Prima Industries Ltd Directors Report.

To

The Members of Prima Industries Limited

Your Directors have pleasure in presenting the 26th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the financial year ended 31st March 2020.

1. Financial Highlights (Standalone)

(Figures in Million)

Particulars For the year ended March 31st 2020 For the year ended March 31st 2019
Revenue from Operations 170.55 90.73
Other Income 4.79 0.57
Total Income 175.34 91.30
Less: Depreciation and amortization expense 7.29 7.17
Less: Other Expenses 142.09 62.47
Profit before Tax 25.96 21.67
Less: Tax expense 0.03 0.69
Net Profit for the period from continuing operations 25.92 22.36
Other Comprehensive Income -4.52 1.62
Total Comprehensive Income for the period 21.40 23.98
Paid up equity share capital(No. of shares) (Face value per share Rs.10 each) 10.79 10.79
Earnings per equity share from continuing operations (Basic) 2.40 2.07
Earnings per equity share from continuing operations (Diluted) 2.40 2.07

2. State of Companys Affairs and Future Outlook.

The Prima Group of Companies has been built on a solid foundation of trust that we have established with all stakeholders over the last Twenty-Six Years. The year gone by is representative of the value Prima Industries Limited continues to create for all its stakeholders. The overall performance of the Company has witnessed a healthy growth

in profits.The total turnover of the Company is Rs. 175.34 Million as against that of the previous year of Rs. 91.30 Million. The Net worth of the Company stands at Rs. 150.68 Million as against that of the previous year of Rs. 129.29 Million.

The International Market Analysis Research and Consulting Group (IMARC Group) in its latest Market Evaluation states that the Indian animal feed market was worth INR 817 Billion in 2018. The market is further projected to reach INR 1,683 Billion by 2024, growing at a CAGR of 12.7% during 2019-2024. India currently represents one of the fastest growing animal feed markets in the world. The increasing demand for animal protein and dairy products has resulted in a growing livestock population in India, which in turn has increased the demand for animal feed. Modern animal feed products are manufactured by carefully selecting and blending ingredients to impart highly nutritional diets that both increase the quality of its end products and at the same time maintain the health of the animal.

The Animal Feed Division of Prima Industries Limited functions towards backward integration as major portion of de-oiled cake produced in its Refinery would be consumed for its Animal Feed Unit. Hygienically prepared and packed Cattle Feed in pellets form is being produced in this plant with modern technology and skill. This plant has a capacity of 250MT production per day. This unit, as presently structured, is poised to produce a variety of Animal Feeds. The Company has installed the most modern plant with computerized controls. By adopting sophisticated techniques and evolving recipes with appropriate ingredients to meet the nutritional and energy requirements of cattle, poultry and goats, Prima has been able to supply cattle feeds of high quality to the domestic market.

The Solvent Extraction Division is a complex unit, which can process all types of oil cakes and other oil-bearing materials such as rice bran and oil seeds. This unique adaptability enables the unit to avail of the advantages of seasonal variations in the prices of various raw materials.

The future prospect of the Company remains robust and will continue to deliver most satisfied business to the customers. Our government is also taking initiatives to improve the economic condition of the country by bringing in new opportunities for employment and business. No wonder, our economy is growing at a good pace. And as such we as a responsible Company, will continue to contribute to the economic and Nation good.

3. Details of change in nature of business

There has been no change in the nature of business of the Company during the year under report.

4. Changes in Share Capital

There were no changes in the share Capital during the year. Also report that:

a. The Company has not bought back any of its securities during the year under review.

b. The Company has not issued any Sweat Equity Shares during the year under review.

c. The Company has not issued any Bonus Shares during the year under review.

d. The Company has not provided any Stock Option Scheme to the employees.

e. The Company has not issued any Equity shares with Differential Rights.

f. The Company has extended the redemption period of Cumulative redeemable Preference shares allotted on 27th March, 2013 for a period of 13 (Thirteen) years from the date of allotment at the meeting of board of directors dated 31.01.2017 after obtaining written consent from the Preference shareholder, holding 100 % Preference shares of the Company.

5. Capital Expenditure

Your Company had incurred an amount of 15,08,612.00 spend on Capital Expenditure and Additions to Fixed Assets during the FY 2019-20 as detailed below.

Item Amount in Rs.
Building 13,00,360.00
Plant &Equipment 26,059.00
Office Equipment 1,82,193.00
Total 15,08,612.00

6. Dividend

With a view to conserve the resources of the Company the Directors are not recommending any dividend for the year under review

7. Transfer to Investor Education and Protection Fund

During the year under Report, the Company has;

a. no unpaid dividends,

b. not issued debentures and

c. not accepted fixed deposits

So there is no need for transferring any amount to Investor Education and Protection Fund during the said period.

8. Amounts Transferred to Reserves.

Your Directors do not propose to transfer any amount to the reserves.

