TO THE MEMBERS
Your Directors are pleased to present the 49thAnnual Report of Pearl Polymers Limited("the Company") for the financial year ended March 312020.
The Company's financial performance for the financial year ended March 312020 incomparison to previous financial year is summarized below:
(Rs. in Lakhs'
|Particulars ||2019-20 ||2018-19 |
|Total Revenue ||14204.58 ||18092.22 |
|Total expenses ||15451.36 ||18723.56 |
|Profit/(loss) before exceptional items and tax ||(1246.78) ||(631.34) |
|Less: Tax Expenses ||(131.90) ||(144.90) |
|Profit/Loss after tax ||(1114.88) ||(486.44) |
The Reserves and Surplus (excluding Revaluation Reserve) of the Company as on March 312020 stood at Rs.1675.96Lakhs. No amount is proposed to be transferred to reserves duringthe year.
In view of the losses the Board of Directors has not recommended any dividend onequity shares for the year under review.
The Company's Capital Structure remains unchanged during the financial year 2019-20.
STATE OF THE COMPANY'S AFFAIRS/CHANGES IN THE NATURE OF BUSINESS IF ANY
During the year under consideration on Standalone basis your Company has achieved totalRevenue of Rs 14204.58Lakhs as against Rs. 18092.22Lakhs in the relevant previousfinancial year.The Company has suffered operating loss of Rs. 1246.78 Lakhs as comparedto Rs. 631.34 Lakhs in the previous year and recorded net loss of Rs. 1114.88 Lakhs ascompared to loss of Rs. 486.44 Lakhs in the previous year due to adverse market conditionsat National and International Level outbreak of COVID 19 and consequential lockdown inthe month of march and stiff competition from un-organized sector and localplayersadversely affected the turnover.
During the year there was no change in the nature of business of the Company.
MATERIAL CHANGES EFFECTING FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the Financial Position ofthe Company which have occurred between the end of Financial Year ended on March 312020and the date of this report.
IMPACT OF COVID-19 PREPAREDNESS AND RESPONSE BY THE COMPANY
We are indeed living through unusual times. Countries across the globe continue to facemultitude of challengesin the form of Covid-19 health crisis that contributed to aneconomic slowdown.The novel coronavirus or Covid-19 has brought unprecedented impact onthe people and economies across the world. It has created uncertainties in businessecosystem by disrupting supply chains. As per the Government's directives and subsequentlockdown our manufacturing operations faced temporary closure and the Companywitnessedweakened sales in the month of March 2020.
At Pearl Polymers Limited we responded to these headwinds by beingwell-preparedthrough our strong core competenciesand resilient business model. The Companyimplementedadequate steps to protect employees and its immediatecommunities. Though wefaced temporary disruption inour manufacturing operations we tried our best to ensureuninterrupted services for our customers by enabling seamless work from home'facility.
The Company being in the packaging industry has tried to increase its revenue bysupplying the packaging of essential items such as Hand Sanitizers; pharmaceutical etc. tothe pharmaceutical companies and other FMCG companies and has done all possible efforts tobring in line the operations.
Our state-of-the art manufacturing units and distribution channels enabled us to timelydeliver products to our customers despite the nationwide lockdown.
Business sentiments across the country are showing positive signs of recovery. But thequestion that comes to the mind of every businessman is "Will it ever be likebefore?" The impact assessment of COVID-19 is a continuing process given theuncertainty with its durations. We at Pearl Polymers Limited will continue to monitor anymaterial changes as the situation evolves and strive to do best in the interest of all thestakeholders.
MATERIAL ORDERS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY
There is no order passed by any regulatory authority or court or tribunal against theCompany impacting the going concern status and future operations of the Company.
Your Company has not accepted any deposits during the year under review falling withinthe ambit of Section 73 ofthe Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules2014.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to Section 125 of the Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 the amountof fixed deposit remaining unpaid /unclaimed for a period of seven years has beentransferred to the Investor Education and Protection Fund (IEPF) established by theCentral Government of India. Further the Company has uploaded the necessary informationin respect of the unclaimed amount on the website of IEPF viz. www.iepf.gov.in and on theCompany's website at www.pearlpet.net
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Corporate Social Responsibility as prescribed under section 135 ofthe Companies Act 2013 are not applicable to the Company.
