As on: Apr 20, 2025 05:41 AM
To,
The Members,
The Directors of "Prime Industries Limited" (PIL) have great pleasure in presenting the 32nd Annual Report of the company together with the audited statements of accounts for the financial year ended 31st March, 2024 along with report of the Statutory Auditors thereon.
1. Financial Highlights
The summary of financial results of the Company for the period ended 31st March, 2024 is as under:
(Rs. In Millions)
2. Change in nature of business
The Company has marked its strategic entry into the sector of capital goods and special products for priority sectors like Nuclear, Defense, Aerospace, Bio energy & Ethanol.
The Board of Directors of the Company in its meeting held on 25th January, 2024 and thereafter the members of the Company at the Extra Ordinary General Meeting of the Company held on 28th February, 2024 approved the alteration of Main object clause of Memorandum of the Association of the Company.
3. Future outlook
Our strategy is to be focused on managing the business of the Company in the sector of capital goods and special products for priority sectors like Nuclear, Defense, Aerospace, Bio energy & Ethanol and further strengthening the business model of the Company. Each of these business segments offer huge headroom for growth.
4. Brief description of the Company's working during the year.
During the year under review, your Company has registered gross operating & other income of Rs. 155.04 Millions as compared to Rs. 76.99 Millions in previous year, showing an increase of 101.38%. The Company earned a net profit of Rs. 108.42 Millions, against a net profit of Rs. 15.69 Millions in the previous year, showing an increase 591.01%.
5. Dividend.
Keeping in view the strategic transformations, the board recommends retaining the earnings in the Company; hence, the Board has not recommended any dividend on the equity share capital of the Company.
6. Transfer of Reserves.
No amount is being transferred to reserve & surplus in the current year.
7. Management Discussion and Analysis Report
The Management Discussion and Analysis Report for the year under review as required under Regulation 34 of SEBI (LODR) Regulations, 2015 is given as a separate statement forming part of the Annual Report as Annexure-A.
8. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.
Following are the material changes and commitments which are affecting the financial position of the Company that have occurred between the end of the financial year to which the Financial Statements relate and the date of the Report:
A. ALLOTMENT OF 17,25,000 CONVERTIBLE WARRANTS PURSUANT TO RECEIPT OF WARRANT SUBSCRIPTION PRICE:
Pursuant to the approval of the Board of Directors at its meeting held on February 23, 2024 and approval of the members of the Company at their Extra-Ordinary General Meeting held on March 23, 2024 for preferential issue of convertible warrants, further pursuant to In-principle approval granted by BSE Limited vide their letter dated April 30, 2024 and upon receipt of an amount aggregating to Rs. 9,05,62,500/- (Rupees Nine Crores Five Lakhs Sixty Two Thousand Five hundred only) at the rate of Rs. 52.50/- per warrant (being warrant subscription price equivalent to 25% of the issue price per warrant of Rs. 210/-) as warrant subscription price, the Board of Directors in its Board Meeting held on 14th May, 2024 has considered and approved the allotment of 17,25,000 (Seventeen Lakhs Twenty Five Thousand only) warrants on preferential basis at an issue price of Rs. 210/- per warrant (includes Face value of Rs. 5/-per warrant and Premium of Rs. 205/- per warrant) to the allottees from whom warrant subscription price equivalent to 25% of issue price i.e. 210/- per warrant was received by the Company.
9. Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future
During the year under review no significant and material orders have been passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.
10. Listing/Delisting with Stock Exchanges and Depository Services
Your Company's equity shares are listed on The BSE Limited and the Annual Listing Fees for the year 2024-25 has already been paid to it. Further, the Company's Equity Shares have been admitted to the depository mechanism of the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). As a result, the investors have an option to hold the shares of the Company in a dematerialized form in either of the two Depositories.
The Company is also listed on the Calcutta Stock Exchange (CSE) and it had applied to the Calcutta Stock Exchange Limited for delisting and the said application is still pending. Company is not filing any documents/information to Calcutta Stock Exchange Limited.
During the financial year 2023-24, BSE has granted following in-principle approvals to the Company for issue and allotment of Convertible warrants:
(a) BSE has granted In-principle approval to the Company vide their letter dated June 20, 2023 for issue of up to 53,50,000 (Fifty Three Lakhs Fifty Thousand) convertible warrants ("Warrants"), at a price of Rs. 13/- (Rupees Thirteen only) per warrant, aggregating up to Rs. 6,95,50,000/- (Rupees Six Crore Ninety Five Lakhs Fifty thousand Only) ("Total Issue Size"), with a right to the warrant holders to apply for and be allotted 1 (One) fully paid-up equity share of the Company of face value Rs. 5.00/- (Rupees Five only), each at a premium of Rs. 8/- (Rupees eight Only) per share for each Warrant within a period of 18 (Eighteen) months from the date of allotment of Warrants, to persons / entity ("Warrant Holder"/ "Proposed Allottees") belonging to Promoter and non-promoter group of the Company on a preferential basis ("Preferential Issue").
