To the Members
Your Directors are pleased to present the 28th Annual Report and AuditedFinancial Statements for the financial year ended 31st March 2017 togetherwith the Auditors' Report thereon.
WORKING RESULTS OF THE COMPANY (STANDALONE)
|Particulars ||2016-17 ||2015-16 |
|Income from operations ||857.85 ||768.18 |
|Other Income ||36.68 ||32.68 |
|Profit before Tax ||10.24 ||18.72 |
|Provision for Tax ||1.51 ||5.41 |
|Profit After Tax ||8.73 ||13.31 |
|Transfer to General Reserves ||- || |
WORKING RESULTS OF THE COMPANY (CONSOLIDATED)
|Particulars ||2016-17 ||2015-16 |
|Income from operations ||1524.18 ||1393.41 |
|Other Income ||27.12 ||25.18 |
|Profit before Tax ||41.85 ||47.26 |
|Provision for Tax ||6.96 ||10.73 |
|Profit After Tax ||34.89 ||36.53 |
|Minorities Share in (Profit)/Loss ||1.39 ||0.13 |
|Profit for the year ||33.50 ||36.66 |
STATE OF THE AFFAIRS OF THE COMPANY
During the year your Company's consolidated income from operations was Rs. 1524.18Crore as against Rs. 1393.41 Crore in the previous year and Net Profit Rs. 33.50 Crore asagainst Net Profit Rs. 36.66 Crore in the previous year.
The income from operations for the year under review for the Company on Standalonebasis was Rs. 857.85 Crore as compared to Rs. 768.18 Crore in the previous year and NetProfit Rs. 8.73 Crore as compared to Net Profit Rs. 13.31 in the previous year.
Pearl Global Industries Limited (PGIL) is one of the India's largest listed garmentexporters manufacturing from multiple sourcing regions within India and countries withinSouth Asia. A preferred long-term vendor to most leading global brands we are amongst theleading player in our Industry. Our mainstay business is to create value fromcompetitively manufacturing and exporting fashion garments to leading global brands. Wehave now also ventured into e-retail through established digital channels and our owne-com portal SbuyS.in giving consumers access to global fashion at attractive values.
Our product rang includes knits woven and bottoms (basic and complex designs) acrossmen women and kids wear segments. We have a well diversified and de- risked manufacturingbase across India Indonesia and Bangladesh. We have a total capacity to manufacturearound 5.5 million garments per month (including own and outsourced facilities).Ourrevenue structure is primarily export based with a major contribution coming from exportsto the United States. We provide total supply chain solutions to customers-value retailersand high end fashion brand retails in the United States and Europe. Our business modelenables us to offer superior quality products across various countries catering to allkinds of consumers. Our esteemed global clientele includes premium retailers in USA andEurope including GAP Banana Republic Kohl's Macy Ralph Lauren Tom Tailor and nextamong others.
We strive to be the most preferred vendor to the top global apparel brands and beranked amongst the top garment manufacturers in the world in terms of quality servicestandards and ultimately-customers satisfaction keeping in line with our broader vision.
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.
The Board of Directors also recommend a dividend Rs. 3/- per equity share for the year2016-17 amounting to Rs.64991811/- (exclusive of tax on dividend).The dividend payoutis subject to approval of the members at the forthcoming Annual General Meeting.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Samar Ballav Mohpatra Independent Director has resigned from the Directorship ofthe Company with effect from 20th March 2017 due to health reasons. TheBoard of Directors placed its appreciation for the contributions made by Mr. Mohapatra forgrowth of the Company.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of your Company Mr. Deepak Seth and Mr. Pulkit Seth Directors would retireby rotation at the ensuing Annual General Meeting and being eligible offer themselves forre-appointment.
The Board of Directors has in its Meeting held on 26th May 2017 appointedMr. Abhishek Goyal as Additional Director in the category of Independent Director whoshall hold office of Director upto forthcoming Annual General Meeting. The Board ofDirectors recommends for appointment of Mr. Abhishek Goyal as Independent Director for aperiod of five years. The Resolution for his appointment is proposed in the Notice callingthe 28th Annual General Meeting.
The Board of Directors of your Company met four times on May 25 2016 August 12 2016November 08 2016 and February 14 2017 during the financial year 2016-17.
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. Abhishek Goyal - 01928855 |
|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 Board of Directors in its meeting held on 14th February 2017 inductedMr. Deepak Seth as Member ofthe Nomination and Remuneration Committee. The Board ofDirectors further re-constituted Nomination and Remuneration Committee in its meeting heldon 26th May 2017 inducted Mr. Abhishek Goyal as Chairman of the Committeedue to resignation of Mr. Samar Ballav Mohapatra Chairman of the Committee. The currentcomposition of Committee comprising three Non-executive Independent Directors and oneNon-executive Director namely Mr. Abhishek Goyal Chairman Mr. Rajendra Kumar Aneja Mr.Anil Nayar and Mr. Deepak Seth Members of the Committee. The Company has also formulateda Policy for performance evaluation of Board Committees Independent Directors and otherindividual Directors which included criteria for performance evaluation of theNon-executive Directors and Executive Directors.
