To The Members of Prima Industries Limited Your Directors have pleasure in presentingthe 25th Annual Report on the business and operations of the Company together with theAudited Financial Statements for the financial year ended 31st March 2019
1. Financial Highlights (Standalone)
(Figures in Million)
|Particulars ||For the year ended March 31st 2019 ||For the year ended March 31st 2018 |
|Revenue from Operations ||90.73 ||275.78 |
|Other Income ||0.57 ||1.68 |
|Total Income ||91.30 ||277.46 |
|Less: Depreciation and amortization expense ||7.17 ||7.07 |
|Less; Other Expenses ||69.69 ||264.78 |
|Profit before Tax ||21.67 ||12.68 |
|Less: Tax expense ||0.69 ||0.43 |
|Ret Profit for the period from continuing operations ||22.36 ||13.11 |
|Other Comprehensive Income ||1.62 ||1.16 |
|Total Comprehensive Income for the period ||23.98 ||14.27 |
|Paid up equity share capital (No. of shares) (Face value per share Rs.10 each) ||10.79 ||10.79 |
|Earnings per equity share from continuing operations (Basic) ||2.07 ||1.21 |
|Earnings per equity share from continuing operations (Diluted) ||2.07 ||1.21 |
2. State of Company's Affairs and Future Outlook.
The Prima Group of Companies has been built on a solid foundation of trust that we haveestablished with all stakeholders over the last Twenty-five Years. The year gone by isrepresentative of the value Prima Industries Limited continues to create for all itsstakeholders. The overall performance of the Company has witnessed a healthy growth inprofits with consolidated Nel Profit increasing by nearly 68% over the previous year.
The International Market Analysis Research and Consulting Group (IMARC Group) in itslatest Market Evaluation states that hie Indian animal teed market was worth INR 817Billion in 2018. The market is further projected to reach IRR1683 Billion by 2024growing at a CAGR of 12.7% during 2019-2024 India currently represents one of the fastestgrowing animal feed markets in the world The increasing demand for animal protein anddairy products has resulted in a growing livestock population in India which in turn hasincreased the demand for animal feed. Modem animal feed products are manufactured bycarefully selecting and blending ingredients to impart highly nutritional diets that bothincrease the quality of its end products and at the same time maintain the health of theanimal.
The Animal Feed Division of Prima Industries Limited functions towards backwardintegration as major portion of de-oiled cake produced in its Refinery would be consumedfor its Animal Feed Unit. Hygienicaly prepared and packed Cattle Feed in pellets form isbeing produced in this plant with modern technology and skill. This plant has a capacityof 25QMT production per day. This unit as presently structured is poised to produce avariety of Animal Feeds. The Company has installed the most modern plant with computerizedcontrols. By adopting sophisticated techniques and evolving recipes with appropriateingredients to meet the nutritional and energy requirements of cattle poultry and goatsPrima has been able to supply cattle feeds of high quality to the domestic market.
The Animal Feed Division of the Company resulted in an Operating Profit of Rs. 6.26Million while comparing to that of previous year. The future prospect of the Companyremains robust and will continue to deliver most satisfied business to the customers. TheSolvent Extraction Division is a complex unit which can process all types of oil cakesand other oil-bearing materials such as rice bran and oil seeds. This unique adaptabilityenables the unit to avail of the advantages of seasonal variations in the prices ofvarious raw materials. Solvent extraction unit of the company resulted in a profit of Rs.28.90 Million from ordinary activities.
According to the UN's World Economic Situation and Prospects (WESP) 2019 India's GDPgrowth is expected to accelerate to 7.6 per cent in 2619-20 from an estimated 7.4 per centin the current fiscal ending March 2019. The growth rate may come down to 6.2 per cent in2020. India will continue to remain the world's fastest-growing large economy in 2019 aswell as in 2020 much ahead of China the report said. Our government is also takinginitiatives to improve the economic condition of the country by bringing in newopportunities for employment and business. No wonder our economy is growing at a goodpace. And as such we as a responsible Company will continue to contribute to the economicand Nation good.
