Prag Bosimi Synthetics Ltd Directors Report.

To,

The Members,

Prag Bosimi Synthetics Limited (PBSL).

Your Directors have pleasure in presenting the 28th Annual Report together with audited accounts of the Company for the 12 months period ended on 31st March, 2020..

1) SUMMARISED FINANCIAL RESULTS:

The financial results of your Company for the period under review are summarized below:

(Rupees in Lakhs)

Particulars 12 month ended 31st March, 2020 12 months ended 31st March, 2019
Gross Turnover 1771.84 5795.15
Profit / (Loss) before Depreciation, Interest and Taxation (580.99) (509.26)
(Add)/ Less: Interest 626.82 191.04
(Add)/ Less: Depreciation 441.65 427.51
Profit / (Loss) for the year (1649.46) (1127.81)
Add/ (Less) Loss brought forward from the previous period (23464.75) (22336.94)
Total Loss carried forward to next period/year (25114.22) (23464.75)

2) COMPANY ACTIVITIES

As mentioned in our last annual report due to heavy storm, rainfall and flood our factory power lines were disrupted and factory was fully on a standstill situation causing a substantial loss to the companys production and revenue. Restoration was delayed due to heavy rain in the factory region but got restored by last week of September 2019. Because of all these calamities our company could attain only average 67 tons/month production during the year.

The Company has requested APDCL to temporarily disconnect the power in order to save the fixed cost of the company in the period of Covid 19. APDCL has finally disconnected the power from June 2020. The management of the company is planning to restart its business at the earliest

3) DIVIDEND:

Due to losses your directors have not recommended any dividend for the current period in respect of Equity Shares capital.

4) TRANSFER TO RESERVES

In view of loss incurred during the period under review, the Board of Directors has not recommended transfer of any amount to reserves.

5) SHARE CAPITAL:

The Authorised Share Capital of the Company is Rs 250/- Cr (Rupees Two Fifty Crore. The authorized capital is divided into 150 Lacs of Equity share capital and 100 Lacs of Preference shares Capital. The paid up Equity Share Capital of the Company as at March 31, 2020 stood at 90.153 Cr divided into 74382960 Equity Shares of Rs 10/- each, 15.77 Lacs redeemable Preference share of Rs 100/- each. During the year under review, the Company has neither issued shares with differential voting rights nor granted any stock options or sweat equity. As on 31st March, 2020, Hemant B. Vyas (M.D.) is holding 5.14 lacs Redeemable Preference Shares of the Company.

As on March 31, 2020, none of the Directors and/or Key Managerial Person of the Company holds instruments convertible into Equity Shares of the Company.

6) PUBLIC DEPOSITS:

The Company has not accepted any Public Deposits during the period under review.

7) DEBENTURES:

The Unsecured Optionally Cumulative Convertible Debentures (OCCD) issued by the Company stands at its original issue value of Rs 54.37 Crores as on March 31,2020. The said OCCD were issued on a private placement basis in October 2017 for a period of Twenty years. The payment of interest is effective from 1st April 2019.

8) CHANGE IN NATURE OF BUSINESS, IF ANY.

There are no changes in the nature of business in the financial year 2019-20.

9) FINANCE AND ACCOUNTS

Your Company prepares its financial statements in compliance with the requirements the Companies Act, 2013 and the Generally Accepted Accounting Principles (GAAP) in India. The financial statements have been prepared on the new accounting Principle i.e IND AS. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Companys state of affairs, profits/(loss) and cash flows for the year ended 31st March 2020.

The Company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

There is no audit qualification in the standalone financial statements by the statutory auditors for the year under review.

10) EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the financial period ended 31st March 2020 made under the provisions of Section 92(3) of the Act is attached as Annexure I which forms part of this Report and also placed on the website at https://www.pragbosimi.com/admin_pbsl/ uploads/products/image/phpMHTVGU.pdf.

11) LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:

Details of Loans, Guarantees and Investments, if any, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

12) COVID-19

The beginning of 2020 has witnessed the global spread of COVID-19, i.e. coronavirus. Threat from COVID-19 is growing at a rapidly accelerating rate.

Consequent to this, Government of India declared nationwide lockdown on March 22, 2020, which has impacted normal business operations of the Company. The Company has assessed the impact of this pandemic on its business operations and has considered all relevant internal and external information available up to the date of approval of these financial results, to determine the impact on the Companys revenue from operations for foreseeable future and the recoverability and carrying value of certain assets such as property, plant and equipment, investments, inventories, trade receivables and MAT credit.

