Prag Bosimi Synthetics Ltd Directors Report.

To,

The Members,

Prag Bosimi Synthetics Limited (PBSL).

Your Directors have pleasure in presenting the 29th Annual Report together with audited accounts of the Company for the 12 months period ended on 31st March, 2021.

1) SUMMARISED FINANCIAL RESULTS:

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

(Rs in Lakhs)

Particulars 12 month ended 31st March, 2021 12 months ended 31st March, 2020
Gross Turnover 162.94 1771.84
Profit / (Loss) before Depreciation, Interest and Taxation (167.77) (580.99)
(Add)/ Less: Interest 606.27 626.82
(Add)/ Less: Depreciation 444.85 441.65
Profit / (Loss) for the year (1218.89) (1649.46)
Add/ (Less) Loss brought forward from the previous period (25114.22) (23464.75)
Total Loss carried forward to next period/year (26333.11) (25114.22)

2) COMPANY ACTIVITIES:

Due to Covid 19 the company virtually could not function from March 2020 Onward. Prior to that also companys operation was adversely affected due to disruption of two electricity Supply Poles which collapsed in storm in May 2019. In spite of our repeated and regular follow up with the concerned authorities the line could not be restored finally after a favorable order from Assam Electricity regulatory commission (AERC) powr was finally restored in Sept 2019. During this span of 4-5 month we had lost our established market. Thereafter even though we gradually restated our production, agitation of CAA further disrupted the production and marketing efforts. After CAA protest subsided, the moment, company was ready to start and increase its production, Covid - 19 lockdown hampered the start off.

Unfortunately, Due to Covid, our MD Mr. Hemant B. Vyas expired on 1st January 2021, which was a big blow to the company. Even Covid did not spare our CEO - Mr. Ramesh Pokhriyal, who was not available from Dec 2020 and is still undergoing Post Covid treatment and further, our CFO - Mr. Raktim Kumar Das also suffered from Covid and is still undergoing post Covid complications. In addition, few senior officers, marketing consultants and several other staff too suffered from Covid -19. Due to all these circumstances company was virtually non- functional.

In addition to the 1st all India Lockdown, we are still facing partial lockdown, both in Maharashtra and Assam in phases. Further, substantial finished goods are still lying in the factory and which could not be sold as the workers did not permit movement of goods out of factory. Since economy has opened out, we expect a concrete plan for companys future course of action would be drawn up and settlement with the employees taken up

3) DIVIDEND:

Due to losses your directors have not recommended any dividend for the current period in respect of any 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 250/- Cr (Rupees Two Hundred and Fifty Crores only).The authorized share capital is divided into 150 Lacs of Equity share capital and Rs.100 Lacs of Preference shares Capital. The paid up Share Capital of the Company as at March 31, 2021 stood at Rs.90.153 Crores divided into 7,43,82,960 Equity Shares of Rs. 10/- each, and 15,77,000. Non-Redeemable Preference shares of Rs 100/- each. During the year under review, the Company has not issued any kind of share capital. As on 31st March, 2021, Legal heirs of Late M. D. Shri Hemant B. Vyas are holding 5,14,000 Redeemable Preference Shares of the Company.

As on March 31,2021, 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 Rupees Fifty four Crores as on March 31,2021. The said NCDs -OCCD were issued on a private placement basis in October 2017 for a period of twenty years. The payment of interest was effective from 1st April 2019. However, Company is pursuing with holders of such NCD -OCCD to waive off interest in view of the Covid-19 situation.

8) CHANGE IN NATURE OF BUSINESS, IF ANY.

There was no changes in the nature of business of Company in the financial year 2020-21.

9) FINANCE AND ACCOUNTS

Your Company prepares its financial statements in compliance with the requirements of 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 and going concern basis, so as to reflect true and fair view, 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 2021.

The Company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters through strict checks and controls on continuous monitoring basis.

There is no audit qualification in the 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) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the Annual Return of the Company for the Financial Year ended 31 March, 2021 in Form MGT-7 is uploaded on the website of the Company and can be accessed at http://pragbosimi.com/admin_pbsl/uploads/products/image/ phpQCM2ly.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) 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 are given as Annexure I 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). In financial terms progress of the park can be seen from following figures

Total project cost is Rs 47.25 Crores
Funds employed till date
Ministry of Textile - Rs 12.00 Crores (25% of total grant)
SPV contribution - Rs 3.63 Crores (50 % of SPV contribution)

Application for release of Third Grant of Rs.10.00 Crores which was placed before Ministry of Textile, Govt. of India during Feb 2019 was released in two installments i. e 1st in Feb 2020 of 2 Crores and 2nd in June 2021, of 8 Crores i.e. after inordinate delay of 15 months. However, 8 Crores received in June 21 is in process of utilization. The delay in release of funds against 3rd Grant had severely affected the progress of the textile park and Covid situation has aggravated.

