Company Overview
Pratibha Industries Limited (the Company) is a limited company incorporated and domiciled in India whose shares are publicly traded. The registered office is located at Shrikant Chambers Phase - II, 5th Floor, Sion, Trombay Road, Next To R. K. Studio, Chembur, Mumbai - 400 071, India.
The Company undertakes infrastructure projects, which includes designing, engineering and execution/ construction of complex & integrated water transmission & distribution projects, water treatment plants, elevated and underground reservoirs, mass housing projects, commercial complexes, pre-cast design & construction, road construction and urban infrastructure.
1.1 Term Deposit (Note 6 & Note 11) as on March 31, 2018 and March 31, 2017 include restricted balances of Rs. 6,408.03 Lakhs and Rs. 17,134.19 Lakhs respectively. The restrictions are primarily on account of balances held as margin money deposits against guarantees and as collateral security.
2.1 Terms/Rights attached to equity shares
Equity shares are having a par value of Rs 2 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
2.2 Details of shareholders holding more than 5% shares in the company_
As per the records of the company, including its register of shareholders/members and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.
During preceeding five years, the company has neither issued bonus shares nor issued shares without consideration. It has also not bought back shares during these years.
3.1. Foreign Currency Loans are repayable in 1 to 2 years at interest rates ranging from 2.98% p.a. to 5.15% p.a. These loans are secured by first charges on specific assets financed by the lender. Further, loans are guaranteed by the personal guarantees of promoter directors of the company.
3.2. Rupee Loans from banks are repayable in 3 to 5 years at interest rates ranging from 11.95% p.a. to 13.55% p.a. These loans are secured by first charges on specific assets financed by the lender. Further, loans are guaranteed by the personal guarantees of promoter directors of the company.
3.3. Fixed Deposit from Public are repayable in 2 to 3 years from the date of deposit at an interest rates ranging from 11.50% p.a. to 12.50%p.a. These deposits are unsecured in nature. All FDs have become payable. Refer Note no. 22 under the head ‘Unpaid matured deposits and interest accrued thereon’.
3.4. Period and amount of continuing default in repayment of loans as on 31.03.2018:-
4.1. Rupee loan is taken from various banks at interest rates ranging from 11.15% to 13.35% p.a. These loans are secured against i) first charge by hypothecation of current assets, namely stock of raw materials, work-in-progress and receivables, ii) first charge on the gross block iii) Project specific current assets and iii) Personal guarantees of Promoter-Directors of the company.
5.1 - The following table set out the status of the Gratuity Plan as required under Ind AS-19 for Indian Operations Reconciliation of opening and closing balance of present value of the defined benefit obligation and plan assets:
6.1.The Management is of the opinion that claims for performance guarantee will not arise related to the projects executed previously.
6.2.During the FY 2016-17, Income tax authorities conducted search and seizure u/s 132 of Income Tax Act. The matter is pending for final assessment.
6.3.The company has received show cause notices from service tax department demanding aggregate dues including penalty of Rs. 2,211.59 Lakh. Management is of the opinion that no liability will arise against these matters. Suitable replies have been given against these show cause notices.
6.4.In case of interstate sales of FY 2012-13 to June 2018, C forms are yet to be collected from few customers. In absence of the forms, additional liability under the CST Act can arise, which is not ascertained by the Company. However, Management is of the opinion that all pending C forms shall be collected and produced in assessment proceedings and no liability will arise.
7. Winding up Petition has been filed against Company by one party for recovery of its dues. Management is of the opinion that the matter will be resolved amicably and no unfavorable order will be passed against the Company.
8. The Company has filed cases against various parties claiming amount aggregating to Rs. 7,317.00 Lakhs. These matters are under litigation and outcome will be known in due course of time. The Management is hopeful that substantial amount will be allowed as claim in favor of the Company.
9. Related Party Disclosure:
9.1.As per the Ind AS 24, details of related parties & transactions with them are given below:
10. Component Accounting for Fixed Assets
In opinion of the management, based on internal verification of the assets of the company, there is no major part, in case of any asset, which is significant to total cost of the asset and whose useful life is different from the useful life of the asset. Hence, there is no change in accounting of fixed assets and depreciation thereon as required under Ind AS 16: Property, Plant and Equipment.
11. Leases:
The company has operating lease agreements, primarily for leasing office space and residential premises for its employees. Most of these lease agreements provide for cancellation by either party with a notice period ranging from 30 days to 120 days and contain a clause for renewal of lease agreement at the option of the company. There are no non-cancelable operating leases. There are no assets taken on finance lease.
12. Financial Reporting of Interest in Joint Ventures:
The investments in joint venture are governed by the Ind AS-31 “Interests in Joint Venture” issued by the Institute of Chartered Accountants of India. During the period under review, there were following active investments in the joint ventures:
As per Para 1, of Ind AS-31 , “This statement should be applied in accounting for interests in joint ventures and the reporting of joint venture assets, liabilities, income, and expenses in the financial statements of ventures and investors, regardless of the structures or forms under which the joint venture activities take place.”
Accordingly, incomes, expenses, assets, and liabilities are incorporated in the Consolidated Balance sheet of the Pratibha Industries Ltd.
13. During the year, the company has not remitted dividend in foreign currency (P.Y NIL)
14. As on 31st March 2018, there is no Mark-to-Market loss on account of derivative forward exchange contract.
15. Segment Reporting:
The Company is operating in single segment i.e. Engineering, Procurement and Construction (EPC) which includes sale of products. There have been no other reportable segments identified by Chief Operating Decision Maker and hence no segment reporting is presented under IND AS 108.
16. The Company has not made provision against Investment of Rs. 1 Crore and Loans given of Rs. 94.73 Crores to its wholly owned subsidiary M/s. Prime Infrapark Private Limited. While investment is carried at cost, advances are considered good and recoverable. The networth of the subsidiary company has fully eroded and its Concession Agreement has been terminated by DMRC. The management is in discussion with DMRC. It is hopeful of resolving the issues and also restoring the Concession Agreement. Hence no provision has been made.
17. The Company has not made provision against Investment of Rs. 0.01 Crore and Loans given of Rs. 73.47 crores to its subsidiary M/s. Bhopal Sanchi Tollways Private Limited. While investment is carried at cost, advances are considered good and recoverable. Its Concession Agreement has been terminated by NHAI. The subsidiary company has lodged claim and the matter is under arbitration. The management is in arbitration with NHAI and is hopeful of recovering its entire investment including Loans. Hence no provision has been made.
18. The company has not spent on CSR activities as required under section 135 of Companies Act, 2013 during the year.
19. Due to financial distress, the Company could not repay public deposits on time and has defaulted in payments to many deposit holders. The company has already made an application to NCLT dated 23/08/2017, seeking extension of time for repayment of all outstanding deposits together with interest thereon.
20. Balance under the head ‘Trade Receivables’, ‘Trade Payables’, ‘Loan and Advances Receivable and Payable’ are shown as per books of accounts subject to confirmation by concerned parties and adjustment if any, on reconciliation thereof.
21. The previous year’s figures have been regrouped, rearranged and reclassified wherever necessary to conform to the current year presentation.
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