Prima Agro Ltd Management Discussions

About the Company

Prima Agro Limited was incorporated on 20th July 1987 as a private Limited Company under the name of Swati Roller Flour Mills Private Limited. Further on, 23rd June 1992, the legal structure of the Company was changed to public limited company and subsequently the name of the Company was changed to Prima Agro Products Limited. The Company went public in 1993 and its shares are listed on Bombay Stock Exchange Limited (BSE). Later on, 16th November 2000, the name of the Company was change to its present name.

The Company is engaged in manufacturing of ready mixed compound cattle feed in pellet form. It also does contract basis manufacturing as per formulae, specifications, instruction as to the quantity of raw material and to the quality of the finished products given by the customers. The Company caters only to the domestic market. Your Company is now operating on contract manufacturing for KSE Ltd.

The Animal Feed Division has the following product range:

? Cattle Feed Pellets in 70 kgs

? Cattle Feed Pellets in 50 kgs

The manufacturing units have capacity to produce animal feeds with an annual production capacity of 180,000 tons of cattle feed. As informed, the current utilization stood at 60%. Your Company controls its activities from its corporate and registered office located at Kochi, Kerala. It also has one manufacturing units located Thiruvananthapuram, Kerala

Supply Information: The Company procures 100.00% of its raw material purchases from the domestic market. Major raw materials are maize, De Oiled Cake (DOC), de-oiled rice bran, rice polish, wheat bran, maize bran etc.

Research & Development

Specific areas in which R&D carried out by the Company are - quality up-gradation, productivity enhancement and quality control management. As a result, Company derived benefits in capacity utilization and increase in production.

Future Plan

i) Your Company is working on increasing its production capacity in Edayar unit by 50 Tons per day. Also, it is looking for extra warehousing space due to space constraints at Kochuvelli, Trivandrum unit, which is operational at 50% of its total annual capacity of 600000 tons.

ii) Your Company also considering installation of 250 Kwp Roof mounted Solar Plant to save Electricity Bill.

The required capex would be funded by internal accruals and Bank borrowings.

Highlights of the Companys Affairs:

The Companys performance in the Financial Year under review had impacted adversely due to sluggish market conditions and subdued margins as compared to the previous year. The major highlights of the Companys Standalone performance for the financial year 2023-24 are as under:

Financial Highlights (Statement of Profit and Loss)

(Note: Net Profit for the F Y 2023-24 -Rs.7.19 Million is after paying Preference Dividend of Rs.24.00 Millions. Net profit before Preference Dividend is Rs.31.19 Millions)

Development and implementation of a Risk Management Policy

The Board of Directors has adopted a Risk Management Policy which sets out the framework for the management of risks faced by the Company in the conduct of its business to ensure that all business risks are identified, managed and monitored.

Internal Control System and their Adequacy

Your Company is having adequate internal financial controls with reference to the Financial Statements. Your Company has appointed M/s G. Joseph and Associates as the Internal Auditor for the financial year 2023-24. The Company has a proper and adequate internal control system to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly. The internal control is exercised through documented policies, guidelines and procedures. This is periodically reviewed by the audit committee to ensure effectiveness of the internal control system. The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of persons.

Human Resources / Industrial Relations

The Companys HR philosophy is to establish and build a high performing organization, where each individual is motivated to perform to the fullest capacity to contribute to developing and achieving individual excellence and departmental objectives and continuously improve performance to realize the full potential of our personnel. The Company is giving direct employment to about 117 employees as per the payroll as on 31st March 2024 out of which 48 are permanent staff and 69 are laborers.

Industrial Relations

The Company maintained healthy, cordial and harmonious industrial relations at all levels. Despite severe competition, the enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry. It has taken various steps to improve productivity across organization.

Your Company continued to receive co-operation and unstinted support from the distributors, retailers, stockiest, suppliers and others associated with the Company as its trading partners. The Directors wish to place on record their appreciation for the same and your Company will continue in its endeavor to build and nurture strong links with trade, based on mutuality, respect and co-operation with each other and consistent with consumer interest.