Mar 31, 2023
Your Directors present their 37th Report together with the Audited Financial Statements for the year ended 31st March, 2023. Financial Results (Standalone)
During the year under review, your Company has recorded total income of Rs.32,032 Mn. (previous year Rs. 21,140 Mn.), registering increase of 51.52% in total income. Profit after Tax increased by 44.53% to 2,376 Mn. (Previous year Rs.1,644 Mn.). The performance summary (standalone) is presented herewith:
(Rs. Mn.) |
||
Particulars |
2022-23 |
2021-22 |
Turnover |
31,526 |
20,623 |
Other Income |
506 |
517 |
Total Income |
32,032 |
21,140 |
Total Expenses |
28,940 |
19,001 |
PBT |
3,092 |
2,139 |
PAT |
2,376 |
1,644 |
Other Comprehensive Income |
(20) |
(8) |
Total Comprehensive Income |
2,356 |
1,636 |
( ) Balance in Profit & Loss account |
6,345 |
5,045 |
( ) INDAS Adjustments (ESOPs) |
- |
|
(-) IND AS Adjustment (Adjustment to opening Retained Earnings |
- |
|
- IND AS 115: Revenue Recognition |
||
Profit Available for Appropriations |
8,701 |
6,681 |
Appropriations |
||
- Dividend |
770 |
397 |
Transfer to / (from) Special Economic zone Re-investment Reserve |
-160 |
-61 |
Balance in Statement of Profit & Loss |
8,090 |
6,345 |
Please refer Management Discussion & Analysis annexed to this report dealing with the state of Company''s affairs at length. (Refer Annexure 1).
Summary of Consolidated Results
During the year, the Total Income stood at Rs. 35,738 Mn which is 50.19% more over last year (Rs. 23,795 Mn). Profit after tax was Rs. 2,398 Mn previous year''s figure (Rs 1,502 Mn) registering an increase of 59.65 % over last year. The performance summary is presented herewith:
('' Mn) |
||
Particulars |
2022-23 |
2021-22 |
Turnover |
35,280 |
23,433 |
Other income |
458 |
362 |
Total income |
35,738 |
23,795 |
Total expenses |
32,551 |
21,746 |
PBT |
3,187 |
2,049 |
PAT (after Minority Interest) |
2,398 |
1,502 |
( ) Other Comprehensive Income |
-16 |
-22 |
Total Comprehensive Income |
2,382 |
1,480 |
The Board of Directors at its meeting held on 25th May, 2023 has recommended Dividend of Rs. 4.50/- per share (225%) of Face value of Rs. 2/- for the financial year 2022-23.
The dividend is payable subject to shareholders'' approval at the ensuing Annual General meeting (AGM). The final dividend payout, if approved by the shareholders in the ensuing AGM, will be around Rs. 826.71 Mn.
The dividend pay-out is in line with the Company''s Dividend Distribution Policy.
In accordance with the Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy and the same is annexed herewith as Annexure 9. The Policy is also hosted on the website of the Company and can be viewed at www.praj.net
Investor Education and Protection Fund (IEPF)
Pursuant to the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has transferred unclaimed/ unpaid dividend of Rs.12,21,883/- pertaining to the financial year 2014-15 & Interim Dividend of Rs. 15,25,700/- for the financial year 2015-16 to IEPF, on 21st September 2022 & 12th May, 2023 respectively. Further, the Company has also transferred corresponding 17,044 shares pertaining to the financial year 2014-15 to IEPF on 14th October 2022. The transfer of 36,374 shares pertaining to unclaimed dividend for the financial year 2015-16 is under process.
Details of Nodal Officer
Mr. Dattatraya Nimbolkar, Chief Internal Auditor and Company Secretary has been appointed as Nodal Officer of the Company. Details in this regard are available on the website of the Company at www.praj.net
The Company is not proposing any transfer to the General Reserve for the year 2022-23.
a) CRISIL has re-affirmed âA1 " rating to the Company''s short-term banking facilities which signifies that the degree of safety regarding timely payment of instruments is very strong.
b) CRISIL has also re-affirmed its rating of the Company''s long-term bank facilities to âAA/stable''.
The âAA/Stable" rating signifies high safety with regard to timely payment of long-term financial obligations.
Praj Engineering & Infra Ltd. India, Praj HiPurity Systems Ltd. India, Praj Americas Inc., U.S.A., Praj Far East Co. Ltd., Thailand, Praj Far East Philippines Ltd. Inc., The Philippines, continue to be subsidiaries of your Company.
During the year, Company has formed Wholly Owned Domestic Subsidiary, Praj GenX Ltd. India, on 15th March, 2023.
Consolidated Financial Statements of the Company, which include the results of the said Subsidiary Companies, except Praj GenX Ltd., are included in this Annual Report. Since Praj GenX Ltd. has not yet started its operations, consolidation of its Financial Statements is not done. Further, a statement containing the details of performance, financial position for each of the Company''s subsidiaries in the prescribed format AOC-1 is also enclosed (Please refer Annexure 6). Copies of Annual Accounts and related detailed information of all the subsidiaries can also be sought by any member of the Company or its Subsidiaries by making a written request to the Company Secretary at the Registered Office of the Company in this regard. The Annual Accounts of the Subsidiary Companies are also available for inspection at the Company''s and/or the concerned Subsidiary''s Registered Office.
The Company has formulated a policy for determining ''material subsidiaries'' and such policy is hosted on the Company''s website
i.e. www.praj.net
Pursuant to the provisions of Regulation 34 (2) & (3) and 53(f), read with Schedule V to SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report (Annexure 1), Report on Corporate Governance and Compliance Certificate on Corporate Governance (Annexure 3), Business Responsibility & Sustainability Report (BRSR) (Annexure 8), Dividend Distribution Policy (Annexure 9) are annexed to this report.
Ms. Parimal Chaudhari (DIN 00724911) retired at 36th Annual General Meeting held on 4th August, 2022 and was re-appointed as Director of the Company.
Ms. Parimal Chaudhari (DIN 00724911) will retire at 37th Annual General Meeting and being eligible, has offered herself for re-appointment as Director of the Company.
Members at 36th Annual General Meeting held on 4th August, 2022 had approved extension of tenure of Dr Pramod Chaudhari (DIN 00196415) as an Executive Chairman for a period of 29 months w.e.f 1st August, 2022 till 31st December, 2024.
Members at 36th Annual General Meeting held on 4th August, 2022 had approved extension of tenure of Mr. Sachin Raole (DIN 00431438) as CFO & Director-Resources for a period of 5 years w.e.f 1st August, 2022 till 31st July, 2027.
Based on the recommendation of Nomination & Remuneration Committee, Board at its meeting held on 3rd February, 2023, has approved re-appointment of Mr. Shishir Joshipura (DIN 00574970) as a CEO & Managing Director for a period of 27 months w.e.f 1st April, 2023 till 30th June, 2025, subject to approval of Shareholders at 37th Annual General Meeting.
Based on the recommendation of Nomination & Remuneration Committee, Board vide Circular Resolution No. CIR/BM/01/2023-24, has approved re-appointment of Dr Shridhar Shukla (DIN 00007607) as an Independent Director of the company for a further period of 5 years w.e.f 12th April, 2023 till 11th April. 2028, subject to approval of Shareholders at 37th Annual General Meeting by way of Special Resolution.
Composition of Key Managerial Personnel (KMP)
The Company has the following KMPs as on 31st March 2023;
Name of the KMP |
Designation |
Date of Appointment |
Date of Resignation |
Dr Pramod Chaudhari |
Executive Chairman |
08.11.1985 |
N.A. |
Mr. Shishir Joshipura |
Chief Executive Officer & Managing Director |
02.04.2018 |
N.A. |
Mr. Sachin Raole |
CFO & Director- Resources |
13.07.2016 |
N.A. |
Mr. Dattatraya Nimbolkar |
Chief Internal Auditor & Company Secretary |
22.07.2011 |
N.A. |
Composition of Audit, Nomination & Remuneration Committee
For details, kindly refer the Corporate Governance Report annexed to this Report (Annexure 3).
Declaration from Independent Directors
The Independent Directors have submitted their annual declaration to the Board confirming that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 read with rules framed there under.
a) Statutory Auditors
Current tenure of P G BHAGWAT LLP, Chartered Accountants, Pune (Firm Regn. No. 101118W/W100682), Statutory Auditors of the Company will expire on the date of 39th Annual General Meeting to be held in the calendar year 2025.
b) Internal Auditors
The Internal Auditors, Khare Deshmukh & Co., Chartered Accountants, Pune have conducted internal audits periodically during Financial Year 2022/23 and submitted their reports to the Audit Committee.
Their reports have been reviewed by the Statutory Auditors and the Audit Committee.
The Board has appointed Khare Deshmukh & Co., Chartered Accountants Pune, as Internal Auditors of the Company for the Financial Year 2023-24.
c) Cost Auditors
Your Company has appointed Dhananjay V. Joshi & Associates, Cost Accountants as Cost Auditors of the Company for the Financial Year 2023-24 at the remuneration as set out in item No. 5 of the explanatory statement which is subject to the ratification of members in the ensuing Annual General Meeting.
d) Secretarial Auditors
M/s KANJ & Co., LLP, Pune, were appointed to conduct the Secretarial Audit of the Company for the Financial Year 2022-23, as required under Section 204 of the Companies Act, 2013 read with rules framed thereunder. The Secretarial Audit Report (MR-3) for Financial Year 2022-23 forms part of the Annual Report as Annexure 5.
The Board has appointed M/s KANJ & Co. LLP, Pune, as Secretarial Auditors of the Company for the Financial Year 2023-24.
Material changes and commitments, if any, affecting the financial position of the Company those occurred between the end of the financial year to which these financial statements relate and the date of the report:
There were no material changes and commitments, affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of the report.
Statement concerning development and implementation of Risk Management Policy of the Company.
In accordance with the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, (LODR) the Board has amended Risk Management Policy and initiated necessary steps for framing, implementing and monitoring the risk management plan for the Company.
Based on market capitalization rank as on 31st March 2023, provisions of Regulation 21 of SEBI (LODR), Regulations 2015, as amended from time to time, are applicable to the Company for the Financial Year 2023-24. As per amended Regulation 21 of SEBI LODR Regulations, it is mandatory for the Company to constitute Risk Management Committee. However, Company had already constituted Risk Management Committee at its Board Meeting held on 16th May 2019.
The main objective of Risk Management policy is to ensure sustainable business growth and to promote a pro-active approach in identifying, reporting, evaluating and mitigating risks associated with the business of the Company.
The policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.
In today''s challenging and competitive environment, strategies for mitigating inherent risks associated with business and for accomplishing the growth plans of the Company are imperative. The common risks inter alia are risks emanating from; Regulations, Cyber Risks, Competition, Business, Technology obsolescence, Investments, Retention of talent, Finance, Politics and Fidelity etc. In today''s complex business environment, Cyber risks have considerably increased. During the year, we continued our efforts to keep ourselves up to date with cyber security events globally to achieve higher compliance and its continued sustenance.
As a matter of Risk Management Policy, these risks are assessed and steps, as appropriate, are taken to mitigate the same.
The Amended Risk Management Policy is hosted on the Company''s website i.e.www.praj.net
The Company has instituted adequate Internal Controls and processes to have a cohesive view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities.
In the opinion of the Board, there are no risks which may threaten the existence of the Company.
The Company has in place, adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
Remuneration Policy for Directors and KMPs:
The Company''s remuneration policy for Directors / KMPs is directed towards rewarding performance based on periodical review of achievements. The remuneration policy is in consonance with the existing industry practice.
The said policy is available on Company''s website i.e. www.praj.net and is also attached as Annexure 7 to this report.
esor
During the year, your Company allotted 40,000 shares on exercise of options under the Employee Stock Option Plan 2011. Consequent to the above, the Issued, Subscribed and Paid-up Share Capital of your Company increased from 183,673,088 (number of shares) (Value Rs.367.346 Mn.) as of 31st March, 2022 to 183,713,088 (number of shares) (Value Rs.367.426 Mn.) as of 31st March, 2023.
Please refer Annexure 4 to this report for the particulars required to be disclosed pursuant to Rule 12 (2) of the Companies (Share Capital and Debentures) Rules, 2014 and Clause 14 of SEBI (Share Based Employee Benefits) Regulations, 2014.
Vigil Mechanism / Whistle Blower Policy:
To ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the Company has adopted a Vigil Mechanism/ Whistle Blower Policy. This policy is explained in Corporate Governance Report and is also hosted on the website of Company at www.praj.net.
Details of policy developed and implemented by the Company on its Corporate Social Responsibility initiatives:
Kindly refer Annexure 2 to this Report.
Particulars of loans, guarantees or investments made under section 186 of the Companies Act, 2013:
Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No 5 & 26 to the Standalone Financial Statements).
Contracts and arrangements with Related Parties:
All contracts / arrangements / transactions entered by the Company during the Financial Year 2022-23 with related parties were in the ordinary course of business and on an arm''s length basis. Such transactions form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No 29 to the Standalone Financial Statements).
During the year, the Company has 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 which is available on the Company''s website at www.praj.net
The information in respect of Related Party transactions is given below.FORM AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in subsection (1) of section 188 of the Companies Act, 2013 including certain arm''s length transactions under third proviso thereto:
1. Details of contracts or arrangements or transactions not at arm''s length basis;
N.A. as there were no transactions during the year which were not at arm''s length.
2. Details of material contracts or arrangement or transactions at arm''s length basis;
During the financial year 2022-23, all the transactions entered into with related parties were at arm''s length. Also, these transactions were not material.
Regulation 4 (2) (f) (ii) (9) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework annually. Also, the Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. In addition, Schedule IV to the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Board works with the Nomination & Remuneration Committee to lay down the evaluation criteria for the performance of Executive / Non-Executive / Independent Directors.
Independent Directors have three key roles -Governance, Control and Guidance. Some of the performance indicators based on which the Independent Directors are evaluated include:
a) Ability to contribute to and monitor the Company''s Corporate Governance practices.
b) Ability to contribute by introducing international best practices to address top-management issues.
c) Active participation in medium to long-term strategic planning.
d) Commitment to the fulfillment of Directors'' obligations and fiduciary responsibilities, which include participation in the
Board and the Committee Meetings.
In pursuance of the above, the Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors.
The evaluation of all the Directors, Committees and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the Nomination & Remuneration Committee, at its meeting held on 25th May, 2023.
Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and the Secretarial Auditors in their reports:
There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Secretarial Auditors in their report.
As per Companies (Amendment) Act, 2017, effective from 28th August, 2020, Company is not required to disclose Extract of Annual Return (MGT-9) in the Directors'' Report. Further, Company is required to place copy of Annual Return on its website and web-link of Annual Return is required to be given in the Directors'' Report. Accordingly Annual Return (Form MGT-7) for the financial year 2022-23 is available on the website of the Company at www.praj.net.
Number of Board Meetings conducted during the year under review:
The Board met four times during the financial year (two meetings through video conferencing and two meetings through physical mode), the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 as amended from time to time.
Directors'' Responsibility Statement:
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement as follows for Financial Year 2022-23:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
(b) the Directors have 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 of the Company for that period.
(c) the Directors have 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 have prepared the annual accounts on a going concern basis.
(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Details in respect of frauds reported by auditors under sub-section (12) of Section 143 other than those which are reportable to the Central Government:
During the year, there was no such incidence of fraud reported by Statutory Auditors to the Management.
The Company has neither accepted nor renewed any deposits during the year under review and also did not have any outstanding deposits at the end of the year.
Remuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees:
The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company and Directors is furnished hereunder:
Sr. No. |
Name |
Designation |
Remuneration paid FY 2022-23 Rs. Mn. |
% increase/ (Decrease) in remuneration over FY 2021-22 |
Ratio of the remuneration of each Director to median remuneration of employees. |
1 |
Dr Pramod Chaudhari |
Executive Chairman |
97.661 |
27% |
79.2 |
2 |
Mr. Shishir Joshipura |
CEO & Managing Director |
57.978 |
27% |
47.0 |
3 |
Mr. Sachin Raole |
CFO & Director- Resources |
27.104 |
36% |
22.0 |
Sr. No. |
Name |
Designation |
Remuneration paid FY 2022-23 Rs. Mn. |
% increase/ (Decrease) in remuneration over FY 2021-22 |
Ratio of the remuneration of each Director to median remuneration of employees. |
4 |
Mr. Dattatraya Nimbolkar |
Chief Internal Auditor & Company Secretary |
10.060 |
8% |
8.2 |
5 |
Mr. Berjis Desai |
Non- Executive Independent Director |
3.000 |
20% |
2.4 |
6 |
Ms. Parimal Chaudhari |
Non- Executive Director |
2.400 |
20% |
1.9 |
7 |
Mr. Sivaramakrishnan Iyer |
Non- Executive Independent Director |
2.700 |
20% |
2.2 |
8 |
Ms. Mrunalini Joshi |
Non- Executive Independent Director |
0.800 |
23% |
0.6 |
9 |
Dr Shridhar Shukla |
Non- Executive Independent Director |
1.000 |
25% |
0.8 |
10 |
Mr. Suhas Baxi |
Non- Executive Independent Director |
0.900 |
13% |
0.7 |
The median remuneration of employees of the Company during the financial year was Rs. 1.234 Million. In the financial year 2022-23, there was an increase of around 5% in the median remuneration of employees.
There were 1063 permanent employees on the rolls of Company as on 31st March, 2023.
Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e., 2022-23 was around 9% whereas the managerial remuneration for the same financial year increased by around 28%.
The key parameters for the variable component of remuneration paid to the Directors are considered by the Board of Directors based on the recommendations of Nomination and Remuneration Committee as per the Remuneration Policy for the Directors, Key Managerial Personnel and other Employees.
It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, duly amended, in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Annual Report, excluding the aforesaid information, is being sent to all the members and others entitled to receive it. Any shareholder interested in obtaining such particulars may write to the Company Secretary.
Details of significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future:
There were no such events that occurred during the Financial Year 2022-23.
Prevention of Sexual Harassment Policy:
The Company has in place Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All Women employees (permanent, contractual, temporary, trainees) are covered under this policy.
The Company has constituted Internal Committee as per the aforesaid Act.
The following is a summary of Sexual Harassment Complaints received and disposed during Financial Year 2022-23, under the aforesaid Act: No of Complaints pending at the beginning of the year : Nil No. of Complaints received : 1 No. of Complaints disposed of : 1 No. of Complaints pending as on 31st March 2023 : Nil |
Energy Conservation, Technology Absorption, Adaptation, Innovation:
As continued efforts towards Decarbonisation of transportation sector, Globally Low Carbon Ethanol production is need of an hour and PRAJ has developed technology solutions focusing on reduction of carbon intensity (CI) approaching towards net zero emission. Low CI ethanol also helps customers in improving profitability and addressing the market requirements for advanced biofuels like Sustainable Aviation Fuel etc.
Four out of the ten principles used for such assessment fall perfectly within our sphere of influence. These are given below:
⢠Continuous efforts for reduction of Carbon intensity for production of renewable Fuels, Chemicals.
⢠Use of technologies that minimize overall water and energy consumption.
⢠Value maximization by exploring technology for creation of value added coproducts (High Protein DDGS)
⢠Compliance to all applicable safety, health and environmental regulations.
Praj Technology and Engineering Group has their focus on the designing and engineering of plants and machinery and processes that minimize consumption of energy and water. The plants are designed to meet regulatory norms of environment, health and safety and thereby reduce customers'' compliance risks.
Our Business Sustainability Systems monitor the critical norms demonstrating that every new generation plant beats the previous benchmarks of yield, consumption of water, energy and effluents.
Infusing Sustainability principles into design and engineering of plants and machinery and providing sustainability solutions to the customers is of prime significance. Number of technologies developed during Financial Year 2022-23 is as under,
⢠Energy Integration (El): Advanced energy integration technology using ''pressure booster technique'' for 80% reduction of thermal energy requirement in Distillation, Dehydration and Evaporation section.
⢠Process Integration (PI): Thin stillage from starch based plants is rich source of energy but difficult in digestion due to high Nitrogen and Sulphate contents. PRAJ has developed technology for maximization of biogas production from thin stillage which can be integrated to reduce thermal energy requirement for plant.
⢠Process optimization (PO): Wet cake is a rich source of fiber. Conversion of Fiber to ethanol for 6-7% higher alcohol yield and high protein DDGS production.
Implementation of all above technologies (EI PI PO) will help customers to achieve 45% reduction in greenhouse gas emissions.
⢠Co-product maximization: For corn based plant, corn fractionation technology for production of Hi-protein DDGS and corn oil recovery techniques helps to maximize profitability. PRAJ is working with different technology approach to meet this customer need.
⢠RenGas Technology: Advanced and efficient bioprocess for production of bio-methane from industrial waste and agrireside namely press mud, rice straw, cotton stalk, Empty fruit bunch etc.
⢠enfinity Technology: Ultra low Carbon- Lignocellulose Ethanol technology developed in PRAJ R & D center is now under execution and optimization of steam, water, chemical and enzyme consumption with further improvement of GHG savings.
⢠Cellunity Technology: Ultra low carbon-Softwood to ethanol technology has been developed with unique wet and dry SO2 pretreatment and being offered in European market.
⢠Sustainable Aviation Fuel (SAF): For de-carbonization of aviation industry, from sugary feedstock SAF will be produced via ASTM approved Alcohol to Jet (ATJ) pathway.
Key Highlights for Financial Year 2022-23:
1. During this financial year, your company has successfully demonstrated IBA dehydration, Bio-methanated spent wash advanced treatment technology.
2. The first plant using enfinity technology for production of ultra low carbon from cellulosic feedstock has been mechanically completed and ready for commissioning.
3. Execution of FEL orders based on low CI energy integration technologies in USA.
4. Successful first commercial test flight on the SAF sample produced in PRAJ Matrix.
5. Lignocellulosic ethanol Alcohol is produced using enfinity technology.
6. Executing front end engineering design orders for low CI energy integration technology.
7. In the year gone by, the Company was granted One (1) Indian and Eight (8) International patents brining the total to Twenty Five (25) granted Indian patents and Seventy Three (73) granted International patents and over 300 patent applications till date.
Total number for patent is less due to :
⢠Expiry of 3 Indian Patents (after completion of 20 years)
⢠Abandonment of 3 International and 1 Indian Patents.
Foreign Exchange Earnings & Outgo:
('' Mn.) |
||
Particulars |
31/3/2023 |
31/3/2022 |
Earnings Outgo Net Foreign Exchange Earnings |
5,209 2,896 2,313 |
3,395 1,711 1,684 |
Your Company has retained its status as a net forex earner consecutively for past 25 years. |
Your Directors wish to place on record their appreciation towards all associates including Customers, Collaborators, Government Agencies, Bankers, Suppliers, Shareholders, Auditors, Employees and others who have reposed their confidence in the Company.
