pradip overseas ltd Directors report


To the Members of

PRADIP OVERSEAS LIMITED

Your Directors are pleased to present the 16th Annual Report of the Company covering the operating and financial performance together with the Audited Financial Statements for the Financial Year ended on March 31, 2021.

Pursuant to the application filed by Standard Chartered Bank before the Honble National Company Law Tribunal, Ahmedabad Bench ("NCLT") in the terms of section 7 of the Insolvency and Bankruptcy Code, 2016 read with rules and regulations framed there under ("Code"), the Honble NCLT had admitted Corporate Insolvency Resolution Process ("CIRP") against the Company vide its order dated 09th November, 2020 ("Admission Order") The NCLT had, pursuant to the Admission Order, appointed an interim resolution professional ("IRP") for the Corporate Debtor vide its order dated November 09, 2020. In terms of the Admission Order, inter alia, the management of the affairs of the Corporate Debtor was vested with the IRP Subsequently, the Committee of Creditors ("CoC") of the Corporate Debtor resolved with the requisite voting share, to continue the IRP as the resolution professional for the Corporate Debtor ("RP" or "Resolution Professional").

In accordance with the provisions of the Code, two resolution plans in respect of the Company were received by the RP. The CoC of the Company, in their meeting held on July 12, 2021 (Evoting was scheduled from July 29, 2021 to August 6, 2021) had approved a resolution plan submitted by Mr. Pradip Karia & Ors. ("Resolution Plan") which was subsequently submitted to the NCLT on August 7, 2021 in accordance with Section 30(6) of the Code. The same is sub-judice with the NCLT.

1) FINANCIAL REVIEW:

The financial highlights of the Company during the period ended March 31, 2021 are as below:

(Rs. In Lacs]

Particulars F Y 2020-21 F Y 2019-20
Revenue From Operations 2,623.32 3,808.07
Other Income 73.66 530.57
Profit/ (Loss) Before Depreciation, Finance Costs, Exceptional
Items & Tax 2,696.98 4,338.64
Expenditure other than Depreciation, Finance Cost, Exceptional Items 17,563.70 3,705.63
Less: Depreciation, Amortization & Impairment Loss 961.04 964.73
Less: Finance Cost 692.23 1,017.75
Profit /loss before Exceptional items and Tax Expense (16,519.98) (1,349.47)
Add/(less): Exceptional items - -
Profit (Loss) Before Tax (16,519.98) (1,349.47)
Current Tax - -
Deferred Tax 1,022.52 1,757.84
Non-Controlling Interest - -
Profit (Loss) for the period (1) (17,542.50) (3,107.31)
Other Comprehensive Income (net of tax) (2)
Items that will not be reclassified subsequently to profit or loss 32.96 3.60
Items that will be reclassified subsequently to profit or loss - -
Total Comprehensive income for the year (1+2) (17,509.54) (3,103.71)
Balance of profit /loss for earlier years (1,02,423.70) (99,319.99)
Balance carried forward (1,19,933.24) (1,02,423.70)
Basic & Diluted Earnings per Share (Rs. Per share) (36.21) (6.41)

2) GLOBAL HEALTH PANDEMIC FROM COVID-19:

The World Health Organization declared a global pandemic of the Novel Coronavirus disease (COVID-19) on February 11, 2020. The outbreak of COVID-19 pandemic has significantly impacted business around the world. The Government of India ordered a nationwide lockdown, initially for 21 days which was extended further upto the 31st July, 2020 for containment zone and partial open for micro containment zone.

In the light of this, the financial year 2020-21 began in the middle of an intense nationwide lockdown mandated due to unprecedented crisis arising from the spread of Corona virus. Henceforth, the Government of India as well as State Government were issued certain guidelines from time to time for strict enforcement of lockdown and follow the restrictions as stipulated under the guidelines.

In enforcing social distancing to contain the spread of the disease, our offices and client offices all over the world have been operating with minimal or no staff for extended periods of time. In keeping with its employee-safety first approach, the Company quickly instituted measures to trace all employees and be assured of their well-being.

Our teams reacted with speed and efficiency, and quickly leveraged technology to shift the workforce to an entirely new work-from-home model. Proactive preparations were done in our work locations during this transition to ensure our offices and training centers were safe.

The Company has put in place measures to ensure the well-being of its employees by re-enforcing the importance of social distancing, safe working practices and general personal hygiene.

After the badly affected the lifestyle of the people due to the first wave of COVID-19 and meanwhile the impact of second wave of COVID-19 was spread rapidly in human being. The numbers of cases of corona virus have been enlarged by leaps and bound day by day during the second wave of COVID-19. In the second wave of COVID-19, the numbers of infected cases of Corona virus were increased huge amount in India as compared to rest of world. Still the situation of second wave of COVID-19 has been affected the several states of the country and henceforth some partial restrictions have been imposed by the respective state governments according to the situation of states.