13) SUBSIDIARIES & ASSOCIATES:

The Company has 2 subsidiary companies and One Associate Company. Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries/ Associate Companies is given as Annexure II in Form AOC-1 which forms an integral part of this Report

Our associate Prag Jyoti Textile Park Pvt Ltd has been duly approved by Ministry of Textiles (MOT) (Govt of India) during. In financial terms the progress of the park can be seen from following facts

Total project cost is - Rs 47.25 Cr Funds employed till date Ministry of Textile - Rs 10.00 Cr (25% of total grant)

SVP contribution - Rs 3.63 Cr (50% of SVP contribution)

Application for release of Third Grant of 10.00 crores is already been placed before Ministry of Textile, Govt. of India during Feb 2019. During Feb 2020 i.e. after 12 months, only partial payment of 2 crores was received. the balance amount is still awaited. The delay in releasing the funds against 3rd Grant is adversely affecting the program of the textile park.

Hopefully the Textile Park shall be operational by end of 2021.

Our subsidiaries namely Prag Bosimi Texurising Private Limited and Prag Bosimi Packaging Private Limited will also commence commercial operations shortly.

14) ONE TIME SETTLEMENT WITH BANKS AND FINANCIAL INSTITUTIONS

We would like to inform that Optionally Cumulative

Convertible debentures issued in the year 2012 pursuant to CDR settlement are been settled fully

15) CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES

There are no transactions / contracts / arrangements entered by the Company with related party (ies) as defined under the provisions of Section 2(76) of the Companies Act, 2013, during the financial year underreview.

Details of contracts and arrangements with related parties in form AOC-2 is annexed as ANNEXURE III to this report.

16) MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis on the operations of the Company as prescribed under Part B of Schedule V read with regulation 34(3) of the Listing Regulations, 2015 is provided in a separate section and forms part of the Directors Report. It gives a reflection of the current state of business. It also deals with opportunities, challenges and the outlook of the Company.

17) DIRECTORS AND KEY MANAGERIAL PERSONS:

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Devang Vyas (DIN 00076459) retires by rotation as Director at the ensuing Annual General Meeting and being eligible, offers herself for the re-appointment. The Board recommends his re-appointment.

18) BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, the Board has carried out an annual performance evaluation of its own performance, of the Directors individually, as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees of the Board.

At the meeting of the Board, all the relevant factors that are material for evaluating the performance of individual Directors, the Board and its various Committees, were discussed in detail. A structured questionnaire each in line with circular issued by SEBI, for evaluation of the Board, its various Committees and individual Directors, was prepared and recommended to the Board by the Nomination & Remuneration Committee, for doing the required evaluation, after taking into consideration the inputs received from the Directors, covering various aspects of the Boards functioning, such as adequacy of the composition of the Board and its Committees, execution and performance of specific duties, obligations and governance, etc.

A separate exercise was carried out to evaluate the performance of individual Directors, including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority Shareholders, etc. The performance evaluation of the independent Directors was carried out by the entire Board

excluding the Director being evaluated. The performance evaluation of the Chairman and non-independent Directors was also carried out by the Independent Directors at their separate meeting. The Directors expressed their satisfaction with the evaluation process.

19) BOARD MEETINGS:

The details of the Board Meetings and other Committee Meetings held during the financial year 2019-20 are given in the separate section of Corporate Governance Report.

20) BOARD COMMITTEES

All Committees of the Board of Directors are constituted in line with the provisions of the Companies Act, 2013 and applicable regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

21) DECLARATIONS BY INDEPENDENT DIRECTORS:

The Company has received declarations form all the Independent Directors under Section 149(6) of the Companies Act, 2013 confirming their independence visa-vis the Company

22) MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments affecting the financial position of the Company between the end of Financial Year and date of the report

23) DIRECTORS RESPONSIBILTY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors of your Company confirm that:

• in the preparation of the accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

• such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the loss of the Company for that period;

• proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• the accounts of the Company have been prepared on a going concern basis;

• internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

• proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

24) RISK MANAGEMENT POLICY:

The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Companys businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/ strategic business plans and in periodic management reviews. However, provision of Regulation 21 of Listing Regulations for constitution of Risk Management Committee is not applicable to the Company.

25) VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:

The Company has put in place a Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The detail of the policy is available on the Companys website www.pragbosimi.com.

No complaint was received by the Company during the year ended 31st March, 2020.

26) DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

As mentioned in the last Annual report the case is still going on in NCLT. NCLT is closed due to Covid 19 hence the matter could not progress further.

27) CORPORATE GOVERNANCE:

Your Company affirms its commitment to Corporate Governance and is fully compliant with the conditions of Corporate Governance stipulated in Regulation 27(2) of the Listing Agreement with Stock Exchanges. A separate section on compliance of Corporate Governance and a Certificate from the Auditors firm and practising Company Secretary dated 31st July, 2020 in this regard are annexed hereto and forms a part of the Report.

28) DISCLOSURE OF INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the period under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

29) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO:

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchang eearnings and outgo etc. are furnished in Annexure IV which forms part of this Report..

30) DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013 READ WITH RULES

Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013 read with Rules thereunder, the Company has not received any complaint of sexual harassment during the year under review.

"Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013".

31) ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:

Attendance at the meetings, Participation and contribution, Responsibility towards stakeholders, Contribution in Strategic Planning, Compliance and Governance, Participation, Performance Evaluation and Updation of Knowledge are the criterias for Performance Evaluation of Directors, Committee and Board.

32) PARTICULARS OF EMPLOYEES & DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

None of the employees of the Company is in receipt of remuneration exceeding the limit prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Disclosure pursuant to Section 197(12) of Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as ANNEXURE V to this report.

33) STATUTORY AUDITORS

M/s M. H Dalal & Associates, Chartered Accountants, Mumbai and M/s. A M D & Associates, Chartered Accountants, Guwahati are Auditors of the Company.

The observations made by the Statutory Auditors in their report for the financial period ended 31st March 2020 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

34) SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Amit Mundra, Practicing Company Secretary had been appointed to undertake the Secretarial Audit of the Company. Secretarial Audit Report issued by Mr. Amit Mundra, Company Secretary in Form MR-3 for the financial year 201920 forms part to this report annexed as ANNEXURE VI. The said report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

35) INTERNAL AUDITOR:

M/s. Dhawan Pandey & Associates, Chartered Accountants, are re-appointed as Internal Auditors of the Company.

36) INTERNAL CONTROL SYSTEMS:

Adequate internal control systems commensurate with the nature of the Companys business and size and complexity of its operations are in place has been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

37) CORPORATE SUSTAINABILITY AND SOCIAL RESPONSIBILITY:

The provision of the Section 135 and Schedule VII of the Companies Act, 2013 as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 effective from April 1, 2014 relating to CSR Initiatives are not applicable to the Company.

38) GREEN INITIATIVES

In line with the ‘Green initiative, the Company has affected electronic delivery of the Annual Report 2019-20, are sent to all members whose email addresses are registered with the Company/ Depository Participant(s). For members who have not registered their email addresses, please register the same with the RTA.

39) REPORTING OF FRAUDS

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit committee and / or Board under Section 143(12) of Act and Rules framed thereunder.

40) INDUSTRIAL RELATIONS/ HUMAN RESOURCES:

Your Company maintained healthy, cordial and harmonious industrial relations at all levels during the period under review. Your Company firmly believes that a dedicated workforce constitute the primary source of sustainable competitive advantage. Accordingly, human resource development continues to receive focused attention. Your Directors wish to place on record their appreciation for the dedicated and commendable services rendered by the staff and workforce of your Company.

41) NON-COMPLIANCE

There is no non-compliance of any of the requirements of corporate governance report as required under the Listing Regulations

42) CEO/CFO CERTIFICATION

As required under Regulation 17(8) of Listing Regulations, the Managing Director and CEO have certified to the Board about compliance by the Company with the requirements of the said sub regulation for the financial year ended 31st March, 2020.

43) COMPLIANCE CERTIFICATE

Compliance Certificate for Corporate Governance from Auditors of the Company is given as Annexure - ‘B to this report.

44) CAUTIONARY STATEMENT

Statements in this Directors Report and Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Companys operations include raw material availability and its prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factor.

45) APPRECIATION:

Your Directors take this opportunity to offer their sincere thanks to the Government of India, State Government of Assam, AIDC, Investors, and Bankers for their continued support and co-operation, have helped in your Companys progress. Also Your Directors wish to place on record their appreciation, and for the contribution made by the employees at all levels whose hard work, and support, without which Companys achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, for their continued support and faith reposed in the Company.

By order of the Board of Directors

Hemant B. Vyas Rohit P. Doshi
Managing Director Independent Director
Din No.: 00076289 Din No. 00424996

Date: 2nd September, 2020

Place: MUMBAI