Prism Johnson Ltd Directors Report.

To the Shareholders,

The Directors present the Twenty-ninth Annual Report together with the audited Statement of Accounts of the Company for the year ended March 31, 2021.

FINANCIAL RESULTS Rs.STANDALONERs.

Particulars 2020-21 2019-20
Revenue from operations 5,035.18 5,578.58
Other income 36.20 27.00
Total income 5,071.38 5,065.58
Expenses 4,862.82 5,502.00
Profit before Exceptional items 208.56 103.58
& tax
Tax expenses 3.83 68.00
Exceptional items (4.78) (10.32)
Profit for the year 199.95 25.26
Other Comprehensive Income/ (2.56) (14.44)
(Loss) - net of tax
Surplus - opening balance 397.13 350.74
Amount available for appropriation 594.52 361.56
Dividend & Dividend Distribution - 60.68
Tax
Transfer from Debenture - 96.25
Redemption Reserve
Surplus - closing balance 594.52 397.13

RESERVES

During the financial year, there was no amount proposed to be transferred to the Reserves.

DIVIDEND

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

The Policy is uploaded on the Companys website at www. prismjohnson.in/investors/disclosures-under-SEBI-LODR-regulations/policies.

The Board of Directors, after considering the overall circumstances and keeping in view the Companys Dividend Distribution Policy, has decided that it would be prudent not to recommend any Dividend for the year under review.

OPERATIONS

The Covid-19 pandemic continues to cast a dark shadow over the whole world and the Board expresses deep gratitude to all those front-line workers who worked tirelessly to help keep others safe and economies moving forward. The pandemic had a significant impact due to strict lockdowns at the beginning of the year but business returned to normalcy in the second half. Despite the inevitable and widespread disruption to the Companys businesses, the Company responded with commendable resilience and ingenuity, delivering an encouraging set of results in very challenging circumstances. As economic activity picked up, the Company experienced demand recovery and strong volume growth. The Company generated turnover of Rs. 5,035.18 Crores, profit before tax of Rs. 203.78 Crores and profit after tax of

Rs. 199.95 Crores during the year ended March 31, 2021 as against turnover of Rs. 5,578.58 Crores, profit before tax of Rs. 93.26 Crores and profit after tax of Rs. 25.26 Crores during the year ended March 31, 2020. The consolidated profit after tax for the year ended March 31, 2021 of the Company and its subsidiary/joint venture companies amounted to Rs. 140.34 Crores as against loss after tax of Rs. 11.95 Crores for the previous year ended March 31, 2020.

FIXED DEPOSITS

During the year, the Company did not accept any public deposits under Chapter V of the Companies Act, 2013 (‘the Act).

FINANCE

The Company has repaid/prepaid loans of Rs. 620.56 Crores and tied-up fresh loans of Rs. 574.91 Crores during the year under review to finance, inter alia, its repayment of debts, ongoing long term working capital and capital expenditure. The loans were used for the purpose they were sanctioned by the respective banks/financial institutions.

During the year ended March 31, 2021, the Company raised

Rs. 125 Crores by way of privately placed Unsecured Redeemable Non-convertible Debentures (‘NCDs), to finance, inter alia, its refinancing of debt, long term working capital and general corporate purpose detailed as under :

Coupon Rate Date of Allotment Series No. of NCDs Total Amount Rs. Crores Tenor Maturity Date
9.75% Unsecured NCDs 21.08.2020 - 750 75.00 3 years 21.08.2023
Tranche - XVII
10.25% 12.06.2020 A 350 35.00 1 year 25.06.2021
Unsecured NCDs B 150 15.00 1 year 30.12.2021
Tranche - XVI

The aforesaid debentures are listed on BSE Limited. The proceeds of the NCDs issue have been fully utilised for the purpose of the issue.

During the year under review, NCDs aggregating Rs. 603.10 Crores were redeemed in accordance with the terms of the issue.