(b) BSE has granted In-principle approval to Company on 30.04.2024 for issue of upto 47,03,125 (Forty seven lakhs three thousand one hundred twenty five) convertible warrants ("Warrants"), at a price of Rs. 210/- (Rupees Two hundred ten only) per warrant, aggregating to upto Rs. 98,76,56,250/- (Rupees Ninety Eight Crore Seventy Six Lakh Fifty Six thousand two hundred fifty Only) ("Total Issue Size"), with a right to the warrant holders to apply for and be allotted 1 (One) fully paid-up equity share of the Company of face value Rs. 5.00/- (Rupees Five only), each at a premium of Rs. 205/- (Rupees Two Hundred Five Only) per share for each Warrant within a period of 18 (Eighteen) months from the date of allotment of Warrants, to persons / entity ("Warrant Holder"/ "Proposed Allottees") belonging to non-promoter group of the Company on a preferential basis ("Preferential Issue").
11. Adequacy of Internal Control
The Company's internal control system is proportional to its size and nature of operations. The Company has implemented well-defined processes, guidelines, and procedures, as well as suitable internal information systems, to enhance internal controls. The Company has designed and implemented internal financial controls for each business process in order to ensure strict adherence to laws and regulations. Built in checks and balances and control mechanisms guarantee that assets are safeguard, utilized with proper authorization and properly accounted for.
The Company's Audit Committee examines the internal control system and investigates the findings of external and internal auditors. The Audit function provides reasonable assurance that operations are effective and efficient, assets are safeguarded, financial records and reports are accurate, and applicable laws and regulations are observed.
12. Subsidiary/Joint Ventures/Associate Companies.
The Company did not have any Subsidiary, Joint Venture or Associate Company during the year under review.
13. Regulatory & Statutory Compliances
A crucial element in business and corporate management is compliance of applicable statutory provisions and adherence of a business to regulations and laws. Keeping that in view the Company has complied with all the guidelines, circular, notification and directions issued by MCA, SEBI, BSE, Income Tax Department etc. from time to time. The Company also places before the Board of Directors at regular intervals all such circulars and notifications to keep the Board informed and report on actions initiated on the same. The Company also complies with the provisions of the Companies Act, 2013 including the Secretarial Standards issued by ICSI, SEBI LODR Regulations, Income Tax Act 1961, and all other applicable statutory requirements.
14. Deposits.
The Company has not accepted any public deposits pursuant to the provisions of Section 73 to 76 of the Companies Act, 2013 and the rules made there under and as such, no amount on account of principal or interest on Pubic Deposits was outstanding on the date of the Balance Sheet.
15. Auditors.
(a) Statutory Auditors
In terms of Section 139 of the Act, M/s C.S. Arora & Associates, Chartered Accountants, were appointed as statutory auditors of the Company for a period of five years in the AGM held on 30.09.2019 from the conclusion of the Twenty Seventh Annual General Meeting until the conclusion of the Thirty Second Annual General Meeting.
There are No qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their Audit Report for the financial year 2023-24.
The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year 2023-24. Auditors' Report on the Accounts of the Company for the period under review are self- explanatory and no comments are required.
The Board of Directors in its meeting held on 29th August, 2024 has recommended the appointment of M/s Bhushan Aggarwal & Co., Chartered Accountant (FRN: 005362N), Ludhiana as Statutory Auditors of the Company to hold office from the conclusion of 32nd Annual General Meeting till the conclusion of 37th Annual General Meeting. In this regards, the Company has received a certificate from the said auditors to the effect that their appointment is in accordance with section 141 of the Companies Act, 2013.
(b) Secretarial Auditors and Secretarial Audit Report.
In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Bhambri & Associates, Company Secretary in practice, as Secretarial Auditors for conducting a Secretarial Audit of your Company for the financial year ended 31st March, 2024.
Due to personal reasons, M/s Bhambri & Associates, Company Secretary in practice, intimated to the company about their resignation from the post of Secretarial Auditors of the Company for the financial year 2023-24.
The Board thereafter in its meeting held on 27th June, 2024 approved the appointment of M/s Pooja M. Kohli & Associates, Company Secretary in Practice as Secretarial Auditor for conducting the Secretarial Audit for the financial year 2023-24 as per Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the Company had received the Secretarial Audit Report for the financial year 2023-24 of the Company as enclosed with this report.
(c) Internal Auditors.