3. Details of change in nature nf business There has been no change in the nature ofbusiness of the Company during the year under report.
4. Changes in Share Capital There were no changes in the share Capital during the year.Also reportthat:
a. The Company has not bought backany of its securities during the year under review.
b. The Company has not issued any Sweat Equity Shares during the year under review. c.The Company has notissued any Bonus Shares during the year under review.
d. The Company has not provided any Stock Option Schemeto the employees.
e. The Company has not issued any Equity shares with Differential Rights.
f. The Company has extended the redemption period of Cumulative redeemable Preferenceshares allotted on 27th March 2013 for a period of 13 (Thirteen) years from the date ofallotment at the meeting of board of directors dated 31.01.2017 after obtaining writtenconsent from the Preference shareholder holding 100 % Preference shares of the Company.
5. Capital Expenditure Your Company had incurred an amount of 2362368.17 spend onCapital Expenditure and Additions to Fixed Assets during the FY 2018-19 as detailed below.
|Item ||Amount in Lakhs |
|Building ||964640.00 |
|Plant &Equipment ||985421.17 |
|Office Equipment ||412307.00 |
|Total ||2362368.71 |
6. Dividend With a view to conserve the resources of the Company the Directors are notrecommending any dividend for the year under review
7. Transfer to Investor Education and Protection Fund During the year under Report theCompany has;
a. no unpaid dividends
b. not issued debentures and o. not accepted fixed deposits So there is no need fortransferring any amount to Investor Education and Protection Fond during the said period.
8. Amounts Transferred to Reserves. Your Directors do not propose to transfer anyamount to the reserves.
9. Board Meetings Four Board Meetings were held during the year 2018-19 and the gapbetween two meetings did not exceed 20 days. The detail of the Board meetings and theattendance of the Directors are provided in the Corporate Governance Report. 10.Director's Responsibility Statement Your directors state that:
a) in the preparation of the annual accounts for the financial year ended 31st March2019 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 31 st March 2019 and of theprofit/loss of the Company forthat 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.
11. Corporate Governance The Company is committed to maintaining the highest standardsof corporate governance and has put in place an effective corporate governance system. Interms of Regulation 34 of the Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 a Report on Corporate Governance along withCompliance Certificate issued by Statutory Auditors of the Company is attached to theAnnual Report and forms integral part of this Report.
12. Directors and Key Managerial Personnel The Board of Prima Industries Limitedcomprises of 5 directors; One Chairman cum Managing Director One Whole Time Director OneNon-Executive Director Two Additional and Independent Non-Executive Directors. The Boardof Directors in its meeting held on 14th February 2019 appointed Mrs. Vanshika Rathi asthe Additional and Independent Non-Executive Director subject to approval of 1heshareholders of the Company who holds office up to the date ot the forthcoming AnnualGeneral Meeting and is eligible for appointment. Based on the recommendation of theNomination and Remuneration Committee the Board recommends for the approval of theMembers through an Ordinary Resolution in the 25th AGM of your Company the re-appointmentof Mrs. Vanshika Rathi as the Independent Non-Executive Director of the Company for a termof live consecutive years from 14th February 2019. Also die Board of Directors in the samemeeting had appointed Miss. Greeshma Baby as the Company Secretary (CS) & ComplianceOfficer being a Whole Time Key Managed at personnel of the Company w.e.f 15th February2019 in compliance with the provisions of Companies Act 2013 and SEBI (LODR) Regulations2015. Pursuant to Disqualification for Appointment of Directors under Section 164 (2) otthe Companies Act 2013 Mrs. Padmaja Nagraj tendered her resignation from the post ofNon-Executive Independent Director of the Company w.e.f 10th April 2019. The board placeson record its appreciation for the contribution and support extended by Mrs. PadmajaNagraj during her tenure. In terms of the Articles of Association of the Company on therecommendation of the Nomination and Remuneration Committee the Board of Directors