Our subsidiaries Company Viz., Prag Bosimi Texurising Private Limited and Prag Bosimi Packaging Private Limited are not operational at present.

13) CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

All Related Party Transactions are first placed before the Audit Committee for its prior / omnibus approval which are of a foreseen and repetitive nature and thereafter referred to the Board. The transactions entered into with the related parties are at arms length and in the ordinary course of business and are in accordance with the provisions of the Companies Act, 2013 read with rules made thereunder and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There were no material related party transactions entered into by the Company during the financial year which attracted the provisions of Section 188 of the Companies Act, 2013. The requisite disclosure, if any in Form AOC - 2 is furnished in Annexure - II. All related party transactions are mentioned in the Notes to the Financial Statements.

None of the transactions with any of related parties were in conflict with the Companys interest. The policy on Related Party and Material Related Party is put up on the website of the Company viz. www.pragbosimi.com

14) 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.

15) DIRECTORS AND KEY MANAGERIAL PERSONS (KMP):

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Devang Vyas (DIN 00096459) retires by rotation as Non-Executive Director at the ensuing Annual General Meeting and being eligible, offers herself for the re-appointment. The Board recommends his re-appointment.

DETAILS OF DIRECTORS / KMP APPOINTED AND RESIGNED DURING THE YEAR

Name Designation Date of Appointment Date of Resignation
1 Mr. Puru Gupta Chairman & Nominee Director 13.02.2019 02.09.2020
2. Mr. Oinam Saran Singh Chairman & Nominee Director 02.09.2020 15.03.2021
3. Mr. Adil Khan Chairman & Nominee Director 15.03.2021
4. Mr. Hemant B. Vyas Managing Director 29.06.1993 01.01.2021 (Deceased)

16) 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.

17) BOARD MEETINGS

The details of the Board Meetings and other Committee Meetings held during the financial year 2020-21 are given in the separate section of Corporate Governance Report.

18) 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.

19) 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 vis- a-vis the Company.

20) MATERIAL CHANGES AND COMMITMENTS

The company has requested for temporary disconnection of power and waiver of Fixed charges in April 2020 due to sudden shut down of operation resulting from the outbreak of Covid19 and subsequent Lockdown. However it was only on 16-06-2020 that our line was temporarily disconnected. Our line was finally disconnected permanently on 30-06-2021 for nonpayment of dues of approx Rs 80 Lacs inspite of our request to kindly refrain from such permanent disconnection until our long pending claims to the tune of approximately 800 Lakhs against APDCL are settled.

21) DIRECTORS RESPONSIBILTY STATEMENT:

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, 2021 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;

22) 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.

23) 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, 2021.

24) 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 of M/s 3A Capital Services Limited. NCLT has ordered clarification from ICICI and Standard Chartered Bank about the history of the matter.

25) 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 30th June 2021 in this regard are annexed hereto and forms a part of the Report.

26) 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.

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

The particulars as required under the provisions of Section134(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 exchange earnings and outgo etc. are furnished in Annexure III which forms part of this Report.

28) 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".

29) 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.

30) 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 IV to this report.

31) 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 2021 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.

32) 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 & Associates, 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 2020-21 forms part to this report annexed as ANNEXURE V. 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.

33) INTERNAL AUDITOR:

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

34) 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.

35) 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.

36) GREEN INITIATIVES

In line with the ‘Green initiative, the Company has affected electronic delivery of the Annual Report 2020-21, 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. It can also be assessed at http://pragbosimi.com/admin_pbsl/uploads/ products/image/phpA6ePKu.pdf

37) REPORTING OF FRAUDS

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

38) 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.

39) NON-COMPLIANCE

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

40) 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, 2021.

41) COMPLIANCE CERTIFICATE

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

42) 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.

43) 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
Raktim Kumar Das Rohit P. Doshi
Date:11th August, 2021 Whole Time Director Independent Director
Place: MUMBAI Din no.: 05115126 Din No. 00424996