For and on behalf of the Board of Directors
Place: Pune Dr Pramod Chaudhari
Date: 25/05/2023 Executive Chairman
Mar 31, 2022
Your Directors present their 36th Report together with the Audited Financial Statements for the year ended 31st March, 2022. Financial Results (Standalone)
During the year under review, your Company has recorded total income of Rs.21,157 Mn (previous year Rs. 11,117 Mn), registering an increase of 90 % in total income. Profit after Tax increased by 131% to Rs.1,644 Mn (Previous year Rs. 712 Mn.). The performance summary (standalone) is presented herewith:
(? Mn.) |
||
Particulars |
2021-22 |
2020-21 |
Turnover |
20,532 |
10,885 |
Other Income (including exceptational item and foreign exchange gain) |
625 |
232 |
Total Income |
21,157 |
11,117 |
Total Expenses |
19,018 |
10,150 |
PBT |
2,139 |
967 |
PAT |
1,644 |
712 |
Other Comprehensive Income |
(8) |
10 |
Total Comprehensive Income |
1,636 |
722 |
( ) Balance in Profit & Loss account |
5,045 |
4,414 |
Profit Available for Appropriations Appropriations |
6,681 |
5,136 |
- Dividend |
397 |
- |
Transfer to / (from) Special Economic zone Re-investment Reserve |
(61) |
91 |
Balance in Statement of Profit & Loss |
6,345 |
5,045 |
State of Company''s Affairs |
||
Please refer Management Discussion & Analysis annexed to this report dealing with the state of the Company''s affairs at length. (Refer Annexure 1). |
||
Summary of Consolidated Results |
||
During the year, the Total Income stood at Rs.23,695 Mn which is 78% more than last year (Rs.13,304 Mn). Profit after tax was 1,502 Mn (previous year''s figure Rs.811 Mn) registering an increase of 86% over last year. The performance summary is presented herewith: (? in Mn) |
||
Particulars |
2021-22 |
2020-21 |
Turnover |
23,333 |
13,047 |
Other income (including foreign exchange gain) |
362 |
257 |
Total income |
23,695 |
13,304 |
Total expenses |
21,646 |
12,173 |
PBT |
2,049 |
1,131 |
PAT (after Minority Interest) |
1,502 |
811 |
( ) Other Comprehensive Income |
-22 |
11 |
1,480 |
822 |
The Board of Directors at its meeting held on 25th May, 2022 has recommended a Dividend of Rs. 4.20/- per share (210%) of the Face value of Rs.2/- for the financial year 2021-22 (comprising of final Dividend @ 135% plus a Special dividend @ 75% on account of Amrit Mahotsav in commemoration of 75 years of independence).
The dividend is payable subject to shareholders'' approval at the ensuing Annual General Meeting (AGM). The final dividend payout, if approved by the shareholders in the ensuing AGM, will be around Rs.771 Mn.
The dividend pay-out is in line with the Company''s Dividend Distribution Policy.
In accordance with Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy and the same is annexed herewith as Annexure 9. The Policy is also hosted on the website of the Company and can be viewed at www.praj.net
Investor Education and Protection Fund (IEPF)
Pursuant to the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has transferred unclaimed/ unpaid dividend of Rs.13,22,461/- pertaining to the financial year 2013-14 to Investor Education and Protection Fund, on 16th September, 2021. Further, the Company has also transferred the corresponding 16,147 shares pertaining to the financial year 2013-14 to IEPF on 14th October, 2021.
Details of Nodal Officer
Mr. Dattatraya Nimbolkar, Chief Internal Auditor and Company Secretary has been appointed as Nodal Officer of the Company. Details in this regard are available on the website of the Company at www.praj.net
The Company is not proposing any transfer to the General Reserve for the financial year 2021-22.
a) CRISIL has re-affirmed âA1 " rating to the Company''s short-term banking facilities which signify that the degree of safety regarding timely payment of instruments is very strong.
b) CRISIL has also re-affirmed its rating of the Company''s long-term bank facilities to âAA/stable''.
The âAA/Stable" rating signifies high safety with regard to the timely payment of long-term financial obligations.
Praj Engineering & Infra Ltd. India, Praj HiPurity Systems Ltd. , India, Praj Americas Inc., U.S.A., Praj Far East Co. Ltd., Thailand, Praj Far East Philippines Ltd. Inc., The Philippines, continue to be subsidiaries of your Company.
During the year, Company closed Praj Industries (Africa) (Pty.) Ltd, Subsidiary Company, on 19th January, 2022.
Consolidated Financial Statements of the Company, which include the results of the said Subsidiary Companies, are included in this Annual Report. Further, a statement containing the particulars for each of the Company''s subsidiaries is also enclosed (Please refer Annexure 6). Copies of Annual Accounts and related detailed information of all the subsidiaries can also be sought by any member of the Company or its Subsidiaries by making a written request to the Company Secretary at the Registered Office of the Company in this regard. The Annual Accounts of the Subsidiary Companies are also available for inspection at the Company''s and/or the concerned Subsidiary''s Registered Office.
The Company has formulated a policy for determining ''material'' subsidiaries and such policy is hosted on the Company''s website i.e. www.praj.net
Further, a statement containing salient features of the financial statements of subsidiaries in the prescribed format AOC-1 is appended as Annexure 6 to this Report. The statement also provides the details of the performance, financial position of each of the subsidiaries.
Pursuant to the provisions of Regulation 34 (2) & (3) and 53(f), read with Schedule V to SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report (Annexure 1), Report on Corporate Governance and Compliance Certificate on Corporate Governance (Annexure 3), Business Responsibility Report (Annexure 8), Dividend Distribution Policy (Annexure 9) are annexed to this report.
Ms. Parimal Chaudhari (DIN 00724911) will retire at 36th Annual General Meeting and being eligible, has offered herself for reappointment as Director of the Company.
The existing Agreement entered into with Dr Pramod Chaudhari, Executive Chairman ends on 31st July, 2022. Based on the recommendation of the Nomination and Remuneration Committee, your Directors have approved the extension of the tenure of Dr Pramod Chaudhari for further period of twenty nine (29) months with effect from 1st August, 2022 till 31st December, 2024, subject to the approval of shareholders by way of Special Resolution at the ensuing Annual General Meeting of the Company.
Item No. 5 of Notice of 36th Annual General Meeting contains necessary details of Special Resolution in this regard.
The existing Agreement entered into with Mr. Sachin Raole, CFO and Director-Resources ends on 31st July, 2022. Based on the recommendation of the Nomination and Remuneration Committee, your Directors have approved the extension of the tenure of Mr. Sachin Raole for further period of five (5) years with effect from 1st August, 2022 till 31st July, 2027, subject to the approval of shareholders at the ensuing Annual General Meeting of the Company.
Item No. 6 of Notice of 36th Annual General Meeting contains necessary details of Ordinary Resolution in this regard.
Composition of Key Managerial Personnel (KMP)
The Company has the following KMPs as on 31st March 2022;
Name of the KMP |
Designation |
Date of Appointment |
Date of Resignation |
Dr Pramod Chaudhari |
Executive Chairman |
08.11.1985 |
N.A. |
Mr. Shishir Joshipura |
Chief Executive Officer and Managing Director |
02.04.2018 |
N.A. |
Mr. Sachin Raole |
CFO and Director- Resources |
13.07.2016 |
N.A. |
Mr. Dattatraya Nimbolkar |
Chief Internal Auditor & Company Secretary |
22.07.2011 |
N.A. |
Composition of Audit, Nomination & Remuneration Committee
For details, kindly refer to the Corporate Governance Report annexed to this Report (Annexure 3).
Declaration from Independent Directors
The Independent Directors have submitted their annual declaration to the Board confirming that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 read with rules framed there under.
a) Statutory Auditors
The current tenure of P G Bhagwat LLP, Chartered Accountants, Pune (Firm Regn. No. 101118W/W100682), Statutory Auditors of the Company will expire on the date of the 39th Annual General Meeting to be held in the calendar year 2025.
b) Interna! Auditors
The Internal Auditors, Khare Deshmukh & Co., Chartered Accountants, Pune have conducted internal audits periodically during Financial Year 2021/22 and submitted their reports to the Audit Committee.
Their reports have been reviewed by the Statutory Auditors and the Audit Committee.
The Board has appointed Khare Deshmukh & Co., Chartered Accountants Pune, as Internal Auditors of the Company for the year 2022-23.
c) Cost Auditors
Your Company has appointed Dhananjay V. Joshi & Associates, Cost Accountants as Cost Auditors of the Company for the financial year 2022-23 at the remuneration as set out in item No.4 of the explanatory statement which is subject to the ratification of members in the ensuing Annual General Meeting.
d) Secretarial Auditors
KANJ & Co., LLP, Pune, were appointed to conduct the Secretarial Audit of the Company for the financial year 2021-22, as required under Section 204 of the Companies Act, 2013 read with rules framed thereunder. The Secretarial Audit Report (MR-3) for FY. 2021-22 forms part of the Annual Report as Annexure 5.
The Board has appointed KANJ & Co. LLP, Pune, as Secretarial Auditors of the Company for the financial year 2022-23.
Material changes and commitments, if any, affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of the report:
There were no material changes and commitments, affecting the financial position of the Company that occurred between the end of the financial year to which these financial statements relate and the date of the report.
Statement concerning development and implementation of Risk Management Policy of the Company:
In accordance with the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, (LODR) the Board has amended the Risk Management Policy and initiated necessary steps for framing, implementing and monitoring the risk management plan for the Company.
Based on market capitalization rank as on 31st March 2022, provisions of Regulation 21 of SEBI (LODR), Regulations 2015, as amended from time to time, are applicable to the Company for the financial year 2022/23. As per amended Regulation 21 of SEBI LODR Regulations, it is mandatory for the Company to constitute Risk Management Committee. The Company had already constituted the Risk Management Committee at its Board Meeting held on 16th May 2019.
The main objective of the Risk Management Policy is to ensure sustainable business growth and to promote a proactive approach in identifying, reporting, evaluating and mitigating risks associated with the business of the Company.
The policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.
In today''s challenging and competitive environment, strategies for mitigating inherent risks associated with business and for accomplishing the growth plans of the Company are imperative. The common risks inter alia are risks emanating from; Regulations, Cyber Risks, Competition, Business, Technology obsolescence, Investments, Retention of talent, Finance, Politics and Fidelity etc. In today''s complex business environment, Cyber risks have considerably increased. During the year, we continued our efforts to keep ourselves up to date with cyber security events globally to achieve higher compliance and its continued sustenance.
As a matter of Risk Management Policy, these risks are assessed and steps, as appropriate, are taken to mitigate the same.
The amended Risk Management Policy is hosted on the Company''s website i.e.www.praj.net
The Company has instituted adequate Internal Controls and processes to have a cohesive view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities.
In the opinion of the Board, there are no risks which may threaten the existence of the Company.
The Company has in place, adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
Remuneration Policy for Directors and KMP
The Company''s remuneration policy for Directors/ KMPs is directed towards rewarding performance based on periodical review of achievements. The remuneration policy is in consonance with the existing industry practice.
The said policy is available on Company''s website i.e. www.praj.net and is also attached as Annexure 7 to this report.
During the year, your Company allotted 444,184 shares on the exercise of options under the Employee Stock Option Plan 2011. Consequent to the above, the Issued, Subscribed and Paid-up Share Capital of your Company increased from 183,228,904 (number of shares) (Value Rs. 366.458 Mn.) as on 31st March 2021 to 183,673,088 (number of shares) (Value Rs.367.346 Mn.) as of 31st March, 2022.
Please refer Annexure 4 to this report for the particulars required to be disclosed pursuant to Rule 12 (2) of the Companies (Share Capital and Debentures) Rules, 2014 and Clause 14 of SEBI (Share Based Employee Benefits) Regulations, 2014.
Board at its meeting held on 17th June, 2021 has granted 1,40,000 options to eligible employees at Rs. 90/- per option under ESOP 2011 - Grant XI.
Vigil Mechanism / Whistle Blower Policy
To ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour, the Company has adopted a Vigil Mechanism/ Whistle Blower Policy. This policy is explained in the Corporate Governance Report and is also hosted on the website of Company at www.praj.net.
Details of policy developed and implemented by the Company on its Corporate Social Responsibility initiatives
Kindly refer Annexure 2 to this Report.
Particulars of loans, guarantees or investments made under section 186 of the Companies Act, 2013
Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No. 5 & 26 to the Standalone Financial Statements).
Contracts and arrangements with Related Parties
All contracts / arrangements / transactions entered by the Company during the financial year 2021/22 with related parties were in the ordinary course of business and on an arm''s length basis. Such transactions form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No. 29 to the Standalone Financial Statements).
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 the materiality of related party transactions which is available on the Company''s website at www.praj.net
The information in respect of Related Party transactions is given below;FORM AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm''s length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm''s length basis ;
N.A. as there were no transactions during the year which were not at arm''s length.
2. Details of material contracts or arrangements or transactions at arm''s length basis;
During the financial year 2021/22, all the transactions entered into with related parties were at arm''s length. Also, these transactions were not material.
Regulation 4 (2) (f) (ii) (9) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework annually. Also, the Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its performance and that of its Committees and individual Directors. In addition, Schedule IV to the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Board works with the Nomination & Remuneration Committee to lay down the evaluation criteria for the performance of Executive / Non-Executive / Independent Directors.
Independent Directors have three key roles -Governance, Control and Guidance. Some of the performance indicators based on which the Independent Directors are evaluated include:
a) Ability to contribute to and monitor the Company''s corporate governance practices.
b) Ability to contribute by introducing international best practices to address top-management issues.
c) Active participation in medium to long-term strategic planning.
d) Commitment to the fulfillment of Directors'' obligations and fiduciary responsibilities; which include participation in the
Board and the Committee Meetings.
In pursuance of the above, the Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors.
The evaluation of all the Directors, Committees and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the Nomination & Remuneration Committee.
In accordance with the above, the Board at its meeting held on 8th February, 2022 has carried out performance evaluation of all Directors.
Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and the Secretarial Auditors in their reports
There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Secretarial Auditors in their report.
As per the Companies (Amendment) Act, 2017, effective from 28th August, 2020, Company is not required to disclose Extract of Annual Return (MGT-9) in the Directors'' Report. Further, Company is required to place a copy of the Annual Return on its website and the web-link of the Annual Return is required to be given in the Directors'' Report. Accordingly, the Annual Return (Form MGT-7) for the financial year 2021/22 is available on the website of the Company at www.praj.net.
Number of Board Meetings conducted during the year under review
The Board met five times during the financial year (four times through video conferencing and once through physical mode), the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 as amended from time to time.
Directors'' Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement: -
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
(b) the Directors have 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 of the Company for that period:
(c) the Directors have 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 have prepared the annual accounts on a going concern basis:
(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Details in respect of frauds reported by auditors under sub-section (12) of Section 143 of the Companies Act, 2013, other than those which are reportable to the Central Government.
During the year, there was no such incidence of fraud reported by Statutory Auditors to the Management.
The Company has neither accepted nor renewed any deposits during the year under review and also did not have any outstanding deposits at the end of the year.
Remuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees
The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company and Directors is furnished hereunder:
Sr. No. |
Name |
Designation |
Remuneration paid during FY 2021-22 Rs. Mn. |
% increase/ (Decrease) in remuneration over FY 2020-21 |
Ratio of the remuneration of each Director to median remuneration of employees. |
1 |
Dr Pramod Chaudhari |
Executive Chairman |
76.857 |
28% |
*62.3 |
2 |
Mr. Shishir Joshipura |
CEO & MD |
57.252 |
15% |
*37.1 |
3 |
Mr. Sachin Raole |
CFO and Director- Resources |
45.419 |
28% |
*16.7 |
4 |
Mr. Dattatraya Nimbolkar |
Chief Internal Auditor & Company Secretary |
9.290 |
6% |
*7.9 |
5 |
Mr. Berjis Desai |
Non- Executive Independent Director |
2.500 |
11% |
2.1 |
6 |
Ms. Parimal Chaudhari |
Non- Executive Director |
2.000 |
14% |
1.7 |
7 |
Mr. Sivaramakrishnan Iyer |
Non- Executive Independent Director |
2.250 |
13% |
1.9 |
8 |
Ms. Mrunalini Joshi |
Non- Executive Independent Director |
0.650 |
8% |
0.6 |
9 |
Dr Shridhar Shukla |
Non- Executive Independent Director |
0.800 |
7% |
0.7 |
10 |
Mr. Suhas Baxi |
Non- Executive Independent Director |
0.800 |
7% |
0.7 |
* Normalised
The median remuneration of employees of the Company during the financial year was Rs. 1.181 Million. In the financial year 2021/22, there was an increase of around 10% in the median remuneration of employees.
There were 1132 permanent employees on the rolls of Company as on 31st March, 2022.
The average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e., 2021-22 was around 11% whereas the managerial remuneration for the same financial year increased by around 23% .
The key parameters for the variable component of remuneration paid to the Directors are considered by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, duly amended, in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Annual Report, excluding the aforesaid information, is being sent to all the members and others entitled to receive it. Any shareholder interested in obtaining such particulars may write to the Company Secretary.
Detailes of significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.
There were no such events that occurred during the financial year 2021-22.
Prevention of Sexual Harassment Policy
The Company has in place Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
The Company has constituted Internal Complaint Committee as per the aforesaid Act.
The following is a summary of Sexual Harassment Complaints received and disposed during Financial Year 2021/22, under the aforesaid Act:
No. of Complaints received : Nil.
No. of Complaints disposed of : Not applicable.
No. of Complaints pending : Nil
Energy Conservation, Technology Absorption, Adaptation, Innovation:
Sustainability is the need of the hour in bio-fuels and bio-materials producing industry. To be able to sell these products in international markets, our customers need to have their operations assessed and certified by an organization such as RSB [Roundtable on Sustainable Bio-materials].
Five out of the ten principles used for such assessment fall perfectly within our sphere of influence. These are given below:
⢠Continuous effect for improvement of GHG emission savings for production of renewable products (Fuels, chemicals etc)
⢠Flex plants: Use of multiple raw materials (Molasses C, B-heavy, Syrup, Corn, Rice) with effective utilization of assets for the production of multiple products (Bioethanol, Pharma grade ethanol, perfumery alcohol, Potable alcohol) based on market requirement and dynamics.
⢠Use of technologies that minimize overall water and energy consumption.
⢠Value maximization by exploring technology for the creation of value added coproducts (High Protein DDGS, Human protein, Bio-Bitumen)
⢠Compliance with all applicable safety, health and environmental regulations.
Praj Technology and Engineering Group have their focus on the designing and engineering of plants and machinery and processes that minimize the consumption of energy and water. Also, this group has focused on the reduction of various process related gaseous emissions. The plants are designed to meet regulatory norms of environment, health and safety and thereby reduce customers'' compliance risks.
Our Business Sustainability Systems monitor the critical norms demonstrating that every new generation plant beats the previous benchmarks of yield, consumption of water, energy and effluents.
Infusing Sustainability principles into the design and engineering of plants and machinery and providing sustainability solutions to the customers is of prime significance. Number of technologies developed and commercialized successfully;
⢠Bio-syrup technology giving the customer increase in ethanol yield as well as flexibility to store sugar rich stream to extended number of days of operation.
⢠EcoSmart Plus: Efficient removal of impurities for production of pharma grade ethanol.
⢠ZLD System: Advanced Bio-methanated Spent wash Treatment for improving reliability and reduction in cleaning frequency of Evaporators leading to reduction in water and chemicals.
⢠Co-product maximization: Exploring production of human grade protein as valuable coproduct from grain based distillery.
⢠EcoCET: 24 x 7 operation of evaporation plant without use of CIP chemical.
⢠IPA (Isopropyl alcohol) Dehydration: Dehydration of IPA for effective removal of moisture and used as solvent for pharmaceutical industry.
⢠RenGas Technology: Advanced and efficient bioprocess for production of bio-methane from agri-reside and other solid waste.
⢠enfinity Technology: Lignocellulose Ethanol technology developed in house is now under execution and optimization of steam, water, chemical and enzyme consumption with improved GHG savings.
⢠CelluNiti Technology: Praj and Sekab E-technology AB is a unique partnership with proren capabilities to develop, intigrate a scale-up advanced bio-fuel technology - CelluNitiâ¢. CelluNiti⢠makes it possible to refine almost any form of bio-mass into environment friendly, high quality a commercially viable chemical products a raw material such as cellulosic sugars, ethanol bio-gass and lignin.
⢠EcoCool : Optimized design of Air Colled Heat Exchange (ACHE) being offered for water stressed projects.
⢠Sustainable aviation fuel (SAF): For de-carbonization of aviation industry, From sugary feedstock SAF will be produced via isobutanol route.
As a part of Bio-Prism⢠platform, Praj Matrix is focusing on Bioplastics. Bioplastics is an apt sustainable solution to replace single use plastics and reduce menace caused by plastic pollution. Praj is developing technologies for Polylactic acid (PLA) and Polyhydroxyalkanoates (PHA). Currently PLA technology is ready to be scaled up to pilot scale whereas
PHA is under development along with our partners. Matrix is also developing technologies for Bio-Bitumen and Rice protein, which are the co-products of ethanol refineries. Bio-Bitumen product has been validated by our partners for road construction and the technology is ready for scale up to pilot scale. Matrix''s Rice Bran Wax, having applications in cosmetics and food sectors, is ready for commercialisation, post successful 1.5 Ton product delivery to potential Europeancustomer.
Praj''s commitment to decarbonization & sustainable development are the major drivers for Praj Matrix. Matrix''s Mantra for technology development is ''Technologies with Lowest in Carbon intencity and Cost and Best in Class'' and is committed to contribute significantly to Praj''s growth story in the coming years.
Key Highlights for Financial Year 2021-22:
1. During the financial year 2021-22, the Company has successfully demonstrated Bio syrup, EcoSmart plus technology for production of Pharma-grade Ethanol, Advanced Bio-methanated spent wash treatment technology, Eco-Cool Technology and IPA dehydration technology.
2. Praj developed Bio-Bitumen technology from the lignin generated from the 2G enfinity plant. This can be bolted on the 2G plant to improve overall viability of 2G ethanol plants.
3. In the year gone by, the company was granted 4 Indian and 8 international patents bringing the total to 28 granted Indian patents and 68 granted international patents and over 300 patents applications till date.
Foreign Exchange Earnings & Outgo
('' Mn.) |
||
Particulars |
31/3/2022 |
31/3/2021 |
Earnings |
3,395 |
3,127 |
Outgo |
1,711 |
954 |
Net Foreign Exchange Earnings |
1,684 |
2,173 |
Your Company has retained its status as a net forex earner consecutively for past 24 years.
Your Directors wish to place on record their appreciation towards all associates including Customers, Collaborators, Government Agencies, Bankers, Suppliers, Shareholders, Auditors, Employees and others who have reposed their confidence in the Company.
For and on behalf of the Board of Directors
Place: Pune Dr Pramod Chaudhari
Date: 25/05/2022 Executive Chairman
Mar 31, 2019
DIRECTORSâ REPORT
To The Members of Praj Industries Limited,
The Directors are pleased to present the 33rd Annual Report and the Audited Financial Statements for the year ended 31st March, 2019.
