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Prism Johnson Ltd.

BSE: 500338 Sector: Industrials
NSE: PRSMJOHNSN ISIN Code: INE010A01011
BSE 00:00 | 18 Sep 59.25 -0.75
(-1.25%)
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59.70

HIGH

60.40

LOW

58.00

NSE 00:00 | 18 Sep 59.10 -0.90
(-1.50%)
OPEN

60.00

HIGH

60.50

LOW

58.00

OPEN 59.70
PREVIOUS CLOSE 60.00
VOLUME 46200
52-Week high 91.10
52-Week low 25.80
P/E
Mkt Cap.(Rs cr) 2,982
Buy Price 58.55
Buy Qty 25.00
Sell Price 59.25
Sell Qty 500.00
OPEN 59.70
CLOSE 60.00
VOLUME 46200
52-Week high 91.10
52-Week low 25.80
P/E
Mkt Cap.(Rs cr) 2,982
Buy Price 58.55
Buy Qty 25.00
Sell Price 59.25
Sell Qty 500.00

Prism Johnson Ltd. (PRSMJOHNSN) - Director Report

Company director report

To the Shareholders

The Directors present the Twenty-eighth Annual Report together with the auditedStatement of Accounts of the Company for the year ended March 31 2020.

FINANCIAL RESULTS (Standalone)

Particulars 2019-20 2018-19
Revenue from operations 5572.29 5955.57
Other income 26.46 20.73
Total income 5598.75 5976.30
Expenses 5467.11 5746.25
Profit before tax 131.64 230.05
Tax expenses 75.19 84.07
Profit for the year 56.45 145.98
Surplus - opening balance 376.08 246.82
Amount available for appropriation 432.53 392.80
Dividend & Dividend Distribution Tax 60.68 30.34
Transfer from Debenture Redemption Reserve 96.25 12.98
Other Comprehensive Income/(Loss) - net of tax (14.36) 0.64
Surplus - closing balance 453.74 376.08

RESERVES

Pursuant to the amendment to the Companies (Share Capital and Debentures) Rules 2014the Company is not required to create a Debenture Redemption Reserve for its outstandingNon-convertible Debentures. Accordingly the Company has transferred an amount of Rs 96.25Crores from the Debenture Redemption Reserve to the Retained Earnings during the yearunder review. An amount of Rs 453.74 Crores is proposed to be retained in the Statement ofProfit and Loss.

DIVIDEND

In compliance with the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 ('SEBI LODR') the Board of Directors of the Company has approved aDividend Distribution Policy. The objective of the policy is to lay down the criteria tobe considered by the Board before recommending dividend to its shareholders for afinancial year and to provide clarity to stakeholders on the profit distribution of theCompany. The Board shall consider distribution of profits in accordance with the businessstrategies provisions of the applicable regulations and seek to balance the benefit toshareholders of the Company with the comparative advantages of retaining profits in theCompany which would lead to greater value creation for all stakeholders.

The Policy is uploaded on the Company's website at www.Prismjohnson.in/investors/disclosures-under-SEBI-LODR- regulations/policies.

During the year the Company has paid an interim dividend of Rs 1/- (@ 10%) per equityshare of Rs 10/- each. The total outflow for the year ended March 31 2020 towardsDividend is Rs 50.34 Crores and Dividend Distribution Tax is Rs 10.34 Crores.

OPERATIONS

The Covid-19 global pandemic which set foot in India in March 2020 has impacted thecountry's economy across industries and businesses. The Company is not immune to thiscrisis. To ensure the safety of its employees and workers and to combat the Covid-19pandemic in compliance with the containment directives of the Government the Company hadshut down its facilities at all locations towards the end of March 2020.

A cross-functional Task Force was constituted under the Managing Director of theCompany which has been constantly reviewing the rapidly changing situation to ensure thatmeasures are continuously implemented to keep employees safe at all times while alsoattempting to ensure business continuity.

Whilst manufacturing and sales came to a standstill supply chains and revenues hadbeen under severe stress with the lockdown restrictions in place. The Management has beenhands-on to re-evaluate its strategies to overcome the unprecedented situation. With majorfocus on preserving cash and reducing fixed costs and resumption of operations in aphased manner since April 20 2020 all efforts are being made to tide over thischallenging time and bounce back.

