| To the Members of Pradip Overseas Limited
The Directors have pleased to submit their Annual Report and Audited
Financial Statement for the financial year ended on 31st March, 2015.
1) FINACIAL REVIEW: [in Lacs]
Sr.
NO. Particulars 2014-15 2013-14
1. Income From Operations 23984.33 59856.73
2. Other Income 422.65 542.90
3. Financial Charges 11442.89 13063.32
4. Depreciation 704.43 840.04
5. Profit(Loss) Before Tax (41683.69) (14007.80)
6. Taxation (1,603.84) 2957.74
7. Profit/(Loss) after Tax (41,350.21) (16965.60)
2) OPERATIONS:
The year under review was also critical year for the Company. The
turnover of the Company was lower by about 60% as compared to the
turnover of the Company for the previous year. The major reasons for
lower turnover was under utilization of installed capacity due to
pending installations of Effluent Treatment Plant (ETP) as stated in
the report of the last year. The demand of the products in the local as
well as overseas market were sluggish, which has also affected the
turnover and profitability of the company.
The Company had placed an order for the plant and machineries for ETP
and the Company had received the same in spite of non disbursement of
sanction term loan by some of the members of the consortium Banks led
by State Bank of India. The Company has installed the said Plant &
Machineries at the factory. The first phase of the ETP, that is
bio-chemical process will commence shortly and the full plant will be
operative within three to four months and as a result the Company is
hopeful for the improvement in performance and profitability of the
Company.
The Company has undertaken to implement two projects of industrial Park
namely Specialty & Fine Chemicals & Auto and Auto Components at village
Bhamsara, Taluka Bavla District -Ahmedabad. The said projects are as
per the policy framed by the Government of Gujarat (GoG) and the
Company is expecting approvals for the same from the GoG shortly. The
Company is also negotiating with some of the renowned Real Estate
Developers to join any of them as a partner for development of the
aforesaid projects.
The Company is appreciating the support extended by member Banks of the
consortium for getting the CDR package through and implementation of
the same.
The Net Worth of the Company is eroded as per the Balance Sheet of the
Company as of 31st March, 2015 and pursuant to section 15 of the Sick
Industrial Companies ( Special Provisions) Act, 1985, the Company will
file reference to Board for Industrial and Financial Reconstruction for
determination of the measures which shall be adopted for the Company.
3) DIVIDEND:
Due to the Loss incurred by Company during the year under review, the
directors are not able to recommend dividend for the year 2014-15.
4) TRANSFER TO RESERVE:
In view of losses, the Company has not proposed to transfer any amount
to any reserves of the Company.
5) FIXED DEPOSIT:
The Company has not accepted or renewed any deposits since inception.
6) DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL :
Mr. Chetan J. Karia, Director of the Company will retire by rotation in
the ensuring Annual General Meeting and being eligible offer himself
for reappointment.
Further, during the year, Mr. Avinash Mayekar had resigned as a
director of the Company with effect from 13- 11-2014. Your Directors
place on record his sincere appreciation for the valuable contribution
made by him during his tenure as a director of the Company.
Ms. Parulben S. Thakore was appointed as an additional director of the
Company with effect from 28-03 2015. She holds the office up to the
date of forthcoming annual general meeting. The Company has received
proposal for her appointment as a Director of the Company and the Board
recommends the members to appoint her as a Director of the Company.
During the year under review Mr. Vishal Karia was appointed as chief
financial officer of the Company.
7) NUMBER OF MEEITNG OF BOARD OF DIRECTORS:
The Board of Directors of the Company had 7 ( Seven ) meetings and one
meeting of the independent Directors were held during the Financial
Year 2014-15. The details of the Board meeting held during the year
2014-15 have been furnished in the Corporate Governance Report.
8) DIRECTORS' RESPONSIBILITY STATEMENT:
The Board of Directors confirm that:
a. that in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
b. that 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 the 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. that the directors had prepared the annual accounts on a going
concern basis;
e. that 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. that 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.
9) DETAILS OF COMMITTEE OF DIRECTORS :
Composition of Audit Committee of Directors, Nomination and
Remuneration Committee of Directors, Stake Holders Relationship/
Grievances Committee and Risk Management Committee of Directors, number
of meetings held of each Committee during the Financial year 2014-15
and meetings attended by each member of the Committee as required under
the Companies Act, 2013 are provided in Corporate Governance Report and
forming part of the report.
The recommendation by the Audit Committee as and when made to the Board
of Directors of the Company has been accepted by it.
10) EXTRACT OF ANNUAL RETURN:
Pursuant to Section 134(3)(a) of the Companies Act, 2013 read with Rule
12(1) of the Companies (Management and Administration) Rules 2014, the
Extract of annual return is attached herewith as Annexure -1 to this
report.
11) SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The company has one wholly own subsidiary namely Pradip Home Fashions,
USA. The Subsidiary Company has not carried out any transaction since
inception except issue of Share Capital by it. A statement containing
salient features of the financial statements of the Company's
subsidiary and Consolidated Financial statement has not bee attached to
the financial statements of the Company, pursuant to section 129 (3) of
the Companies Act, 2013 read with proviso of rule 6 of the of the
Companies (Accounts) Rules, 2014.
12) DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS:
Pursuant to Section 149(6) of the Companies Act, 2013, Independent
Directors of the Company have made a declaration confirming the
compliance of the conditions of the independence stipulated in the
aforesaid section.
13) POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The Policy on Director's Appointment including criteria for determining
qualification, positive attributes, independence of a director and
policy relating to remuneration for Director, Key Managerial Personnel
and other employees is as mentioned in this report.
- Policy on Directors' Appointment
The Company has followed the policy regarding appointment of Director
as laid down in the Companies Act, 2013 and clause-49 of the Listing
Agreement with Stock Exchanges and good corporate practices.
- Policy on remuneration of Directors :
For Directors ,it is based on the Shareholders resolution , provisions
of the Companies Act, 2013 and rules framed therein, circulars and
guidelines issued by the Central Government and other authorities from
time to time.
- Remuneration to the workers is based on the Contract with the
Contractors keeping in view Minimum Wages payable to the workmen.
Remuneration to Key Managerial Personnel, Senior Executives, Managers,
Staff and Other Employees is Industry Driven.
14) PARTICULARS OF LOANS ,GUARANTEES AND INVESTMENT U/S 186 OF THE
COMPANIES ACT, 2013 :
The particulars of the loan given, investment made, along with the
purpose for which the loan is proposed to be utilized by the recipient
are provided in the Financial statement. (Please refer to notes no. 11,
12 &16 of the Financial Statement). The Company has not given
securities or guarantee during the year under review.
15) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES :
There is no transaction with related party which requires disclosures
under section 134 (3) (h) of the Companies Act, 2013 and rule 8 (2) of
the Companies (Accounts) Rules, 2014.
16) CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS:
Your Company fully complies with conditions of the Corporate Governance
stipulated in clause 49 of the Listing Agreement with Stock Exchanges.
A separate section on compliance with the conditions of Corporate
Governance and a certificate from firm of Practicing Chartered
Accountants dated 9th June, 2015 in this regard is annexed hereto and
forms a part of the report. Management discussion and analysis are
attached, which form part of this report.
17) (a) PARTICULARS OF THE EMPLOYEES :
There are no employees in the Company who are receiving remuneration in
excess of the limit specified in under section 197 (12) of the
Companies Act,2013 read with rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 and therefore
there is no information required to be given:
(b) ANALYSIS OF REMUNERATION :
Disclosure pertaining to remuneration and other details as required
under section 197 (12) of the Companies Act, 2013 read with rule 5 (1)
of the Companies (Appointment and Remuneration of Managerial Personnel
) Rules, 2014 are stated in Annexure no. 2.
18) WHISTLE BLOWER & VIGIL MECHANISM
The Company has established a "Whistle Blower and Vigil Mechanism
Policy" for Directors and employees to report the genuine concerns. The
provisions of this policy are in line with the provisions of Section
177(9) of the Companies Act, 2013 and the revised clause 49 of the
Listing Agreements with the stock exchanges. Policy is available on
the website of the Company.
19) INTERNAL CONTROL SYSTEMS
The Company has an adequate system of internal control procedures which
is commensurate with the size and nature of business. Detailed
procedural manuals are in place to ensure that all the assets are
safeguarded, protected against loss and all transactions are
authorised, recorded and reported correctly. The internal control
systems of the Company are monitored and evaluated by internal auditors
and their audit reports are periodically reviewed by the Audit
Committee of the Board of Directors.
20) AUDITORS :
M/s. Ashok Dhariwal and Co., Chartered Accountants, Statutory Auditors
of the Company will retire from the office of the auditor and being
eligible offer themselves for reappointment. They confirm their
eligibility to the effect that their reappointment, if made, would be
within the prescribed limit under the Act and they are not disqualified
for the reappointment.
21) SECRETARIAL AUDIT REPORT
The Board has appointed M/s. Ashish Shah & Associates, Practising
Company Secretary to Conduct Secretarial Audit for the financial year
2014-15. The Secretarial Audit Report for the year ended 31st March,
2015 is annexed herewith and forming part of the report.
22) EXPLANATIONS / COMMENTS BY THE BOARD ON QUALIFICATIONS ,
RESERVATION OR ADVERSE REMARKS OR DISCLAIMER MADE BY THE AUDITOR /
COMPANY SECRETARY IN PRACTICE IN THEIR REPORT :
(1) Reply on the Qualification/Comments of Auditors made by them in
Audit Report:- (A) Reply to the point no. A of Basis for disclaimer of
opinion of Auditors' Report Trade Receivables:-
The Company has pursued with debtors for recovery of the due amounts
and it could recover some amount from trade receivables. The Company is
still pursuing in the matter for recovery of balance trade receivables.