3) STATE OF COMPANY AFFAIRS:

Due to continuous outbreak of COVID-19, the year under review was also critical year for the Company. The turnover of the Company was of Rs. 2696.98 lacs, which depicts a Sharp penetrate into the turnover of the Company for the previous year 2019-20. During the year, the net loss of the Company was (17,542.50) lacs.

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.

Currently all the operations of the Company and all decisions related to finance activities will be overseen as well as managed by the RP under their strict supervision.

The management of the Company are giving their best efforts to improve the situations of the Company and the management of the Company are expecting that the upcoming days will be better for the Company.

4) DIVIDEND:

As the Company has suffered loss during the year 2020-21, therefore your directors are unable to recommend dividend for the year 2020-21.

5) 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 has transferred Unpaid or unclaimed dividend to Investor Education and Protection Fund and equity shares in respect of the said shareholders to IEPF account for the year 2017-18 and 2018-19.

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.

There is no amount lying into the Companys unpaid or unclaimed divided account.

6) TRANSFER TO RESERVE:

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

7) 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 - 5.

8) CHANGE IN NATURE OF BUSINESS:

There is no change in the nature of business.

9) DEPOSIT:

The Company has never accepted or renewed any deposits from the public since inception as covered under the section 73 of the Companies Act, 2013 ("the Act") and the Companies (Acceptance of Deposits) Rules, 2014. Accordingly, no disclosure and reporting are required in respect of details relating to deposits covered under this chapter.

10) SHARE CAPITAL:

There was no change in the issued and subscribed capital of the Company. The structure of paid-up of the Company as on 31-03-2021 is enumerated as below.

Particulars No. of shares Face value per share (Amount in Rs.) Total paid-up Capital as on 31-03-2021 (Amount in Rs.)
1 Equity Share Capital 4,84,40,183 10 48,44,01,830
2 Preference Share Capital 38,98,000 100 38,98,00,000
TOTAL PAID-UP SHARE CAPITAL 87,42,01,830

During the year under review, the Company has not issued shares with differential voting rights or granted stock options or issued sweat equity.

11) ENVIRONMENT, HEALTH AND SAFETY:

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

• The Company has 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 are associated and also provide the compensation during injury occurred into factory premises.

• The Company has prepared a Systematic Operating Procedures for work place and as per the terms and conditions as stipulated under the said SOP all worker, employee follows the code of conduct. The said SOP has been reviewed periodically by the Management of the Company.

12) 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.

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

The Board of Directors consists of 6 members, of which three are Independent Directors. The Board also comprises of one women Independent Director.

Pursuant to provision of Section 152 (6) of the Companies Act, 2013 Mr. Chetan Jayantilal Karia, (DIN:- 00191790) who has been longest in the office, retires by rotation in the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

The members at their 15th Annual General Meeting (the AGM") had approved the re-appointment of below mentioned Executive Directors of the Company for the period of three years for their respective term period.

1) Mr. Pradip J. Karia (DIN:- 00123748)

2) Mr. Chetan J. Karia (DIN:- 00191790)

3) Mr. Vishal R. Karia (DIN:- 00514884)

The Company was proposed the remuneration of aforesaid Directors subject to approval of the Banks/ Financial Institutions / Asset Reconstruction Company as required under the Section 197 of the Companies Act, 2013 read rules made there under along with schedule V of the said act but unfortunately the Company didnt receive any communication from the Banks (expect SBI) or other secured lenders within the date of AGM i.e. 20th October, 2020.

Meanwhile, the Honble NCLT, Ahmedabad Bench has initiated the CIRP against the Company and into the meeting of COC as held on 20th January, 2021, had decided to provide the remuneration of Rs. 50,000/ - per month to Mr. Chetan J. Karia and Mr. Vishal R. Karia. Accordingly, the Company has provided the remuneration to said directors.

There is no changes in Directors and Key Managerial Personnel of the Company during the year under review.

14) MEETINGS OF BOARD OF DIRECTORS & COMPLIANCE TO SECRETARIAL STANDARDS:

The Board of Directors of the Company were held 4 (Four) meetings during the Financial Year 2020-21. The details of the Board meetings and attendance of the Directors are provided in the Corporate Governance Report, which forms a part of this Annual 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).

15) DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors to the best of its knowledge and ability, confirm that:

(a) In the preparation of the annual accounts for the financial year ended on March 31, 2021, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) They 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 March 31, 2021 and of the profit and loss of the Company for that period;

(c) They had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) They had prepared the annual accounts on a going concern basis;

(e) They 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) They had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Note:-

The Company is under the CIRP process, the management of the affairs of the Company is vested with Resolution Professional, all the above mentioned duties and responsibility of Directors have been performed by directors under the direction of RP of the Company.

16) DETAILS OF COMMITTEE OF DIRECTORS:

Your Company has several Committees which have been established as part of the best Corporate Governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

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

• Audit Committee

• Stakeholders Relationship Committee

• Nomination and Remuneration Committee

• Risk Management Committee

Their composition, number of meetings held by each Committee during the financial year 2020-21 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.

As the Company is under CIRP and the management of the affairs of the Company vested with the RP After the initiation CIRP process, all the aforesaid meetings of the Company were held under the Chair and supervision of the RP

With the reference to the recent SEBI notification dated 05th May, 2021 the Regulation 21 (5) of the SEBI (LODR) Regulations, 2015, the constitution of Risk Management Committee shall be applicable to top 1000 listed companies determined on the basis of market capitalization, as at the end of the immediate previous financial year. The Company does not fall under the criteria of top 1000 listed Companies on the basis of market capitalization and therefore, the decision was taken to dissolve the Risk Management Committee of the Company. Hence, currently there is no risk management committee in the Company. During the year, all the recommendations made by the Audit Committee were accepted by the Directors and RP of the Company.

17) ANNUAL RETURN:

As per the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, as amended from time to time, the Annual Return of the Company has been placed on the website of the Company and can be accessed: at https:// www.pradipoverseas.com .

18) CORPORATE SOCIAL RSPONSIBILITY:

As 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.

19) SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

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

20) 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.

21) POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The Nomination and Remuneration Committee has approved the Policy on Directors Appointment/re- 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 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.

The above policy is also available on the website of the Company at https:// www.pradipoverseas.com.

As the Company is under the CIRP and therefore, the prior approval of the COC is necessary for appointment and remuneration of Directors of the Company

22) 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 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.

23) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Company has entered into contracts or arrangements with related parties and details as required under section 134 (3) (h) of the Companies Act, 2013 are appended herewith in the prescribed Form AOC- 2, as Annexure-1, which forms part of this report.

As the Company is under CIRP Process, according to Section 28(1 )(f) of the Insolvency and Bankruptcy Code, 2016, prior approval of the Committee of Creditors ("COC") is required and therefore, approval of COC was obtained for entering into related party transactions in the meeting held on 09th December, 2020.

24) 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 14th August, 2021 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.

25) DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

(a) PARTICULARS OF THE EMPLOYEES:

There are no employees in the Company who are receiving remuneration in excess of the limit specified 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. 2.

26) 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/whistle blower policy2014-15.pdf.

27) 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.

28) STATUTORY AUDITORS:

M/s. Vijay Moondra & Co., Chartered Accountants (Firm Registration No. 112308W/ M. No.-119398), Statutory Auditors of the Company were 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 in 2017 till the conclusion of the Annual General Meeting of the Company to be held in the year, 2022.

29) SECRETARIAL AUDITOR & AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Ashish Shah Company Secretary in practice, to conduct the Secretarial Audit of the Company for the financial year 2020- 21 in the Board Meeting held on 23rd July, 2021.

The Secretarial Audit Report for the financial year ended 31st March 2021, pursuant to Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed herewith as "Annexure 4".

30) EXPLANATIONS / COMMENTS BY THE BOARD ON QUALIFICATIONS, RESERVATION OR ADVERSE REMARKS OR DISCLAIMER MADE BY THE AUDITOR / COMPANY SECRETARY IN PRACTICE IN THEIR REPORT:

The Auditors Report annexed to the financial statements for the year under review does not contain any qualification, reservation, adverse remark or disclaimer.

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.

31) 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.

32) 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.

33) 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 forms part of this report.

34) RISK MANAGEMENT:

Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhances Companys competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The risk framework has different risk models which helps in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments.

35) 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.

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

Except as mentioned elsewhere in this report, there have been no material changes and commitments, affecting the financial position of the Company which have occurred during the financial year under review to which the financial statements relate and the date of the report.

37) SIGNIFICANT AND MATERIAL ORDERS:

Except as disclosed elsewhere in this report, no orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and the Companys operation.

38) 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.

39) 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.

By Order Of the Board of Directors For, PRADIP OVERSEAS LIMITED
Sd/-
Pradip J. Karia
Chairman and Managing Director
DIN:00123748
Sd/-
Vishal R. Karia
Place : Ahmedabad Chief Financial Officer and WTD
Date : 14th August, 2021 DIN:00514884