Ms. Harwinder Kaur, Sr. Executive of the Company was appointed by the Board of Directors in its Board Meeting held on 30th May, 2024, as Internal Auditor of the Company to assist in internal audit with the audit processes and internal audit reviews for the Company for FY 2024-25.
(d) Cost Auditors and Maintaince of cost records
In terms of provision of Section 148 read with Rule 3 & 4 of Companies (Cost Records and Audit) Rules, 2014, the Company is not required to maintain its cost records and undertake its audit.
16. Auditors' Report.
M/s C. S. Arora & Associates, Chartered Accountants, Statutory Auditors of the Company, have audited the accounts of the Company for the year 2023-24 and their Report is annexed. Pursuant to Section 143(3)(i) of the Companies Act, 2013, the Statutory Auditors have also reported on the adequacy and operating effectiveness of the internal financial controls system over financial reporting, which has been enclosed as 'Annexure' to Independent Auditor's Report. Significant Audit observations, if any, and corrective actions taken by the Management are presented to the Audit Committee of the Board from time to time. There are no qualifications, reservations or adverse remarks or disclaimers made in the Auditor's Report.
17. Reporting of frauds by Auditors
During the year under review, the Statutory Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees.
18. Extract of the annual return.
Pursuant to the requirements under Section 92(3) and Section 134(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in prescribed Form MGT-9 is uploaded on the website of the Company and it can be accessed at https://www.primeindustrieslimited.com/investors.html
19. Conservation of energy, technology absorption and foreign exchange earnings and outgo.
Information with respect to Conservation of energy, technology, absorption, foreign exchange earnings and outgo pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is not applicable because there are no manufacturing activities in the Company.
20. Board of Directors and Key Managerial Personnel.
The Company's Board comprised seven Directors as on March 31, 2024, viz.
Details of KMP and changes as below:
Managing Director: - Mr. Rajinder Kumar Singhania is the Managing Director of the Company.
Chief Financial Officer: Mr. Rajesh Kumar Kakar is the Chief Financial Officer of the Company.
Company Secretary and Compliance Officer: -
- Ms. Alka Mishra (ACS 67565), Company Secretary and Compliance Officer of the Company has tendered her resignation w.e.f. 12.05.2023, due to personal reasons.
- Thereafter, pursuant to recommendation of Nomination and Remuneration Committee of the Company, the Board of Directors of the Company in it Meeting held on 23.05.2023 has appointed, Ms. Shruti Sood (ACS 71639) as Company Secretary and Compliance Officer of the Company.
- Thereafter due to pre-occupancy in other assignments, Ms. Shruti Sood (ACS 71639) has also resigned from the post of Company Secretary and Compliance Officer w.e.f. 18.12.2023 (after closure of business hours).
- Thereafter, pursuant to recommendation of Nomination and Remuneration Committee of the Company, the Board of Directors of the Company in it Meeting held on 25.01.2024 has appointed, Mr. Mohit Verma (ACS 67765) as Company Secretary and Compliance Officer of the Company.
(a) Statement on Declaration by Independent Directors.
The Company has received declaration from each independent director under Section 149(7) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), that they meet the criteria of independence laid down in the Companies Act, 2013 and Listing Regulations.
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and based on the Declarations received by the Company under Section 149(7) of the Companies Act, 2013 the following Non- Executive Directors are identified as Independent Directors of the Company as on 31.03.2024.
i) Mr. Ashwani Kumar
ii) Mr. Rajiv Kalra
iii) Mr. Deepak Chauhan
iv) Ms. Ritu Sarin
(b) Appointment / Re-appointment / Resignation / Retirement of Directors.
In order to ensure compliance with Section 152(6) of the Act, the Board has considered that:
Mr. Saket Agarwal (DIN: 00203084), Non-Executive and Non-Independent Director of the Company, being longest in office, shall retire at the ensuing AGM and being eligible, offers himself for re-appointment, for ensuring compliance with Section 152(6) of Act.
Relevant details, including brief profile of the Director seeking appointments at the ensuing Annual General Meeting, have been furnished in the Notice of the Annual General Meeting.
During the Financial Year 2023-24, following changes has been undertaken in the Board of Directors of the Company:
- Mrs. Parveen Singhania (DIN: 00112932), Women Director (Non-Executive and Non-Independent) of the
Company has resigned from the Board of Directors of the Company w.e.f. 11.08.2023 due to pre- occupations and personal reasons and her resignation have been approved by the Board in its Board Meeting held on 10th August, 2023. The Board of Directors of the Company appreciates the efforts of Mrs. Parveen Singhania (DIN: 00112932) and extending a hand of thanks for spending the good time with the Company.