All statutory obligations have been paid within time limit allowed by the Governmentwith relaxations as announced. The Company has been monitoring cash inflows withcontinuous follow up with customers during the lock down period and managing vendorpayments. Due to rigorous follow-up trade collections have been better. The Company hasnot opted for moratorium with any banks/fis for principal or interest payments and hasmade TDS and all payments in time.

During the year ended March 31 2020 revenue from operations decreased to Rs 5572Crores from Rs 5956 Crores in the previous year due to impact of the lockdown on volumesin the last quarter. The Company earned a profit before tax of Rs 131.64 Crores and profitafter tax of Rs 56.45 Crores during the year ended March 31 2020 as against profit beforetax of Rs 230.05 Crores and profit after tax of Rs 145.98 Crores during the year endedMarch 31 2019.

The consolidated loss after tax for the year ended March 31 2020 of the Company andits subsidiary/joint venture companies amounted to Rs 20.65 Crores as against profit aftertax of Rs 109.60 Crores for the previous year ended March 31 2019.

No other material changes and commitments affecting the financial position of theCompany occurred between the end of the financial year to which the financial statementsrelate and the date of this report.

SHARE CAPITAL

The paid-up equity share capital was Rs 503.36 Crores as on March 31 2020. During theyear under review the Company has not issued shares with differential voting rightsneither granted any stock options nor sweat equity.

FIXED DEPOSITS

The Company has discontinued acceptance of any fixed deposits and also the renewal ofits fixed deposits on maturity. During the year ended March 31 2020 175 depositsamounting to Rs 0.57 Crores had matured and had not been claimed as on that date.

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 were incompliance with the requirement of the Companies Act 2013 and the Rules thereunder.

FINANCE

The Company has repaid/prepaid loans of Rs 439.37 Crores and tied-up fresh loans of Rs822.92 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.

During the year ended March 31 2020 the Company raised Rs 199 Crores by way ofprivately placed Secured/ Unsecured Redeemable Non-convertible Debentures ('ncds') tofinance inter alia its refinancing of debt long term working capital and generalcorporate purpose detailed as under :

Coupon Rate Date of Allotment No. Of ncds Total Amount Rs Crores Tenor Maturity

Date

10.70% Unsecured ncds Tranche - XIV 26.07.2019 1150 115.00 36 months 25.07.2022
10% Unsecured ncds Tranche - XV 31.01.2020 840 84.00 36 months 31.01.2023

The aforesaid debentures are listed on BSE Limited. The proceeds of the ncds issue havebeen fully utilised for the purpose of the issue.

During the year under review ncds aggregating Rs 171.90 Crores were redeemed inaccordance with the terms of the issue.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year the Company has transferred a sum of Rs 0.39 Crores to the InvestorEducation and Protection Fund in compliance with provisions of the Companies Act 2013which represents unclaimed/unpaid dividend unclaimed fixed deposits and unclaimedinterest on the fixed deposits.

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 Company has 5 subsidiaries 3 step-down subsidiaries 6 joint ventures and 4associate companies as on March 31 2020. The subsidiaries and joint ventures haveperformed satisfactorily during the year under review. The details of subsidiaries jointventures and associates of the Company are given in Form MGT-9 extract of the AnnualReturn annexed herewith as Annexure 'F'.

Silica Ceramica private Limited ('Silica') : The Company acquired 62500 equity sharesrepresenting 0.07% in the total paid-up equity share capital of Silica a subsidiary ofthe Company for Rs 0.16 Crores during the year under review. Consequent to the aforesaidacquisition Silica became a wholly owned subsidiary of the Company effective October 92019.

Sunspring Solar Private Limited ('Sunspring Solar') : During the year under review theCompany has acquired 1478412 equity shares of Rs 10/- each aggregating to Rs 1.48 Croresconstituting 27% in the total paid-up equity share capital of Sunspring Solar due to whichit has become an associate of the Company. Sunspring Solar is engaged in the business ofproviding solar power solutions comprising of consulting design engineeringfabrication installation commissioning distribution operation & maintenance andmonitoring of distributed rooftop and ground mounted solar power plants primarily forcaptive consumption of commercial and industrial customers in India. Sunspring Solar willsupply power to the Company's tile manufacturing facilities resulting in reduction ofpower costs thereby increasing the cost competitiveness.

