| Dear Members,
The Directors are pleased to present the Seventeenth Annual Report of
the Company alongwith the Audited Statement of Accounts for the year
ended March 31, 2011.
FINANCIAL HIGHLIGHTS
Key aspects of the financial performance of the Company for the year
ended March 31, 2011 are tabulated below:
(Amount in Rs '000)
Particulars For the Year Ended For the Year Ended
March 31, 2011 March 31, 2010
Net Sales 1,050,971 1,395,418
Other Income 37,341 20,792
Total Income 1,088,312 1,416,210
Total Expenditure 1,144,426 1,445,311
Profit/(Loss) before
Depreciation & Tax (56,114) (29,101)
- Exceptional/
Extra-ordinary Items - 18,492
- Depreciation 48,983 48,582
- Tax Expense 10 26 Net
Profit/(Loss) after
Depreciation &
Tax (105,107) (59,217)
PUBLIC DEPOSITS
During the year under review, the Company has not accepted any public
deposit under Section 58A and 58AA of the Companies Act, 1956 read with
the Companies (Acceptance of Deposits) Rules, 1975. Hence, there is no
outstanding amount as on the Balance Sheet date.
BOARD OF DIRECTORS
The composition of the Board of Directors of the Company is governed by
the provisions of Companies Act, 1956 (the 'Act'), the Articles of
Associations of the Company and satisfies the requirement as envisaged
in the Listing Agreement entered into with the Stock Exchanges.
However, during the year, there has been a change in the compostion of
the Board of Directors of the Company and details with respect to such
change are as follows:
(a) Appointment
Mr. Harish Kumar Midha was appointed as an Additional Director of the
Company with effect from May 30, 2011, in accordance with the
provisions of Section 260 of the Act, read with Article 96 of the
Articles of Association of the Company and holds office till the date
of the Annual General Meeting of the Company scheduled to be held on
September 30, 2011.
The requisite notice has been received from a member pursuant to
Section 257 of the Act, proposing the candidature of Mr. Harish Kumar
Midha as a Director of the Company. Necessary resolution for his
appointment as a Non-Executive and Independent Director forms part of
the notice of the Annual General Meeting of the Company.
(b) Re-appointment
In terms of section 256 of the Act, read with Article 110 of the
Articles of Association of the Company, Mr. B.B. Mathur, Director,
retires by rotation and being eligible offers himself for
re-appointment at the ensuing Annual General Meeting of the Company.
The brief resume and other particulars of the appointing/re-appointing
Directors, as required by Clause 49 of the Listing Agreement are
furnished in the explantory statement to the Notice calling Annual
General Meeting of the Company.
(c) Cessation
During the year under review, Mr. Chand Seth, Chairman & Managing
Director resigned from the Board with effect from February 24, 2011.
The Board of Directors considered and accepted the resignation of Mr.
Chand Seth, vide resolution passed by way of circulation on February
24, 2011. Mr. Ashok Khanna has resigned from the position of
Non-executive and Independent Director of the Company w.e.f. May 30,
2011. The Board places on record its deep sense of appreciation for the
valuable contributions of Mr. Chand Seth and Mr. Ashok Khanna to the
Company during their tenure of office.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors' Responsibility Statement, it is
hereby confirmed that:
(a) In the preparation of the Annual Accounts for the year ended on
March 31, 2011, the applicable Accounting Standards have been followed
and that no material departures are made from the same;
(b) The Accounting policies selected, have been applied consistently
and judgements and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at
March 31, 2011 and of the losses of the Company for the year ended on
that date;
(c) Proper and sufficient care have been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
(d) The Annual Accounts have been prepared on a going concern basis.
AUDITORS & AUDITORS' REPORT
The Statutory Auditors, J. C. Bhalla & Co., Chartered Accountants,
retire at the ensuing Annual General Meeting and are eligible for
reappointment. They have expressed their willingness to continue as the
Statutory Auditors, if re-appointed at the Annual General Meeting to
hold office until the conclusion of the next Annual General Meeting of
the Company.
