Pradip Overseas Ltd Directors Report.

To the Members of Pradip Overseas Limited

Your Directors are pleased to submit their Annual Report and Audited Financial Statement for the financial year ended on 31st March, 2019.

1) FINACIAL REVIEW:

Summary of Financial results of the Company for the year under review is as under:

[Rs in Lacs]
Particulars 2018-19 2017-18
Revenue From Operations 9,634.34 10,362.83
Other Income 465.74 386.31
Profit/ (Loss) Before Depreciation, Finance Costs, Exceptional Items & Tax 10,100.08 10,749.14
Less: Depreciation, Amortization & Impairment Loss 967.40 968.99
Profit /loss before Finance Costs, Exceptional items and Tax Expense 9,808.48 11,137.60
Less: Finance Cost 859.08 766.28
Profit /loss before Exceptional items and Tax Expense (567.48) (1,154.74)
Add/(less): Exceptional items - -
Profit (Loss) Before Tax (567.48) (1,154.74)
Current Tax
Deferred Tax (2,278.33) 272.12
Non-Controlling Interest - -
Profit (Loss) for the period (1) 1,710.85 (1,426.86)
Other Comprehensive Income (net of tax) (2)
Items that will not be reclassified subsequently to profit or loss 7.58 2.98
Items that will be reclassified subsequently to profit or loss - -
Total Comprehensive income for the year (1+2) 1,718.43 (1,423.89)
Balance of profit /loss for earlier years (10,138.42) (99,614.54)
Balance carried forward (99,320.00) (10,138.42)
Basic & Diluted Earnings per Share (Rs Per share) 3.53 (2.95)

2) Highlights:

The year under review was also critical year for the Company. The turnover of the Company was of Rs 10100.08 lacs, which depicts a slightly down as compared to the turnover of the Company for the previous year 2017-18. During the year, the net profit of the Company was Rs 1718.43 lacs. Due to the effect of Deferred Tax Reversal of Rs 22,78,33,145 it was affect the profitable status of the Company. The major reasons for lower turnover were sluggish market conditions, international competition and shortage of working capital. Effluent Treatment Plant (ETP) is operative in full capacity and the performance is satisfactory.

Moreover, as the Company is facing crunch of Working Capital, the Company has put thrust on the job work which results into lower turnover and lower profitability.

Further the management of the Company has taken some corrective steps to overcome the Company from this situation and they hope that in upcoming years would be beneficial for the Company and it would also possible that the Company repay its outstanding liabilities or settled their debts with banks and ARC.

3) DIVIDEND:

Due to the insufficient profit during the year 2018-19, the directors have decided that it is not advisable to recommend dividend for the year 2018-19.

4) TRANSFER OF UNCLAIMED DIVIDEND AND EQUITY SHARES TO THE INVESTORS EDUCATION AND PROTECTION FUND:

Pursuant to provisions of Sections 124 and 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules) notified by Ministry of Corporate Affairs as amended from time to time, in terms of compliance of aforesaid section of the Companies Act, 2013, the Company was transferred Unpaid or unclaimed dividend to Investor Education and Protection Fund and equity shares in respect of the said dividend holders to IEPF Suspense account as opened with National Securities Depositories Limited. The details of the said unpaid dividend and equity share are mentioned as below.

Dividend for Financial Year Unpaid/unclaimed Dividend Transferred (In Rs.) No. of Equity shares transferred
2010-11 32141/- 9987

Details of such shareholders, whose shares are transferred to IEPF are available at the website of the Company viz. www.pradipoverseas.com. Members whose shares and unclaimed dividend, have been transferred to the IEPF Demat Account or IEPF Account, as the case may be, may claim the shares or apply for refund of dividend by making application to IEPF Authority in Form IEPF-5 (Available on http:// www.iepf.gov.in) along with fee specified by the Authority from time to time in consultation with the Central Government.