SCPL Tranche – II (Linked to MIBOR (+) 4.75 % subject to a minimum of 10.64% and a maximum of 10.65 %) Unsecured, Rated, Unlisted, Redeemable, Taxable, Non-convertible Debentures of the face value of

Rs. 10,00,000/- each aggregating up to Rs. 50 Crores issued by erstwhile Silica Ceramica Private Limited (‘SCPL) have been vested in the Company pursuant to the amalgamation with the Company in accordance with the Order dated April 28, 2021 passed by the National Company Law Tribunal, Hyderabad Bench.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the Company has transferred a sum of Rs. 0.08 Crores to the Investor Education and Protection Fund in compliance with provisions of the Act, which represents unclaimed/unpaid dividend, unclaimed fixed deposits and unclaimed interest on the fixed deposits.

Composite Scheme of Arrangement and Amalgamation

The Board of Directors, at its meeting held on October 23, 2019 and the shareholders, secured and unsecured creditors of the Company have, vide special resolution passed by them respectively through Postal Ballot dated November 27, 2020, considered and approved a Composite Scheme of Arrangement and Amalgamation as under :

a. Demerger of retail/trading business undertakings of TBK Rangoli Tile Bath Kitchen Private Limited, TBK Venkataramiah Tile Bath Kitchen Private Limited and TBK Samiyaz Tile Bath Kitchen Private Limited, into its holding company H. & R. Johnson (India) TBK Limited (‘HRJ TBK) and subsequent demerger of retail/trading business undertaking of HRJ TBK into the Company.

b. Subsequent amalgamation of Milano Bathroom Fittings Private Limited (‘Milano) and Silica Ceramica Private Limited (‘Silica), into the Company.

The Composite Scheme of Arrangement and Amalgamation has received the approval of the NCLT, Hyderabad vide order dated April 28, 2021. Pursuant thereto :

l Milano and Silica have ceased to be subsidiaries of the Company without being wound up and Equity Shares and Preference Shares held by the Company in each of Milano and Silica got cancelled and stand extinguished. All assets and liabilities of Milano and Silica were transferred to the Company.

l Investments of HRJ TBK in its subsidiary companies

- TBK Rangoli Tile Bath Kitchen Private Limited (‘TBK Rangoli), TBK Venkataramiah Tile Bath Kitchen Private Limited (‘TBK Venkat), TBK Samiyaz Tile Bath Kitchen Private Limited (‘TBK Samiyaz) and TBK Prathap Tile Bath Kitchen Private Limited (‘TBK Prathap) became the investments of the Company. Hence, TBK Rangoli, TBK Venkat and TBK Samiyaz, became the wholly-owned subsidiary companies of the Company and TBK Prathap became the subsidiary of the Company.

l TBK Deepgiri Tile Bath Kitchen Private Limited and TBK Florance Ceramics Private Limited, which were earlier the joint ventures of HRJ TBK, have become the joint ventures of the Company.

The financial statements include effects of this Arrangement and Amalgamation.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

The Company has seven subsidiaries, nine joint ventures and two associate companies as on March 31, 2021. The performance of the subsidiaries has been adversely impacted due to the ongoing Covid-19 pandemic. The joint ventures have performed satisfactorily during the year under review. A statement providing details of performance and salient features of the financial statements of subsidiary/associate/ joint venture companies, as per Section 129(3) of the Act, is provided in AOC-1 attached to the consolidated financial statement and therefore not repeated in this Report to avoid duplication.

The highlights of performance of subsidiaries, associates and joint venture companies during the financial year is as under :

Raheja QBE General Insurance Company Limited (‘RQBE) : The Company during the year under review approved the divestment of its entire holding of 51% of the paid-up equity share capital in RQBE, a material subsidiary, to Paytm Insuretech Private Limited (erstwhile QORQL Private Limited) for an aggregate consideration of Rs. 289.68 Crores, subject to receipt of requisite approvals. The consideration to be received by the Company for the divestment is subject to certain adjustments which may be carried out between the date of execution of definitive agreement and closure of the sale, and other customary terms for a sale of such nature. Pending the requisite approvals and to support the expansion plans of RQBE, the Company has acquired 2,94,41,709 equity shares of Rs. 10/- each aggregating Rs. 76.55 Crores by subscribing to right issues. The Joint Venture partner also subscribed to the rights issue and hence the shareholding percentage of the Company in RQBE remains unchanged.