- pursuant to recommendation of Nomination and Remuneration Committee of the Company, the Board of Directors of the Company in its Meeting held on 10.08.2023 has approved the appointment of Ms. Ritu Sarin (DIN: 02503754) as Additional Women Director (Non-Executive and Independent), which thereafter, further approved by the members of the Company in the 31st Annual General Meeting to designate Ms. Ritu Sarin (DIN: 02503754) as Women Director (Non-Executive and Independent) for the first term of five years w.e.f. 10th August, 2023 to 09th August, 2028, not being liable to retire by rotation.
- Mr. Anil Bhatia (DIN: 00254117), Non-Executive and Independent Director of the Company has resigned from the Board of Directors of the Company w.e.f. 11.08.2023 purely on account of personal reasons and other professional commitments and his resignation have been approved by the Board in its Board Meeting held on 10th August, 2023. The Board of Directors of the Company appreciates the efforts of Mr. Anil Bhatia (DIN: 00254117) and extending a hand of thanks for spending the good time with the Company.
- pursuant to recommendation of Nomination and Remuneration Committee of the Company, the Board of Directors of the Company in its Meeting held on 10.08.2023 has approved the appointment of Mr. Deepak Chauhan (DIN: 10263588), as Additional Non-Executive and Independent Director which thereafter, further approved by the members of the Company in the 31st Annual General Meeting to designate Mr. Deepak Chauhan (DIN: 10263588), as Non-Executive and Independent Director for the first term of five years w.e.f. 10th August, 2023 to 09th August, 2028, not being liable to retire by rotation.
- pursuant to recommendation of Nomination and Remuneration Committee of the Company, the Board of Directors of the Company in its Meeting held on 10.08.2023 has approved the appointment of Mr. Saket Agarwal (DIN: 00203084), as Additional Non-Executive and Non-Independent Director which thereafter, further approved by the members of the Company in the 31st Annual General Meeting to designate Mr. Saket Agarwal (DIN: 00203084), as Non-Executive and Non-Independent Director w.e.f. 10th August, 2023 , being liable to retire by rotation.
(c) Remuneration to Directors/Employees and related analysis.
During the year under review, no employee of the Company received salary in excess of the limits as prescribed under the Act. Accordingly, no particulars of employees are being given pursuant to Section 134 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The details pertaining to the ratio of the remuneration of each director to the median employee's remuneration and other prescribed details as required under section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed herewith and forms part of the Directors' Report.
(d) Key Managerial Personnel.
Mr. Rajinder Kumar Singhania, Managing Director Mr. Rajesh Kumar Kakar, Chief Financial Officer
Mr. Mohit Verma, Company Secretary and Compliance Officer (w.e.f. 25.01.2024)
21. Number of meetings of the Board of Directors and General Meetings.
The board meetings are convened by giving appropriate notice. The Board meets at least once a quarter to review the results and other items on the agenda, once a year for the Annual General Meeting. When necessary, additional meetings are held.
Regular meetings of the Board are held to discuss and decide on various business policies, strategies and other businesses. The Board met Seven (7) times during the FY 2023-24 viz. on 03.04.2023, 23.05.2023, 03.07.2023, 10.08.2023, 09.11.2023, 25.01.2024, 23.02.2024.
Extra Ordinary General Meeting: 01st May, 2023, 28th February, 2024 and 23rd March, 2024.
Annual General Meeting for financial year 2022-23: 25th September, 2023
22. Committees of Board of Directors of the Company.
The Company has 3 (three) Committees which have been established in compliance with the requirements of the relevant provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.
The Company has formed following Committees of the Board:
• Audit Committee.
To ensure the composition & independence of the Committee as per the Companies Act, 2013, the Audit Committee's composition and terms of reference are in compliance with provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations.
As on 31.03.2024, the Audit Committee is comprised of three Non- Executive Independent Directors viz. Mr. Rajiv Kalra as Chairman, Mr. Ashwani Kumar and Mr. Deepak Chauhan as members of the Audit Committee. All the Members of Audit Committee are financially literate and have accounting knowledge to interpret and understand the financial statements.
Mr. Mohit Verma, Company Secretary and Compliance officer of the Company as on 31st March, 2024 act as a Secretary to the Audit Committee.
The Audit Committee meetings were held at the Registered Office of the Company and the representatives of Statutory Auditors, Internal Auditor, CFO, executives from finance and secretarial departments and Managing Director and other departmental heads may attend the meeting whenever required. The Company Secretary of the Company acts as the secretary of the Committee. During the year Audit Committee members, met four (4) times on 23.05.2023, 10.08.2023, 09.11.2023 and 25.01.2024.
• Nomination and Remuneration Committee.