HOLDING SUBSIDIARY ASSOCIATE OR JOINT VENTURE COMPANIES
The Company has no Holding Subsidiary Associate or Joint Venture Company.
DIRECTORSAND KEY MANAGERIAL PERSONNEL
a) Director Liable to Retire by Rotation
Mr. Varun Seth (DIN:00017552)the Whole Time Director of the Company retires byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment. The Board recommends his re-appointment.
b) Re-appointment of Mr. Chand Seth as Chairman and Managing Director of the Company
Mr. Chand Seth was re-appointed as Chairman and Managing Director of the Company w.e.f.April 012017 for a period of three years. The said tenure of his reappointment has endedon March 31st 2020. Further as Mr. Chand Seth has attained the age of 76 years it ismandatory as per section 196 of the Companies Act 2013 to get his re-appointment approvedby the members of the Company by passing the Special Resolution and also to approve hisremuneration in view of losses. Accordingly on the basis of recommendation of Nominationand Remuneration Committee and the performance evaluation the Board of Directors of the
Company in its meeting dated February 13 2020 has subject to the approval of themembers by Special Resolution at the ensuing Annual General Meeting approved there-appointment of Mr. Chand Seth as Chairman & Managing Director for further period of3 years w.e.f. 01st April 2020. Accordingly it is proposed to re-appoint Mr. Chand Sethfor such further term and on such terms & conditions as are specified in the Noticecalling 49th Annual General Meeting of the Company.
c) Re-appointment of Mr. Ramesh Mehra as Whole Time Director of the Company
The Shareholders of the Company had in their meeting held on September 29 2017re-appointed Mr. Ramesh Mehra as the Whole Time Director of the Company for a period of 3(three years) w.e.f. September 012017.Accordingly the said tenure of his re-appointmenthas ended on August 312020. As Mr. Ramesh Mehra has attained the age of 71 years it ismandatory as per section 196 of the Companies Act 2013 to get his re-appointment approvedby the members of the Company by passing the Special Resolution and also to approve hisremuneration in view of losses. Accordingly on the basis of recommendation of Nominationand Remuneration Committee and the performance evaluation the Board of Directors of theCompany in its meeting dated August 312020 has subject to the approval of the members bySpecial Resolution at the ensuing Annual General Meeting approved the re-appointment ofMr. Ramesh Mehra for such further term and on such terms & conditions as are specifiedin the Notice calling 49th Annual General Meeting of the Company.
d) Number of meetings of the Board of Directors
The Board of Directors of the Company met Six (6) times during the financial year2019-20.
|15th May 2019 || |
|14th August 2019 |
|10th June 2019 ||14th November 2019 |
|23rd July 2019 ||13th February 2020 |
The independent directors also held separate meeting to review the performance ofNon-independent Directors and overall performance of the board.
There was no change in the composition of the Board of Directors of the Company duringthe financial year 2019-20.
e) Changes in Key Managerial Personnel
During the year Ms. Priyanka has resigned from the Company as Company Secretary &Compliance Officer of the Company and the Board has appointed Mr. Vineet Gupta as theCompany Secretary & Compliance Officer of the Company w.e.f. 10th June 2019.
f) Declaration by Independent Directors
The Company has received declarations from the Independent Directors confirming thatthey meetthe criteria of independence as prescribed under Section 149(6) of the CompaniesAct 2013 and in compliance with the provisions of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
In the opinion of the Board Independent Directors fulfill the conditions specified inthe Act Rules made thereunder and Listing Regulations and possess relevant expertise& experience and are independent of the management. However the online proficiencyself assessment test is yet to be given by the Independent Directors.
g) Board Evaluation
The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual Directorspursuant to Companies Act 2013 andRegulation 17(10) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.
The evaluation framework for assessing the performance of Directors was on the basis ofcriteria such as the Board composition and structure effectiveness of board processesinformation and functioning etc.The Nomination and Remuneration Committee had evaluatedthe performance of individual Directors on the basis of criteria such as the contributionof the individual Director to the board and committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc.A member of the Board does not
participate in the discussion of his/her evaluation. Performance evaluation ofIndependent Directors was carried out by the entire board excluding the IndependentDirector being evaluated.