Financial Results
During the year under review, your Company has recorded total income of Rs, 9517 Mn (previous year Rs, 7283 Mn), registering increase of 31% in total income. Profit before Tax increased by 103% to Rs, 809 Mn (previous year Rs, 399 Mn). The performance summary is presented herewith:
(Rs, Mn.)
Particulars |
2018-19 |
2017-18 |
Turnover |
9233 |
7020 |
Other Income |
284 |
263 |
Total Income |
9517 |
7283 |
Total Expenses |
8708 |
6884 |
PBT |
809 |
399 |
PAT |
624 |
315 |
Other Comprehensive Income |
5 |
7 |
Total Comprehensive Income |
629 |
322 |
( ) Balance in Profit & Loss account |
4969 |
5067 |
( ) INDAS Adjustments (ESOPs) |
9 |
2 |
(-) IND AS Adjustment (Adjustment to opening Retained Earnings - IND AS 115: Revenue Recognition) |
(154) |
- |
Profit Available for Appropriations Appropriations Dividend (Including Special Interim Dividend) |
5453 |
5391 |
Dividend |
386 |
291 |
Dividend Tax (Including Special Interim Dividend) |
79 |
59 |
Transfer to Special Economic Zone Re-investment Reserve |
62 |
72 |
Balance in Statement of Profit & Loss |
4926 |
4969 |
State of Companyâs Affairs
Please refer Management Discussion & Analysis report annexed to this report dealing with the state of Company''s affairs at length. (Refer Annexure 1).
Summary of Consolidated Results
During the year, the Total Income stood at Rs, 11734 Mn which is more by 23% over last year(? 9502 Mn). Profit before tax at '' 879 Mn is higher by 66% over last year (Rs, 530 Mn). The performance summary is presented herewith:
(Rs, in Mn)
Particulars |
2018-19 |
2017-18 |
Turnover |
11411 |
9235 |
Other income |
323 |
267 |
Total income |
11734 |
9502 |
Total expenses |
10855 |
8972 |
PBT |
879 |
530 |
PAT (after Minority Interest) |
682 |
395 |
( ) Other Comprehensive Income |
6 |
8 |
Total Comprehensive Income |
688 |
403 |
Dividend
The Board of Directors at its meeting held on 28th January, 2019, declared and paid Special Interim Dividend of Rs, 0.50 per equity share (25%) of Face value of Rs, 2/- for the financial year 2018-19. The Special Interim Dividend pay-out was Rs, 110.029 Mn (Dividend: Rs, 91.266 Mn and Dividend Distribution Tax Rs, 18.763 Mn).
The Board of Directors of your Company has recommended a final dividend of Rs, 1.62 /-(81%) per equity share of Face value of Rs, 2/- for the Financial Year ended 31st March, 2019. The dividend is payable subject to shareholders'' approval at the ensuing Annual General Meeting (AGM). The final dividend pay-out, if approved by the shareholders in the ensuing AGM, will be around Rs, 356.992 Mn (Dividend: Rs, 296.123 Mn and Dividend Distribution Tax Rs, 60.869 Mn).
With this, the total dividend payout, including dividend distribution tax for the financial year 2018-19 will be Rs, 467.021 Mn The dividend payout is in accordance with the Company''s Dividend Distribution Policy.
Dividend Distribution Policy
In accordance with the Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy and the same is annexed herewith as Annexure 11. The Policy is also hosted on the website of the Company and can be viewed at www.prai.net
Investor Education and Protection Fund (IEPF)
Pursuant to the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has transferred unclaimed/ unpaid dividend of '' 10,93,699/- to Investor Education and Protection Fund pertaining to the financial year 2010-11 on 14/09/2018. Further, the Company has also transferred 39,880 shares to IEPF on 26/10/2018.
Details of Nodal Officer
Mr. Dattatraya Nimbolkar, Chief Internal Auditor and Company Secretary has been appointed as Nodal Officer of the Company. Details in this regard are available on the website of the Company at www.praj.net
Reserves
The Company is not proposing any transfer to the General Reserve for the year 2018-19.
Credit Rating
a) CRISIL has re-affirmed âA1 " rating to the Company''s short-term banking facilities which signifies that the degree of safety regarding timely payment of instruments is very strong.
b) CRISIL has also re-affirmed its rating of the Company''s long-term bank facilities to âAA/stable''. The âAA" rating signifies high safety with regard to timely payment of long-term financial obligations.
Subsidiaries
Praj Engineering & Infra Ltd., India, Praj HiPurity Systems Ltd. , India, Praj Americas Inc., U.S.A., Praj Far East Co. Ltd., Thailand, Praj Industries (Africa) (Pty.) Ltd, South Africa, Praj Far East Philippines Ltd. Inc., The Philippines and Praj Industries (Namibia) Pty. Ltd., Namibia continue to be subsidiaries of your Company.
Consolidated Financial Statements of the Company, which include the results of the said Subsidiary Companies, are included in this Annual Report. Further, a statement containing the particulars for each of the Company''s subsidiaries is also enclosed. Copies of Annual Accounts and related detailed information of all the subsidiaries can also be sought by any member of the Company or its Subsidiaries by making a written request to the Company Secretary at the Registered Office of the Company in this regard. The Annual Accounts of the Subsidiary Companies are also available for inspection at the Company''s and/or the concerned Subsidiary''s Registered Office.
The Company has formulated a policy for determining ''material'' subsidiaries and such policy is hosted on the Company''s website i.e. www.praj.net
Further, a statement containing salient features of the financial statements of subsidiaries in the prescribed format AOC-1 is appended as Annexure 7 to this Report. The statement also provides the details of performance, financial position of each of the subsidiaries.
Corporate Governance
Pursuant to the provisions of Regulation 34 (2) & (3) and 53(f), read with Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report (Annexure 1), Report on Corporate Governance and Compliance Certificate on Corporate Governance (Annexure 3) ,Business Responsibility Report (Annexure 10), Dividend Distribution Policy (Annexure 11) are annexed to this report.
Directors
Shareholders at their 32nd Annual General Meeting held on 6th August, 2018, approved the appointment of Mr. Shishir Joshipura (DIN: 00574970) as Chief Executive Officer and Managing Director of the Company for a period of Five (5) years with effect from 2nd April, 2018 and appointment of Dr. Shridhar Shukla (DIN 00007607) as an Independent Director for a period of Five (5) years with effect from 12th April, 2018.
Mr. Daljit Mirchandani Director (DIN: 00022951) is retiring by rotation at the ensuing Annual General Meeting. However, due to his other pre-occupations, Mr. Daljit Mirchandani is not offering himself for re-appointment. The Board wishes to place on record its appreciation for his valuable contribution during his tenure as Director of the Company.
Ms. Parimal Chaudhari (DIN 00724911) will retire at 33rd Annual General Meeting and being eligible, has offered herself for re-appointment as Director of the Company.
The existing Agreement entered into with Mr. Pramod Chaudhari, Executive Chairman (DIN 00196415) expires on 31st July, 2019. Based on the recommendation of Nomination and Remuneration Committee, your Directors have approved the extension of tenure of Mr. Pramod Chaudhari for further period of three (3) years up to 31st July, 2022, subject to approval of shareholders at the ensuing Annual General Meeting of the Company.
Item No. 5 of Notice of 33rd Annual General Meeting contains necessary details of Special Resolution in this regard.
The existing Agreement entered into with Mr. Sachin Raole, CFO and Director-Finance & Commercial (DIN 00431438) expires on 31st July, 2019. Based on the recommendation of Nomination and Remuneration Committee, your Directors have approved the extension of tenure of Mr. Sachin Raole for further period of three (3) years, up to 31st July, 2022, subject to approval of shareholders at the ensuing Annual General Meeting of the Company.
Item No. 6 of Notice of 33rd Annual General Meeting contains necessary details of Ordinary Resolution in this regard.
Members at 28th Annual General Meeting held on 28th July, 2014, had appointed Mr. Berjis Desai, Mr. Rajiv Maliwal and Mr. Sivaramakrishnan S. Iyer as Independent Directors of your Company for a period of five (5) years.
As per provisions of Section 149 (10) of the Companies Act, 2013 read with relevant Rules and Schedule IV, Independent Director can be re-appointed for consecutive term of five (5) years, subject to approval of shareholders by way of Special Resolution.
Mr. Berjis Desai (DIN 00153675) and Mr. Sivaramakrishnan S. Iyer (DIN 00503487) have given their consent for re-appointment as Independent Directors.
Item Nos. 7 & 8 of Notice of 33rd Annual General Meeting contain necessary details of Special Resolution of respective Independent Directors.
The tenure of Mr. Rajiv Maliwal (DIN 00869035) as Independent Director expires at the conclusion of 33rd Annual General Meeting of the Company. However, he is not offering himself for reappointment. The Board wishes to place on record its appreciation for his valuable contribution during his tenure as Director of the Company.
Composition of Key Managerial Personnel (KMP)
The Company has the following KMP;
Name of the KMP |
Designation |
Date of Appointment |
Date of Resignation |
Mr. Pramod Chaudhari |
Executive Chairman |
08.11.1985 |
N.A. |
Mr. Shishir Joshipura |
Chief Executive Officer and Managing Director |
02.04.2018 |
N.A. |
Mr. Sachin Raole |
CFO and Director- Finance & Commercial |
13.07.2016 |
N.A. |
Mr. Dattatraya Nimbolkar |
Chief Internal Auditor & Company Secretary |
22.07.2011 |
N.A. |
Composition of Audit, Nomination & Remuneration Committee
For details, kindly refer the Corporate Governance Report annexed to this Report(Annexure 3).
Declaration from Independent Directors
The Independent Directors have submitted their annual declaration to the Board confirming that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 read with rules framed there under.
Auditors
a) Internal Auditors
The Internal Auditors, Khare Deshmukh & Co., Chartered Accountants, Pune have conducted internal audits periodically and submitted their reports to the Audit Committee. Their reports have been reviewed by the Statutory Auditors and the Audit Committee.
The Board has appointed Khare Deshmukh & Co., Chartered Accountants Pune, as Internal Auditors of the Company for the financial year 2019-20.
b) Statutory Auditors
The members, in the 29th Annual General Meeting held on 6th August, 2015, appointed M/s PG. Bhagwat, Chartered Accountants, Pune as Statutory Auditors of the Company for a period of five years with effect from the conclusion of 29th Annual General Meeting held on 6th August, 2015.
c) Cost Auditors
Your Company has appointed Dhananjay V. Joshi & Associates, Cost Accountants as Cost Auditors of the Company for the financial year 2019-20 at the remuneration as set out in item No.4 of the explanatory statement which is subject to the ratification of members in the ensuing Annual General Meeting.
d) Secretarial Auditors
M/s KANJ & Co., LLP, Pune, were appointed to conduct the Secretarial Audit of the Company for the financial year 201819, as required under Section 204 of the Companies Act, 2013 read with rules framed thereunder. The Secretarial Audit Report (MR-3) for F.Y. 2018-19 forms part of the Annual Report as Annexure 6.
The Board has appointed KANJ & Co. L.L.P, Pune, as Secretarial Auditors of the Company for the financial year 2019-20.
Material changes and commitments, if any, affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of the report
No material changes and commitments affecting the financial position of the Company occurred from the end of the financial year 2018-19 till the date of this report. Further there was no change in the nature of business of the Company.
Statement concerning development and implementation of risk management policy of the Company
In accordance with the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board adopted Risk Management Policy and initiated necessary steps for framing, implementing and monitoring the risk management plan for the Company.
The main objective of this policy is to ensure sustainable business growth and to promote a pro-active approach in identifying, reporting, evaluating and mitigating risks associated with the business.
The policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.
In today''s challenging and competitive environment, strategies for mitigating inherent risks associated with business and for accomplishing the growth plans of the Company are imperative. The common risks inter alia are risks emanating from; Regulations, Competition, Business, Technology obsolescence, Investments, Retention of talent, Finance, Politics and Fidelity.
As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.
The Risk Management Policy is also hosted on the Company''s website i.e. www.prai.net
The Company has instituted adequate Internal Controls and processes to have a cohesive view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities.
In the opinion of the Board, there are no risks which may threaten the existence of the Company.
Internal financial controls
The Company has in place, adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
Remuneration Policy for Directors and KMP
The Company''s remuneration policy for Directors/ KMP is directed towards rewarding performance based on review of achievements periodically. The remuneration policy is in consonance with the existing industry practice.
The said policy is available on Company''s website i.e. www.praj.net and is also attached as Annexure 8 to this report.
ESOP
During the year, your Company allotted 1,715,435 shares on exercise of options under the Employee Stock Option Plan 2011. Consequent to the above, the Issued, Subscribed and Paid up Share Capital of your Company increased from 180,932,415 (Rs, 361.865 Mn) shares to 182,647,850 (Rs, 365.296 Mn.) as of 31st March, 2019.
During the year, your Company has granted the following options under Employees Stock Option Plan 2011;
Sr. No. |
No. of Options |
Exercise Price/Option |
Grant VIII |
90,000 |
Rs, 50/- per option |
Grant IX |
1,135,000 |
Rs, 70/- per option |
Grant X |
400,000 |
Rs, 70/ per option |
Please refer Annexure 4 to this report for the particulars required to be disclosed pursuant to Rule 12 (2) of the Companies (Share Capital and Debentures) Rules, 2014 and Clause 14 of SEBI (Share Based Employee Benefits) Regulations, 2014.
Vigil Mechanism / Whistle Blower Policy
In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the Company has adopted a Vigil Mechanism/Whistle Blower Policy. This policy is explained in Corporate Governance Report and is also hosted on the website of Company at www.praj.net.
Details of policy developed and implemented by the Company on its Corporate Social Responsibility initiatives
Kindly refer Annexure 2 to this Report.
Particulars of loans, guarantees or investments made under section 186 of the Companies Act, 2013
Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No. 4 to the Standalone Financial Statements).
Contracts and 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. Such transactions form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No. 31 to the Standalone Financial Statements).
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 which is available on the Company''s website at the link: www.praj.net
The information in respect of Related Party transactions is given below; FORM AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain armâs length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm''s length basis ;
N.A. as there were no transactions during the year which were not at arm''s length.
2. Details of material contracts or arrangement or transactions at arm''s length basis;
During the financial year 2018-19, all the transactions entered into with related parties were at arm''s length. However, these transactions were not material.
Performance Evaluation
Regulation 4 (2) (f) (ii) (9) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. Also, the Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its Committees and individual Directors. In addition, Schedule IV to the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Board works with the Nomination & Remuneration Committee to lay down the evaluation criteria for the performance of Executive / Non-Executive / Independent Directors.
Independent Directors have three key roles - Governance, Control and Guidance. Some of the performance indicators based on which the Independent Directors are evaluated include:
a) Ability to contribute to and monitor the Company''s corporate governance practices.
b) Ability to contribute by introducing international best practices to address top-management issues.
c) Active participation in long-term strategic planning.
d) Commitment to the fulfillment of a Directors'' obligations and fiduciary responsibilities; these include participation in the Board and the Committee Meetings.
In pursuance of above, the Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors.
The evaluation of all the Directors, Committees and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the Nomination & Remuneration Committee.
Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and the Secretarial Auditors in their reports
There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report. Extract of Annual Return
The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 in prescribed Form MGT-9 for the year ended 31st March, 2019 is as per Annexure 5 to this report.
Number of Board Meetings conducted during the year under review
The Board met five times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
Directorsâ Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:-
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) the Directors have 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 of the Company for that period;
(c) the Directors have 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 have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Details in respect of frauds reported by auditors under sub-section (12) of Section 143 other than those which are reportable to the Central Government.
During the year, there was no such incidence of fraud reported by Statutory Auditors to the Management.
However, there was one case involving unauthorized transfer of secret information relating to the business of the Company by one of the employees of the Company to the outsiders, for which necessary legal action has been initiated by the Company.
Deposits
The Company has neither accepted nor renewed any deposits during the year under review and also did not have any outstanding deposits at the end of the year.
Remuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees
The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company and Directors is furnished hereunder:
Sr. No. |
Name |
Designation |
Remuneration paid FY 2018-19 '' Mn. |
% increase/ (Decrease)in remuneration over FY 2017-18 |
Ratio of the remuneration of each Director to median remuneration of employees |
1 |
Mr. Pramod Chaudhari |
Executive Chairman |
51.627 |
Nil |
53.7 |
2 |
Mr. Shishir Joshipura |
CEO & MD |
28.580 |
NA |
29.7 |
3 |
Mr. Berjis Desai |
Non- Executive Independent Director |
2.100 |
56 |
2.2 |
4 |
Ms. Parimal Chaudhari |
Non- Executive Director |
1.650 |
65 |
1.7 |
5 |
Mr. Rajiv Maliwal |
Non- Executive Independent Director |
0.600 |
33 |
0.6 |
6 |
Mr. Sivaramakrishnan Iyer |
Non- Executive Independent Director |
1.750 |
30 |
1.8 |
7 |
Mr. Daljit Mirchandani |
Non-Executive Non -Independent Director |
11.700 |
7 |
12.2 |
8 |
Mr. Sachin Raole |
CFO and Director- Finance & Commercial |
7.711 |
1 |
8.0 |
9 |
Ms. Mrunalini Joshi |
Non- Executive Independent Director |
0.550 |
57 |
0.6 |
10 |
Dr. Shridhar Shukla |
Non- Executive Independent Director |
0.550 |
NA |
0.6 |
11 |
Mr. Dattatraya Nimbolkar |
Chief Internal Auditor & Company Secretary |
9.089 |
4 |
9.4 |
The median remuneration of employees of the Company during the financial year was '' 0.962 Million. In the financial year, there was an increase of 8% in the median remuneration of employees.
There were 885 permanent employees on the rolls of Company as on 31st March, 2019.
Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2018-19 was around 9% whereas the managerial remuneration for the same financial year increased by around 4%.
The key parameters for the variable component of remuneration paid to the Directors are considered by the Board of Directors based on the recommendations of Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
Particulars of employees
The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is given in Annexure 9 to this Report.
Details of significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.
No such events occurred during the financial year 2018-19.
Prevention of Sexual Harassment Policy
The Company has in place Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
The Company has constituted Internal Complaint Committee as per the aforesaid Act.
Your Directors state that during the year under review, there was no case filed pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Energy Conservation, Technology Absorption, Adaptation, Innovation:
During the year, Praj in its continued endeavor of optimizing energy and water consumption in distillery has come up with Innovative integrated Sustainable Technologies. Adoption of these technologies will help distillery to reduce water and thermal energy requirement by 75%. Praj has successfully commissioned and demonstrated this technology in one of the plants in Maharashtra and already set a new benchmark.
Praj Green fuel production technologies play a key role in meeting greenhouse gas emission reduction target, a step towards global sustainability. Praj has successfully developed and commercialized Process Optimized Flexible Integrated Incineration Technology for improving carbon footprint.
Key highlights:
1. During the year, 13 foreign patents were applied and 10 patents (Indian 7 and foreign 3) were granted.
2. As a part of value maximization initiative, Praj has continued its focus on development of bio-refinery based on 1st generation and 2nd generation feedstocks. Praj''s advanced Maximol dehydration technology for throughput enhancement with sweating of plant assets helps to increase profitability for the customers. Process Reliability, equipment performance with respect to uptime (on-stream factor) has been successfully demonstrated on Rice straw and Wheat straw for domestic and international customer. We are glad to announce that Praj has been selected as technology partner for four commercial scale 2nd generation plants announced by OMCs.
3. Praj announced ground-breaking of integrated demo plant of compressed bio-Gas (CBG) at the hands of Dr. Anil Kakodkar, Chairman- High Level Committee and Chairman- Scientific Advisory Committee on Hydrocarbons of Ministry of Petroleum and Natural Gas. The ceremony was held on Wednesday, 9th Jan 2019. Commercial demo plant installation and commissioning will be done in coming financial year.
4. Praj and GEVO has jointly developed advanced biofuel (IBA) technology using Sugary feedstock.
5. Praj has also developed enzymatic bio-diesel technology from oleo-chemical feed stock(UCO). Praj''s clean and efficient bio-diesel technology helps to promote waste to energy initiative from Ministry of India.
6. As recognition towards contribution made by Praj in Bio-economy, it gives us immense pleasure to share that Praj is ranked as 8th in the list of TOP 50 hottest companies in Advanced Bio-economy for Year 2019 by Biofuel Digest.
Foreign Exchange Earnings & Outgo
(Rs, Mn.)
Particulars |
31/3/2019 |
31/3/2018 |
Earnings |
2742 |
3404 |
Outgo |
977 |
600 |
Net Foreign Exchange Earnings |
1765 |
2804 |
Your Company has retained its status as a net forex earner consecutively for past 22 years.
Acknowledgements
Your Directors wish to place on record their appreciation towards all associates including Customers, Collaborators, Government Agencies, Bankers, Suppliers, Shareholders, Auditors, Employees and others who have reposed their confidence in the Company.
For and on behalf of the Board of Directors
Place: Pune Pramod Chaudhari
Date: 16th May, 2019 Executive Chairman
Mar 31, 2018
To The Members of Praj Industries Limited,
The Directors are pleased to present the 32nd Annual Report and the Audited Financial Statements for the year ended 31st March, 2018.
Financial Results
During the year under review, your Company has recorded total income of Rs.7283 Mn (previous year Rs.7787 Mn), 7% reduction in total income. Profit before Tax declined by 41% to Rs.399Mn (previous year Rs.674Mn). The performance summary is presented herewith:
(Rs. Mn.)
Particulars |
2017-18 |
2016-17 |
Turnover |
7020 |
7592 |
Other Income |
263 |
195 |
Total Income |
7283 |
7787 |
Total Expenses |
6884 |
7113 |
PBT |
399 |
674 |
315 |
469 |
|
Other Comprehensive Income |
7 |
1 |
Total Comprehensive Income |
322 |
470 |
( ) Balance in Profit & Loss account |
5067 |
4580 |
( ) INDAS Adjustments (ESOPs) |
2 |
17 |
Profit Available for Appropriations |
5391 |
5067 |
Appropriations |
||
Dividend |
||
- Final |
291 |
- |
- Dividend Tax (final Dividend) |
59 |
- |
Transfer to Special Economic zone Re-investment Reserve |
72 |
- |
Balance in Statement of Profit & Loss |
4969 |
5067 |
State of Companyâs Affairs
Please refer Management Discussion & Analysis report annexed to this report dealing with the state of Companyâs affairs at length. (Refer Annexure 1).