Committee is constituted in line with the provisions of Regulation 19 of SEBI Listing Regulations, read with Section 178 of the Act., The Nomination and Remuneration Committee comprises of Mr. Rajiv Kalra (Chairman), Mr. Deepak Chauhan and Mr. Harjeet Singh Arora, as on 31.03.2024.
Policy on Remuneration of Directors, Key Managerial Personnel & senior employees is annexed herewith and forms the part of Board Report. Policy is also available on the website of the Company and can be accessed at https://www.primeindustrieslimited.com/nomination%20&%20remuneration%20PIL.pdf
During the year Nomination and Remuneration committee members, met three (3) times on 23.05.2023, 10.08.2023 and 25.01.2024.
• Stakeholders Relationship Committee
The Stakeholders' Relationship Committee is constituted in line with the provisions of Regulation 20 of SEBI Listing Regulations read with section 178 of the Act. The Stakeholders' Relationship Committee of Board (SRC) comprises Mr. Harjeet Singh Arora (Chairman), Mr. Deepak Chauhan (Member) and Mr. Rajiv Kalra (Member), as on 31.03.2024. SRC monitors Redressal of complaints received from shareholders/ investors with respect to transfer of shares, non-receipt of dividend, non-receipt of Annual Reports, interest payment on Bonds, etc.
During the FY 2023-24, no complaints were received. There was no complaint outstanding as on 31st March, 2024. Also, no instruments of transfer were pending as on 31st March, 2024. The Company Secretary is the Compliance Officer of the Committee. The Committee meets as and when required, to deal with the investor related matters etc.
One stakeholders' relationship committee meeting was held during the year on 25.01.2024.
23. Share Capital.
The paid-up Equity Share Capital as on March 31, 2024 was Rs. 7.83 crores. During the financial year under review, the Company has not issued any shares and the Company has not issued shares with differential voting rights for the period ended 31.03.2024.
During the financial year under review 2023-24, following changes/updates related to share capital has been undertaken:
- Increase in Authorized Share Capital of the Company
During the Financial year under review, Authorized Share Capital of the Company has been increased with the approval of members of the Company in the 31st Annual General Meeting of the Company held on 25th September, 2023, from the present Rs. 11,00,00,000.00/- (Rupees Eleven Crore Only) divided into 2,20,00,000 (Two Crore Twenty Lakh only) Equity Shares of face value of Rs. 5.00/- (Rupees Five Only) each to Rs. 20,00,00,000.00/- (Rupees Twenty Crore Only) divided into 4,00,00,000 (Four Crore Only) Equity Shares of Rs. 5.00/- (Rupees Five Only) each ranking pari-passu in all respects with the existing equity shares.
- Issue of Convertible Warrants
(a) Issue of 53,50,000 convertible warrants
The Board of directors of the Company in its meeting held on 03rd April, 2023 accorded its consent to issue subject to approval of shareholders up to 53,50,000 (Fifty Three Lakhs Fifty Thousand) convertible warrants ("Warrants"), at a price of Rs. 13/- (Rupees Thirteen Only) per warrant, aggregating up to ^6,95,50,000/- (Rupees Six Crore ninety Five Lakhs fifty Thousand Only), with a right to the warrant holders to apply for and be allotted 1 (One) fully paid-up equity share of the Company of face value Rs. 5.00/- (Rupees Five only), each at a premium of Rs. 8/- (Rupees eight Only) per share for each Warrant within a period of 18 (Eighteen) months from the date of allotment of Warrants to the allottees belonging to promoters and non-promoter group on preferential basis.
Thereafter, the Shareholders of the Company in the Extra Ordinary General Meeting of the Company held on 01st May, 2023 has approved the issue of 53,50,000 warrants convertible into equity shares to the proposed allottees, on a preferential basis.
(b) Issue of 47,03,125 convertible warrants
The Board of directors of the Company in its meeting held on 23rd February, 2024 accorded its consent to issue subject to approval of shareholders up to 47,03,125 (Forty Seven Lakh Three Thousand One Hundred Twenty Five) convertible warrants ("Warrants"), at a price of Rs. 210/- (Rupees Two Hundred Ten Only) per warrant, aggregating upto ^98,76,56,250/- (Rupees Ninety Eight Crore Seventy Six Lakhs Fifty Six Thousand Two Hundred Fifty Only), with a right to the warrant holders to apply for and be allotted 1 (One) fully paid- up equity share of the Company of face value Rs. 5.00/- (Rupees Five only), each at a premium of Rs. 205/- (Rupees Two Hundred Five Only) per share for each Warrant within a period of 18 (Eighteen) months from the date of allotment of Warrants to the allottees belonging to non-promoter group on preferential basis.
Thereafter, the Shareholders of the Company in the Extra Ordinary General Meeting of the Company held on 23rd March, 2024 has approved the issue of 47,03,125 warrants convertible into equity shares to the proposed allottees, on a preferential basis.
