Prism Johnson Ltd.
|BSE: 500338||Sector: Industrials|
|NSE: PRSMJOHNSN||ISIN Code: INE010A01011|
|BSE 00:00 | 22 Mar||90.05||
|NSE 00:00 | 22 Mar||89.70||
|Mkt Cap.(Rs cr)||4,533|
|Mkt Cap.(Rs cr)||4532.76|
Prism Johnson Ltd. (PRSMJOHNSN) - Director Report
Company director report
To the Shareholders
The Directors present the Twenty-sixth Annual Report together with the auditedStatement of Accounts of the Company for the yearended March 312018.
FINANCIAL RESULTS (Standalone)
The Company has transferred an amount of Rs. 12.20 Crores from the Debenture RedemptionReserve to the Retained Earnings pursuant to the redemption of some of the debenturesduring the year under review. An amount of Rs. 246.82 Crores is retained in the Statementof Profit and Loss.
Pursuant to the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 the Board of Directors of the Company have approved a Dividend Distribution Policy.The objective of the policy is to lay down the criteria to be considered by the Boardbefore recommending dividend to its shareholders for a financial year and to provideclarity to stakeholders on the profit distribution of the Company. The Board shallconsider distribution of profits in accordance with the business strategies provisions ofthe applicable regulations and seek to balance the benefit to shareholders of the Companywith the comparative advantages of retaining profits in the Company which would lead togreater value creation for all stakeholders.
The Policy is uploaded on the Company's website at
The Directors have not recommended any dividend for the financial year ended March 312018 due to conservation of profits.
During the year ended March 31 2018 revenue from operations increased to Rs. 5520Crores from Rs. 5465.71 Crores in the previous year. With improved operationalperformance increased volumes and realisations despite va rious cha I lenges the Com pany ea rned a profit before tax of Rs. 105.06 Crores and profit after tax of Rs. 70.41Crores during the year ended March 31 2018 as against profit before tax of Rs. 28.13Crores and profit after tax of Rs. 17.51 Crores during the yearended March 312017.
For the year ended March 31 2018 the consolidated profit after tax for the year ofthe Company and its subsidiary/ joint venture companies amounted 10^55 Crores as against ^14.25 Crores for the previous yearended March 312017.
CHANGE IN NAME OF COMPANY
The name of the Company stands changed from 'Prism Cement Limited' to 'Prism JohnsonLimited' pursuant to fresh Certificate of Incorporation issued by the Registrar ofCompanies Hyderabad effective April 182018.
The approval of the shareholders was obtained through Postal Ballot for the abovechange.
The paid-up equity share capital was Rs. 503.36 Crores as on March 31 2018. During theyear under review the Company has not issued shares with differential voting rightsneither granted any stock options nor sweat equity.
The Company has repaid/prepaid loans of Rs. 443.15 Crores and tied-up fresh loans ofRs. 510.67 Crores during the year under review to finance inter alia its repayment ofdebts ongoing long term working capital and capital expenditure. The loans were used forthe purpose they were sanctioned by the respective banks/financial institutions.
Pursuant to the approval granted by the shareholders the Company raised Rs. 100 Croresin FY 2017-18 and Rs. 75 Crores in April 2018 by way of privately placed Secured/UnsecuredRedeemable Non-convertible Debentures ('NCDs') to finance inter alia its refinancing ofdebt longterm working capital and general corporate purpose. The proceeds of the NCDsissue have been fully utilised for the purposes of the issue. During the year underreview NCDs aggregating Rs. 260 Crores were redeemed in accordance with the terms of
the issue. NCDs aggregating^ 100 Crores have been further redeemed in April 2018.
The Company accepted fixed deposits aggregating to ^5.50 Crores during the year endedMarch 312018. Out of the total 2329 deposits of ^ 12.84 Crores from the public and theshareholders as at March 31 2018 456 deposits amounting to Rs. 1.50 Crores had maturedand had not been claimed as on that date. Since then 53 of these deposits aggregating Rs.0.18 Crores have been claimed.
