To, The Members,
The Directors of “Prime Industries Limited” (PIL) have great pleasure in presenting the 31st Annual Report of the company together with the audited statements of accounts for the financial year ended 31st March, 2023 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, 2023 is as under: (Rs. In Millions)
PARTICULARS
2. 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. 76.99 Millions as compared to Rs. 16.95 Millions in previous year, increased by 354%. The Company earned a net profit of Rs. 15.69 Millions, against a net Loss of Rs. 1.66 Millions in the previous year.
3. 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.
4. Transfer of Reserves.
No amount is being transferred to reserve & surplus in the current year.
5. 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. The Company in its Extra ordinary general meeting held on 01st May, 2023 with the approval of members of the company has issued warrants convertible into equity shares, on preferential basis in one more tranches, up to 53,50,000 (Fifty Three Lakhs Fifty Thousands only) convertible warrants (“Warrants”), at a price of Rs. 13.00/- (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. 8.00/- per share for each Warrant within a period of 18 (Eighteen) months from the date of allotment of Warrants on a preferential basis (“Preferential Issue”), for consideration payable through electronic means/ banking channels and in such manner and upon such terms and conditions as may be deemed appropriate by the Board in accordance with the terms of this Preferential Issue, provisions of SEBI ICDR Regulations, or other applicable laws in this respect: B. The Company has invested in the equity shares of M/s Kay Bouvet Engineering Limited through Private Placement offer letter dated 27th June, 2023 issued by investee Company for 98,59,000 equity shares of Rs.10/- each and the company has paid share application money Rs. 2.50/- per share with total amount of Rs. 2,46,47,500/- on 7th August, 2023.
6. 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.
7. Listing with Stock Exchanges and Depository Services
Your Company's equity shares are listed on The BSE Limited. 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.
8. 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 safeguarded, utilized with proper authorization, and properly accounted for. There is an enterprise-wide definition of roles and responsibilities that assures the flow of information and monitoring. Regular internal audits and reviews are conducted, and the internal auditor's recommendations for improving systems and procedures are considered. The Company's Audit Committee examines the internal control system and investigates the findings of external and internal auditors. In addition to designating responsibility for all controls, this also includes a review of the Company's approved policies and procedures for ensuring the orderly and effective operation of its business. The design evaluation was followed by the management's testing of controls across all business processes and the correction of any anomalies in business operations. 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.
9. Subsidiary/Joint Ventures/Associate Companies.
The Company did not have any Subsidiary, Joint Venture or Associate Company during the year under review.
10. 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.
11. 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.
12. 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, for the period of 5 years. There are No qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their Audit Report for the financial year 2022-23. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year 2022-23. Auditors' Report on the Accounts of the Company for the period under review are self- explanatory and no comments are required.
(b) Secretarial Auditors and Secretarial Audit Report.
Pursuant to the requirements of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the Listing Regulations, the Company had appointed M/s. Bhambri & Associates, Company Secretaries in Practice, Ludhiana, for conducting Secretarial
Audit for the year 2022-2023 The Secretarial Audit Report for the financial year ended March 31, 2023 is part of this Annual Report.
(c) Internal Auditors.
Ms. Harwinder Kaur, Sr. Executive of the Company was appointed by the Board of Directors as Internal Auditor of the Company to assist in internal audit with the audit processes and internal audit reviews for the Company for FY 2022-23.
13. 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 2022-23 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.
14. Extract of the annual return.
The details forming part of the extract of the Annual Return in Form MGT-9, as required-under the provisions of the Companies Act, 2013, forms an integral part of Board Report. Form MGT-9 is available on the website of the Company and can be accessed at https://www.primeindustrieslimited.com/investors.html
15. 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.
16. Directors and Key Managerial Personnel.
The Company's Board comprised six Directors as on March 31, 2023, 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 has resigned from the post of Company Secretary and Compliance Officer of the Company w.e.f. 12.05.2023 and Ms. Shruti Sood has been appointed as Company Secretary and Compliance Officer of the Company w.e.f. 23.05.2023.
(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 31.03.2023. i) Mr. Ashwani Kumar ii) Mr. Rajiv Kalra iii) Mr. Anil Bhatia
(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. Harjeet Singh Arora, 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. There were no other appointments/Resignations of Directors during the Financial Year 2022-23.
(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 and Mr. Rajesh Kumar Kakar, Chief Financial Officer of the Company. Ms. Alka Mishra who has resigned from the post of Company Secretary and Compliance Officer of the Company w.e.f. 12.05.2023 and Ms. Shruti Sood who has been appointed as Company Secretary and Compliance Officer of the Company w.e.f. 23.05.2023.