- Allotment of Convertible Warrants
(a) Allotment of 53,50,000 Convertible Warrants
Pursuant to the approval of the Board of Directors at its meeting held on April 03, 2023 and approval of the members of the Company at their Extra-Ordinary General Meeting held on May 01, 2023 for preferential issue of convertible warrants, further pursuant to In-principle approval granted by BSE Limited vide their letter dated June 20, 2023 and upon receipt of an amount aggregating to Rs. 1,73,87,500/- (Rupees One Crores Seventy three Lakhs eighty Seven Thousand Five hundred only) at the rate of Rs. 3.25/- per warrant (being 25% of the issue price per warrant) as warrant subscription price, the Board of Directors of the Company in its meeting held on 03rd July, 2023 has considered and approved the allotment of 53,50,000 (Fifty Three Lakhs Fifty Thousand only) warrants on preferential basis at an issue price of Rs. 13/- per warrant (includes Face value of Rs. 5/- per warrant and Premium of Rs. 8/- per warrant), issue price of Rs. 13/- per warrant divided in to warrant subscription price of Rs. 3.25/- per warrant and the warrant exercise price of Rs. 9.75/- per warrant, aggregating to Rs. 6,95,50,000/- (Rupees Six Crore Ninety Five Lakhs Fifty Thousand Only) to person belonging to Promoter and non-promoter persons/ entities ('Allottees').
(b) Allotment of 17,25,000 Convertible Warrants
Pursuant to the approval of the Board of Directors at its meeting held on February 23, 2024 and approval of the members of the Company at their Extra-Ordinary General Meeting held on March 23, 2024 for preferential issue of convertible warrants, further pursuant to In-principle approval granted by BSE Limited vide their respective letter dated April 30, 2024 and upon receipt of an amount aggregating to Rs. 9,05,62,500/- (Rupees Nine Crores Five Lakhs Sixty Two Thousand Five hundred only) at the rate of Rs. 52.50/- per warrant (being 25% of the issue price per warrant) as warrant subscription price, the Board of Directors of the Company in it meeting held on 14th May, 2024 has considered and approved the allotment of 17,25,000 (Seventeen Lakhs Twenty Five Thousand only) warrants on preferential basis at an issue price of Rs. 210/- per warrant (includes Face value of Rs. 5/- per warrant and Premium of Rs. 205/- per warrant), issue price of Rs. 210/- per warrant divided in to warrant subscription price of Rs. 52.50/- per warrant and the warrant exercise price of Rs. 157.50/- per warrant, aggregating to Rs. 36,22,50,000/- (Rupees Thirty Six Crore Twenty Two Lakhs Fifty Thousand Only) to person belonging to non-promoter persons/ entities ('Allottees').
24. Vigil Mechanism / Whistle Blower Policy.
Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act, 2013 and Schedule V of SEBI (LODR) Regulations, 2015, the Company has established a vigil mechanism to provide appropriate avenues to the directors and employees to bring to the attention of the Management, their genuine concerns about behavior of employees.
During the financial year 2023-24, no cases under this mechanism were reported to the Company and/or to any of its subsidiaries/associate.
A copy of the Vigil Mechanism/Whistle Blower as approved by the board may be accessed at https://www.primeindustrieslimited.com/PIL%20WHISTLE%20BLOWER.pdf
25. BOARD EFFECTIVENESS
Familiarization Programme for Independent Directors
Your Company has in place a structured induction programme for induction of new Directors as well as other initiatives to update the existing Directors on a continuous basis. The Familiarization Programme of the Company provides information relating to the Company, operational activities, business model of the Company, geographies in which Company operates, etc. The programme also intends to improve awareness of the Independent Directors on their roles, rights, responsibilities towards the Company. Further, the Familiarization Programme also provides information relating to the financial performance of the Company, budget and control process of the Company.
The familiarization program and other disclosures as specified under the Listing Regulations is available on the Company's website at: https://www.primeindustrieslimited.com/pil-familarisation-programme-for-independent-directors.pdf
Evaluation of the Board's Performance
In terms of requirements of the Act read with the Rules issued thereunder and the Listing Regulations, the Board carried out the annual performance evaluation of the Board of Directors as a whole, Committees of the Board and individual Directors. Your Company believes that the process of performance evaluation at the Board level is pivotal to its Board Engagement and Effectiveness. The Policy and criteria for Board Evaluation is duly approved by N&RC. Performance evaluation is facilitated by the Chairman of the Board who is supported by the Chairman of N&RC.
The process of Board Evaluation is conducted through structured questionnaires for the Board as a whole, Committees of the Board and individual Directors.
