Pradip Overseas Ltd Management Discussions.

Your Directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2020.

1. INDUSTRY STRUCTURE AND DEVELOPMENT:

As you aware that the Company is mainly engaged into the manufacturing of textile products i.e. Bed Sheets and other linen products. There are so many outside factors affect the industry structure such as National Election in the country, crunch of capital in the market, uncertainty of the political future of our country. We aware about the current textile industry condition into the Country. There are incentive plan adopted by the Government to enhance the level of textile industry. In the textile industry we have to change product design, style, according to the need and perception of the consumers. After the passing of few times, their views have been change regarding design, style, texture of product and therefore, the industry has also change its product pattern to satisfy the desire of clients. Pradip (the Company) is also focus on the customer satisfaction and updates into the products according the need of clients. In spite these challenges the Company is managed to have accurate performance which is marginally lower than the previous year.

2. OPPORTUNITIES AND THREATS:

According to the report of International Monetary Fund (IMF) that the world will slip into a recession in 2020 over COVID-19, pandemic led lockdown and resulting suspension of economic activity. The textile industry of India is already on penetrating level before the effect of COVID-19 pandemic and due to the spread of the said disease its create situation worse. Despite these we accepted new challenges and focus on the growth of the Company. We strongly believe that upcoming years better for the Company as compare to the current situation. We have concentrated also on overseas market along with local market of the Country.

3. SEGMENT WISE PERFORMANCE:

The company is engaged only in one segment i.e. Textile. The product of the Company has been well accepted in the market. The Company is manufacturing wide range of the bed sheet and other linen products with attractive design & finishing. However, it has customer in India as well as Overseas market and therefore, the segment based on geographical location of its customer mentioned as below:

Particulars Within India Outside India TOTAL
2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
Sale/Income From operations 3808.07 9,630.73 - 3.61 3808.07 9,634.34
TOTAL 3808.07 9,630.73 - 3.61 3808.07 9,634.34

4. OUTLOOK:

The Company has put thrust on Development of new activities and maintaining the quality of the products and cost cuttings. During past few years, various initiative or creative steps have been taken by th e management of the Company for the development of product, technology upgradation, develop skills and expertise of the workers and such other steps to give the positive outcome for bright future of the Company.

Meanwhile, the outbreak of COVID 19 pandemic globally and in India is carrying significant disturbance and slowdown of economic activity. COVID19 has caused interruption in production, supply chain disruption, unavailability of personnel, etc. during last week of March 2020 and thereafter. The year has started with the negative effects of the COVID19 pandemic with businesses facing temporary shutdowns and vanishing demand due to lockdowns globally and in India. The management of the Company will expect that it will take 1 year period to come over from this tide situation.

5. RISKS AND CONCERNS:

Due to volatility into the price of grey cloth the operating expenses are uncertain. It is also difficult for the Company to compete the Companys product into the International market. Beside aforementioned risk such other factor also affect the productivity of the Company such as technology upgrade, changes into trends into market related to product, obstacle for continuous power supply, discharge of effluent water.

The company has conversant with all these risk factors and they have taken some measure to mitigate the same on continuous basis. The company also focuses on its commitment towards the protection of environment and increasing awareness amongst all the stakeholders of the Company.

The spread of Covid-19 and the resultant lockdowns imposed by the authorities will have impact on some of the businesses of the Company, more particularly the franchised distribution business. Foreseeable business impacts are: (a) reduction in demand for products; (b) reduced collection efficiency causing non-collection of outstanding dues; (c) incurrence of costs on labour and employees not fully utilised; and (d) regulatory response to the pandemic causing reduction in profits. There could be several other unforeseeable impacts, as the pandemic situation evolves.

6. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Companys operating and business control procedures ensure efficient use of resources and comply with the procedures and regulatory requirements. There are adequate internal controls to safeguard the assets and protect them against losses from unauthorized use or disposition and the transactions are authorized, recorded and reported correctly.

The Audit Committee periodically reviews the internal controls systems and reports their observations to the Board of Directors.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

[ In Lacs]

Particulars F Y 2019-20 F Y 2018-19
Revenue From Operations 3808.07 9,634.34
Other Income 530.57 465.74
Profit/ (Loss) Before Depreciation, Finance Costs, Exceptional Items & Tax 4338.64 10,100.08
Less: Depreciation, Amortization & Impairment Loss 964.72 967.40
Profit /loss before Finance Costs, Exceptional items and Tax Expense (331.72) 291.59
Less: Finance Cost 1017.75 859.08
Profit /loss before Exceptional items and Tax Expense (1349.47) (567.48)
Add/(less): Exceptional items - -
Profit (Loss) Before Tax (1349.47) (567.48)
Current Tax - -
Deferred Tax 1757.84 (2,278.33)
Non-Controlling Interest - -
Profit (Loss) for the period (1) (3107.31) 1,710.85
Other Comprehensive Income (net of tax) (2)
Items that will not be reclassified subsequently to profit or loss 3.60 7.58
Items that will be reclassified subsequently to profit or loss -
Total Comprehensive income for the year (1+2) (3103.71) 1,718.43
Basic & Diluted Earnings per Share (Rs. Per share) (6.41) 3.53

The following table set forth key financial ratios with brief explanation on changes, relevant.

Particulars 2019-20 2018-19 % of change as compared to previous year Details explanations for change
Debtor Turnover 0.23 0.58 60% Due to decreased into the sales of the Company as compared to previous year.
Inventory 0.69 0.19 265% The revenue of the Company has been decreased against the inventory stock and due to that reason its effect on the inventory.
Turnover
Interest (32.59) 0.34 - The liabilities of the interest are increased as compared to previous year but there is sharp fall in revenue from operations. Due to that reason it vast changes of interest coverage ratio as compare to previous year.
Coverage Ratio
Current Ratio 6.71 5.64 - N.A
Debt Equity Ratio (1.67) (1.72) - N.A
Operating Profit Margin (%) (8.71) 3.03 387% The depreciation liabilities as well as other expenses are largely impact on the earnings before the interest and tax. Meanwhile the revenue from operations are more down as compare to previous year.
Net Profit Margin (%) (35.44) (5.89) 500% The revenue from operations has been decreased and burden of interest as well as liabilities of other expenses are high as compared with net profit.
Return on Net Worth (%) 1.57 0.68 130% Due to sharp fall in net profit and increase in networth.

8. DEVELOPMENT IN HUMAN RSOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE:

The companys manufacturing activities carried out at Changodar Factory during the entire year.

Industrial relations have been conductive and cordial at factory. At the end of the year the total no. 103 employees are on permanent basis and other unskilled contract workers are working at the factory as per the requirement of production department.

The due care is being taken to ensure the good health of the employees in and around the areas of the factory of the Company. All due care is being taken to keep the clean environment in the factory of the Company.

9. CAUTIONERY STATEMENT:

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

By Order Of the Board of Directors
For, PRADIP OVERSEAS LIMITED
Sd/-
(Pradip J. Karia)
Place: Ahmedabad Chairman and Managing Director
Date: 23rd July, 2020 DIN:00123748