There has been no default in the repayment of the deposits or payment of interestthereon during the year under review. All deposits accepted by the Company are incompliance with the requirement of the Companies Act 2013 and the Rules thereunder.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the year the Company has transferred a sum of ^ 1.31 Crores to the InvestorEducation and Protection Fund ('IEPF') in compliance with provisions of the Companies Act2013 which represents unclaimed/unpaid dividend unclaimed fixed deposits and unclaimedintereston thefixed deposits.
Pursuant to the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 the Company has transferred 2471599 equity shares onwhich dividend has been unpaid or unclaimed for seven consecutive years to the demataccount of IEPF Authority.
SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANIES
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining salient features of financial statements of subsidiary joint venture andassociate companies in Form AOC-1 is attached to the Accounts.
The summary of the performance of the Company's subsidiary associate and joint venturecompanies included in the consolidated financial statements is presented below:
Raheja QBE General Insurance Company Limited
('RQBE') the general insurance subsidiary witnessed higher growth in its motorportfolio during the year under review. RQBE is in the process of launching new liabilityproducts to cater to the growi ng needs of the consu mers.
Silica Ceramica Private Limited has been able to reduce the process lossessignificantly with continuous efforts during the year 2017-18 which has resulted in
reduction of variable cost. Availability of natural gas installation of new powergenerator change in body composition of the product introduction of innovative designsquality assurance dynamic plant leadership are some of the factors contributing to plantproductivity and quality growth of business and performance of the Company.
H. & R. Johnson (India) TBK Limited ('HRJTBK') the wholly-owned subsidiaryof the Company is in the field of Tile and Bath retail business having pan Indiapresence. HRJTBK with its subsidiaries & joint ventures has number of showrooms in thestyle of 'House of Johnson' and 'Johnson Corners' for retail business.
Milano Bathroom Fittings Private Limited the
wholly-owned subsidiary of the Company manufacturing bathroom fittings and accessorieshas performed well during the year. Improved capacity utilisation at the Samba Unitintroduction of new product range and cost efficient manufacturing has contributed to thegrowth of the business.
TBK Venkataramiah Tile Bath Kitchen Private Limited TBK Rangoli Tile BathKitchen Private Limited wholly-owned subsidiaries of HRJTBK and TBK Samiyaz Tile BathKitchen Private Limited which became a subsidiary of HRJTBK during the year are in thefield of tileand bath retailing.
RMC Readymix Porselano (India) Limited a wholly-owned subsidiary is yet tocommence operations.
Joint Ventures (JV)
Ardex Endura (India) Private Limited JV with the Ardex Group Germany whichmanufactures and markets tile adhesives grouts flooring waterproofing and alliedproducts has performed satisfactorily during the year.
Sentini Cermica Private Limited the mid-segment glazed floor tile JV company inTelangana has performed well during the year. The profitability for the company hasincreased despite of lower capacity utilisation.
In addition Antique Marbonite Private Limited Spectrum Johnson Tiles Private LimitedSmall Johnson Floor Tiles Private Limited and Coral Gold Tiles Private Limited the tileJV companies in Gujarat performed satisfactorily during the year.
Prism Power and Infrastructure Private Limited an associate of the Company is yet tocommence operations.
CONSOLIDATED FINANCIAL STATEMENTS
The audited consolidated financial statements of the Company prepared in accordancewith the Companies
Act 2013 and the applicable Indian Accounting Standards alongwith all relevantdocuments and the Auditors Report form part of this Annual Report.