26. Particulars of loans, guarantees or investments under section 186.
During the year under review, The Company had made a strategic entry into manufacturing of Capital Goods and Special Products for Priority sectors like defence, Aerospace and nuclear industries by making investment in M/s Kay Bouvet Engineering Limited (KBEL) having its registered office address N-3 Addl MIDC Area Satara -415004, who is already engaged into manufacturing in this line of business.
As per MOU, the company along with another investors are required to invest by way of equity and loans up to a sum of Rs.125 crore in KBEL to settle the total dues of KBEL under OTS proposal with the banks. As per MOU the company has made investment in KBEL by acquiring 98,59,000 equity shares of Rs.10/- each of KBEL being 48.69% stake and paid Rs.2,46,47,500/- being Rs.2.50 per share.
The above transaction in the form of loans and Investment is within the limits as approved by the Shareholders of the Company.
27. Contingent Liabilities or commitment that may arise
KBEL has submitted the OTS proposal to settle the outstanding dues to various banks at Rs.125 crore. The company along with another investors called as "Investors" have entered into the Memorandum of Understanding dated 29.06.2023 (MOU) with the M/s Kay Bouvet Engineering Limited. As per MOU, the company along with another investors is required to invest by way of equity and loans up to a sum of Rs.125 crore in KBEL to settle the total dues of KBEL under OTS proposal with the banks. As per MOU the company has acquired 98,59,000 equity shares of Rs.10/- each of KBEL being 48.69% stake and paid Rs.2,46,47,500/- being Rs.2.50 per share.
Further, uncalled liability on 98,59,000 equity shares @ Rs.7.50 per share amounting to Rs.7,39,42,500/- will be brought by the company in the 12th month from the date of OTS Sanctioned by all lenders. The proposal of OTS is pending with the lenders.
The balance of Rs.102.64 Crores shall be brought by the Investors including the company jointly and severally in KBEL after the sanction of the OTS proposal based on the maximum of Rs.125 crore as mentioned in the MOU. In case OTS proposal is not sanctioned by all lenders then all the funds including Rs. 12.50 crore will be refunded to the Company.
28. Particulars of contracts or arrangements with related parties.
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
The Policy on dealing with materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: https://www.primeindustrieslimited.com/pil-policy-on-dealinp-with-rpt.pdf
29. Insider Trading Regulations.
Trading Practices In compliance with the SEBI Regulation on Prohibition of Insider Trading, the Company has in place a comprehensive Code of Conduct to Regulate, Monitor and Report Trading by Insiders, for its Directors and Senior Management Officers. The Code lays down guidelines, which advises them on procedures to be followed and disclosures to be made, while dealing with the shares of the Company. The Code specifies, among other matters, that Directors and Designated Persons of the Company, as defined in the Code, can trade in the shares of the Company only during 'Trading Window Open Period'. The trading window is closed during the time of declaration of results, dividend and other material events as per the Code. The intimation of the closure of Trading Window, as per the SEBI Regulations on Prohibition of Insider Trading, is given to the Stock Exchanges before the end of every quarter with effect from the 1st day of the month immediately succeeding the end of every quarter till 48 hours after the declaration of financial results of the Company to the Stock Exchanges. The same is intimated to the Designated Persons as well.
These aforementioned Codes are posted on the website of the Company at the link: https://www.primeindustrieslimited.com/Code%20of%20Fair%20disclosure%20PIL%20Insider%20Trading%20Regu lation%20SEBI%202015.pdf
30. Nomination and Remuneration Policy.
The Company's Nomination and Remuneration Policy formulated by the Nomination and Remuneration Committee deals with the appointment and remuneration of Directors and KMPs of the Company. The policy also covers the criteria for determining qualifications, positive attributes, independence of a Director and KMP. In terms of Section 134(3) (e) of Companies Act, 2013 the Nomination and Remuneration Policy of the Company is annexed herewith and forms part of this Annual Report.
Nomination and Remuneration Policy also published by the Company in its website at: https://www.primeindustrieslimited.com/nomination%20&%20remuneration%20PIL.pdf
31. Risk Management.
The Board of Directors of your Company has formulated the risk management policy which seeks to identify risks inherent in business operations of the Company and provides guidelines to define, measure, report, control and mitigate the identified risks.
The objective of Risk Management is to create and protect shareholder value by minimizing threats or losses, and identifying and maximizing opportunities. An enterprise-wide risk management framework is applied so that effective management of risks is an integral part of every employee's job.
The Board's role under the policy is to ensure framing, implementing and monitoring risk management plan, having in place systems for risk management as part of internal controls. It is the duty of Independent Directors to bring unbiased angle to the Board's deliberations on making risk management systems more robust.