Antique Marbonite Private Limited, Joint Venture of the Company, decided to permanently close one of its production lines having capacity equivalent to 3 mn m2 per annum with effect from November 2, 2020, due to an aging unviable plant. The Company had already made cost effective arrangements for transition to outsourced vendor(s) so that there is full continuity with profitability and no impact on sales.

Sanskar Ceramics Private Limited (‘Sanskar) : The Company acquired additional 35% equity stake for

Rs. 12.95 Crores in Sanskar, during the year under review.

Consequent to aforesaid acquisition, Sanskar became a Joint Venture of the Company effective from July 6, 2020. This arrangement is expected to increase the Companys footprint in Morbi for supply of wall and vitrified tiles.

Prism Power and Infrastructure Private Limited (‘PPIPL), an associate in which the Company held 49% equity stake, had made an application for striking-oRs. of its name from the Register of Companies as per applicable provisions of the Act. The Registrar of Companies, Hyderabad vide its order dated April 9, 2021 has struck off the name from the Register of Companies and PPIPL stands dissolved from the said date.

CSE Solar Parks Satna Private Limited (‘CSE Solar) : The Company has acquired 44,80,000 equity shares of Rs. 10/- each at par aggregating to Rs. 4.48 Crores in CSE Solar, associate of the Company. Post the acquisition, the shareholding of the Company in CSE Solar has increased from 27% to 27.95%.

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

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statements of the Company, prepared in accordance with the Act, and the applicable Indian Accounting Standards, alongwith all relevant documents and the Auditors Report form part of this Annual Report.

The separate audited financial statements in respect of each subsidiary company is also available on the website of the Company at www.prismjohnson.in/investors/subsidiary- annual-accounts.

SHARE CAPITAL

Pursuant to the approval of the Composite Scheme of Arrangement and Amalgamation by the NCLT, Hyderabad vide order dated April 28, 2021, the authorised capital of the Company increased from Rs. 525,00,00,000 (Rupees Five Hundred Twenty-five Crores only) divided into 52,50,00,000 Equity shares of Rs. 10/- (Rupees Ten only) each to

Rs. 651,21,50,000 (Rupees Six Hundred Fifty One Crores Twenty-one Lakhs Fifty Thousand only) divided into 65,12,15,000 Equity shares of Rs. 10/- (Rupees Ten only) each.

The paid-up equity share capital remains unchanged at

Rs. 503.36 Crores as on March 31, 2021. During the year under review, the Company has not issued shares with differential voting rights neither granted any stock options nor sweat equity.

DIRECTORS

The Board of Directors has, at its Meeting held on May 19, 2021, subject to requisite approvals and based on the performance evaluation and recommendations of the Nomination and Remuneration Committee, re-appointed Mr. Vivek K. Agnihotri as Executive Director & CEO (Cement) for a period of three years with effect from August 17, 2021, upon terms and conditions mentioned in the Notice of the ensuing Annual General Meeting read with the Explanatory Statement thereto. The Board recommends passing of the special resolution at Item No. 4 of the Notice.

Pursuant to Section 152 of the Act, Mr. Vivek Agnihotri and Mr. Atul Desai retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, have offered themselves for re-appointment. The Company has received declarations from Ms. Ameeta A. Parpia, Mr. Shobhan M. Thakore and Dr. Raveendra Chittoor,

Independent Directors of the Company, confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Act, and under the SEBI LODR. The terms and conditions of appointment of the Independent Directors are placed on the website of the Company www.prismjohnson.in/investors/disclosures-under-SEBI-LODR-regulations/policies.