5) TRANSFER TO RESERVE:

The Company has not proposed to transfer any amount to any reserves of the Company.

6) MANAGEMENT DISCUSSION AND ANALYSIS:

As stipulated in the Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report form part of this Annual Report as Annexure-6

7) CHANGE IN NATURE OF BUSINESS:

There is no change in the nature of business.

8) DEPOSIT:

The Company has not accepted or renewed any deposits since inception as covered under Chapter V of the Companies Act, 2013. Accordingly, no disclosure and reporting are required in respect of details relating to deposits covered under this chapter.

9) ENVIRONMENT, HEALTH AND SAFETY:

The Company accords utmost care to environment, health and safety (EHS) into its various department or operations.

- The Company had installed Effluent Treatment Plant at Changodar Factory.

- The Company has also concern for health and safety of the employees as well as contract workers who associated and also provide the compensation during injury occurred into factory premises.

10) HUMAN RESOURCES:

Human Resources play a crucial role into the development and success of any organization. HR department is also one pillar of the organization to achieve each and every goal of the Company.

As Pradip, We firmly believe that each milestone achieved by the Organization is an outcome of efforts, dedication and conviction demonstrated by its people.

We have also assisted into the developing the necessary skills and right attitude amongst the employees through training, development and performance appraisal etc.

11) DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL AND CHANGES AMONGST THEM:

Pursuant to provision of Section 152 (6) of the Companies Act, 2013 Mr. Pradip J. Karia, who has been longest in the office, retires by rotation in the ensuing Annual General Meeting and being eligible offer himself for re-appointment.

During the Year, Ms. Zalpa B. Rathod (DIN: 08144926), appointed as an Additional Independent Director of the Company by the Board of Directors w.e.f. 29th May, 2018 as an Independent, Non executive Director. Her appointment was approved by members in last Annual General meeting held on 29th September, 2018 and accordingly, she will hold office for five consecutive years i.e. upto 28th May, 2023.

In terms of the requirements of the Companies Act, 2013, the Independent Directors of the Company were appointed for a period of five years on 30th September, 2014. Such term of appointment of the Independent Directors shall come to an end. In view of the same, the Board of Directors have basis the recommendation of the Nomination and Remuneration Committee proposed to re-appoint Mr. Jivansingh Negi (DIN: 01656455), Mr. Gurpur Ramdas Kamath (DIN: 02234255) as an Independent Director of the Company for a second term. A special resolution proposing their re-appointment as Independent Directors of the Company for the second term forms part of the Notice of Annual General Meeting.

Mr. Gurpur Ramdas Kamath shall attain age of 75 years during the proposed second term. A special resolution pursuant to Regulation 17 (1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 proposing to continue him as an Independent Director even after attaining age of 75 years forms part of the Notice of Annual General Meeting.

The Independent Directors of your Company have given the certificate of independence to your Company stating that they meet the criteria of independence as mentioned under Section 149(6) of the Companies Act, 2013.

The details of training and familiarisation programme and Annual Board Evaluation process for Directors have been provided under the Corporate Governance Report. The policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Director, and also remuneration for key managerial personnel and other employees, forms part of the Corporate Governance Report of this Annual Report.

12) MEEITNGS OF BOARD OF DIRECTORS & COMPLIANCE TO SECRETARIAL STANDARDS:

The Board of Directors of the Company had 4 (Four) meetings and one meeting of the independent Directors was held during the Financial Year 2018-19. The details of the Board meetings held during the year 2018-19 have been furnished in the Corporate Governance Report.

During the year under review, the Company has complied with the provisions of Secretarial Standard-1(relating to meetings of the Board of Directors) and Secretarial Standard-2 (relating to General meeting).

13) DIRECTORS RESPONSIBILITY STATEMENT:

In the terms of Section 134 (3) of the Companies Act, 2013, the Board of Directors confirms that: 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 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. the directors had prepared the annual accounts on a going concern basis; e. 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. 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.

