ANNUAL
REPORT
2 0 1 8 - 2 0 1 9
Sustainability
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CONTENTS
Statutory Report & Financial Statement
Notice
Directors’ Report
Corporate Governance
Management Discussion and Analysis
Consolidated Financials
Independent Auditors’ Report
Consolidated Balance Sheet
Consolidated Statement of Profit & Loss
Consolidated Cash Flow Statement
Notes
Standalone Financials
Independent Auditors’ Report
Balance Sheet
Statement of Profit & Loss
Cash Flow Statement
Notes
Proxy Form
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Pearl Global Industries Limited Annual Report 2018-19 2
Notice
Registered Office: A-3, Community Centre, Naraina Industrial Area, Phase-II, New Delhi-110028
Corporate Office: Pearl Tower, Plot No.51, Sector-32, Gurugram-122001(Haryana)
Tel: 0124-4651000, Fax: 0124-4651010, Website: www.pearlglobal.com; e-mail: investor.pgil@pearlglobal.com
CIN: L74899DL1989PLC036849
NOTICE TO MEMBERS
Notice is hereby given that the 30th Annual General Meeting
of the Members of Pearl Global Industries Limited will be
held on Tuesday, September 24, 2019 at 10:30 A.M. at Sri
Sathya Sai International Centre, Pragati Vihar (Near Pragati
Vihar Hostel), Lodhi Road, New Delhi-110 003, to transact
the following businesses:
ORDINARY BUSINESS
1. To receive, consider and adopt the Standalone and
Consolidated Audited Financial Statements of the
Company for the financial year ended March 31, 2019
including the Reports of the Board of Directors and
Auditors thereon.
2. To declare dividend on Equity Shares for the financial
year ended March 31, 2019.
3. To appoint a Director in place of Mr. Deepak Seth (DIN
00003021), who retires by rotation and being eligible,
offers himself for re-appointment.
4. To appoint a Director in place of Mr. Pulkit Seth (DIN
00003044), who retires by rotation and being eligible,
offers himself for re-appointment.
SPECIAL BUSINESS
5. TO APPROVE REVISION IN REMUNERATION
OF MR. VINOD VAISH (DIN: 01945795), WHOLE-
TIME DIRECTOR
To consider and if thought fit, to pass with or without
modification(s) the following resolution as an Ordinary
Resolution:
“RESOLVED THAT in partial modification of earlier
Resolution passed by the shareholders at the 29th
Annual General Meeting of the Company held on
September 24, 2018 and pursuant to the provisions of
Sections 196, 197, and 203 read with Schedule V and
other applicable provisions, if any, of the Companies
Act, 2013 and the Companies (Appointment and
Remuneration of Managerial Personnel) Rules 2014
(including any statutory modification(s), enactment(s)
or re-enactment(s) thereof for the time being in force),
approval of members of the company be and is hereby
accorded for revision in the monthly remuneration of
Mr. Vinod Vaish, Whole-time Director of the Company
with effect from April 01, 2018, as follows:
Particulars
Basic Pay
House Rent Allowance
Special Allowance
(Amount in Rs.)
68,890/-
34,440/-
33,668/-
Provident Fund & Gratuity As per Company’s rules
He will be provided a Company maintained Car with
driver and a mobile phone for official purpose, and
also be entitled for reimbursement of actual business
expenses.
RESOLVED FURTHER THAT the Board of Directors
be and is hereby authorized to do all such acts and deeds
as may be necessary to give effect to this Resolution.”
6. TO RE-APPOINT MR. PULKIT SETH (DIN:
00003044) AS MANAGING DIRECTOR
To consider and if thought fit, to pass with or without
modification(s) the following resolution as Special
Resolution:
“RESOLVED THAT pursuant to the provisions of
Sections 196, 197, 203 read with Schedule V and
other applicable provisions, if any, of the Companies
Act, 2013 (including any statutory modification(s),
enactment(s) or re-enactment(s) thereof for the time
being in force) and Regulation 17(6)(e) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015, as amended, the approval of the members of the
Company be and is hereby accorded for re-appointment
and payment of remuneration to Mr. Pulkit Seth as
Managing Director of the Company for a period of
Three years with effect from 1st June, 2019, with liberty
to the Board of Directors to alter and vary the terms and
conditions and / or remuneration.”
RESOLVED FURTHER THAT Mr. Pulkit Seth will be
entitled for the following remuneration as Managing
Director of the Company:
Salary
Car
Mobile / Telephone
Provident Fund &
Gratuity
: Rs. 15.00 Lakh per month.
: A Company maintained car for
official purpose.
: A mobile for official purpose.
: As per Company’s rules.
Pearl Global Industries Limited Annual Report 2018-19
Notice
3
RESOLVED FURTHER THAT Mr. Pulkit Seth,
Managing Director shall not only manage the day-to-
day affairs of the Company but shall also carry out all
duties and functions subject to the supervision, control
and directions of the Board of Directors of the Company
and shall perform such other duties and services as shall
from time to time be entrusted to him by the Board of
Directors of the Company.”
RESOLVED FURTHER THAT the Board be and is
hereby authorized to take all such steps as may be
necessary, proper or expedient to give effect to this
resolution.”
7. TO RE-APPOINT MR. ANIL NAYAR
(DIN:
01390190) AS AN INDEPENDENT DIRECTOR
To consider and if thought fit, to pass with or without
modification(s) the following resolution as Special
Resolution:
“RESOLVED THAT pursuant to the provisions of
Section 149 and 152 read with Schedule IV and other
applicable provisions, if any, of the Companies Act,
2013 and Companies (Appointment and Qualification
of Directors) Rules, 2014 and the applicable provisions
of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015
(including any
statutory modification(s) or re-enactment(s) thereof, for
the time being in force), Mr. Anil Nayar (DIN 01390190),
who was appointed as an Independent Director for a
period of five years with effect from April 01, 2014, be
and is hereby re-appointed as an Independent Director
of the Company, not liable to retire by rotation, to hold
office for a second term of 5(five) consecutive years
with effect from April, 01, 2019, on the Board of the
Company.
RESOLVED FURTHER THAT the Board or any
Committee thereof, be and is hereby authorized to
do all such things, deeds, matters and acts, as may be
required to give effect to this resolution and to do all
things incidental and ancillary thereto.”
8. TO RE-APPOINT MR. CHITTRANJAN DUA (DIN:
00036080) AS AN INDEPENDENT DIRECTOR
To consider and if thought fit, to pass with or without
modification(s) the following resolution as a Special
Resolution:
“RESOLVED THAT pursuant to the provisions of
Section 149 and 152 read with Schedule IV and other
applicable provisions, if any, of the Companies Act,
2013 and Companies (Appointment and Qualification
of Directors) Rules, 2014 and the applicable provisions
of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015
(including any
statutory modification(s) or re-enactment(s) thereof,
for the time being in force), Mr. Chittranjan Dua (DIN
00036080), who was appointed as an Independent
Director for a period of five years with effect from
April 01, 2014, be and is hereby re-appointed as an
Independent Director of the Company, not liable to
retire by rotation, to hold office for a second term of
5(five) consecutive years with effect from April, 01,
2019, on the Board of the Company.
RESOLVED FURTHER THAT the Board or any
Committee thereof, be and is hereby authorized to
do all such things, deeds, matters and acts, as may be
required to give effect to this resolution and to do all
things incidental and ancillary thereto.”
9. TO RE-APPOINT MR. RAJENDRA KUMAR
ANEJA (DIN: 00731956) AS AN INDEPENDENT
DIRECTOR
To consider and if thought fit, to pass with or without
modification(s) the following resolution as a Special
Resolution:
“RESOLVED THAT pursuant to the provisions of
Section 149 and 152 read with Schedule IV and other
applicable provisions, if any, of the Companies Act,
2013 and Companies (Appointment and Qualification
of Directors) Rules, 2014 and the applicable provisions
of the SEBI (Listing Obligations and Disclosure
(including any
Requirements) Regulations, 2015
statutory modification(s) or re-enactment(s) thereof,
for the time being in force), Mr. Rajendra Kumar Aneja
(DIN 00731956), who was appointed as an Independent
Director for a period of five years with effect from
April 01, 2014, be and is hereby re-appointed as an
Independent Director of the Company, not liable to
retire by rotation, to hold office for a second term of
5(five) consecutive years with effect from April, 01,
2019, on the Board of the Company.
RESOLVED FURTHER THAT the Board or any
Committee thereof, be and is hereby authorized to
do all such things, deeds, matters and acts, as may be
required to give effect to this resolution and to do all
things incidental and ancillary thereto.”
Pearl Global Industries Limited Annual Report 2018-19
4
Notice
10. TO APPROVE RELATED PARTY TRANSACTIONS
NOTES:
FOR THE FINANCIAL YEAR 2020-2021
To consider and if thought fit, to pass with or without
modification(s) the following resolution as an Ordinary
Resolution:
“RESOLVED THAT pursuant to Section 188 and any
other applicable provisions of the Companies Act, 2013
and the rules made there under (including any statutory
modification(s) or re-enactment thereof for the time
being in force), and pursuant to the consent of the Audit
Committee and the Board of Directors, the approval of
the members of the Company be and is hereby accorded
for entering into contract or arrangement with the
related parties as defined under the Companies Act,
2013 and the Rules made there under, namely Norp Knit
Industries Limited, PT Pinnacle Apparels, Pearl Global
(HK) Limited, Pearl Global Fareast Limited, DSSP
Global Limited, PDS Multinational Fashions Limited,
Norwest Industries Limited, Pearl Grass Creations
Limited, Pearl Apparel Fashions Limited, Prudent
Fashions Limited, Vin Pearl Global Vietnam Limited,
Pearl Global F.Z.E., PGIC Investment limited, Pearl
Global (Chang Zhou) Textile Technology Co. Limited,
and Pearl Global Vietnam Co. Limited, for the financial
year 2020-21, as per details and terms & conditions as
set out under the Explanatory Statement annexed to this
Notice.”
“RESOLVED FURTHER THAT the Board of Directors
be and is hereby authorized to perform and execute all
such acts, deeds, matters and things including delegate
such authority, as may be deemed necessary, proper or
expedient to give effect to this resolution and for the
matters connected herewith or incidental hereto.”
By order of the Board of Directors
for Pearl Global Industries Limited
Place: Gurugram
Date: August 13, 2019
(Sandeep Sabharwal)
Company Secretary
1. A MEMBER ENTITLED TO ATTEND AND VOTE IS
ENTITLED TO APPOINT A PROXY TO ATTEND
AND VOTE INSTEAD OF HIMSELF/HERSELF
AND SUCH PROXY NEED NOT BE A MEMBER
OF THE COMPANY. THE PROXY FORM DULY
COMPLETED MUST REACH THE COMPANY’S
REGISTERED OFFICE ATLEAST 48 HOURS
BEFORE THE TIME OF THE MEETING.
2. The Register of Members and Share Transfer Books
of the Company will remain closed from Wednesday,
September 18, 2019 to Tuesday, September 24, 2019
(both days inclusive).
The dividend of Rs.3/- per equity share of Rs.10/- each,
as recommended by the Board of Directors of the
Company, if declared at the meeting, will be paid on or
before Wednesday, October 23, 2019 to those members:
• whose names appear as Beneficial Owners as at
the end of business hours on Tuesday, September
17, 2019 in the lists of Beneficial Owners furnished
by National Securities Depository Limited (NSDL)
and Central Depository Services (India) Limited
(CDSL) in respect of the shares held in electronic
form; and
• whose names appear as members in the Register
of Members of the Company at the end of business
hours on Tuesday, September 17, 2019.
3. The statement pursuant to Section 102 of the Companies
Act, 2013 (the Act) is annexed hereunder and forms part
of the Notice. As required under Secretarial Standard-2
and regulations 26(4) and 36(3) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 (Listing Regulations), the relevant information of
Directors is enclosed as Annexure-1.
4. Members/Proxies are requested to bring their attendance
slip along with copy of Annual Report to the Meeting
and are requested not to bring any article, briefcase,
hand bag, carry bag etc., as the same will not be allowed
to be taken inside the Auditorium for security reasons.
Further, the Company or any of its officials shall not be
responsible for their articles, bags etc., being misplaced,
stolen or damaged at the Meeting place.
5. Members/Proxies should fill the attendance slip for
attending the meeting. Members who hold shares in
dematerialized form are requested to write their Client
Pearl Global Industries Limited Annual Report 2018-19
Notice
5
ID and DP ID numbers and those hold shares in Physical
forms are requested to write their Folio Number in the
attendance slip for attending the meeting.
6.
In case of joint holders attending the meeting, only such
joint holder who is higher in the order of names will be
entitled to vote.
7. Corporate members intending to send their authorized
representative are requested to send a duly certified copy
of the Board Resolution authorizing their representatives
to attend and vote at the Annual General Meeting.
Information in respect of such unclaimed dividend
including when due for transfer to the said Fund is given
below:
Financial year ended
Rate of Dividend
Declared on the paid-up
equity share capital
Date of declaration
of Dividend
Last date for
claiming unpaid
Dividend
Due date for
transfer to IEP
Fund
31.03.2013
31.03.2014
31.03.2015
31.03.2016
31.03.2016
31.03.2017
31.03.2018
10.00% (Final)
20.00% (Final)
22.50% (Final)
25.00% (Interim)
5.00% (Final)
30.00% (Final)
20.00% (Final)
27.09.2013
26.09.2014
22.09.2015
11.03.2016
27.09.2016
28.09.2017
24.09.2018
25.10.2020
24.10.2021
20.10.2022
09.04.2023
26.10.2023
27.10.2024
23.10.2025
24.11.2020
23.11.2021
19.11.2022
08.05.2023
25.11.2023
26.11.2024
22.11.2025
Members who have not en-cashed their dividend
warrant(s) so far, are requested to make their claim to
the Company or to the Registrar and Share Transfer
Agent of the Company at Link Intime India Pvt. Limited,
Noble Heights, 1st Floor, Plot NH-2, C-1 Block LSC,
Near Savitri Market, Janakpuri, New Delhi-110058.
8. Members holding shares in dematerialised mode are
requested to intimate all changes with respect to their
bank details, mandate, nomination, power of attorney,
change of address, e-mail address, change in name etc.
to their depository participant. These changes will be
automatically reflected in the Company’s records which
will help the Company to provide efficient and better
services to the Members.
9. Members holding shares in physical form are requested
to intimate changes with respect to their bank account
(viz. name and address of the branch of the bank,
MICR code of branch, type of account and account
number), mandate, nomination, power of attorney,
change of address, e-mail address, change in name etc.
immediately to the Company.
10. Soft copy of the Annual Report for the financial year
2018-19 is being sent to all the members, whose email
IDs are registered with the Company/RTA/Depository
for communication purposes. For
Participants(s)
members who have not registered their email address,
physical copies of the Annual Report for the financial
year 2018-19 are being sent in the permitted mode.
11. NO GIFT(S) SHALL BE DISTRIBUTED AT THE
ENSUING 30TH ANNUAL GENERAL MEETING OF
YOUR COMPANY.
12. Voting through electronic means
I. In compliance with provisions of Section 108 of the
Companies Act, 2013 and Rule 20 of the Companies
(Management and Administration) Rules, 2014,
as amended from time to time and Regulation
44 of Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company is pleased to
provide to its members facility to exercise their right
to vote at the 30th Annual General Meeting (AGM)
by electronic means and the business contained
herein may be transacted through e-voting Services
provided by Central Depositary Services Limited
(CDSL):
The instructions for e-voting are as under:-
(i) The voting period begins on Friday, September
20, 2019 at 09:00 A.M. and ends on Monday,
September 23, 2019 at 05:00 P.M. During this period
shareholders’ of the Company, holding shares either
in physical form or in dematerialized form, as on the
cut-off date September 17, 2019 (record date) may
cast their vote electronically. The e-voting module
shall be disabled by CDSL for voting thereafter.
Pearl Global Industries Limited Annual Report 2018-19
6
Notice
(ii) The shareholders should log on to the e-voting
(v) Next enter the Image Verification as displayed and
website www.evotingindia.com.
Click on Login.
(iii) Click on Shareholders.
(iv) Now Enter your User ID
a. For CDSL: 16 digits beneficiary ID,
b. For NSDL: 8 Character DP ID followed by 8
Digits Client ID,
c. Members holding shares in Physical Form
should enter Folio Number registered with the
Company.
(vi) If you are holding shares in demat form and had
logged on to www.evotingindia.com and voted on
an earlier voting of any company, then your existing
password is to be used.
(vii) If you are a first time user follow the steps given
below:
For Members holding shares in Demat Form and Physical Form
PAN
DOB
Dividend
Bank
Details
Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both
demat shareholders as well as physical shareholders)
• Members who have not updated their PAN with the Company/Depository Participant are
requested to use the sequence number which is printed on Postal Ballot/Attendance Slip indicated
in the PAN field.
Enter the Date of Birth as recorded in your demat account or in the company records for the said
demat account or folio in dd/mm/yyyy format.
Enter the Dividend Bank Details as recorded in your demat account or in the company records for
the said demat account or folio.
• Please enter the DOB or Dividend Bank Details in order to login. If the details are not recorded
with the depository or company please enter the member ID/folio number in the Dividend Bank
details field as mentioned in instruction (iv).
(viii) After entering these details appropriately, click on
“SUBMIT” tab.
(ix) Members holding shares in physical form will
then directly reach the Company selection screen.
However, members holding shares in demat form
will now reach ‘Password Creation’ menu wherein
they are required to mandatorily enter their
login password in the new password field. Kindly
note that this password is to be also used by the
demat holders for voting for resolutions of any
other company on which they are eligible to vote,
provided that company opts for e-voting through
CDSL platform. It is strongly recommended not to
share your password with any other person and take
utmost care to keep your password confidential.
(x) For Members holding shares in physical form,
the details can be used only for e-voting on the
resolutions contained in this Notice.
(xi) Click on the EVSN for the relevant on which you choose to vote.
(xii) On the voting page, you will see “RESOLUTION
DESCRIPTION” and against the same the option
“YES/NO” for voting. Select the option YES or NO
as desired. The option YES implies that you assent
to the Resolution and option NO implies that you
dissent to the Resolution.
(xiii)Click on the “RESOLUTIONS FILE LINK” if you
wish to view the entire Resolution details.
(xiv) After selecting the resolution you have decided to
vote on, click on “SUBMIT”. A confirmation box
will be displayed. If you wish to confirm your vote,
click on “OK”, else to change your vote, click on
“CANCEL” and accordingly modify your vote.
(xv) Once you “CONFIRM” your vote on the resolution,
you will not be allowed to modify your vote.
(xvi) You can also take out print of the voting done by
you by clicking on “Click here to print” option on
the Voting page.
(xvii) If Demat account holder has forgotten the changed
password then Enter the User ID and the image
Pearl Global Industries Limited Annual Report 2018-19 Notice
7
verification code and click on Forgot Password &
enter the details as prompted by the system.
(xviii) Shareholder can also cast their vote using CDSL’s
mobile app m-voting available for android based
mobiles. The m-voting app can be downloaded from
Google Play Store. Please follow the instructions as
prompted by the mobile app while voting on your
mobile.
(xix) Note for Non-Individual Shareholders and
Custodians
• Non-Individual shareholders (i.e. other than
Individuals, HUF, NRI etc.) and Custodians are
required to log on to www.evotingindia.co.in
and register themselves as Corporate.
• A scanned copy of the Registration Form
bearing the stamp and sign of the entity should
be emailed to helpdesk.evoting@cdslindia.
com.
• After receiving the login details a compliance
user should be created using the admin login
and password. The compliance user would be
able to link the account(s) for which they wish
to vote on.
• The list of accounts should be mailed to
helpdesk.evoting@cdslindia.com
on
approval of the accounts they would be able to
cast their vote.
and
• A scanned copy of the Board Resolution and
Power of Attorney (POA) which they have
issued in favour of the Custodian, if any, should
be uploaded in PDF format in the system for
the scrutinizer to verify the same.
(xx) Any person, who acquires shares of the Company
and become Member of the Company after dispatch
of the Notice and holding shares as on the cut-off
date i.e September 17, 2019 may follow the same
instructions as mentioned above for e-Voting.
(xxi) In case you have any queries or issues regarding
e-voting, you may refer the Frequently Asked
Questions (“FAQs”) and e-voting manual available
at www.evotingindia.com, under help section or
write an email to helpdesk.evoting@cdslindia.com
II. Mr. Deepak Somaiya, Practicing Company Secretary
(Membership No. FCS 5845) has been appointed as
the Scrutinizer to scrutinize the e-voting process in
a fair and transparent manner.
III. The Scrutinizer shall, immediately after the
conclusion of voting at the general meeting, first
count the votes cast at the meeting, thereafter
unblock the votes cast through remote e-voting
in the presence of at least two witnesses not in the
employment of the Company and make, not later
than three days of conclusion of the meeting, a
Consolidated Scrutinizer’s Report of the total votes
cast in favour or against, if any, to the Chairman or
a person authorised by him in writing who shall
countersign the same.
IV. The Results shall be declared on or after the AGM of
the Company. The Results declared along with the
Scrutinizer’s Report shall be placed immediately on
the Company’s website www.pearlglobal.com and
on the website of CDSL and communicated to the
BSE Limited and National Stock Exchange of India
Limited simultaneously.
EXPLANATORY STATEMENT
As required by Section 102 of the Companies Act, 2013 the
following Explanatory Statement sets out the material facts
relating to the businesses under Item Nos. 5 to 10 of the
accompanying Notice.
Item No. 5:
Mr. Vinod Vaish, aged about 61 years, is a Bachelor of
Science and Long Logistics Management. He is Whole-Time
Director of the Company and heading Administration and
HR functions of the Company since 2012. He had been in
the Indian Navy for 28 years at various levels in various
capacities and has achieved in depth knowledge of all aspects
of Administration and Logistics Management. He has been
conferred President Gold Medal for overall outstanding best
officer in Naval Academy.
In view of the growth in the business activities, increased
volume of work the Nomination and Remuneration
Committee and subsequently the Board of Directors in their
meetings held on November 13, 2018, considered it just, fair
and reasonable to revise remuneration of Mr. Vinod Vaish
with effect from April 01, 2018.
Details of other Directorship/Committee Membership held
by him in other Companies are as follows:
Directorship:
Mr. Vinod Vaish holds Directorship in Pearl Apparel
Fashions Limited.
Pearl Global Industries Limited Annual Report 2018-19 8
Notice
Committee Membership:
He is Chairman of the Corporate Social Responsibility
Committee and member of Audit Committee, Stakeholders
Relationship Committee and Finance Committee of your
Company.
Shareholders’ approval is sought for variation in terms
of remuneration of Mr. Vinod Vaish. The proposed
remuneration is within the limits provided under Section
197 read with Schedule V and other applicable provisions of
the Companies Act, 2013.
Your Directors recommend the passing of the resolution at
Item no. 5 as an Ordinary Resolution.
The statement pursuant to Section II of Part II of Schedule
V of the Companies Act, 2013, is provided below Item no. 6
alongwith details of Managing Director.
None of the Directors and Key Managerial Personnel of the
Company, or their relatives, except Mr. Vinod Vaish, himself
is interested, financially or otherwise, in this Resolution.
Item No. 6:
Mr. Pulkit Seth was re-appointed as Managing Director of
the Company for a period of three years with effect from
1st June, 2016 to 31st May, 2019.
The Board of Directors in its meeting held on 28th May, 2019,
had re-appointed Mr. Pulkit Seth as Managing Director for
a further period of Three years commencing from 1st June,
2019, pursuant to the recommendation of Nomination and
Remuneration Committee with following remuneration.
The Remuneration Committee and the Board of Directors
of the Company are of the opinion that he is fit and proper
person to hold the said office and his reappointment will be
in the interest of the Company.
Salary
Car
: Rs. 15.00 Lakh per month.
: A Company maintained car
for official purpose.
Mobile / Telephone
: A mobile for official purpose.
Provident Fund & Gratuity : As per Company’s rules.