9. Board Meetings

Four Board Meetings were held during the year 2019-20 and the gap between two meetings did not exceed120 days. The detail of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.

10. Directors Responsibility Statement

Your directors state that:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2020, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and 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, 2020 and of the profit /loss of the Company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

f) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

11. Corporate Governance

The Company is committed to maintaining the highest standards of corporate governance and has put in place an effective corporate governance system. In terms of Regulation 34 of the Securities Exchange Board of India (Listing Obligations and

Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance along with Compliance Certificate issued by Statutory Auditors of the Company is attached to the Annual Report and forms integral part of this Report.

12. Directors and Key Managerial Personnel

The Board of Prima Industries Limited comprises of 6 directors; One Chairman cum Managing Director, One Whole Time Director, One Non-Executive Director, Three Independent Non-Executive Directors.

The Board of Directors, in its meeting held on 13thNovember 2019 appointed Mrs. Sruti Jindal as the Additional and Independent Non-Executive Director subject to approval of the shareholders of the Company who holds office up to the date of the forthcoming Annual General Meeting and is eligible for appointment. Based on the recommendation of the Nomination and Remuneration Committee, the Board recommends for the approval of the Members through an Ordinary Resolution in the 26thAGM of your Company, the re-appointment of Mrs. Sruti Jindal as the Independent Non-Executive Director of the Company for a term of five consecutive years from 13thNovember 2019.

13. Corporate Social Responsibility (CSR)

Even though the CSR provisions are not applicable as per Section 135 of the Companies Act, 2013, the Company had voluntarily constituted a sub-committee of the Board called CSR Committee considering the sustainable development by delivering economic, social and environmental benefits for all stakeholders. The detail of the CSR meetings and the attendance of the Directors are provided in the Corporate Governance Report.

14. Statutory Auditors

Pursuant to the resolution passed by the members of the Company at its 23rdAnnual General Meeting held on 18thSeptember,2017 in respect of the appointment of M/s. J.Krishnan& Associates, Chartered Accountant, (Firm Registration No. 001523S) till the conclusion of the 28thAnnual General Meeting of the Company, your Board proposed a resolution in the AGM Notice for ratifying the appointment of M/s. J.Krishnan& Associates, Chartered Accountant, (Firm Registration No. 001523S) as the Statutory Auditors of the Company, to hold office from the conclusion of the 26thAnnual General Meeting till the conclusion of the 27thAnnual General Meeting of the Company.

15. Statutory Audit Report.

M/s. J.Krishnan& Associates, Statutory Auditors have submitted an unqualified Audit Report for the Financial Year 2019-20 except a mentioning about few related party transactions in the form of loans which are well within the limit specified in section 185 of the Companies Act, 2013. The comments/observations of Auditors are explained in the Notes to the Accounts, forming part of the Balance Sheet as at 31st March, 2020 which are self-explanatory and, therefore do not call for any further comment under Section 134(5) of the Companies Act, 2013.

16. Cost Auditors.

Your Company does not qualify for the eligibility norms of the Section 148 of the Companies Act, 2013 read with Companies (Cost Records and audit) Rules, 2014 regarding the appointment of Cost Auditor for conducting cost audit. Accordingly, Cost Audit was not conducted for the Financial Year 2019-20. However, the company is maintaining adequate cost records as stated under the said rules.

17. Secretarial Auditors

Pursuant to the resolution passed by the Board of Directors in its meeting held on 29thJune 2020 had appointed Mr. CS N Balasubramanian, Partner, M/s. BVR Associates, Company Secretaries (ACS/FCS No.F6439, CP. No.4996) to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2019-20.

18. Secretarial Audit Report and Secretarial Standards

The Report given by the Secretarial Auditors is annexed as Annexure - I and forms integral part of this Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report.

However they pointed out that;

(i) the Company being a Public listed company is required to appoint Internal Auditor as per Section 138 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The Company is in the process of complying with the provisions of the Act.

(ii) it is noted that dematerialization of promoter shareholding is less than 100% i.e. 98.24% of the total promoter shareholding has been dematerialized and the rest 1.76% is in the process of dematerialization and the company is in the process of such conversion.

During the year 2019-20, your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

19. Extract of Annual Return

The extract of annual return in Form MGT 9 as required under Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the website of the Company. The Annual Return is annexed as Annexure - II and forms integral part of this Report.

20. Particulars of Loan, Guarantees and Investments

During the year under Report, your company has not given directly or indirectly any loan to any person or other body corporate or has given any guarantee or provide security in connection with a loan to any other body corporate or person and has not acquired by way of subscription, purchase or otherwise, the securities of any other body corporate, exceeding sixty per cent of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more as prescribed under section 186 of the Companies Act, 2013.