Summary of Consolidated Results
During the year, the Total Income stood at Rs.9502 Mn which is lower by 3% over last year (Rs.9774Mn). Profit before tax at Rs.530 Mn is lower by 21% over last year (Rs.675 Mn). The performance summary is presented herewith:
(Rs. in Mn)
Particulars |
2017-18 |
2016-17 |
Turnover |
9235 |
9552 |
Other income |
267 |
222 |
Total income |
9502 |
9774 |
Total expenses |
8972 |
9099 |
PBT |
530 |
675 |
PAT (after Minority Interest) |
395 |
446 |
( ) Other Comprehensive Income |
8 |
(6) |
Total Comprehensive Income |
403 |
440 |
Dividend
The Board of Directors of your Company has recommended a final dividend of Rs.1.62/-(81%) per equity share of Face Value of Rs.2/- for the Financial Year ended 31st March, 2018. The dividend is payable subject to shareholdersâ approval at the ensuing Annual General meeting (AGM). The final dividend pay-out, if approved by the shareholders in the ensuing AGM, will be around Rs.353Mn (Dividend: Rs.293 million and Dividend Distribution Tax Rs.60 Mn).
Dividend Distribution Policy
In accordance with the Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy and the same is annexed herewith as Annexure 11. The Policy is also hosted on the website of the Company and can be viewed at www.praj.net
Reserves
The Company is not proposing any transfer to the General Reserve for the year 2017-18.
Credit Rating
a) CRISIL has re-affirmed âA1 â rating to the Companyâs short-term banking facilities which signifies that the degree of safety regarding timely payment of instruments is very strong.
b) CRISIL has also re-affirmed its rating of the Companyâs long-term bank facilities to âAA/stableâ.
The âAAâ rating signifies high safety with regard to timely payment of long-term financial obligations.
Subsidiaries
During the fiscal, in view of project completion, your Company has closed down its project specific step down subsidiary by name Praj Industries (Tanzania) Limited with effect from 23rd October, 2017. In view of this, it ceased to be the step down subsidiary of the Company.
Praj Engineering & Infra Ltd. (Formerly, Pacecon Engineering Projects Ltd.), India, Praj HiPurity Systems Ltd., India, Praj Americas Inc., U.S.A., Praj Far East Co. Ltd., Thailand, Praj Industries (Africa) (Pty.) Ltd, South Africa, Praj Far East Philippines Ltd. Inc., The Philippines, and Praj Industries (Namibia) Pty. Ltd., Namibia continue to be subsidiaries of your Company.
Consolidated Financial Statements of the Company, which include the results of the said Subsidiary Companies, are included in this Annual Report. Further, a statement containing the particulars for each of the Companyâs subsidiaries is also enclosed. Copies of Annual Accounts and related detailed information of all the subsidiaries can also be sought by any member of the Company or its Subsidiaries by making a written request to the Company Secretary at the Registered Office of the Company in this regard. The Annual Accounts of the Subsidiary Companies are also available for inspection at the Companyâs and/or the concerned Subsidiaryâs Registered Office.
The Company has formulated a policy for determining âmaterialâ subsidiaries and such policy is hosted on the Companyâs website i.e. www.praj.net
Further, a statement containing salient features of the financial statements of subsidiaries in the prescribed format AOC-1 is appended as Annexure 7 to this Report. The statement also provides the details of performance, financial position of each of the subsidiaries.
Corporate Governance
Pursuant to the provisions of Regulation 34 (2) & (3) and 53(f), read with Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report (Annexure 1), Report on Corporate Governance and Compliance Certificate on Corporate Governance (Annexure 3), Business Responsibility Report (Annexure 10), Dividend Distribution Policy (Annexure 11) are annexed to this report.
Directors
Ms. Parimal Chaudhari, Director (DIN: 00724911) will retire by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.
During the year, Mr. Prakash Kulkarni (DIN : 00019652) and Mr. Kishor Chaukar (DIN : 00033830) Independent Directors of the Company retired with effect from 11th August, 2017.
Mr. Daljit Mirchandani (DIN : 00022951) retired by rotation as Director of the Company on 11th August, 2017 and being willing and eligible, was re-appointed as Director of the Company.
Ms. Mrunalini Joshi (DIN 00957617) was appointed as Additional Director of the Company under Section 160 of the Companies Act, 2013 and also as Independent Director under Sections 149 and 152 of the Companies Act, 2013 with effect from 11th August, 2017 till the conclusion of Annual General Meeting to be held for adoption of accounts for the financial year 2019-20 or 10th August, 2020 whichever occurs earlier, subject to the approval of shareholders at ensuing Annual General Meeting of the Company.
Mr. Shishir Joshipura (DIN: 00574970) was appointed as Additional Director under Section 160 of the Companies Act, 2013 with effect from 2nd April, 2018. Further, Mr. Shishir Joshipura was appointed as Chief Executive Officer and Managing Director of the Company for a period of Five (5) years with effect from 2nd April, 2018, subject to the approval of shareholders at ensuing Annual General Meeting of the Company.
Dr. Shridhar Shukla (DIN 00007607) was appointed as Additional Director of the Company under Section 160 of the Companies Act, 2013 and also as an Independent Director under Sections 149 and 152 of the Companies Act, 2013 for a period of Five (5) years with effect from 12th April, 2018, subject to the approval of shareholders at ensuring Annual General meeting.
Composition of Key Managerial Personnel (KMP)
The Company has the following KMP :
Name of the KMP |
Designation |
Date of Appointment |
Date of Resignation |
Mr. Pramod Chaudhari |
Executive Chairman |
08.11.1985 |
N.A. |
Mr. Shishir Joshipura* |
Chief Executive Officer and Managing Director |
02.04.2018 |
N.A. |
Mr. Sachin Raole |
CFO and Director- Finance & Commercial |
13.07.2016 |
N.A. |
Mr. Dattatraya Nimbolkar |
Chief Internal Auditor & Company Secretary |
22.07.2011 |
N.A. |
* Mr. Shishir Joshipura was appointed as CEO and Managing Director for a period of Five (5) years with effect from 2nd April, 2018.
Composition of Audit, Nomination & Remuneration Committee
For details, kindly refer the Corporate Governance Report annexed to this Report (Annexure 3).
Declaration from Independent Directors
The Independent Directors have submitted their annual declaration to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 read with rules framed there under.
Auditors
a) Internal Auditors
The Internal Auditors, Khare Deshmukh & Co., Chartered Accountants, Pune have conducted internal audits periodically and submitted their reports to the Audit Committee. Their reports have been reviewed by the Statutory Auditors and the Audit Committee.
b) Statutory Auditors
The members, in the 29th Annual General Meeting held on 6th August, 2015, appointed M/s P.G. Bhagwat, Chartered Accountants, Pune as Statutory Auditors of the Company for a period of five years with effect from the conclusion of 29th Annual General Meeting held on 6th August 2015.
c) Cost Auditors
Your Company has appointed Dhananjay V. Joshi & Associates, Cost Accountants as Cost Auditors of the Company for the financial year 2018-19 at the remuneration as set out in item No.4 of the explanatory statement which is subject to the ratification of members in the ensuing Annual General Meeting.
d) Secretarial Auditors
M/s KANJ & Associates, Pune, were appointed to conduct the Secretarial Audit of the Company for the financial year 2017-18, as required under Section 204 of the Companies Act, 2013 read with rules framed thereunder. The Secretarial Audit Report (MR-3) for F.Y. 2017-18 forms part of the Annual Report as Annexure 6.
The Board has appointed KANJ & Co. L.L.P. (formerly KANJ & Associates) Pune, as Secretarial Auditors of the Company for the financial year 2018-19.
Material changes and commitments, if any, affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of the report
No material changes and commitments affecting the financial position of the Company occurred from the end of the financial year 2017-18 till the date of this report. Further there was no change in the nature of business of the Company.
Statement concerning development and implementation of risk management policy of the Company
In accordance with the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board adopted Risk Management Policy and initiated necessary steps for framing, implementing and monitoring the risk management plan for the Company.
The main objective of this policy is to ensure sustainable business growth and to promote a pro-active approach in identifying, reporting, evaluating and mitigating risks associated with the business.
The policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.
In todayâs challenging and competitive environment, strategies for mitigating inherent risks associated with business and for accomplishing the growth plans of the Company are imperative. The common risks inter alia are risks emanating from; Regulations, Competition, Business, Technology obsolescence, Investments, Retention of talent, Finance, Politics and Fidelity.
As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.
The Risk Management Policy is also hosted on the Companyâs website i.e. www.praj.net
The Company has instituted adequate Internal Controls and processes to have a cohesive view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities.
In the opinion of the Board, there are no risks which may threaten the existence of the Company.
Internal financial controls
The Company has in place, adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
Remuneration Policy for Directors and KMP
The Companyâs remuneration policy for Directors/ KMP is directed towards rewarding performance based on review of achievements periodically. The remuneration policy is in consonance with the existing industry practice.
The said policy is available on Companyâs website i.e. www.praj.net and is also attached as Annexure 8 to this report.
ESOP
During the year, your Company allotted 14,88,227 shares on exercise of options under the Employee Stock Option Plan 2011. Consequent to the above, the Issued, Subscribed and Paid up Share Capital of your Company increased from 179,444,188 shares (Rs.358.888 Mn.) to 180,932,415 shares (Rs.361.865 Mn.) as of 31st March, 2018.
During the year, your Company has granted the following options under Employees Stock Option Plan 2011;
Sr. No. |
No. of Options |
Exercise Price/Option |
Grant VII |
19,69,700 |
Rs.50/- |
Please refer Annexure 4 to this report for the particulars required to be disclosed pursuant to Rule 12 (2) of the Companies (Share Capital and Debentures) Rules, 2014 and Clause 14 of SEBI (Share Based Employee Benefits) Regulations, 2014.
Vigil Mechanism / Whistle Blower Policy
In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the Company has adopted a Vigil Mechanism/Whistle Blower Policy. This policy is explained in Corporate Governance Report and is also hosted on the website of Company at www.praj.net.
Details of policy developed and implemented by the Company on its Corporate Social Responsibility initiatives
Kindly refer Annexure 2 to this Report.
Particulars of loans, guarantees or investments made under section 186 of the Companies Act, 2013
Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No. 4 to the Standalone Financial Statements).
Contracts and 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 armâs length basis. Such transactions form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No. 31 to the Standalone Financial Statements).
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 which is available on the Companyâs website at the link: www.praj.net
The information in respect of Related Party transactions is given below;
FORM AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at armâs length basis;
N.A. as there were no transactions during the year which were not at armâs length.
2. Details of material contracts or arrangement or transactions at armâs length basis;
During the financial year 2017-18, all the transactions entered into with related parties were at armâs length. However, these transactions were not material.
Performance Evaluation
Regulation 4 (2) (f) (ii) (9) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. Also, the Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its Committees and individual Directors. In addition, Schedule IV to the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Board works with the Nomination & Remuneration Committee to lay down the evaluation criteria for the performance of Executive/ Non-Executive/ Independent Directors.
Independent Directors have three key roles - Governance, Control and Guidance. Some of the performance indicators based on which the Independent Directors are evaluated include:
a) Ability to contribute to and monitor the Companyâs corporate governance practices.
b) Ability to contribute by introducing international best practices to address top-management issues.
c) Active participation in long-term strategic planning.
d) Commitment to the fulfillment of a Directorsâ obligations and fiduciary responsibilities; these include participation in the Board and the Committee Meetings.
In pursuance of above, the Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors.
The evaluation of all the Directors, Committees and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the Nomination & Remuneration Committee.
Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and the Secretarial Auditors in their reports
There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.
The Secretarial Auditors in their report have mentioned that an enquiry of the matter of Trading of Shares by insider during the window closure is under process.
The Board of Directors submits that Company has reported the above mentioned transaction made by an Insider to the BSE and NSE on 7th November, 2017 under Regulation 7(2) read with Regulation 6(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015. The Company has since concluded the enquiry based on which appropriate action will be taken by the Company.
Extract of Annual Return
The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 in prescribed Form MGT-9 for the year ended 31st March, 2018 is as per Annexure 5 to this report.
Number of Board Meetings conducted during the year under review
The Board met six times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
Directorsâ Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:-
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) the Directors have 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 of the Company for that period;
(c) the Directors have 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 have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Details in respect of frauds reported by auditors under sub-section (12) of Section 143 other than those which are reportable to the Central Government.
During the year under consideration, there were no such instances.
Deposits
The Company has neither accepted nor renewed any deposits during the year under review and also did not have any outstanding deposits at the end of the year.
Remuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees
The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company and Directors is furnished hereunder:
Sr. No. |
Name |
Designation |
Remuneration paid FY 2017-18 Rs. Mn. |
% increase/ (Decrease) in remuneration over FY 2016-17 |
Ratio of the remuneration of each Director to median remuneration of employees |
1 |
Mr. Pramod Chaudhari |
Executive Chairman |
43.175 |
(16.8) |
48.3 |
2 |
Mr. Berjis Desai |
Non-Executive Independent Director |
1.350 |
Nil |
1.5 |
3 |
Ms. Parimal Chaudhari |
Non-Executive Director |
1.000 |
Nil |
1.1 |
4 |
Mr. Rajiv Maliwal |
Non-Executive Independent Director |
0.450 |
Nil |
0.5 |
5 |
Mr. Sivaramakrishnan Iyer |
Non-Executive Independent Director |
1.350 |
Nil |
1.5 |
6 |
Mr. Daljit Mirchandani |
Non-Executive Non-Independent Director |
10.900 |
0.9 |
12.2 |
7 |
Mr. Sachin Raole |
CFO and Director- Finance & Commercial |
6.220 |
(19.9) |
7.0 |
8 |
Ms. Mrunalini Joshi1 |
Non-Executive Independent Director |
0.350 |
N.A. |
0.4 |
9 |
Mr. Dattatraya Nimbolkar |
Chief Internal Auditor & Company Secretary |
6.756 |
(26.0) |
7.6 |
* appointed as Independent Director with effect from 11th August, 2017.
The median remuneration of employees of the Company during the financial year was Rs. 0.893 Million. In the financial year, there was an increase of 5% in the median remuneration of employees.
There were 884 permanent employees on the rolls of Company as on 31st March, 2018.
Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2017-18 was around 5% whereas the managerial remuneration for the same financial year reduced by around 27%.
The key parameters for the variable component of remuneration paid to the Directors are considered by the Board of Directors based on the recommendations of Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
Particulars of employees
The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is given in Annexure 9 to this Report.
Details of significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companyâs operations in future.
No such events occurred during the financial year 2017-18.
Prevention of Sexual Harassment Policy
The Company has in place Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Directors state that during the year under review, there was no case filed pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Energy Conservation, Technology Absorption, Adaptation, Innovation:
Praj has always endeavoured to minimize its energy and water usage. Deployment of Solar power systems, water recycle and reuse systems. Sustainability remains at the core of all solutions offered by your Company. During the year, Your Company has -
1. Filed 21 new patents.
2. Firmed up its front runner position in the 2nd generation cellulosic ethanol technology with the launch of its and Indiaâs first integrated 2nd generation bio-refinery. The plant was inaugurated in May 2017, at the hands of Mr Nitin Gadkari, Honâble Minister for Road Transport & Highways, Shipping and Water Resources, River Development & Ganga Rejuvenation. This is a landmark development in Indiaâs journey toward energy independence and relates to many of the nationally relevant agendas. The advanced bio-refinery technology demonstrates integrated production capability of 1 million litre per annum (MLPA) of ethanol from variety of biomass and paves the way for stepping up Indiaâs ambitious ethanol blending programme.
Your Company has retained its status as a net forex earner consecutively for past 21 years.
Acknowledgements
Your Directors wish to place on record their appreciation towards all associates including Customers, Collaborators, Government Agencies, Bankers, Suppliers, Shareholders, Auditors, Employees and others who have reposed their confidence in the Company.
For and on behalf of the Board of Directors
Place: Pune Pramod Chaudhari
Date: 12th June, 2018 Executive Chairman
Mar 31, 2017
To The Members of Praj Industries Limited,
The Directors are pleased to present the 31st Annual Report and the Audited Financial Statements for the year ended 31st March, 2017.
Financial Results
During the year under review, your Company has recorded total income of Rs.7787 Mn (previous year Rs. 8750 Mn). In view of 11% reduction in total income, Profit before Tax declined by 13% to Rs.674 Mn (previous year Rs.775 Mn). Despite global turbulent environment, your Company''s performance has been relatively stable. The performance summary is presented herewith:
(Rs. Mn.)
Particulars |
2016-17 |
2015-16 |
Turnover |
7592 |
8580 |
Other Income |
195 |
170 |
Total Income |
7787 |
8750 |
Total Expenses |
7113 |
7975 |
PBT |
674 |
775 |
PAT |
469 |
654 |
Other Comprehensive Income |
1 |
-* |
Total Comprehensive Income |
470 |
654 |
( ) Balance in Profit & Loss account |
4580 |
4686 |
( ) Ind AS Adjustments (ESOPs) |
17 |
- |
Profit Available for Appropriations |
5067 |
5340 |
Appropriations |
||
Dividend |
||
- Interim |
- |
288 |
- Final |
- |
287 |
- Dividend Tax (Interim Dividend) |
- |
59 |
- Dividend Tax (Final Dividend) |
- |
59 |
Transfer to General Reserve |
- |
67 |
Balance in Statement of Profit & Loss |
5067 |
4580 |
* insignificant when rounded off to Million.
State of Company''s Affairs
Please refer Management Discussion & Analysis report annexed to this report dealing with the state of Company''s affairs at length.
Summary of Consolidated Results
During the year, the Total Income was at Rs. 9774 Mn which is lower by 10% over last year (Rs. 10822 Mn). Due to this, PBT at Rs. 675 Mn is lower by 36% over last year (Rs. 1054 Mn). The performance summary is presented herewith:
(Rs. Mn)
Particulars |
2016-17 |
2015-16 |
Turnover |
9552 |
10638 |
Other income |
222 |
184 |
Total income |
9774 |
10822 |
Total expenses |
9099 |
9768 |
PBT |
675 |
1054 |
PAT (after Minority Interest) |
446 |
825 |
( ) Other Comprehensive Income |
(6) |
7 |
Total Comprehensive Income |
440 |
832 |
Dividend
The Board of Directors of your Company has recommended a final dividend of Rs.1.62 (81%) per equity share of Face Value of Rs. 2/- for the Financial Year ended 31st March, 2017. The dividend is payable subject to shareholders'' approval at the ensuing Annual General Meeting (AGM). The final dividend pay-out, if approved by the shareholders in the ensuing AGM, will be around Rs. 350 Mn (Dividend: Rs. 291Mn and Dividend Distribution Tax Rs. 59 Mn).
Dividend Distribution Policy
In accordance with the Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy and the same is annexed herewith as Annexure 11. The Policy is also hosted on the website of the Company and can be viewed at http://www.praj.net/policies.html
Reserves
In pursuance of Ind AS - 10, the dividend will be recorded in the books of the Company only upon approval by the shareholders in the ensuing AGM. Consequently, the Company is not proposing any transfer to the General Reserve for the year 2016-17.
Credit Rating
a) CRISIL has reaffirmed âA1 " rating to the Company''s short-term banking facilities which signifies that the degree of safety regarding timely payment of instruments is very strong.
b) CRISIL has also reaffirmed its rating of the Company''s long-term bank facilities to ''AA/Stable''.
The âAA" rating signifies high safety with regard to timely payment of long-term financial obligations.
Subsidiaries
During the fiscal, your Company has divested from Praj Sur America S.R.L., and the subsidiary was closed with effect from 31st August, 2016. Hence it ceased to be the subsidiary of the Company.
Praj Engineering & Infra Ltd. (Formerly, Pacecon Engineering Projects Ltd.), India, Praj HiPurity Systems Ltd., India, Praj Americas Inc., U.S.A., Praj Far East Co. Ltd., Thailand, Praj Industries (Africa) (Pty.) Ltd, South Africa, Praj Far East Philippines Ltd. Inc., The Philippines, and Praj Industries (Namibia) Pty. Ltd., Namibia continue to be subsidiaries of your Company.
Consolidated Financial Statements of the Company, which include the results of the said Subsidiary Companies, are included in this Annual Report. Further, a statement containing the particulars for each of the Company''s subsidiaries is also enclosed. Copies of Annual Accounts and related detailed information of all the subsidiaries can also be sought by any member of the Company or its Subsidiaries by making a written request to the Company Secretary at the Registered Office of the Company in this regard. The Annual Accounts of the Subsidiary Companies are also available for inspection at the Company''s and/or the concerned Subsidiary''s Registered Office.
The Company has formulated a policy for determining ''material'' subsidiaries and such policy is hosted on the Company''s website i.e. http://www.praj.net/policies.html
Further, a statement containing salient features of the financial statements of subsidiaries in the prescribed format AOC-1 is appended as Annexure 7 to this Report. The statement also provides the details of performance, financial position of each of the subsidiaries.
Corporate Governance
Pursuant to the provisions of Regulation 34(2) & (3) and 53(f), read with Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report (Annexure 1), Report on Corporate Governance and Compliance Certificate on Corporate Governance (Annexure 3), Business Responsibility Report (Annexure 10), Dividend Distribution Policy (Annexure 11) are annexed to this report.
Directors
Ms. Parimal Chaudhari, Director (DIN: 00724911) retired by rotation as Director of the Company on 22nd July, 2016 and being willing and eligible, was re-appointed as Director of the Company.
Pursuant to the provisions of the Section 161(1) of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Sachin Raole (DIN: 00431438) was appointed as Additional Director by the Board on 16th January, 2017 and he shall hold office up to the date of this Annual General Meeting and being eligible, has offered himself for appointment as Director liable to retire by rotation.
Also, the Board appointed Mr. Sachin Raole as Whole Time Director of the Company for a period with effect from 16th January, 2017 till 31st July, 2019 subject to the approval of members in the ensuing Annual General Meeting.
The contract with Mr. Pramod Chaudhari (DIN: 00196415) to act as the Executive Chairman of the Company will expire on 31st July, 2017. The Board, in its meeting held on 30th June, 2017, has, subject to the approval of the members in the ensuing Annual General Meeting, extended the term of his contract to act as Executive Chairman of the Company for a further period of two years with effect from 1st August, 2017 on the same terms and conditions including remuneration which has remained unchanged since last two terms i.e. from 1st August 2012 to 31st July 2015 and from 1st August 2015 to 31st July 2017.
Mr. Gajanan Nabar (DIN :00714569) , ceased to be a Director due to resignation as CEO & MD and Director with effect from 16th January, 2017. The Board wishes to place on record, its appreciation for the valuable contributions made by Mr. Gajanan Nabar during his tenure as CEO & MD of the Company.
The term of appointment of Mr. Prakash Kulkarni (DIN : 00019652) and Mr. Kishor Chaukar (DIN : 00033830) as Independent Director is getting over at the conclusion of the ensuing Annual General Meeting.
Mr. Daljit Mirchandani (DIN: 00022951) will retire by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for reappointment.
