To the Members
Your Directors are pleased to present the 27th Annual Report and AuditedFinancial Statements for the financial year ended 31st March 2016 togetherwith the Auditors Report thereon.
WORKING RESULTS OF THE COMPANY (STANDALONE)
| || ||(Rs. in Crore) |
|Particulars ||2015-16 ||2014-15 |
|Income from operations ||768.18 ||623.99 |
|Other Income ||32.68 ||27.82 |
|Profit before Tax ||18.72 ||15.17 |
|Provision for Tax ||5.41 ||4.95 |
|Profit After Tax ||13.31 ||10.22 |
|Transfer to General Reserves ||- ||- |
WORKING RESULTS OF THE COMPANY (CONSOLIDATED)
| || ||(Rs. in Crore) |
|Particulars ||2015-16 ||2014-15 |
|Income from operations ||1393.41 ||1023.74 |
|Other Income ||25.18 ||24.05 |
|Profit before Tax ||47.26 ||34.21 |
|Provision for Tax ||10.73 ||9.90 |
|Profit After Tax ||36.53 ||24.31 |
|Minorities Share in (Profit)/Loss ||0.13 ||0.75 |
|Profit for the year ||36.66 ||25.06 |
STATE OF THE AFFAIRS OF THE COMPANY
During the year your Companys consolidated income from operations was Rs.1393.41 Crore as against Rs. 1023.74 Crore in the previous year and Net Profit increasedby 46.29% to Rs. 36.66 Crore as against Net Profit Rs. 25.06 Crore in the previous year.
The income from operations for the year under review for the Company on Standalonebasis was Rs. 768.18 Crore as compared to Rs. 623.99 Crore in the previous year and NetProfit increased by 30.23% to Rs. 13.31 Crore as compared to Net Profit Rs. 10.22 in theprevious year.
Your Company has adopted market strategy based on the changing dynamics of growth inthe world economy as it is necessary to ensure sustained growth of exports. We mustestablish new beachheads and strengthen our presence in newly opened up markets. Thecompany has leveraged its experience and expertise in cost competitiveness in channelizingthe business through its manufacturing or outsourcing activities based on buyersrequirements.
Our main market in the USA looks relative healthy with both employment and consumptionon a steady rise. We expect our business into USA to grow consistently over near term.Simultaneously we expect to continue our steady penetration into other markets allowingus to use our capacity in lean seasons and so gradually improve our ROIs. We also intendto strengthen our existing association with various apparels brands by becoming a largermore service oriented vendor-partner to them.
We are geographically well positioned to produce from the most cost effective supplybases in Asia keeping us highly competitive and relevant to our customers. We expect tomaintain and step up our Profitability from superior value added products and meticulousmanagement of our costs and processes.
Your Directors have declared an interim dividend Rs. 2.50/- per Equity Share of Rs.10/- each for the financial year 2015-16 amounting Rs. 541.60 Lacs (exclusive of dividenddistribution tax). The above interim dividend have been paid to those members whose nameappears in the register of members and beneficial owners as per details received fromNSDL and CDSL as on record date 21st March 2016. The payment of interimdividend has completed on 31st March 2016.
The Board of Directors also recommend a final dividend Rs.0.50 per equity share for theyear 2015-16 amounting to Rs.10831968.50 (exclusive of tax on dividend).The finaldividend payout is subject to approval of the members at the ensuing Annual GeneralMeeting.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of your Company Mrs. Shefali Seth and Mr. Vinod Vaish Directors wouldretire by rotation at the ensuing Annual General Meeting and being eligible offerthemselves for re-appointment.
The Board of Directors have re-appointed Mr. Pulkit Seth as Managing Director of theCompany for a further period of three years with effect from 1st June 2016 to31st May 2019. The Resolution for his re-appointment is proposed in the Noticecalling the 27th Annual General Meeting.
The Board of Directors have re-appointed Mr. Vinod Vaish as Whole-Time Director of theCompany for a further period of two years with effect from 19th October 2016to 18th October 2018. The Resolution for his re-appointment is proposed in theNotice calling the 27th Annual General Meeting.
The Board of Directors of your Company met five times on May 22 2015 August 11 2015November 09 2015 February 12 2016 and March 11 2016 during the financial year 2015-16.