A meeting of the Independent Directorswas also held toreview the performance of theNon-Independent Directors the Board as a whole and the Chairperson on the parameters ofeffectivenessand to assess the quality quantity and timeliness of the flow of informationbetween the Management and the Board.
h) Nomination and Remuneration Policy
Your Company has adopted a Nomination and Remuneration Policy as required by Section178 of the Companies Act 2013 which provides for the appointment/selection of DirectorsKey Managerial Personnel &other employees board diversity and theirremunerationincluding criteria for determining qualifications positiveattributesindependence of a director etc. Your Company affirmed that the remuneration paid is as perthe Remuneration Policy for Directors Key Managerial Personnel andother Employees. Thedetails of such policy can be viewed on the Company's website www.pearlpet.net.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees or Investments if any covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.
RISK MANAGEMENT AND INTERNAL FINANCIAL CONTROL
The Company has put in place a policy and mechanism to identify assess monitor andmitigate various risks to key business objectives. Major risks identified by thebusinesses and functions are systematically addressed through mitigating actions oncontinuing basis.There are no risks which in the opinion of the Board threaten theexistence of the Company.The Policy is available on the Company's website atwww.pearlpet.net.Your Company has an Internal Financial ControlSystem which was operatingeffectively for ensuring the orderly and efficient conduct of its business thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
INSIDER TRADING CODE
In compliance with the Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015 (the PIT Regulations') on prevention of insider tradingyour Company has put in place the Code of Conduct for regulating monitoring and reportingof trading by Designated Persons and immediate relatives of Designated Persons in linewith SEBI(PIT) Regulations as amended from time to time. Your Company has also
policy for determination of legitimate purposes in line with the PIT (Amendment)Regulations 2018 as a part of Code of practices and procedures of fair disclosures ofunpublished price sensitive information.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Your Company is committed to highest standards of ethical moral and legal businessconduct. The Company has adopted a policy on whistle blower and vigil mechanism forproviding a framework to promote responsible and secure whistle blowing. It protectsDirectors and employees wishing to raise a concern about serious irregularities within theCompany. The Policy is available on the Company's website at www.pearlpet.net.
During FY 2019-20 no complaint was received. Further no individual was denied accessto the Audit Committee for reporting concerns if any.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL ACT) 2013
The Company has put in place a policy on prevention of Sexual Harassment in line withthe requirement of Sexual Harassment of Women atWorkplace (Prevention Prohibition &Redressal) Act 2013 and has already constituted the Internal Complaints Committee atdifferent levels. All employees (Permanent Contractual Temporary Trainees) are coveredunder this policy. The Company has not received any complaint of sexual harassment duringthe financial year 2019-20.
PARTICULARS OF EMPLOYEES AND REMUNERATION
The Disclosure required under Section 197(12) of the Act read with the Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedas Annexure I' and forms an integral part of this Report. A statement comprising thenames of top 10 employees and other details in terms of remuneration drawn in terms ofRule 5(2)& (3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 forms an integral part of this annual report but the said statement is notbeing sent alongwith this annual report to the members of the Company in line with theprovisions of Section 136 of the Act. Members who are interested in obtaining theseparticulars may write to the Company Secretary at the Registered Office of the Companyonany working day of the Company up to the date of the ensuing Annual General Meeting.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
Particulars in respect of Conservation of Energy Technology absorption and ForeignExchange earnings and outgo as required under section 134 (3)(m) of the
Companies Act 2013 read with the rules there under are provided inAnnexure-II'to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors of the Company to the best of their knowledge and beliefconfirm that:
I. In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
II. 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 as atMarch 31 2020and of the profit andloss of the Company for that period;
III. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
IV. The Directors have prepared the annual accounts on a going concern basis;
V. The Directors have laid down internal financial controls which were followed by theCompany and such internal financial controls are adequate and were operating effectively;and
VI. The directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems were adequate and operating effectively.
a) Statutory Auditors
Statutory Auditors and Auditor's Report
The shareholders of the Company at 46thAGM held onSeptember 29 2017 had appointed M/s.Sehgal Mehta & Co.Chartered Accountants (ICAI Registration No-003330N) as theStatutory Auditors of theCompany for a term of 5 years subject to ratification by membersat every AGM if required under the provisions of the Companies Act 2013. However theCompanies Amendment Act 2017 has removed the requirement ofratification of statutoryauditors and accordingly they holdtheir office till the conclusion of Annual GeneralMeeting tobe held in 2022.
b) Secretarial Auditor
Your Company has appointedMs. Rashmi Sahni (Certificate of PracticeNo. 10493)Practicing Company Secretary as the Secretarial Auditor to conduct an audit of theSecretarial records for the financial year 2019-20.