Risk Management Policy also published by the Company in its website at:
https://www.primeindustrieslimited.com/Risk%20management%20policy%20-%20PIL.pdf
32. Human Resources Development.
A Company's continued success depends on the ability to attract, develop and retain the best talent at every level. The Company's Human Resource (HR) Management practices are deep rooted in ensuring a fair and reasonable process for all- round development of its talent. The Company strives to maintain a skilled and dedicated workforce, representing diverse experiences and viewpoints.
The Company finds it imperative to follow policies and regulations that produce an unbiased work and safe work environment.
33. Report on Corporate Governance.
The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. However, since the Company does not fulfill the criteria mentioned in Regulation 15(2)(a) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the compliances with regard to corporate governance provisions are not applicable to the Company.
34. Corporate Social Responsibility.
The provisions of Section 135 of Companies Act, 2013 are not applicable on the Company.
35. Prevention of Sexual Harassment at Workplace.
The Company has Zero tolerance towards any action on the part of any employee which may fall under the ambit of 'Sexual Harassment' at workplace, and is fully committed to uphold and maintain the dignity of every women working in the Company.
During the year under review, no complaints were received from any of the employees and no complaints were pending at the beginning of the year.
36. Directors' Responsibility Statement.
The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that—
a) In the preparation of the annual accounts for the year ended 31st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures and the annual accounts have been prepared in compliance with the provisions of the Companies Act, 2013.
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 at the end of the financial year and of the profit and 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 this Act 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; and
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.
37. Board Evaluation.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI Circular no SEBI/CFD/CMD/CIR/P/2017/304 dated January 05, 2017, the Company has devised a formal process for annual evaluation of performance of the Board, its Committees and Individual Directors ("Performance Evaluation") which include criteria for performance evaluation of Non-Executive Directors and Executive Directors as laid down by the Nomination and Remuneration Committee and the Board of Directors of the Company. It covers the areas relevant to the functioning as Independent Directors or other Directors, Member of the Board or Committee of the Board.
The above criteria for evaluation were based on the Guidance Note issued by Securities and Exchange Board of India ('SEBI'). ln a separate Meeting, the Independent Directors evaluated the performance of Non-Independent Directors and performance of the Board as a whole. They also evaluated the performance of the Managing Director taking into account the views of Non-Executive Directors. The Nomination and Remuneration Committee reviewed the performance of the Board, its Committees and of the Directors.
The Board carried out annual performance evaluation of its own performance. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Committees. A consolidated report was shared with the Chairman of the Board for his review and giving feedback to each Director.
38. Managing Director (MD) and Chief Financial Officer (CFO) Certificate.
In terms of the Listing Regulations, the certificate, as prescribed in Part B of Schedule II of the said Regulations, has been obtained from the Chief Financial Officer and Managing Director of the Company, for the financial year 2023- 24 with regard to the financial statements and other matters. The said certificate forms part of this Annual Report.
39. Dividend Distribution Policy.
Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations') is not applicable on the Company.
40. Reporting of Frauds by Auditors.
During the year under review, the Statutory Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act, details of which needs to be mentioned in this Report.
41. Secretarial Standards of ICSI.
The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India ('ICSI') and that such systems were adequate and operating effectively.
42. Event Subsequent to the date of Financial Statement
Following is the event which has been happened subsequent to the date of financial Statement
The Board of Directors in its Meeting held on 14th May, 2024 has considered and approved the allotment of 17,25,000 (Seventeen Lakhs Twenty Five Thousand only) Convertible warrants on preferential basis at an issue price
of Rs. 210/- per warrant (includes Face value of Rs. 5/-per warrant and Premium of Rs. 205/- per warrant) to the allottees from whom warrant subscription price equivalent to 25% of issue price i.e. 210/- per warrant was received by the Company in Separate Account maintained by the Company for the issue of convertible warrants.
43. Miscellaneous
• Your company has not issued equity shares with differential rights as to dividend, voting or otherwise;
• Your Company did not allot any sweat equity shares. Therefore, no disclosures as required under Rule 8(13)of Companies(Share Capital and Debentures) Rules,2014.
• During the financial year under review, no applications was made or proceeding initiated against the Company under the Insolvency and Bankruptcy Code, 2016 nor any such proceeding was pending at the end of the financial year under review.
44. Appreciation and Acknowledgement
Your directors are grateful to the Shareholders for their continued patronage and confidence in the Company over the past several years. Your directors also thank the Central and State Governments, other Statutory and Regulatory Authorities for their continued guidance, assistance, co-operation and support.
Your directors also wish to convey their sincere appreciation to all employees at all levels for their dedicated efforts and consistent contributions and cooperation extended and is confident that they will continue to contribute their best towards achieving still better performance in future to become a significant leading player in the industry.