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Pearl Polymers Directors Report, Pearl Polymers Reports by Directors

Pearl Polymers

BSE: 523260|NSE: PEARLPOLY|ISIN: INE844A01013|SECTOR: Plastics
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Directors Report Year End : Mar '16    Mar 15


The Directors are pleased to present the 45th Annual Report together with the Audited Accounts for the financial year ended 31 March, 2016.


The Company''s financial performance for the year under review along with previous year''s figures is given below :


Financial Year 2015-16

Financial Year 2014-15

Gross Sales



Less: Excise Duty



Net Sales



Other Income



Total Income



Total Expenditure



Profit Before tax and Exceptional items (PBT)



Tax Expenses

Current tax



Deferred T ax



Profit after Taxation




During the year under review, the Company''s PBT (Profit before Tax and Exceptional Items) is Rs. (39.21) Lakhs from Rs. (191.22) Lakhs in financial year 2014-15. The Gross Sales reflects a marginal decline due to sharp decline in the international prices. The improvement in operating margin has helped the Company to earn Profit (after tax) of Rs. 46.40 Lakhs for the year against a corresponding loss of Rs. 250.65 Lakhs in the previous year.

In order to improve the performance, the Company continues its focus on conversion cost efficiencies, improving product quality and developing capabilities for servicing the stringent requirements of customers.


The Reserves and Surplus of the Company as on 31 March, 2016 stood at Rs. 3602.13 Lakhs. No amount is proposed to be transferred to Reserves during the year.


The Board has not proposed any dividend for the financial year ended 31 March, 2016, with a perspective to strengthen financial position of your company and increase value to the shareholders investment. Such a measure eventually will nurture and nourish shareholders wealth.


The Authorized Share Capital of the Company is Rs. 5000 Lakhs. The issued, subscribed & paid up capital of the Company was Rs. 1682.69 Lakhs as on 31 March, 2016 consisting of Rs. 16834932 Equity Shares of Rs. 10/- each


The Company has no Holding, Subsidiary, Associate or Joint Venture Company.


a) Director Liable to Retire by Rotation

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Ramesh Mehra (DIN No. 00003334) Whole Time Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-app° i nt me nt. (Rs. in Lakhs)

The details of Director being recommended for reappointment as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are contained in the accompanying Notice convening the ensuing Annual General Meeting of the Company.

b) Number of meetings of the Board of Directors

During the financial year 2015-2016, the Board of Directors of the Company, met Four (4) times on 27 May, 2015, 12 August, 2015, 9 November, 2015, and 9 February, 2016.

The intervening gap between the Meetings was within the period prescribed under Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with the erstwhile Listing Agreement.

Further, a separate Meeting of the Independent Directors of the Company was also held on 12 August, 2015, as prescribed under Schedule IV to the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

There was no change under the composition of the Board of Directors of the Company during the financial year 2015-16.

c) Changes in Key Managerial Personnel

Pursuant to the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, following persons are acting as Key Managerial Personnel of the Company as on 31 March, 2016:

Mr. Chand Seth Chairman & Managing Director

Mr. Varun Seth Whole Time Director

Mr. Ramesh Mehra Whole Time Director

Mr. Rajesh Mehra Chief Financial Officer

Ms. Shilpa Verma Company Secretary

During the year, there has been no change in the Key Managerial Personnel of the Company.

d) Declaration by Independent Director(s)

All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules

e) Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015.

The performance of the Board was evaluated on the basis of criteria such as the board composition and structure, effectiveness of Board processes, participation in assessment of annual operating plan, risks etc. Using appropriate criteria, the performance of the various Committees was separately evaluated by the Board. In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman were evaluated, taking into account the views of executive directors and non-executive directors. For Board evaluation the basic parameters which were considered are as achievement against key performance objectives, attendance at meetings, time devoted for the Company, contribution in the Board process etc.

f) Nomination and Remuneration Policy

Your Board has adopted a Nomination and Remuneration Policy as required by Section 178 of the Companies Act, 2013. The Policy provides for the appointment and removal of Directors, Key Managerial Personnel and other employees and their remuneration. The terms of reference of the Nomination and Remuneration Committee are given in the Report on Corporate Governance under the section “Nomination & Remuneration Committee”.


During the financial year ended 31 March, 2016, the Company has not granted any Loan, Guarantee as required under section 186 of the Companies Act, 2013.

The particulars of Investment made by the Company, as required under Section 186 of the Companies Act, 2013 are furnished under Note No. 13 of Notes to Financial Statement and forms part of this Report.


All related party transactions that were entered into during the financial Year 2015-16 were at an arm''s length basis and were in the ordinary course of business. Hence, there are no transactions to be reported in Form AOC- 2. There were no materially significant related party transactions made by the Company that would have required members'' approval under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All Related Party Transactions are placed before the Audit Committee. The policy on Related Party Transactions as adopted by the Board is uploaded on the Company''s website.

Details of Related Party Transaction for the financial year 2015-16 are mentioned in Note no. 40 to 43 of Notes to Financial Statement for the financial year 2015-16.


Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as prescribed under SEBI (Listing of Obligations and Disclosure Requirements) Regulation 2015 with the Stock Exchanges. A separate Report on Management Discussion and Analysis is enclosed as part of this Report.

The Company has obtained a certificate from a Statutory Auditors of the Company confirming compliance of the conditions of Corporate Governance as stipulated in Para E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Clause 49 of the erstwhile Listing Agreement. The Certificate is attached as Annexure-I forming part of this Directors'' Report.


