreported that the same will be done in time in future.
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 tothebusiness segments which your Company operates.
During the year your Company has not earned any Foreign Exchange and there isnooutgoingsin ForeignExchange.
19. Development and implementation of a risk management policy
The Board of Directors hasadopted a Risk Management Policy which sets out the frameworkfor the management of risks faced by the Company in the conduct of its business to ensurethat all business risks are identified managed and monitored.
20.Details of Directors and Key Managerial Personnel
(i)) Mr. S.K. Gupta (DIN:01575160) is the Chairman & Managing Director of theCompany .
(ii)During the reporting year Mrs. Swati Gupta (DIN 00249036) Director is retiring byrotation and who being eligible offered herself for re-appointment and the same is beingproposed in the forthcoming Annual General meeting.
(iii) Mr.Ladhu Singh and Miss.Vanshika Agarwala were appointedas Directorsof theCompany. They are continuing as such in the Board.
(iv)Mr.Janak Vasantlal Kikaniwho was appointed as director of the Company during theprevious Annual General Meeting voluntarily resigned from the Board w.e.f 12th December2016 and ceases to be a Director of the Company.
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. Statementin Respect of Adequacy of Internal Financial Control with Reference to theFinancial 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.Receipt of any commission by MD / WTD from a Company or for receipt of commission /remuneration from it Holding or subsidiary
Your CMD or Whole Time Director is not in receipt any commission from any Holding orSubsidiary Company of your Company other than remuneration from yourCompany.
24. 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.
25. Re-appointment ofIndependent Auditor.
Your board proposed to change the present Statutory Auditors of the Company to complywith the provisions of Section 139(2) of the Companies Act 2013 (the Act). M/sVijayakumar & Easwaran Chartered Accountants (Registration No.004703S) is thereforeretires and the Board had recommended the name of M/s VBV & Associates CharteredAccountants Ground Floor Palms Two Chammani Road Kaloor Kochi-682017( FRN NO 013524S)as the new auditor of the Company who are eligible for appointment and have given awritten certificate as per Section 141 of the Companies Act 2013 read with Companies(Audit and Auditors) Rules 2014 and hence a resolution is proposed in the AGM.
26. SecretarialAudit 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 2016-17.The report of the Secretarial Auditor is annexed to this report.
27. CorporateSocial Responsibility (CSR) Policy
As per the Companies Act 2013 companies having net worth of 500 crore or more orturnover of1000crore or more or net profit of5 crore or more during any financial yeararerequired 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.
Any of the above criteria become applicable to your company for the reporting year.
During the year your Company had reconstituted its Audit Committee with the followingindependent directors as members.
Miss Vanshika Agarwala - Chairman Mr.Ladhu Singh - Member
The Audit Committee had convened its meetings4(Four) times during the period underreport.
29. 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 AppointmentsRe-appointments 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.
30.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''.
31.Familiarization programme for IndependentDirectors
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.
32.Listing Agreement Compliance
Your company has complied with the requirements of the Listing Agreement and necessarydisclosures have been made in this regard in the Corporate Governance Report.
A certificate from the statutory auditors of the Company confirming the compliance ofconditions of corporate governance under clause 49 of the Listing Agreement is alsoattached to this report.
33.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.
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] as annexed is also formingpart of this report.
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 and in receipt of remuneration of Rs.60lacs or more employees employed for part of the year and in receipt of 5 lac or more permonth pursuant to Rule 5(2) The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
36. 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
37. Fraud Reporting (Required by Companies Amendment Bill 2014)
There were no casesof fraud reported to the Audit Committee / Board in the company tilldate.
38. 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 2016-17. However thecompany is maintaining adequate cost records as stated under the said rules.
39.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 .
40. 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 March2017 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 2017 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.
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 orotherwise.
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.
42. Significant and material orders passed by the regulators or courts or tribunalsimpacting the going concerns status and company's operations in future
The Company has not received any significant or material orders passed by anyRegulatory Authority Court or Tribunal which shall impact the going concern status andCompany's operations in future.
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 cooperation with each other and consistent withconsumer interest.
44. 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. Thisisperiodicallyreviewed by the audit committee to ensure effectiveness of the internalcontrol system. The internal control is designed to ensure that the financial and otherrecords are reliable for preparing financialstatements and other data and for maintainingaccountability of persons.
45. 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
46. 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 theco-operation and assistance provided to your company by its bankersfinancialinstitutionsand government as well as Non-Government agencies. The Board wishes to place on record itsappreciation to the contribution made by employees of the company during the year underreview. The Company has achieved impressive growth through the competence hard worksolidarity co-operation and support of employees at all levels. Your Directors thanks thecustomers clients vendors and other business associates for their continued support inthe Company's growth.
The Board also takes this opportunity to express its deep gratitude for the continuedco-operation and support received from its valued shareholders.
|For and on behalf of the Board |
|S.K. Gupta |
|Chairman &MD |
Place: Cochin Date: 31-7-2017
Annexure to the Directors' Report
A. CONSERVATION OF ENERGY
The Company continues its efforts to improve methods for energy conservation andutilization by (1) More usage of electricity purchased from KSEB.
(2) Improved efficiency of own generation by usage of diesel generator only foremergencies and as stand by.
(3) Intensified vigil on wastage/leakage control.
B. CONSUMPTION PER UNIT OF PRODUCTION
The company manufactures only Animal Feed and power and fuel consumption per unit ofproduction was as follows.
|Particulars ||For the Year2016-17 ||For the Year2015-16 |
|Actual Production ||107850 MT ||119674.04 MT |
|Total Power and Fuel Charges ||Rs.23269636.00 ||Rs.30154734.00 |
|Consumption Per MT ||Rs.215.76 ||Rs.251.97 |
C. TECHNOLOGY ABSORPTION
Disclosure of particulars with respect to technology absorption:-
RESEARCH & DEVELOPMENT
1. SPECIFIC AREAS IN WHICH R&D CARRIED OUT BY THE COMPANY. a) Quality Upgradation b) Productivity enhancement c) Quality Control Management
2. BENEFITS DERIVED AS A RESULT OF THE ABOVE R&D a) Increase in production andcapacity utilization. b) Repeat order from customersdue to consistency in quality.
3. FUTURE PLAN OF ACTION a) To acquire Cost-efficiency in manufacturing operationsthrough better methods and techniques of production. b) To Increase range of production.c) Todevelopof new markets.
4. EXPENDITURE IN R&D
Specific expenditure of recurring or capital nature is not involved in Technologyabsorption adoption and innovation.
To Develop products of International Quality and Standards and implementation of totalQuality Assurance System.
a) Quality of products can be improved. b) Scoring high points in evaluation by reputedbuyers.
D. FOREIGN EXCHANGE EARNINGS AND OUTGO
|2016-17 ||Nil |
|2015-16 ||Nil |
|Expenditure || |
|2016-17 ||NIL |
|2015-16 ||100010 USD |
For and on behalf of the Board of Directors
Chairman& Managing Director.