The Company has also received a certificate from the Auditors stating
that their appointment, if made, would be within the prescribed limit
under section 224(1B) of the Companies Act, 1956 and that they are not
disqualified for such appointment within the meaning of section 226 of
the Act.
The notes to Accounts referred to in the Auditors' Report are
self-explanatory and therefore do not call for any further comments.
CLARIFICATION TO REMARKS CONTAINED IN POINT 3(x), 4(d) & 4(f) OF THE
AUDITORS REPORT
Clause 3 (x) of the Auditors' Report: During the year ended March 31,
2011, the accumulated losses of the Company have exceeded 50% of the
peak net worth of the Company during the immediately preceding four
financial years, making it a potentially Sick Industrial Company,
pursuant to the provisions of Sick Industrial Companies (Special
Provisions) Act, 1985. The Company has also incurred cash losses during
the financial year ended on that date and also in the immediately
preceding financial year. Accordingly, as per section 23 of the Sick
Industrial Companies (Special Provisions) Act, 1985, the Board of
Directors will report the fact of such erosion of net worth to the
Board for Industrial and Financial Reconstruction (BIFR) as potentially
sick company within the prescribed time i.e. within 60 days from the
date of adoption of Accounts of the Company at the ensuing Annual
General Meeting to be held on September 30, 2011.
Clause 4(d) & 4(f) of the Auditors' Report: As per the legal opinion
given by the legal advisors of the Company, the Foreign Financial
Institution (AFIC) or its Assignee, cannot enforce any outstanding
against the Company in any court of law despite existence of debt, as
the same has become a time barred debt under the provisions of the
Limitations Act, 1963. Based on the said opinion of the advisors:
Clause 4(d): The outstanding by way of secured and unsecured loan and
interest aggregating to Rs.1619.24 lacs thereon (shown as an "Erstwhile
loan barred by limitation" in the Balance Sheet of the Company for the
financial Year ended March 31, 2011) have not been reinstated, as
required under Accounting Standard (AS11) on the effects of changes in
foreign exchange rates notified in the Companies (Accounting Standards)
Rule 2006; and
Clause 4(f): The provision for interest amounting to Rs.50.54 lacs
(including interest of Rs.35.19 Lacs for the year ended March 31,
2011), in respect of the foreign currency loan of Rs.1619.24 Lacs has
not been made.
CORPORATE SOCIAL RESPONSIBILTY
We at Pearl conduct our business in a way that reflects best practices
as well as the highest standards of legal and ethical conduct. As a
socially responsive organization, your Company is committed to ensure
well being of the communities around it while recognizing interest of
all its shareholders, consumers, employees and suppliers at all times.
During the year, your Company continued with the following initiatives:
Safety: 40th National Safety week was observed from March 04, 2011 to
March 11, 2011 to sensitize employees towards safer work practices and
habits. Safety pledge was taken by all employees.
Environment: The Company organized the World Environment day on June
05, 2011, thereby promoting awareness for a clean, green and healthy
environment amongst the employees.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The particulars relating to the Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings & Outgo, as prescribed under
Section 217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosures of Particulars in Report of Board of Directors) Rules,
1988 form part of this Report as
Annexure - 'I'.
PERSONNEL
During the financial year ended March 31, 2011, none of the employees
was in receipt of remuneration exceeding limit specified under Section
217(2A) read with Companies (Particulars of Employees) Amendment Rules,
2011.
CORPORATE GOVERNANCE
Your Company believes that good Corporate Governance is the basis of
stakeholders' statisfaction and is thus, committed to attain the
highest level of transparency, accountability and compliance of law in
all facets of operations.
A detailed report on Corporate Governance along with the certificate
from the Statutory Auditors confirming compliance with the conditions
of Corporate Governance as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges, forms part of this report.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to express their gratitude for the
assistance and cooperation received from the shareholders, customers,
vendors, financial institutions, banks, Government authorities for
their consistent support and cooperation to the Company during the year
under review. Your Directors also wish to place on record their deep
sense of appreciation for the committed services by the executives,
staff and workers of the Company.
On behalf of the Board of Directors
For Pearl Engineering Polymers Limited
Place : New Delhi Harish Seth
Date : August 11, 2011 Chairman & Managing Director |