Mr. Pulkit Seth, aged about 39 years, has a Bachelor of
Business Management degree from Leonard N. Stern School
of Business, University of New York, USA. He has over
fifteen years of experience in the Apparel Industry. He has
been overseeing the domestic & overseas operations of the
Group and has played an important role in streamlining
business processes and enhancing our relationship with
leading retailers in the U.S.
Details of other Directorship (except Foreign Companies /
Bodies Corporate)/Committee Membership held by him in
other Companies are as follows:
S.No. Name of the Company
Designation
1.
2.
Pearl Global Kaushal Vikas Limited
PS Arts Private Limited
Director
Director
He is the Member of Stakeholders Relationship Committee,
Corporate Social Responsibility Committee, and Chairman
of Finance Committee of the Company.
He does not hold any committee membership in other
Companies.
Shareholders’ approval is sought for re-appointment of Mr.
Pulkit Seth as Managing Director of the Company. The re-
appointment and Remuneration payable to Mr. Pulkit Seth
is within the limits provided under Section 196, 197 and 203
read with Schedule V and other applicable provisions of the
Companies Act, 2013.
The terms as set out in the resolution and explanatory
statements may be treated as a written memorandum setting
out terms of re-appointment of Mr. Pulkit Seth under
Section 190 of the Companies, Act, 2013.
None of the Directors or Key Managerial Personnel of the
Company or their relatives except Mr. Pulkit Seth, himself
and Mr. Deepak Seth, Mrs. Shifalli Seth, and Mrs. Payel Seth,
being relatives, are concerned or interested, financially or
otherwise, in the resolution set out at the Item No. 6 of the
Notice.
Your Directors recommend the passing of the Resolution at
Item no.6 as Special Resolution.
Copies of the resolutions passed by the Board in respect of
the above may be inspected at the Corporate Office of your
Company between 11:00 a.m. and 1:00 p.m. on all working
days except Saturday, Sunday and holidays.
Pearl Global Industries Limited Annual Report 2018-19
Notice
THE STATEMENT PURSUANT TO SECTION II OF PART II OF SCHEDULE V OF THE COMPANIES ACT, 2013
9
I. GENERAL INFORMATION:
1. Nature of industry
2. Date or
expected date
of
of
commencement
commercial production
3.
4.
5.
date
In case of new companies,
expected
of
commencement of activities
as per project approved
institutions
by financial
appearing in the prospectus
Financial performance
based on given indicators
Foreign investments or
collaborators, if any
Pearl Global Industries Limited is engaged in manufacture and exports of Readymade
Garments. Garment and Textile Industries plays a major role in the economy of the
country. Indian garment and textile industry is the second largest after agriculture in
the country in terms of employment generation. Indian industry currently generates
employment to more than 45 million people directly and 60 million people indirectly.
The Industry contributes approximately 5% to India’s gross domestic product (GDP)
and contributes to nearly 30% of the total exports.
The Company has large installed capacity for apparel manufacturing with state-of-the-
art machinery and work process for supplying high quality products to Customers
and with the continuous up-gradation of manufacturing facilities, the Company shall
record further increase in Turnover and Profits in future years.
The date of commencement of commercial production (in erstwhile Pearl Global
Limited, since merged with the Company) was 7th December, 1988.
Not Applicable
The gross income of the Company stood at Rs.866.56 Crore. The Profit before Tax for
the year is Rs.31.85 Crore as against Rs.6.77 Crore last year. The Company managed to
have PAT of Rs.21.50 Crore.
The Company has no foreign collaboration.
Apart from holding 33,14,537 equity shares of Rs.10/- each of your Company by 148
NRI/FPI/ Members/Folios representing 15.30% of the total paid up Capital of the
Company as on 31st March, 2019, there is no other foreign investment in the Company.
II. INFORMATION ABOUT THE APPOINTEE:
Information
Mr. Pulkit Seth
Mr. Vinod Vaish
1.
Background Details
Mr. Pulkit Seth, aged about 39 years, has a
Bachelor of Business Management degree
from Leonard N. Stern School of Business,
University of New York, USA. He has over
fifteen years of experience in the Apparel
Industry. He has been overseeing the domestic
& overseas operations of the Group and has
played an important role in streamlining
business processes and enhancing our
relationship with leading retailers in the U.S.
Mr. Vinod Vaish, aged about 61 years,
is a Bachelor of Science and Long
Logistics Management. He had been
in the Indian Navy for 28 years at
various levels in various capacities
and has achieved in depth knowledge
of all aspects of Administration and
Logistics Management.
2.
Past Remuneration
Rs. 10.00 Lakh Per Month
Rs. 1,24,072/- Per Month
Pearl Global Industries Limited Annual Report 2018-19 10
Notice
3.
Recognition or Awards
NIL
4.
Job Profile and their
Suitability
Mr. Pulkit Seth, Managing Director shall
manage the day-to-day affairs of the Company
and shall also carry out all duties and
functions subject to the supervision, control
and directions of the Board of Directors of
the Company and shall perform such other
duties and services as shall from time to time
be entrusted to him by the Board of Directors
of the Company.”
President Gold Medal for overall
outstanding best officer in Naval
Academy.
is
Mr. Vinod Vaish
heading
Administration and HR functions of
the Company and shall perform such
other duties and services as shall from
time to time be entrusted to him by the
Board of Directors of the Company.
5.
Remuneration Proposed
Salary: Rs. 15.00 Lakh per month.
Basic Pay: Rs.68,890/- Per Month
Car : A Company maintained car for official
purpose
Mobile / Telephone: A mobile for official
purpose.
Provident Fund & Gratuity: As per
Company’s rules.
House Rent Allowance: Rs. 34,440/-
Per Month
Special Allowance: Rs.33,668/- Per
Month
Provident Fund and Gratuity: As per
Company’s rules
Company maintained
Car
A
with Driver
for official purpose,
Mobile Phone and also entitled for
reimbursement of actual expenses for
business of the Company.
6.
Comparative Remuneration
to
profile with
industry,
the
size
company profile of position
and person
respect
of
7.
Pecuniary
relationship
directly or indirectly with
the company or with the
managerial personnel, if any
Arvind Limited
Period: 2018-19
Kitex Garments Ltd
Period:- 2018-19
Turnover: Rs.6,539.81 Crore
Turnover: Rs.629.26 Crore
Managerial Personnel:
Managerial Personnel:
Chairman and Managing Director:
Chairman & Managing Director
Annual Managerial Remuneration:Rs.7.22
Crore
Annual Managerial Remuneration:
Rs.6.85 Crore
to
Relating
Relationship,
Pecuniary
information provided under Past and
proposed Remuneration hereinabove.
Mr. Pulkit Seth is related to Mr. Deepak
Seth, and Mrs. Shifalli Seth, Directors of the
Company. He holds 6947621 Equity Shares
(32.07%) of the Company.
Pecuniary Relationship other than
is
Remuneration proposed above,
NIL. No relationship with Managerial
Personnel. He does not hold any Share
in the Company.
Pearl Global Industries Limited Annual Report 2018-19 Notice
III. OTHER INFORMATION:
1. Reasons of loss or inadequate
profits
2.
taken or proposed
for
undertaken
Steps
to
be
improvements
3. Expected
increase
in
productivity and profits in
measurable terms
11
The Readymade Garments Export Industry had yet another tough year where
profitability was impaired due to higher cost of production coupled with pressure on
margins due to recession.
Your Company realises that the Buyers can only be attracted through a proper blend
of cost, speed / logistics, plant efficiency, supply chain, compliance, reliability and
relationship.
The Company is laying special focus on technological up-gradation, lesser breakdown
time, use labour saving devices, training of managers, supervisors and operators.
Besides, the Company is also outsourcing manufacturing from low cost destinations.
Maintaining quality, reducing cost with better productivity will help the Company to
operate profitably.
The Sales Turnover of your Company during the year 2018-19 was Rs.866.56 Crore.
The Company‘s PAT stood at Rs.21.50 Crore during 2018-19.
Your Company has since identified and prioritized its targets and has been gearing up
to face the perceived challenges and further enhance its presence in the International
Markets. Barring under seen circumstances, your company’s profitability during
2019-20 should increase by 20% and productivity by 15% to 20%.
IV. DISCLOSURES:
Disclosures in the Board of Directors’ report under the heading ‘Corporate Governance’ included in Annual Report
2018-19: The requisite details of remuneration etc. of Directors are included in the Corporate Governance Report,
forming part of the Annual Report of FY 2018-19 of the Company. The Company has no policy for stock option,
pension, and performance linked incentives.
Item No. 7:
Mr. Anil Nayar was appointed as an Independent Director of
the Company in the first term of 5 (five) consecutive years,
with effect from 1st April, 2014. The Board on the basis of
performance evaluation and as per the recommendation
of the Nomination and Remuneration Committee at their
meetings held on 12th February, 2019, after considering
his background, experience and contributions made by
him during his tenure, and to continue avail his services
as an Independent Director, re-appointed Mr. Nayar, as an
Independent Director in the second term of five consecutive
years with effect from 1st April, 2019, subject to approval of
members in the forthcoming Annual General Meeting. Your
Directors considers that the continued association of Mr.
Nayar would be beneficial to the Company.
Accordingly, it is proposed to re-appoint Mr. Anil Nayar as
an Independent Director of the Company, not liable to retire
by rotation, for a second term of the 5(five) consecutive
years with effect from 1st April, 2019, on the Board of the
Company. The Company has also received a notice in
writing from a Member under Section 160 of the Companies
Act, 2013, proposing his candidature for appointment as
Director of the Company.
Mr. Anil Nayar is not disqualified from being appointed as a
Director in terms of Section 164 of the Act, and has given his
consent to act as Independent Director.
The Company has also received declaration from Mr.
Anil Nayar that he meets the criteria of independence as
prescribed both under Section 149(6) of the Companies Act,
2013 and under SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. Further, in the opinion
of the Board, Mr. Nayar fulfils the conditions specified
in the Companies Act, 2013, the Rules thereunder and
SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015 for reappointment as an Independent
Director and that he is independent of the management of
the Company.
Details of Mr. Nayar, are provided in “Annexure-1 to
the Notice”. He shall be paid remuneration by way of
fee for attending meetings of the Board or for any other
purpose whatsoever as may be decided by the Board and
reimbursement of expenses for participation in the Board.
Copy of the draft letter for appointment of Mr. Nayar as an
Independent Director setting out the terms and conditions
is available for inspection by members at the Registered
Office of the Company.
Pearl Global Industries Limited Annual Report 2018-19 12
Notice
None of the Directors or Key Managerial Personnel of
the Company or their relatives except Mr. Anil Nayar is
concerned or interested, financially or otherwise, in the
resolution set out at the Item No. 7 of the Notice.
This disclosure may be regarded as an appropriate disclosure
under the Act and Listing Regulations.
The Board recommends the Special Resolution set out at
Item no. 7 of the Notice for the approval of the Members.
Item No. 8:
Mr. Chittranjan Dua was appointed as an Independent
Director of the Company in the first term of 5 (five)
consecutive years, with effect from 1st April, 2014. The
Board on the basis of performance evaluation and as per
the recommendation of the Nomination and Remuneration
Committee at their meetings held on 12th February, 2019, after
considering his background, experience and contributions
made by him during his tenure, and to continue avail his
services as an Independent Director, re-appointed Mr.
Dua, as an Independent Director in the second term of five
consecutive years with effect from 1st April, 2019, subject to
approval of members in the forthcoming Annual General
Meeting. Your Directors considers that the continued
association of Mr. Dua would be beneficial to the Company.
Accordingly, it is proposed to re-appoint Mr. Chittranjan
Dua as an Independent Director of the Company, not
liable to retire by rotation, for a second term of the 5(five)
consecutive years with effect from 1st April, 2019, on the
Board of the Company. The Company has also received a
notice in writing from a Member under Section 160 of
the Companies Act, 2013, proposing his candidature for
appointment as Director of the Company.
Mr. Chittranjan Dua is not disqualified from being appointed
as a Director in terms of Section 164 of the Act, and has
given his consent to act as Independent Director.
The Company has also received declaration from Mr.
Chittranjan Dua that he meets the criteria of independence
as prescribed both under Section 149(6) of the Companies
Act, 2013 (“Act”) and under SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (“Listing
Regulations”). Further, in the opinion of the Board, Mr.
Dua fulfils the conditions specified in the Act, the Rules
thereunder and the Listing Regulations for reappointment
as an Independent Director.
Details of Mr. Dua, are provided in “Annexure-1 to the
Notice”. He shall be paid remuneration by way of fee
for attending meetings of the Board or for any other
purpose whatsoever as may be decided by the Board and
reimbursement of expenses for participation in the Board.
Copy of the draft letter for appointment of Mr. Dua as an
Independent Director setting out the terms and conditions
is available for inspection by members at the Registered
Office of the Company.
None of the Directors or Key Managerial Personnel of the
Company or their relatives except Mr. Chittranjan Dua
is concerned or interested, financially or otherwise, in the
resolution set out at the Item No. 8 of the Notice.
This disclosure may be regarded as an appropriate disclosure
under the Act and Listing Regulations.
The Board recommends the Special Resolution set out at
Item no. 8 of the Notice for the approval of the Members.
Item No. 9:
Mr. Rajendra Kumar Aneja was appointed as an
Independent Director of the Company in the first term of
5 (five) consecutive years, with effect from 1st April, 2014.
The Board on the basis of performance evaluation and as per
the recommendation of the Nomination and Remuneration
Committee at their meetings held on 12th February,
2019, after considering his background, experience and
contributions made by him during his tenure, and to continue
avail his services as an Independent Director, re-appointed
Mr. Aneja, as an Independent Director in the second
term of five consecutive years with effect from 1st April,
2019, subject to approval of members in the forthcoming
Annual General Meeting. Your Directors considers that the
continued association of Mr. Aneja would be beneficial to
the Company. Accordingly, it is proposed to re-appoint Mr.
Rajendra Kumar Aneja as an Independent Director of the
Company, not liable to retire by rotation, for a second term
of the 5(five) consecutive years with effect from 1st April,
2019, on the Board of the Company. The Company has also
received a notice in writing from a Member under Section
160 of the Companies Act, 2013, proposing his candidature
for appointment as Director of the Company.
Mr. Rajendra Kumar Aneja is not disqualified from being
appointed as a Director in terms of Section 164 of the Act,
and has given his consent to act as Independent Director.
The Company has also received declaration from Mr.
Rajendra Kumar Aneja that he meets the criteria of
independence as prescribed both under Section 149(6) of
the Companies Act, 2013 (“Act”) and under SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 (“Listing Regulations”). Further, in the opinion of
Pearl Global Industries Limited Annual Report 2018-19 13
None of the Directors or Key Managerial Personnel of the
Company or their relatives except Mr. Rajendra Kumar
Aneja is concerned or interested, financially or otherwise, in
the resolution set out at the Item No. 9 of the Notice.
This disclosure may be regarded as an appropriate disclosure
under the Act and Listing Regulations.
The Board recommends the Special Resolution set out at
Item no. 9 of the Notice for the approval of the Members.
Notice
the Board, Mr. Aneja fulfils the conditions specified in the
Act, the Rules thereunder and the Listing Regulations for
reappointment as an Independent Director.
Details of Mr. Aneja, are provided in “Annexure-1 to
the Notice”. He shall be paid remuneration by way of
fee for attending meetings of the Board or for any other
purpose whatsoever as may be decided by the Board and
reimbursement of expenses for participation in the Board.
Copy of the draft letter for appointment of Mr. Aneja as an
Independent Director setting out the terms and conditions
is available for inspection by members at the Registered
Office of the Company.
Item No. 10: Related Party transactions:
The Audit Committee and Board of Directors of the Company have, in their meetings held on August 13, 2019, approved a
proposal for entering into the following related party transactions for the financial year 2020-21:
Name of Related Party
Sl.
No.
Nature of
relationship
1. Norp Knit Industries
Subsidiary
Limited
Name of the Director
or Key Managerial
Personnel who is
related, if any
Mr. Deepak Seth
Mr. Pulkit Seth
2.
PT Pinnacle Apparels
Step down
subsidiary
Mr. Deepak Seth
Mr. Pulkit Seth
Nature of Transactions
Amount
(Rs. in
Crore)
Purchase of Goods
Sale of Goods
SAP Facilities Charges
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
Purchase of Goods
Sale of Goods
SAP Facilities Charges
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
300.00
25.00
0.25
12.00
1.00
15.00
1.00
0.10
2.00
2.00
10.00
250.00
1.50
7.50
30.00
3.
Pear Global (HK)
Limited
Wholly
owned
subsidiary
Mr. Deepak Seth
Mr. Pulkit Seth
Mr. Abhishek Goyal
Purchase of Goods
Sale of Goods
SAP Facilities Charges
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
Pearl Global Industries Limited Annual Report 2018-19 14
Notice
Name of Related Party
Sl.
No.
Nature of
relationship
4.
Pearl Global Fareast
Limited
Wholly
owned
subsidiary
Name of the Director
or Key Managerial
Personnel who is
related, if any
Mr. Deepak Seth
Mr. Pulkit Seth
5.
DSSP Global Limited
Step down
subsidiary
Mr. Deepak Seth
Mr. Pulkit Seth
Nature of Transactions
Amount
(Rs. in
Crore)
Purchase of Goods
Sale of Goods
SAP Facilities Charges
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
Purchase of Goods
Sale of Goods
SAP Facilities Charges
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
Sale of Samples
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
Purchase of Goods
Sale of Goods
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
SAP Facilities Charges
10.00
60.00
0.25
2.50
1.00
10.00
25.00
0.10
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
6.00
6.00
1.00
1.00
0.25
5.00
5.00
0.25
0.25
Mr. Deepak Seth
6.
7.
PDS Multinational
Fashions Limited
Norwest Industries
Limited
E n t e r p r i s e
over KMP has
s i g n i f i c a n t
influence
Enterprise
over
KMP has
significant
influence
Mr. Deepak Seth
Sale of Goods
8.
Pearl Grass Creations
Limited
Step down
subsidiary
Mr. Deepak Seth
Mr. Pulkit Seth
Mrs. Shifalli Seth
9.
Pearl Apparel Fashions
Limited
Wholly
owned
subsidiary
Mr. Vinod Vaish
Purchase of Goods
Sale of Goods
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
Pearl Global Industries Limited Annual Report 2018-19 Notice
Name of Related Party
Sl.
No.
Nature of
relationship
Nature of Transactions
Name of the Director
or Key Managerial
Personnel who is
related, if any
10.
Prudent Fashions
Limited
Step down
subsidiary
Mr. Deepak Seth
Mr. Pulkit Seth
11.
Vin Pearl Global
Vietnam Limited
Step down
subsidiary
Mr. Deepak Seth
Mr. Pulkit Seth
Sale of Goods
Sale of Samples
SAP Facilities Charges
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
Sale of Goods
Sale of Samples
SAP Facilities Charges
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
12.
Pearl Global F.Z.E
Step down
subsidiary
Mr. Deepak Seth
Sale of Goods
13.
PGIC Investment
Limited
Step down
subsidiary
Mr. Deepak Seth
Mr. Pulkit Seth
14.
Pearl Global (Chang
Zhou) Textile
Technology Co. Ltd.
Step down
subsidiary
-
Sale of Samples
SAP Facilities Charges
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
Sale of Goods
Sale of Samples
SAP Facilities Charges
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
Sale of Goods
Sale of Samples
SAP Facilities Charges
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
15
Amount
(Rs. in
Crore)
1.00
1.00
0.10
1.00
1.00
5.00
1.00
0.25
1.00
1.00
1.00
1.00
0.10
1.00
1.00
1.00
1.00
0.10
1.00
1.00
1.00
1.00
0.20
1.00
1.00
Pearl Global Industries Limited Annual Report 2018-19 16
Notice
Name of Related Party
Sl.
No.
Nature of
relationship
15.
Pearl Global Vietnam
Co. Limited
Step down
subsidiary
Nature of Transactions
Name of the Director
or Key Managerial
Personnel who is
related, if any
Mr. Pulkit Seth
Purchase of Goods
Sale of Goods
SAP Facilities Charges
Expenses incurred by them on our
behalf
Expenses paid by us on their
behalf
Amount
(Rs. in
Crore)
10.00
10.00
0.20
1.00
1.00
Mr. Deepak Seth, Chairman, Mr. Pulkit Seth, Managing
Director, Mrs. Shifalli Seth, Whole-Time Director, and Mrs.
Payel Seth are relatives.
None of the Directors or Key Managerial Personnel or their
relatives except as disclosed above are interested in this
resolution.
Mr. Pulkit Seth is member of Norp Knit Industries Limited,
PT Pinnacle Apparels and Prudent Fashions Limited.
Mr. Deepak Seth is member of Norp Knit Industries Limited
and Prudent Fashions Limited.
By order of the Board of Directors
for Pearl Global Industries Limited
Your Directors recommend the passing of the resolution at
Item no.10 as an Ordinary Resolution.
Place: Gurugram
Date: August 13, 2019
(Sandeep Sabharwal)
Company Secretary
Pearl Global Industries Limited Annual Report 2018-19 Notice
17
Annexure-1 to the Notice:
DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE
FORTHCOMING ANNUAL GENERAL MEETING
[Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard-2]
Item no. 3: Mr. Deepak Seth (DIN: 00003021)
Age
Qualifications
Experience
expertise
(including
in specific functional area) / Brief
resume
Date of first appointment on the
Board
Shareholding in the Company as on
31st March, 2019
Directorships
memberships
companies as on 31st March, 2019
Committee
other
in
and
held
:
68 years
: B.A (Economics) and Master of Business Administration (MBA)
: He is founder of Pearl Group and has over four decades of experience in garment
industry. He is an active member of the Apparel Export Promotion Council of
India (“AEPC”) and held the post of “Vice Chairman” of the Eastern Region of
AEPC for 2 years. He is also an executive member of the Apparel Exporters &
Manufacturers Association (AEMA) and was awarded the “Udyog Ratna” Award
by the Haryana Govt. in 2006 for his entrepreneurial skills. His knowledge of the
business environment and vast experience in general management has been an
asset to the Company.
22nd March, 1994
:
:
28,62,145 Equity Shares
: Directorship (excluding Foreign
Companies/Bodies Corporate)
Membership in committees
Pearl Global Industries Limited Member of Nomination and Remuneration
Committee
PDS Multinational
Limited
Fashions
Member of Audit Committee
Stakeholders Relationship Committee
and
Pearl Global Kaushal Vikas
Limited
PS Arts Private Limited
Digital Ecom Techno Private
Limited
Technocian Fashions Pvt. Ltd.
-
-
-
-
Inter-se
between
relationships
Directors, Manager and other Key
Managerial Personnel
: Father of Mr. Pulkit Seth, Managing Director and
Father in-Law of Mrs. Shifalli Seth, Whole-Time Director
No. of Board Meetings attended
during the Financial year 2018-19
:
1 of 4
and
Terms
appointment
conditions of
re-
: Mr. Deepak Seth has been appointed as Non-Executive Director, liable to retire
by rotation.
Details of last drawn remuneration
and proposed remuneration
: No remuneration being paid or proposed to be paid except sitting fee of
Rs.10,000/- for attending per Board Meeting.
Mr. Deepak Seth, the retiring Director, being eligible, offers himself for re-appointment. The Board of Directors of your
Company propose to appoint Mr. Deepak Seth as a Director, liable to retire by rotation and therefore this Resolution is
recommended for approval of the Shareholders of the Company.
Pearl Global Industries Limited Annual Report 2018-19 18
Notice
None of the Directors & Key Managerial Personnel, except Mr. Deepak Seth, himself, Mr. Pulkit Seth, Mrs. Shifalli Seth and
Mrs. Payel Seth, being relatives, are interested, whether directly or indirectly, in this Resolution.
Item no.4&6: Mr. Pulkit Seth (DIN: 00003044)
Age
Qualifications
: 39 years
: Bachelor degree in Business Management from Leonard N. Stern School of
Business, University of New York, USA.