Composition of Key Managerial Personnel (KMP)
The Company has the following KMP;
Name of the KMP |
Designation |
Date of Appointment |
Date of Resignation |
Mr. Pramod Chaudhari |
Executive Chairman |
08.11.1985 |
N.A. |
Mr. Sachin Raole |
CFO and Director- Finance & Commercial |
13.07.2016* |
N.A. |
Mr. Dattatraya Nimbolkar |
Chief Internal Auditor & Company Secretary |
22.07.2011 |
N.A. |
Mr. Gajanan Nabar |
CEO & MD |
15.11.2010 |
16.01.2017 |
* Mr. Sachin Raole was appointed as CFO & President - Finance & Commercial of the Company with effect from 13th July, 2016 and as CFO and Director- Finance & Commercial with effect from 16th January, 2017.
Composition of Audit, Nomination & Remuneration Committee
For details, kindly refer the Corporate Governance Report annexed to this Report (Annexure 3).
Declaration from Independent Directors
The Independent Directors have submitted their annual declaration to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 read with rules framed there under.
Auditors
a) Internal Auditors
The Internal Auditors, Khare Deshmukh & Co., Chartered Accountants, Pune have conducted internal audits periodically and submitted their reports to the Audit Committee. Their reports have been reviewed by the Statutory Auditors and the Audit Committee.
b) Statutory Auditors
The members, in the 29th Annual General Meeting held on 6th August, 2015, appointed M/s PG. Bhagwat, Chartered Accountants, Pune as Statutory Auditors of the Company for a period of five years with effect from the conclusion of 29th Annual General Meeting held on 6th August 2015.
Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014, the appointment of Statutory Auditors for the financial year 2017-18 needs to be ratified by the members.
The letter received from M/s P. G. Bhagwat also states that their appointment, if made, is as per eligibility required to be confirmed under Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.
Your Directors seek ratification from the members for the appointment of M/s PG. Bhagwat, Chartered Accountants, Pune, as the Statutory Auditors of your Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the 32nd Annual General Meeting of the Company.
c) Cost Auditors
Your Company has appointed Dhananjay V. Joshi & Associates, Cost Accountants as Cost Auditors of the Company for the financial year 2017-18 at the remuneration as set out in Item No. 5 of the explanatory statement which is subject to the ratification of members in the ensuing Annual General Meeting.
d) Secretarial Auditors
M/s KANJ & Associates, Pune, were appointed to conduct the secretarial audit of the Company for the financial year 2016-17, as required under Section 204 of the Companies Act, 2013 read with rules framed there under. The Secretarial Audit Report for FY 2016-17 forms part of the Annual Report as Annexure 6.
The Board has appointed KANJ & Associates, Pune, as Secretarial Auditors of the Company for the financial year 2017-18.
Material changes and commitments, if any, affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of the report
No material changes and commitments affecting the financial position of the Company occurred from the end of the financial year 2016-17 till the date of this report. Further there was no change in the nature of business of the Company.
Statement concerning development and implementation of risk management policy of the Company
In accordance with the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board adopted Risk Management Policy and initiated necessary steps for framing, implementing and monitoring the risk management plan for the Company.
The main objective of this policy is to ensure sustainable business growth and to promote a pro-active approach in identifying, reporting, evaluating and mitigating risks associated with the business.
The policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.
In today''s challenging and competitive environment, strategies for mitigating inherent risks associated with business and for accomplishing the growth plans of the Company are imperative. The common risks inter alia are risks emanating from; Regulations, Competition, Business, Technology obsolescence, Investments, retention of talent, finance, politics and fidelity.
As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.
The Risk Management Policy is also hosted on the Company''s website i.e. http://www.praj.net/policies.html
The Company has instituted adequate Internal Controls and processes to have a cohesive view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities.
In the opinion of the Board, there are no risks which may threaten the existence of the Company.
Internal financial controls
The Company has in place, adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
Remuneration Policy for Directors and KMP
The Company''s remuneration policy for Directors / KMPs is directed towards rewarding performance based on review of achievements periodically. The remuneration policy is in consonance with the existing industry practice.
The said policy is available on Company''s website i.e. http://www.praj.net/policies.html and is also attached as Annexure 8 to this report.
ESOP
During the year, your Company allotted 411,179 shares on exercise of options under the Employee Stock Option Plan 2005 Grant IV & 1,060,600 shares on exercise of options under the Employee Stock Option Plan 2011 Grant I. Consequent to the above, the Issued, Subscribed and Paid-up Share Capital of your Company increased from 177,972,409 shares (Rs. 355.945 Mn.) to 179,444,188 shares (Rs. 358.888 Mn.) as of 31st March, 2017.
The Compensation & Share Allotment Committee, vide resolution passed in its meeting, decided to close ESOP 2005 with effect from 30th June, 2017. Accordingly, 4,129,249 balance outstanding options under ESOP 2005 stand cancelled.
During the year, your Company has granted the following options under Employees Stock Option Plan 2011;
Sr. No. |
No. of Options |
Exercise Price/Option |
Grant VI |
1,00,000 |
Rs. 85.25 |
Please refer Annexure 4 to this report for the particulars required to be disclosed pursuant to Rule 12 (2) of the Companies (Share Capital and Debentures) Rules, 2014 and Clause 14 of SEBI (Share Based Employee Benefits) Regulations, 2014.
Vigil Mechanism / Whistle Blower Policy
In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the Company has adopted a Vigil Mechanism/ Whistle Blower Policy. This policy is explained in Corporate Governance Report and is also posted on the website of Company at http://www.praj.net/policies.html
Details of policy developed and implemented by the Company on its Corporate Social Responsibility initiatives
Kindly refer Annexure 2 to this Report.
Particulars of loans, guarantees or investments made under Section 186 of the Companies Act, 2013
Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No.4 to the Standalone Financial Statements).
Contracts and 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. Such transactions form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No. 31 to the Standalone Financial Statements).
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 which is available on the Company''s website at the link: http://www.prai.net/policies.html
The summary of related party transactions is given below:
FORM AOC-2
(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm''s length basis;
N.A. as there were no transactions during the year which were not at arm''s length.
2. Details of material contracts or arrangement or transactions at arm''s length basis;
During the financial year 2016-17, all the transactions entered into with related parties were at arm''s length. However, these transactions were not material.
Performance Evaluation
Regulation 4 (2) (f) (ii) (9) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. Also, the Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its Committees and individual Directors. In addition, Schedule IV to the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Board works with the Nomination & Remuneration Committee to lay down the evaluation criteria for the performance of Executive/ Non-Executive/ Independent Directors.
Independent Directors have three key roles - governance, control and guidance. Some of the performance indicators based on which the Independent Directors are evaluated include:
a) Ability to contribute to and monitor the Company''s corporate governance practices.
b) Ability to contribute by introducing international best practices to address top-management issues.
c) Active participation in long-term strategic planning.
d) Commitment to the fulfillment of a Directors'' obligations and fiduciary responsibilities; these include participation in the Board and the Committee Meetings.
In pursuance of above, the Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors.
The evaluation of all the Directors, Committees and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the Nomination & Remuneration Committee.
Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and the Secretarial Auditors in their reports
There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors or Secretarial Auditors in their report.
Extract of Annual Return
The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 in prescribed Form MGT-9 is as per Annexure 5 to this report.
Number of Board Meetings conducted during the year under review
The Board met four times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
Directors'' Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit 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;
(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) 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.
Details in respect of frauds reported by auditors under sub-section (12) of Section 143 other than those which are reportable to the Central Government.
During the year under consideration, there were no such instances.
Deposits
The Company has neither accepted nor renewed any deposits during the year under review and also did not have any outstanding deposits at the end of the year.
Remuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees
The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished hereunder:
Sr. No. |
Name |
Designation |
Remuneration paid FY 2016-17 Rs. Mn. |
% increase in remuneration over FY 2015-16 |
Ratio of the remuneration of each Director to median remuneration of employees |
1. |
Mr. Pramod Chaudhari |
Executive Chairman |
51.872 |
(16.5) |
61.2 |
2. |
Mr. Berjis Desai |
Non-Executive Independent Director |
1.350 |
Nil |
1.6 |
3. |
Mr. Kishor Chaukar |
Non-Executive Independent Director |
0.550 |
(21.4) |
0.6 |
4. |
Ms. Parimal Chaudhari |
Non-Executive Director |
1.000 |
(14.5) |
1.2 |
5. |
Mr. Prakash Kulkarni |
Non-Executive Independent Director |
1.600 |
Nil |
1.9 |
6. |
Mr. Rajiv Maliwal |
Non-Executive Independent Director |
0.450 |
(25) |
0.5 |
7. |
Mr. Sivaramakrishnan Iyer |
Non-Executive Independent Director |
1.350 |
(8.8) |
1.6 |
8. |
Mr. Daljit Mirchandani |
Non-Executive Non-Independent Director |
10.800 |
18.5 |
12.7 |
9. |
Mr. Sachin Raole |
CFO and Director - Finance & Commercial |
10.839 |
* |
12.8 |
10. |
Mr. Gajanan Nabar** |
CEO & MD |
12.794 |
(63.8) |
15.1 |
11. |
Mr. Dattatraya Nimbolkar |
Chief Internal Auditor & Company Secretary |
9.131 |
34.4 |
10.8 |
* Mr. Sachin Raole was appointed as CFO with effect from 25th July, 2016 and Director & Whole Time Director w.e.f. 16th January, 2017.
** Mr. Gajanan Nabar ceased to be a Director with effect from 16th January, 2017.
The median remuneration of employees of the Company during the financial year was Rs. 0.848 Million. In the financial year, there was an increase of 7% in the median remuneration of employees.
There were 901 permanent employees on the rolls of Company as on 31st March, 2017.
Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2016-17 was around 5% whereas the managerial remuneration for the same financial year reduced by around 19%.
The key parameters for the variable component of remuneration paid to the Directors are considered by the Board of Directors based on the recommendations of Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year -
Not Applicable;
It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
Percent increase over/ decrease in the market quotations of the shares of the Company as compared to the rate at which the Company came out with the last public offer in the year -
The Company had come out with initial public offer (IPO) in January, 1994. An amount of Rs.4/- invested in one equity share of the said IPO would be worth Rs. 80.05 as on 31st March, 2017 indicating a Compounded Annual Growth Rate of 14%. This is excluding the dividend accrued thereon.
Particulars of employees
The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is given in Annexure 9 to this Report.
Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future
No such events occurred during the financial year 2016-17.
Prevention of Sexual Harassment Policy
The Company has in place Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Directors state that during the year under review, there was one case filed pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 which is since resolved.
Energy Conservation, Technology Absorption, Adaptation, Innovation
Praj has always endeavored to minimize its energy and water usage. Deployment of Solar power systems, water recycle and reuse systems. Sustainability remains at the core of all solutions offered by your Company. During the year, Your Company has -
1. filed 14 new patents.
2. commissioned first plant based on innovative Ecosmart technology in Europe.
3. introduced new sustainable technologies which contributed 10% to the order intake.
There is significant progress on development of the 2nd Generation ethanol technology and your Company is making headway in installation of a 12 MT 2nd Generation Integrated Bolt-On "Smart Bio Refinery" Demo Plant in Maharashtra. This will be a multi-feed, multi-product facility complete with Zero Liquid discharge system.
Foreign Exchange Earnings & Outgo
(Rs. Mn.)
Particulars |
31.3.2017 |
31.3.2016 |
Earnings |
1440 |
4184 |
Outgo |
706 |
967 |
Net Foreign Exchange Earnings |
735 |
3217 |
Your Company has retained its status as a net forex earner consecutively for past 20 years.
Acknowledgements
Your Directors wish to place on record their appreciation towards all associates including Customers, Collaborators, Government Agencies, Financial Institutions, Bankers, Suppliers, Shareholders, Auditors, Employees and others who have reposed their confidence in the Company.
For and on behalf of the Board of Directors
Place: Mumbai Pramod Chaudhari
Date: 30th June, 2017 Executive Chairman
Mar 31, 2016
The Directors are pleased to present the 30th Annual Report and the
Audited Financial Statements for the year ended 31st March, 2016.
Financial Results
In the year under review, your Company has recorded total income of Rs.
8362 Mn (previous year Rs. 8334 Mn). While the total income increased
marginally, Profit before Tax increased by 15.40% to Rs. 787 Mn
(previous year Rs. 682 Mn). Despite turbulent global economies, your
Company''s performance has been stable. The performance summary is
presented herewith:
(Rs. Mn.)
Particulars 2015-16 2014-15
Turnover 8240 8011
Other Income 122 323
Total Income 8362 8334
Total Expenses 7575 7652
PBT 787 682
PAT 667 685
( ) Balance in Profit & Loss account 4322 4081
Profit Available for Appropriations 4989 4766
Appropriations
Adjustment relating to Fixed Assets - 29
Dividend
- Interim 288 -
- Final (Proposed) - 287
- Dividend Tax (Interim Dividend) 59 -
- Dividend Tax (Final Dividend) - 59
- Transfer to General Reserve 67 69
Balance in Statement of Profit &
Loss 4575 4322
State of Company''s Affairs
Please refer Management Discussion & Analysis (Annexure 1) dealing with
the state of Company''s affairs at length.
Summary of Consolidated Results
Total Income at Rs. 10304 Mn is lower by 1.48% over last year whereas
PBT at Rs. 897 Mn is higher by 3.82% over last year.
(Rs. Mn)
Particulars 2015-16 2014-15
Turnover 10158 10119
Other income 146 340
Total income 10304 10459
Total expenses 9407 9595
PBT 897 864
PAT (after Minority Interest) 694 763
Dividend
The Board of Directors declared an Interim Dividend of Rs. 1.62 (81%)
per equity share of Face Value of Rs. 2/- during the Financial Year
2015 - 2016. The dividend pay-out was Rs. 346. 959 Mn including
dividend distribution tax. Your Directors are of the opinion that the
said Interim Dividend be treated as Final Dividend for the Financial
Year 2015 -2016.
Reserves
The Company proposes to carry Rs. 67 Mn to Reserves.
Credit Rating
a) CRISIL has reaffirmed "A1 " rating to the Company''s short-term
banking facilities which signifies that the degree of safety regarding
timely payment of instruments is very strong.
b) CRISIL has also reaffirmed its rating of the Company''s long-term
bank facilities to ''AA/Stable''.
The "AA" rating signifies high safety with regard to timely payment of
long-term financial obligations.
Subsidiaries
During the year, your Company acquired balance 20% stake in its
subsidiary Company viz. Praj HiPurity Systems Limited thus completing
100% acquisition and making Praj HiPurity Systems Limited a Wholly
Owned Subsidiary of your Company.
Praj Engineering & Infra Ltd. (Formerly, Pacecon Engineering Projects
Ltd.), India, Praj HiPurity Systems Ltd., India, Praj Americas Inc.,
U.S.A., Praj Far East Co. Ltd., Thailand, Praj Industries (Africa)
(Pty.) Ltd., South Africa, Praj Far East Philippines Ltd. Inc., The
Philippines, Praj Sur America S.R.L., Argentina and Praj Industries
(Namibia) Pty. Ltd., Namibia continue to be subsidiaries of your
Company.
Consolidated Financial Statements of the Company, which include the
results of the said Subsidiary Companies, are included in this Annual
Report. Further, a statement containing the particulars for each of the
Company''s subsidiaries is also enclosed. Copies of Annual Accounts and
related detailed information of all the subsidiaries can also be sought
by any member of the Company or its Subsidiaries by making a written
request to the Company Secretary at the Registered Office of the
Company in this regard. The Annual Accounts of the Subsidiary Companies
are also available for inspection at the Company''s and/or the concerned
Subsidiary''s Registered Office.
The Company has formulated a policy for determining ''material''
subsidiaries and such policy is hosted on the Company''s website i.e.
http://www.prai.net/policies.html
Further, a statement containing salient features of the financial
statements of our subsidiaries in the prescribed format AOC-1 is
appended as Annexure 7 to the Board''s Report. The statement also
provides the details of performance, financial position of each of the
subsidiaries.
Corporate Governance
Pursuant to the provisions of Regulation 34(3) and 53(f), read with
Schedule V of SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015, Management Discussion and Analysis Report (Annexure
1), Report on Corporate Governance and Compliance Certificate on
Corporate Governance (Annexure 3), Business Responsibility Report
(Annexure 10) are annexed to this report.
Directors
Mr. Daljit Mirchandani (DIN : 00022951) was appointed as Additional
Director in the Board Meeting held on 28th May, 2015. Subsequently, he
was appointed as Non Executive - Non Independent Director, liable to
retire by rotation in the Annual General Meeting held on 6th August,
2015.
Mr. Gajanan Nabar, Director (DIN: 00714569) retired by rotation as
Director of the Company on 6th August, 2015 and being willing and
eligible, was re-appointed as Director of the Company.
Ms. Parimal Chaudhari, Director (DIN: 00724911) will retire by rotation
at the ensuing Annual General Meeting and, being eligible, has offered
herself for reappointment.
The members in the Annual General Meeting held on 6th August, 2015,
granted their approval for extension of the term of contract of Mr.
Pramod Chaudhari to act as Executive Chairman of the Company for a
further period of two years with effect from 1st August, 2015 on the
same terms and conditions including remuneration.
The re-appointment of Mr. Gajanan Nabar as CEO & Managing Director (
DIN: 00714569) was approved by the members in the 29th Annual General
Meeting held on 6th August, 2015, for a period of three years with
effect from 1st August, 2014.
Composition of Key Managerial Personnel (KMP)
The Company has the following KMP;
Name of the KMP Designation Date of
Appointment Date of
Resignation
Mr. Pramod Chaudhari Executive Chairman 08.11.1985 N.A.
Mr. Gajanan Nabar CEO & MD 15.11.2010 N.A.
Mr. Dattatraya
Nimbolkar CFO & Company
Secretary 22.07.2011 N.A.
Composition of Audit, Nomination & Remuneration Committee
For details, kindly refer the Corporate Governance Report annexed to
this Report (Annexure 3).
Declaration from Independent Directors
The Independent Directors have submitted their annual declaration to
the Board that they fulfill all the requirements as stipulated in
Section 149(6) of the Companies Act, 2013 read with rules framed there
under.
Auditors
a) Internal Auditors
The Internal Auditors, Khare Deshmukh & Co., Chartered Accountants,
Pune have conducted internal audits periodically and submitted their
reports to the Audit Committee. Their reports have been reviewed by the
Statutory Auditors and the Audit Committee.
b) Statutory Auditors
The members, in the 29th Annual General Meeting held 6th August, 2015,
appointed M/s P.G. Bhagwat, Chartered Accountants, Pune as Statutory
Auditors of the Company for a period of five years with effect from the
conclusion of 29th Annual General Meeting held on 6th August 2015.
Pursuant to the provisions of Section 139 of the Companies Act, 2013
read with Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014
the appointment of Statutory Auditors for the Financial Year 2016-17
needs to be ratified by the members.
The letter received from M/s P. G. Bhagwat also states that their
appointment, if made, is as per eligibility required to be confirmed
under Section 139 of the Companies Act, 2013 read with the Companies
(Audit and Auditors) Rules, 2014.
Your Directors seek ratification from the members for the appointment
of M/s P.G. Bhagwat, Chartered Accountants, Pune, as the Statutory
Auditors of your Company from the conclusion of the ensuing Annual
General Meeting till the conclusion of the 31st Annual General Meeting
of the Company.
c) Cost Auditors
Your Company has appointed Dhananjay V. Joshi & Associates, Cost
Accountants as Cost Auditors of the Company for the Financial Year
2016-17 at the remuneration as set out in item No. 4 of the explanatory
statement which is subject to the ratification of members in the
ensuing Annual General Meeting.
d) Secretarial Auditors
M/s KANJ & Associates, Pune, were appointed to conduct the secretarial
audit of the Company for the Financial Year 2015-16, as required under
Section 204 of the Companies Act, 2013 read with rules framed there
under. The Secretarial Audit Report for Financial Year 2015-16 forms
part of the Annual Report as Annexure 6.
The Board has appointed KANJ & Associates, Pune, as Secretarial
Auditors of the Company for the Financial Year 2016-17.
Material changes and commitments, if any, affecting the financial
position of the Company occurred between the end of the Financial Year
to which these financial statements relate and the date of the report
No material changes and commitments affecting the financial position of
the Company occurred from the end of the Financial Year 2015-16 till
the date of this report. Further there was no change in the nature of
business of the Company.
Statement concerning development and implementation of Risk Management
policy of the Company
In accordance with the provisions of SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015, the Board adopted Risk
Management Policy and initiated necessary steps for framing,
implementing and monitoring the risk management plan for the Company.
The main objective of this policy is to ensure sustainable business
growth and to promote a pro-active approach in identifying, reporting,
evaluating and mitigating risks associated with the business.
The policy establishes a structured and disciplined approach to Risk
Management, in order to guide decisions on risk related issues.
In today''s challenging and competitive environment, strategies for
mitigating inherent risks associated with business and for
accomplishing the growth plans of the Company are imperative. The
common risks inter alia are risks emanating from; Regulations,
Competition, Business, Technology Obsolescence, Investments, Retention
of talent, Finance, Politics and Fidelity.
As a matter of policy, these risks are assessed and appropriate steps
are taken to mitigate the same.
The Risk Management Policy is also hosted on the Company''s website i.e.
http://www.praj.net/policies.html
During the year, the Board of Directors has merged Risk Management
Committee (which was formed pursuant to the provisions of erstwhile
Clause 49 of the Listing Agreement) into Audit Committee and the role
and responsibilities of Risk Management Committee are assigned to the
Audit Committee.
However, pursuant to Regulation 21(5) of the SEBI (Listing Obligations
& Disclosure Requirements) Regulations, 2015, (which came into effect
from 1st December, 2015) constitution of Risk Management Committee is
not applicable to your Company.
The Company has instituted adequate Internal Controls and processes to
have a cohesive view of risks, optimal risk mitigation responses and
efficient management of internal control and assurance activities.
In the opinion of the Board, there are no risks which may threaten the
existence of the Company.
Internal Financial Controls
The Company has in place adequate internal financial controls with
reference to financial statements. During the year, such controls were
tested and no reportable material weaknesses in the design or operation
were observed.
Directors and KMP
The Company''s remuneration policy for KMPs is directed towards
rewarding performance based on review of achievements periodically.
The remuneration policy is in consonance with the existing industry
practice.
The said policy is available on Company''s website i.e.
http://www.praj.net/policies.html and is also attached as Annexure 8 to
this report. ESOP
During the year, your Company allotted 5,07,330 shares on exercise of
options under the Employee Stock Option Plan 2005 Grant IV & Employee
Stock Option Plan 2011 Grant I. Consequent to the above, the Issued,
Subscribed and Paid - up Share Capital of your Company increased from
177,465,079 shares (Rs. 354.930 Mn) as on 31st March, 2015 to
177,972,409 shares (Rs. 355.945 Mn) as on 31st March, 2016.
During the year, your Company has given following grants under
Employees Stock Option Plan 2011;
Sr.
No. No. of Options Exercise Price/Option
Grant II 1,20,000 114.32
Grant III 1,00,000 85.32
Grant IV 1,10,000 81.70
Grant V 60,000 85.37
Please refer Annexure 4 to this report for the particulars required to
be disclosed pursuant to Rule 12 (2) of the Companies (Share Capital
and Debentures) Rules, 2014 and Clause 14 of SEBI (Share Based Employee
Benefits) Regulations, 2014.
