To the Members
Your Directors have pleasure in presenting the 23rd Annual Report of the Company alongwith the Audited Financial Statements for the Financial Year ended March 31 2017.
The financial performance of the Company for the financial year ended March 31 2017 istabulated below:
(Amount in Lacs)
|Particulars ||For Financial Year ||For Financial Year |
| ||2016-17 ||2015-16 |
|Revenue from Operation ||- ||- |
|Other Income ||199.77 ||268.22 |
|Total Revenue ||199.77 ||268.22 |
|Total Expenditure ||473.23 ||178.42 |
|Profit/(Loss) before Exceptional Items and Tax ||(273.47) ||89.80 |
|Exceptional Items (Income/(Exps)) ||- ||- |
|Profit/(Loss) before Tax ||(273.47) ||89.80 |
|Tax expense ||0 ||0 |
|Net Profit/ (Loss) for the period ||(273.47) ||89.80 |
The accumulated losses of the Company are more than 50% of its net worth. In view ofabnormal market conditions & volatility in addition to financial liquidityconstraints the Company had discontinued its manufacturing activity since February 2013.
Since the Companys had discontinued its manufacturing activity in February 2013due to financial problems there was no significant development during the year underreview affecting the operations of the Company.
In view of losses your Directors regret their inability to recommend dividend onEquity Shares of the Company for the year ended March 31 2017
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of this Report.
The Authorised Share Capital of the Company is Rs. 5000 Lakhs. The issued subscribed& paid up capital of the Company was Rs. 3747.256 Lakhs as on 31 March 2017consisting of 30412560 Equity Shares of Rs. 10/- each and 706000 Preference shares ofRs. 100 each.
During the year under review the Company has not altered its share capital.
SUBSIDIARY COMPANIES JOINT VENTURES AND ASSOCIATE COMPANIES
As on 31st March 2017 the Company does not have any subsidiary Companyassociate Company or any Joint Venture.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) Appointment/Re-appointment of Director
In terms of the provisions of Section 152(6) of the Act Mr. Harish Seth (DIN00002948) is liable to retire by rotation at the ensuing Annual General Meeting and beingeligible offer himself for re-appointment. The Board recommends his re-appointment.
Brief resume of the Directors proposed to be re-elected is included in the Notice forthe ensuing Annual General Meeting.
b) Changes in Key Managerial Personnel
Pursuant to the provisions of Section 2(51) and 203 of the Companies Act 2013 readwith Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 Mr. Harish Seth (Chairman & Managing Director) acting as Key ManagerialPersonnel of the company as on 31st March 2017.
During the year there has been no change in the Key Managerial Personnel of theCompany.
c) Declaration by Independent Director
All the Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 (the Act) that he/she meets the criteria ofindependence laid down under Section 149(6) of the Act.
PERFORMANCE EVALUATION OF BOARD COMMITTEES AND DIRECTORS
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and Individual Directors pursuant to the provisions of the Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The evaluation framework for assessing the performance of Directors comprised ofcriteria like contribution in Board process time devoted for the Company attendance ofBoard Meetings and Committee Meetings and commitment to shareholder and other stakeholderinterests. Using appropriate criteria the performance of the various Committees wasseparately evaluated by the Board.
AUDITORS & AUDITORS REPORT
Pursuant to the provisions of section 139 of the Act and the rules framed thereafterM/s Sehgal Mehta & Co. Chartered Accountants were appointed as statutory auditors ofthe Company from the conclusion of the twentieth annual general meeting (AGM) of theCompany held on September 30 2014 till the conclusion of the twenty fifth AGM to be heldin the year 2019 subject to ratification of their appointment at every AGM. Accordinglythe appointment of M/s. Sehgal Mehta & Co. Chartered Accountants as StatutoryAuditors of the Company is placed for ratification by the shareholders.
The Company has received confirmation from the Statutory Auditors regarding theirconsent and eligibility under Sections 139 and 141 of the Companies Act 2013 read withthe Companies (Audit & Auditors) Rules 2014 for appointment as the Statutory Auditorsof the Company.
The auditors report does not contain any qualifications reservations or adverseremarks.
COMMITTEES OF THE BOARD
The Board has constituted various committees in accordance with the requirements ofCompanies Act 2013. The Board has following committees:
a. Audit Committee b. Stakeholders & Relationship Committee c. Committee ofDirectors
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee is constituted in line with the provisions of Section 177 of theCompanies Act 2013 read with Rule 6 and 7 of the Companies (Meetings of the Board and itsPowers) Rules 2014.
The Audit Committee assists the Board in the dissemination of financial information andin overseeing the financial and accounting processes in the Company.