inits meeting held on 30th May 2019 appointed Mr. Kushagra Gupta as Chief Financial Officer(CFO) being a Whole Time Key Managerial personnel of the Company with effect from 31st May2019in compliance with the provisions of Companies Act 2013 and SEBI (LODR) Regulations2015 Also the Board of Directors in the same meeting had appointed Miss. Vedika Agarwalaas the Additional and Independent Non-Executive Director subject to approval of theshareholders of the Company who of the office up to the date ot the forthcoming AnnualGeneral Meeting and is eligible for appointment. Based on the recommendation of theNomination and Remuneration Committee the Board recommends for the approval of theMembers through an Ordinary Resolution in the 25thAGM of your Company the reappointmentof Miss Vedika Agarwala as the Independent Non-Executive Director of the Company for aterm of five consecutive years from 31st May 2019. The Board of Directors in its meetingheld on12th August 2019 appointed Mr. Kusbeshwar Jha as the Additional and IndependentNon-Executive Director subject to approval of the shareholders of the Company who holdsoffice up to the date of the forthcoming Annual General Meeting and is eligible forappointment. Based on the recommendation of the Nomination and Remuneration Committee theBoard recommends tortile approval of the Members through an Ordinary Resolution in the25th AGM of your Company the re-appointment of Mr. Kusheshwar Jha as the Independent Non-Executive Director of the Company for a term of five consecutive years from 12th August2019.
13. Corporate Social Responsibility (CSF) Even though the CSR provisions are notapplicable as per Section 135 of the Companies Act 2013 the Company had voluntarilyconstituted a sub-committee of the Board called CSR Committee considering the sustainabledevelopment by delivering economic social and environmental benefits for all stakeholders. The detail of the CSR meetings and the attendance of the Directors are providedinthe Corporate Governance Report
14. Statutory Auditors Pursuant to the resof ution passed by the members of the Companyat its 23rd Annual General Meeting held on 18th September 2017 in respect of theappointment of M/s. J.Krishnan & Associates Chartered Accountant (Firm RegistrationNo. 001523S) till the conclusion of the 28th Annual General Meeting of the Company yourBoard passed resof ution in the Board Meeting for ratifying the appointment of M/s.J.Krishnan & Associates Chartered Accountant (Firm Registration No. 001523S) as theStatutory Auditors of the Company to hof d office from the conclusion of the 25th AnnualGeneral Meeting till the conclusion of the 26thAnnua] General Meeting of the Company.
15. Statutory Audit Report M/s. J. Krishnan & Associates Statutory Auditors havesubmitted an unqualified Audit Report for the Financial Year 2018- 19 except a mentioningabout few related party transactions in the form of loans which are well within the limitspecified in section 185 of the Companies Act 2013.
The comments/observations of Auditors are explained in the Notes to the Accountsforming part of the Balance Sheet as at 31 st March 2019 which are self-explanatory andtherefore do not call for any further comment under Section 134(5) ofthe Companies Act2013.
16. Cost Auditors Your Company does not qualify for the eligibility norms of theSection 148 of the Companies Act 2013 read with Companies (Cost Records and audit) Rules2014 regarding the appointment of Cost Auditor for conducting cost audit. AccordinglyCost Audit was rot conducted for the Financial Year 2018-19. Flowever the company ismaintaining adequate cost records as stated underthe said rules.
17. Secretarial Auditors Pursuant to the resolution passed by the Board of Directors inits meeting held on 30th May 2019 had appointed Mr. CS N Balasubramanian Partner M/s.BVR Associates Company Secretaries (ACS/FCS NO.F6439 CR No. 4996) to carry outSecretarial Audit under the provisions of Section 204 ofthe Companies Act 2013 for thefinancial year 2018-19.
18. Secretarial Audit Report and Secretarial Standards The Report given by theSecretarial Auditors is annexed as Annexure -1 and forms integral part of this Report.There has been no qualification reservation or adverse remark or disclaimer in theirReport. However they pointed out that; (i) the Company being a Public listed company isrequired to appoint Internal Auditor as per Section 138 of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014. The Company is in the process of complying withthe provisions of the Act.