Experience
expertise
(including
in specific functional area) / Brief
resume
: He has over fifteen years of experience in the Apparel Industry. He has been
overseeing the domestic & overseas operations of the Group and has played
an important role in streamlining business processes and enhancing our
relationship with leading retailers in the U.S.
Date of first appointment on the
Board
: 1st November, 2004
Shareholding in the Company as on
31st March, 2019
Directorships
memberships
companies as on 31st March, 2019
Committee
other
in
and
held
between
relationships
Inter-se
Directors, Manager and other Key
Managerial Personnel
: 6947621 Equity Shares
: Directorship (excluding Foreign
Companies/Bodies Corporate)
Membership in committees
Pearl Global Industries Limited Member of Stakeholders Relationship
Committee; CSR Committee and
Chairman of Finance Committee
-
-
PS Arts Private Limited
Pearl Global Kaushal Vikas
Limited
: Son of Mr. Deepak Seth; and
Husband of Mrs. Shifalli Seth, Whole-Time Director
No. of Board Meetings attended
during the Financial year 2018-19
: 2 of 4
Terms
and
appointment
conditions of
re-
: As per the resolution at Item No.4 of the Notice convening this meeting read with
explanatory statement thereto, Mr. Pulkit Seth is proposed to be re-appointed as
a Director, liable to retire by rotation.
Details of last drawn remuneration
and proposed remuneration
Further, as per the resolution at Item No. 6 of the Notice convening this meeting
read with explanatory statement thereto, Mr. Pulkit Seth is proposed to be re-
appointed as Managing Director for a period of (3) Three years w.e.f. 1st June,
2019.
: Please refer explanatory statement of this Notice for details of remuneration of
Mr. Pulkit Seth.
Mr. Pulkit Seth, the retiring Director, being eligible, offers himself for re-appointment. The Board of Directors of your
Company propose to appoint Mr. Pulkit Seth as a Director, liable to retire by rotation and therefore this Resolution is
recommended for approval of the Shareholders of the Company.
None of the Directors or Key Managerial Personnel of the Company or their relatives except Mr. Pulkit Seth, himself and Mr.
Deepak Seth, Mrs. Shifalli Seth, and Mrs. Payel Seth, being relatives, are concerned or interested, financially or otherwise, in
the resolution set out at the Item No. 4&6 of the Notice.
Pearl Global Industries Limited Annual Report 2018-19 Notice
19
Item no.7: Mr. Anil Nayar (DIN: 01390190)
Age
Qualifications
expertise
(including
Experience
in specific functional area) / Brief
resume
Date of first appointment on the
Board
: 68 years
: B. Tech in Mechanical Engineering from IIT, Kanpur and MBA from IIM,
Ahmadabad.
: He has over 36 years of experience in the area of Corporate Strategy, Corporate
Restructurings, Structured Finance and HR Initiatives.
: 19th January, 2012
Shareholding in the Company as on
31st March, 2019
: NIL
Directorships
memberships
companies as on 31st March, 2019
Committee
other
in
and
held
:
Directorship (excluding Bodies
Corporate)
Pearl Global Industries Limited
Membership in committees
Chairman of Audit Committee;
Member of Nomination and
Remuneration Committee; Stakeholders
Relationship Committee; and CSR
Committee.
Inter-se
between
relationships
Directors, Manager and other Key
Managerial Personnel
: Not related to any Director/ Key Managerial Personnel.
No. of Board Meetings attended
during the Financial year 2018-19
:
3 of 4
Terms
and
appointment
conditions of
re-
: As per the resolution at Item No. 7 of the Notice convening this meeting
read with explanatory statement thereto, Mr. Anil Nayar is proposed to be
re-appointed as an Independent Director.
Details of last drawn remuneration
and proposed remuneration
: Last Drawn Remuneration: Sitting Fees of Rs.10,000/- per meeting of the Board.
Proposed Remuneration: Sitting Fees of Rs. 10,000/- per meeting of the Board.
Item no.8: Mr. Chittranjan Dua (DIN: 00036080)
Age
Qualifications
Experience
expertise
(including
in specific functional area) / Brief
resume
Date of first appointment on the
Board
:
67 years
: Master’s Degree in Economics from Delhi School of Economics and LLB.
: He has been a practicing advocate and has vast experience in Corporate Laws,
Merger & Amalgamation, Public Issues, Corporate Structuring, Infrastructure
Projects, and International Trade & Taxation.
12th September, 2006
:
Shareholding in the Company as on
31st March, 2019
: NIL
Pearl Global Industries Limited Annual Report 2018-19 20
Notice
Directorships
memberships
companies as on 31st March, 2019
Committee
other
in
and
held
:
Directorship (excluding Bodies
Corporate)
Membership in committees
Cabot India Limited
Gillette India Limited
Wimco Limited
TVS Motor Company Limited
Tractors and Farm Equipment
Limited
Amit Investment Private Limited
Associated Corporate Consultants
India Private Limited
Inapex Private Limited
Linde Engineering India Private
Limited
McCann Erickson (India) Private
Limited
PBE India Private Limited
Result Services Private Limited
Sella Synergy India Private Limited
-
Chairman of Audit Committee; Member
and Remuneration
of Nomination
Committee; Cash
Investment
Committee and Risk Management
Committee.
and
-
Chairman of Stakeholders Relationship
Committee and Member of Audit
Management
Committee;
Risk
and
Committee;
Remuneration Committee.
and Nomination
Member of Audit Committee.
-
-
-
Member of CSR Committee
-
-
-
-
Inter-se
between
relationships
Directors, Manager and other Key
Managerial Personnel
: Not related to any Director/ Key Managerial Personnel.
No. of Board Meetings attended
during the Financial year 2018-19
:
3 of 4
Terms
and
appointment
conditions of
re-
Details of last drawn remuneration
and proposed remuneration
: As per the resolution at Item No. 8 of the Notice convening this meeting read
with explanatory statement thereto, Mr. Chittranjan Dua is proposed to be re-
appointed as an Independent Director.
: Last Drawn Remuneration: Sitting Fees of Rs.10,000/- per meeting of the
Board.
Proposed Remuneration: Sitting Fees of Rs. 10,000/- per meeting of the Board.
Pearl Global Industries Limited Annual Report 2018-19 Notice
21
Item no.9: Mr. Rajendra Kumar Aneja (DIN: 00731956)
Age
Qualifications
expertise
(including
Experience
in specific functional area) / Brief
resume
Date of first appointment on the
Board
:
69 years
: Master’s degree in Management Studies with an Advanced Management
Programme at Harvard Business School.
: He has more than 35 years of robust business management experience in
multinational and family businesses in Asia, Latin America and the Middle
East.
He has also been the CEO of a large retail business in the Middle East, handling
about 75 large retail outlets in fashion, cosmetics and electronics goods in the
Middle East, Far East countries.
12th September, 2006
:
Shareholding in the Company as on
31st March, 2019
Directorships
memberships
companies as on 31st March, 2019
Committee
other
in
and
held
Inter-se
between
relationships
Directors, Manager and other Key
Managerial Personnel
: NIL
:
Directorship (excluding Bodies
Corporate)
Pearl Global Industries Limited
Membership in committees
Member of Audit Committee;
Nomination and Remuneration
Committee; and Stakeholders
Relationship Committee
Aneja Management Consultants
Private Limited
Aneja Assurance Private Limited
Aneja Advisory Private Limited
-
-
-
: Not related to any Director/ Key Managerial Personnel.
No. of Board Meetings attended
during the Financial year 2018-19
:
1 of 4
Terms
and
appointment
conditions of
re-
: As per the resolution at Item No. 9 of the Notice convening this meeting read
with explanatory statement thereto, Mr. Rajendra Kumar Aneja is proposed to
be re-appointed as an Independent Director.
Details of last drawn remuneration
and proposed remuneration
: Last Drawn Remuneration: Sitting Fees of Rs.10,000/- per meeting of the Board.
Proposed Remuneration: Sitting Fees of Rs. 10,000/- per meeting of the Board.
Pearl Global Industries Limited Annual Report 2018-19 22
Directors’ Report
To the Members,
Your Directors are pleased to present the 30th Annual Report and Audited Financial Statements for the financial year ended
31st March 2019, together with the Auditors’ Report thereon.
WORKING RESULTS OF THE COMPANY (STANDALONE)
Particulars
Income from operations
Other Income
Profit before Tax
Provision for Tax
Profit After Tax
Other comprehensive income
Total comprehensive income
Transfer to General Reserves
WORKING RESULTS OF THE COMPANY (CONSOLIDATED)
Particulars
Income from operations
Other Income
Profit before Tax
Provision for Tax
Profit After Tax
Other comprehensive income
Total comprehensive income
2018-19
840.26
26.30
31.85
10.35
21.50
1.32
22.82
----
(Rs. in Crore)
2017-18
710.77
48.02
6.77
4.11
2.66
(0.42)
2.24
----
2018-19
1,757.50
(Rs. in Crore)
2017-18
1,496.04
33.93
82.94
15.83
67.11
14.73
81.84
47.56
32.40
9.31
23.09
(1.70)
21.39
STATE OF THE AFFAIRS OF THE COMPANY
During the year, your Company’s consolidated income from
operations was Rs.1,757.50 as against Rs.1,496.04 Crore in
the previous year and Net Profit Rs.67.11 Crore as against
Net Profit Rs. 23.09 Crore in the previous year.
The income from operations for the year under review for
the Company on Standalone basis was Rs.840.26 Crore as
compared to Rs.710.77 Crore in the previous year and Net
Profit Rs.21.50 Crore as compared to Net Profit Rs.2.66
Crore in the previous year.
Pearl Global Industries Limited (PGIL) is one of the
India’s largest listed garment exporters, manufacturing
from multiple sourcing regions within India and countries
within South Asia. A preferred long-term vendor to most
leading global brands, we are amongst the leading player
in our Industry. Our mainstay business is to create value
from competitively manufacturing and exporting fashion
garments to leading global brands. We have also ventured
into e–retail through established digital channels and our
own e-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) across men, women and
kids wear segments. We have a well diversified and de-
risked manufacturing base across India, Indonesia and
Bangladesh. We have a total capacity to manufacture
around 5.5 million garments per month (including own and
outsourced facilities).Our revenue structure is primarily
export based, with a major contribution coming from
exports to the United States. We provide total supply chain
solutions to customers-value retailers and high end fashion
brand, retails in the United States and Europe. Our business
model enables us to offer superior quality products across
various countries, catering to all kinds of consumers. Our
esteemed global clientele includes premium retailers in USA
and Europe, including GAP, Banana Republic, Kohl’s, Macy,
Ralph Lauren, Tom Tailor and Next among others.
Pearl Global Industries Limited Annual Report 2018-19 Directors’ Report
23
We strive to be the most preferred vendor to the top global
apparel brands and be ranked amongst the top garment
manufacturers in the world, in terms of quality, service
standards and ultimately-customers satisfaction, keeping in
line with our broader vision.
We are geographically well positioned to produce from the
most cost effective supply bases in Asia, keeping us highly
competitive and relevant to our customers. We expect to
maintain and step up our profitability from superior value
added products and meticulous management of our costs
and processes.
DIVIDEND
The Board of Directors recommend a dividend Rs.3/- per
equity share of Rs.10/- each for the year 2018-19 amounting
to Rs.6,49,91,811/- (exclusive of tax on dividend).The
dividend payout is subject to approval of the members at the
forthcoming Annual General Meeting.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act,
2013 and the Articles of Association of your Company, Mr.
Deepak Seth and Mr. Pulkit Seth, Directors, would retire by
rotation at the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment.
The Board of Directors of your Company met four times
on May 29, 2018, August 09, 2018, November 13, 2018, and
February 12, 2019 during the financial year 2018-19.
DIRECTORS’ IDENTIFICATION NUMBER (DIN)
The following are the Directors Identification Number
(DIN) of your Directors:
The Company has received necessary declaration from each
Independent Director of the Company that the Independent
Directors meet with the criteria of their Independence as
laid down in Section 149(6) of the Companies Act, 2013
and Regulation 25(8) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
The Nomination and Remuneration Committee and the
Board of Directors in their meetings held on February 12,
2019, have appointed Mr. Raghav Garg as Chief Financial
Officer of the Company in place of Mr. Raj Kumar Chawla,
who was resigned from the office of CFO of the Company
with effect from January 25, 2019.
Mr. Raghav Garg, aged about 36 years, is a qualified Chartered
Accountant and having more than 12 years experience
in the field of finance functions including maintenance &
finalization of accounts, financial planning, budgeting,
resource mobilization, working capital management, project
monitoring, building internal financial controls, etc. Prior
to joining your Company he had been working as Vice-
President- Finance & Accounts with Trident Limited.
The Nomination and Remuneration Committee and the
Board of Directors in their meetings held on 28th May, 2019,
have approved re-appointment Mr. Pulkit Seth as Managing
Director of the Company for a further period of Three years
with effect from 1st June, 2019. Necessary Resolution for
re-appointment of Mr. Pulkit Seth as Managing Director is
proposed in the Notice calling 30th Annual General Meeting
for approval of the Shareholders.
The Nomination and Remuneration Policy of the Company
is annexed herewith as Annexure-I with this report.
BOARD EVALUATION
Mr. Deepak Seth
Mr. Pulkit Seth
Mrs.Shifalli Seth
Mr. Anil Nayar
-
-
-
-
00003021 Mr. Chittranjan Dua
00003044 Mr. Abhishek Goyal
-
-
00036080
01928855
01388430 Mr. Rajendra Kumar Aneja -
00731956
01390190 Mr. Vinod Vaish
-
01945795
The Board of Directors has carried out an annual evaluation
of its own performance, committees and individual Directors
pursuant to the provisions of the Companies Act, 2013 and
Rules made there under.
The Board of Directors have in its meeting held on February
12, 2019, re-appointed Mr. Chittranjan Dua, Mr. Anil Nayar
and Mr. Rajendra Kumar Aneja as Independent Directors
in the second term of five years with effect from April 01,
2019, after evaluation of their performance and considering
the recommendation of Nomination and Remuneration
Committee. Re-appointment of above Directors are subject
to approval of shareholders in the ensuing Annual General
Meeting. Necessary Resolutions for their re-appointment as
Independent Director are proposed in the Notice calling 30th
Annual General Meeting for approval of the Shareholders.
The performance of the Board was evaluated by the
Board after seeking inputs from all the Directors on the
basis of the criteria such as the Board composition and
structure, effectiveness of Board processes, information and
functioning, etc.
The performance of the committees was evaluated by the
Board after seeking inputs from the committee members
on the basis of the criteria such as the composition of
committees, effectiveness of committee meetings, etc.
Pearl Global Industries Limited Annual Report 2018-19 24
Directors’ Report
The Board and the Nomination and Remuneration
Committee reviewed the performance of the individual
Directors on the basis of the criteria such as the contribution
of the individual Director to the Board and committee
meetings like preparedness on the issues to be discussed,
meaningful and constructive contribution and inputs in
meetings, etc. In addition, the Chairman was also evaluated
on the key aspects of his role.
In a separate meeting of independent Directors, performance
of non-independent Directors, performance of the Board as
a whole and performance of the Chairman was evaluated,
taking into account the views of Executive Directors and
Non-Executive Directors. The same was discussed in the
Board meeting that followed the meeting of the Independent
Directors, at which the performance of the Board, its
committees and individual Directors was also discussed.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal control system
commensurate with the size, scale and complexity of
operations. During the year, such controls were tested and
no reportable material weakness in the design or operation
was observed.
AUDIT COMMITTEE
The Audit Committee comprises Three Non-executive
Independent 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.
VIGIL MECHANISM
The Company has set up a Vigil Mechanism, which also
incorporates a whistle blower policy in terms of Listing
Agreement/Regulations made by the SEBI. Protected
disclosures can be made by a whistle blower through an
e-mail, or dedicated telephone no. or a letter through to
the Vigilance Officer or to the Chairman of the Audit
Committee. The policy on vigil mechanism and whistle
blower policy may be accessed on the Company’s website at
the link: http://pearlglobal.com/investors/policy
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Committee of the
Company has formulated a Corporate Social Responsibility
Policy (CSR Policy) indicating the activities to be undertaken
by the Company, which has 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,
promoting health care and promoting arts and culture.
The prescribed CSR amount for the financial year 2018-19
was Rs.16.39 Lakh. However, the Company had earmarked
Rs.22.76 Lakh for spending under CSR activities for the
financial year 2018-19, which has been fully utilised.
The Annual Report on CSR activities is annexed herewith
as Annexure-II.
SUBSIDIARY COMPANIES
During the year under review, no Company has become
or ceased subsidiary, Joint Venture or Associate of the
Company.
Pursuant to Section 129(3) of the Companies Act, 2013, a
statement containing the salient features of the financial
statements of the subsidiary companies is attached to the
Financial Statements in Form AOC-1.The Company will
make available the said financial statements and related
detailed information of the subsidiary companies upon the
request by any member of the Company. These financial
statements will also be kept open for inspection by any
member at the Registered Office of the Company.
The financial statements of the Company, consolidated
financial statements along with the relevant documents
and separate audited accounts in respect of subsidiaries, are
available on the website of the Company.
The Policy of determining material subsidiaries as approved
may be accessed on the Company’s website at http://
pearlglobal.com/investors/policy
STATUTORY AUDITORS’ REPORT
The Auditors’ Reports (Consolidated & Standalone) for the
financial year ended 31st March, 2019 do not contain any
qualification, reservation or adverse remark. The Auditors’
Reports are enclosed with the financial statements in this
Annual Report.
STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Companies
Act, 2013, M/s B.R. Gupta & Co. Chartered Accountants,
New Delhi (Regn. No. 008352N) were appointed as
Statutory Auditors of the Company, by the members of the
Company in their 28th Annual General Meeting held on 28th
September, 2017, for a period of five years, with effect from
financial year 2017-18.
Pearl Global Industries Limited Annual Report 2018-19 Directors’ Report
25
SECRETARIAL AUDITOR
RISK MANAGEMENT
The Board has appointed Mr. Deepak Somaiya, Practising
Company Secretary, proprietor of M/s. Deepak Somaiya &
Co., to conduct Secretarial Audit for the financial year 2018-
19. The Secretarial Audit Report for the financial year 2018-
19 is annexed herewith as Annexure-III. The Secretarial
Audit Report does not contain any qualification, reservation
or adverse remark.
INTERNAL AUDITOR
The Board has appointed M/s. Narula & Gupta, Chartered
Accountants, New Delhi (FRN 013532N), as Internal
Auditor for the financial year 2018-19.
EXTRACTS OF ANNUAL RETURN
The Company has implemented procedures and policies in
place for risk management including 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, with respect to Directors
Responsibility Statement, your Directors state that:
a)
in the preparation of the annual accounts for the
financial year ended 31st March 2019, the applicable
accounting standards have been followed along with
proper explanation relating to material departures.
There are no material departures from the same;
Pursuant to the provision of Section 92(3) of the
thereunder,
Companies Act, 2013, and rules made
as amended, an Extract of Annual Return of the Company
is annexed herewith as Annexure-IV to this Report
and also available on
the Company’s website at
http://www.pearlglobal.com/investors/annual-return
b) the Directors have 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 31st March, 2019 and of
the profit and loss of the Company for that period;
RELATED PARTY TRANSACTIONS
All related party transactions entered during the financial
year were in ordinary course of the business and on arm’s
length basis. Details of material related party transaction
entered during the financial year by the Company is annexed
in Form AOC-2 as Annexure-V.
Members may refer to Note no.47 to the standalone financial
statements which sets out related party disclosures pursuant
to Ind AS-24.
A disclosure on related party, as required under Regulation
34(3) read with Schedule V of SEBI (Listing Obligations and
Disclosures Requirements) Regulations, 2015 is annexed as
Annexure-VI.
PARTICULARS OF LOANS, GUARANTEES AND
INVESTMENTS
Particulars of Loans, guarantees and investments covered
under Section 186 of the Companies Act, 2013 is annexed
as Annexure-VII.
FIXED DEPOSITS
Your Company has not accepted any Fixed Deposits
from Public or Shareholders during the year, nor has any
unclaimed or unpaid deposits at the end of the financial year.
c) the Directors have taken proper and sufficient care for
the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a
‘going concern’ basis;
e)
f)
the Directors have laid down internal financial controls
to be followed by the Company and that such internal
financial controls are adequate and are operating
effectively; and
the Directors have devised proper systems to ensure
compliance with the provisions of all applicable laws and
that such systems are adequate and operating effectively.
LISTING
The shares of your Company are listed at BSE Limited and
National Stock Exchange of India Limited, Mumbai. The
listing fees to the Stock Exchanges for the year 2018-19 have
been paid.
REGISTRAR AND SHARE TRANSFER AGENT
Link Intime India Pvt. Ltd is Company’s Registrars and Share
Transfer Agent (RTA) as common agency both for physical
and demat shares, as required under Securities Contract
Pearl Global Industries Limited Annual Report 2018-19 26
Directors’ Report
(Regulation) Act, 1956. The detail of RTA forms part of the
Corporate Governance Report.
REPORT ON SEXUAL HARASSMENT-INTERNAL
COMPLAINTS COMMITTEE
CORPORATE GOVERNANCE
Report on Corporate Governance along with the certificate
of the Auditors, confirming compliance of conditions of
Corporate Governance as stipulated under Schedule V of
the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, forms part of the Annual report.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of operations, performance and future
outlook of the Company is given separately under the head
“Management Discussion and Analysis”.
PARTICULARS OF EMPLOYEES AND RELATED
DISCLOSURES
Pursuant to the provisions of The Sexual Harassment of
Women at the Workplace (Prevention, Prohibition and
Redressal) Act, 2013, Internal Complaints Committee
has been set up to redress complaints received regarding
sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy. There
were no complaints received during the financial year
2018-19.
SECRETARIAL STANDARDS
The Company has complied with applicable Secretarial
Standards issued by the Institute of the Company Secretaries
of India.
ACKNOWLEDGEMENT
The details as required under Section 197(12) of the
Companies Act, 2013 read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014, as amended from time to time, is annexed as
Annexure-VIII to this report.
The Directors of your Company are thankful to Bankers,
Business Associates, Customers, Members, Government
Bodies & Regulators for the continuous support received
from them and place on record their appreciation for the
sincere services rendered by the employees at all level.
For and on behalf of the Board
for PEARL GLOBAL INDUSTRIES LIMITED
(VINOD VAISH)
Whole-Time Director
DIN 01945795
Place: Gurugram
Date: May 28, 2019
(PULKIT SETH)
Managing Director
DIN 00003044
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 time
to time, is annexed as Annexure- IX to this report.
CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS
AND OUTGO
The particulars relating
to conservation of energy,
technology absorption, foreign exchange earnings and
outgo, as required under Section 134(3)(m) is annexed as
Annexure-X to this report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS
PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS IMPACTING THE GOING CONCERN
STATUS AND COMPANY’S OPERATIONS IN FUTURE
No significant and material orders were passed by the
regulators or courts or tribunals impacting the going
concern status and Company’s operations in future.
Pearl Global Industries Limited Annual Report 2018-19 Annexure-I to the Directors’ Report
27
NOMINATION AND REMUNERATION POLICY
2.4.4. Company Secretary; and
1. OBJECTIVE
2.4.5. such other officer as may be prescribed.
The Nomination and Remuneration Committee
and this Policy shall be in compliance with Section
178 of the Companies Act, 2013 read along with the
applicable rules thereto and requirements of Securities
and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015. The Key
Objectives of the Committee would be:
1.1. To guide the Board in relation to appointment and
removal of Directors, Key Managerial Personnel
and Senior Management.
1.2. To evaluate the performance of the members of
the Board and provide necessary report to the
Board for further evaluation of the Board.
2.5. Senior Management means Senior Management
means personnel of the company who are
members of its core management team excluding
the Board of Directors.