The Composition of Audit Committee is given below:
|Name of the Members ||Chairman/Member ||Category of Director |
|Mr. B. B. Mathur ||Chairman ||Non- Executive & Independent Director |
|Mr. Ramesh Mehra ||Member ||Non- Executive & Independent Director |
|Mr. Harish Seth ||Member ||Executive Director |
MEETINGS OF THE BOARD
The Board met four (4) times during the financial year 2016-2017 on 6th June 201612th August 2016 14th November 2016 and 11th February 2017. The necessary quorum waspresent for all the meetings. The maximum interval between any two meetings did not exceed120 days.
Composition of Board
The strength of the Board of Directors as on 31st March 2017 was 3 Directors. TheBoard comprises of one executive Director designated as Chairman & Managing Director.The rest are Non-executive Independent Directors. No woman Director is appointed on theBoard.
|Name of the Director ||DIN ||Designation |
|Mr. Harish Seth ||00002948 ||Chairman & Managing Director |
|Mr. B. B. Mathur ||00004452 ||Independent Director |
|Mr. Ramesh Mehra ||00003334 ||Independent Director |
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Your Company has not made any loan to any person within the meaning of Section 186 ofthe Companies Act 2013 and has also not given any guarantees/securities or made anyinvestment within the meaning of that section.
RELATED PARTY TRANSACTIONS:
During the year your company has not entered into related party transactions (RPTs)that would have attracted the provisions of section 188 of Companies Act 2013 and rulesmade thereunder and Regulation 23 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015
During the period under review the Company has not accepted any deposits within themeaning of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has an Internal Control Framework which is commensurate with the sizescale and complexity of its operations. This framework ensures adequate safeguards andprocesses to address the evolving business requirements.
Extract of Annual Return:
The extract of Annual Return as provided under sub-section (3) of section 92 of theCompanies Act 2013 in the prescribed Form MGT-9 is annexed to this Report as AnnexureI.
CORPORATE SOCIAL RESPONSIBILITY
The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within purview of Section 135(1) of the Companies Act 2013 and henceit is not required to formulate policy on corporate social responsibility.
CLARIFICATION TO REMARKS CONTAINED IN THE AUDITORS REPORT Report on other legal andRegulatory requirements
Clause 2 (d) & (e) of the Auditors Report: As per the legal opinion given bythe legal advisors of the Company the Foreign Financial Institution (AFIC) or itsAssignee cannot enforce any outstanding against the Company in any court of law despiteexistence of debt as the same has become a time barred debt under provisions of theLimitations Act 1963. Based on the said opinion of the advisors.
Clause 2 (d) of the Auditors Report : No provision has been made for interest inrespect of the foreign currency loan of Rs.161924 thousands; and
Clause 2 (e) of the Auditors Report: The outstanding by way of secured andunsecured loan and interest aggregating to Rs.161924 thousands thereon (shown as an"Erstwhile loan barred by limitation" in the
Balance Sheet of the Company for the financial year ended March 31 2016) have not beenreinstated as required under Accounting Standard (AS11) on the effects of changes inforeign exchange rates notified in the Companies (Accounting Standards) Rule 2006.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b) hey have selected such accounting policies and applied consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and loss of thecompany for that period
c) they 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 annual financial statements have not been prepared on going concernassumption/basis;
e) they have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
There are no significant and material orders passed by the regulators or courts ortribunals during the year.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Since your Company has ceased its operations the requirements pertaining to disclosureof particulars relating to conservation of energy research & development andtechnology absorption as prescribed under Section 134(3)(m) of the Companies Act 2013read with Rule 8 of The Companies (Accounts) Rules 2014 is not applicable to theCompany.
There were no foreign exchange earnings or outgo during the year.
PARTICULARS OF EMPLOYEES
Since the Company has discontinued its operations there was no employee in the Companyso the Company is not require to give details as required under section Section 197(12) ofthe Companies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
VIGIL MECHANISM POLICY
As there was no employee in the Company during the year the Company has not framed thePolicy on Vigil Mechanism.
As the net worth of your company is in negative then as per Regulation 15 of SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 the provisionsrelated to Corporate Governance are not applicable on the Company.
Your Directors take this opportunity to express their gratitude for the assistance andcooperation received from the shareholders Banks and other authorities for theirconsistent support and cooperation to the Company during the year under review.
| ||On Behalf of the Board of Directors |
| ||For Pearl Engineering Polymers Limited |
| ||Sd/- |
|Place: New Delhi ||Harish Seth |
|Date: August 12 2017 ||Chairman & Managing Director |
| ||DIN : 00002948 |