Prospect Consumer Products Ltd

To,

The Members,

PROSPECT COMMODITIES LIMITED

Your Directors have pleasure in submitting their 1^st Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31^st March, 2023.

1. FINANCIAL RESULTS

The Company's financial performances for the year under review are given hereunder:

-Company is incorporated on date 06/01/2022 and First financial year of company is from 06.01.2022 to 31^st March, 2023.

2. SHARE CAPITAL:

As on 31 March, 2023, The Authorized Capital of the Company was Rs.4,10,00,000 (Rupees Four Crore Ten Lakh) consisting of 41,00,000 (Forty One Lakh) equity shares of Rs.10 each and the Issue and Paid up Capital of the Company was Rs. 4,09,05,000 (Rupees Four Crore Nine Lakh Five Thousand) consisting of 40,90,500 (Forty Lakh Ninety Thousand Five Hundred) equity shares of Rs.10 each.

3. CONVERSION OF COMPANY FROM PRIVATE LIMITED TO PUBLIC LIMITED:

The Company was converted from Private Limited to Public Limited i.e. From ‘PROSPECT COMMODITIES PRIVATE LIMITED' to ‘PROSPECT COMMODITIES LIMITED'.

Fresh Certificate of Incorporation Consequent upon Conversion from Private Company to Public Company was issued on 3^rd January, 2023.

4. LISTING ON BSE SME PLATFORM:

We are pleased to inform you that the Company has made an Initial Public Offer of 12,26,000 Equity Shares at Face Value of Rs. 10/- each, at a price of Rs. 61/- per Equity Share (including a Share Premium of Rs.51/- per Equity Share) vide prospectus dated 27^th February, 2023. The Company has successfully completed the Initial Public Offer (IPO) pursuant to the applicable SEBI Rules and Regulations. The issue opening date was 8^th March, 2023 and the issue closing date was 13^th March, 2023.

The IPO of the Company received great response from the public and the issue was oversubscribed.

The Company got listed with the SME Platform of BSE Limited on 20^th March, 2023. The Equity Shares of the Company as Listed on SME Platform for BSE Limited are on regular and continuous trading.

5. DIVIDEND:

The Board decided that the profits should be retained for the expansion of the Company, which is in pipeline for more growth and value addition to the company and forming a strong business base so that revenue flows from many channels and hence the Directors of your Company do not recommend any dividend for FY 2022-23.

6. AMOUNTS PROPOSED TO BE CARRIED TO RESERVES :

Net Profit of the Company after tax is Rs. 54.67 Lakhs and same is transferred to Reserves and Surplus under the head Surplus/ (Deficit) in the statement of Profit and Loss.

7. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND:

There is no unpaid/unclaimed Dividend required to be transferred to Investor Education and Protection Fund as prescribed under the provisions of Section 125 of the Companies Act, 2013.

8. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS :

During the year, your Company has achieved the Total Revenue of Rs. 1269.30 Lakhs. There is no other income during the year. Total expense of the company during the year is Rs. 1189.42 Lakhs. After meeting the expenses your Company has earned profit of Rs. 54.67 Lakhs. The management of the Company is putting all efforts for better performance in coming period.

9. DEPOSITS FROM PUBLIC:

Your Company has not accepted any Deposits from public as prescribed under Section 73 of the Companies Act, 2013 and rules framed thereunder.

10. CHANGE IN NATURE OF THE BUSINESS:

There is no change in the nature of business of the Company during the year under review.

11. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

During the year Company converted from Private Limited to Public Limited. The Company got listed with the SME Platform of BSE Limited on 20^th March, 2023. The Equity Shares of the Company as Listed on SME Platform for BSE Limited are on regular and continuous trading.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are:

A. Conservation of Energy

B. Technology absorption

C. Foreign Exchange Earnings and outgo

13. REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY

No employee of the Company was in receipt of remuneration in excess of the limits specified under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the financial year ended March 31, 2022.

14. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Company does not have any Risk Management Policy as the element of risk threatening the Company's existence is very minimal.

15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Details of Loan, Guarantee and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All contracts/transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. After conversion of Company from Private Limited to Public Limited, Board of Directors of the Company has formulated the Policy on Related Party Transactions.