Vigil Mechanism / Whistle Blower Policy
In order to ensure that the activities of the Company and its employees
are conducted in a fair and transparent manner by adoption of highest
standards of professionalism, honesty, integrity and ethical behaviour,
the Company has adopted a Vigil Mechanism/Whistle Blower Policy. This
policy is explained in Corporate Governance Report and is also posted
on the website of Company at http://www.praj. net/policies.html
Details of policy developed and implemented by the Company on its
Corporate Social Responsibility initiatives
Kindly refer Annexure 2 to this Report.
Particulars of Loans, Guarantees or Investments made under Section 186
of the Companies Act, 2013
Loans, Guarantees and Investments covered under Section 186 of the
Companies Act, 2013 form part of the notes to the financial statements
provided in this Annual Report. (Please refer Note No.11 to the
Standalone Financial Statements).
Contracts and 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. Such transactions form
part of the notes to the financial statements provided in this Annual
Report. (Please refer Note No.29 to the Standalone Financial
Statements).
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 which is available on the
Company''s website at the link: http://www.praj.net/policies.html
The summary of related party transactions is given below;
FORM AOC-2
(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act
and
Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered
into by the Company with related parties referred to in sub-section (1)
of Section 188 of the Companies Act, 2013 including certain arms length
transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm''s
length basis;
N.A. as there were no transactions during the year which were not at
arm''s length.
2. Details of material contracts or arrangement or transactions at
arm''s length basis;
During the Financial Year 2015-16, all the transactions entered into
with related parties were at arm''s length. However, these transactions
were not material.
Performance Evaluation
Regulation 4 (2) (f) (ii) (9) of the SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015 mandates that the Board
shall monitor and review the Board evaluation framework. Also, the
Companies Act, 2013 states that a formal annual evaluation needs to be
made by the Board of its own performance and that of its Committees and
individual Directors. In addition, Schedule IV to the Companies Act,
2013 states that the performance evaluation of Independent Directors
shall be done by the entire Board of Directors, excluding the Director
being evaluated. The Board works with the Nomination & Remuneration
Committee to lay down the evaluation criteria for the performance of
Executive / Non-Executive / Independent Directors.
Independent Directors have three key roles - governance, control and
guidance. Some of the performance indicators based on which the
Independent Directors are evaluated include:
a) Ability to contribute to and monitor the Company''s Corporate
Governance practices.
b) Ability to contribute by introducing international best practices to
address top-management issues.
c) Active participation in long-term strategic planning.
d) Commitment to the fulfillment of a Directors'' obligations and
fiduciary responsibilities; these include participation in the Board
and the Committee Meetings.
In pursuance of above, the Company has devised a policy for performance
evaluation of Independent Directors, Board, Committees and other
individual Directors.
The evaluation of all the Directors, Committees and the Board as a
whole was conducted based on the criteria and framework adopted by the
Board. The Board approved the evaluation results as collated by the
Nomination & Remuneration Committee.
Explanation or comments on qualifications, reservations or adverse
remarks or disclaimers made by the Statutory Auditors and the
Secretarial Auditors in their reports
There were no qualifications, reservations or adverse remarks made by
the Statutory Auditors or Secretarial Auditors in their report.
Extract of Annual Return
The extract of Annual Return pursuant to the provisions of Section 92
read with Rule 12 of the Companies (Management and Administration)
Rules, 2014 in prescribed Form MGT-9 is as per Annexure 5 to this
report.
Number of Board Meetings conducted during the year under review
The Board met six times during the Financial Year, the details of which
are given in the Corporate Governance Report that forms part of this
Annual Report. The intervening gap between any two meetings was within
the period prescribed by the Companies Act, 2013 and the SEBI (Listing
Obligations & Disclosure Requirements) Regulations, 2015.
Directors'' Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies
Act, 2013 the Board hereby submits its responsibility Statement:-
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the Financial Year and of the profit 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;
(e) the Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
(f) 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.
Details in respect of frauds reported by auditors under sub-section
(12) of Section 143 other than those which are reportable to the
Central Government.
During the year under consideration, there were no such instances.
Deposits
The Company has neither accepted nor renewed any deposits during the
year under review and also did not have any outstanding deposits at the
end of the year.
Remuneration ratio of the Directors/Key Managerial Personnel
(KMP)/Employees
The information required pursuant to Section 197 read with Rule 5 of
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in
respect of employees of the Company and Directors is furnished
hereunder:
Sr. Name Designation Remuneration
No. paid Financial
Year 2015-16
Rs. Mn
1 Mr. Pramod Chaudhari Executive Chairman 62.151
2 Mr. Gajanan Nabar CEO & MD 35.337
3 Mr. Berjis Desai Non-Executive 1.350
Independent
Director
4 Mr. Kishor Chaukar Non-Executive 0.700
Independent
Director
5 Ms. Parimal Chaudhari Non-Executive 1.170
Director
6. Mr Prakash Kulkarni Non-Executive 1.600
Independent
Director
7 Mr. Rajiv Maliwal Non-Executive 0.600
Independent
Director
8 Mr. Sivaramakrishnan
Iyer Non-Executive 1.480
Independent
Director
9 Mr. Daljit
Mirchandani Non Executive 9.116
Non-Independent
Director
10 Mr. Dattatraya
Nimbolkar CFO & Company 6.793
Secretary
Sr.
No. Name % increase in Ratio of the Comparison of the
remuneration remuneration Remuneration of
over Financial of each
Director the KMP against
Year 2014-15 to median the performance
remuneration
of of the Company
employees for Financial
Year
2015-16
1 Mr.Pramod
Chaudhari -2.5* 78.5 Profit before Tax
increased by
15.4%
2 Mr.Gajanan Nabar 1.7** 33.5** Profit before Tax
increased by
15.4%
3 Mr.Berjis Desai 7.1 1.7 N.A.
4 Mr.Kishor Chaukar 22.8 0.9 N.A.
5 Ms.Parimal
Chaudhari 8.3 1.5 N.A.
6 Mr Prakash Kulkarni 6.7 2.0 N.A.
7 Mr.Rajiv Maliwal 5.3 0.8 N.A.
8 Mr.Sivaramakrishnan
Iyer 12.1 1.9 N.A.
9 Mr.Daljit
Mirchandani *** 13.6 N.A.
10 Mr.Dattatraya
Nimbolkar 7.7 N.A. Profit before
Tax
increased by
15.4%
* Based on Normalized remuneration for Financial Year 2014-15.
** Based on Normalized remuneration for Financial Year 2015-16.
*** Mr. Daljit Mirchandani was appointed as Director w.e.f. 28.05.2015.
The median remuneration of employees of the Company during the
Financial Year was Rs. 0.792 Mn. In the Financial Year, there was an
increase of 9.4% in the median remuneration of employees.
There were 978 permanent employees on the rolls of Company as on 31st
March, 2016.
Relationship between average increase in remuneration and Company
performance:
The Profit before Tax for the Financial Year ended 31st March, 2016
increased by 15.4% whereas the increase in median remuneration was
9.4%. The average increase in median remuneration was in line with the
industry standards.
Comparison of Remuneration of the Key Managerial Personnel(s) against
the performance of the Company:
The total normalized remuneration of Key Managerial Personnel reduced
by 0.7% from Rs. 96.138 Mn in 2014-15 to Rs. 95.481 Mn in 2015-16
whereas the Profit Before Tax increased by 15.4 % to Rs. 786.769 Mn in
2015-16 (Rs.681.592 Mn in 2014-15).
Variations in the market capitalisation of the Company:
The market capitalisation as on 31st March, 2016 was Rs.15,875.139 Mn
(Rs.11,073.821Mn as on 31st March, 2015)
Price Earnings ratio of the Company was 22.54 as on 31st March, 2016
and was 15.29 as at 31st March, 2015.
Percent increase over/ decrease in the market quotations of the shares
of the Company as compared to the rate at which the Company came out
with the last public offer in the year-
The Company had come out with initial public offer (IPO) in January,
1994. An amount of Rs.4/- invested in one equity share of the said IPO
would be worth Rs.89.20 as on 31st March, 2016 indicating a Compounded
Annual Growth Rate of 15%. This is excluding the dividend accrued
thereon.
Average percentage increase made in the salaries of employees other
than the managerial personnel in the last Financial Year i.e. 2015- 16
was around 10 % whereas the managerial remuneration for the same
Financial Year reduced by 0.7%.
The key parameters for the variable component of remuneration paid to
the Directors are considered by the Board of Directors based on the
recommendations of Nomination and Remuneration Committee as per the
Remuneration Policy for Directors, Key Managerial Personnel and other
Employees.
The ratio of the remuneration of the highest paid Director to that of
the employees who are not Directors but receive remuneration in excess
of the highest paid Director during the year -
Not Applicable;
It is hereby affirmed that the remuneration paid is as per the
Remuneration Policy for Directors, Key Managerial Personnel and other
Employees.
Particulars of employees
The information required pursuant to Section 197 read with rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of the Company is given in Annexure
9 to this Report.
"Group" for SEBI Takeover Regulations:
For the purpose of Regulation 2 (1) (t) of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011, persons
constituting ''Group'' as defined in the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2009
are - Mr. Pramod Chaudhari, Ms. Parimal Chaudhari, Moriyaset Trust, Mr.
Parth Chaudhari, P-Cube Enterprises Private Limited, Turtle
Communication, Fusiontech Ventures Private Limited, Plutus Properties
LLP and Parimal and Pramod Chaudhari Family Discretionary Trust.
Details of significant and material orders passed by the regulators or
courts or tribunals impacting the going concern status and Company''s
operations in future
No such events occurred during the Financial Year 2015-16.
Prevention of Sexual Harassment Policy
The Company has in place Prevention of Sexual Harassment Policy in line
with the requirements of The Sexual Harassment of Women at the
Workplace (Prevention, Prohibition & Redressal) Act, 2013. All
employees (permanent, contractual, temporary, trainees) are covered
under this policy.
Your Directors state that during the year under review, there were no
cases filed pursuant to the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
Energy Conservation, Technology Absorption, Adaptation, Innovation:
While Praj''s operations are not very energy intensive, Praj has been
making efforts to reduce its energy and water foot print by
implementing solar power system and water recycle and reuse system in
its various facilities.
Sustainability remains at the core of all solutions offered by your
Company. During the year, Your Company has -
1. filed 33 new patents
2. commissioned first plant based on novel Ecosmart technology in
Europe
3. introduced new sustainable technologies which contributed 10% to
the order intake
There is progress on the 2nd Generation ethanol technology and your
Company is making headway in installing a 12 MT 2nd Generation
Integrated Bolt-On "Smart Bio Refinery" Demo Plant in Maharashtra. This
will be a multi-feed, multi-product facility complete with integrated
effluent treatment system.
Foreign Exchange Earnings & Outgo
(Rs.Mn.)
Particulars 31/3/2016 31/3/2015
Earnings 4184 3364
Outgo 967 826
Net Foreign Exchange Earnings 3217 2538
Your Company has retained its status as a net forex earner
consecutively for past 19 years.
Acknowledgements
Your Directors wish to place on record their appreciation towards all
associates including Customers, Collaborators, Government Agencies,
Financial Institutions, Bankers, Suppliers, Shareholders, Auditors,
Employees and others who have reposed their confidence in the Company.
For and on behalf of the Board of Directors
Place: Mumbai Pramod Chaudhari
Date: 20th May, 2016 Executive Chairman
Mar 31, 2015
To The Members of Praj Industries Limited,
The Directors are pleased to present the 29th Annual Report and the
Audited Statements of Account for the year ended 31st March, 2015.
Financial Results
In the year under review, your Company has recorded total income of Rs.
8334 Mn. (previous year Rs. 8048 Mn). While the total income increased by
3.6%, Profit before Tax decreased by 13.0% to Rs. 682 Mn. (previous year
Rs. 784 Mn). Despite turbulent global economy, your Company''s performance
has been stable. The performance summary is presented herewith:
(Rs Mn.)
Particulars 2014-15 2013-14
Turnover 8011 7827
Other Income 323 221
Total Income 8334 8048
Total Expenses 7652 7264
PBT 682 784
PAT 685 624
( ) Balance in Profit & Loss
account 4081 3980
Profit Available for
Appropriations 4766 4604
Appropriations
Adjustment relating to Fixed
Assets 29 -
Dividend
- Interim - 106
- Final (Proposed) 287 287
- Dividend Tax (interim Dividend) - 18
- Dividend Tax (final Dividend) 59 49
- Transfer to General Reserve 69 63
Balance in Statement of Profit
& Loss 4322 4081
State of Company''s Affairs
Please refer Management Discussion & Analysis report annexed to this
report dealing with the state of Company''s affairs at length.
Summary of Consolidated Results
Total Income at Rs. 10459 Mn is higher by 3.7% over last year whereas PBT
at Rs. 864 is higher by 12.4% over last year.
(Rs Mn.)
Particulars 2014-15 2013-14
Turnover 10119 9858
Other income 340 230
Total income 10459 10088
Total expenses 9595 9319
PBT 864 769
PAT (after Minority
Interest) 763 546
Dividend
The Board of Directors of your Company has recommended a final dividend
of Rs. 1.62 (81%) per equity share of Face Value of Rs. 2/- for the
Financial Year ended 31st March, 2015. The dividend is payable subject
to shareholders'' approval at the ensuing AGM. The final dividend
pay-out will be Rs. 346.020 Mn. (Dividend: Rs. 287.493 Million and Dividend
Distribution Tax: Rs. 58.527 Million).
Reserves
The Company proposes to carry Rs. 69.000 Million to Reserves.
Credit Rating
a) CRISIL has reaffirmed "A1 " rating to Company''s short-term banking
facilities which signifies that the degree of safety regarding timely
payment of instruments is very strong.
b) CRISIL has also reaffirmed its rating of the Company''s long-term
bank facilities to ''AA/Stable''. The "AA" rating signifies high safety
with regard to timely payment of long-term financial obligations.
Subsidiaries
During the fiscal, your Company has divested from BioCnergy Europa B.
V., The Netherlands and the subsidiary was closed. Hence it ceased to
be the subsidiary of the Company.
Apart from the above, Pacecon Engineering Projects Ltd., India, Praj
HiPurity Systems Ltd. (formerly Neela Systems Ltd.) India, Praj
Americas, Inc., U.S.A., Praj Far East Co. Ltd., Thailand, Praj
Industries (Africa) (Pty.) Ltd, South Africa, Praj Far East Philippines
Ltd. Inc., The Philippines, Praj Sur America SRL, Argentina and Praj
Industries (Namibia) Pty. Ltd., Namibia continue to be subsidiaries of
your Company.
Consolidated Financial Statements of the Company, which include the
results of the said Subsidiary Companies, are included in this Annual
Report. Further, a statement containing the particulars for each of the
Company''s subsidiaries is also enclosed. Copies of Annual Accounts and
related detailed information of all the subsidiaries can also be sought
by any member of the Company or its Subsidiaries by making a written
request to the Company Secretary at the Registered Office of the
Company in this regard. The Annual Accounts of the Subsidiary Companies
are also available for inspection at the Company''s and/or the concerned
Subsidiary''s Registered Office.
The Company has formulated a policy for determining ''material''
subsidiaries and such policy is hosted on the Company''s website i.e.
http://www.prai.net/policies.html
Further, a statement containing salient features of the financial
statements of our subsidiaries in the prescribed format AOC-1 is
appended as Annexure 7 to the Board''s Report. The statement also
provides the details of performance, financial position of each of the
subsidiaries.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report (Annexure 1) and
Report on Corporate Governance and Compliance Certificate on Corporate
Governance (Annexure 3) are annexed to this report.
Directors
Mr. Utpal Sheth (DIN : 00081012) retired by rotation as Director of the
Company on 28th July, 2014 and pursuant to his unwillingness to act as
a Director, ceased to be the Director of the Company with effect from
28th July, 2014.
Mr. Gajanan Nabar, Director (DIN: 00714569) will retire by rotation at
the ensuing Annual General Meeting and, being eligible, has offered
himself for reappointment.
Pursuant to the provisions of the Section 161(1) of the Companies Act,
2013 read with the Articles of Association of the company, Mr. Daljit
Mirchandani (DIN: 00022951) is appointed as Additional Director with
effect from 28th May, 2015 and he shall hold office only up to the date
of this Annual General Meeting and being eligible, has offered himself
for re-appointment as Director liable to retire by rotation.
Mr. Gajanan Nabar was reappointed as CEO & Managing Director in the
Board meeting held on 28.07.2014, subject to the approval of members in
the ensuing Annual General Meeting, for a period of three years with
effect from 01.08.2014.
The contract with Mr. Pramod Chaudhari (DIN: 00196415) to act as the
Executive Chairman of the Company will expire on 31st July, 2015. The
Board, in its meeting held on 28th May, 2015, has, subject to the
approval of the members in the ensuing Annual General Meeting, extended
the term of his contract to act as Executive Chairman of the Company
for a further period of two years with effect from 1st August, 2015 on
the same terms and conditions including remuneration.
Composition of Key Managerial Personnel (KMP)
The Company has the following KMP;
Name of Designation Date of Date of
the KMP Appointment Resignation
Mr.Pramod
Chaudhari Executive Chairman 08.11.1985 N.A.
Mr.Gajanan Nabar CEO & MD 15.11.2010 N.A.
Mr.Dattatraya
Nimbolkar CFO & Company 22.07.2011 N.A.
Secretary
Mr. Dattatraya Nimbolkar was appointed as Chief Financial Officer in
addition to his holding of office as the Company Secretary in the Board
meeting held on 26th May, 2014.
Composition of Audit and Nomination & Remuneration Committee
For details, kindly refer the Corporate Governance Report annexed to
this Report (Annexure 3).
Declaration from Independent Directors
The Independent Directors have submitted their declaration to the Board
that they fulfill all the requirements as stipulated in Section 149(6)
of the Companies Act, 2013 read with rules framed thereunder.
Auditors
a) Internal Auditors
The Internal Auditors, Khare Deshmukh & Co., Chartered Accountants,
Pune have conducted internal audits periodically and submitted their
reports to the Audit Committee. Their reports have been reviewed by the
Statutory Auditors and the Audit Committee.
b) Statutory Auditors
Your Directors would like to inform you that the Company has received a
letter dated 10th June, 2015 from the Statutory Auditors B. K. Khare &
Co., Chartered Accountants, Mumbai (Firm Regn. No. 105102W), conveying
their unwillingness to continue as the Statutory Auditors of the
Company. Pursuant to provisions of Section 139 of the Companies Act,
2013 read with the Companies (Audit and Auditors) Rules, 2014, any
casual vacancy caused in the office of the Statutory Auditors of the
Company shall be filled by the Board of Directors within thirty days of
such resignation, but if such casual vacancy is due to resignation of
the Statutory Auditors, such appointment shall also be approved by the
Company at a General Meeting convened within three months of the
recommendation of the Board and the Auditor shall hold the office till
the conclusion of the next Annual General Meeting. Considering the
casual vacancy in the office of Statutory Auditors, the Company has
vide its letter dated 13th June, 2015 approached M/s. P G. Bhagwat,
Chartered Accountants, Pune (Firm Regn. No. 101118W); to act as the
Statutory Auditors of the Company. M/s. P G. Bhagwat, Chartered
Accountants, Pune, have conveyed their willingness to act as Statutory
Auditors of the Company vide their letter dated 13th June, 2015 subject
to the approval of shareholders in the ensuing Annual General Meeting.
The Board of Directors has, subject to the approval of the shareholders
in the ensuing Annual General meeting, appointed M/s. P G. Bhagwat,
Chartered Accountants, Pune as Statutory Auditors of the Company for a
period of five years with effect from Financial Year 2015-16.
In view of the above, the Statutory Auditors of your Company, M/s. P G.
Bhagwat, Chartered Accountants, Pune, shall hold office from the date
of their appointment by the Board of Directors till the conclusion of
this Annual General Meeting and shall, subject to your approval, hold
the office of Statutory Auditors from the conclusion of this Annual
General Meeting until the conclusion of the Sixth Annual General
Meeting of the Company to be held after this meeting.
The letter received from M/s. P G. Bhagwat, also states that their
appointment, if made, is as per eligibility required to be confirmed
under Section 139 of the Companies Act, 2013 read with the Companies
(Audit and Auditors) Rules 2014.
Your Directors recommend the appointment of M/s. P G. Bhagwat,
Chartered Accountants, Pune, as the Statutory Auditors of your Company
at the ensuing Annual General Meeting
Your Directors also place on record sincere thanks to B. K. Khare & Co.
for their valuable contribution.
c) Cost Auditors
The Cost Audit Report under The Companies (Cost Audit Report) Rules,
2011 for the year 2013-14 was duly filed with the Ministry of Corporate
Affairs on 18th September, 2014.
Your Company has appointed Dhananjay V. Joshi & Associates, Cost
Accountants as Cost Auditors of the Company for the year 2015-16 at the
remuneration as set out in item No 8 of the explanatory statement which
is subject to the approval of members in the ensuing Annual General
Meeting.
d) Secretarial Auditors
Kanj & Associates, Pune, Practising Company Secretaries, were appointed
to conduct the secretarial audit of the Company for the financial year
2014-15, as required under Section 204 of the Companies Act, 2013 read
with rules framed thereunder. The Secretarial Audit Report for FY
2014-15 forms part of the Annual Report as Annexure 6.
The Board has appointed Kanj & Associates, Pune, Practising Company
Secretaries, as secretarial auditors of the Company for the financial
year 2015-16.
Material changes and commitments, if any affecting the financial
position of the Company occurred between the end of the financial year
to which these financial statements relate and the date of the report
No material changes and commitments affecting the financial position of
the Company occurred from the end of the financial year 2014-15 till
the date of this report. Further there was no change in the nature of
business of the Company.
Statement concerning development and implementation of risk management
policy of the Company
In accordance with Clause 49 of the listing agreement, the Board
formally adopted steps for framing, implementing and monitoring the
risk management plan for the Company by way of Risk Management Policy.
The main objective of this policy is to ensure sustainable business
growth with stability and to promote a pro-active approach in
reporting, evaluating and mitigating risks associated with the
business.
The policy establishes a structured and disciplined approach to Risk
Management, in order to guide decisions on risk related issues.
In today''s challenging and competitive environment, strategies for
mitigating inherent risks associated with business and for
accomplishing the growth plans of the Company, are imperative. The
common risks inter alia are risks emanating from; Regulations,
Competition, Business, Technology obsolescence, Investments, retention
of talent, finance, politics and fidelity.
As a matter of policy, these risks are assessed and steps as
appropriate are taken to mitigate the same.
The Risk Management Policy is also hosted on the Company''s website i.e.
http://www.praj.net/policies.html During the year, your Directors have
constituted a Risk Management Committee which;
i. Identifies, assesses, manages and monitors risk.
ii. allows investors and other stakeholders to be informed of material
changes to the Company''s risk profile.
iii. recommends to the Board and then formally announces clear
standards of ethical behaviour required of directors, employees and
contractors and encourages observance of those standards.
