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Pratibha Industries Ltd.

BSE: 532718 Sector: Infrastructure
NSE: PRATIBHA ISIN Code: INE308H01022
BSE 00:00 | 17 Jun Pratibha Industries Ltd
NSE 05:30 | 01 Jan Pratibha Industries Ltd
OPEN 0.72
PREVIOUS CLOSE 0.72
VOLUME 16720
52-Week high 3.17
52-Week low 0.72
P/E
Mkt Cap.(Rs cr) 17
Buy Price 0.72
Buy Qty 1620.00
Sell Price 0.75
Sell Qty 2730.00
OPEN 0.72
CLOSE 0.72
VOLUME 16720
52-Week high 3.17
52-Week low 0.72
P/E
Mkt Cap.(Rs cr) 17
Buy Price 0.72
Buy Qty 1620.00
Sell Price 0.75
Sell Qty 2730.00

Pratibha Industries Ltd. (PRATIBHA) - Director Report

Company director report

Directors’ Report

To

The Members

Pratibha Industries Limited

Your Directors have pleasure in presenting the 23rd Annual Report together with thefinancial statements for the financial year ended 31st March 2018.

FINANCIAL HIGHLIGHTS

The performance of the Company for the financial year ended 31 st March 2018 issummarized below:

( Rs. in crores)
Particulars

Standalone

Consolidated

31.03.2018 31.03.2017 31.03.2018 31.03.2017
Total Revenue 1010.45 1102.35 1241.40 1730.02
Total Expenditure 3133.42 2025.14 3380.42 2666.60
Profit/(loss) before Tax (2122.97) (922.79) (2139.02) (936.59)
Less: Provision of Taxation - (99.23) (0.40) (99.46)
Profit/(loss) After Tax (2122.97) (823.55) (2138.62) (837.13)
Add: Share in Profit/(loss) of Joint Ventures/ - - (1.86) (2.27)
Associates (net) & Adjustment for Non-Controlling
interest in Subsidiaries
Net Profit after Tax Non-Controlling interest (2122.97) (823.55) (2140.48) (839.40)
and share in Profit/(loss) of Joint Ventures
Other Compressive Income (0.15) 0.97 (0.16) 1.04
Total Comprehensive Income (2123.12) (822.59) (2140.64) (838.36)
Earnings Per Share (in Rs. )
Basic (88.98) (61.69) (89.71) (62.87)
Diluted (88.98) (61.69) (89.71) (62.87)

PERFORMANCE REVIEW

During the financial year 2017-18 (‘FY2018’ or ‘year underreview’) the Company has achieved a consolidated turnover of Rs. 982.61 Crores ascompared to Rs. 1687.15 crores in the financial year 2016-17 (‘FY 2017’ or‘corresponding previous year’) thereby significant reduction in revenue ofapprox. 41.75% at consolidated level. The Company has consolidated loss of Rs. 2140.64Crores during FY 2018 as against Rs. 839.39 crores loss in FY2017 mainly due to increasein finance cost and reduction in turnover.

The Company bagged fresh orders to the tune of Rs. 1170.08 Cr. during the year underreview in joint ventures.

The prominent projects bagged were from water segment institutional buildings andmetro station During the year under review. The company bagged 3 projects in total worthRs. 1170.08 crores approx.. One construction and redevelopment of Panvel depot in PPP modeworth Rs. 330 Cr. Another Water supply scheme for water supply scheme for KRISHNA BHAGYANIGAM LIMITED amounting to Rs. 523.03 Cr Third Rehabillation of Distribution Network forNRW reduction for Dhaka city Zones for Dhaka Water Supply & Sewerage BoardBangladesh for Rs. 317.05 Cr .

The business of the Company has been discussed in separate section viz. "Management Discussion and Analysis" which forms part of this report.

The lenders due to the severe financial crisis invoked the SDR on the 16.06.2016 with18 months moratorium for arriving at a satisfactory solution. Though few investors evincedinterest the SDR conclusion process could not be achieved and accordingly the accountturned NPA with effect from 16.06.2016.

Currently the company is snaring at severe financial crunch coupled with paucity in theworking capital requirements nonpayment of salary to works and staff nonpayment ofstatutory dues etc.

Further bankers and government authorities have attached our various bank accounts forrecovering their dues pertaining to the company.

The Bank of Baroda financial creditor of the company has initiated Insolvency processunder IBC Code and has filed petition with NCLT Mumbai for the same. Company hasreceived copy of the same Company Petition from HAS Advocates on behalf of its client Bank of Baroda

Financial Creditor of the company under section 7 of the Insolvency and BankruptcyCode 2016 along with ancillary documents. The matter was listed on 5/11/2018 for hearingand was adjourned to 2nd January 2019 for further proceeding.