17. Number of meetings of the Board of Directors.
The board meetings are convened by giving appropriate notice after obtaining the approval of the Managing Director. The Board meets at least once a quarter to review the results and other items on the agenda, once a year for on the occasion of the annual shareholders' 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 five (5) times during the FY 2022-23 viz. on 30.05.2022, 09.08.2022, 25.08.2022, 14.11.2022, 03.02.2023.
18. Committees of the Board.
The Company has several Committees which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes. The Company has 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 31.03.2023, the Audit Committee is comprised of two Non- Executive Independent Directors and one Non-Executive/ Non-Independent Director viz. Mr. Rajiv Kalra (Non- Executive/Independent Director) as Chairman, Mr. Ashwani Kumar (Non- Executive/Independent Director) and Mr. Anil Bhatia (Non- Executive/Independent Director) 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. Ms. Alka Mishra, Company Secretary and Compliance officer of the Company as on 31st March, 2023 act as a Secretary to the Audit Committee.
The Audit Committee meetings were held at the Registered Office of the Company and Statutory Auditor, Company Secretary and Head of Accounts Department are permanent invitees to the meetings. The Company Secretary of the Company acts as the secretary of the Committee. During the year Audit Committee members, met four (4) times on 30.05.2022, 09.08.2022, 14.11.2022 and 03.02.2023.
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. Anil Bhatia and Mr. Harjeet Singh Arora, As on 31.03.2023.
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 two (2) times on 14.11.2022 and
03.02.2023.
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. Anil Bhatia (Member) and Mr. Rajiv Kalra (Member), As on 31.03.2023, . 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 2022-23, no complaints were received. There was no complaint outstanding as on 31st March, 2023. Also, no instruments of transfer were pending as on 31st March, 2023. 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 03.02.2023. 19. Listing / De-listing of Shares.
The Shares of your Company are presently listed on The Bombay Stock Exchange Limited, Mumbai (BSE) and the Annual Listing Fees for the year 2023-24 has already been paid to it. 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.
20. Share Capital.
The paid-up Equity Share Capital as on March 31, 2023 was Rs. 7.83 crores. During the 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 31.03.2023.
21. 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. Details of Vigil Mechanism/Whistle Blower are included in the report on Corporate Governance. During the financial year 2022-23, 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
22. 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.
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.
23. Particulars of loans, guarantees or investments under section 186.
During the year under review, the company has not given any loan, guarantee, provided security to any person or other body corporate or acquired by way of subscription, purchase or otherwise, the securities of any other body corporate, exceeding the limits prescribed under section 186 of the Companies Act, 2013.
24. 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-dealing-with-rpt.pdf
Your Directors draw attention of the members to Note 30 to the financial statement which sets out related party disclosures.
25. Insider Trading Regulations.
Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ("Code of Fair Disclosure") and the Code of Conduct to regulate, monitor and report trading by employees and other connected persons ("Code of Conduct") as approved by the Board on 14.05.2015 are in force by the Company and amendments from time to time. The objective of this Code is to protect the interest of shareholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, Designated employees and Specified Persons. The Company also adopts the concept of Trading Window Closure, to prevent its Directors, Designated employees and Specified Persons from trading in the securities of the Company at the time when there is unpublished price sensitive information.
26. 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.
27. 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. On the other hand, Audit Committee's role is Evaluate the risk management systems.
28. 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's HR Policy is focused on supporting employee's well-being. The Company finds it imperative to follow policies and regulations that produce an unbiased work and safe work environment.
29. 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.
30. Corporate Social Responsibility.
The provisions of Section 135 of Companies Act, 2013 are not applicable on the Company.
31. 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.
32. 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, 2023, 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.
33. Board Evaluation.
The Board of Directors of your Company recognizes and accepts that Boards are accountable to the public to ensure that they are operating in an effective manner. Care is taken to avoid that the Board does not fall into the "same old way of doing things". Therefore, one of the few ways to identify and address the problem is for the Board to conduct a self-evaluation. The Nomination and Remuneration Committee of the Company has approved the Annual Evaluation Plan for the Board, Committees and Individual Directors. The Board including its committees and members shall evaluate itself once a year, whether there are apparent major problems or not. Each member of the Board shall complete a form which comprises of objective questions on certain parameters such as their own roles and responsibilities in the Company, Strategic Leadership, Accountability, Board Processes and Board Performance. The responses shall be discussed among members of Board, Committees and at Individual level. The exercise shall be led by the Chairman along with a Senior Independent Director of the Company. The results of the Evaluation shall be shared with the Board, Chairman of respective Committees and individual Director Based on the outcome of the Evaluation, the Board and Committees shall agree on the action plan to improve on the identified parameter. The evaluation in terms of the plan has been completed during the period under review.