14) DETAILS OF COMMITTEE OF DIRECTORS:

The Board has constituted the following committees and the said committees have been restructured from time to time.

Composition of Audit Committee of Directors, Nomination and Remuneration Committee of Directors, Stakeholders Relationship Committee and Risk Management Committee of Directors, number of meetings held by each Committee during the Financial year 2018-19 and meetings attended by each member of the Committee as required under the Companies Act, 2013 are provided in Corporate Governance Report which forms part of this report.

The recommendation by the Audit Committee as and when made to the Board of Directors of the Company has been accepted by it.

15) EXTRACT OF ANNUAL RETURN:

The extract of annual return in Form MGT-9 as required under Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure-1 to this Annual Report and also available on the website of the Company at https:// www.pradipoverseas.com.

16) CORPORATE SOCIAL RSPONSIBILITY:

As per the review of the Profit & Loss Statement of the Company during the year, its depicted Rs 17,10,84,761 net profit of the Company but the said profit was arrived due to the effect of Deferred Tax Reversal of Rs 22,78,33,145. According the terms of Income Tax Act, the profit was arrived due to deferred tax effect and therefore, it was considered as actual net profit of the Company.

Pursuant to the provision of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modification(s) or re-enactment thereof for time being in force) are not applicable to the Company and therefore, it is neither required to disclose in the Boards Report of the Company nor required to constitute Corporate Social Responsibility Committee of the Company.

17) SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any subsidiary or Joint Venture or Associate Company.

18) DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS:

Pursuant to Section 149(7) of the Companies Act, 2013, the Company has received declaration from each Independent Directors confirming that they meet the criteria of Independence as prescribed under Section 149 (6) of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Independent Directors are in compliance with the Code of Conduct prescribed under Schedule IV of the Companies Act, 2013.

19) POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The Nomination and Remuneration Committee has approved the Policy on Directors Appointment/reappointment 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 Appointment of Directors:

The Company has followed the policy regarding appointment of Director as laid down in the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and good corporate practices.

- Policy on remuneration of Directors:

Remuneration for Directors are 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.

20) PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT U/S 186 OF THE COMPANIES ACT, 2013:

The particulars of the loan given, investment made, alongwith the purpose for which the loan or guarantee or security is proposed to be utilized by the recipients are provided in the financial statement. (Please refer to notes no. 7 of the Financial Statement.) The Company has not provided any securities or guarantees during the year under review.

21) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The details of related party transactions have been placed before the Audit Committee for review and approval. The said committee had given omnibus approval of related party transactions as fall under the Section 188 of the Companies Act, 2013 read with Rule 15 of Companies (Meetings of Board and its Powers) Rules, 2014 and Listing Regulations.

The Company has entered into contracts or arrangements with related parties in the ordinary course of business and not at arms length basis. Details as required under section 134 (3) (h) of the Companies Act, 2013 are appended herewith in the prescribed Form AOC-2, as Annexure-2, which forms part of this report.

22) CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS:

Your Company fully complies with conditions of the Corporate Governance stipulated in Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on compliance with the conditions of Corporate Governance and a certificate from firm of Practicing Chartered Accountants dated 28th May, 2019 in this regard is annexed hereto and forms a part of the report. A Certificate of the CFO of the Company in terms of Listing Regulations, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed. Management discussion and analysis are attached, which form part of this report.

23) (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), (2) 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, as amended from time to time are forming part of this report as Annexure no. 3.

24) 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 Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Policy is available on the website of the Company. Weblink for the same is www.pradipoverseas.com

25) 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. The Internal Auditor of the Company has submitted reports on quarterly basis and the said reports were placed before the Board of Directors for review.

26) AUDITORS:

M/s. Vijay Moondra & Co., Chartered Accountants (Firm Registration No. 112308W/ M. No.-119398), Statutory Auditors of the Company appointed by members of the Company in the Annual General Meeting of the Company held on 29th September, 2017 for a period of five consecutive years from the conclusion of the Annual General Meeting of the Company held on 29th September, 2017 till the conclusion of the Annual General Meeting of the Company to be held in the year, 2022.