3. Policy for appointment and removal of Director,
KMP and Senior Management
3.1. Appointment criteria and qualifications:
a) The Committee shall identify and ascertain
the integrity, qualification, expertise and
experience of the person for appointment
as Director, KMP or at Senior Management
level and recommend to the Board his / her
appointment.
1.3. To recommend to the Board on Remuneration
the Directors, Key Managerial
payable
Personnel and Senior Management.
to
1.4. To provide to Key Managerial Personnel and
Senior Management reward linked directly to their
effort, performance, dedication and achievement
relating to the Company’s operations.
1.5. To retain, motivate and promote talent and
to ensure long term sustainability of talented
managerial persons and create competitive
advantage.
1.6. To devise a policy on Board diversity
1.7. To develop a succession plan for the Board and to
regularly review the plan;
2. DEFINITIONS
2.1. Act means the Companies Act, 2013 and Rules
framed thereunder, as amended from time to
time.
2.2. Board means Board of Directors of the Company.
2.3. Directors mean Directors of the Company.
2.4. Key Managerial Personnel means
2.4.1. Chief Executive Officer or the Managing Director
or the Manager;
2.4.2. Whole-time director;
2.4.3. Chief Financial Officer;
b) A
should
person
possess
adequate
qualification, expertise and experience
for the position he / she is considered for
appointment. The Committee has discretion
to decide whether qualification, expertise and
experience possessed by a person is sufficient
/ satisfactory for the concerned position.
c) The Company shall not appoint or continue
the employment of any person as Whole-time
Director who has attained the age of seventy
years. Provided that the term of the person
holding this position may be extended beyond
the age of seventy years with the approval of
shareholders by passing a special resolution
based on the explanatory statement annexed
to the notice for such motion indicating the
justification for extension of appointment
beyond seventy years.
3.2. Term / Tenure
a) Managing Director/Whole-time Director:
The Company shall appoint or re-appoint any
person as its Executive Chairman, Managing
Director or Executive Director for a term
not exceeding five years at a time. No re-
appointment shall be made earlier than one
year before the expiry of term.
b) Independent Director:
- An Independent Director shall hold
Pearl Global Industries Limited Annual Report 2018-19 28
Annexure-I to the Directors’ Report
office for a term up to five consecutive
years on the Board of the Company
and will be eligible for re-appointment
on passing of a special resolution by
the Company and disclosure of such
appointment in the Board’s report.
- No Independent Director shall hold
office for more than two consecutive
terms, but such Independent Director
shall be eligible for appointment after
expiry of three years of ceasing to
become an
Independent Director.
Provided that an Independent Director
shall not, during the said period of three
years, be appointed in or be associated
with the Company in any other capacity,
either directly or indirectly. However, if
a person who has already served as an
Independent Director for 5 years or more
in the Company as on October 1, 2014
or such other date as may be determined
by the Committee as per regulatory
requirement; he / she shall be eligible for
appointment for one more term of 5 years
only.
- At
the
time of appointment of
Independent Director
it should be
ensured that number of Boards on
which such Independent Director serves
is restricted to seven listed companies
as an Independent Director and three
listed companies as an Independent
Director in case such person is serving
as a Whole-time Director of a listed
company or such other number as may
be prescribed under the Act.
3.3. Evaluation
The Committee shall carry out evaluation of
performance of every Director, KMP and Senior
Management Personnel at
interval
(yearly).
regular
3.4. Removal
Due to reasons for any disqualification mentioned
in the Act or under any other applicable Act,
rules and regulations thereunder, the Committee
may recommend, to the Board with reasons
recorded in writing, removal of a Director, KMP
or Senior Management Personnel subject to the
provisions and compliance of the said Act, rules
and regulations.
3.5. Retirement
The KMP and Senior Management Personnel
shall retire as per the applicable provisions of the
Act and the prevailing policy of the Company.
The Board will have the discretion to retain the
Director, KMP, Senior Management Personnel
in the same position/ remuneration or otherwise
even after attaining the retirement age, for the
benefit of the Company.
4. Policy relating to the Remuneration for the Whole-
time Director, KMP and Senior Management
Personnel
4.1. General:
a) The
/
remuneration
compensation
/
commission etc. to the Whole-time Director,
KMP and Senior Management Personnel
will be determined by the Committee or as
per policies framed by the committee. The
remuneration / compensation / commission
etc. shall be subject to the prior/post approval
of the shareholders of the Company and
Central Government, wherever required.
structure
b) Increments to the existing remuneration/
compensation
be
recommended by the Committee to the
Board which should be within the slabs
approved by the Shareholders in the case of
Whole-time Director.
may
c) Where any insurance is taken by the Company
on behalf of its Whole-time Director, Chief
Executive Officer, Chief Financial Officer, the
Company Secretary and any other employees
for indemnifying them against any liability,
the premium paid on such insurance shall
not be treated as part of the remuneration
payable to any such personnel. Provided
that if such person is proved to be guilty, the
premium paid on such insurance shall be
treated as part of the remuneration.
Pearl Global Industries Limited Annual Report 2018-19
Annexure-I to the Directors’ Report
29
4.2. Remuneration
/ Executive
to Whole-time
/ Managing Director, KMP and Senior
Management Personnel:
a) Fixed pay:
The Whole-time Director/ KMP and Senior
Management Personnel shall be eligible for a
monthly remuneration as may be approved
by the Board on the recommendation of the
Committee. The breakup of the pay scale and
quantum of perquisites including, employer’s
contribution to P.F, pension scheme, medical
expenses, club fees etc. shall be decided
and approved by the Board/ the Person
authorized by the Board or the Committee.
b) Minimum Remuneration:
If, in any financial year, the Company has
no profits or its profits are inadequate, the
Company shall pay remuneration to its
Whole-time Director in accordance with the
provisions of Schedule V of the Act and if it
is not able to comply with such provisions,
with the previous approval of the Central
Government.
c) Provisions for excess remuneration:
If any Whole-time Director draws or receives,
directly or indirectly by way of remuneration
any such sums in excess of the limits
prescribed under the Act or without the
prior sanction of the Central Government,
where required, he / she shall refund such
sums to the Company and until such sum is
refunded, hold it in trust for the Company.
The Company shall not waive recovery of
such sum refundable to it unless permitted
by the Central Government.
4.3. Remuneration to Non- Executive / Independent
Director:
a) Sitting Fees:
The Non- Executive / Independent Director
may receive remuneration by way of fees for
attending meetings of Board or Committee
thereof. Provided that the amount of such
fees shall not exceed Rs. One Lac per
meeting of the Board or Committee or such
amount as may be prescribed by the Central
Government from time to time.
b) Stock Options:
An Independent Director shall not be entitled
to any stock option of the Company.
5. MEMBERSHIP
5.1 The Committee shall consist of a minimum 3
non-executive directors, majority of them being
independent.
5.2 Minimum two (2) members shall constitute a
quorum for the Committee meeting.
5.3 Membership of the Committee shall be disclosed
in the Annual Report.
5.4 Term of the Committee shall be continued unless
terminated by the Board of Directors.
6. CHAIRPERSON
6.1 Chairperson of the Committee shall be an
Independent Director.
6.2 Chairperson of the Board may be appointed as
a member of the Committee but shall not be a
Chairman of the Committee.
6.3 In the absence of the Chairperson, the members of
the Committee present at the meeting shall choose
one amongst them to act as Chairperson.
6.4 Chairman of the Nomination and Remuneration
Committee meeting could be present at the
Annual General Meeting or may nominate some
other member to answer the shareholders’ queries.
7. FREQUENCY OF MEETINGS
The meeting of the Committee shall be held at such
regular intervals as may be required.
8. COMMITTEE MEMBERS’ INTERESTS
8.1 A member of the Committee is not entitled to
be present when his or her own remuneration
is discussed at a meeting or when his or her
performance is being evaluated.
8.2 The Committee may invite such executives, as
it considers appropriate, to be present at the
meetings of the Committee.
Pearl Global Industries Limited Annual Report 2018-19
30
Annexure-I to the Directors’ Report
9. SECRETARY
12. REMUNERATION DUTIES
The Company Secretary of the Company shall act as
The duties of the Committee in relation to remuneration
Secretary of the Committee.
matters include:
12.1 to consider and determine the Remuneration
Policy, based on the performance and also bearing
in mind that the remuneration is reasonable and
sufficient to attract retain and motivate members
of the Board and such other factors as the
Committee shall deem appropriate all elements of
the remuneration of the members of the Board.
12.2 to approve the remuneration of the Senior
Management including key managerial personnel
of the Company maintaining a balance between
fixed and incentive pay reflecting short and long
term performance objectives appropriate to the
working of the Company.
12.3 to delegate any of its powers to one or more of its
members or the Secretary of the Committee.
12.4 to consider any other matters as may be requested
by the Board.
12.5 Professional indemnity and liability insurance for
Directors and senior management.
*************************
10. VOTING
10.1 Matters arising for determination at Committee
meetings shall be decided by a majority of votes of
Members present and voting and any such decision
shall for all purposes be deemed a decision of the
Committee.
10.2 In the case of equality of votes, the Chairman of
the meeting will have a casting vote.
11. NOMINATION DUTIES
The duties of the Committee in relation to nomination
matters include:
11.1 Ensuring that there is an appropriate induction in
place for new Directors and members of Senior
Management and reviewing its effectiveness;
11.2 Ensuring that on appointment to the Board, Non-
Executive Directors receive a formal letter of
appointment in accordance with the Guidelines
provided under the Act;
11.3 Identifying and recommending Directors who are
to be put forward for retirement by rotation.
11.4 Determining the appropriate size, diversity and
composition of the Board;
11.5 Setting a formal and transparent procedure for
selecting new Directors for appointment to the
Board;
11.6 Evaluating
the Board
the performance of
members and Senior Management in the context
of the Company’s performance from business and
compliance perspective;
11.7 Delegating any of its powers to one or more of its
members or the Secretary of the Committee; and
11.8 Considering any other matters, as may be
requested by the Board.
Pearl Global Industries Limited Annual Report 2018-19 Annexure-II-Annual Report on CSR activities
31
1. Over the year, we have been focusing on sustainable business practices encompassing economic, environmental and
social imperatives that not only cover our business, but also that of communities around us.
We had set up a Society namely Arpan Educational Society For Underprivileged Children in the year 2006. This was
done to provide the free education to underprivileged children. Visit http://www.arpaneducation.com/index.html for
more details and the activities of the Society.
2. The CSR Committee comprises Mr. Vinod Vaish, Chairman, Mr. Pulkit Seth, and Mr. Anil Nayar as Members.
3. Average net profit of the Company for last three financial years: Rs. 819.44 Lakh
4. Prescribed CSR expenditure (two percent of the amount mentioned in item 3 above): Rs. 16.39 Lakh
The Company has earmarked Rs.22.76 Lakh for CSR expenditure for the financial year 2018-19.
5. Details of CSR spent during the financial year:
(a) Total amount to be spent for the financial year: Rs. 22.76 Lakh
(b) Amount unspent, if any: NIL
(c) Manner in which the amount spent during the financial year is detailed below:
Sr.
No.
CSR Project or
activity indentified
Sector in which
the Project is
covered
Projects or
programmes
(1) Local Area or
other
(2) Specify the State
and district
where projects
or programs was
undertaken
Amount
outlay
(Budget)
Proj-
ect or
Program
wise
Amount Spent
on the Projects
or Programs Sub
heads:
(1) Direct
expenditure
on projects or
program
(2) Overheads
2.00
1.
2.
3.
4.
5.
6.
7.
Education and
other initiatives
Education and
other initiatives
Promoting
Education
Promoting
Education
Education and
other initiatives
Promoting
Education
Education and
other initiatives
Promoting health
care including
preventive health
care
Promoting health
care including
preventive health
care
Promotion and
development of
traditional art and
handicraft
Promoting
Education
Promoting
preventive
health care
Promoting
health care
Promotion and
development of
traditional art
Chennai
2.00
New Delhi & Mumbai 2.50
2.50
New Delhi
1.76
1.76
Secunderabad
New Delhi
1.00
5.00
1.00
5.00
Sirsa, Kaithal,
Bhivani, Hissar and
Faridabad Districts in
the State of Haryana
New Delhi
8.00
8.00
2.50
2.50
(Rs. in Lakh)
Amount spent:
Direct or through
implementing agency
Cumu-
lative
expendi-
ture upto
to the
reporting
period
2.00
2.50
1.76
1.00
5.00
8.00
2.50
Through Help the
Blind Foundation
Through Adhyayan
Quality Education
Foundation
Through Arpan
Educational Society
for underprivileged
children
Through Udbhav
School
Through Cancer
Awareness,
Prevention and Early
Detection Trust
Through Vyakti
Vikas Kendra
Through Natya
Vriksha
Total
22.76
22.76
22.76
6. Reasons for not spending the amount: Not applicable as the Company has spent more than the minimum prescribed
amount for CSR activities.
7. RESPONSIBILITY STATEMENTS
The Responsibility Statement of the CSR Committee of the Board of Directors of the Company is reproduced below:
“The implementation and monitoring of Corporate Social Responsibility (CSR) Policy, is in compliance with CSR
objectives and policy of the Company.”
Place: Gurugram
Date: May 28, 2019
(Pulkit Seth)
Managing Director
(Vinod Vaish)
Chairman of CSR Committee
Pearl Global Industries Limited Annual Report 2018-19
32
Annexure-III to the Directors’ Report
SECRETARIAL AUDIT REPORT
For the financial year ended 31st March, 2019
[Pursuant to section 204(1) of the Companies Act, 2013
and rule No. 9 of the Companies (Appointment and
Remuneration Personnel) Rules, 2014]
To,
Pearl Global Industries Limited
A-3, Community Centre,
Naraina Industrial Area
Phase-II, New Delhi-110028
We have conducted the Secretarial Audit of the compliance
of applicable statutory provisions and the adherence to good
corporate practices by Pearl Global Industries Limited
(hereinafter called the “Company”). The Secretarial Audit
was conducted in a manner that provided us a reasonable
basis for evaluating the corporate conducts/statutory
compliances and expressing our opinion thereon.
Based on our verification of Pearl Global Industries
Limited’s books, papers, minute books, forms and returns
filed and other records maintained by the Company and
also the information provided by the Company, its officers,
agents and authorized representatives, during the conduct of
Secretarial Audit, we hereby report that in our opinion, the
Company has, during the audit period covering the financial
year ended on 31st March, 2019 complied with the statutory
provisions listed hereunder and also that the Company
has proper Board-processes and compliance mechanism
in place to the extent, in the manner and subject to the
reporting made hereinafter:
We have examined the books, papers, minute books,
forms and returns filed and there records maintained by
Pearl Global Industries Limited (“the Company”) for the
financial year ended on 31st March, 2019, according to the
provisions of (hereinafter to be referred as “Act” collectively):
(i) The Companies Act, 2013 (the Act) and the rules
made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956
(‘SCRA’) and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and
Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the
rules and regulations made thereunder to the extent
of Foreign Direct Investment, Overseas Direct
Investment and External Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed
under the Securities and Exchange Board of India
Act, 1992 (‘SEBI Act’):-
(a) The Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers)
Regulations, 2011;
(b) The Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations,
2015;
(c) The Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements)
Regulations, 2009;
(d) The Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999; (There
is no stock option scheme issued during the
year)
(e) The Securities and Exchange Board of India (Issue
and Listing of Debt Securities) Regulations, 2008;
( Not applicable to the company)
(f) The Securities and Exchange Board of India
(Registrars to an Issue and Share Transfer Agents)
Regulations, 1993 regarding the Companies Act
and dealing with client; (Not applicable to the
Company)
(g) The Securities and Exchange Board of India
(Delisting of Equity Shares) Regulations, 2009;
(No such case) and
(h) The Securities and Exchange Board of India
(Buyback of Securities) Regulations, 1998;(There
is no buyback of Shares during the year)
(vi) No specific law applicable specifically to the company
(like Banking and Insurance).
We have also examined compliance with the applicable
Clauses / Regulations of the following:
i.
Secretarial Standards issued by The Institute of
Company Secretaries of India.
ii. The Listing Agreements entered into by the Company
with BSE and NSE Stock Exchange(s).
iii. The Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements)
Regulations, 2015.
During the period under review we found that the Company
has complied with the various provisions of the Act, Rules,
Regulations, Guidelines, Standards, etc. mentioned above
are as follows:
Pearl Global Industries Limited Annual Report 2018-19 Annexure-III to the Directors’ Report
33
•
•
•
•
•
•
•
Company has received the disclosure under Regulation
30(1) and 30(2) of SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations, 2011 and intimated
to Stock Exchanges also.
Company has received declaration under Section 149(6)
of the Companies Act, 2013 from all the Independent
directors.
5. Finance Committee
Mr. Pulkit Seth
Mrs. Shifalli Seth
Mr. Vinod Vaish
6. Compliance Officer:
Mr. Sandeep Sabharwal
- Chairman
- Member Director
- Member Director
Company has adopted a conflict of interest policy, a
code of business conduct setting out the Company’s
requirements and process to report and deal with non
compliance.
Company has made responsible the Compliance officer
for oversight and management of these policies and
procedures.
Company has established various policies as per the
Companies Act, 2013 and listing agreement / SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015, like,
CSR policy, Vigil Mechanism policy, Related Party
Transaction Policy, Whistle Blower Policy and Directors
appointment and remuneration policy.
Company has composite various committee(s) are as
under:
1. Audit Committee:
Mr. Anil Nayar
Mr. Rajendra K. Aneja
Mr. Abhishek Goyal
Mr. Vinod Vaish
- Chairman
- Member Director
- Member Director
- Member Director
2. Nomination and Remuneration Committee:
Mr. Abhishek Goyal
Mr.Rajendra K. Aneja
Mr. Anil Nayar
Mr. Deepak Seth
- Chairman
- Member Director
- Member Director
- Member Director
Stakeholders Relationship Committee:
3.
Mr. Anil Nayar
Mr. Pulkit Seth
Mr. Vinod Vaish
Mr.Rajendra K. Aneja
4. CSR Committee:
- Chairman
- Member Director
- Member Director
- Member Director
• The Company’s shares are in compulsory demat
segment and are available for trading in the depository
system of both NSDL and CDSL. As on 31st March
2019 the company has 19255886 shares in NSDL A/c,
2264676 shares in CDSL A/c and balance of 143375 are
in physical mode.
The Company’s shares in physical form are process by the
Registrar and Share Transfer Agent ( Link Intime India
Pvt Ltd at Noble Heights, 1st Floor, NH 2 C-1 LSC, Near
Shavitri Market, Janakpuri, New Delhi – 110 058, and
approved by the Stakeholders Relationship Committee.
Share transfer process also reviewed by the Board.
•
Investor’s Grievance Report during the Financial year:
No. of Grievances Received
- 2
No. of Grievances Attended - 2
No. of Grievances Pending
- 0
• As informed to us there is no change in general character
or nature of business / disruption of operations due to
natural calamity/ dispute with a material impact during
year.
• The Company has published quarterly results during
the year in time.
Various Committee meetings and meeting of Independent
Directors:
Audit Committee: During the Financial Year 2018-19 Audit
Committee met on 29/05/2018, 08/08/2018, 13/11/2018 and
12/02/2019 The Company has also maintained the proper
record of the minutes of the meetings.
Stakeholders Relationship Committee: During
the
Financial Year 2018-19 the committee met on 10/05/2018,
25/07/2018,
10/11/2018,
03/12/2018, 06/03/2019, 13/03/2019 and 30/03/2019. The
Company has also maintained the proper record of the
minutes of the meetings.
16/10/2018,
17/09/2018,
Mr. Vinod Vaish
- Chairman
Nomination and Remuneration Committee meeting:
Mr.Pulkit Seth
Mr.Anil Nayar
- Member Director
- Member Director
The Committee met on 09/08/2018, 13/11/2018 and
05/02/2019 during the Financial Year 2018-19.
Pearl Global Industries Limited Annual Report 2018-19
34
Annexure-III to the Directors’ Report
CSR Committee:
The Committee met on 29/05/2018 during the Financial
Year 2018-19.
Finance Committee:
Park, New Delhi-110010. The Company has kept the date
of book Closure on 18th September 2018 to 24th September
2018 (both days inclusive).
Maintenance of Statutory Registers:
The Committee met on 10/01/2019, 24/01/2019, 12/02/2019
and 05/03/2019 during the Financial Year 2018-19.
The Company has maintained the following Statutory
Registers required under the Companies Act 2013.
Independent Directors’ meeting:
During the Financial Year 2018-19 the Independent
Directors met on 19/03/2019.
We further report that
The Board of Directors of the Company is duly constituted
with proper balance of Executive Directors, Non-Executive
Directors and Independent Directors. No changes in the
composition of the Board of Directors during the period
under review.
Composition of the Board:
Mr. Deepak Seth
- Chairman
Mr. Pulkit Seth
- Vice-Chairman & Managing Director
Mrs. Shifalli Seth
- Whole-Time Director
Mr. Vinod Vaish
- Whole-Time Director
Mr. Abhishek Goyal
- Non-executive Independent Director
Mr. Chittranjan Dua
- Non-executive Independent Director
Mr. Rajendra K. Aneja - Non-executive Independent Director
Mr. Anil Nayar
- Non-executive Independent Director
Adequate notice is given to all directors to schedule the
Board Meetings, agenda and detailed notes on agenda were
sent at least seven days in advance, and a system exists for
seeking and obtaining further information and clarifications
on the agenda items before the meeting and for meaningful
participation at the meeting.
Details of Board Meeting:
Board has met four times during the financial year on
29/05/2018, 09/08/2018, 13/11/2018 and 12/02/2019. The
Company has also maintained the proper record of the
minutes of the meetings.
Majority decision are carried through the Board (means
unanimously) and there is no dissenting members’ views are
captured and recorded as part of the minutes.
Annual General Meeting:
During the Financial Year 2018-19 the Company has called
29th Annual General Meeting for the Financial Year 2017-18
on 24th September 2018 at Air Force Auditorium, Subroto
1. Register of Members
2. Register of Directors and Key Managerial personnel
3. Register of Security held by the Director
4. Register of Loans, Investment and Guarantee
5. Register of Charge
6. Register of Contracts or Arrangements
7. Register of Transfer and Transmission.
8. Register of Renewal and Duplicate Shares Certificate
Declaration and Payment of Dividend:
The Dividend declared for the financial year ending 31st
March 2018 is paid in prescribed time.
The Board of Directors have declared final dividend Rs. 2/-
per Equity Share of Rs. 10/- each for the financial year 2017-
18.
We further report that there are adequate systems and
processes in the Company commensurate with the size
and operations of the Company to monitor and ensure
compliance with applicable laws, rules, regulations and
guidelines mentioned above at para (i) to (v) and also laws
listed herein below:
As the Company carries on the business of manufacturing,
Export and Merchant trade of readymade Garments the
various applicable Acts are:
1. The Apprentices Act, 1961.
2. The Air (Prevention and Control of Pollution) Act,
1981.
3. The Indian Boilers Act, 1923.
4. The Child Labour (Prohibition and Regulation) Act,
1986.
5. The Child (Pledging of Labour) Act, 1933.
6. The Collection of Statistics Act, 2008.
7. The Contract Labour (Regulation and Abolition) Act,
1970.
8. Employee’s Compensation Act, 1923 (earlier known as
Workmen’s Compensation Act, 1923)
Pearl Global Industries Limited Annual Report 2018-19 Annexure-III to the Directors’ Report
35
9. The Employees’ Provident Funds and Miscellaneous
Provisions Act, 1952.
10. The Employees’ State Insurance Act, 1948.
11. The Employers’ Liability Act, 1938.
12. The Employment Exchanges (Compulsory Notification
of Vacancies) Act, 1959.
13. The Environment (Protection) Act, 1986.
14. The Equal Remuneration Act, 1976.
15. The Factories Act, 1948.
16. The Fatal Accidents Act, 1855.
17. The Industrial Disputes Act, 1947.
18. The Industrial Employment (Standing Orders) Act,
1946.