The Company has a system of monitoring, reporting and mitigating the
major risks and uncertainties that can impact its ability to achieve
its strategic business plans.
The Company has instituted adequate Internal Controls and processes to
have a cohesive view of risks, optimal risk mitigation responses and
efficient management of internal control and assurance activities.
In the opinion of the Board, there are no risks which may threaten the
existence of the Company.
Internal financial controls
The Company has in place adequate internal financial controls with
reference to financial statements. During the year, such controls were
tested and no reportable material weaknesses in the design or operation
were observed.
Policy on Director''s appointment, remuneration including criteria for
determining qualifications, positive attributes, independence of a
Director and other matters
The Company''s Remuneration Policy for Directors, Key Managerial
Personnel and other employees is available on Company''s website i.e.
http://www.prai.net/policies.html and is also attached as Annexure 8 to
this report.
Criteria for evaluation of KMPs
The Company''s remuneration policy for KMPs is directed towards
rewarding performance based on review of achievements periodically. The
remuneration policy is in consonance with the existing industry
practice.
ESOP
Please refer Annexure 4 to this report for the particulars pursuant to
Rule 12 (2) of the Companies (Share Capital and Debentures) Rules,
2014.
Familiarization programme for Independent Directors:
The Board of Directors of the Company has adopted familiarization
program for Independent Directors. The details of such program are
posted on the Company''s website i.e. http://www.prai.net/policies.html.
This Program aims to provide insights into the Company to enable the
Independent Directors to understand its business in depth and
contribute significantly to the Company.
Vigil Mechanism / Whistle Blower Policy
In order to ensure that the activities of the Company and its employees
are conducted in a fair and transparent manner by adoption of highest
standards of professionalism, honesty, integrity and ethical behaviour,
the Company has adopted a Vigil mechanism/Whistle Blower Policy. This
policy is explained in corporate governance report and also posted on
the website of company i.e. http://www.praj.net/policies.html.
Details of policy developed and implemented by the Company on its
Corporate Social Responsibility initiatives
Kindly refer Annexure 2 to this Report
Particulars of loans, guarantees or investments made under Section 186
of the Companies Act, 2013
Loans, Guarantees and Investments covered under Section 186 of the
Companies Act, 2013 form part of the notes to the financial statements
provided in this Annual Report.
Contracts and 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. Such transactions form part of
the notes to the financial statements provided in this Annual Report.
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 materiality of related party transactions and dealing
with related party transactions as approved by the Board may be
accessed on the Company''s website i.e.
http://www.praj.net/policies.html.
The summary of related party transactions is given below;
FORM AOC-2
(Pursuant to Clause (h) of sub-section (3) of Section 134 of the Act
and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered
into by the Company with related parties referred to in sub-section (1)
of Section 188 of the Companies Act, 2013 including certain arms length
transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm''s
length basis;
N.A. as there were no transactions during the year which were not at
arm''s length.
2. Details of material contracts or arrangements or transactions at
arm''s length basis;
During the financial year 2014-15, all the transactions entered into
with related parties were at Arm''s Length. However, these transactions
were not material.
Performance evaluation
Clause 49 of the Listing Agreement mandates that the Board shall
monitor and review the Board evaluation framework. The Companies Act,
2013 states that a formal annual evaluation needs to be made by the
Board of its
own performance and that of its committees and individual Directors.
Schedule IV to the Companies Act, 2013 states that the performance
evaluation of Independent Directors shall be done by the entire Board
of Directors, excluding the Director being evaluated. The Board works
with the Nomination & Remuneration Committee to lay down the evaluation
criteria for the performance of executive/ non-executive/ independent
directors.
Independent directors have three key roles - governance, control and
guidance. Some of the performance indicators based on which the
independent directors are evaluated include:
a) Ability to contribute to and monitor our corporate governance
practices.
b) Ability to contribute by introducing international best practices to
address top-management issues.
c) Active participation in long-term strategic planning.
d) Commitment to the fulfillment of a director''s obligations and
fiduciary responsibilities; these include participation in Board and
Committee meetings.
The evaluation of all the Directors, Committees and the Board as a
whole was conducted based on the criteria and framework adopted by the
Board. The Board approved the evaluation results as collated by the
Nomination & Remuneration Committee.
Explanation or comments on qualifications, reservations or adverse
remarks or disclaimers made by the statutory auditors and the
secretarial auditors in their reports
There were no qualifications, reservations or adverse remarks made by
the Statutory Auditors or Secretarial Auditors in their report.
Extract of annual return
The extract of Annual Return pursuant to the provisions of Section 92
read with Rule 12 of the Companies (Management and administration)
Rules, 2014 in prescribed Form MGT-9 is as per Annexure 5 to this
report.
Number of Board meetings conducted during the year under review
The Board met Six times during the financial year, the details of which
are given in the Corporate Governance Report that forms part of this
Annual Report. The intervening gap between any two meetings was within
the period prescribed by the Companies Act, 2013 and the Listing
Agreement.
Directors'' Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies
Act, 2013 the Board hereby submits its responsibility Statement:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) the directors had selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company 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 laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively;
(f) 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.
Details in respect of frauds reported by auditors under sub-section
(12) of Section 143 other than those which are reportable to the
central government.
During the year under consideration, there were no such instances.
Deposits
The Company has neither accepted nor renewed any deposits during the
year under review.
Remuneration ratio of the Directors/ Key Managerial Personnel (KMP)/
Employees
The information required pursuant to Section 197 read with Rule 5 of
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in
respect of employees
of the Company and Director is furnished hereunder
Name Designation Remuneration
paid FY 2014-15
Rs Mn.
Mr.Pramod Executive 50.132
Chairman Chaudhari
Mr.Gajanan
Nabar CEO & MD 26.091
Mr.Berjis
Desai Non- 1.260
Executive
Independent
Director
Mr.Kishor
Chaukar Non- 0.570
Executive
Independent
Director
Ms.Parimal
Chaudhari Non- 1.080
Executive
Director
Mr.Prakash
Kulkarni Non- 1.500
Executive
Independent
Director
Mr.Rajiv
Maliwal Non- 0.570
Executive
Independent
Director
Mr.Sivaramakrishnan
S.Iyer Non- 1.320
Executive
Independent
Director
Mr.Dattatraya
Nimbolkar CFO & 6.307
Company
Secretary
Name %increase/ Ratio of the Comparision
(decrease)in remuneration of the
remuneration of each remuneration
over Director of the KMP
Fy 2013-14 to median against the
remuneration performance of
of employees the company
for Fy 2014-15
Mr.Pramod (20.2) 69.2 Profit before
Chairman Tax reduced
by 13.0%
Mr.Gajanan (8.4) 36.0 Profit before
Nabar Tax reduced
by 13.0%
Mr.Berjis (6.7) 1.7 NA
Desai
r.Kishor (5.0) 0.8 NA
Chaukar
Ms.Parimal (7.7) 1.5 NA
Chaudhari
Mr.Prakash (2.0) 2.1 NA
Kulkarni
Mr.Rajiv (5.0) 0.8 NA
Maliwal
Mr.Sivaramakr- (2.2) 1.8 NA
ishnan S.Iyer
Mr.Dattatraya 2.0 NA Profit before
Nimbolkar Tax reduced
by 13.0%
Note - 1: Details not given for Mr. Utpal Sheth as he was a Director
only for part of the financial year 2014-15
i.e. upto 28th July, 2014.
Note - 2: Details not given for Mr. Daljit Mirchandani as he was not a
Director during the financial year 2014-15.
The median remuneration of employees of the Company during the
financial year was Rs. 0 .724 Million. In the financial year, there was
an increase of 9.7% in the median remuneration of employees;
There were 979 permanent employees on the rolls of Company as on 31st
March, 2015.
Relationship between average increase in remuneration and Company
performance:-
The Profit before Tax for the financial year ended 31st March, 2015
reduced by 13.0% whereas the increase in median remuneration was 9.7%.
The average increase in median remuneration was in line with the
industry standards.
Comparison of Remuneration of the Key Managerial Personnel (s) against
the performance of the Company
The total remuneration of Key Managerial Personnel decreased by 15.4%
from Rs. 97.508 Million in 2013-14 to Rs. 82.530 Million in 2014-15 whereas
the Profit before Tax decreased by 13.0% to Rs. 681.592 Million in
2014-15 (Rs. 784.400 Million in 2013-14).
Variations in the market capitalisation of the Company
The market capitalisation as on 31st March, 2015 was Rs. 11,073.821
Million (Rs. 9,316.917 Million as on 31st March, 2014). Price Earnings
ratio of the Company was 15.29 as at 31st March, 2015 and was 14.91 as
at 31st March, 2014.
Percent increase over/ decrease in the market quotations of the shares
of the Company as compared to the rate at which the Company came out
with the last public offer in the year- The Company had come out with
initial public offer (IPO) in January, 1994. An amount of Rs. 4 invested
in one equity share of the said IPO would be worth Rs. 62.4 as on 31st
March, 2015 indicating a Compounded Annual Growth Rate of 14.0%. This
is excluding the dividend accrued thereon.
Average percentage increase made in the salaries of employees other
than the managerial personnel in the last financial year i.e. 2014-15
was around 8.0% whereas the Managerial Remuneration for the same
financial year came down by 16.5%.
The key parameters for the variable component of remuneration paid to
the Directors are considered by the Board of Directors based on the
recommendations of Nomination and Remuneration Committee as per the
Remuneration Policy for Directors, Key Managerial Personnel and other
Employees.
The ratio of the remuneration of the highest paid director to that of
the employees who are not directors but receive remuneration in excess
of the highest paid director during the year - Not Applicable.
It is hereby affirmed that the remuneration paid is as per the
Remuneration Policy for Directors, Key Managerial Personnel and other
Employees.
Particulars of employees
The information required pursuant to Section 197 read with rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of the Company is given in Annexure
9 to this report.
Employee Stock Option Plan
The information to be disclosed as per SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed
to this Report (Annexure 4).
"Group" for SEBI Takeover Regulations
For the purpose of Regulation 2 (1) (t) of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011, persons
constituting ''Group'' as defined in the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2009
are - Mr. Pramod Chaudhari, Ms. Parimal Chaudhari, Moriyaset Trust, Mr.
Parth Chaudhari, P-Cube Enterprises Private Limited, Turtle
Communication, Fusiontech Ventures Private Limited, Plutus Properties
LLP and Parimal and Pramod Chaudhari Family Discretionary Trust.
Details of significant and material orders passed by the regulators or
courts or tribunals impacting the going concern status and company''s
operations in future
No such events occurred during the financial year 2014-15.
Prevention of Sexual Harassment Policy
The Company has in place Prevention of Sexual Harassment Policy in line
with the requirements of The Sexual Harassment of Women at Workplace
(Prevention, Prohibition & Redressal) Act; 2013. All employees
(permanent, contractual, temporary, trainees) are covered under this
policy.
Your Directors state that during the year under review, there were no
cases filed pursuant to The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
Energy Conservation, Technology Absorption, Adaptation, Innovation
Sustainability remains at the core in everything your Company
undertakes.
During the year, your Company has -
1. been granted one international patent. With this, total number of
granted patents stands at 16.
2. in association with Praj HiPurity Systems Limited and Praj Matrix -
The Innovation Center, launched innovative Biowiz bio-reactor for the
pharmaceutical industry.
3. developed and commercialized Ecophotox (Advanced Photochemical
Oxidation) application for distillery condensate treatment & recycle.
4. introduced Customized Research Services & Solutions (CRSS).
The efforts on 2G ethanol technology are also on right path and Your
Company is awaiting the final approval on the Government assistance.
The demonstration project has received environmental clearance.
For and on behalf of the Board of Directors
Place: Pune Pramod Chaudhari
Date: 13th June, 2015 Executive Chairman
Mar 31, 2013
To The Members of Praj Industries Limited,
The Directors are pleased to present the 27th Annual Report and the
Audited Statements of Account for the year ended 31st March, 2013.
Financial Results
In the year under review, your Company has recorded a total income of Rs.
7556 Mn (previous year Rs. 9237 Mn). While the total income decreased by
18%, Proft before Tax decreased by 28% to Rs. 807 Mn (previous year Rs.
1119 Mn). Considering very turbulent economic environment, your
Company''s performance has been stable. The performance summary is
presented herewith:
(Rs. in Mn)
2012-13 2011-12
Turnover 7264 8805
Other Income 292 432
Total Income 7556 9237
Total Expenses 6749 8118
PBT 807 1119
PAT 662 658
( ) Balance in Proft and Loss account 3720 3462
Proft Available for Appropriations 4382 4120
Appropriations
- Dividend
Final (Proposed) 287 287
- Dividend Tax 49 47
- Transfer to General Reserve 66 66
Balance in Statement of Proft and
Loss 3980 3720
Praj and Local Execution Companies:
The execution related responsibility is borne by the execution arm of
your Company also known as Local Execution Companies (LEC). Each LEC is
a subsidiary/step down subsidiary of your Company. These comprise of
Praj Industries (Sierra Leone) Limited, Praj Industries (Tanzania)
Limited, Pacecon Engineering Projects Limited, Praj Far East
Philippines Limited Inc. and Praj Far East Co. Limited. Considering
the combined results of Praj and LECs, the total income for FY 2012-13
receded by 10% while proft before tax has reduced by 26%, as summarized
below:
(Rs. in Mn)
2012-13 2011-12
Operating Income 8282 9118
Other Income 267 411
Total Income 8549 9529
Total Expenses 7714 8394
PBT 835 1135
PAT 678 669
Dividend
The Board of Directors of your Company has recommended a dividend of Rs.
1.62 per equity share (81%) of face value of Rs. 2/- each for the
Financial Year ended 31st March, 2013. The dividend is payable subject
to shareholders'' approval at the ensuing AGM. The dividend payout will
be ? 336 Mn including dividend distribution tax.
Credit Rating
a) CRISIL has reaffrmed ÂP1 Â rating to Company''s short-term banking
facilities which signifes that the degree of safety regarding timely
payment of instruments is very strong.
b) CRISIL has also reaffrmed its rating of the Company''s long-term bank
facilities to ÂAA/Stable''. The ÂAAÂ rating signifes high safety with
regard to timely payment of long-term fnancial obligations.
Subsidiaries
Your Company has formed a subsidiary by name Praj Far East Philippines
Ltd. Inc., in Philippines on 17th August, 2012.
Your Company has divested its stake in Praj Jaragua Bioenergia S.A.,
Brazil, on 22nd October, 2012. The Company had already provided for
the divestment in earlier years.
Apart from the above, Pacecon Engineering Projects Ltd., BioCnergy
Europa B. V., Netherlands, Praj Americas Inc., Texas, Houston, U.S.A.,
Praj Far East Co. Ltd., Thailand, Praj Industries (Africa) Pty. Ltd.,
South Africa and Neela Systems Ltd. continue to be the subsidiaries of
your Company.
The Central Government has granted exemption under Section 212(8) of
the Companies Act, 1956, from attaching to the Balance sheet of the
Company, the Accounts and the other documents of its Subsidiary
Companies. In view of this, Consolidated Financial Statements of the
Company, which include the results of the said Subsidiary Companies,
are included in this Annual Report. Further, a statement containing the
particulars prescribed under the terms of the said exemption for each
of the Company''s subsidiaries is also enclosed. Copies of Annual
Accounts and related detailed information of all the subsidiaries can
also be sought by any investor of the Company or its Subsidiaries on
making a written request to the Company Secretary at the Registered
Offce of the Company in this regard. The Annual Accounts of the
Subsidiary Companies are also available for inspection at the Company''s
and/or the concerned Subsidiary''s Registered Offce.
Proceedings under Section 132 of the Income Tax Act, 1961
In April 2012 the Income Tax Department initiated proceedings against
the Company under Section 132 of the Income Tax Act, 1961. Currently,
the proceedings are pending before the Settlement Commission. As per
Company''s estimate, adequate provision for liability arising out of
this has already been made in the books of account.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report (Annexure 1),
Sustainability Report (Annexure 2) and Report on Corporate Governance
and Compliance Certifcate on Corporate Governance (Annexure 3) are
annexed to this report.
Directors
Mr. Kishor Chaukar and Mr. Prakash Kulkarni, Directors, retire by
rotation from the Board and being eligible, offer themselves for
re-appointment at the ensuing Annual General Meeting.
Auditors
a) Internal Auditors
The Internal Auditors, M/s. Khare Deshmukh & Co., Chartered
Accountants, Pune have conducted internal audits periodically and
submitted their reports to Audit Committee. Their reports have been
reviewed by the Statutory Auditors and the Audit Committee.
b) Statutory Auditors
The Statutory Auditors, M/s. B. K. Khare & Co., Chartered Accountants,
Mumbai, (Registration Number 105102W) hold offce until the conclusion
of the ensuing Annual General Meeting. The Company has received a
letter from them to the effect that their reappointment, if made, would
be within the prescribed limits under Section 224 (1B) of the Companies
Act, 1956.
c) Cost Auditors
The Compliance Report under The Companies (Cost Accounting Records)
Rules, 2011 for the year 2011-12 was duly fled with the Ministry of
Corporate Affairs on 28th December, 2012.
The Central Government had approved appointment of M/s. Dhananjay V.
Joshi & Associates, Cost Accountants as Cost Auditors of the Company
under Section 233B of the Companies Act, 1956 for the year 2012-13. The
Cost Audit Report for the year 2012-13 is due for fling with the
Ministry of Corporate Affairs on 27th September, 2013.
Your Company has reappointed them as Cost Auditors of the Company for
the year 2013-14.
Directors'' Responsibility Statement
In accordance with the requirements of Section 217(2AA) of the
Companies Act, 1956, the Board of Directors states that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed and there are no material departures from
the same;
- The accounting policies selected have been applied consistently and
judgements and estimates made 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 fnancial year 2012-13 and of the proft of the Company for that
period;
- Proper and suffcient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- The annual accounts have been prepared on a going concern basis.
Employee Stock Option Plan
The information to be disclosed as per SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed
to this Report (Annexure 4).
Additional Statutory Information
Particulars of Employees:
The statement of particulars required pursuant to Section 217(2A) of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Amendment Rules, 2011, forms a part of this Report.
However, as permitted by the Companies Act, 1956, the Report and
Accounts are being sent to Members and other entitled persons excluding
the above statement. Those interested in obtaining a copy of the said
statement may write to the Company Secretary at the Registered Offce.
The statement is also available for inspection at the Registered Offce,
during working hours up to the date of the Annual General meeting.
ÂGroup for SEBI Takeover Regulations:
For the purpose of Regulation 2 (1) (t) of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011, persons
constituting ÂGroup'' as defned in the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2009
are - Mr. Pramod Chaudhari, Mrs. Parimal Chaudhari, Moriyaset Trust,
Mr. Parth Chaudhari, P-Cube Enterprises Private Limited, Turtle
Communication, Fusiontech Ventures Private Limited, P-CUBE Trusteeship
Services Private Limited and Plutus Properties LLP.
Energy Conservation, Technology Absorption, Adaptation, Innovation:
Your Company''s operations are not energy or water intensive. However,
as part of its sustainability focus, it provides solutions which focus
on reducing energy, water and carbon footprints.
Your Company has intensifed its innovation program. It has enhanced its
focus on application of patents to monetize technology development and
discovery. During the year, the Company has applied for 9 patents.
The discovery based innovation is focused on development of new
products and processes. The Company has chalked out a program to
develop different biochemicals and human health and wellness products.
These are high value products which can be produced at the factory at
Jejuri, which was commissioned during the fscal.
Your Company has:
- Successfully commercialized the ECOSMART technology which was
developed in the previous fscal.
- Successfully commissioned a ZLD system for Textile Wastewater
Management at a Dyeing Unit in Southern India.
- Installed a Âlow-water'', Âlow-steam'' distillation technology that has
ensured that intake of water is reduced signifcantly (see
sustainability report)
- Commenced commercial production of livestock health and nutrition
product, which was developed at Praj Matrix - the innovation center.
Net Foreign Exchange Earnings 2669 2080
Your Company has retained its status as a net forex earner for past
many years.
Acknowledgements
Your Directors wish to place on record their appreciation towards all
associates including Customers, Collaborators, Government Agencies,
Financial Institutions, Bankers, Suppliers, Shareholders, Employees and
others who have reposed their confdence in the Company.
For and on behalf of the Board of Directors
Place: Pune Pramod Chaudhari
Date: 13th May, 2013 Executive Chairman
Mar 31, 2012
To The Members of Praj Industries Limited,
The Directors are pleased to present the 26th Annual Report and the
Audited Statements of Accounts for the year ended 31st March, 2012.
Financial Results
In the year under review, your Company has achieved a significant
growth in total income of Rs 9237 Mn (previous year Rs 5777 Mn). While
the total income increased by 60%, Profit before Tax increased by 87%
to Rs1119 Mn (previous year Rs 599 Mn). Highlights of performance are
indicated below:
(Rs in Mn)
2011-12 2010-11
Turnover 8805 5529
Other Income 432 248
Total Income 9237 5777
Total Expenses 8118 5178
PBT 1119 599
PAT 658 535
( ) Balance in Profit & Loss Account 3462 3252
Prof it Available for Appropriations 4120 3787
Appropriations
- Dividend
Interim - -
Final (Proposed) 287 233
- Dividend Tax 47 38
- Transfer to General Reserve 66 54
Balance in Profit & Loss Account 3720 3462
Dividend
The Board of Directors of your Company have recommended a dividend of Rs
1.62 per equity share (81%) of face value of Rs 21- each for the
Financial Year ended 31st March, 2012. The dividend is payable subject
to shareholders' approval at the ensuing AGM. The dividend payout
will be Rs 334 Mn including dividend distribution tax.
Credit Rating
a) CRISIL has reaffirmed "P1 " rating to Company's short-term banking
facilities which signifies that the degree of safety regarding timely
payment of instruments is very strong.
b) CRISIL has also reaffirmed its rating of the Company's long-term
bank facilities to 'AA/Stable'. The 'AA' rating signifies high safety
with regard to timely payment of long-term financial obligations.
Buy-back of Equity Shares
Your Company, pursuant to the approval of the Board of Directors under
Section 77A of the Companies Act, 1956, decided to buy-back fully
paid-up equity shares of the Company at a price not exceeding Rs90/- per
equity share from the open market through the Stock Exchanges for an
aggregate amount not exceeding Rs558.639 Mn being 10% of the aggregate
of the Company's total paid-up equity share capital and free reserves
as on 31st March, 2011.
The Company has closed the Buy-back on 24th April, 2012, after buying
back 7,313,644 equity shares for a total consideration of Rs 558.638 Mn
(exclusive of Brokerage, STT and other charges) utilizing
the Securities Premium account. All the equity shares bought back have
been extinguished. Post Buy-back, the paid-up equity shares of your
Company stand at 177,465,079 nos.
