To the Members Pradip Overseas Limited,
The Directors have pleasure to submit their Annual Report and Audited
Statement of Accounts for the Period ended on 31st March, 2012.
1) FINANCIAL REVIEW: [Rs. in lacs]
Particulars 2011-12 2010-11
1. Income From Operations 166991.16 216118.90
2. Other Income 2036.66 1665.85
3. Financial Charges 14501.38 10320.77
4. Depreciation 732.68 570.46
5. Profit(loss) Before Tax (11441.49) 11741.75
6. Taxation (3810.93) 3601.07
7. Profit After Tax (7630.56) 6925.51
The crisis in Europe has not only affected Euro Zone but also the
entire world including India. Indian economic growth also moderated
with GDP growing by 6.5 % in comparison to 8.5 % in previous financial
year. Average inflation at 9 % remained high during the year. This led
to policy interest rate hike by RBI continuously.
The Domestic market was also dull due to poor market sentiments and
Overseas market has become tougher in terms of Competition from other
During the year under review the performance of the Company was sharply
affected for the aforesaid reason as well as high volatility in the
prices of the Cotton as a result of which the price of yarn which is
the main raw material of the Company remained highly volatile. The
Company maintains stock of raw material in order to fulfill the orders
on hand which are contracted on long term basis and accordingly the
Company was not able to pass on the hike in the price of the raw
material on their customers. Moreover, the realization of the sale
proceeds were got substantially delayed/ not yet realized due to this
volatility which led to the Company to reformulate the Marketing
strategy by providing more credit period/ discount/ incentive to the
customers which has resulted in to severe liquidity crisis. Further,
the higher rate of interest has aLso affected the financial performance
of the Company.
In view of the above, the Company had approached to the members of the
Consortium Banks for restructuring of the Debts and the Bankers has
approved the restructuring of the Debts for which the Company express
its thanks to the Bankers for the same.
Management is however hopeful that things would turn around soon and
Company would be able to come back to its growth plans.
3) UTILISATION OF THE IPO PROCEEDS:
The statement showing proposed and actual utilization of IPO proceeds
as on 31st March, 2012 is as follows:
(Rs. in lacs)
no. Particulars Utilisation of Funds
As per Prospectus Actual
01 Manufacturing Facility 9995.00 229.76
02 Margin Money for Working Capital 9995.00 *9995.00
03 Public Issue Expenses 622.33 875.32
Total 20612.33 11100.08
* The shareholders of the Company had granted their consent through the
process of the postal ballot for utilization of the part of the IPO
proceeds, meant as margin money for working capital for new unit to be
established in SEZ, for working capital for existing unit of the
Company till the aforesaid new unit commence commercial activities.
Accordingly the company has utilized the fund.
The Company has invested the unutilized money in the Mutual Fund, Fixed
Deposit with Banks as stated in the Balance Sheet of the Company for
the year under review.
Due to the loss incurred by the Company during the year under review,
the Directors expressed their inability to recommend dividend for the
5) FIXED DEPOSIT:
Your company has not invited any fixed deposit from the Public since
its incorporation under section 58 A of the Companies Act, 1956 hence
no information is required to be furnished in respect of outstanding
6) DIRECTORS'' RESPONSIBILITY STATEMENT:
As stipulated in Section 217(2AA) of Companies Act, 1956 your directors
confirm as under:
a. That in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures.
b. That the Directors have 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.
c. That the Directors have taken proper and sufficient care of 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 have prepared the Annual accounts on a going
Mr. Sudhir Jumani, Director of the Company will retire by rotation in
the ensuing Annual General Meeting and being eligible offer himself for
8) PARTICULAR AS PER SECTION 217 OF THE COMPANIES ACT, 1956:
As required by the Companies (disclosure of particulars in the Report
of the Board of Directors) Rules, 1988, information pertaining to
conservation of energy, Technology absorption and foreign exchange
earnings & outgo are given as Annexure-I to this report.
The information required under section 217(2A) of the Companies Act,
1956 read with Rule framed there under forms part of this report and
M/s. ASHOK DHARIWAL & CO., Chartered Accountants retire at the ensuing
Annual General Meeting and being eligible offer themselves for
re-appointment. The Board recommends to the members to appoint them as
Auditors of the Company and to fix their remuneration.
10) AUDITOR''S REPORT:
The Auditors Report to the shareholders does not contain any
reservation, qualification or adverse remarks.
Pursuant to the requirements of the Listing Agreement with Stock
Exchanges, your Directors are pleased to furnish the following:
1. Management Discussion and Analysis Report.
2. A report on Corporate Governance along with Auditor''s Certificate
relating to compliance of conditions thereof.
12) SEZ :
As reported last year, the Company is considering to develop Textile
Park in place of SEZ and if the same is finalized, the Company will
obtain necessary approvals for the same.
Your Directors acknowledge with gratitude the Co-Operation and
Assistance received from the Banks, Government, Employees and all those
associated with the Company during the year under review.
For And on behalf of the Board of Directors
Place : Ahmedabad. (Pradip J. Karia)
Date : 24th August, 2012 Chairman & Managing Director