DIVIDEND

In view of losses your Directors do not recommend any dividend for the F.Y. 2017-18.

TRANSFER TO GENERAL RESERVE

The Directors do not propose to transfer any amount to the General Reserve.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed as

Annexure -A to this Report.

SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES

The names of companies which are subsidiaries associates and joint ventures of theCompany are provided under point III of MGT 9. Pursuant to the provisions of Section 129and other applicable provisions of the Companies Act 2013 ("the Act") read withrules framed thereunder the

Company has prepared consolidated financial statements of the Company and itssubsidiaries associate companies and joint ventures in accordance with IND AS-27 onConsolidated Financial Statements read with IND AS-31 on interest in Joint Ventures andIND AS-28 on Investments in Joint Ventures and a separate statement containing thesalient features of financial statements of subsidiaries joint ventures and associates inForm AOC-1 are attached to the said consolidated financial statement forming part of theAnnual Report.

The business highlights of subsidiaries have been covered in Management Discussion andAnalysis forming part of this Annual Report.

FIXED DEPOSITS

The Company has not invited accepted and renewed fixed deposits from public/membersduring the year under review.

The Company had accepted public deposits prior to the commencement of the Act. As perSection 74(1)(b) of the Act the entire amount was to be repaid by 31st March 2015.Hon’ble Company Law Board has vide its order dated 19th May 2015 has allowed theCompany to repay the deposit on the respective date of maturity of fixed deposits alongwith interest due thereon if any instead of repayment of entire fixed deposit on orbefore the 31st March 2015.

The company has made an application u/s 74(2) of The Companies Act 2013 to NCLT MUMBAI Bench in August 2017 for seeking an extension for further period of three yearsfor repayment of outstanding deposits which was already matured. However the same matterhas not been listed for hearing.

As on 31st March 2018 fixed deposits outstanding stood at Rs. 2972.94 lacs includingInterest due and Provision for penal Interest.

The Company made payments of matured and claimed deposits to the extent permitted bythe liquidity.

DIRECTORS

Mr. Ravi Kulkarni Dy. Managing Director retired by rotation in the last AGM.

During the Financial year there were various changes in the Board of Directors asfollow:

1. Mr. Shrikant T. Gadre the Independent Director resigned on 22/12/2017.

2. Mr. Awinash M. Arondekar the Independent Director resigned on 20/03/2018.

3. Mr. Sivakumaran Vaidyanathan the Independent Director resigned on 20/03/2018.

4. Dr. Sunder Lal Dhingra the Independent Director resigned on 21/03/2018.

5. Mrs. Sunanda D. Kulkarni was appointed as an additional director of the company witheffect from 20/02/2018. Mrs. Sunanda D. Kulkarni holds office only upto the date of theensuing Annual General Meeting and is eligible for appointment as a Director.

6. Mr. Haresh Adhia Nominee Director of the company resigned on 12/05/2018.

KEY MANAGERIAL PERSONNEL

During the year under review Ms. Bhavana Shah was appointed as Company Secretaryw.e.f. 20th July 2017. Mr. K. Sethuraman is CFO of the company.

MEETINGS OF THE BOARD

The details of meetings of Board and its Committees held during FY 2017-18 and otherprescribed information are provided in the Corporate Governance Report forming part ofthis Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the

Act your Directors hereby affirm that:

(a) in the preparation of the annual accounts the applicable IND AS have been followedalong with proper explanation relating to material departures;

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

STATUTORY AUDITORS

M/s. Ramanand & Associates Chartered Accountants (ICAI Firm Registration Number117776W) were appointed as the Statutory Auditors of the Company to hold office for a termof 5 years from the conclusion of the 22nd Annual General Meeting (AGM) held on 29thSeptember 2017 until the conclusion of the 27th Annual General Meeting (AGM) of theCompany to be held in the year 2022.

Pursuant to the Notification issued by the Ministry of Corporate Affairs on 7th May2018 amending section 139 of the Companies Act 2013 the mandatory requirement forratification of appointment of Auditors by the Members at every AGM has been omitted andhence your Company has not proposed ratification of appointment of M/s. Ramanand &Associates Chartered Accountants at the forthcoming AGM.

AUDITORS’ REPORT

The Auditors have made certain qualified observations their Reports. Reply to thequalifications in auditor’s report on stand alone and consolidated financialstatements of the period under review is annexed to the Directors’ Report as Thestatement on impact of audit qualifications as stipulated in Regulation 33(3)(d) of SEBI(LODR) Regulations as Annexure B.