(ii) it is noted that dematerialization of promoter sharehof ding is less than 100%i.e. 98.39% of the total promoter shareholding has been dematerialized and the rest 1.61 %is in the process of dematerialization and the company is in the process of suchconversion. During the year 2018-19 your Company has complied with the applicableSecretarial Standards issued by the Institute of Company Secretaries of India. 19. Extractof Annual Return The extract of annual return in Form MGT 9 as required under Section92(3) of the Companies Act 2013 and Rule 12 of the Companies (Management andAdministration) Rules 2014 is available on the website of the Company. The Annual Returnis annexed as Annexure-ll andforms integral part of this Report.
20. Particulars of Loan Guarantees and Investments During the year under Report yourcompany 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 rot acquired by way of subscription purchase orotherwise the securities of any other body corporate exceeding sixty per cent of itspaid-up share capital tree reserves and securities premium account or one hundred percent of its free reserves and securities premium account whichever is more as prescribedunder section 186 of the Companies Act 2013.
21. Particulars ofContracts or Arrangement with Related Parties The Related PartyTransactions that were entered during the financial year under review were in the ordinarycourse of business. There were no materially significant Related Party Transactionsentered into by the Company during the year under review other than reported in theaccounts. The Company has a process in place to periodically review and monitor RelatedParty Transactions. All the related party transactions were in the ordinary course ofbusiness and at arm's length as prescribed under section 188(1) of the Companies Act2013. The Audit Committee has approved all related party transactions for the FY 2018-19and estimated transactions for FY 2019-2020. There were no material transactions withrelated parties during the year otherthan as shown in the Financial Statements.
22. Subsidiary/Associate/Joint Venture Companies Your Company has no subsidiariesjoint ventures or associate companies.
23. Deposits Your Company has not accepted any deposit from public within the meaningof Sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and therules framed the reunder.
24. Risk management The Board of Directors had constituted Risk Management Committee toidentify elements of risk in different areas of operations and to develop pof icy foractions associated to mitigate the risks. The Committee on timely basis informs the Boardof Directors about risk assessment and minimization procedures which in the opinion of theCommittee may threaten the existence of die Company it any. The details of RiskManagement Committee and its frequency of meetings are included in the CorporateGovernance Report.
25. Significant and Material orders passed by the Regulators/Courts/ Tribunals Nosignificant or material orders were passed by the Regulators or Courts or Tribunals whichimpacts the going concern status and Company's operations in future.
26. Material changes and commitments No material changes and commitments affectingthefinancial position of the Company have occurred between the end of the financialyearof the Company and the date of this Report.
27. Internal Control Systems and their Adequacy The Directors had laid down internalfinancial controls to be of followed by your Company and such poliicies and proceduresadopted by your Company for ensuring the orderly and efficient conduct of its bosinessincluding adherence to your Company's policies the safeguarding of its assets theprevention and detection ot frauds and errors 1he accuracy and completeness of theaccounting records and the timely preparation of reliable financial information. TheAudit Committee evaluates the internal financial control system periodically.
28. Audit Committee The present Audit Committee of your Company is constituted withMrs. Swati Gupta Mrs. Vanshika Rathi & Miss. Vedika Agarwala During the year allrecommendations of the Audit Committee were accepted by the Board of Directors.Particulars regarding the Audit Committee are provided under the Section 'Board Committees1in the Report on Corporate Governance.
29. Declaration and Meeting of Independent Directors The Company has receiveddeclarations from all the Independent Directors of the Company confirming that they meetthe criteria of independence as prescribed under the Companies Act 2013. A separatemeeting of Independent Directors was held on 4th May 2018 and 22nd February 2019 inwhich all the Independent Directors were present and reviewed the performance of the Boardof Directors of the Company and its management
30. Familiarization Program tor Independent Directors The Company proactively keep itsIndependent Directors informed of the activities of the Company its management andoperations and provides an overal industry perspective as well as issues being faced bythe Industry.