In the Board Meeting held on 10th February, 2016 M/s. Ashish Shah & Associates, Practising Company Secretaries was appointed as Secretarial Auditor of the Company for the financial year 2018-19.

27) SECRETARIAL AUDIT REPORT:

Pursuant to Section 204 of the Companies Act 2013, and in pursuant to Reg. 24A of Securities Exchange Board of India (Listing Obligations & Disclosure Requirements) (Amendments) Regulations, 2018 the Secretarial Audit Report for the Financial Year ended 31st March, 2019 given by M/s. Ashish Shah & Associates, Practicing Company Secretary is annexed to this Report as an "Annexure - 5.

28) 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 Statutoty Auditors made by them in Audit Report:-Reply to the Basis for qualified opinion:-

As per the RBI Guidelines in case, if the account is NPA banks should reverse the interest already charged and not collected by debiting Profit and Loss account, and stop further application of interest. However, banks may continue to record such accrued interest in a Memorandum account in their books. For the purpose of computing Gross Advances, interest recorded in the Memorandum account should not be taken into account. As the Banks are not taking in to account the interest recorded in Memorandum, the Company has not booked expenses of interest in the Books of the Company.

(2) Reply on the Qualification/Comments of Secretarial Auditors made by them in Secretarial Audit Report:-

There is no qualification, reservation or adverse remark or disclaimer in Secretarial Audit Report issued by the Secretarial auditor of the Company.

29) FRAUDS REPORTED BY AUDITORS:

During the Year under review, no frauds were reported by the Auditor (Statutory Auditor, Secretarial Auditor) to the Audit Committee/ Board.

30) MAINTENANCE OF COST RECORDS AS SPECIFIED BY THE CENTRAL GOVERNMENT UNDER SUB SECTION (1) OF SECTION 148 OF THE COMPANIES ACT, 2013 AND STATUS OF THE SAME:

The Company has maintained proper cost records. However, provisions regarding the Cost Audit as specified by the Central Government under Sub Section (2) of Section 148 of the Companies Act, 2013 are not applicable to the Company.

31) 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-4 and forms part of this report.

32) 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 risks and that there is no element of risk identified that may threaten the existence of the Company.

33) ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

As per Section 134 (3) (p) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, 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.

34) MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

The State Bank of India (formerly known as State Bank of Patiala) ("financial creditor") has filed application bearing no. C.P. (IB) no. 20 of 2019 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the "Insolvency Code") read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, into the NCLT, Ahmedabd, for initiation of corporate insolvency resolution process against the Company.

The Standard Chartered Bank has filed application bearing no. C.P. (IB) 221 of 2019 under 7 of the Insolvency and Bankruptcy Code, 2016 (the "Insolvency Code") read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, into the National Company Law Tribunal, Ahmedabad for initiation of corporate insolvency resolution process against the Company.

Both the cases are pending into the aforementioned tribunal for further hearing.

Except the mentioned above, there have been no material changes and commitments, affecting the financial position of the Company which have occurred during the financial year of the Company to which the financial statements relate and the date of the report.

35) SIGNIFICANT AND MATERIAL ORDERS:

There are no material orders passed by Regulators, Courts or Tribunals impacting the going concern status and companys operations in future.

36) DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

The Company believes in providing equal opportunity/ Affirmation Action. The Board has developed the Sexual Harassment Policy of the Company for safety of the women employees employed in the Company. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, there were no cases filed pursuant to sexual harassment at work place (Prevention, Prohibition and Redressal) Act, 2013.

37) APPRECIATION AND ACKNOWLEDGEMENTS:

The Board of Directors is pleased to place on record its appreciation for continued support received from all stakeholders including government 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 : 28th May, 2019 DIN: 00123748