The particulars of Contracts or Arrangements made with related parties made pursuant to Section 188 is furnished in Annexure I and is attached to this report.

17. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There is no a qualification, reservations or adverse remarks made by either the Auditors or by the Practicing Company Secretary in their respective reports.

18. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

Pursuant to provisions of Section 178 (1) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company has framed a policy for selection, nomination, appointment and remuneration of Directors suitably containing the criteria determining qualifications, positive attributes and independence of a Director.

The said policy is available on the website of the company at https://prospectcommodities.com/docs/policies/nomination and remuneration policy .pdf

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of the Company comprises of Five (5) Directors. As on the date of this report, the Board of the company constitutes of the following directors:

i. Retire by Rotation- Mrs. Priyanka Vimal Mishra

Pursuant to Sections 149, 152 and other applicable provisions of the Companies Act, 2013, one-third of the directors of the company are liable to retire by rotation, and if eligible, they can offer themselves for the re-appointment. In this Annual General Meeting Mrs. Priyanka Vimal Mishra (DIN: 09459276), Non-Executive Director of the Company is liable to retire by rotation and being eligible to offer herself for re-appointment.

ii. Regularization of Additional Director Mrs. Riddhi Bharatkumar Vasita

Mrs. Riddhi Bharatkumar Vasita (DIN: 06876566). who was appointed as an Additional Director of the company, with effect from 23rd December, 2022 by the Board of Directors of the Company under Section 161(1) of the Companies Act, 2013 and other applicable provisions of the Companies act, 2013, will be eligible to appoint as a regular Director subject to approval of Members in ensuing AGM.

20. DETAILS OF MANAGERIAL REMUNERATION

The information relating to remuneration paid to directors as required under Section Section 197(12) of the Companies Act, 2013 Read with Rule 5 of the Companies(Appointment & Remuneration of Managerial Personnel) Rules, 2014, is given under Annexure-II.

21. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Board meets at regular interval with gap between not exceeding 120 days. Additional meetings are held as and when necessary. During the year 2022-23, the Board of Directors met Thirteen times scheduled as under:

Attendance of Directors during the Board Meeting

The company has complied with the applicable Secretarial Standard issued by the Institute of the Company Secretaries of India.

A. AUDIT COMMITTEE:

The Board of Directors has constituted Audit Committee comprising of three directors including two Independent Director and all having financial literacy. The committee was constituted on 04.01.2023 with the following members on the committee:

Meeting of Audit Committee

Company was converted from private Limited to Public Limited as on 3^rd day of January, 2023. After conversion, Company got listed on BSE SME Platform as on 20.03.2023. Section 177 of the Companies Act, 2013 became applicable to company from date 20.03.2023 i.e. Date of Listing.

Company has conducted its First Audit committee meeting on 17.05.2023.

B. NOMINATION AND REMUNERATION COMMITTEE:

The Board of Directors has constituted Nomination and Remuneration Committee comprising of three directors including two Independent Director and one Non-executive director and all having financial literacy. The committee was constituted on 04.01.2023 with the following members on the committee:

Meeting of Nomination and Remuneration Committee

Section 178 of the Companies Act, 2013 became applicable to company from date 20.03.2023 i.e. Date of Listing. Company will conduct its First Nomination and Remuneration Committee meeting in FY 2023-24.

C. STAKEHOLDER RELATIONSHIP COMMITTEE:

The Board of Directors has constituted Stakeholder Relationship Committee comprising of three directors including two Independent Director and all directors having financial literacy. The committee was constituted on 04.01.2023 with the following members on the committee:

Meeting of Stakeholder Relationship Committee

Section 178 of the Companies Act, 2013 became applicable to company from date 20.03.2023 i.e. Date of Listing. Company will conduct its First Stakeholder Relationship Committee meeting in FY 2023-24.