19. The Industries (Development and Regulation) Act,
1951.
20. The Inter-State Migrant Workmen (Regulation of
Employment and Conditions of Service) Act, 1979.
21. The Maternity Benefit Act, 1961.
22. The Minimum Wages Act, 1948.
23. The Payment of Bonus Act, 1965.
24. The Payment of Gratuity Act, 1972.
25. The Payment of Wages Act, 1936.
26. The Personal Injuries (Compensation Insurance) Act,
1963.
27. Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
28. The Water (Prevention and Control of Pollution) Act,
1974.
29. The Weekly Holidays Act, 1942.
30. Indian Stamp Act.
Company has established various policy and systems as
per the above applicable Acts for all units and work Places
are as below:
Hiring Policy
Sub Contractor and Home working policy
Anti Child Labour Policy
Suggestion Policy
Prevention of Sexual Harrassment Policy
Employee Benefit Policy
Safety Policy
Broken Niddle Policy
Blood Policy
Company Policy
Anti Forced Labour Policy
Freedom of Association and Collective Bargaining
Grievance Handling Policy
Environment Policy
Health and safety Policy
Quality Policy
Policy on Fire
Overtime Policy
Security Policy
Child Labour Policy
Policy on fabric safety
Human rights and Forced labour policy
Chemical Spillage Control and Storage Policy
Sharp Tools policy
Social Accountability Policy
Non Discrimination Policy
Fast Aid Facility
Creche Facility
Canteen Facility
Restroom Facility
Medical Room
We have checked the records available and provided to us
during our visit to 3(three) units/ Plants (A) 446 Udyog
Vihar Phase-V Gurugram, Haryana (B) 16-17 Udyog Vihar
Phase VI Khandsa Gurugram Haryana (C) 274 Udyog Vihar
Phase-II Gurugram Haryana. During our audit we have
examined the records of the Company regarding various
permissions and licenses:
NOC from Department of Air and Water Pollution Control
required under Air and Water (Prevention and Control
of Pollution) Act. The Company Units have effluent
treatment
plants (ETP) duly tested from the authorised
Lab and also maintain the ETP log book.
Factory license as required under the Factories Act.
Inspection report obtained
from Executive Engineer
generally complying with the relevant Provision of Central
Pearl Global Industries Limited Annual Report 2018-19 36
Annexure-III to the Directors’ Report
Electricity Authority (Measures relating to safety and
Electricity Supply) Regulation 2010.
Report of Examination of pressure vessel or plants required
under the Factory Act, 1948 and Boiler Act 1923.
Fire fighting systems available and Company has obtained
the adequate NOC from Municipal Corporation for the
units where ever required.
The Company Permissible labour license required under the
Factory Act and Contract Labour Act.
9. Wage Register / Salary Sheet
10. Bonus Register
The Industrial Employment Standing Order Act 1956
is applicable to Company and Company has Certified
Standing Orders both in Hindi and English.
Company has paid to Bonus to eligible staffs and
workers during the year for the Financial Year 2017-18
as per the Bonus Act 1965
Company is paying gratuity to the eligible Workers as
The Company has got the registration under ESI and PF Act.
per the Payment of Gratuity Act.
The Company is paying Equal Remuneration to men and
women.
Various Register maintained by the Company Required
under the applicable Acts:
1. Accidental Register ( Required under ESI and Factory
Act)
2. Register of Deduction of loss and damages as per
Factory Act 1948
3. Register of Accident and dangerous occurance as per
Factory Act.
4. Register of Advance
5. Register of Loans to worker and staff
6. Register of fines under Factory Act
7. Adult workers register
8. Attendance Register/ Electronic device know as Bio
matrices System.
Company has constituted the Committee as required
under The Sexual Harassment of Women at the Work
Place (Prevention, Prohibition and Redressal) Act
2013.
Company has appointed Welfare officer.
We further report that during the audit period the Company
has not taken any major matter requiring members’ approval.
For Deepak Somaiya & Co.
Company Secretaries
(CS Deepak Somaiya)
Proprietor
FCS: 5845, CP No. 5772
Place: New Delhi
Date: May 21, 2019
Pearl Global Industries Limited Annual Report 2018-19 Annexure -IV to the Directors’ Report
37
FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN
As on financial year ended on 31.03.2019
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company
(Management & Administration) Rules, 2014.
I. REGISTRATION & OTHER DETAILS:
1
2
CIN
Registration Date
L74899DL1989PLC036849
5/7/1989
3 Name of the Company
Pearl Global Industries Limited
4
Category/Sub-category of the Company
Public Limited Company / Limited by Shares
5 Address of the Registered office
& contact details
A-3, Community Centre, Naraina Industrial Area,
Phase-II, New Delhi-110028
6 Whether listed company
Yes
7 Name, Address & contact details of the
Registrar & Transfer Agent, if any.
Link Intime India Private Limited, Noble Heights,
1st Floor, NH 2 C-1 Block LSC, Near Shavitri Market,
Janakpuri, New Delhi – 110 058 Tel: 011-41410592
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
(All the business activities contributing 10 % or more of the total turnover of the company shall be stated)
S.
No.
Name and Description of main products /
services
NIC Code of the Product/
service
% to total turnover of the
company
1
Manufacturing & Exporting of Readymade
Garments
141
100
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
S.No.
Name and address of the Company
CIN/GLN/FCRN
U74900DL2007PLC161396
Holding/
Subsidiary/
Associate
Subsidiary
% of
shares
held
100
Applicable
Section
2(87)(ii)
1
2
3
4
5
6
Pearl Apparel Fashions Limited
(Formerly Lerros Fashions India Limited)
A-3, Community Centre, Naraina Industrial Area,
Phase-II, New Delhi-110028
Pearl Global Kaushal Vikas Limited
(Formerly Pixel Industries Limited)
No.1/31, Thirukazhukundram Road, Karunguzhi,
Maduranthagam Taluk, Kancheepuram,
Tamil Nadu-603303
Norp Knit Industries Limited Vill: North Khailpur, P.O.
National University, Gazipur, Bangladesh
Pearl Global Fareast Limited Unit: 801-3, 8/F,
9 Wing Hong Kong Street Cheung Sha Wan,
Kowloon, Hong Kong
Pearl Global (HK) Limited Unit: 801-3, 8/F,
9 Wing Hong Kong Street Cheung Sha Wan,
Kowloon, Hong Kong
PGIC Investment Limited Unit: 801-3, 8/F,
9 Wing Hong Kong Street Cheung Sha Wan,
Kowloon, Hong Kong
U74110TN2014PLC096204
Subsidiary
100
2(87)(ii)
C-52664(2959)/2004
Subsidiary
99.99
2(87)(ii)
NA
NA
NA
Subsidiary
100
2(87)(ii)
Subsidiary
100
2(87)(ii)
Subsidiary
100
2(87)(ii)
Pearl Global Industries Limited Annual Report 2018-19
38
Annexure -IV to the Directors’ Report
S.No.
Name and address of the Company
CIN/GLN/FCRN
8
7
Pearl Global F.Z.E SM-Office-E1-4013H,
Ajman Free Zone, Ajman, UAE
Prudent Fashions Limited 29,
Gareeb-E-Newaz Avenue,(4th Floor), Sector-11,
Uttara , Dhaka, Bangladesh
Pearl Global (Chang Zhou) Textile Technology Co., Ltd.
Changzhou City, Jiangsu Province, China
10 Vin Pearl Global Vietnam Limited Unit: 801-3,
9
11
12
8/F, 9 Wing Hong Kong Street Cheung Sha Wan,
Kowloon, Hong Kong
Pearl Global Vietnam Company Limited Dinh Tri
Commune, Bae Giang City, Bae Giang Province,
Vietnam
Pearl Grass Creations Limited Unit: 801-3, 8/F,
9 Wing Hong Kong Street Cheung Sha Wan,
Kowloon, Hong Kong
13 A&B Investment Limited Po Box 60869, Dubai, UAE
14 DSSP Global Limited Unit: 801-3, 8/F, 9 Wing Hong
Kong Street Cheung Sha Wan, Kowloon, Hong Kong
PT Pinnacle Apparels Graha Kirana Lt.1, Suite 103,
JI. Yos Sudarso Kav. 88, Menara Kelapa Gading
Kondominium Tower E605, Kelapa Gading-Jakarta
Utara, Indonesia
15
NA
NA
NA
NA
NA
NA
NA
NA
NA
Holding/
Subsidiary/
Associate
Subsidiary
% of
shares
held
100
Applicable
Section
2(87)(ii)
Subsidiary
97.5
2(87)(ii)
Subsidiary
100
2(87)(ii)
Subsidiary
100
2(87)(ii)
Subsidiary
100
2(87)(ii)
Subsidiary
80
2(87)(ii)
Subsidiary
Subsidiary
100
100
2(87)(ii)
2(87)(ii)
Subsidiary
69.91
2(87)(ii)
IV. SHARE HOLDING PATTERN (Equity share capital breakup as percentage of total equity)
(i) Category-wise Share Holding
Demat Physical
No. of Shares held at the beginning of the year
% of
Total
Shares
Total
No. of Shares held at the end of the year
Demat Physical
Total
Category of Shareholders
A. Promoters
(1) Indian
a) Individual/ HUF
b) Central Govt
c) State Govt(s)
d) Bodies Corp.
e) Banks / FI
f) Any other
Sub Total (A) (1)
(2) Foreign
a) NRI Individuals
b) Other Individuals
c) Bodies Corp.
d) Banks/FI
e) Any other
Sub Total (A) (2)
TOTAL (A)
11,562,734
-
-
30
-
-
11,562,764
2,862,145
-
-
-
-
2,862,145
14,424,909
- 11,562,734
-
-
-
-
30
-
-
-
-
-
- 11,562,764
2,862,145
-
-
-
-
-
-
-
-
-
-
2,862,145
- 14,424,909
53.37% 11,562,734
-
0.00%
-
0.00%
30
0.00%
-
0.00%
0.00%
-
53.37% 11,562,764
2,862,145
-
-
-
13.21%
0.00%
0.00%
0.00%
0.00%
13.21%
2,862,145
66.58% 14,424,909
- 11,562,734
-
-
-
-
30
-
-
-
-
-
- 11,562,764
-
-
-
-
2,862,145
-
-
-
-
-
2,862,145
- 14,424,909
%
Change
during
the year
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
% of
Total
Shares
53.37%
0.00%
0.00%
0.00%
0.00%
0.00%
53.37%
13.21%
0.00%
0.00%
0.00%
0.00%
13.21%
66.58%
Pearl Global Industries Limited Annual Report 2018-19
Annexure -IV to the Directors’ Report
39
%
Change
during
the year
0.00%
-0.77%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2.69%
% of
Total
Shares
0.00%
2.33%
0.00%
0.00%
0.00%
0.24%
0.00%
6.01%
0.00%
0.00%
8.59%
Category of Shareholders
B. Public Shareholding
1. Institutions
a) Mutual Funds
b) Banks / FI
c) Central Govt
d) State Govt(s)
e) Venture Capital Funds
f) Alternate Investment
Funds
g) Insurance Companies
h) FIIs
i) Foreign Venture Capital
Funds
j) Others (specify)
Sub-total (B)(1):-
2. Non-Institutions
a) Bodies Corp.
i) Indian
ii) Overseas
b) Individuals
i) Individual shareholders
holding nominal share
capital upto Rs. 1 lakh
ii)
Individual
shareholders
share
holding nominal
capital in excess of Rs 1 lakh
c) NBFCs Registered with RBI
c) Others (specify)
Non Resident Indians (Non
Repat)
Non Resident Indians (Repat)
Overseas Corporate Bodies
Foreign Nationals
Clearing Members
Trusts
Hindu Undivided Family
Foreign Bodies - D R
Sub-total (B)(2):-
Total Public (B)
C. Shares held by Custodian
for GDRs & ADRs
Grand Total (A+B+C)
Demat Physical
No. of Shares held at the beginning of the year
% of
Total
Shares
Total
No. of Shares held at the end of the year
Demat Physical
Total
-
509,431
-
-
-
-
-
1,301,678
-
-
1,811,109
-
66
-
-
-
-
-
509,497
-
-
-
-
-
-
-
-
1,301,678
-
0.00%
2.35%
0.00%
0.00%
0.00%
0.00%
0.00%
6.01%
0.00%
-
505,532
-
-
-
52,627
-
1,301,678
-
-
66
-
-
-
-
-
505,598
-
-
-
52,627
-
-
-
-
1,301,678
-
-
66
-
1,811,175
0.00%
8.36%
-
1,859,837
-
66
-
1,859,903
561,721
325,606
863
-
562,584
325,606
2.60%
1.50%
528,842
-
863
-
529,705
-
2.45%
-5.84%
0.00% -100.00%
1,996,444
127,193
2,123,637
9.80%
1,614,746
120,234
1,734,980
8.01% -18.30%
1,737,991.00
-
1,737,991
8.02% 2,276,887.00
-
2,276,887
10.51% 31.01%
-
29,248
165,230
-
-
46,588
260
414,164
-
5,277,252
7,088,361
-
-
-
-
0.00%
100
29,248
0.14%
49,165
-
-
100
0.00%
0.00%
49,165
0.23% 68.10%
22,545
-
-
-
-
-
-
150,601
150,667
-
187,775
-
-
46,588
260
414,164
-
5,427,853
7,239,028
-
0.87%
0.00%
0.00%
0.22%
0.00%
1.91%
0.00%
25.05%
33.42%
0.00%
195,207
-
-
58,324
260
512,285
-
5,235,816
7,095,653
-
22,212
-
-
-
-
-
-
143,309
143,375
-
217,419
-
-
58,324
260
512,285
-
5,379,125
7,239,028
-
1.00% 15.79%
0.00%
0.00%
0.00%
0.00%
0.27% 25.19%
0.00%
0.00%
2.36% 23.69%
0.00%
0.00%
-0.90%
24.83%
0.00%
33.42%
0.00%
0.00%
21,513,270
150,667 21,663,937 100.00% 21,520,562
143,375 21,663,937 100.00%
0.00%
Pearl Global Industries Limited Annual Report 2018-19
40
Annexure -IV to the Directors’ Report
(ii)
Shareholding of Promoter
Shareholder’s Name
S.
No.
Shareholding at the beginning
of the year
Shareholding at the end
of the year
No. of
Shares
% of total
Shares
of the
company
% of Shares
Pledged /
encumbered
to total shares
No. of
Shares
% of total
Shares
of the
company
% of Shares
Pledged /
encumbered
to total shares
% change
in
share-
holding
during
the year
1 Mr. Pulkit Seth
6,947,621
32.07%
NIL 6,947,621
32.07%
NIL
0.00%
2 Mrs. Payel Seth
4,413,635
20.37%
NIL 4,413,635
20.37%
NIL
0.00%
3 Mr. Deepak Seth (NRI)
2,862,145
13.21%
NIL 2,862,145
13.21%
NIL
0.00%
4 Mrs. Shifalli Seth
201,478
0.93%
NIL
201,478
0.93%
NIL
0.00%
5 NIM International
Commerce LLP
30
0.00%
NIL
30
0.00%
NIL
0.00%
(iii) Change in Promoters’ Shareholding (please specify, if there is no change)
S.
No.
Particulars
Shareholding at the beginning of
the year
Cumulative Shareholding during
the year
No. of shares
% of total
shares
No. of shares
% of total
shares
At the beginning of the year
14,424,909
66.58%
14,424,909
66.58%
Date wise increase/decrease in
promoters shareholding during
the year specifying the reasons
for increase/decrease (e.g.
allotment/transfer/bonus/sweat
equity etc.
No Change
No Change
No Change
No Change
At the end of the year
14,424,909
66.58%
14,424,909
66.58%
Pearl Global Industries Limited Annual Report 2018-19
Annexure -IV to the Directors’ Report
41
(iv) Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs)
Date
S.No. For each of the Top 10 shareholders
Reason
Shareholding at the
beginning of the year
Cumulative
Shareholding during
the year
1
Sanjiv Dhireshbhai Shah
At the beginning of the year
Changes during the year
2
3
At the end of the year
Premier Investment Fund Limited
At the beginning of the year
Changes during the year
At the end of the year
General Insurance Corporation of India
At the beginning of the year
Changes during the year
At the end of the year
No. of
shares
% of total
shares
No. of
shares
% of total
shares
-
01.04.2018
11.05.2018 Transfer
18.05.2018 Transfer
25.05.2018 Transfer
01.06.2018 Transfer
15.06.2018 Transfer
22.06.2018 Transfer
30.06.2018 Transfer
06.07.2018 Transfer
13.07.2018 Transfer
20.07.2018 Transfer
27.07.2018 Transfer
03.08.2018 Transfer
10.08.2018 Transfer
14.09.2018 Transfer
21.09.2018 Transfer
29.09.2018 Transfer
05.10.2018 Transfer
12.10.2018 Transfer
19.10.2018 Transfer
26.10.2018 Transfer
02.11.2018 Transfer
09.11.2018 Transfer
16.11.2018 Transfer
30.11.2018 Transfer
07.12.2018 Transfer
21.12.2018 Transfer
22.02.2019 Transfer
01.03.2019 Transfer
08.03.2019 Transfer
15.03.2019 Transfer
22.03.2019 Transfer
29.03.2019 Transfer
31.03.2019
832,449
99,277
136,729
87,266
5,517
7,552
12,013
11,819
3,387
875
4,418
500
7,137
4,869
983
7,290
4,084
21,410
21,201
17,567
3,000
4,000
940
2,000
1
9,259
9,721
966
3,739
57,289
27,814
33,099
11,149
3.84%
832,449
931,726
1,068,455
1,155,721
1,161,238
1,168,790
1,180,803
1,192,622
1,196,009
1,196,884
1,201,302
1,201,802
1,208,939
1,213,808
1,214,791
1,222,081
1,226,165
1,247,575
1,268,776
1,286,343
1,289,343
1,293,343
1,294,283
1,296,283
1,296,284
1,305,543
1,315,264
1,316,230
1,319,969
1,377,258
1,405,072
1,438,171
1,449,320
1,449,320
01.04.2018
-
31.03.2019
01.04.2018
-
31.03.2019
-
-
-
-
-
-
1,051,231
-
4.85% 1,051,231
-
0.00%
1,051,231
256,666
-
1.18%
0.00%
256,666
-
256,666
3.84%
4.30%
4.93%
5.33%
5.36%
5.40%
5.45%
5.51%
5.52%
5.52%
5.55%
5.55%
5.58%
5.60%
5.61%
5.64%
5.66%
5.76%
5.86%
5.94%
5.95%
5.97%
5.97%
5.98%
5.98%
6.03%
6.07%
6.08%
6.09%
6.36%
6.49%
6.64%
6.69%
6.69%
4.85%
0.00%
4.85%
1.18%
0.00%
1.18%
Pearl Global Industries Limited Annual Report 2018-19
42
Annexure -IV to the Directors’ Report
S.No. For each of the Top 10 shareholders
Date
Reason
Shareholding at the
beginning of the year
Cumulative
Shareholding during
the year
No. of
shares
% of total
shares
No. of
shares
% of total
shares
4
5
6
LTS Investment Fund Limited
At the beginning of the year
Changes during the year
At the end of the year
Life Insurance Corporation of India
At the beginning of the year
Changes during the year
At the end of the year
Shah Sanjivbhai Dhireshbhai
At the beginning of the year
Changes during the year
7
8
9
10
At the end of the year
Virat Services LLP
At the beginning of the year
Changes during the year
At the end of the year
Shah Krinaben Sanjivbhai
At the beginning of the year
Changes during the year
At the end of the year
Nirmal Hiroo Bharwani
At the beginning of the year
Changes during the year
At the end of the year
Rajasthan Global Securities Private Limited
At the beginning of the year
Changes during the year
01.04.2018
-
31.03.2019
01.04.2018
-
31.03.2019
-
-
-
-
-
-
01.04.2018
06.04.2018 Transfer
13.04.2018 Transfer
20.04.2018 Transfer
11.05.2018 Transfer
02.11.2018 Transfer
16.11.2018 Transfer
30.11.2018 Transfer
07.12.2018 Transfer
14.12.2018 Transfer
18.01.2019 Transfer
25.01.2019 Transfer
01.02.2019 Transfer
08.02.2019 Transfer
15.02.2019 Transfer
31.03.2019
-
01.04.2018
31.08.2018 Transfer
07.09.2018 Transfer
14.09.2018 Transfer
31.03.2019
-
01.04.2018
04.05.2018 Transfer
11.05.2018 Transfer
11.01.2019 Transfer
31.03.2019
-
01.04.2018
25.01.2019 Transfer
31.03.2019
250,447
-
1.16%
0.00%
227,292
-
1.05%
-
0.42%
0.00%
0.41%
90,983
8,755
5,195
2,025
5,000
20,308
1,500
610
702
245
22,693
22,429
16,304
919
2,313
-
115,468
2
60,000
88,342
16,741
7,956
2,350
90,000
20,000
0.42%
01.04.2018
10.08.2018 Transfer
-
332,222
-73,096
1.53%
250,447
-
250,447
227,292
-
227,292
90,983
99,738
104,933
106,958
111,958
132,266
133,766
134,376
135,078
135,323
158,016
180,445
196,749
197,668
199,981
199,981
-
115,468
115,470
175,470
175,470
88,342
105,083
113,039
115,389
115,389
90,000
110,000
110,000
332,222
259,126
1.16%
0.00%
1.16%
1.05%
-
1.05%
0.42%
0.46%
0.48%
0.49%
0.52%
0.61%
0.62%
0.62%
0.62%
0.62%
0.73%
0.83%
0.91%
0.91%
0.92%
0.92%
0.00%
0.53%
0.53%
0.81%
0.81%
0.41%
0.49%
0.52%
0.53%
0.53%
0.42%
0.51%
0.51%
1.53%
1.20%
Pearl Global Industries Limited Annual Report 2018-19
Annexure -IV to the Directors’ Report
43
S.No. For each of the Top 10 shareholders
Date
Reason
Shareholding at the
beginning of the year
Cumulative
Shareholding during
the year
No. of
shares
% of total
shares
0.46%
17.08.2019 Transfer
24.08.2018 Transfer
31.08.2018 Transfer
07.09.2018 Transfer
14.09.2018 Transfer
29.09.2018 Transfer
02.11.2018 Transfer
25.01.2019 Transfer
15.03.2019 Transfer
22.03.2019 Transfer
29.03.2019 Transfer
31.03.2019
-
01.04.2018
25.05.2018 Transfer
27.07.2018 Transfer
10.08.2018 Transfer
17.08.2018 Transfer
24.08.2018 Transfer
07.09.2018 Transfer
14.09.2018 Transfer
21.09.2018 Transfer
29.09.2018 Transfer
05.10.2018 Transfer
19.10.2018 Transfer
26.10.2018 Transfer
09.11.2018 Transfer
18.01.2019 Transfer
25.01.2019 Transfer
01.02.2019 Transfer
08.03.2019 Transfer
29.03.2019 Transfer
31.03.2019
7,437
-88,067
-14,211
5,886
6,633
-44,637
4,808
-14,918
-1,000
-16,049
-5,000
98,771
-9,559
-5,470
-5,000
-10,126
-6,500
-1,385
-1,500
-2,000
-532
-2,000
-3,659
-660
-3,000
-7,093
-7,379
-3,458
-2,500
-3,000
1.50%
-
01.04.2018
11.05.2018 Transfer
18.05.2018 Transfer
25.05.2018 Transfer
31.03.2019
325,606
-190,000
-72,700
-62,906
-
01.04.2018
02.11.2018 Transfer
31.03.2019
103,160
-103,160
0.48%
No. of
shares
266,563
178,496
164,285
170,171
176,804
132,167
136,975
122,057
121,057
105,008
100,008
100,008
% of total
shares
1.23%
0.82%
0.76%
0.79%
0.82%
0.61%
0.63%
0.56%
0.56%
0.48%
0.46%
0.46%
98,771
89,212
83,742
78,742
68,616
62,116
60,731
59,231
57,231
56,699
54,699
51,040
50,380
47,380
40,287
32,908
29,450
26,950
23,950
23,950
325,606
135,606
62,906
-
-
103,160
-
-
0.46%
0.41%
0.39%
0.36%
0.32%
0.29%
0.28%
0.27%
0.26%
0.26%
0.25%
0.24%
0.23%
0.22%
0.19%
0.15%
0.14%
0.12%
0.11%
0.11%
1.50%
0.63%
0.29%
0.00%
0.00%
0.48%
0.00%
0.00%
At the end of the year
11 Dheeraj Kumar Lohia
At the beginning of the year
Changes during the year
12
At the end of the year
Lesing Mauritius Limited
At the beginning of the year
Changes during the year
At the end of the year
13 Mayur Mukundbhai Desai
At the beginning of the year
Changes during the year
At the end of the year
Pearl Global Industries Limited Annual Report 2018-19
44
Annexure -IV to the Directors’ Report
(v) Shareholding of Directors and Key Managerial Personnel:
S.