Spectrum Johnson Tiles Private Limited Joint Venture of the Company decided topermanently close its wall manufacturing plant with capacity of 5 MSM per annum witheffect from March 1 2020 due to an aged unviable plant. Adequate cost effectivearrangements have already been made for transition to outsourced vendor(s) so that thereis full continuity with better profitability and no impact on sales.

Sanskar Ceramics Private Limited ('Sanskar') : The Company acquired 15% equity stakefor Rs 5.25 Crores in Sanskar for supply of wall and vitrified tiles. Sanskar is engagedin manufacturing of ceramic tiles at Morbi Gujarat. Sanskar is a joint venture of SmallJohnson Floor Tiles Private Limited a joint venture of the Company. With this investmentSanskar has become an associate of the Company. This arrangement is expected to increasethe Company's footprint in Morbi.

Prism Power and Infrastructure Private Limited ('PPIPL') :

The Company has made an application for striking-off of the name of PPIPL an associatein which the Company holds 49% equity stake from the Register of Companies as perapplicable provisions of the Companies Act 2013. PPIPL was incorporated in 2006 with theobject to carry on the business of generation of electrical power by conventionalnon-conventional methods etc. PPIPL is not doing/carrying on any business right from thedate of its incorporation and there is no intention to do any business or commercialactivity as laid down in the main objects of its Memorandum of Association in future.

TBK Samiyaz Tile Bath Kitchen Private Limited became wholly owned step down subsidiarywith effect from October 14 2019.

There has been no material change in the nature of the business of the othersubsidiaries joint ventures and associates during the year under review.

Composite Scheme of Arrangement and Amalgamation

The Board of Directors had at its meeting held on October23 2019 considered andapproved a Composite Scheme of Arrangement and Amalgamation as under :

A. Demerger of retail/trading business undertakings of TBK Rangoli Tile Bath KitchenPrivate Limited TBK Venkataramiah Tile Bath Kitchen Private Limited and TBK Samiyaz TileBath Kitchen Private Limited into its holding company H. & R. Johnson (India) TBKLimited ('HRJ TBK') and subsequent demerger of retail/trading business undertaking of HRJTBK into the Company.

B. Subsequent amalgamation of Milano Bathroom Fittings Private Limited and SilicaCeramica Private Limited with the Company.

The application is pending before the NCLT Hyderabad.

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 allrelevant documents and the Auditors' Report form part of this Annual Report.

The separate audited financial statements in respect of each subsidiary company is alsoavailable on the website of the Company at www.prismjohnson.in/investors/disclosures-under-SEBI-LODR-regulations/financials.

Directors

Pursuant to Section 152 of the Companies Act 2013 Mr. Rajan B. Raheja and Mr. VijayAggarwal retire by rotation at the forthcoming Annual General Meeting of the Company andbeing eligible have offered themselves for re-appointment.

In accordance with the requirements of the Companies Act 2013 the shareholders onAugust 9 2017 have appointed Dr. Raveendra Chittoor and on July 31 2019 have appointedMr. Shobhan M. Thakore and Ms. Ameeta A. Parpia as Independent Directors for a term offive consecutive years from July 3 2017 and July 31 2019 respectively.

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 LODR. The terms and conditions of appointment of the IndependentDirectors are placed on the website of the Companywww.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 Companywww.prismjohnson.in/investors/disclosures-under-SEBI- LODR-regulations/policies.

As required the requisite details of Directors seeking appointment/re-appointment areincluded in this Annual Report.

Meetings

The Board of Directors met 11 times during the year ended March 31 2020. Additionallyseveral Committee Meetings were held including the Audit Committee which met 11 timesduring the year. Details of the meetings are included in the Report on CorporateGovernance.

Evaluation

Pursuant to the provisions of the Companies Act 2013 and the SEBI LODR the Board hascarried out an annual performance evaluation during the year under review. Details of thesame is given in the Report on Corporate Governance.

Remuneration policy

The policy on Director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Director and alsoremuneration for Key Managerial Personnel Senior Management and other employees formspart of the Report on Corporate Governance and is also available on the website of theCompany at www.prismjohnson.in/investors/disclosures-under-SEBI-LODR-regulations/policies.