COST AUDITORS

Pursuant to provisions of Section 148 of the Act the Board of Directors on therecommendation of the Audit Committee reappointed M/s. Ketki D. Visariya & Co. CostAccountant as Cost Auditor of the Company for the financial year 2018-19 at aremuneration of Rs. 200000/- plus applicable taxes and out of pocket expenses.

A resolution for ratification by shareholders of said remuneration payable to CostAuditors is included in the AGM notice.

INTERNAL FINANCIAL CONTROLS

During the year under review the Company appointed Internal auditor as per therequirements of the Companies Act 2013. However due to Stressed Financial Conditionsleading to irragularities in payment of fees to internal auditor resulting into nonCo-operation from auditor. The effectiveness of the internal controls is continuouslyreviewed by the Audit Committee. The internal control system is supplemented by anextensive programme of internal external audits and periodic review by the management.

Main objective of Internal Audit is to provide the Audit Committee an independentobjective and reasonable assurance of the adequacy and effective operation ofCompany’s risk management internal control and governance processes.

On the basis of its deliberations on the internal control systems and internal auditsthe Audit Committee makes recommendations to the Board.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 The Board appointedM/s. Haresh M. Associates Company Secretaries in Whole Time Practice to conductSecretarial Audit of the Company for the financial year 2017-18. The report of theSecretarial

Auditor is annexed to this report as Annexure - C.

As far point wise reply to the qualifications of Secretarial Audit Report is asfollow:

1. As mentioned earlier in this report company is facing severe financial crunch sincelast two years leading to delay in completion of projects resulting intonon-availability of funds on time and shortage of working capital company could notcomply with statutory compliance under various laws including SEBI(LODR)

Regulations 2015. Hence company did not file results on time as per SEBI Regulations.The company has from time to time apprised both stock exchange vide various lettersabout the financial situation of the company. BSE and NSE has levied penalty whichcompany was not in position to pay and BSE has issued notice to the company for suspensionof trading of the company shares w.e.f. 26th November 2018.

2. The company was in process to identify and appoint woman director on the Board ofthe company. and company appointed woman director w.e.f. 20/02/2018.

3. The company due to financial problems could not repay deposits on time. The companygot extension from CLB in 2015 for repayment of deposits and after that company soughtlegal opinion regarding disqualification of director due to default of repayment indeposits on time which on the basis of extension granted by CLB gave favourable opinionregarding the qualification of directors accordingly directors continued as such.

After that company in August 2017 has made petition to the NCLTMumbai Bench forfurther extension of period of 3 years of time for repayment of deposit but the matter isnot listed for hearing.

Further to inform that in such tight situation company has made efforts to pay maximumpossible and made repayment of around Rs. 12 crores principal and Rs. 2 crores interest.This shows clear intention of the company that default is not intentional but due toprevailing circumstances.

4. As mentioned above majority Independent Directors have resigned during the yearunder review either due to health reasons or personal reasons.

5. As regards point no. 5 67 8 company could not pay fees to the cost auditor andinternal auditor on time which is pending for nearly last two years. Similarly companydid not pay fees of the foreign subsidiary companies and auditor has not submitted thefinancial statements. Hence cost audit internal audit was not carried out and also APRrelating to foreign subsidiary was not filed.

6. As far point no. 9 composition of audit committee was not as per SEBI(LODR)Regulations but to comply with the other requirements the present members of thecommittee have to work till new members are appointed.

7. Delay in listing fees again due to non-availability of funds on time. The companywas looking for company secretary after the resignation of previous company and appointedon 20th July 2017.

8. As regards confirmation and approval of minutes of subsidiary companies by theBoard there was delay in getting records on time from subsidiary companies and some timenot getting financials from auditors

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company does not own any manufacturing facility. The business activities of yourCompany are not energy intensive. However your Company is committed to take requiredmeasures to reduce energy consumption by the purchase of energy efficient constructionequipment implementation of energy efficient lightings. The specific details as per Rule8(3) are provided under

Annexure – D. PERSONNEL

Disclosure with respect to the remuneration of Directors and Employees in accordancewith the provisions of Section 197 of the Act read with rule 5(1) & (2) the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of thisReport as Annexure E CORPORATE SOCIAL RESPONSIBILITY

The Company is a socially conscious organisation and assigns tremendous value inserving the society at large. We appreciate our position of responsibility for sharing thebenefits with those less fortunate in society and their upliftment.