No.
Shareholding of each Directors and
each Key Managerial Personnel
Date
Reason Shareholding at the
beginning of the year
Cumulative
Shareholding during
the year
No. of
shares
% of total
shares
No. of
shares
% of total
shares
-
01.04.2018
31.03.2019
31.03.2019
01.04.2018
31.03.2019
31.03.2019
01.04.2018
01.04.2018
01.04.2018
1 Mr. Deepak Seth, Chairman
At the beginning of the year
Changes during the year
At the end of the year
2 Mr. Pulkit Seth, Managing Director
At the beginning of the year
Changes during the year
At the end of the year
3 Mrs. Shifalli Seth, Whole-Time Director
At the beginning of the year
Changes during the year
At the end of the year
4 Mr. Vinod Vaish, Whole-Time Director
At the beginning of the year
Changes during the year
At the end of the year
5 Mr. Chittranjan Dua, Non-Executive Independent Director
At the beginning of the year
Changes during the year
At the end of the year
6 Mr. Anil Nayar, Non-Executive Independent Director
At the beginning of the year
Changes during the year
At the end of the year
7 Mr. Rajendra Kumar Aneja, Non-Executive Independent Director
At the beginning of the year
Changes during the year
At the end of the year
8 Mr. Abhishek Goyal, Non-Executive Independent Director
At the beginning of the year
Changes during the year
At the end of the year
9 Mr. Raghav Garg, Chief Financial Officer
At the beginning of the year
Changes during the year
At the end of the year
10 Mr. Sandeep Sabharwal, Company Secretary
At the beginning of the year
Changes during the year
At the end of the year
01.04.2018
31.03.2019
01.04.2018
31.03.2019
31.03.2019
31.03.2019
01.04.2018
01.04.2018
01.04.2018
31.03.2019
31.03.2019
2,862,145
13.21% 2,862,145
13.21%
No Change
2,862,145
13.21%
6,947,621
32.07% 6,947,621
32.07%
No Change
6,947,621
32.07%
0.93% 201,478
0.93%
201,478
No Change
201,478
0.93%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
-
0.00%
No Change
-
-
0.00%
0.00%
No Change
-
-
0.00%
0.00%
No Change
-
-
0.00%
0.00%
No Change
-
-
0.00%
0.00%
No Change
-
-
0.00%
0.00%
No Change
-
-
0.00%
0.00%
No Change
-
0.00%
Pearl Global Industries Limited Annual Report 2018-19
Annexure -IV to the Directors’ Report
(V) INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment.
45
(Amt. Rs.)
Particulars
Secured Loans
excluding deposits
Unsecured
Loans
Deposits
Total
Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii)
Change in Indebtedness during the financial year
* Addition
* Reduction
Net Change
Indebtedness at the end of the financial year
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii)
2,311,525,772
-
3,573,148
2,315,098,920
(10,332,700,684)
10,618,767,169
286,066,485
2,025,459,287
-
2,467,226
2,027,926,513
-
-
-
-
-
-
-
-
-
-
-
(VI) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
S.
No.
Particulars of Remuneration
Name of MD/WTD/ Manager
2,311,525,772
-
3,573,148
2,315,098,920
(10,332,700,684)
10,618,767,169
286,066,485
2,025,459,287
-
2,467,226
2,027,926,513
Total Amount
in Rs.
Name
Designation
1 Gross salary
Mr. Pulkit Seth Mrs. Shifalli Seth Mr. Vinod Vaish
Managing
Director
Whole-Time
Director
Whole-Time
Director
(a) Salary as per provisions contained in
section 17(1) of the Income-tax Act, 1961
12,000,000
7,500,000
1,651,476
21,151,476
(b) Value of perquisites u/s 17(2) Income-tax
28,800
28,800
58,310
115,910
Act, 1961
(c) Profits in lieu of salary under section 17(3)
Income- tax Act, 1961
2 Stock Option
3 Sweat Equity
4 Commission
- as % of profit
- others, specify
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5 Others, please specify (Provident Fund)
21,600
21,600
21,600
64,800
Total (A)
12,050,400
7,550,400
1,731,386
21,332,186
Ceiling as per the Act
As per Schedule-V of the Companies Act, 2013
Pearl Global Industries Limited Annual Report 2018-19
46
Annexure -IV to the Directors’ Report
B. Remuneration to other Directors
Particulars of Remuneration
Name of Directors
S.
No.
Total Amount
(in Rs.)
1
Independent Directors
Mr. Chittranjan
Dua
Mr. Anil Nayar
Mr. Rajendra
Kumar Aneja
Mr. Abhishek
Goyal
Fee for attending Board/
Committee meetings
Commission
Others, please specify (for
attending Independent
Directors Meeting)
Total (1)
30,000
30,000
10,000
40,000
110,000
-
10,000
-
10,000
-
-
-
10,000
-
30,000
40,000
40,000
10,000
50,000
140,000
2 Other Non-Executive
Mr. Deepak Seth
Directors
Fee for attending Board/
Committee meetings
Commission
Others, please specify
Total (2)
Total (B)=(1+2)
Total Managerial Remuneration
Overall Ceiling as per the Act
10,000
-
-
10,000
50,000
-
-
-
-
-
-
-
-
-
-
-
-
40,000
10,000
50,000
As per Schedule-V of Companies Act, 2013
C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD
Particulars of Remuneration
Name of Key Managerial Personnel
S.
No.
Name
Designation
1
Gross salary
Mr. Raj Kumar Chawla
Mr. Raghav Garg
Mr. Sandeep Sabharwal
CFO
(upto 25.01.2019)*
CFO
(from 12.02.2019)
Company Secretary
-
10,000
-
-
10,000
150,000
21,482,186
Total
Amount
in Rs.
(a) Salary as per provisions contained in
section 17(1) of the Income-tax Act, 1961
5,024,885
692,256
1,761,024
7,478,165
(b) Value of perquisites u/s 17(2) Income-tax
385,251
Act, 1961
(c) Profits in lieu of salary under section
17(3) Income- tax Act, 1961
2
3
4
Stock Option
Sweat Equity
Commission
- as % of profit
- others, specify
5
Others, please specify
Total
*Mr. Rajkumar Chawla, resigned from office of CFO w.e.f. 25.01.2019
-
-
-
-
-
-
-
-
-
-
-
-
-
-
32,359
417,610
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,410,136
692,256
1,793,383
7,895,775
Pearl Global Industries Limited Annual Report 2018-19
Annexure -IV to the Directors’ Report
47
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Type
Section of the
Companies
Act
Brief
Description
Details of Penalty
/ Punishment/
Compounding fees
imposed
Authority
[RD / NCLT/
COURT]
Appeal made,
if any (give
Details)
Nil
Nil
Nil
A. COMPANY
Penalty
Punishment
Compounding
B. DIRECTORS
Penalty
Punishment
Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty
Punishment
Compounding
Nil
Nil
Nil
Nil
Nil
Nil
Place: Gurugram
Date: May 28, 2019
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
For and on behalf of the Board
for PEARL GLOBAL INDUSTRIES LIMITED
(VINOD VAISH)
Whole-Time Director
DIN 01945795
(PULKIT SETH)
Managing Director
DIN 00003044
Annexure -V to the Directors’ Report
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies
(Accounts) Rules, 2014)
1. Details of contracts or arrangements or transactions not at arm’s length basis: NIL
2. Details of material contracts or arrangement or transactions at arm’s length basis:
Sl.
No.
Name of the
related party
Nature of the
relationship
Nature of
Contracts/
arrangement/
transactions
Duration of
the contracts/
arrangements/
transactions
Salient terms of
the contracts or
arrangements or
transactions
Value
(` in Lakh)
Date of
approval of
the Board,
if any
Amount
paid as
advances,
if any
1
Norp Knit
Industries
Limited
01.04.2018
to
31.03.2019
Subsidiary
Purchase of goods
Sale of goods
Expenses incurred
by them on our
behalf
Expenses paid by
us on their behalf
-
14,023.75
26.05.2017
202.16
820.44
27.35
NIL
NIL
NIL
NIL
Place: Gurugram
Date: May 28, 2019
For and on behalf of the Board
for PEARL GLOBAL INDUSTRIES LIMITED
(VINOD VAISH)
Whole-Time Director
DIN 01945795
(PULKIT SETH)
Managing Director
DIN 00003044
Pearl Global Industries Limited Annual Report 2018-19
48
Annexure -VI to the Directors’ Report
Related Party disclosure under regulation 34 of listing regulations
Loan / Advances
Name of Party
PDS Multinational Fashions Limited
Pearl Global Fareast Limited
Investments (Equity Shares)
Name of Party
Pearl Global Fareast Limited
Norp Knit Industries Ltd
Pearl Apparel Fashions Limited
Pearl Apparel Fashions Limited (Preference Shares)
Pearl Global (HK) Limited
Pearl Global Kaushal Vikas Limited (Formerly Pixel
Industries Ltd.)
Status
Associates
Subsidiary
Status
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Balance as on
31.03.2019
(` in Lakh)
Maximum during
the year
300.00
456.52
300.00
456.52
Balance as on
31.03.2019
Maximum
during the year
2,797.29
2,419.51
1,648.35
300.00
6,173.19
5.00
2,797.29
2,419.51
1,648.35
300.00
6,173.19
5.00
Place: Gurugram
Date: May 28, 2019
For and on behalf of the Board
for PEARL GLOBAL INDUSTRIES LIMITED
(VINOD VAISH)
Whole-Time Director
DIN 01945795
(PULKIT SETH)
Managing Director
DIN 00003044
Name of the Company
Annexure-VII to the Directors’ Report
Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013
[Pursuant to Section 134 (3)(g) of the Companies Act, 2013]
Sl.
No.
1
2
3
4
5
6
7
Note:
1. Investment are in equity shares, unless otherwise mentioned
2. Guarantees are issued to Banks to secure the facilities extended to these Companies
Pearl Global (HK) Limited
PDS Multinational Fashions Limited
Pearl Global Fareast Limited
Norp Knit Industries Limited
Pearl Apparel Fashions Limited
Pearl Apparel Fashions Limited (Preference Shares)
Pearl Global Kaushal Vikas Limited (Formerly Pixel Industries Limited)
7,800.04
-
-
7,389.08
-
-
-
-
300.00
456.52
-
-
-
-
Guarantees
Loans
(` in Lakh)
Investments
6,173.19
5.00
2,797.29
2,419.51
1,648.35
300.00
5.00
Place: Gurugram
Date: May 28, 2019
For and on behalf of the Board
for PEARL GLOBAL INDUSTRIES LIMITED
(VINOD VAISH)
Whole-Time Director
DIN 01945795
(PULKIT SETH)
Managing Director
DIN 00003044
Pearl Global Industries Limited Annual Report 2018-19
Annexure-VIII to the Directors’ Report
49
[Pursuant to Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
Sl.No. Particulars
Disclosures
I
The ratio of the remuneration of each Director to the
median remuneration of the employees for the financial
year
Mr. Pulkit Seth (VC&MD) 40.73x
Mrs. Shifalli Seth (WTD) 25.45x
Mr. Vinod Vaish (WTD) 9.33x
II The percentage increase in remuneration of each Director,
Mr. Pulkit Seth (VC&MD) Nil
CFO, CS in the financial year
III The percentage increase in the median remuneration of
employees in the financial year
IV The number of permanent employees on the rolls of the
Company
Average percentile increase already made in the salaries
of employees other than the managerial personnel in the
last financial year and its comparison with the percentile
increase in the managerial remuneration and justification
thereof and point out if there are any exceptional circum-
stances for increase in the managerial remuneration;
Mrs. Shifalli (WTD) Nil
Mr. Vinod Vaish (WTD) 10%
Chief Financial Officer Nil
Company Secretary 4%
The median remuneration of the employees in the
financial year was increased by 7%.
There were approx 6200 permanent employees as
on 31st March, 2019
Average percentile increase in the salary of
employees other than managerial personnel in the
last financial year was 7%.
Average percentile increase in the salary of
Managerial personnel in the last financial year was
7%.
V
VI
Affirmation
remuneration policy of the Company
the remuneration
that
is as per
the
The remuneration paid to Directors/employees is
as per remuneration policy.
For and on behalf of the Board
for PEARL GLOBAL INDUSTRIES LIMITED
(VINOD VAISH)
Whole-Time Director
DIN 01945795
(PULKIT SETH)
Managing Director
DIN 00003044
Place: Gurugram
Date: May 28, 2019
Pearl Global Industries Limited Annual Report 2018-19
Annexure-IX to the Directors’ Report
50
Annexure-IX to the Directors’ Report
[Pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014, as amended
List of top ten employee in terms of remuneration drawn
Sl.
No.
Name of
Employee
Designation
Educational
qualification
Age
Experience
(in years)
Date of
Joining
Remuneration
paid
Previous
employment
Percentage
of equity
share held
Whether
employee is
relative of
any Director
or Manager
1 Mr. Amit
Mohan
Group CFO
B.Com
(Hons), CA,
CPA, ISA
53
30
2/11/2015
6,354,915
B.Com, CA
44
22
15/2/2012
5,410,136
MBA
48
25
1/11/2017
4,038,172
2 Mr. Raj Kumar
Chawla
3 Mr. Manish
Sareen
Chief Financial
Officer (till
25.01.2019)
Senior Vice
President
(Marketing &
Operations)
4 Mr. Pankaj
Bhasin
CEO-Sampling &
Merchandising
CFO, Vishvaraj
Infrastructure,
Nagpur
GM-F&A,
Shyam
Telecom, Ltd,
Founder &
CEO-J&M
Fashions
NIL
NIL
NIL
No
No
No
46
24
15/7/1995
3,979,405
NIL
NIL
No
B.Com and
Apparel
Production
Management
5 Mr. Sundeep
Chatrath
COO-Knits
Division (India)
B.A.
52
31
1/6/2017
3,901,495
6 Mr. Anand
Bhatia
Vice-President
(Production)
B.Sc., MBA
50
27
9/8/2011
3,696,454
7 Mr. Sumit
Kumar
8 Mr. Ashutosh
Sharma
Executive
Assistant-
Chairman
Assistant Vice
President
(Human
Resource)
37
12
8/2/2017
3,529,012
B.E. (M.E.),
PGDMA,
CFA-II
P.G.
40
18
15/3/2018
2,780,732
9 Mr. Ashish
Kumar Garg
Vice-President
(Sampling &
Merchandising)
10 Mr. Sachin
Gupta
Vice-President
(SBUYS)
B.Sc., PG-
GMT
B. E. (IE)
from IIT
Roorkee
Note: Nature of employment is non contructual
41
20
30/1/2010
2,417,741
46
24
8/2/2011
2,133,507
Head-
Merchandising,
Gupta Exim,
Faridabad
Factory
Manager,
Texport
Fashion Ltd
AGM, Punj
Lloyd
Head & GM-
Paras Group
(Real Estate
& Education
Business)
Sr. Business
Manager, Shahi
Export
Busana
Apparel Group,
Indonesia
NIL
No
NIL
No
NIL
NIL
NIL
NIL
No
No
No
No
Pearl Global Industries Limited Annual Report 2018-19 Annexure-IX to the Directors’ Report
Remuneration of Executive Directors
Sl.
No.
Name of
Employee
Designation
Educational
qualification
Age Experience
(in years)
Date of
Joining
Remuneration
paid
Previous
employment
51
Percentage
of equity
share held
Whether
employee is
relative of
any Director
or Manager
1 Mr.Pulkit Seth Managing
Director
2 Mrs. Shifalli
Seth
Whole-Time
Director
3 Mr. Vinod
Vaish
Whole-Time
Director
39
15
1/11/2004
12,050,400
NIL
32.07
Yes
38
14
1/5/2005
7,550,400 Pearl Global
Ltd.
0.93
Yes
Bachelor
of Business
Management
Bachelor
degree in
Business
Administration
B.Sc.
61
29
8/6/2009
1,731,386 Director,
NIL
No
Uttranchal
Biodiesel Ltd
Note: Nature of employment is contructual
For and on behalf of the Board
for PEARL GLOBAL INDUSTRIES LIMITED
(VINOD VAISH)
Whole-Time Director
DIN 01945795
(PULKIT SETH)
Managing Director
DIN 00003044
Place: Gurugram
Date: May 28, 2019
Annexure X to the Directors’ Report
Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required under the
Companies (Accounts) Rules, 2014.
A. CONSERVATION OF ENERGY
(i) Steps taken for conservation of energy:
-
-
-
-
Installed Steam boilers in place of electrical boilers
Replaced old office electrical items like Air Conditions, fans with energy efficient ones.
Other measures like placing focused lighting systems and reducing lights wherever not needed.
Effective utilization of work station for energy conservation
(ii) Steps taken by the Company for utilizing alternate sources of energy:
The Company being into garment manufacturing does not consume heavy electricity. However, The Company has
installed 200 KW capacity of solar energy plant at its factory located at chennai.
(iii) The Capital investment on energy conversation equipment:
The Company has invested approx Rs. 1.07 crore for installation of solar energy plant.
B. TECHNOLOGY ABSORPTION :
(i) Efforts made towards technology absorption:
Nil
Pearl Global Industries Limited Annual Report 2018-19
52
Annexure-X to the Directors’ Report
(ii) Benefits derived like product improvement, cost reduction, product development or import substitution:
Not Applicable
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the
financial year):
a
b
c
d
: Not Applicable
Technology Imported
: N.A.
Year of Import
Has technology been fully absorbed?
: N.A.
If not fully absorbed, areas where this has not taken place, and the reasons. : N.A.
(iv) The expenditure incurred on Research & Development:
Expenditure on R & D
a) Capital
b) Recurring
Total
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
(` in Lakh)
2018-19
2017-18
NIL
576.31
576.31
NIL
596.89
596.89
2018-19
77,985.01
29.68
81.68
78,096.37
2018-19
2,889.52
69.47
37.09
85.18
3,081.26
(` in Lakh)
2017-18
64,361.23
25.52
78.77
64,465.52
(` in Lakh)
2017-18
695.11
86.37
37.10
47.91
866.49
For and on behalf of the Board
for PEARL GLOBAL INDUSTRIES LIMITED
(VINOD VAISH)
Whole-Time Director
DIN 01945795
(PULKIT SETH)
Managing Director
DIN 00003044
Foreign Exchange Earnings
Particulars
Export of Goods - FOB basis
Interest Income
IT/SAP Income
Total
Foreign Exchange Outgo
Particulars
Imports
Foreign Travelling
EDI Expenses
Others
Total
Place: Gurugram
Date: May 28, 2019
Pearl Global Industries Limited Annual Report 2018-19
53
Statement containing salient features
of the financial statement of subsidiary companies
[Pursuant to first proviso to Sub-Section (3) of Section 129 of the Companies Act, 2013, read with Rule 5 of the Companies (Accounts)
Rules, 2014-AOC-1]
(` in Lakh)
Name of Subsidiary
Sl.
No.
Reporting
Period
Date of
Acquisi-
tion
Re-
porting
Cur-
rency
Ex-
change
rate
Equity
Share
Capital
Reserves
&
surplus
Total
assets
Total
Liabilities
Invest-
ments
Turnover
Profit/
Loss
before
taxation
Provi-
sion for
taxa-
tion
Profit
/Loss
after
taxation
Pro-
posed
dividend
% of
share-
holding
Other com-
prehensive
(Expenses)
Income
Total Com-
prehensive
income for
the Year
1 Pearl Apparel Fashions Limited
30.03.2007 31-Mar-19
INR
N.A. 2763.91
-2736.27
328.30
300.66
0.00
104.99
-183.10
126.24
-309.34
2 Pearl Global Kaushal Vikas Limited
(Formerly Pixel Industries Limited)
18.06.2014 31-Mar-19
INR
N.A.
5.00
-3.68
2.16
0.84
0.00
0.00
-0.68
0.00
-0.68
3 Norp Knit Industries Limited
22.03.2006 31-Mar-19
USD
69.17 3331.65
8495.24 30089.88
18262.98
321.02
58675.75
2277.20
300.90
1976.29
4 Pearl Global Fareast Limited
16.03.2009 31-Mar-19
USD
69.17 2998.58
3096.67 10887.42
4792.17
0.00
19940.23
948.43
0.00
948.43
5 Peal Global (HK) Limited
22.12.2009 31-Mar-19
USD
69.17 6266.92
2350.42 37100.59
27217.19 11887.76
81909.90
530.55
121.62
408.93
6 PGIC Investment Limited
16.08.2016 31-Mar-19
USD
69.17
0.00
-40.60
4120.76
4161.36
0.00
0.28
-38.08
0.00
-38.08
7 Pearl Grass Creations Limited
11.07.2016 31-Mar-19
USD
69.17
276.69
-1214.22
1001.02
1938.55
0.00
3919.50
-609.81
0.00
-609.81
8 Vin Pearl Global Vietnam Limited
11.07.2016 31-Mar-19
USD
69.17
8.30
-1388.20
4507.22
5887.12
1317.46
189.91
-948.72
0.00
-948.72
9 Pearl Global Vietnam Co. Limited
01.05.2017 31-Mar-19
VND
0.00
621.14
-1796.38
3176.12
4351.37
0.00
8616.74
-802.63
0.00
-802.63
10 Prudent Fashions Limited
02.03.2017 31-Mar-19
BDT
0.82
6.52
-33.08
647.71
674.26
0.00
0.00
-27.12
0.00
-27.12
11 Pearl Global (Changzhou) Textile
14.11.2016 31-Mar-19
Technology Co., LTD
RMB
Yuan
10.33
81.68
-76.16
5.54
0.02
0.00
0.00
-58.70
0.00
-58.70
12 DSSP Global Limited
08.11.2012 31-Mar-19
USD
69.17 1041.11
2700.41 12121.63
6925.86
726.28
24666.66
561.41
121.62
439.79
13 PT Pinnacle Apparels
30.03.2006 31-Mar-19
USD
69.17 1040.31
3792.19
9178.94
4346.43
0.00
15369.27
471.98
123.40
348.58
-
-
-
-
-
-
-
-
-
-
-
-
-
100
100
99.99
100
100
100
80
100
100
100
100
-
-
-
-
(309.34)
(0.68)
1,976.29
948.43
(26.40)
382.53
-
-
(38.08)
(609.81)
(0.17)
(948.89)
-
-
-
(802.63)
(27.12)
(58.70)
100
3.20
442.99
69.91
3.20
351.78
Note:
In addition to above the Company has invested in 3000000 Preference Shares of ` 10/- each aggregating Rs.
3,00,00,000/- of Pearl Apparel Fashions Limited
For and on behalf of the Board
for PEARL GLOBAL INDUSTRIES LIMITED
(Pulkit Seth)
Managing Director
DIN 00003044
(Deepak Seth)
Chairman
DIN 00003021
(Raghav Garg)
Chief Financial Officer
(Sandeep Sabharwal)
Company Secretary
Place: Gurugram
Date: May 28, 2019
Pearl Global Industries Limited Annual Report 2018-19
54
Corporate Governance
1. COMPANY’S PHILOSOPHY
Corporate Governance is a set of systems and practices to ensure that the affairs of the Company are being managed
in a way which ensures accountability, transparency and fairness in all its transactions in widest sense and meet its
stakeholders aspirations. Good governance practices stem from the culture and mindset of the organization and at Pearl
Global Industries Limited, we are committed to meet the aspirations of all our stakeholders.
