Premier II~~ Ehplo/Lufll - , MGMT
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150 9001 REGISTERED Premier II~~ EHplo/lufll - , MGMT. SYS. • \ , Rv A C024 limited DNV Certification B.V., The Netherlands ze" October, 2020 To To The General Manager The Vice President, Department of Corporate Relations Listing Department BSE Limited . The National Stock Exchange of India Sir Phiroze Jeejeebhoy Towers, Limited Dalal Street, Fort, Exchange Plaza Mumbai -400 001 Bandra Kurla Complex, Bandra (East) Mumbai 400 051 Scrip code: 526247 Scrip code: PREMEXPLN Dear Sirs, Sub: Notice of 40th Annual General Meeting and Annual Report This is to inform you that the 40th Annual General Meeting of the Company will be held on Thursday, 19th day of November, 2020 at 11.30 A.M through VideoConferencing/Other Audio Visual Mode. In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are submitting herewith Annual Report of the Company for the financial year 2019-20 and the Notice of AGM. The Annual Report for the financial year 2019-20 including Notice of AGM is being sent to the shareholders electronically who have registered their email Ids. The same is also available on the Company's website at www.pelgel.com Brief details of AGM are as under: Date & Time 19th November, 2020 at 11.30 a.m. 1ST Mode Video Conference I Other Audio-Visual Means Cut-off date 1210 November, 2020 e-voting start date & time 16th November, 2020, 9.00 a.m 1ST e-voting end date & time 1810 November, 2020, 5.00 p.m. 1ST Website for e-voting https:llevoting.kfintech.com Website for attending the AGM https:llemeetings.kfintech.com Thanking you, Regd. Office: "Premier House", # 11, Ishaq Colony, Near AOC Centre, Secunderabad - 500 015. (T.S) INDIA www pelgel tOm Phones: 040-66146801 to 05 Fax: +91 (40) 27843431 email: [email protected] '. CIN : L24110TG1980PLC002633 STAYING ON THE COURSE 40th Annual Report 2019-20 TABLE OF CONTENTS 1 Staying on the Course 10 Key Drivers of the Business 2 About the Company 11 PEL’s Capabilities 4 Chairman’s Message 14 Board of Directors 6 Review by Deputy Managing Director 16 Senior Management 8 Financial Highlights 17 Corporate Information 9 10 Years at a Glance 18 Corporate Social Responsibility STATUTORY REPORTS 20 MD & A 33 Report on Corporate Governance 26 Directors’ Report FINANCIAL STATEMENTS 20 Standalone Independent Auditor’s Report 106 Consolidated Independent Auditor’s Report 68 Standalone Financial Statements 112 Consolidated Financial Statements 73 Notes to Standalone Financial Statements 117 Notes to Consolidated Financial Statements NOTICE 151 Notice of the 40th Annual General Meeting Disclaimer Statements in this report that describe the Company’s objectives, projections, estimates, expectations or predictions of the future may be ‘forward-looking statements’ within the meaning of the applicable securities laws and regulations. The Company cautions that such statements involve risks and uncertainty and that actual results could differ materially from those expressed or implied. Important factors that could cause differences include raw materials’ cost or availability, cyclical demand and pricing in the Company’s principal markets, changes in government regulations, economic developments within the countries in which the Company conducts business, and other factors relating to the Company’s operations, such as litigation, labour negotiations and fiscal regimes. Some of the images used in this report are purely for illustrative purposes only and hence they are not the photos/images of our facilities, products or of any such nature/kind. STAYING ON THE COURSE Premier Explosives Ltd (PEL) continues its technological journey in India’s defence indigenization. Through research & development and manufacturing of high energy materials, the company is strengthening its product capability matrix in defence, aerospace and commercial explosives. In the recent times PEL has expanded its manufacturing capability. Its greenfield project at Katepally is under commissioning. In June 2020, PEL become the first company in India to receive SCOMET license (Special Chemicals, Organisms, Materials, Equipment and Technologies) for export of Propellant filled Rocket Motors, thus confirming the company’s ability to match global standards in defence manufacturing. With a healthy order book which continues to be strengthened through regular additions of fresh orders from the defence and mining sector the company is staying on the course to reach its long term vision. Premier Explosives Limited 40th Annual Report 2019-20 1 ABOUT THE COMPANY Premier Explosives Ltd is engaged in the manufacture of high energy materials and allied products for the defence, space, mining and infrastructure industries. The company has been developing and manufacturing