Strategic Acquisition
During the year under review:
Your Company has acquired majority stake (50.20%) in Neela Systems Ltd
" Neela" on 6th January, 2012 for a consideration of Rs 646 Mn.
Neela is a Mumbai based Company having business interests in Water
Treatment and Modular Process Systems, focused on Biotech, Pharma, Life
Sciences and Cosmetics Industries. Future arrangements provide for
further increase in stake by Praj. Neela is now a subsidiary of your
Company.
Subsidiaries
Your Company has formed a wholly owned subsidiary by name Praj
Industries (Africa) Pty. Ltd., in South Africa on 19th July, 2011. Praj
Industries (Africa) Pty. Ltd., also formed two wholly owned
subsidiaries by name Praj Industries (Tanzania) Ltd., Tanzania and Praj
Industries (Sierra Leone) Ltd., Sierra Leone on 20th September 2011 and
28th October 2011, respectively.
Apart from the above, Pacecon Engineering Projects Ltd., BioCnergy
Europa B. V., Netherlands, Praj Jaragua Bioenergia S.A., Brazil, Praj
Americas Inc., Texas, Houston, U.S.A and Praj Far East Co. Ltd.,
Thailand continue to be the subsidiaries of your Company and are
operating in their respective areas.
The Central Government has granted exemption under Section 212(8) of
the Companies Act, 1956, from attaching to the Balance sheet of the
Company, the Accounts and the other documents of its Subsidiary
Companies. In view of this, Consolidated Financial Statements of the
Company, which include the results of the said Subsidiary Companies,
are included in this Annual Report. Further, a statement containing the
particulars prescribed under the terms of the said exemption for each
of the Company's subsidiaries is also enclosed. Copies of Annual
Accounts and related detailed information of all the subsidiaries can
also be sought by any investor of the Company or its Subsidiaries on
making a written request to the Company Secretary at the Registered
Office of the Company in this regard. The Annual Accounts of the
Subsidiary Companies are also available for inspection at the
Company's and/or the concerned Subsidiaries' Registered Office.
Proceedings under Section 132 of the Income Tax Act, 1961
In the month of April 2012, proceedings were initiated by the Income
Tax Department under Section 132 of the Income Tax Act, 1961. Though
the Company is yet to receive a demand notice from the Income Tax
Department, it is in the process of gathering the information /
documents and tax advice.
Due to this, the Company is not in a position to reliably estimate the
liability (if any) arising out of these proceedings. The management, on
the basis of best estimate, has made a prudential provision of Rs250 Mn
in the Statement of Profit and Loss which the Company presently
believes to be adequate. In the subsequent quarters, when more clarity
is achieved, the difference, if any, between the above referred
provision and envisaged liability will be debited I credited to the
Profit & Loss Account as the case may be.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, Management Discussion & Analysis Report (Annexure 1),
Sustainability Report (Annexure 2) and Report on Corporate Governance
and Compliance Certificate on Corporate Governance (Annexure 3) are
annexed to this report.
Directors
Mr. Berjis Desai and Mr. Rajiv Maliwal, Directors, retire by rotation
from the Board and being eligible, offer themselves for re-appointment
at the ensuing Annual General Meeting.
Auditors
a) Internal Auditors
The Internal Auditors, M/s. Khare Deshmukh & Co., Chartered
Accountants, Pune, have conducted internal audits periodically and
submitted their reports to Audit Committee. Their reports have been
reviewed by the Statutory Auditors and the Audit Committee.
b) Statutory Auditors
The Statutory Auditors, M/s. B. K. Khare & Co., Chartered Accountants,
Mumbai, (Registration Number 105102W) hold office until the conclusion
of the ensuing Annual General Meeting. The Company has received a
letter from them to the effect that their re-appointment, if made,
would be within the prescribed limits under Section 224 (1B) of the
Companies Act, 1956.
c) Cost Audit
Pursuant to the directives of the Ministry of Corporate Affairs, your
Company has appointed Mr. Dhananjay V. Joshi & Associates, Cost
Accountants as Cost Auditors of the Company under Section 233B of the
Companies Act, 1956 for the year 2012-13.
Directors' Responsibility Statement
In accordance with the requirements of Section 217(2AA) of the
Companies Act, 1956, the Board of Directors states that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed and there are no material departures from
the same;
- The accounting policies selected have been applied consistently and
judgments and estimates made 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 2011-12 and of the profit of the Company for that
period;
- Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- The annual accounts have been prepared on a going concern basis.
Employee Stock Option Plan
The information to be disclosed as per SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed
to this Report (Annexure 4).
Additional Statutory Information
Particulars of Employees:
The statement of particulars required pursuant to Section 217(2A) of
the Companies Act, 1956, read with the Companies (Particulars of
Employees) Amendment Rules, 2011, forms a part of this report.
However, as permitted by the Companies Act, 1956, the Report and
Accounts are being sent to Members and other entitled persons excluding
the above statement. Those interested in obtaining a copy of the said
statement may write to the Company Secretary at the Registered Office.
The statement is also available for inspection at the Registered
Office, during working hours up to the date of the Annual General
Meeting.
"Group" for SEBI Takeover Regulations:
For the purpose of Regulation 2 (1) (t) of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011, persons
constituting 'Group' as defined in the Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009 are - Mr. Pramod Chaudhari, Ms. Parimal Chaudhari,
Moriyaset Trust, Mr. Parth Chaudhari, P-Cube Enterprises Private
Limited, Turtle Communication and Fusion tech Ventures Private Limited.
Energy Conservation, Technology Absorption, Adaptation, Innovation:
Your Company values innovation and invests considerable resources in
promoting this value. The Company is constantly enhancing its offerings
in the market as it recognizes that this is the most effective way to
grow sustain ably. Each year, it incorporates incremental innovation in
order to improve competitiveness of its offerings. The Company focuses
on energy, water and product yields for its existing business lines.
While Praj Matrix carries out discovery based Research & Development,
application related innovation is carried out by the Center of
Innovation & Applied Technology as well as various groups working in
tandem with them. The Company drives innovation through 'market-in'
approach and through 'internal initiatives'.
Your Company is proceeding with its in-house program for scale-up of
its Lignocellulosic biomass to ethanol program. During the fiscal, your
Company acquired the rights to Qteros 'Consolidated Bio Processing
Platform', after ceasing of the Joint Development Program.
Your Company has;
- Developed Xylose (Pentose sugar) fermentation strain with scale up of
the microbe to pilot plant with minimum media and very low retention
time. When incorporated into Praj's LC to Ethanol Technology, it will
add significant value in terms of cost of production.
- Incorporated a specially designed MVR evaporation system in its
solutions which significantly reduces steam consumption.
- Developed a distillation system called ECOSMART wherein capacity
expansion can be undertaken with performance intensification such as
enhancement of biogas in biomethanation of distillery effluent and
other process and wastewater treatment applications.
- Commissioned a Sequential Batch Reactor system for wastewater
treatment in the agrichemicals sector. This system is offered entirely
through internal developmental efforts. The system considerably reduces
energy for treatment of wastewater
Other than this, your Company has introduced many new schemes and
processes for lowering energy, water consumption and generation of
wastewater. The initiatives taken by your Company to enhance its
commitment to Sustainable Practices are given in the Sustainability
Report, enclosed separately.
Foreign Exchange Earnings & Outgo
(Rs in Mn)
31/03/2012 31/03/2011
Earnings 3634 1838
Outgo 1554 850
Net Foreign Exchange Earnings 2080 988
Your Company has retained its status as a net forex earner.
Acknowledgements
Your Directors wish to place on record their appreciation towards all
associates including Customers, Collaborators, Government Agencies,
Financial Institutions, Bankers, Suppliers, Shareholders, Employees and
others who have reposed their confidence in the Company.
For and on behalf of the Board of Directors
Place: Pune Pramod Chaudhari
Date: 29th May, 2012 Executive Chairman
Mar 31, 2011
The Directors are pleased to present the 25th Annual Report and the
Audited Statements of Accounts for the year ended 31st March, 2011.
Financial Results
In the year under review, your Company has recorded a total income of Rs.
5820 million (previous year Rs. 6447 million). While the total income
decreased by 10% Profit before Tax decreased by 54% to Rs.599 million
(previous year Rs. 1231 million). The performance was impacted by adverse
global market conditions.
(Rs. in million)
2010-11 2009-10
Turnover 5529 6023
Other Income 291 424
Total Income 5820 6447
Total Expenses 5220 5216
PBT 599 1231
PAT 535 1139
(+) Balance in Profit & Loss account 3252 2538
Profit Available for Appropriations 3787 3677
Appropriations
- Dividend
Interim - 266
Final (Proposed) 233 -
Dividend Tax 38 45
- Transfer to General Reserve 54 114
Balance in Profit and Loss Account 3462 3252
Dividend
Your Board of Directors decided to recommend a dividend of Rs. 1.26 per
equity share (63%) of face value of Rs. 2/- each for the Financial Year
ended 31st March, 2011.
Credit Rating
a) CRISIL has reaffi rmed "P1+" rating to Companys short-term banking
facilities which signifi es that the degree of safety regarding timely
payment of instruments is very strong.
b) CRISIL has also reaffi rmed its rating of the Companys long-term
bank facilities to AA/Stable. The "AA" rating signifi es high safety
with regard to timely payment of long-term fi nancial obligations.
Subsidiaries
Pacecon Engineering Projects Ltd. (PEPL), BioCnergy Europa B. V.,
Netherlands, Praj Jaragua Bioenergia S.A., Brazil, Praj Americas Inc.,
Texas, Houston and Praj Far East Co. Ltd., Thailand are subsidiaries of
your Company and are operating in their respective areas.
Your Company has received approval from the Ministry of Corporate
Affairs, Government of India under Section 212 (8) of the Companies
Act, 1956 exempting it from attaching various documents in respect of
subsidiary companies, as set out under Section 212 (1) of the Companies
Act, 1956, to the Annual Accounts of your Company, for the Financial
Year ended 31st March, 2011. As per the terms of the letter, a
statement containing brief fi nancial details of the Companys
subsidiaries for the year
ended 31st March, 2011 is included in the annual report. The annual
accounts of these subsidiaries and the related detailed information
will be made available to any member of the Company and its
subsidiaries at any point of time upon request. The same will also be
made available for inspection by any member of the Company / its
subsidiaries at the registered offi ce of the Company.
Strategic Partnership / Joint Ventures
Your Company has entered into a strategic partnership with Qteros Inc.,
USA to accelerate commercialization efforts for industrial-scale
cellulosic ethanol production. (Please refer to Annexure 1 for more
details.)
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report (Annexure 1),
Sustainability Report (Annexure 2) and Report on Corporate Governance
and Compliance Certifi cate on Corporate Governance (Annexure 3) are
annexed to this report.
Directors
Ms. Parimal Chaudhari and Mr. Sivaramakrishnan Iyer, Directors, retire
from the Board by rotation and being eligible, offer themselves for
re-appointment at the ensuing Annual General Meeting.
Mr. Prakash Kulkarni, who was appointed on 11th October, 2010 in the
casual vacancy caused by the resignation of Mr. Anil Joshi, holds offi
ce upto the date of the forthcoming Annual General Meeting. The
Company has received Notice in writing along with requisite deposit
from a member under Section 257 of the Companies Act, 1956 proposing
candidature of Mr. Prakash Kulkarni for the offi ce of Director liable
to retire by rotation.
During the year, Mr. Shashank Inamdar stepped down as CEO & Managing
Director of the Company effective 15th November, 2010 and subsequently
resigned from the offi ce of additional director with effect from 3rd
February 2011. The Board placed on record its appreciation for the
valuable contribution made by Mr. Inamdar during his tenure with the
Company.
Mr. Gajanan Nabar was appointed as an Additional Director of the
Company with effect from 15th November, 2010. He was also appointed as
CEO & Managing Director of the Company. A detailed profi le of Mr.
Nabar is forming part of Corporate Governance Report. In terms of
Section 260 of the Companies Act, 1956 he shall hold offi ce upto the
date of the ensuing Annual General Meeting. The Company has received
Notice in writing along with requisite deposit from a member under
Section 257 of the Companies Act, 1956 proposing candidature of Mr.
Gajanan Nabar for the offi ce of Director not liable to retire by
rotation.
Mr. Pramod Chaudhari, Promoter Director, continues to lead as Executive
Chairman of the Company.
Auditors
a) Internal Auditors
The Internal Auditors, M/s. Khare Deshmukh & Co., Chartered
Accountants, Pune have conducted the internal audits periodically and
submitted their reports to Audit Committee. Their reports have been
reviewed by the Statutory Auditors and the Audit Committee.
b) Statutory Auditors
The Statutory Auditors, M/s. B. K. Khare & Co., Chartered Accountants,
Mumbai, (Registration Number 105102W) hold offi ce until the conclusion
of the ensuing Annual General Meeting. The Company has received a
letter from them to the effect that their reappointment, if made, would
be within the prescribed limits under Section 224 (1B) of the Companies
Act, 1956.
Directors Responsibility Statement
In accordance with the requirements of Section 217(2AA) of the
Companies Act, 1956, the Board of Directors states that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed and there are no material departures from
the same;
- The accounting policies selected have been applied consistently and
judgements and estimates made 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 fi nancial year 2010-11 and of the Profit of the Company for
that period;
- Proper and suffi cient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- The annual accounts have been prepared on a going concern basis.
Employee Stock Option Plan
- During the year, your Company allotted 40,231 equity shares on
exercise of options under the Employee Stock Option Plan 2005 Grant I,
II & III. Consequent to the above, the Issued, Subscribed and Paid-up
Equity Share Capital of your Company increased from 184,738,492 equity
shares (Rs. 369.477 million) to 184,778,723 equity shares (Rs. 369.557
million) as of 31st March, 2011.
- During the year, the Company has issued Grant IV - Plan A & Plan B of
Options under the Employee Stock Option Plan 2005 aggregating 1,950,000
options to senior executives including new CEO & MD of the Company at
the rate of Rs. 72.70 per option.
- The information to be disclosed as per SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed
to this Report (Annexure 4).
Additional Statutory Information
Particulars of Employees:
The statement of particulars required pursuant to section 217(2A) of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Amendment Rules, 2011, forms a part of this Report.
However, as permitted by the Companies Act, 1956, the Report and
Accounts are being sent to Members and other entitled persons excluding
the above statement. Those interested in obtaining a copy of the said
statement may write to the Company Secretary at the Registered Offi ce.
The statement is also available for inspection at the Registered Offi
ce, during working hours upto the date of the Annual General meeting.
Group for SEBI Takeover Regulations:
For the purpose of Regulation 3 (1) (e) of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997, persons
constituting Group as defi ned in the Monopolies and Restrictive
Trade Practices Act, 1969 are - Mr. Pramod Chaudhari, Mrs. Parimal
Chaudhari, Moriyaset Trust, Mr. Parth Chaudhari, P-Cube Enterprises
Private Limited, Turtle Communication and Fusiontech Ventures Private
Limited.
Energy Conservation, Technology Absorption, Adaptation, Innovation
Your Company offers innovative solutions to customers through continual
research and development. During the year, your Company,
- developed a pre-processing system for sand removal from cassava chips
for which the Company has fi led a patent.
- worked on value-added products which can be derived out of brewery
spent yeast;
- developed a technology package for Hyloronic Acid, a high value
ingredient used in skin care formulations and in osteo - arthritic and
opthalmic treatments. Patent fi ling is in process.
- introduced an effl uent treatment special process for evaporation of
biomethanated spentwash. The same is being tried out at a commercial
scale operation.
- developed Technology for production of "Value added Fermentation
Nutrition Products" from waste streams of Brewery Plants.
Other than this, your Company has introduced many new schemes and
processes for lowering energy and water consumption and generation of
wastewater. The initiatives taken by your Company to enhance its
commitment to Sustainable Practices are given separately in a
Sustainability Report, enclosed separately.
Acknowledgements
Your Directors wish to place on record their appreciation towards all
associates including Customers, Collaborators, Government Agencies,
Financial Institutions, Bankers, Suppliers, Shareholders, Employees and
others who have reposed their confi dence in the Company.
For and on behalf of the Board of Directors
Place: Pune Pramod Chaudhari
Date: 24th May, 2011 Executive Chairman
Mar 31, 2010
The Directors are pleased to present the 24th Annual Report and the
Audited Statements of Accounts for the year ended 31st March, 2010,
together with the notice of the Annual General Meeting.
Financial Results
In the year under review, your Company has recorded a total income of
Rs. 6447 million (previous year Rs. 7957 million). While the total
income decreased by 19 %, Profit before Tax decreased by 23% to Rs.
1231 million (previous year Rs. 1608 million). The performance was
impacted by adverse global market conditions, against which your
Companys performance can be considered modest.
(Rs. in million)
2009-10 2008-09
Turnover 6023 7719
Otherlncome 424 238
Total Income 6447 7957
Total Expenses 5216 6349
PBT 1231 1608
PAT 1139 1298
Dividend
The Board of Directors had declared an Interim Dividend of Rs. 1.44 per
share on Face Value of Rs. 21- per share (72 %) for the financial year
2009 - 2010. The Board has decided not to recommend any further
dividend for the Financial Year 2009-2010.
Credit Rating
a. CRISIL has reaffirmed "P1+" rating to Companys short term banking
facilities which signifies that the degree of safety regarding timely
payment of instruments is very strong.
b. CRISIL has also upgraded its rating of the Companys long-term
bankfacilities to AA/Stable from AAVStable.The "AA" rating
signifies high safety with regard to timely payment of long-term
financial obligations.
Subsidiaries
Pacecon Engineering Projects Ltd. (PEPL), BioCnergy Europa B. V.,
Netherlands, Praj Jaragua Bioenergia S.A., Brazil and Praj Far East Co.
Ltd., Thailand are subsidiaries of your Company and are operating in
their respective areas.
During the year under review, your Company divested its shareholding in
Praj Schneider Inc., USA. Consequently, it ceases to be a subsidiary of
your Company. This decision was taken keeping in mind the need to
re-structure its business in North and
South America. This led the Company to incorporate a new wholly owned
subsidiary inTexas, Houston called Praj Americaslnc.
Your Company has applied to the Central Government for exemption from
attaching the audited accounts of the subsidiaries to the Annual
Accounts of your Company, for the financial year ended 31st March,
2010. The said application is under process and final approval letter
is awaited. A statement containing brief financial details of the
Companys subsidiaries for the year ended 31st March, 2010 is included
in the annual report. The annual accounts of these subsidiaries will be
made available for inspection to members of the Company / its
subsidiaries upon request at the registered office of the Company.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report (Annexure 1),
Sustainability Report (Annexure 2) and Report on Corporate Governance
and Compliance Certificate on Corporate Governance (Annexure 3) are
annexed to this report.
Directors
During the year under review.Mr.Rajiv Maliwal has been appointed as
Additional Director with effect from 14th August, 2009. He holds office
upto the date of the ensuing Annual General Meeting. He is eligible for
appointment as Director. Mr. Daljit Mirchandani retired at the 23rd
Annual General Meeting held on 9th July, 2009.
Mr. Berjis Desai and Mr. Kishor Chaukar retire by rotation in terms of
Article 83 of the Articlesof Association of the Companyand being
eligible offer themselves for re-appointment.
Auditors
a) Internal Auditors
The Internal Auditors, M/s. Khare Deshmukh &Co., Chartered Accountants,
Pune, (Formerly known as M/s. Khare & Bhide) have conducted the
internal audits periodically and submitted their reports to Audit
Committee. Their reports have been reviewed by Audit Committee and
Statutory Auditors.
b) Statutory Auditors
The Statutory Auditors, M/s. B. K. Khare & Co., Chartered Accountants,
Mumbai, hold office until the conclusion of the ensuing Annual General
Meeting. The Company has received a letter from them to the effect that
the ir re-appointment,if made, would be within the prescribed limits
under Section 224 (IB) of the Companies Act, 1956.
Directors Responsibility Statement
In accordance with the requirements of Section 217(2AA) of the
Companies Act, 1956, the Board of Directors states that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
- The accounting policies selected have been applied consistently and
judgements and estimates made 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 2009-10 and of the profit of the Company for that
period;
- Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- The annual accounts have been prepared ona going concern basis.
Employee StockOption Plan
- During the year, your Company allotted 1,307,410 equity shares on
exercise of options under the Employee StockOption Plan 2005 Grant I
&II. Consequent to the above, the Issued, Subscribed and Paid - up
Equity Share Capital of your Company increased from 183,431,082 equity
shares (Rs. 366.862 million) to 184,738,492
equityshares(Rs.369.477million)asofMarch31,2010.
- During the year, the Company has issued Grant III of Options under
the Employee Stock Option Plan 2005 aggregating 3,029,626 options to
its eligible employees at the rate of Rs.81.75 per option.
- The information to be disclosed as per SEBI (Employees Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed
to this Report (Annexure 4).
Particulars of Employees
The statement of particulars required pursuant to section 217(2A) of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) (Amendment) Rules, 2002, forms a part of this Report.
However, as permitted by the Companies Act, 1956, the Report and
Accounts are being sent to Members and other entitled persons excluding
the above statement. Those interested in obtaining a copy of the said
statement may write to the Company Secretary at the Registered Office
and the same will be sent by post. The statement is also available for
inspection at the Registered Office, during working hours upto the date
of the Annual General Meeting.
Energy Conservation, Technology Absorption, Adaptation, Innovation
Thetechnology.plant&equipmentofferedbyyourCompanyadopts sustainability
criterion in terms of energy, water, environment, safety and social
dimensions.
Towards this end, your Company carries out R & D for systems that will
enhance sustainability.
The Company specifically focusses on innovation and has set up a
facility called Praj Matrix - The Innovation Center, which is currently
engaged in development of cellulosicethanol program.
Your Company has taken an initiative to enhance its commitment to
sustainable practices. A Sustainability Report is separately enclosed.
Towards these initiatives, the Annual Report for the year ended 31st
March, 2010 contains only those details that are statutorily required
to be published in the Annual Report along with Abridged Standalone
Financial Statements prepared in compliance with the provisions of
Section 219 of the Companies Act, 1956. The complete and full set of
Annual Report is made available on the Companys web-site at
www.praj.net in the Investors Lounge Section. The same is also
available for inspection at the Registered Office during working hours
upto the date of the Meeting. Any member interested in obtaining a
copy of the full Annual Report may write to the Company Secretary or
email us at [email protected]
Foreign Exchange Earnings & Outgo_
Rs. in millions
31/03/2010 31/03/2009
Earnings 2676 3553
Outgo 762 1018
NFE 1914 2535
Acknowledgements
Your Directors wish to place on record their appreciation towards all
associatesincludingCustomers,Collaborators,GovernmentAgencies,
Financial Institutions, Bankers, Suppliers, Shareholders, Employees and
others who have reposed their confidence in the Company.
For and on behalf of the Board of Directors
Shashank Inamdar Sivaramakrishnan Iyer
CEO & MD Director
PLACE : PUNE
DATE : 29TH MAY, 2010
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