The demand of corporate governance require professional to raise their competency and capability levels to meet the
expectations in managing the enterprise and its resources effectively with the highest standards of ethics.
At Pearl Global Industries Limited, it is our belief that as we move closure towards our aspirations of becoming a global
corporation, our corporate governance standards must be globally benchmarked. This gives us the confidence of having
put in the right building blocks for future growth and ensuring that we achieve our ambitions in prudent and sustainable
manner.
Over the years governance processes and systems have been strengthened at Pearl Global Industries Limited.
Your Company is committed to best Corporate Governance and has fully complied with the requirements of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The Company in its
endeavor towards the best Corporate Governance and to provide transparency initiated various measures.
This report along with the chapters on Management Discussion and Analysis reports company’s compliance with SEBI
Listing Regulations.
2. BOARD OF DIRECTORS
As on 31st March 2019, the Company’s Board of Directors consists of 8 (Eight) members. The Chairman of the Board is
non-executive Promoter Director. The Board comprises of three executive Directors of whom one women Director and
five non-executive Directors, of whom four are Independent Directors. The composition of the Board is in conformity
with the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All non-executive
independent Directors are persons of eminence and bring a wide range of expertise and experience to the Board.
Composition and Category of the Board as on 31.03.2019 and their attendance in the Board and
Annual General Meetings are as hereunder:
Name of Director
Category
S.
No.
No. of outside
Directorships*
No. of Committee
Attendance
Member Chairman
Board
Meetings
Annual General
Meeting
1
2
3
4
5
6
7
8
Mr. Deepak Seth
Promoter,
Non-Executive
Mr. Pulkit Seth
Promoter, Executive
Mrs. Shifalli Seth
Promoter, Executive
Mr. Vinod Vaish
Executive
Mr. Chittranjan Dua
Mr. Rajendra K. Aneja
Mr. Anil Nayar
Mr. Abhishek Goyal
Independent
Non-executive
Independent
Non-executive
Independent
Non-executive
Independent
Non-executive
2
1
1
1
5
-
-
2
1
2
--
3
4
3
4
2
--
--
--
1
1
--
2
1
1
2
3
4
3
1
3
4
Yes
Yes
No
No
Yes
No
Yes
Yes
*Foreign Companies, Bodies Corporate, Private Companies and Companies under Section 8 of the Companies Act, 2013 are
excluded for the above purpose.
Pearl Global Industries Limited Annual Report 2018-19
55
Name of other listed entities where Directors of the Company is Directors and category of Directorship:
Name of Director
DIN
Name of listed entities in which the
concerned Director is a Director
Category of Directorship
Mr. Deepak Seth
00003021 PDS Multinational Fashions Limited
Mr. Pulkit Seth
Mrs. Shifalli Seth
Mr. Vinod Vaish
00003044 NIL
01388430 NIL
01945795 NIL
Mr. Chittranjan Dua
00036080 TVS Motor Company Limited
Gillete India Limited
Mr. Rajendra Kumar Aneja
Mr. Anil Nayar
Mr. Abhishek Goyal
00731956 NIL
01390190 NIL
01928855 NIL
Promoter,
Non-Executive Director
NIL
NIL
NIL
Independent
Non-Executive Director
Independent
Non-Executive Director
NIL
NIL
NIL
Mr. Deepak Seth, Chairman, Mr. Pulkit Seth, Vice Chairman & Managing Director and Mrs. Shifalli Seth, Whole-Time
Director are relatives. Mrs. Shifalli Seth is wife of Mr. Pulkit Seth, Mr. Pulkit Seth is Son of Mr. Deepak Seth.
There is no Nominee or Institutional Directors on the Board of the Company.
During the financial year 2018-19, four (4) Board Meetings were held on 29th May 2018, 9th August 2018, 13th November
2018 and 12th February, 2019.
Mr. Deepak Seth, Chairman holds 28,62,145 equity shares (13.21%), Mr. Pulkit Seth, Vice Chairman & Managing
Director holds 69,47,621 equity shares (32.07%) and Mrs. Shifalli Seth, Whole Time Director holds 2,01,478 equity
shares (0.93%) of the Company. No other Director holds any equity share in the Company.
Details of familiarisation programmes imparted to Independent Directors are disclosed at Company’s website at http://
www.pearlglobal.com/investors/policy
Skills/Expertise/Competence of the Board of Directors
The Board comprises qualified members who bring the required skill, competence and expertise that allow them to make
effective contribution to the Board.
The following is the list of core skills/expertise/competencies identified by the Board of Directors as required in the
context of the business of the Company for it to function effectively and those actually available the Board:
Skill area
Description
Number of Directors
having particular skills
Product design,
Manufacturing,
Sales and Marketing
Finance
Global Business
• Experience in design and manufacturing of products and
developing strategies to increase sales and market share.
• Qualification and experience in accounting and finance
and ability to understand key financial statements, strategic
financial planning and budgets.
• Experience in driving business in markets around the world.
• Understanding of diverse business environments, economic
conditions, cultures and regulatory frameworks.
3
6
3
Pearl Global Industries Limited Annual Report 2018-19
56
Skill area
Description
Number of Directors
having particular skills
Leadership and
Strategic Planning
Technology and
Innovation
Legal and
Governance
• Ability
to understand organization, processes, strategic
planning and risk management.
• Experience in developing talent, succession planning and
driving change and long term growth.
• Knowledge of technological trends in apparel industry.
• Ability to protect shareholders’ interest and observe appropriate
governance practices.
• Monitor risk and compliance management system including
legal framework.
Human Resource
and Administration
• Ability to understand Labour Laws and other related applicable
Laws including administration functions of the Company.
4
3
4
4
All the Independent Directors fulfill the conditions specified in the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and are independent of the management.
During the year, no Independent Director has resigned before the expiry of his tenure.
Information supplied to the Board
The Board has complete access to all information with the company. Inter alia, the following information are provided to the
Board and the agenda papers for the meetings are circulated in advance of each meeting or are tabled.
Annual Operating plans and budgets, Capital budgets, updates;
Quarterly results for the company and its operating divisions or business segments;
Minutes of meetings of Audit Committee and other committees of the board;
Information on recruitment and remuneration of senior officers just below the board level including appointment or
removal of Chief Financial Officer and Company Secretary;
Materially important show cause, demand, prosecution and penalty notices;
Fatal or serious accidents or dangerous occurrences;
Any materially significant effluent or pollution problems;
Any materially relevant default in financial obligations to and by the Company, or substantial non-payment for goods
sold by the Company;
Any issue, which involves possible public or product liability claims of a substantial nature;
Details of any joint venture or collaboration agreement;
Transactions that involve substantial payment towards goodwill, brand equity or intellectual property;
Significant labour problems and their proposed solutions;
Any significant development in the human resources and industrial relations fronts;
Sale of material nature, of investments, subsidiaries, assets, which is not in the normal course of business;
Quarterly details of foreign exchange exposure and the steps taken by management to limit the risks of adverse exchange
rate movement, and
Non-compliance of any regulatory, statutory nature or listing requirements and shareholder services such as non-
payment of dividend and/or delay in share transfer.
Pearl Global Industries Limited Annual Report 2018-19
57
3. AUDIT COMMITTEE
The Audit Committee has been constituted as per Section 177 of the Companies Act, 2013 and the guidelines set out
in Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The terms of reference
includes:-
• Overseeing financial reporting processes.
• Reviewing periodic financial results, financial statements and adequacy of internal control systems.
• Discussion and review of periodic audit reports and
• Discussions with external auditors about the scope of audit including the observations of the auditors.
• Recommending the appointment, remuneration and removal of statutory auditors.
• Discussing with internal auditors any significant findings and follow up there on.
• Reviewing the adequacy of internal control systems with management, external and internal auditors and reviewing
the Company’s risk management policies / systems.
• Reviewing the financial statements and quarterly financial results.
• Reviewing Management discussion and analysis of financial condition and result of operations.
• Reviewing statement of significant related party transactions.
• Review and monitor the auditor’s independence and performance, and effectiveness of audit process.
•
Scrutiny of inter-corporate loans and investments.
All the members of Audit Committee are Non-Executive Directors except Mr. Vinod Vaish and the Chairman of the Committee
is Non-Executive Independent Director. All the members of the committee possess financial/accounting expertise.
Mr. Sandeep Sabharwal, Company Secretary acts as Secretary of the Audit Committee.
During the year, the Audit Committee, met four times and discharged its responsibilities in accordance with Section 177 of
the Companies Act, 2013 and SEBI Listing Regulations. The meetings of the Audit Committee were held on 29th May 2018,
8th August 2018, 13th November 2018 and 12th February 2019 during the financial year 2018-19. The maximum gap between
any two meetings was less than one hundred twenty days.
During the year 2018-19, the members of the Audit Committee and their attendance are as under:
Composition
No. of Meetings attended
Audit Committee
Mr. Anil Nayar – Chairman
Mr. Vinod Vaish – Member Director
Mr. Abhishek Goyal -- Member Director
Mr. Rajendra K Aneja -- Member Director
4
4
4
1
4. NOMINATION AND REMUNERATION COMMITTEE
Terms of Reference of the Nomination and Remuneration Committee include:
• To guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel and Senior
Management.
• To evaluate the performance of the members of the Board and provide necessary report to the Board for further
evaluation of the Board.
• To recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior
Management.
• To provide to Key Managerial Personnel and Senior Management reward linked directly to their effort, performance,
dedication and achievement relating to the Company’s operations.
Pearl Global Industries Limited Annual Report 2018-19
58
• To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create
competitive advantage.
• To devise a policy on Board diversity
• To develop a succession plan for the Board and to regularly review the plan;
All the members of the Nomination and Remuneration Committee are Non Executive Directors.
Three meetings of the Nomination and Remuneration Committee were held on 9th August, 2018, 13th November,
2018 and 5th February, 2019, during the financial year 2018-19. Details of meeting of the members of Nomination and
Remuneration Committee and their attendance are as under:
Nomination and Remuneration Committee
Composition
No. of Meetings attended
Mr. Abhishek Goyal - Chairman
Mr. Deepak Seth - Member Director
Mr. Anil Nayar - Member Director
Mr. Rajendra K Aneja - Member Director
3
2
2
1
The Nomination and Remuneration Committee has laid down the criteria for evaluation of performance of Independent
Directors and the Board.
• Attendance and contribution at Board and Committee meetings
• Knowledge on specific matters like finance, legal, marketing, internal controls, risk management, and business
operations.
• Pro-active and positive approach with regard to Board and Senior Management particularly the arrangement for
management of risk and the steps needed to meet challenges from the competition.
• Openness to ideas, perspectives and opinions and ability to challenge old practices and throwing up new ideas for
discussion.
• Capacity to effectively examine financial and other information on operations of the Company and the ability to
make positive contribution thereon.
5. REMUNERATION OF DIRECTORS
Details of remuneration paid to all the Directors for the year 2018-19 are as under:
Name of the
Director(s)
Mr.Deepak
Seth
Mr. Pulkit
Seth
Mr.Anil
Nayar
Mr. C R
Dua
Mr.
Rajendra
K Aneja
Mr.
Abhishek
Goyal
Designation
Chairman Managing
Director
Director Director
Director
Director
Salary
Benefits
HRA
Special Allowance
Medical
Bonus
Commission
--
--
--
--
--
--
--
1,20,00,000
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
(Amount in Rs.)
Mrs.
Shifalli
Seth
Whole
Time
Director
Mr. Vinod
Vaish
Whole Time
Director
75,00,000
8,26,680
--
--
--
--
--
--
--
4,13,280
4,04,016
7,500
--
--
Pearl Global Industries Limited Annual Report 2018-19
59
Mrs.
Shifalli
Seth
Whole
Time
Director
--
21,600
28,800
--
Mr. Vinod
Vaish
Whole Time
Director
--
21,600
58,310
--
--
--
3 years Upto October
2020
Nil
Nil
Nil
Nil
Name of the
Director(s)
Mr.Deepak
Seth
Mr. Pulkit
Seth
Mr.Anil
Nayar
Mr. C R
Dua
Mr.
Rajendra
K Aneja
Mr.
Abhishek
Goyal
Designation
Chairman Managing
Director
Director Director
Director
Director
--
--
--
--
--
--
Nil
Nil
--
21,600
28,800
--
--
3 years
Nil
Nil
--
--
--
--
--
--
Nil
Nil
--
--
--
--
--
--
Nil
Nil
--
--
--
--
--
--
Nil
Nil
--
--
--
--
--
--
Nil
Nil
Pension
Provident Fund
Perquisites
Break up of fixed
components and
Performance
linked incentives
with performance
criteria
Performance
Incentive
Service Contract
Notice Period,
Severance fees
Stock Options
details (if any):
Whether issued at
discount. Period
over which it is
accrued and is
exercisable
Sitting Fees
Total
10,000
--
10,000
1,20,50,400
40,000
40,000
40,000
40,000
10,000
10,000
50,000
--
--
50,000
75,50,400
17,31,386
A sitting fee of Rs. 10,000/- is payable to Independent Directors for attending meeting of Independent Directors. Besides
above, the Company does not pay any other commission or remuneration to its Directors. The Company has no policy of
stock option, pension or severance fee for its Directors. Notice period of executive directors are as per Company policy,
i.e. 3 months. The Company does not have any separate service contract with executive directors apart from Resolution
of Board/shareholders.
6. STAKEHOLDER RELATIONSHIP COMMITTEE
As on 31st March, 2019,
The Stakeholder Relationship Committee comprises of:
-
Mr. Anil Nayar
-
Mr. Pulkit Seth
Mr. Vinod Vaish
-
Mr. Rajendra K Aneja -
The Chairman of the Committee is Non- Executive Independent Director.
Mr. Sandeep Sabharwal, Company Secretary is Compliance Officer of the Company.
Chairman
Member
Member
Member
Pearl Global Industries Limited Annual Report 2018-19
60
The Secretary of the Company acts as Secretary of the Committee.
The meetings of the Stakeholder Relationship Committee were held on 10th May, 2018, 25th July, 2018, 17th September,
2018, 16th October, 2018,10th November, 2018, 3rd December, 2018, 6th March,2019, 13th March,2019, and 30th March,
2019 during the financial year 2018-19.
Status of Shareholders Complaints during the year 2018-19
Complaints at the
beginning of the year.
Complaints received
during the year.
Complaints settled
during the year.
Complaints pending at
the ending of the year
Nil
2
2
Nil
7. CORPORATE SOCIAL REPOSIBILITY COMMITTEE
As on 31st March, 2019,
The Corporate Social Responsibility Committee comprises of:
-
Mr. Vinod Vaish
-
Mr. Pulkit Seth
-
Mr. Anil Nayar
The Chairman of the Committee is Executive Director.
The Secretary of the Company acts as Secretary of the Committee.
One meeting held on 29th May, 2018, during the financial year 2018-19.
8. FINANCE COMMITTEE
Chairman
Member
Member
The finance committee constituted by the Board of Directors on 13th November, 2018.
As on 31st March, 2019,
Chairman
The Finance Committee comprises of:
Mr. Pulkit Seth -
Mrs. Shifalli Seth - Member
Mr. Vinod Vaish - Member
The Chairman of the Committee is Executive Director.
The Secretary of the Company acts as Secretary of the Committee.
The meetings of Finance Committee were held on 10th January, 2019, 24th January, 2019, 12th February, 2019 and 5th
March, 2019, during the financial year 2018-19.
9. GENERAL BODY MEETINGS
Location and time where last 3 Annual General Meetings were held:
Year
AGM Location
Date
Time
2015-16
27th
2016-17
28th
2017-18
29th
Sri Sathya Sai International Centre, Pragati
Vihar (Near Pragati Vihar Hostel)
Lodhi Road, New Delhi-110 003
Sri Sathya Sai International Centre, Pragati
Vihar (Near Pragati Vihar Hostel)
Lodhi Road, New Delhi-110 003
Air Force Auditorium, Near R&R Hospital
Subroto Park, New Delhi-110 010
27.09.2016
10.30 A.M.
28.09.2017
03.30 P.M.
24.09.2018
10.30 A.M.
Pearl Global Industries Limited Annual Report 2018-19
61
Detail of Special Resolutions Passed During last three Annual General Meetings:
Particulars of Special Resolution
Date
Financial
Year
Sl.
No.
1
Re-appointment of Mrs. Shifalli Seth as Whole-Time Director of the
Company.
To approve remuneration of Mr. Pulkit Seth as Managing Director of the
Company.
To Increase the Investment Limit by Non Resident Indian (NRI) or
Overseas Citizen of Indian (OCI) in the Company.
Alteration of Memorandum of Association of the Company for
commencement of New Business.
2 NIL
3
Re-appointment of Mr. Pulkit Seth as Managing Director of the Company.
Revision in remuneration of Mr. Vinod Vaish as Whole-Time Director
of the Company.
Re-appointment of Mr. Vinod Vaish as Whole-Time Director of the
Company.
24th September, 2018
2017-18
24th September, 2018
2017-18
24th September, 2018
2017-18
24th September, 2018
2017-18
28th September, 2017
27th September, 2016
27th September, 2016
2016-17
2015-16
2015-16
27th September, 2016
2015-16
During the year, no Special Resolution was passed through Postal Ballot. No special resolution is proposed to be
conducted through postal ballot.
10. MEANS OF COMMUNICATION
(i) The quarterly results of the Company are published in leading and widely circulated English/Hindi National/
Regional Newspapers as per the requirements of the Listing Regulations with the Stock Exchanges. The results are
also submits to the BSE Limited and National Stock Exchange of India Limited, through their online portal.
(ii) The results normally published in Business Standard (English) and Naya India (Hindi).
(iii) The Company’s Financial Results, Shareholding Pattern and official news releases, if any, are displayed on the
Company’s website www.pearlglobal.com
(iv) The Company regularly updates the media, analysts, institutional investors, etc., through a formal presentation on
its financials as well as other business developments.
11. GENERAL SHAREHOLDER INFORMATION
(i) Annual General Meeting
30th Annual General Meeting is scheduled as under:-
Day
Date
Time
Venue
Tuesday
24th September, 2019
10.30 A.M.
Sri Sathya Sai International Centre
Pragati Vihar (Near Pragati Vihar Hostel)
Lodhi Road, New Delhi-110 003
(ii) Financial year
: The financial year covers the period 1st April to 31st March.
Financial Calendar, 2019-20 (Tentative)
First Quarter Results
: Second week of August, 2019
Second Quarter & Half Yearly Results
: Second week of November, 2019
Third Quarter Results
: Second week of February, 2020
Fourth Quarter & Annual Results
: Last week of May, 2020
Pearl Global Industries Limited Annual Report 2018-19
62
(iii) Dividend payment date
The dividend will be paid within 30 days from the date of Annual General Meeting, subject to declaration by the
Shareholders.
(iv) Date of Book Closure
: 18th September, 2019 to 24th September, 2019
(both days inclusive)
(v) Listing on Stock Exchanges and their Stock Code
Name of the Stock Exchanges, wherein shares of the Company are currently listed and their Script Code:
Stock Exchange
BSE LIMITED
1ST FLOOR, NEW TRADING RING
ROTUNDA BUILDING, P. J. TOWERS
DALAL STREET, FORT,
MUMBAI – 400 001Mumbai
NATIONAL STOCK EXCHANGE OF INDIA LTD.
“EXCHANGE PLAZA”, PLOT NO. C- 1, G- BLOCK,
BANDRA - KURLA COMPLEX,
BANDRA ( E ),
MUMBAI - 400 051
Script Code
532808
PGIL
The Annual Listing Fee for the financial year 2018-2019 has been paid to the Stock Exchanges within stipulated time.
The ISIN No. of the equity shares of your Company is INE940H01014.
(vi) Market Price Data: High, Low during each month in financial year 2018-19:
MONTH(S)
BOMBAY STOCK EXCHANGE
Company Code: 532808
NATIONAL STOCK EXCHANGE
Company Code: PGIL
April 2018
May 2018
June 2018
July 2018
August 2018
September 2018
October 2018
November 2018
December 2018
January 2019
February 2019
March 2019
HIGH
135.35
128.45
133.90
143.25
167.00
166.95
154.00
163.00
148.90
158.00
145.00
192.95
LOW
105.05
106.10
110.00
119.00
131.00
139.00
117.00
127.20
131.70
128.05
128.25
134.00
HIGH
135.50
128.55
134.00
139.20
170.00
169.85
153.00
146.90
150.00
157.45
147.70
192.90
LOW
101.60
109.00
110.00
118.45
131.00
137.50
119.00
130.05
131.00
131.25
130.10
133.00
Pearl Global Industries Limited Annual Report 2018-19
63
(vii) Share price performance in comparison to BSE Sensex and NSE Nifty:
MONTH(S)
(As on end of last trading day of
the month)
SHARE PRICES COMPARISION
BSE
NSE
PGIL
123.50
122.35
124.00
135.00
164.95
145.60
131.50
145.20
139.85
141.80
136.45
179.10
BSE (Sensex)
35160.36
35322.38
35423.48
37606.58
38645.07
36227.14
34442.05
36194.30
36068.33
36256.69
35867.44
38672.91
PGIL
125.35
122.60
123.30
134.90
165.90
143.75
132.40
144.65
136.15
133.70
134.10
178.70
NSE (Nifty)
10739.35
10736.15
10714.30
11356.50
11680.50
10930.45
10386.60
10876.75
10862.55
10830.95
10792.50
11623.90
April 2018
May 2018
June 2018
July 2018
August 2018
September 2018
October 2018
November 2018
December 2018
January 2019
February 2019
March 2019
(Viii) Registrar and Share Transfer Agent
Link Intime India Pvt. Limited
Nobel Heights, 1st Floor
Plot No.NH-2, C-1 Block
LSC Near Savitri Market
Janakpuri, New Delhi - 110 058.
Tel. No. : 011 - 41410592 - 94
Fax No. : 011 – 41410591
E-mail
: delhi@linkintime.co.in
(ix) Share Transfer System
The Company’s shares being in compulsory demat form are transferable through the depository system. The Shares
in physical form are processed by the Registrar and Transfer Agents and approved by the Stakeholder Relationship
Committee. Share transfer process reviewed by the Board.
(x) Distribution Schedule
(a) Distribution of Equity Shareholding of the Company as on 31st March 2019
Number of
Equity Shares * held
1 - 500
501 - 1000
1001 - 2000
2001 - 3000
3001 - 4000
4001 - 5000
5001 – 10000
10001 and above
Total
Shareholders
Equity shares held
Numbers
% to total
17048
268
124
54
25
21
36
68
17644
96.62
1.52
0.70
0.31
0.14
0.12
0.20
0.39
100.00
Numbers
1173972
201954
183536
134774
87712
101434
275802
19504753
21663937
% to total
5.42
0.93
0.85
0.62
0.41
0.47
1.27
90.03
100.00
Pearl Global Industries Limited Annual Report 2018-19
64
(b) Categories of Shareholders as on 31st March 2019
No. of Folio’s % to total Folios
No. of Shares
Held*
% to total
Shares
PROMOTERS
Indian
NRI
TOTAL (A)
Mutual Funds / Foreign Portfolio
Investors
Financial Institutions/Banks
NRI’s / Foreign Companies
Bodies Corporate
Clearing Members
Individual
Hindu Undivided Family
Trusts
NBFCs registered with RBI
Alternate Investment Funds
TOTAL (B)
TOTAL { (A) + (B) } = (C)
* Equity Share of the face value of Rs.10/- each.