The financial statements of the subsidiary companies are not attached alongwith thefinancial statements of the Company. Separate audited financial statements in respect ofeach of the subsidiary companies shall be kept open for inspection at the RegisteredOffice of the Company during working hours for a period of 21 days before the date of theAnnual General Meeting. The Company shall also provide a copy of the Annual Report andother related information of its subsidiary companies as required under Section 136 of theCompanies Act 2013 to the shareholders of the Company and the subsidiaries upon theirwritten request. The separate audited financial statements in respect of each subsidiarycompany is also available on the website of the Company at
Mr. J. A. Brooks Non-executive Independent Director resigned from the Board of theCompany on November 7 2017. The Board wishes to place on record its deep sense ofappreciation for the valuable guidance contribution and support received from Mr. Brooksduring his tenure with the Company.
The Board of Directors has at its Meeting held on May 29 2018 subject to requisiteapprovals re-appointed Mr. Vivek K. Agnihotri as Executive Director & CEO (Cement)for a period of three years with effect from August 17 2018 upon terms and conditionsmentioned in the Notice of the ensuing Annual General Meeting read with the ExplanatoryStatement thereto. The Board recommends passing of the special resolution at Item No. 5 ofthe Notice.
Pursuant to Section 152 of the Companies Act 2013 Mr. Vijay Aggarwal and Mr. Vivek K.Agnihotri retire by rotation at the forthcoming Annual General Meeting of the Company andare eligible for re-appointment.
In accordance with the requirements of the Companies Act 2013 the shareholders atthe Annual General Meetings of the Company held on July 31 2014 and August 9 2017 haveappointed the Independent Directors - Ms. Ameeta A. Parpia Mr. Shobhan M. Thakore and Dr.Raveendra Chittoor for a term of five consecutive years from their respective dates ofappointment.
The Company has received declarations from Ms. Parpia Mr. Thakore and Dr. ChittoorIndependent Directors of the Company confirming that they meet with the criteria ofindependence as prescribed both under sub-section (6) of Section 149 of the Companies Act2013 and under the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. The terms and conditions of appointment of the Independent Directors are placed onthe website of the Company http://www.prismjohnson.in/investors/disclosures-under-SEBI-LODR-regulations/policies.
The details of familiarisation programme for Independent Directors have been disclosedin the Report on Corporate Governance and on the website of the Company
As required the requisite details of Directors seeking appointment/re-appointment areincluded in this Annual Report.
The Board of Directors met six times during the year ended March 31 2018.Additionally several Committee Meetings were held including the Audit Committee whichmet nine times during the year. Details of the meetings are included in the Report onCorporate Governance.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation during the year under review. Details of the same is given in theReport on Corporate Governance.
The policy on Director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Director and alsoremuneration for Key Managerial Personnel and other employees forms part of the Report onCorporate Governance.
KEY MANAGERIAL PERSONNEL
During the year Mr. Pramod K. Akhramka Chief Financial Officer and KMP of the Companyresigned from the services of the Company. The resignation was effective August 22 2017.
Consequent to Mr. Akhramka's resignation the Board appointed Mr. Manish Bhatia as theChief Financial Officer and KMP of the Company effective August 222017.
COMPOSITION OF AUDIT COMMITTEE
The Board has constituted an Audit Committee details of the same is stated in theReport on Corporate Governance.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has established a vigil mechanism by adopting a Whistle Blower Policy toreport concerns about illegal or unethical practices if any. The details of the Policy isexplained in the Report on Corporate Governance and is also available on the website ofthe Company at http://www.prismjohnson.in/investors/disclosures-under-SEBI-LODR-regulations/policies .
PREVENTION OF SEXUAL HARASSMENT
The Company offers equal employment opportunity and is committed to creating a healthyworking environment that enables employees to work without fear of prejudice gender biasand sexual harassment. The Company has also framed a policy on Prevention of SexualHarassment of Women at workplace. As per the requirement of the Sexual Harassment of Womenat Workplace (Prevention Prohibition & Redressal) Act 2013 and Rules madethereunder the Company has constituted an Internal Complaints Committee (ICC) to inquireinto complaints of sexual harassment and recommend appropriate action.