The details of familiarisation programme for Independent Directors have been disclosed in the Report on Corporate Governance and on the website of the Company www. prismjohnson.in/investors/disclosures-under-SEBI-LODR-regulations/policies.

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

Meetings

The Board of Directors met seven times during the year ended March 31, 2021. Additionally, several Committee Meetings were held including the Audit Committee, which met ten times during the year. Details of the meetings are included in the Report on Corporate Governance.

Evaluation

Pursuant to the provisions of the Act, and the SEBI LODR, the Board has carried out an annual performance evaluation during the year under review. Details of the same are given in the Report on Corporate Governance.

Remuneration Policy

The policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Director and also remuneration for Key Managerial Personnel, Senior Management and other employees forms part of the Report on Corporate Governance and is also available on the website of the Company 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 year under review.

COMPOSITION OF AUDIT COMMITTEE

The Board has constituted an Audit Committee, details of the same are stated in the Report on Corporate Governance.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a vigil mechanism by adopting a Whistle Blower Policy to report concerns about illegal or unethical practices, if any. The details of the Policy are explained in the Report on Corporate Governance and are also available on the website of the 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 healthy working environment that enables employees to work without fear of prejudice, gender bias and sexual harassment. The Company has also framed a policy on Prevention of Sexual Harassment of Women at workplace. As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘POSH Act) and Rules made thereunder, the Company has constituted an Internal Committee to inquire into complaints of sexual harassment and recommend appropriate action. The Company has been conducting induction/refresher programmes in the organisation on a continuous basis to build awareness in this area.

During the financial year 2020-21, two complaints were received with allegations of sexual harassment, of which one was investigated and resolved as per the provisions of the POSH Act. The second complaint is under investigation.

RISK MANAGEMENT

The Company has constituted a Risk Management Committee. The details of the Committee and 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 fittings and Ready Mixed Concrete. Several of the product lines have their own unique business and operating models. These businesses operate in an evolving and challenging business environment. The Risk Management Policy framed by the Company details the objectives and principles of risk management along with an overview of the risk management process, procedures and related roles and responsibilities. The risk management process includes identifying types of risks and its assessment, risk handling and monitoring, reporting and controlling/ mitigation.

The Committee, on timely basis, informed members of the Audit Committee and the Board of Directors about risk assessment and minimisation procedures and in their opinion there was no risk that may threaten the existence of the Company.

CORPORATE SOCIAL RESPONSIBILITY Rs.‘CSRRs.

The Company has adopted a CSR Policy based on which all CSR activities are initiated and implemented. The Company Policy is focused on CSR initiatives in areas such as water, health and sanitation, energy conservation, pollution-free atmosphere, clean technologies and primary health care for the villagers in the vicinity of the plants. The Policy is available on the Companys website at www.prismjohnson.in/investors/disclosures-under-SEBI-LODR-regulations/policies.

During the financial year 2020-21, the Company has spent Rs. 3.48 Crores towards CSR activities.

Requisite disclosure including composition of the CSR Committee has been made in the prescribed form annexed herewith as Annexure ‘A.

BUSINESS RESPONSIBILITY REPORTING

A separate section on Business Responsibility Reporting forms part of this Annual Report 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 Section 186 of the Act, are given in the notes to Financial Statements.

RELATED PARTY TRANSACTIONS

All related party transactions are placed before the Audit Committee and the Board, wherever required, for prior approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. A statement giving details of all related party transactions entered into pursuant to the omnibus approval is placed before the Audit Committee for their review on a quarterly basis. The statement 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 the Board of Directors is available on the website of the Company at www.prismjohnson.in/investors/ disclosures-under-SEBI-LODR-regulations/policies. Details of the transactions entered during the year ended March 31, 2021, pursuant to sub-section (1) of Section 188 of the Act are given in the prescribed Form AOC-2 annexed herewith as Annexure ‘C. There was no material related party transaction made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. None of the Directors have any pecuniary relationships or transactions vis--vis the Company.