The Board has constituted a CSR Committee which has recommended to the Board aCorporate Social Responsibility Policy (CSR Policy) indicating the activities to beundertaken by the Company. The Corporate Social Responsibility policy has been devised inaccordance with Section 135 of Act. The CSR policy of the Company is available on thewebsite of the Company www. pratibhagroup.com. Since company has incurred losses duringthe year 2016-17 and 2017-18 and due to liquidity crunch the Company could not spendmoney on CSR activities. The annual report on CSR activities is set out as Annexure-Fto this report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2017-18 your Company has entered into transactions withrelated parties as defined under Section 2(76) of the Act read with Companies(Specification of Definitions ordinary course of business and at arm’s length basis.Since all the related party transactions are carried out at arm’s length basis in theordinary course of business the Company do not have any particulars to report in FormAOC- 2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014. However the disclosure of transactions with related party for theyear as per Accounting Standard -18 Related Party Disclosures is given in Note no 40 tothe Balance Sheet as on 31st March 2018.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company’s website at thelink: http://www.pratibhagroup.com/pratibha_new/ pages/PDFs/PIL_RPT.pdf.

. PARTICULARS OF LOANS INVESTMENTS GUARANTEES UNDER SECTION 186

The details of investment made during the year under review (including previous years)are disclosed under Note no.43 of the standalone financial statements of the Company.

The Company is engaged in providing infrastructural facilities and therefore isexempted under sub-section 11 of Section 186 of the Act from the application of provisionsof that Section. As such the requirement to provide the details of a loan guarantee orsecurity is not applicable to the Company.

ANNUAL EVALUATION OF BOARD

In terms of provisions of the Act read with Rules issued thereunder and SEBI LODRRegulations the Nomination and Remuneration Committee formulated the criteria forevaluating the Board of Directors its Committees and individual Directors. On the basisof criteria so approved the evaluation of the Board of Directors and its committees wascarried out on 30th May 2017 to assess the effectiveness of the Board and its Committeesduring F. Y. 2017-18. A separate exercise was also carried out to evaluate the performanceof individual Directors on various parameters which inter alia included understanding oftheir roles and responsibilities business of the Company level of participation andcontribution independence of judgement safeguarding the overall interest of shareholdersand the Company.

CORPORATE GOVERNANCE

As per the provisions of SEBI LODR Regulations a Corporate Governance Report isincluded in the Annual Report as Annexure – G.

PREVENTION OF SEXUAL HARRASSMENT AT WORK PLACE

In line with the provisions of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 read with rules made thereunder your Company hasconstituted Internal Complaints Committee which is responsible for redressal of complaintsrelated to sexual harassment. During the year under review there were noDetails) Rules2014 in the complaints pertaining to sexual harassment.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism to facilitate reporting of any instancesof fraud unethical conduct and mismanagement if any vide Whistle Blower Policy which isin compliance with the provisions of Section 177 (10) of the Act and SEBI LODRRegulations.

The policy also provides for adequate safeguards against victimization of persons whouse such mechanism and makes provision for direct access to the Chairman of the AuditCommittee in all cases. The Whistle Blower Policy of the Company is available on thewebsite of the Company http://www.pratibhagroup.com/pratibha_new/pages/PDFs/WHISTLE_BLOWER_POLICY_PIL_.pdf.

EMPLOYEE RELATIONSHIP

The Company due to financial crunch was not fair enough and could not make payments tothe employees on time. However staff and other employees through out the year gavevaluable support to the company by giving uninterrupted service to the company. Managementis thankful to them for such gesture and wishes to place on record its sincereappreciation of the efforts put in by the Company’s workers staff and executives forachieving results under demanding circumstances.

OTHER DISCLOSURES

- During the year under review there were no significant and material orders passed bythe regulators or courts or tribunals impacting the going concern status andCompany’s operations in future.

- No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year and the date of this Report.

- The Company has not issued any shares or options for subscription of shares by itsemployees under any employee stock option scheme or any other scheme.

- None of the Directors received any remuneration or commission from any of thesubsidiaries.

- The Company has not issued any equity shares with differential voting rights.

- During the year under review no instances of fraud were reported to the AuditCommittee/Board of Directors by Statutory Auditors Secretarial Auditors Cost Auditors orInternal Auditors.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the Banks Financial InstitutionsCentral and State Governments Various Statutory Authorities Customers SuppliersEmployees and Business Associates for their continued co-operation and support to theCompany. Your Directors appreciate and value the trust reposed and faith shown by everyshareholders of the Company.

For and on behalf of the Board of Directors
Sd/-
Date: 9th Novemebr 2018 Ajit Kulkarni
Place: Mumbai Chairman & Director