Explanations or comments by the Board on every qualification reservation or adverseremark or disclaimer made:
I. Statutory Auditor's Report
There are no qualifications reservations or adverse remarks or disclaimers made byStatutory Auditors in their report. There are no frauds reported in the reports of theAuditors as mentioned under sub-section (12) of Section 143 of the Act.
II. Secretarial Auditor's Report
The Secretarial Audit Reportdoes not contain any qualifications reservations oradverse remarks or declaimer.A Report of Secretarial Auditisprovided inAnnexure-III'tothis report.
c) Internal Auditor
Nikhil Goel & Associates (Firm Registration No. 020934C) Chartered Accountants hasbeen appointed as an Internal Auditor of the Company to conduct an internal audit of thefunctions and activities of the Company for financial year 2019-20 in terms of Section138 of the Companies Act 2013.
d) Cost Auditor
The provisions regarding maintenance of Cost Records and conducting the Cost Audit asprescribed under section 148 of the Companies Act 2013 are not applicable to the Company.
e) Compliance with the Institute of Company Secretaries of India ("ICSI")Secretarial Standards
The relevant Secretarial Standards issued by the ICSI related to the Board Meetings andGeneral Meetings have been complied with by the Company.
f) Statutory Compliances
The Board periodically reviews the mechanism put in place by themanagement to ensurethe compliances with Laws and Regulations asmay be applicable to the Company as well asthe steps taken by theCompany to rectify the instances of non-compliances if any.
RELATED PARTY TRANSACTIONS
During the year there were no transactions with related parties which were not atarm's length and not in the ordinary course of business as per the provisions of section188 of the Companies Act 2013 or materially significant or which were in conflict withthe interests of the Company and that require an approval of the Company's shareholders interms of the Companies Act or SEBI Listing Regulations.Accordingly the disclosure of thetransactions in Form AOC-2 is not applicable to your Company.
All Related Party Transactions are placed before the Audit Committee and the Board forreview and approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are of a foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted are placed before the Audit Committee and theBoard of Directors for their review and approval on a quarterly basis. The detailed policyon Related Party Transactions is available on the website of the Company atwww.pearlpet.net. The details regarding Related Party Transactions are contained in theNotes to Financial Statements.
Pursuant to sec 92(3) of the Companies Act 2013 read with Rule 12 of the Companies(Management and Administration) Rules 2014 the extract of Annual Return in form MGT-9 isattached as Annexure-'IV' to this report and also placed on the website of the Company atwww.pearlpet.net.
CORPORATE GOVERNANCE REPORT
A Separate report on Corporate Governance alongwith certificate from Rashmi SahniCompany Secretaries confirming compliance with the requirement of Corporate Governance asstipulated under SEBI (LODR) Regulations 2015 forms an integral part of the AnnualReport and is attached as Annexure-'V'.
Statements in this report particularly those which relate to Management Discussion& Analysis describing the Company's objectives projections estimates andexpectations may constitute 'forward looking statements' within the meaning of applicablelaws and regulations. Actual results may differ materially from those either expressed orimplied.
The Board of Directors would like to express their sincere appreciation for theassistance and co-operation received from the financialinstitutions banks Governmentauthorities customers vendors and members during the year under review. The Boards ofDirectorsalso wish to place on record its deep sense of appreciation for the committedservices by the Company's executives staff and workers.
Last but not least your Directors wish to place on record their warm appreciation toyou for your continuous support and encouragement.
For and on behalf of the Board of Directors
| ||Sd/- |
| ||Chand Seth |
|Place: New Delhi Chairman & Managing Director |
|Date: November 112020 ||DIN: 00002944 |