Attention of the members is drawn to the disclosure of related party transactions set out in Note 4.09 of the Standalone Financial Statements forming part of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Act, to the best of their knowledge and belief and according to the information and explanations obtained by them, the Directors confirm :

a. That in the preparation of the annual financial statements for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. That they have selected such accounting policies and applied them consistently and made judgements 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 March 31, 2021 and of the profit of the Company for the year ended on that date;

c. That proper and sufficient care has been taken 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. 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 financial controls were adequate and were operating effectively;

f. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

EMPLOYEE REMUNERATION

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are forming part of this report as Annexure ‘D.

The information required under Section 197 of the Act and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any shareholder interested in obtaining a copy of the statement may send an email to investor@prismjohnson.in.

CONSERVATIONOFENERGY,TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134 of the Act read with the Companies (Accounts) Rules, 2014, is given in Annexure ‘E forming part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review as stipulated under 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 a certificate from the Companys Auditors confirming compliance forms part of this Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEMS

The Company has established set of standards, processes and structure which enable it to implement adequate internal financial controls and ensure that the same are operating effectively. The internal financial control systems of the Company are commensurate with its size and the nature of its operations. The Company has well defined delegation of authority limits for approving revenue as well as capital expenditures. The Company uses an established ERP system to record day to day transactions for accounting and financial reporting.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work done by the Internal, Statutory, Cost and Secretarial Auditors and the reviews of the Management and the relevant Board Committees, including the Audit Committee, the Company believes that the internal financial controls were adequate and effective during the financial year 2020-21.

AUDITORS Statutory Auditors

The shareholders at the 26th Annual General Meeting appointed M/s. G. M. Kapadia & Co., Chartered Accountants,

Mumbai as the Companys Auditors upto conclusion of the 31st Annual General Meeting of the Company. The Auditors have confirmed their eligibility under Section 141 of the Act, and the Rules framed thereunder. As required under the SEBI LODR, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Report given by the Auditors on the financial statements of the Company is part of this Annual Report. There is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Cost Auditors

Pursuant to Section 148 of the Act, read with the Rules thereunder, as amended, the Company needs to maintain the cost records and such accounts and records are maintained for its businesses. The Board of Directors of the Company has, on the recommendation of the Audit Committee, at its meeting held on May 19, 2021, appointed M/s. D. C. Dave & Co., Cost Accountants as the Cost Auditors for the year ending March 31, 2022 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, Practising Company Secretary, Hyderabad to undertake the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Act, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. There was no qualification, reservation or adverse remarks given by Secretarial Auditor of the Company. The Report of the Secretarial Auditor in Form MR-3 is annexed herewith as Annexure ‘F.

Secretarial Audit of Material Unlisted Subsidiaries

For the financial year 2020-21, Raheja QBE General Insurance Company Limited (‘RQBE) is the material unlisted subsidiary of the Company. In terms of Regulation 24A of SEBI LODR read with Section 204 of the Act, Secretarial Audit of RQBE has been conducted for the year 2020-21 by Practising Company Secretary. The said Audit Report which does not contain any qualification, reservation or adverse remark or disclaimer has been annexed herewith as Annexure ‘G.

ANNUAL RETURN

The Annual Return of the Company has been placed on the website of the Company and can be accessed at www. prismjohnson.in/investors/annual-return.

GENERAL

1. No other material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of this report.

2. No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

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

4. The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act.

5. For the financial year ended on March 31, 2021, the Company has complied with provisions relating to the constitution of Internal Committee under the POSH Act.

ACKNOWLEDGEMENTS

The Directors thank the shareholders, various Central and State Government departments/agencies, banks and other business associates for their valuable services and continued support during the year under review. The Board also takes this opportunity to express its sincere appreciation of the contribution and dedicated work of all the employees of the Company.

Place : Mumbai

Dated : May 19, 2021

For and on behalf of the Board

SHOBHAN M. THAKORE

Chairman

(DIN : 00031788)