KEY MANAGERIAL personnel

There were no changes in the Key Managerial Personnel of the Company during the yearunder review.

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 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 Committee to inquire into complaintsof sexual harassment and recommend appropriate action.

During the financial year 2019-20 no complaint was received.

RISK MANAGEMENT

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 andcontrolling/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 www.prismjohnson.in/investors/disclosures-under-SEBI-LODR-regulations/policies.

During the financial year 2019-20 the Company has spent Rs 2.80 Crores (2.05% of theaverage net profits of the last three financial years) towards CSR activities.

Requisite disclosure including composition of the CSR Committee has been made in theprescribed 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) of the SEBI LODR 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 atwww.prismjohnson.in/investors/ disclosures-under-SEBI-LODR-regulations/policies.

There was no material related party transaction 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 have anypecuniary relationships or transactions vis-a-vis the Company.

Attention of the members is drawn to the disclosure of related party transactions setout in Note 4.09 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 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

B. That they have selected such accounting policies and applied them consistently andmade judgements 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 March 31 2020 and of the profit ofthe Company 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 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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.

EMPLOYEE REMUNERATION

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 'C'.

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. Any shareholder interested in obtaining a copy of thestatement may send an e-mail to investor@prismjohnson.in.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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 'D' forming part of thisReport.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review as stipulatedunder the SEBI LODR is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

As per the SEBI LODR a separate section on Corporate Governance together with acertificate from the Company's Auditors confirming compliance forms part of this AnnualReport.

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 to day 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 year 2019-20.

AUDITORS

Statutory Auditors

The shareholders at the 26th Annual General Meeting appointed M/s. G. M.Kapadia & Co. Chartered Accountants Mumbai as the Company's Auditors upto conclusionof the 31st Annual General Meeting of the Company. The Auditors have confirmedtheir eligibility under Section 141 of the Companies Act 2013 and the Rules framedthereunder. As required under the SEBI LODR the Auditors have also confirmed that theyhold a valid certificate issued by the Peer Review Board of the Institute of CharteredAccountants 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.

Cost Auditors

Pursuant to Section 148 of the Companies Act 2013 read with the Rules thereunder asamended the Company needs to maintain the cost records and such accounts and records aremaintained for its businesses. The Board of Directors of the Company has on therecommendation of the Audit Committee at its meeting held on May 28 2020 appointed M/s.D. C. Dave & Co. Cost Accountants as the Cost Auditors for the year ending March 312021 and has recommended their remuneration to the shareholders for their ratification.

Secretarial Auditors

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 was 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 'E'.

Secretarial Audit of Material Unlisted Subsidiaries

For the Financial year 2019-20 Raheja QBE General Insurance Company Limited ('RQBE')is the material unlisted subsidiary of the Company. In terms of Regulation 24A of SEBILODR read with Section 204 of the Companies Act 2013 Secretarial Audit of the RQBE hasbeen conducted for the year 2019-20 by Practicing Company Secretary. The said Audit Reportwhich does not contain any qualification reservation or adverse remark or disclaimer hasbeen annexed to RQBE's Board Report.

ANNUAL RETURN

The Annual Return of the Company has been placed on the website of the Company and canbe accessed at www.prismjohnson.in/ investors/annual-return. The extract of the AnnualReturn in Form MGT - 9 is furnished in Annexure 'F' attached to this Report.

GENERAL

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. During the year no revision was made in the previous financial statement of theCompany.

3. No fraud has been reported during the audit conducted by the Statutory AuditorsInternal Auditors Secretarial Auditor and Cost Auditors of the Company.

4. The Company is in compliance with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India and approved by the Central Government underSection 118(10) of the Companies Act 2013.

5. For the financial year ended on March 31 2020 the Company has complied withprovisions relating to the constitution of Internal Committee under the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013. Support duringthe year under review. The Board also takes this opportunity to express its sincereappreciation of the contribution and dedicated work of all the employees of the Company.

ACKNOWLEDGEMENTS

The Directors thank the shareholders various Central and State Governmentdepartments/agencies banks and other business associates for their valuable services andcontinued

For and on behalf of the Board of Directors
Place : Mumbai SHOBHAN M. THAKORE
Date : May 28 2020 Chairman