DIRECTORS IDENTIFICATION NUMBER (DIN)
The following are the Directors Identification Number (DIN) of your Directors:
|Mr. Deepak Seth ||- 00003021 ||Mr. Chittranjan Dua ||- 00036080 |
|Mr. Pulkit Seth ||- 00003044 ||Mr. Samar Ballav Mohapatra ||- 00327410 |
|Mrs.Shefali Seth ||- 01388430 ||Mr. Rajendra Kumar Aneja ||- 00731956 |
|Mr. Anil Nayar ||- 01390190 ||Mr. Vinod Vaish ||- 01945795 |
The Company has received necessary declaration from each independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence as laid down in Section 149(6) ofthe Companies Act 2013.
The Company has Nomination and Remuneration Committee as required under Sub-Section (1)of Section 178 of the Companies Act 2013 Comprising three non-executive IndependentDirectors Mr. S.B. Mohapatra Chairman Mr. Rajendra Kumar Aneja and Mr. Anil NayarMembers of the Committee. The Company has also formulated a Policy for performanceevaluation of Board Committees Independent Directors and other individual Directorswhich included criteria for performance evaluation of the non-executive directors andexecutive directors.
The Nomination and Remuneration Policy of the Company is annexed herewith as ANNEXURE-Iwith this report.
The Board of Directors has carried out an annual evaluation of its own performancecommittees and individual Directors pursuant to the provisions of the Companies Act 2013and Rules made there under.
The performance of the Board was evaluated by the Board After seeking inputs from allthe Directors on the basis of the criteria such as the Board composition and structureeffectiveness of Board processes information and functioning etc.
The performance of the committees was evaluated by the Board After seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual Directors on the basis of the criteria such as the contribution of theindividual Director to the Board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of independent Directors performance of non-independentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors. The same was discussed in the Board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual Directors was also discussed.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal control system commensurate with the sizescale and complexity of operations. During the year such controls were tested and noreportable material weakness in the design or operation was observed.
The Audit Committee comprises two Independent Directors namely Mr. Anil NayarChairman Mr. S.B. Mohapatra Member and one executive Director Mr. Vinod Vaish asMember of the Committee. All the recommendations made by the Audit Committee were acceptedby the Board.
The Company has set up a Vigil Mechanism which also incorporates a whistle blowerpolicy in terms of Listing Agreement/Regulations made by the SEBI. Protected disclosurescan be made by a whistle blower through an e-mail or dedicated telephone no. or a letterthrough to the Vigilance Officer or to the Chairman of the Audit Committee. The policy onvigil mechanism and whistle blower policy may be accessed on the Companys website atthe link: http:// pearlglobal.com/investors/policy
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Committee of the Company has formulated a CorporateSocial Responsibility Policy (CSR Policy) indicating the activities to be undertaken bythe Company which has been approved by the Board.
The CSR Policy may be accessed on the Companys website athttp://pearlglobal.com/investors/policy
Your Company has identified an area of education for underprivileged children forengagement under CSR activities. The Company had earmarked Rs. 15.00 Lakh for spending onthe area of education for the financial year 2014-15 which was fully utilised. TheCompany has earmarked Rs. 24.76 Lakh for spending on the area of education in thefinancial year 2015-16 and would be utilised in due course on need base.
The Annual Report on CSR activities is annexed herewith as ANNEXURE-II.
During the year under review no Company have become or ceased to be Companyssubsidiaries joint ventures or associates Companies.
The subsidiaries assist our Company in providing one shop stop to our preferred longterm vendors thereby having an edge over competitors. Their contribution to theCompanys performance is as evident from the consolidated results of the Company.
Pursuant to Section 129(3) of the Companies Act 2013 a statement containing thesalient features of the financial statements of the subsidiary companies is attached tothe Financial Statements in Form AOC-1. The Company will make available the said financialstatements and related detailed information of the subsidiary companies upon the requestby any member of the Company.
These financial statements will also be kept open for inspection by any member at theRegistered Office of the Company. The financial statements of the Company consolidatedfinancial statements along with the relevant documents and separate audited accounts inrespect of subsidiaries are available on the website of the Company.