The Company had also submitted balance confirmation letter to the
debtors and had received response from some debtors. In view of the
above the Company has made provision for doubtful debts to the tune of
Rs.262.56 Crores being older than 36 months, therefore the Board of
Directors of the Company is of the opinion that the provision for
doubtful debts made by the Company is adequate and sufficient.
(B) Reply to the point no. B of Basis for disclaimer of opinion of
Auditors' Report Inventories:-
The Management is carrying out physical verification of inventories as
and when required. The Company is also maintaining records of
inventories. The turnover of the Company during the year under review
deteriorated due to various reasons inter alia non establishment of New
ETP Plant and therefore the inventories are hire as compared to
turnover. The basic raw material of the Company is grey cloth and
quality of the raw material does not deteriorated even though the same
is not utilized for a period of 2-3 years and therefore the Company has
not made provision for diminution in the value of old and slow moving
inventories and the Company is utilising the said inventories as and
when the order in respect such old stock is received.
(C) Reply to the point no. C of Basis for disclaimer of opinion of
Auditors' Report ON GOING CONCERN:-
The Company is suffering loss from operations since 2011-12. The
commitment made by the Company in the approved CDR could not be
fulfilled for various reasons viz. delay in disbursements of sanctioned
term loan for ETP Plant, Non fulfillment of the conditions by Banks
like refund of interest/charges paid by the Company after cut-off date
but before the date of approval of CDR scheme. The Company has
undertaken two projects for development of Specialty & Fine Chemical
Park and Auto & Auto Component Park on the Land of the Company situated
at Village Bhamsara, Taluka- Bavla, Ahmedabad. The Company is expecting
approval from the Govt. of Gujarat for both the aforesaid projects
shortly and also Company is in the advance stage for negotiation with
some Real Estate Developers to join them as a partner for development
of these projects. And on completion of the projects the Company will
be able to meet its financial obligations.
(2) Reply on the Qualification/Comments of Secretarial Auditor made in
the Secretarial Auditor in their Report:-
1. The Company will take due care in compliance with provisions of rule
20(5) of The Companies (Management and Administration) Rules, 2014 are
not complied.
2. The Company will take due care in compliance with section 181 of
the Companies Act, 2013.
3. Mr. Avinash Mayekar, an Independent Director had resigned as a
Director with effect from 13th November, 2014. As per clause 49 (D) (4)
of the Listing Agreement , the Company is required to appoint another
Independent Director in his place within within a period three months
or immediate next Board Meeting which ever is later from the date of
the Resignation of Mr. Avinash Mayekar.
After resignation of Mr. Avinash Mayekar, the Company had initiated
dialogues with number of proper and fit persons to appoint any of them
as a Director in his place . However, due to poor financial conditions
of the Company none of them was effectively coming forward to join the
Board of the Company. And the Company had intimated the aforesaid fact
to the Exchanges.
23) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO.
Particulars in respect of conservation of energy, technology absorption
and foreign exchange earnings and out go, as required under Section 134
(3) (m) of the Companies Act, 2013 read with Companies (Accounts)
Rules, 2014 are set out in separate statement attached hereto as
Annexure-3 and forming part of the report.
24) RISK MANAGEMENT :
During the year , the Management of the Company had evaluated the
existing Risk Management Policy of the Company. The Risk Management
policy has been reviewed and found adequate and sufficient to the
requirement of the Company. The Management has evaluated various risk
and that there is no element of risk identified that may threaten the
existence of the Company.
25) ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE , ITS
COMMITTEES AND INDIVIDUAL DIRECTORS :
The Board of Directors of the Company has initiated and put in place
evaluation of its own performance, its Committees and individuals. The
result of the evaluation is satisfactory and adequate and meets the
requirements.
26) ALLOTMENT OF PREFERENCE SHARES
During the year under review, the Board of Directors of the company had
allotted 38,98,000/-, 2% Non Cumulative , Non Convertible, Redeemable
Preference Shares of Rs. 100/- each at par to the Promoters and their
relatives on Preferential basis.
27) MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION
OF THE COMPANY
There have been no material changes and commitments, if any, affecting
the financial position of the Company which have occurred between the
end of the financial year of the Company to which the financial
statements relate and the date of the report.
28) SIGNIFICANT AND MATERIAL ORDERS
There are no material orders passed by Regulators, Courts or Tribunals
impacting the going concern status and company's operations in future.
29) General :
During the year under review, there were no cases filed pursuant to
sexual harassment at work place (Prevention, Prohibition and Redressal
) Act, 2013.
30) ACKNOWLEDGEMENT :
Your Directors acknowledge with gratitude the Co-operation and
assistance received from the Banks, Government and employees and all
those associated with the Company during the year under review.
For and On behalf of Board of Directors
Sd/-
(PRADIP J KARIA)
Place: Ahmedabad CHAIRMAN & MANAGING DIRECTOR
Date : 9th June, 2015 DIN 00123748 |