The risk management process has been established across the organization which facilitates identification, assessment and formulation of mitigation plans for risks that affect the achievement of Company''s objectives. It is embedded across all the major functions and businesses and aligned to the Company''s vision and goals. The risks are identified, evaluated and mitigated at the business and Enterprise level.

The business risks, which are reviewed based on impact and likelihood, are presented to the Senior Management for review at periodic intervals. The Enterprise risks presented are reviewed by the Audit Committee and Board on a periodic basis.


The Company has a Vigil Mechanism/ Whistle Blower Policy to deal with instances of fraud, unethical behavior, mismanagement etc. The Policy provides a mechanism for employees of the Company and other persons dealing with the Company to report to the Chairman of the Audit Committee any instance of unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct. No person has been denied access to the Audit Committee in this regard. The Policy is uploaded on the

Company''s website.


The Company has implemented a Policy for prevention of Sexual Harassment at workplace. This inter alia provides a mechanism for the resolution, settlement or prosecution of acts or instances of Sexual Harassment at work and ensures that all employees are treated with respect and dignity. During the year no complaint was received by the Company.


Your Company has always recognized that human relation play a significant role in the development of the skills of employee and improvement of Organizational performance.

The Company organized various employee welfare and get together programmes during the year to foster a culture of engagement amongst employees. As on 31 March, 2016 the employee strength of your Company is 506.


In terms of the provisions of Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return for the Financial Year 31 March, 2016 in Form MGT-9 is given in Annexure-II to this Report.


The Company has an Internal Control Framework which is commensurate with the size, scale and complexity of its operations. This framework ensures adequate safeguards and processes to address the evolving business requirements. Key controls have been identified along with risks and mitigation processes covering major areas across all businesses and functions. Internal controls are reviewed by Internal Auditor on a periodical basis.

Strengthening of controls is a continuous and evolving process in the Company. Based on observations I findings and recommendations of the Internal Auditor, the Company undertake preventive and corrective actions which are then horizontally deployed across the organization.


Information relating to Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo as required under section 134 (3)(m) of the Companies Act, 2013, read with the rules there under, are provided in Annexure -III to this report.


During the financial year ended 31 March, 2016, none of the employee was in receipt of remuneration exceeding the limit specified under Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the members at the Registered Office of the company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Secretarial Department of the Company in advance.


During Financial Year 2015-16

a) There were no public deposits accepted by the Company pursuant to provisions of the Companies Act, 2013, including rules there under.

b) There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.


Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, the work performed by the Internal, Statutory and Secretarial Auditors including Audit of Internal Financial Controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s Internal Financial Controls were adequate and effective during the financial year 2015-16.

Pursuant to Section 134(3) (c) of the Companies Act, 2013, the Directors to the best of their knowledge hereby state and confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act,

2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the internal financial controls to be followed by the company were laid down and such internal financial controls were adequate and were operating effectively; and

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


a) Statutory Auditors

M/s. Sehgal Mehta & Co. (Firm Registration No. 003330N) Chartered Accountants, were appointed as the Statutory Auditors of the Company at the 43rd Annual General Meeting for a period of 3 years from the conclusion of that meeting till the conclusion of 46th Annual General Meeting, subject to ratification by the members at every Annual General Meeting.

As required under the provisions of Section 139 and 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, the Company has received a written confirmation from M/s. Sehgal Mehta & Co., Statutory Auditors that their appointment, if made, would be in conformity with the limits specified in the said Section.

The Board recommends the ratification of the appointment of M/s. Sehgal Mehta & Co. (Firm Registration No. 003330N), Chartered Accountants as the Statutory Auditors of the Company for the financial Year 2015-16.

Auditors'' Report

There are no qualifications, reservations or adverse remarks or disclaimers made by, Statutory Auditors, in their report. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

b) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, the Company has appointed Ms. Rashmi Sahni, (C.P. No. 25681) Company Secretaries, to undertake the Secretarial Audit of the Company for the financial year 2015-16.

Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Ms. Rashmi Sahini, Company

Secretaries, was appointed to undertake the Secretarial Audit. The Report of the Secretarial Audit in Form No. MR-3 is attached as Annexure-IV with this Report for the year ended 31 March, 2016.

There are no qualifications, reservations or adverse remarks made in the Secretarial Audit Report.

c) Internal Auditor

Ms. Anupma Halder, Chartered Accountants, has been appointed as Internal Auditor of the Company in terms of Section 138 of the Companies Act, 2013 and Rules made there under, for the financial year 201516 by the Board of Directors, upon recommendation of the Audit Committee.

d) Cost Auditor

The provisions of Cost Audit as prescribed under section 148 of the Companies Act, 2013 are not applicable to the Company.


In terms of Chapter IV of the SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015, the Management Discussion & Analysis Report on the operations of the Company is provided as a separate section and forms part of this Annual Report.


Statements in this report, particularly those which relate to Management Discussion & Analysis, describing the Company''s objectives, projections, estimates and expectations may constitute ''forward looking statements'' within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied.


The Directors would like to place on record their appreciation of the contribution made and support provided to the Company by the shareholders, employees, bankers, suppliers and customers.

For and on behalf of the Board of Directors

Chand Seth

Place: New Delhi Chairman & Managing Director

Date : August 11, 2016 DIN No: 00002944

Source : Dion Global Solutions Limited
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