The Policy of determining material subsidiaries as approved may be accessed on theCompanys website at http:// pearlglobal.com/investors/policy
In terms of Section 139 of the Companies Act 2013 M/s S. R. Dinodia & Co. LLPChartered Accountants (Regn. No. 001478N/N500005) New Delhi were appointed by theMembers in its 25th Annual General Meeting held on 26th September2014 as Statutory Auditors of the Company for a period of three years. A Resolution forratification of their appointment as Statutory Auditors is proposed in the Notice callingthe 27th Annual General Meeting.
The Board has appointed Mr. Deepak Somaiya Practising Company Secretary proprietor ofM/s. Deepak Somaiya & Co. to conduct Secretarial Audit for the financial year2015-16. The Secretarial Audit Report for the financial year 2015-16 is annexed herewithas ANNEXURE-III. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
The Board has appointed M/s. Narula & Gupta Chartered Accountants New Delhi (FRN013532N) as Internal Auditor for the financial year 2015-16.
EXTRACTS OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as ANNEXURE-IV to thisReport.
RELATED PARTY TRANSACTIONS
Particulars of Contracts or Arrangements with Related Parties referred to in Section188(1) of the Companies Act 2013 in Form AOC-2 is annexed as ANNEXURE-V.
A disclosure on related party as required under Regulation 34(3) read with Schedule Vof SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 is annexed asANNEXURE-VI.
PARTICULARS OF LOANS GUARANTEES AND LISTING INVESTMENTS
Particulars of Loans guarantees and investments covered under Section 186 of theCompanies Act 2013 is annexed as ANNEXURE-VII.
Your Company has not accepted any Fixed Deposits from Public or Shareholders during theyear nor has any unclaimed or unpaid deposits at the end of the financial year.
The Company has implemented procedures and policies in place for risk managementincluding identifying risk which may threaten the existence/operations of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (5) of the Companies Act 2013 withrespect to Directors Responsibility Statement your Directors state that:
a) in the preparation of the annual accounts for the financial year ended 31stMarch 2016 the applicable accounting standards have been followed along with properexplanation relating to material departures. There are no material departures from thesame;
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 31stMarch 2016 and of the 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 Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the Directors have prepared the annual accounts on a going concernbasis;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
The shares of your Company are listed at BSE Limited and National Stock Exchange ofIndia Limited Mumbai. The listing fees to the Stock Exchanges for the year 2015-16 havebeen paid.
REGISTRAR AND SHARE TRANSFER AGENT
Link Intime India Pvt. Ltd is Companys Registrars and Share Transfer Agent (RTA)as common agency both for physical and demat shares as required under Securities Contract(Regulation) Act 1956. The detail of RTA forms part of the Corporate Governance Report.
Report on Corporate Governance along with the certificate of the Auditors confirmingcompliance of conditions of Corporate Governance as stipulated under Schedule V of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forms part ofthe Annual report.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of operations performance and future outlook of the Company is givenseparately under the head "Management Discussion and Analysis".
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The details as required under Section 197 (12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended from time to time is annexed as ANNEXURE-VIII to this report.
Particulars of employees as required under Rule 5(2) and (3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from timeto time is annexed as ANNEXURE-IX to this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134(3)(m) is annexed as ANNEXURE-Xto this report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
No significant and material orders were passed by the regulators or courts or tribunalsimpacting the going concern status and Companys operations in future.
REPORT ON SEXUAL HARASSMENT-INTERNAL COMPLAINTS COMMITTEE
Pursuant to the provisions of the Sexual Harassment of Women at the Workplace(Prevention Prohibition and Redressal) Act 2013 Internal Complaints Committee has beenset up to redress complaints received regarding sexual harassment. All employees(permanent contractual temporary trainees) are covered under this policy. There were nocomplaints received during the financial year 2015-16.
The Directors of your Company are thankful to Bankers Business Associates CustomersMembers Government Bodies & Regulators for the continuous support received from themand place on record their appreciation for the sincere services rendered by the employeesat all level.
| ||For and on behalf of the Board |
| ||for PEARL GLOBAL INDUSTRIES LIMITED |
|(VINOD VAISH) ||(PULKIT SETH) |
|Whole-Time Director ||Managing Director |
|DIN 01945795 ||DIN 00003044 |
|Place: Gurgaon || |
|Date: August 12 2016 || |