34. 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 2022-23 with regard to the financial statements and other matters. The said certificate forms part of this Annual Report.
35. 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.
36. 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.
37. 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.
38. Miscellaneous
During the year, there was no change in the general nature of business of your Company. 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
39. 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.
(POLICY ON REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL & SENIOR EMPLOYEES)
BACKGROUND
Prime Industries Limited (hereinafter referred as the ‘Company') practices a corporate culture that is based on the tenets of trusteeship, empowerment, accountability, control and ethical practices with transparency at its core for creation of maximum value for the stakeholders.
BRIEF OVERVIEW UNDER COMPANIES ACT 2013
{Section 178 & Companies [Meetings of Board and its Powers] Rules 2014}
Constitution of the Nomination and Remuneration Committee consisting of three or more non-executive directors out of which not less than one-half shall be independent directors.
The Nomination and Remuneration Committee shall identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every director's performance.
The Nomination and Remuneration Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and senior management personnel i.e. employees at one level below the Board including functional heads.
NOMINATION AND REMUNERATION POLICY
This Nomination and Remuneration Policy is being formulated in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Regulation 19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”). This policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated by the Nomination and Remuneration Committee (NRC or the Committee) and has been approved by the Board of Directors in its meeting held on 14th day of November 2014.
Definitions
“Remuneration” means any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as defined under the Income-tax Act, 1961;
“Key Managerial Personnel” means”:
(i) Managing Director, or Chief Executive Officer or Manager and in their absence, a Whole-time Director; (ii) Chief Financial Officer; (iii) Company Secretary;
(iv) such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board;
(v) and such other officer as may be prescribed;
“Senior Managerial Personnel” means the personnel of the company who are members of its core management team excluding Board of Directors. Normally, this would comprise all members of management of rank equivalent to General Manager and above, including all functional heads.
Objective
The objective of the policy is to ensure that:-
The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully; Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.
Role of the Committee
The role of the NRC will be the following:
To formulate criteria for determining qualifications, positive attributes and independence of a Director. To formulate criteria for evaluation of Independent Directors and the Board. To identify persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down in this policy. To carry out evaluation of Director's performance. To recommend to the Board the appointment and removal of Directors, KMP and Senior Management. To devise a policy on Board diversity, composition and size. Succession planning for replacing Key Executives and overseeing their orientation and successful alignment with the philosophy of the Company. To carry out any other function as is mandated by the Board from time to time and / or enforced by any statutory notification, amendment or modification, as may be applicable. To perform such other functions as may be necessary or appropriate for the performance of its duties.
APPOINTMENT AND REMOVAL OF DIRECTOR, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT
a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend his / her appointment, as per Company's Interview and Selection procedure.
1) A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has authority to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the position.
2) The Company shall not appoint or continue the employment of any person as the M.D or Whole-time Director or a manager who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution.
TERM / TENURE
a) Managing Director/Whole-time Director:
The Company shall appoint or re-appoint any person as its Managing Director or Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term. Rotation: The Managing Director/Whole Time Director and other Non-Executive Directors of the Company shall be liable to retire by rotation subject to the employment agreement, if any signed between the company and such Directors of the Company at the time of appointment.
Independent Director:
An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report.
No Independent Director shall hold office for more than two consecutive terms of upto maximum of 5 years each, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director.
Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly.
Rotation: An Independent Director shall not be liable to retire by rotation pursuant to the provisions of sub-sections (6) and (7) of section 152 of the Companies Act, 2013.
At the time of appointment of Independent Director it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company or such other number as may be prescribed under the Listing Agreement.
EVALUATION
The Committee shall carry out evaluation of performance of Director, KMP and Senior Management Personnel yearly.
REMOVAL
The Committee may recommend with reasons recorded in writing, removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the Companies Act, 2013, rules and regulations.
RETIREMENT
The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Act and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Senior Management Personnel in the same position/ remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.
POLICY FOR REMUNERATION TO DIRECTORS/KMP/SENIOR MANAGEMENT PERSONNEL
1. Remuneration to Managing Director / Whole-time Directors:
a) The Remuneration/ Commission etc. to be paid to Managing Director / Whole-time Directors, etc. shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force and the approvals obtained from the Members of the Company. b) The Nomination and Remuneration Committee shall make such recommendations to the Board of Directors, as it may consider appropriate with regard to remuneration to Managing Director / Whole-time Directors.