During the financial year 2017-18 the ICC received one complaint on sexual harassmentand appropriate actions are being taken.
The Company has constituted a Risk Management Committee. The details of the Committeeand its terms of reference are set out in the Report on Corporate Governance.
The Company works across a wide range of products i.e. Cement Tiles Bath and ReadyMixed Concrete. Several of the product lines have their own unique business and operatingmodels. These businesses operate in an evolving and challenging business environment.
The Risk Management Policy framed by the Company details the objectives and principlesof risk management along with an overview of the risk management process procedures andrelated roles and responsibilities. The risk management process includes identifying typesof risks and its assessment risk handling and monitoring reporting and controlling/mitigation.
The Committee on timely basis informed members of the Audit Committee and the Board ofDirectors about risk assessment and minimisation procedures and in their opinion there wasno risk that may threaten the existence of the Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has adopted a CSR Policy based on which its future CSR initiatives shall bedeveloped and implemented. The Company policy is focussed on CSR initiatives in areas suchas water health and sanitation energy conservation pollution-free atmosphere cleantechnologies and primary health care for the villagers in the vicinity of the plants. ThePolicy is available on the Company's website at http://www .prismjohnson.in/investors/disclosures-under-SEBI-LODR- regulations/policies.
In view of the average net profits of the three immediately preceding financial yearsbeing in the negative the Company was not required to spend on CSR activities for the
FY 2017-18. Requisite disclosure including composition of the CSR Committee has beenmade in the prescribed form annexed herewith as Annexure 'A'.
BUSINESS RESPONSIBILITY REPORTING
A separate section on Business Responsibility Reporting forms part of this AnnualReport as required under Regulation 34(2)(f) f SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 annexed herewith as Annexure 'B'.
LOANS GUARANTEES AND INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.
RELATED PARTY TRANSACTIONS
All related party transactions are placed before the Audit Committee as also the Boardwherever required for prior approval. Prior omnibus approval of the Audit Committee isobtained for the transactions which are of a foreseen and repetitive nature. A statementgiving details of all related party transactions entered into pursuant to the omnibusapproval is placed before the Audit Committee for their review on a quarterly basis. Thestatement is supported by a Certificate from the Managing Director Executive Director& CEOs and the Chief Financial Officer.
The Policy on Related Party Transactions as approved by the Audit Committee and theBoard of Directors is available on the website of the Company at
There were no material related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. None of the Directors has anypecuniary relationships or transactions vis-a-vis the Company.
The Company has provided Corporate Guarantees to financiers of its subsidiary - SilicaCeramica Private Limited to facilitate fund raising. Details of the said transactionsentered during the year ended March 31 2018 pursuant to sub-section (1) of Section 188of the Companies Act 2013 are given in the prescribed Form AOC-2 annexed herewith asAnnexure 'C'. The said guarantees are given in the interest of the Company.
Attention of the members is drawn to the disclosure of related party transactions setout in Note 4.08 of the Standalone Financial Statements forming part of this AnnualReport.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act 2013 to the best of theirknowledge and belief and according to the information and explanations obtained by themthe Directors confirm :
a. That in the preparation of the annual financial statements for the year ended March31 2018 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. They have selected such accounting policies and applied them consistently and madejudgement and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2018 and of the profit of theCompany for the year ended on that date;
c. That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafegua rding the assets of the Com pa ny a nd for preventi ng a nd detecti ng fraud a ndother irregula rities;
d. That the annual financial statements have been prepared on a going concern basis;
e. That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
f. That systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
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 forming part of this report asAnnexure 'D'.