31. Evaluation of Board's Performance The overall effectiveness of the Board shall bemeasured on the basis of the ratings obtained by each Director and accordingly the Boardshall decide the Appointments Re-appointments and Removal of the non-performing Directorsof the Company. The Board review the various strategies of the Company and accordingly setthe performance objectives for directors consistent with the varying nature andrequirements of Company's business. The Board as a whole shall discuss and analyze its ownperformance during the year together with suggestions for improvement thereon pursuant tothe performance objectives.
32. Managerial Remuneration V our Company does not have arty employee in respect ofwhom information required pursuant to Section 197 (12) of the Companies Act 2013 readwith Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014. None of the employees employed throughout the financial year and in receiptof remuneration of Rs.60 lacs or more employees employed for part of the year and inreceipt of 5 lac or more per month pursuant to Rule 5(2) The Companies (Appointment andRemuneration ot Managerial Personnel) Rules 2014. The statement of Disclosure ofRemuneration under Section 197 of the Act and Rule 5(1) ot the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 ("Rules") forms part of theCorporate Governance Report.
33. Disclosure on Establishment of a Vigil Mechanism In terms of the provisions ofSection 177(9) & (10) of the Companies Act 2013 and pursuant to the Regulation 22 ofSEBI (LODR) Regulations 2015 a Vigil Mechanism has been established by the Company fordirectors and employees to report genuine concerns. This shall provide for adequatesafeguards against victimization of directors or employees or any other person who availthe mechanism and also provide fordirect access to the chairperson otthe audit committeein appropriate or exceptional cases.
34. Fraud Reporting reported by Auditors under Section 143 There were no cases of fraudreported to the Audit Committee/Board in the company till date.
35. Provision for safeguard of women The Sexual Harassment of Women at Work Place(Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunder are strictlycomplied with. Your Company believes in providing a safe and harassment free workplace forevery individual working in the company premises through various interventions andpractices. 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 poliicy on Prevention of Sexual Harassment for an employee. TheCompany did not receive any Complaint during the year 2018-19.
36. Conservation ot energy technology absorption foreign exchange earnings and outgoThe particulars as prescribed under Section 134(3) (m) of the Companies Act 2013 readwith Companies (Accounts) Rules 2014forthefinancial year ended 2018-19 is enclosed asAnnexure lll to the Board's Report.
37. Human Resources/lndustrial Relations Your Company considers people as its biggestassets and 'Believing in People'is at the heart of its human resource strategy. TheCompany's HR philosophy is to establish and build a high performing organization whereeach 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 40 employees.
38. Industrial Relations The Company maintained healthy cordial and harmoniousindustrial relations at all levels. Despite severe competition the enthusiasm andunstinting efforts of the employees have enabled the Company to remain at the forefront ofthe Industry. It has taken various steps to improve productivity across organization. YourCompany continued to receive co-operation and unstinted support from the distributorsretailers stockiest suppliers and others associated with the Company as its tradingpartners. The Directors wish to place on record their appreciation for the same and yourCompany will continue in its endeavor to build and nurture strong links with trade basedon mutuality respect and co-operation with each other and consistent with consumerinterest.
39. Appreciation Your Directors express their appreciation and gratitude to all thecustomers clients vendors investors bankers financial institutions Government aswell as Non-Government agencies and other business associates for their continued supportand participation in the Company. It is our strong belief that caring for our businessconstituents has ensured our success in the past and will do so in future.Ttie Board alsotakes this opportunity to express its deep gratitude for the continued cooperation andsupport received from its valued shareholders.
The Board also places on record its appreciation for the contribution and supportextended by all employees of Prima Industries Ltd.
| ||For & or behalf of the Board of Directors |
| ||Sd/- |
| ||S K Gupta |
|Place: Cochin ||Chairman & Managing Director |
|Date: 12.08.2019 ||(DIN:00248760) |