2. Remuneration to Non-Executive / Independent Directors:
a) The Non-Executive / Independent Directors may receive sitting fees and such other remuneration as permissible under the provisions of Companies Act, 2013. The amount of sitting fees shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors. b) All the remuneration of the Non-Executive / Independent Directors (excluding remuneration for attending meetings as prescribed under Section 197 (5) of the Companies Act, 2013) shall be subject to ceiling/limits as provided under Companies Act, 2013 and rules made there under or any other enactment for the time being in force. The amount of such remuneration shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors or shareholders, as the case may be. c) An Independent Director shall not be eligible to get Stock Options and also shall not be eligible to participate in any share based payment schemes of the Company. d) Any remuneration paid to Non-Executive / Independent Directors for services rendered which are of professional in nature shall not be considered as part of the remuneration for the purposes of clause(b) above if the following conditions are satisfied: i. The Services are rendered by such Director in his capacity as the professional; and ii. In the opinion of the Committee, the director possesses the requisite qualification for the practice of that profession.
3. Remuneration to Key Managerial Personnel and Senior Management:
a) The remuneration to Key Managerial Personnel and Senior Management shall consist of fixed pay and incentive pay, in compliance with the provisions of the Companies Act, 2013 and in accordance with the Company's HR Policy. b) The Compensation Committee of the Company, constituted for the purpose of administering the Employee Stock Option/ Purchase Schemes, shall determine the stock options and other share based payments to be made to Key Managerial Personnel and Senior Management. c) The Fixed pay shall include monthly remuneration, employer's contribution to Provident Fund, contribution to pension fund, pension schemes, etc. as decided from to time. d) The Incentive pay shall be decided based on the balance between performance of the Company and performance of the Key Managerial Personnel and Senior Management, to be decided annually.
IMPLEMENTATION
The Committee may issue guidelines, procedures, formats, reporting mechanism and manuals in supplement and for better implementation of this policy as considered appropriate. The Committee may Delegate any of its powers to one or more of its members.
DETAILS PERTAINING TO REMUNERATION 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.
(i) The ratio of the remuneration of the Managing Director to the median remuneration of the employees of the company for the financial year was Nil. No other Director of the Company is being paid any remuneration.
(ii) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year.
Sr. No Name of Director/KMP and Designation.
1. Mr. Rajinder Kumar Singhania (Managing Director/KMP)
2. Ms. Alka Mishra* (Company Secretary)
3. Mr. Rajesh Kumar Kakar** (Chief Financial Officer)
*% Increase due to Change in Position/Designation of Ms. Alka Mishra.
** Mr. Rajesh Kumar Kakar was appointed on 08.03.2022; therefore % increase in Remuneration in the Financial Year 2022-2023 is not applicable.
(iii) The percentage increase in the median remuneration of employees in the financial year: 45.56%.
(iv) As on 31st March, 2023, the Company has 8 permanent employees on the rolls of the Company.
(v) Average percentage increase made in the salaries of employees other than the managerial personnel in financial year 2022-23 was 8.25%. Whereas the increase in the managerial remuneration was 47.86 for the same financial year due to Change in Position/Designation of Ms. Alka Mishra to Company Secretary and compliance officer.
(vi) Affirmed that the remuneration is as per the remuneration policy of the company.
Compliance Certificate by Chief Executive Officer/MD and Chief Financial Officer
Pursuant to 17(8) of the SEBI (Listing Obligations and Disclosure Requirements), 2015, we hereby certify that:
a. We have reviewed the financial statements and the Cash Flow Statement for the year ended on 31.03.2023 and that to the best of our knowledge and belief:
I. These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; II. These statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.
b. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company's Code of Conduct.
c. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
d. We have indicated to the auditors and the Audit committee:
I. Significant changes, if any, in internal control over financial reporting during the year;
II. Significant changes in accounting policies during the year, if any, and that the same have been disclosed in the notes to the financial statements; and III. That no instances of significant fraud have come to our notice.
For and on behalf of the Board of PRIME INDUSTRIES LIMITED
CERTIFICATE OF COMPLIANCE OF THE CODE OF CONDUCT OF THE COMPANY
I, Rajinder Kumar Singhania, Managing Director of “Prime Industries Limited” hereby declare that all the members of the Board of Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct, as applicable to them, for the year ended March 31, 2023.