The information required under Section 197 of the Companies Act 2013 and Rule 5(2)& 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 forms part of this Report. Having regard to the provisions of the first proviso toSection 136(1) of the Act the Annual Report excluding the aforesaid information is beingsent to the members of the Company. The said information is available for inspection bythe members at the Registered Office of the Company during business hours on working daysupto the date of the ensuing Annual General Meeting. Any shareholder interested inobtaining a copy of the statement may write to the Company's Registered Office atHyderabad or to its Corporate Office at Mumbai.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information relating to conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134 of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 is given in Annexure 'E'forming part of thisReport.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Reportforthe year under review as stipulatedunder SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 ispresented in a separate section forming part of this Annual Report.
As per SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 aseparate section on Corporate Governance together with a certificate from the Company'sAuditors confirming compliance forms part of this Annual Report.
INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has established set of standards processes and structure which enable itto implement adequate internal financial controls and ensure that the same are operatingeffectively. The internal financial control systems of the Company are commensurate withits size and the nature of its operations. The Company has well defined delegation ofauthority limits for approving revenue as well as expenditures. The Company uses anestablished ERP system to record day today transactions for accounting and financialreporting.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company the work done by the Internal Statutory Costand Secretarial Auditors and the reviews of the Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial year2017-18.
In terms of the provisions of Section 139 of the Companies Act 2013 the term ofoffice of M/s. G. M. Kapadia & Co. Chartered Accountants Mumbai (Firm RegistrationNo. 104767W) will end at the conclusion of the forthcoming Annual General Meeting. It isproposed to re-appoint M/s. G. M. Kapadia & Co. as the Statutory Auditors of theCompany for a further period of five years from the conclusion of the ensuing AnnualGeneral Meeting to the conclusion of the 31st Annual General Meeting of theCompany.
As required under the provisions of Section 139 and 141 of the Companies Act 2013 theCompany has received written consent and certificate from M/s. G. M. Kapadia & Co.Chartered Accountants proposing to be re-appointed as Auditors upto conclusion of the 31stAnnual General Meeting of the Company to the effect that their re-appointment
if made would be in conformity with the limits specified in the said Section.
Pursuant to SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015the Auditors have also confirmed that they hold a valid certificate issued by the PeerReview Board of the Institute of Chartered Accountants of India.
The Report given by the Auditors on the financial statements of the Company are part ofthis Annual Report. There is no qualification reservation adverse remark or disclaimergiven by the Auditors in their Report.
The Company has appointed Ms. Savita Jyoti M/s. Savita Jyoti Associates PractisingCompany Secretary Hyderabad to undertake the Secretarial Audit of the Company pursuant tothe provisions of Section 204 of the Companies Act 2013 and the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014. There were no qualificationreservation or adverse remarks given by Secretarial Auditor of the Company. The Report ofthe Secretarial Auditor in Form MR-3 is annexed herewith as Annexure 'F'.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 and the Companies (Cost Records and Audit) Amendment Rules 2014the Company maintains the cost audit records for its businesses. The Board of Directors ofthe Company has on the recommendation of the Audit Committee at its meeting held on May29 2018 appointed M/s. D. C. Dave & Co. Cost Accountants as the Cost Auditors forthe year ending March 31 2019 and has recommended their remuneration to the shareholdersfor their ratification.
The extract of the Annual Return in Form MGT-9 is furnished in Annexure 'G' attached tothis Report.
1. No significant and material orders were passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
2. No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which the financial statements relateand the date of this report.
3. No fraud has been reported during the audit conducted by the Statutory AuditorsInternal Auditors Secretarial Auditorand Cost Auditors of the Company.
4. The Company is in compliance with the applicable Secreta ria I Sta nda rds issued bythe I nstitute of Com pa ny Secretaries of India and approved by the Central Governmentunder Section 118(10) of the Companies Act 2013.
The Directors thank the shareholders various Central and State Governmentdepartments/agencies banks and other business associates for their valuable services andcontinued support during the year under review. The Board also takes this opportunity toexpress its sincere appreciation of the contribution and dedicated work of all theemployees of the Company.
Forand on behalf of the Board
SHOBHAN M. THAKORE
Place : Mumbai
Date : May 29 2018