23. EVALUATION OF THE PERFORMANCE OF THE BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 read with Rules framed there under and in compliance with the requirements of SEBI (LODR) Regulations, 2015,The Board evaluated the effectiveness of its functioning and that of the Committees and of individual directors by seeking their inputs on various aspects of Board/Committee Governance. The evaluation covered functioning and composition of the Board and its committees, understanding of the roles and responsibilities, experience, competencies, participation at the Board and Committee meetings, corporate governance practices etc. Evaluation of the Board and its compositions was carried out through a defined process covering the areas of the Boards functioning viz. composition of the Board and Committees, understanding of roles and responsibilities, experience and competencies, contribution at the meetings etc.

24. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate internal financial controls commensurate with the nature & size of business of the Company.

25. DECLARATION OF INDEPENDENT DIRECTORS

The Company has received Declaration from all Independent Directors as required under Section 149 of the Companies Act, 2013 confirming that they meet criteria of Independence as per relevant provisions of Companies Act, 2013 and SEBI (LODR) Regulations.

26. WEBLINK OF ANNUAL RETURN

In accordance with the provisions of Section 134(3) read with Section 92(3) of the Companies Act, 2013, the Annual Return as on March 31, 2023 is available on website of the Company and can be viewed at www.prospectcommodities.com . By virtue of amendment to Section 92(3) of the Companies Act, 2013, the Company is not required to provide extract of Annual Return (Form MGT-9) as part of the Board's report.

27. 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 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;

(e) The Directors had device and implemented adequate systems and procedures for adequate internal financial controls over financial reporting and the Board believed that the same were operative effectively for the financial year under review.

(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.

28. STATUTORY AUDITORS

M/s. C.R Sharedalal & Co., Chartered Accountants (Firm Registration No.:109943W) was appointed as the First Auditors of the Company, to hold office till the conclusion of the first annual general meeting ("AGM") of the Company.

The Audit Committee of the Company, in its meeting held on 31.07.2023 had approved and recommended the appointment of C.R Sharedalal & Co., Chartered Accountants (Firm Registration No.:109943W), as the Statutory Auditors of the Company for a term of 5 years.

Board recommends their appointment for approval of the Members of the Company.

29. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mrs. Kadambari Dave, proprietor of M/s. Kadambari Dave & Associates,

Company Secretary in practice (COP No. 5854) to undertake the Secretarial Audit of the Company for the year under review. The Board has duly reviewed the Secretarial

Auditor's Report and the comments, appearing in the report are self-explanatory and do not call for any further explanation by the Board of Directors as provided under section 134 of the Act.

The Secretarial Audit Report is annexed herewith as "Annexure III".

30. INTERNAL AUDITORS

In terms of Section 138 of the Companies Act, 2013 and Rules made there under, M/s. Dhruvil Shah & Co., Chartered Accountants, Ahmedabad have been appointed as an Internal Auditors of the Company. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of works includes, Review of the accuracy and reliability of the Corporation accounting records and financial reports, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths, opportunities for cost saving and recommending company for improving cost efficiencies.

31. REPORT ON CORPORATE GOVERNANCE

Our company provides utmost importance at best Governance Practices and are designated to act in the best interest of its stakeholders. Better governance practice enables the company to introduce more effective internal controls suitable to the changing nature of business operations, improve performance and also provide an opportunity to increase stakeholders understanding of the key activities and policies of the organization. Our Company has incorporated the appropriate standards for corporate governance. Pursuant to Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is not required to mandatorily comply with the provisions of certain regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Hence, company is not filing Corporate Governance Report to stock exchange quarterly and not providing the Corporate Governance Report as the part of this Annual Report.

32. MANAGEMENT AND DISCUSSION ANALYSIS REPORT:

A Separate report on Management Discussion and Analysis Report as required under clause 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been presented in a separate section forming part of this Annual Report.