FOR PRIME INDUSTRIES LIMITED
SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2023 [Pursuant to section 204(1) of the Companies Act, 2013 and rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members, PRIME INDUSTRIES LIMITED, Master Chambers, 19, Feroze Gandhi Market, Ludhiana-141001, Punjab (India). CIN: L15490PB1992PLC012662
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Prime Industries Limited (hereinafter called the “Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2023 (‘Audit Period') complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company, on test basis, for the financial year ended on 31st March, 2023, to the extent applicable and according to the provisions of: (i) The Companies Act, 2013 (the Act) and the rules made thereunder; (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA') and the rules made thereunder; (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act'):
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; b) SEBI (Prohibition of Insider Trading) Regulations, 1992 and SEBI (Prohibition of Insider Trading) Regulations, 2015; c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and amendments from time to time. d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;
vi) We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the company to monitor and ensure compliance with laws relating to, inter alia:
- All labour laws;
We have also examined compliance with the applicable clauses of the following:
I. Secretarial Standards issued by The Institute of Company Secretaries of India to the extent of its applicability. II. The Listing Agreement entered into by the Company with the BSE Limited read with SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except the following:
The Circular for maintenance of website pursuant to Regulation 46 and Regulation 62 by BSE (Notice No 20220704-44) has not been followed till date. The Company, on numerous occasions, have not complied with the BSE circular (Notice No. 20220801-24) where it was made mandatory to file announcements under various SEBI Regulations using digital signature certification to the Stock Exchange, the circular was effective from 01.09.2022. The Company had not complied with the Circular of MCA, whereby the link of the Annual report and Notice of the AGM was required to be provided in the newspaper publication. The company had not Complied with the BSE circular (Notice No. 20220412-39) till date for filing of statement of redressal of investor grievance (for the quarters ended 31.03.2022 and 30.06.2022) in XBRL mode under Regulation 13 (3) of “LODR Regulations” with w.e.f. 12.04.2022. The company had failed to disclose on its website all such events or information which has been disclosed to stock exchange(s) under regulation 30. During the year the Company had updated the policy for determination of materiality of events or information but failed to intimate the same to the BSE in a timely manner.
WE FURTHER REPORT THAT
The Board of Directors of the Company is duly constituted. The changes, if any, in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
All decisions at Board Meetings and Committee Meetings are carried out unanimously or by the majority as recorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.
We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period the Company has following specific events/actions having a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc. as detailed below:
The company had applied to the Calcutta Stock Exchange Limited for voluntary delisting and the said application is still pending for want of approval. Company is not filing any documents/information to Calcutta Stock Exchange Limited.
Note: This report is to be read with our letter of even date which is annexed as ‘ANNEXURE A' and forms an integral part of this report.
‘ANNEXURE A' To,
The Members, Prime Industries Limited,
Master Chambers, 19, Feroze Gandhi Market, Ludhiana-141001, Punjab (India). CIN: L15490PB1992PLC012662
Our report of even date is to be read along with this letter.
1. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
2. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company as we have relied upon the Audit done by Statutory Auditors as required under Companies Act, 2013.
3. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.
4. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.
5. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.
6. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit.
OBSERVATIONS/ REMARKS OF THE PRACTICING COMPANY SECRETARY MADE IN SECRETARIAL AUDIT REPORT AND MANAGEMENT RESPONSE/REPLY
There are some Observations/Remarks made in Secretarial Audit Report and our remarks as below:
The Circular for maintenance of website pursuant to Regulation 46 and Regulation 62 by BSE (Notice No 20220704-44) has not been followed till date.
All the related disclosures and information's are there at the website and the website of the Company under maintenance for the separate section of the disclosure.
The Company had not complied with the Circular of MCA, whereby the link of the Annual report and Notice of the AGM was required to be provided in the newspaper publication. The company had not Complied with the BSE circular (Notice No. 20220412-39) till date for filing of statement of redressal of investor grievance (for the quarters ended 31.03.2022 and 30.06.2022) in XBRL mode under Regulation 13 (3) of “LODR Regulations” with w.e.f. 12.04.2022.
Link of the Website was mentioned in the newspaper publication throw that stakeholder can easily access the Annual Report, Notice of AGM and investor relation related disclosure and information. XBRL Filling of statement of redressal of investor grievance for the said period Inadvertently missed by the Company but the company submit the details to BSE on timely basis.
The company had failed to disclose on its website all such events or information which has been disclosed to stock exchange(s) under regulation 30.
During the year the Company had updated the policy for determination of materiality of events or information but failed to intimate the same to the BSE in a timely manner.
The Company had updated the policy for determination of materiality of event and disclosed at the website of the Company but inadvertently late intimated to the exchange.