solid propellants for rockets like Pinaka, tactical missiles like Astra, Akash, LRSAM / MRSAM / QRSAM, Brahmos, etc., strategic missiles like Agni and also for strap-on- motors of satellite launchers. The extended capabilities of the company include products such as chaff, IR flares, explosive bolts, pyro devices, smoke markers, cable cutters, tear gas grenades and many other products including pyrogen igniters for defence and space applications. The company is the pioneer in indigenising the technology for manufacture of explosives and accessories. Vision Mission We envisage to be a global leader in our segment through Become a global player in quality formulations of high energy relentless research and development of knowledge-based materials in a safe, green and economical way through an products for defence applications, mines, infrastructure and employee empowered organization allied sectors 2 Premier Explosives Limited 40th Annual Report 2019-20 Premier’s Technology Capability Matrix Propellants Pyro devices High explosives & energetic materials Propellant Rocket Motors Pyro cartridges CL20 Booster motors for different missiles Pyro actuators HNS IV Pyrogen Igniters Smoke / flash generators HMX Case-bonded propellants IR generators RDX Free standing and fuel rich grains Specialized squibs PETN Air Target Imitator Explosives bolts Igniter compositions Gas generator Impulse cartridges Ammonium Perchlorate Strap on motors for satellite launchers Counter measures Chaffs Flares Thermal insulation Lining of rocket motors First company in India to have deployed First company in India to indigenously First Indian private entity manufacturing indigenous technology for manufacturing manufacture Countermeasures for Indian and supplying solid propellants to India’s explosives defence prestigious missile programmes and delivered more than 2000 Booster Grains for First company in the world to produce safer Akash missile. and greener NHN detonators on commercial scale replacing ASA detonators Operating revenue (Standalone) Capex in FY20 (work in progress) ` 15,650 lakhs ` 2,733 lakhs Premier Explosives Limited 40th Annual Report 2019-20 3 CHAIRMAN’S MESSAGE The challenging environment is continuing in FY21 also; however, your company has been working hard towards improving the profitability, especially by focussing on defence explosives business. Dear Members including Sanitization, Physical However, the new project is substantial distancing and Personal protective gear. in terms of the size and complexity of Welcome to the annual meeting of your the manufacturing processes. company for the year 2019-20. Business challenges The plant mainly comprises of facilities Firstly, I trust all of you and your families During the year under review, your for manufacturing are safe and healthy in the wake of company faced a few challenges like Covid-19 outbreak. We are living in longer monsoon, cut throat market • Solid propellants challenging times now, with the rapid competition forcing your company to • Rockets and missiles spread of the corona virus. Across withdraw from a major tender below • HMX, RDX and their compounds the globe, economies and people are profitable price point, postponement of • Medium and large calibre deeply impacted by this global health few of the defence deliveries, etc. pandemic. Ammunition & Warheads / Bombs, A week long Corona-induced year- Mines & Fuses However, it is heartening to note that end lockdown also has its impact on a few curative medicines have already Current plant at Peddakandukuru is production and deliveries in March 2020. arrived in the market and perhaps by mainly catering to solid propellants early 2021, preventive vaccines would Resultant lower turnover could not for Akash, MRSAM, LRSAM and Astra also be available to people, thanks absorb the fixed costs fully and thereby missiles and few larger missiles and to the concerted efforts of research company’s net result has not been their derivatives. However, Katepally institutes, medical professionals, positive. plant is designed for much larger pharmaceutical companies and propellants for satellite launchers and The challenging environment is governments. Brahmos missiles, Pralay missiles, etc. continuing in FY21 also; however, In India, while the lockdown brought your company has been working hard High explosives like RDX / HMX are new everything to a grinding halt in March towards improving the profitability, products and there are encouraging and April, thereafter economic activity especially by focussing on defence prospects considering the domestic and has been gradually resuming under explosives business. global demand for the products. precautionary protocols. We are all Ammunition is another important New products from new plant learning to