The Nomination and Remuneration Policy of the Company is annexed herewith as Annexure-Iwith this report.
The Board of Directors in its meeting held on 14th February 2017 inductedMr. Rajendra Kumar Aneja as Member of the Stakeholders Relationship Committee. The Boardof Directors further re-constituted Stakeholders Relationship Committee in its meetingheld on 26th May 2017 inducted Mr. Anil Nayar as Chairman of the Committeedue to resignation of Mr. Samar Ballav Mohapatra Chairman of the Committee. The currentcomposition of Committee comprising two Non-executive Independent Directors and twoExecutive Directors namely Mr. Anil Nayar Chairman Mr. Rajendra Kumar Aneja Mr. PulkitSeth and Mr. Vinod Vaish Members of the Committee.
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 the individual Directors on the basis of thecriteria such as the contribution of the individual Director to the Board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc. In addition the Chairman was also evaluated onthe 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 Board of Directors have in its meeting held on 26th May 2017re-constituted Audit Committee due to resignation of Mr. Samar Ballav Mohapatra Memberof the Committee from the Directorship of the Company due to health reasons on 20thMarch 2017. The current composition of the Audit Committee comprises Three Non-executiveIndependent Directors and one Executive Director namely Mr. Anil Nayar Chairman Mr.Abhishek Goyal Mr. Rajendra Kumar Aneja and Mr. Vinod Vaish as Members of the Committee.All the recommendations made by the Audit Committee were accepted by 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 Company's website at thelink: 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 by the Company whichhas been approved by the Board.
The CSR Policy may be accessed on the Company's website at http://pearlglobal.com/investors/policy
Your Company has identified an area of education for underprivileged children forengagement under CSR activities. The Company had earmarked Rs. 31.42 Lakh for spending onthe area of education for the financial year 2016-17 which has been fully utilised.
The Annual Report on CSR activities is annexed herewith as Annexure-II.
During the year under review six Companies have become step down subsidiaries of theCompany Namely Prudent Fashions Limited Pearl Grass Creations Limited Vin Pearl GlobalVietnam Limited Pearl Global F.Z.E. PGIC Investment Limited and A&B InvestmentLimited. These Companies are yet to commence business.
The subsidiaries assist our Company in providing one stop shop to our preferred longterm vendors thereby having an edge over competitors. Their contribution to the Company'sperformance 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 forinspection by any member at the Registered Office of the Company.
The financial statements of the Company consolidated financial statements along withthe relevant documents and separate audited accounts in respect of subsidiaries areavailable on the website of the Company.
The Policy of determining material subsidiaries as approved may be accessed on theCompany's website at http:// pearlglobal.com/investors/policy
STATUTORY AUDITORS' REPORT
The Auditors' Reports (Consolidated & Standalone) for the financial year ended 31stMarch 2017 do not contain any qualification reservation or adverse remark. The Auditors'Reports are enclosed with the financial statements in this Annual Report.
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 holding office ofAuditors upto forthcoming Annual General Meeting.
As per the provisions of mandatory rotation of Auditors under Section 139(2) of theCompanies Act 2013 and rules framed there under the Audit Committee and Board ofDirectors in their meetings held on 26th May 2017 have considered forappointment of M/s B. R. Gupta & Co. Chartered Accountants New Delhi (Regn. No.008352N) as Statutory Auditors of the Company for a period of five years with effectfrom financial year 2017-18 in place of M/s S. R. Dinodia & Co. LLP. A Resolution forappointment of M/s B. R. Gupta & Co. Chartered Accountants as Statutory Auditors ofthe Company is proposed in the Notice calling the 28th 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 year2016-17. The Secretarial Audit Report for the financial year 2016-17 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 2016-17.
EXTRACTS OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure-IV tothis Report.
RELATED PARTY TRANSACTIONS
All related party transactions entered during the financial year were in ordinarycourse of the business and on arm's length basis. No material related party transactionswere entered during the financial year by the Company. Accordingly the disclosure ofrelated party transactions as required under Section 134(3)(h) of the Companies Act 2013in Form AOC-2 is not applicable to the Company.
Members may refer to note no. 30 to the standalone financial statements which sets outrelated party disclosures pursuant to AS-18.
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-V.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Particulars of Loans guarantees and investments covered under Section 186 of theCompanies Act 2013 is annexed as Annexure-VI.
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 2017 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 2017 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 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 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 2016-17 havebeen paid.
REGISTRAR AND SHARE TRANSFER AGENT
Link Intime India Pvt. Ltd is Company's Registrars and Share Transfer Agent (RTA) ascommon 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-VII 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- VIII 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-IXto this report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
No significant and material orders were passed by the regulators or courts or tribunalsimpacting the going concern status and Company's 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 2016-17.
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: Gurugram || |
|Date: May 26 2017 || |