21. Particulars of Contracts or Arrangement with Related Parties

The Related Party Transactions that were entered during the financial year under review were in the ordinary course of business. There were no materially significant Related Party Transactions entered into by the Company during the year under review other than reported in the accounts. The Company has a process in place to periodically review and monitor Related Party Transactions. All the related party transactions were in the ordinary course of business and at arms length as prescribed under section 188(1) of the Companies Act, 2013. The Audit Committee has approved all related party transactions for the FY 2019-20 and estimated transactions for FY 2020-2021. There were no material transactions with related parties during the year other than as shown in the Financial Statements.

22. Subsidiary/Associate/Joint Venture Companies

Your Company has no subsidiaries, joint ventures or associate companies.

23. Deposits

Your Company has not accepted any deposit from public within the meaning of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder.

24. Risk management

The Board of Directors had constituted Risk Management Committee to identify elements of risk in different areas of operations and to develop policy for actions associated to mitigate the risks. The Committee on timely basis informs the Board of Directors about risk assessment and minimization procedures which in the opinion of the Committee may threaten the existence of the Company, if any. The details of Risk Management Committee and its frequency of meetings are included in the Corporate Governance Report.

25. Significant and Material orders passed by the Regulators/Courts/ Tribunals

No significant or material orders were passed by the Regulators or Courts or Tribunals which impacts the going concern status and Companys operations in future.

26. Material changes and commitments

No material changes and commitments, affecting the financial position of the Company, have occurred between the end of the financial year of the Company and the date of this Report.

27. Internal Control Systems and their Adequacy

The Directors had laid down internal financial controls to be followed by your Company and such policies and procedures adopted by your Company for ensuring the orderly and efficient conduct of its business, including adherence to your Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.

28. Audit Committee

The present Audit Committee of your Company is constituted with Mrs. Swati Gupta, Mrs. Vanshika Rathi& Miss. Vedika Agarwala. During the year, all recommendations of the Audit Committee were accepted by the Board of Directors. Particulars regarding the Audit Committee are provided under the Section ‘Board Committees in the Report on Corporate Governance.

29. Declaration and Meeting of Independent Directors

The Company has received declarations from all the Independent Directors of the

Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013. A separate meeting of Independent Directors was held on 8thMay, 2019 and 20thFebruary, 2020in which all the Independent Directors were present and reviewed the performance of the Board of Directors of the Company and its management.

30. Familiarization Program for Independent Directors

The Company proactively keep its Independent Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the Industry.

31. Evaluation of Boards Performance

The overall effectiveness of the Board shall be measured on the basis of the ratings obtained by each Director and accordingly the Board shall decide the Appointments, Reappointments and Removal of the non-performing Directors of the Company. The Board review the various strategies of the Company and accordingly set the performance objectives for directors, consistent with the varying nature and requirements of Companys business. The Board as a whole shall discuss and analyze its own performance during the year together with suggestions for improvement thereon, pursuant to the performance objectives.

32. Managerial Remuneration

Your Company does not have any employee in respect of whom information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. None of the employees employed throughout the financial year and in receipt of remuneration of Rs.60 lacs or more, employees employed for part of the year and in receipt of 5 lac or more per month, pursuant to Rule 5(2) The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The statement of Disclosure of Remuneration under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (“Rules”), forms part of the Corporate Governance Report.

33. Disclosure on Establishment of aVigil Mechanism

In terms of the provisions of Section 177(9) & (10) of the Companies Act, 2013 and pursuant to the Regulation 22 of SEBI (LODR) Regulations 2015, a Vigil Mechanism has been established by the Company for directors and employees to report genuine concerns. This shall provide for adequate safeguards against victimization of directors

or employees or any other person who avail the mechanism and also provide for direct access to the chairperson of the audit committee in appropriate or exceptional cases.

34. Fraud Reporting reported by Auditors under Section 143

There were no cases of fraud reported to the Audit Committee / Board in the company till date.

35. Provision for safeguard of women

The Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder are strictly complied with. Your Company believes in providing a safe and harassment free workplace for every individual working in the company premises through various interventions and practices. The Company endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. In this light, the company has framed a well-defined policy on Prevention of Sexual Harassment for an employee. The Company did not receive any Complaint during the year 2019-20.

36. Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Section 134(3) (m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 for the financial year ended 2019-20is enclosed as Annexure III to the Boards Report.

37. Human Resources/Industrial Relations

Your Company considers people as its biggest assets and ‘Believing in People is at the heart of its human resource strategy. 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 40 employees.

38. 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.

39. Appreciation

Your Directors express their appreciation and gratitude to all the customers, clients, vendors, investors, bankers, financial institutions, Government as well as NonGovernment agencies and other business associates for their continued support and participation in the Company. It is our strong belief that caring for our business constituents has ensured our success in the past and will do so in future.The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders. The Board also places on record its appreciation for the contribution and support extended by all employees of Prima Industries Limited.

Place: Cochin
Date :13.08.2020 For and on behalf of the Board of Directors
Sd/-
S K Gupta
Chairman & Managing Director
(DIN:00248760)