33. VIGIL MECHANISM /WHISTLE BLOWER POLICY:

As per the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read with Regulation 22 of Securities and Exchange Board Of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has a Whistle Blower Policy with a view to provide vigil mechanism to Directors, employees and other stakeholders to disclose instances of wrong doing in the workplace and report instances of unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. The Whistle Blower Policy also states that this mechanism should also provide for adequate safeguards against victimization of Director(s)/ Employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The Policy is available on the Company's website at link https://prospectcommodities.com/docs/policies/whistle_blower_policy.pdf

34. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,PROHIBITION AND REDRESSAL) ACT, 2013:

Pursuant to the provisions of Section 21 of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition, Redressal) Act, 2013, the Company formulated a Policy on Prevention of Sexual Harassment at Workplace. All employees (permanent, contractual, temporary, trainees, etc) are covered under this policy. An Internal Complaints Committee (ICC) is constituted which is responsible for redressal of complaints related to sexual harassment at the workplace. Following are the members of the committee:

Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013 read with Rules thereunder, the Internal Complaints Committee of the Company has not received any complaint of Sexual Harassment during the year under review and no complaint was pending as of 31st March, 2023.

No. of Complaints received: NIL

No. of Complaints disposed of: NIL

Company has formulated the policy for prevention of sexual Harassment as work place. Said policy is available on the website of company at link https://prospectcommodities.com/docs/policies/prevention_of_sexual_harassment .pdf

35. BUSINESS RESPONSIBILITY REPORT:

As stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is not applicable to your company being SME listed company, as per the exemptions provided under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

36. POLICY ON CODE OF CONDUCT AND ETHICS:

Being a SME listed Company exemption has been provided to the Company from formulating of Code of Conduct for Board of Directors and Senior Management Personnel. However, Board of Directors has formulated and adopted Code of Business Conduct Ethics for Director & Senior Management Executive policy. As an organization your Company places a great importance in the way business is conducted and the way each employee performs his/her duties. Your Company encourages transparency in all its operations, responsibility for delivery of results, accountability for the outcomes of our actions, participation in ethical business practices and being responsive to the needs of our people and society. Towards this end, your Company has laid down a Code of conduct applicable to all the employees of your Company. The detailed Code of Business Conduct Ethics for Director & Senior Management Executive policy available on website https://prospectcommodities.com/docs/policies/code_of_conduct.pdf

37. DISCLOSURE WITH RESPECT TO MAINTENANCE OF COST RECORDS:

Your Company doesn't fall within the scope of Section 148(1) of the Companies Act, 2013 and hence does not require to maintain cost records as specified by the Central Government.

ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES.

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.

39. LISTING FEES:

The Company affirms that the annual listing fees for the year 2023-24 to the BSE Limited (BSE SME) has been duly paid.

40. REPORTING OF FRAUDS:

During the year under review, neither the Statutory Auditors nor the Secretarial Auditor has reported to the Audit Committee under Section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in boards report.

41. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THEGOING CONCERN STATUS OF THE COMPANY:

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Company' future operations.

42. COMPLIANCE OF SECRETARIAL STANDARDS:

The Company hereby affirms that during the year under review the Company has complied with all the applicable mandatory secretarial standards (including any modifications or amendments thereto) issued by the Institute of Company Secretaries of India. The Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India on Board and General Meetings.

43. PREVENTION OF INSIDER TRADING

The Board has Insider Trading Policy for regulating, monitoring and reporting of Trading of Shares by Insiders. The Code lays down guidelines, procedures to be followed and disclosures to be made while dealing with shares of the Company. The copy of the same is available on the website of the Company at https://prospectcommodities.com/docs/policies/code_of%20_internal_procedure_c onduct_for_prevention_of_insider_trading.pdf

44. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint Ventures and Associate Companies.

AND THEIR RELATIVES:

The Company has not invited deposit to public during the year under review.

Disclosure of money received during the year under review from Directors and their relatives Pursuant to Rule 2 (vii) of The Companies (Acceptance of Deposits) Rules, 2014

46. SHARE CAPITAL

a. Provision of money by company for purchase of its own shares by employees or by trustees for the benefit of employees

The Company has not made any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees as per Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014.

The Company has not issued any sweat equity share during the financial year in accordance with the provisions of Section 54 of Companies Act, 2013 read with Rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014.

c. Issue of Equity Shares With Differential Rights

The Company has not issued any equity shares with differential voting rights during the financial year as per Rule 4(4) of Companies (Share Capital and Debentures) Rules, 2014.

d. Issue of Employee Stock Options

The Company has not issued any employee stock option during the financial year as per Rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014.

47. ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company.