4
1
5
2
6
213
129
49
15953
637
2
1
3
16995
17000
0.02
0.00
0.02
0.01
0.04
1.25
0.76
0.29
93.86
3.75
0.01
0.00
0.01
99.98
100.00
11562764
2862145
14424909
1301678
505598
266584
529705
58324
4011867
512285
260
100
52627
7239028
21663937
53.37
13.21
66.58
6.01
2.33
1.23
2.45
0.27
18.52
2.36
0.00
0.00
0.24
33.42
100.00
(xi) Dematerialisation of Shares and liquidity
The shares of the Company are in compulsory demat segment and are available for trading in the depository systems
of both NSDL and CDSL. As on 31st March 2019, 21520562 equity shares of the Company forming 99.33% of the
Share Capital of the Company stand dematerialized.
(xii) Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on
equity:
The Company has not issued any GDRs/ADRs/Warrants etc. till date.
(xiii) Commodity price risk or foreign exchange risk and hedging activities
The Company is into the business of exporting garments and may face foreign exchange fluctuation risk.
The Company uses derivative financial instruments, such as forward currency contracts, interest rate swaps, full
currency swaps and forward commodity contracts, to hedge its foreign currency risks and commodity price risks,
respectively. Such derivative financial instruments are initially recognized at fair value on the date on which a
derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial
assets when the fair value is positive and as financial liabilities when the fair value is negative. Embedded derivatives
are separated from the host contract and accounted for separately if the host contract is not a financial asset and
certain criteria are met. Any gains or losses arising from changes in the fair value of derivatives are taken directly to
statement of profit and loss.
(xiv) Plant locations:
The Company have following plants at various locations in India, Bangladesh, Indonesia and Vietnam, as follows:
i) 446, Udyog Vihar, Phase-V, Gurgaon - 122 016 (Haryana)
ii) Plot No.73,Udyog Vihar,Phase-I,Gurgaon-122016
iii) Plot No.274,Udyog Vihar,Phase-II,Gurgaon-122016
iv) 16-17, Udyog Vihar, Phase VI, Khandsa, Gurgaon - 122 004 (Haryana)
v) 751, Pace City II, Sector 37, Khandsa, Gurgaon - 122 004 (Haryana)
vi) Plot at Khasra No 15//19 & 22, Village Begumpur Khatola, Gurugram, Haryana – 122001
Pearl Global Industries Limited Annual Report 2018-19
65
vii) NH-8, Narsinghpur Village, District, Gurgaon (Haryana)
viii) No.64,Janakiraman Nagar,Puthagaram,Cuddapa Road,Kilattur,Chennai-600009
ix) NH-45 Chettipunniam Village near Chengalpattu,Kanchipuram District, Chennai-603204
x)
2/31/,Thirukahukundram Road, Melavalam Village, Madhuranthagam, Taluk, Kancheepuram
District-603303
xi) Plot No. 19A, NTTF Road, Peenya Industrial Area, Bengaluru-560058
xii) Norp Knit Industries Ltd, North Khailkur, P.O. National University, Gazipur-1704 Bangladesh.
xiii) Norp Knit Industries Ltd- 93, Islampur, Kodda, Nandun, Gazipur-1700, Bangladesh
xiv) Prudent Fashions Ltd. Kaichabari Road, Bypail, Ashulia, Savar, Bangladesh
xv) PT Pinnacle Apparels, JL Coaster No. 8, Blok A-15-15, a TEPZ, Kawasan Berikat Lamicitra Tanjung Emas
Export Processing Zone,Semarang-50174, Indonesia
xvi) PT Pinnacle Apparels, JL Coaster No. 8, Blok B-15, Kawasan Berikat Lamicitra Tanjung Emas Export Processing
Zone,Semarang-50174, Indonesia
xvii) PT Pinnacle Apparels, JL.Soekarno-Hatta No.55 Km 30.5, Blok KL Dusan Kutan, Rt04 Rw02 Kel. Randugunting,
Kec. Bergas, Kabupaten Semarang, Jawa Tengah-50552, Indonesia
xviii) Pearl Global Vietnam Company Limited, Dinh Tri Commune, Bae Giang City, Bae Giang Province,Vietnam
(xv) Registered Office of the Company:
A-3, Community Centre, Naraina Industrial Area,
Phase-II, New Delhi - 110 028
Corporate Office & Address for Correspondence:
Pearl Tower, Plot No.51, Sector-32
Gurugram - 122 001, Haryana (India)
In case of any Complaint, Investors can contact Compliance Officer:
Mr. Sandeep Sabharwal
Company Secretary
Pearl Global Industries Limited
Pearl Tower, Plot No.51, Sector-32
Gurugram - 122 001, Haryana (India)
Tel. No. : 91 - 124 - 4651714
Fax No. : 91 - 124 - 4651173
(xvi) Credit Ratings
The Company has obtained credit ratings from ICRA Limited. Credit ratings of the Company as at the end of the
financial year 2018-19 are given below:
Rating Agency
ICRA Limited
12. OTHER DISCLOSURES
Credit Rating
Long term rating : [ICRA] BBB (Stable)
Short term rating : [ICRA] A3+
a) There had been no materially significant related party transaction that might have potential conflict with the interests
of the Company at large. Transactions with related parties are disclosed in Note 47 of Notes to Financial Statement
in the Annual Report.
b) There has been no non-compliance, penalties/strictures imposed on the company by Stock Exchange(s) or SEBI or
any other Statutory Authority, on any matter related to capital markets, during the last three years.
c) The Company has a Whistle Blower Policy and Vigil Mechanism. No personnel of the Company have been denied
access to the Audit Committee.
Pearl Global Industries Limited Annual Report 2018-19
66
d) The Company has complied with all the mandatory requirements including Regulations 17 to 27 and 46 (2) (b) to
(i) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
e) As regard the non-mandatory requirements, the extent of compliance has been stated in this report against each of
them.
f) Policy for determining ‘material’ subsidiaries is disclosed at Company’s website at http://www.pearlglobal.com/
investors/policy
g) Policy on dealing with related party transactions is disclosed at Company’s website at http://www.pearlglobal.com/
investors/policy
h) During the financial year 2018-19, the Company has not raised funds through preferential allotment or qualified
institutional placement.
i) A Certificate from a Company Secretary in practice that none of the Directors on the Board of the Company have
been debarred or disqualified from being appointed or continuing as Directors of the Company by the Board/
Ministry of Corporate Affairs or any such statutory authority is annexed with this report.
j) The Board had accepted all recommendations of Committees of the Board which is mandatorily required, in the
financial year 2018-19.
k) The details of total fees for all services paid by the Company and its subsidiaries, on consolidated basis, to the
statutory auditors and all entities in the network firm/network entity of which statutory auditors is a part, are as
follows:
Particulars
Audit Fee
Other Services
Reimbursement of Expenses
Total
For the financial year ended
March 31, 2019
(Rs. in Lakh)
For the financial year ended
March 31, 2018
12.62
6.05
2.65
21.32
12.73
6.11
0.30
19.14
l) There were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013, during the financial year 2018-19.
13. The Company has fully complied with all the requirements of the Corporate Governance including the applicable
requirements specified in Regulation 17 to 27 and clause (b) to (i) of sub-regulation (20 of Regulation 46. There has been
no instance of non-compliance of any requirement of the Corporate Governance Report.
14. Non-Mandatory Requirements as specified in Part E of Schedule II of the SEBI Listing Regulations
Discretionary requirements are as follows:-
A. The Board
Maintenance of Non-Executive Chairman’s Office
Presently, the Company is maintaining office of the Non-Executive Chairman.
B. Shareholders Rights
The Company’s Financial Results, Shareholding Pattern and official news releases are displayed on the Company’s
website www.pearlglobal.com.
C. Modified opinion(s) in audit report – there is no modified opinion in the audit report.
D. Separate Posts of chairperson and chief executive officer
Presently, the Company has separate post of Non-executive Chairman and Managing Director.
E. Reporting of internal auditor-The internal auditor reports to Audit Committee as and when required.
Pearl Global Industries Limited Annual Report 2018-19
67
Compliance with the Code of Conduct
The Company has adopted a “Code of Conduct for the Directors and Senior Management”. The Code is available on the
official website of the Company www.pearlglobal.com.
The declaration from the Managing Director regarding compliance with the code by all the Directors and Senior
Management forms part of the Report.
Compliance certificate on Corporate Governance
A certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance is annexed with
this Annual Report.
CEO/CFO CERTIFICATION
The Managing Director and Chief financial Officer have certified to the Board, inter alia, the accuracy of financial statements
and adequacy of Internal Controls for the financial reporting purpose as required under Regulation 17(8) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, for the year ended 31st March 2019.
Disclosure with respect to demat suspense account / unclaimed suspense account:
In regards, shares remains unclaimed and lying in the IPO escrow A/c of the company for the financial year 2018-19,
information is as follows:
- Total shares outstanding at the beginning of Financial Year are 420 & total number of shareholders is 20.
- Number of shareholders approached the company for transfer of shares: Nil
- No. of shareholders to whom shares transferred from escrow a/c: Nil
- Aggregate number of shareholders & shares at the close of the year are 20 and 420 respectively.
- Voting rights of these shares shall remain frozen till claim made against their shares.
Electronic Clearing Service (ECS)
SEBI had vide its Circular No. DCC/FITTCIR-3/2001 dated October 15, 2001 advised that all companies should mandatorily
use ECS facility wherever available. In the absence of ECS facility, companies may use warrants for distributing the dividends
and vide its Circular No. D&CC/FITTCIR-04/2001 dated November 13, 2001 had advised companies to mandatorily print
the Bank Account details furnished by the Depositories, on the dividend warrants. This ensures that the dividend warrants,
even if lost or stolen, cannot be used for any purpose other than for depositing the money in the accounts specified on the
dividend warrants and ensures safety for the investors. However, members who wish to receive dividend in an account other
than the one specified while opening the Depository account, may notify their DPs about any change in the Bank Account
details.
Depository Services
For guidance on depository services, shareholders may write to the Company or to the respective Depositories:
National Securities Depository Ltd.
Central Depository Services (India) Ltd.
Trade World, 4th Floor, Kamala Mills Compound
Phiroze Jeejeebhoy Towers
Senapati Bapat Marg, Lower Parel, Mumbai-400013
28th Floor, Dalal Street, Mumbai-400023
Telephone : 022-24994200
Facsimile : 022-24972993
E-Mail : info@nsdl.co.in
Website : www.nsdl.co.in
Telephone : 022-22723333/3224
Facsimile : 022-22723199
E-Mail : investors@cdslindia.com
Website : www.cdslindia.com
Pearl Global Industries Limited Annual Report 2018-19 68
Management
Discussion and Analysis
INDUSTRY OVERVIEW
India is one of the largest exporter of textiles and apparels
with a massive raw material and manufacturing base. The
industry is a significant contributor to the economy, both
in terms of its domestic share and exports. It contributes
about seven percent to industry output, two percent to the
GDP and 15 percent to the country’s total exports earnings.
The sector is one of the largest sources of job creation in the
country, employing about 45 Mn people directly.
The Indian textile and apparel market was worth $ 90 bn in
2017.The market is further projected to reach $ 198bn by
2023, at a CAGR of around 14 percent during 2018-2023.
India is the largest textile exporter in the world. India’s share
in global trade of textiles and apparels is approximately 6
percent. Today the textile and apparel market has become a
vital contributor to the Indian Economy. The apparel export
has seen a positive trend from November 2018 onwards.
Between April-December 2018, Ready-made garments
(RMG) exports from India stood at $ 11,350.44 mn. Total
textile and apparel exports from India increased by seven
percent to Rs.1600.10 bn. In April to November 2018
compared to exports of Rs.1492.54 bn. in the corresponding
period of last fiscal. The total exports of textiles and apparels
are expected to touch $ 82bn by 2021 with CAGR of 12.06
percent.
India is one of the fastest growing economies in the world
and is the 6th largest economy that is expected to be among
the top five global economies by FY 2020.Currently, India
ranks 6th in the world in terms of nominal GDP and is the
third largest economy in the world in PPP terms. India’s
GDP is expected to reach US$3.5 trillion by FY2021, it is
also expected that this growth trajectory of Indian economy
will enable India to be among the top three global economies
by FY2050. Not to deny that sustained high-real GDP
growth of over 6% since FY1991 has led to a fundamental
transformation of the Indian economy.
the opportunities in markets globally and brings technology
& quality to clients, while reiterating its belief of delivering
the best, in customer services and manufacturing. Our
26000+ strong diversified, skilled, multicultural workforce
has the experience of working in different geographies, with
diverse product styles/categories, as our core differentiator.
Our product range includes knits, woven and bottoms
(basic and complex designs) across men, women and
kids wear segments. We have a well diversified and de-
risked manufacturing base across India, Indonesia and
Bangladesh. We have a total capacity to manufacture
around 69 million garments per annum (including own and
outsourced facilities).Our revenue structure is primarily
export based, with a major contribution coming from
exports to the United States. We provide total supply chain
solutions to customers-value retailers and high end fashion
brand, retails in the United States and Europe. Our business
model enables us to offer superior quality products across
various countries, catering to all kinds of consumers. Our
esteemed global clientele includes premium retailers in USA
and Europe, including GAP, Banana Republic, Kohl’s, Macy,
Ralph, Lauren, Tom Tailor and Next among others.
We strive to be the most preferred vendor to the top global
apparel brands and be ranked amongst the top garment
manufacturers in the world, in terms of quality, service
standards and ultimately-customers satisfaction, keeping in
line with our broader vision.
1. Our manufacturing facilities
Country
Name
Factories
India
Pearl Global
Bangladesh
Norp knit
Indonesia
Vietnam
Total
PT Pinnacle
Pearl Global Vietnam
11
2
3
1
17
COMPANY OVERVIEW
2. Our Pillars of Strengths
Pearl Global Industries Ltd is a multinational apparel
manufacturing conglomerate, with integrated value chain
around Design & Development, Global manufacturing,
marketing & distribution and sourcing & supply chain for the
world Apparel & Fashion Industry. Pearl Global Industries
is operating 19 state of the Art Manufacturing Plants out of
India (Gurgaon, Chennai, Bangaluru), Vietnam, Indonesia
and Bangladesh.
Pearl Global Industries Ltd is a dynamic enterprise, pursues
a) A Multi Location Manufacturing capability
Global apparels sourcing market is witnessing a
shift from China to other low-cost Asian countries,
primarily Bangladesh, India and Indonesia. Our
Company already has a strong manufacturing
presence in leading sourcing nations such as India,
Bangladesh, Indonesia and Vietnam. Each of these
countries exhibits certain core advantages.
Pearl Global Industries Limited Annual Report 2018-19
Management
Discussion and Analysis
b) Design Cell
Our Company has a dedicated in house design team
of 75+ designers in Hong kong, India, Bangladesh,
Indonesia, Vietnam, USA, UK and Spain. The
design teams continuously observe the trend in
all markets across the world and visit almost all
the globally renowned fashion and textile fairs to
refresh their inspiration for new design ideas. As
a result they are well equipped to serve the global
brands from concept boards to ready new samples.
New design ideas also emerge from our various
marketing teams, who are close to and in continuous
conversations with buyers located in Hong Kong,
London, USA and Germany. There is an increased
focus being placed on creating brand-specific
product designs to generate and accelerate business
opportunities for global brands and retailers.
c) Strong Compliance across all Factories:
Compliances in all our facilities are directly linked
to the corporate office, which drives all strategy of
social compliance, new initiatives and sustainability
directly from the top. The corporate compliance
acts as a communication hub and control tower
for all our customers, providing them with a single
point of contact. Strong compliances are established
and maintained in all our facilities in line with
international standards and several channels are
available in each facility to address any concerns.
We drive our social responsibility initiatives with
a focus on environmental sustainability, gender
equality, health and capacity building, in line with
our Chairman’s vision of a better world and the
United Nation’s Sustainable Development Goals.
3. E-Commerce Channels
We have already ventured into e-retail through our
online website www.sbuys.in . Our vision behind this
is to provide international trend to online shoppers. In
addition to our own retail platform, we have established
tie-ups with leading online marketplaces.
SbuyS is a popular brand among online shoppers for
western women wear and kids wear. It brings in the
latest international fashion in Women wear (19-29 yrs).
Beyond Clouds is our another flagship brand which
brings in interesting fashion wear for pre-teen girls (8-
14yrs).
69
www.sbuys.in has successfully completed four years and
is showing exponential growth every year. The brand
is managed by a team of experience and dedicated
professionals.
We are confident of capitalizing the growth prospect.
We expect that this channel to evolve gradually and
become more significant in the coming years. Since
our margin contribution through this channel is higher
than B2B, our top line growth in our B2C business has
positive impact on our bottom line.
COMPANY PERFORMANCE AND MANAGEMENT
OUTLOOK
The company has achieved a gross income of Rs. 866.56
Crore compared to Rs. 758.79 Crore in last financial year
and Net Profit Rs. 21.50 Crore as compared to Net Profit
Rs. 2.66 Crore in the previous year on the standalone basis
and consolidated income of Rs. 1,791.42 crore compared
to Rs. 1,543.60 in the last financial year and net profit
Rs. 67.10 crore as compared to net profit Rs. 23.08 crore in
the previous financial year.
Going forward, as the expanded capacity in Vietnam become
fully operational, the share of overseas manufacturing will
increase leading to improvement in overall margins.
In the last year as the expanded capacities in Bangalore
and Chennai fully operational, the share of in house
manufacturing already increased leading to improvement
in overall margins.
Forward integration into online fashion apparel retailing in
the brand ”SBUYS”. Online retailing is a high-growth space
and offers strong potential to build a business model with
healthy margin profile.
GOVERNMENT INITIATIVE
To promote exports of readymade garments and made-ups,
government of India increase Merchandise Export from
India Scheme (MEIS) rates from 4 to 6 percent under Mid-
Term review of Foreign Policy 2015-20.The government is
also making investments under the scheme for Integrated
Textiles Parks and the Technology Up-gradation Fund
Scheme for training workforce and to encourage private
investment in the Indian textile and apparel industry.
The Government has been implementing various policy
initiatives and programs for development of textiles and
handicrafts particularly
infrastructure
creation, skill development including:
technology,
for
Pearl Global Industries Limited Annual Report 2018-19
70
Management
Discussion and Analysis
• Amended
Technology
Up-gradation
Fund
Scheme(ATUFS)
Scheme for integrated Textile Parks
SAMARTH-Scheme for capacity building in textile
sector
•
•
•
Silk Samagra-integated silk development scheme
• North Eastern Region Textile Promotion Scheme
(NERTPS)
• National Handicraft Development Program (NHDP)
• Comprehensive Handicrafts Cluster Development
Scheme (CHCDS)
The Government approved scheme on rebate of state and
central embedded taxes (RoSCTL). RoSCTL came into
effect from 7th March,2019. It is applicable for both apparel
and made-ups. Apparels products currently get RoSCTL of
1.5% to 1.7%. Embedded taxes are total upto 5%.
The Indian government has come up with a number of
export promotion policies for textile sector. It has also
allowed 100 percent FDI in the Indian Textile sector under
automatic route.
OPPORTUNITIES & THREAT
Rising cost of labour in china and marginal price difference
in fabrics prices in India and china are helping India. Since
costs are rising in china, the media to long term business will
move to other countries which can better or match china’
cost and delivery capabilities. Since buyers are looking at
alternate markets for sourcing, India has greater chance,
being economically and socially stable country. Besides,
large garment industry in India is getting more organized
for higher demands.
However, the inflationary situation in India demands for
rise in wages for workers also. Cotton prices are also rising
in India, which require authorities intervention like ban on
cotton exports. Due to rising cost, India faces competition
from low cost countries like Bangladesh and Indonesia.
In today’s market scenario, where most of the top retailers of
the world are consolidating their vendor bases, stand alone
vendors are going out of business and there share is being
taken over by companies like PGIL. Vendors that are able
to offer value addition in terms of design input, provide
different sourcing options and have the operational and
financial resources to meet retailers increasing requirements
are being categorized as their “Preferred Vendors”. This
gives the vendor an edge over the competition. Due to all
its investments over the last couple of years, your company
through its subsidiaries has already been categorized as
Preferred Vendor by various big Retailers in US and Europe.
RISKS MANAGEMENT & CONCERNS
The overseas buyers are reducing not only their orders but
also their prices due to serious liquidity problems being
faced by them.
Garment manufacturing is totally a labour intensive and
even after greater automation it will remain so. The obsolete
and antiquated labour legislation has hindered the growth of
the extremely labour intensive garment manufacturing. The
restrictive industrial and labour laws restrain management’s
capability to respond professionally, effectively and speedily
to the fast changing dynamic international textile scenario
and request for labour reforms with flexible labour laws to
increase productivity.
There is an urgent need for flexible labour norms specific
to garment manufacturers and exporters to enable them to
meet the increasing international competition especially
with regard to employment of casual labour and overtime
hours of work during high season which are necessitated by
the requirement of meeting tight delivery schedules required
for export.
The Company has established factories and operating in the
region for long time continuous efforts for betterment of
labour has been conducted to improve the condition both
at work and home for labour company till now haven’t faced
any labour issues in terms of strike etc.
The Company is undertaking various measures like lean
manufacturing at ground level to increase the productivity
and further reduce rejection to improve margin.
INTERNAL CONTROL SYSTEM
The Company’s internal control system has been designed
to provide for:
i) Accurate recording of transactions with internal checks
and prompt reporting through SAP
ii) Adhere to applicable Accounting standards and policies.
iii) Review of capital investments and long term business
plans.
iv) Periodic review meetings
implementation of system.
to manage effectively
Pearl Global Industries Limited Annual Report 2018-19 Management
Discussion and Analysis
v) Compliance with applicable statutes, policies, listing
HUMAN RESOURCE MANAGEMENT
71
requirements and operating guidelines
vi) Effective use of resources and safeguarding of assets.
vii) IT systems with in built controls to facilitate all of the
above.
The Company has adequate systems of internal controls to
ensure that transactions are properly recorded, authorized
and reported apart from safeguarding its assets. Your
company has successfully
its
manufacturing units and will continue upgrading the same.
implemented SAP
for
The Company has its own Corporate Internal Audit set
up which carries out periodic audits at all locations and
all functions and brings out deviations to internal control
procedures. The observations arising out of audit are
periodically reviewed and compliance ensured. It has
successfully implemented SAP for its manufacturing units
and will continue upgrading the same.
The Pearl Global Industries Limited, forward-thinking and
employee centric human resource department is devoted
to providing effective policies, procedures, people-friendly
guidelines and support governance with the organization.
Our HR philosophy revolves around right people for the
right job, maintaining a safe, hygienic, and sustainable work
environment across geographies, capability building at all
level with program such as iLEAD [Leadership Development
Program], SEED [Operational Development Program],
innovate with technology with our Human Resource
Management System, Pay for Performance [Achieve: Pearl’s
Performance Management System]. There by building a
PearlONE culture, with employee engagement being centric
of all our HR initiatives. Presently Company employs 6200
work force.
DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE) IN KEY FINANCIAL RATIOS
Details of changes in Key Financial ratios are given below:
FY
2017-18
Reason for change in Ratio
FY
2018-19
%
Change
Particulars
S.
No.
1 Debtors Turnover (Days)
2
3
Inventory Turnover (Days)
Interest Coverage Ratio
4 Current Ratio
5 Debt Equity Ratio
48.37
118.25
3.25
1.15
0.13
44.93
125.62
2.01
1.13
7.66% Increased debtors due to change in customer mix
-5.86% Better control of inventory
61.38% Higher margins and increased turnover
1.97% Higher margins and reduced utilisation of
Working capital limits
0.16
-20.36% repayment of debts and no new loans
6 Operating Profit Margin
14.45%
9.20%
57.05% Higher margins and turnover
7 Net Profit Margin
8 Return on networth
2.48%
6.80%
0.35% 606.80% Higher margins and turnover
0.89% 662.27% Better profitability
CAUTION STATEMENT
Investors are cautioned that this discussion contains statements that involve risks and uncertainties. Words like anticipate,
believe, estimate, intend, will, expect and other similar expressions are intended to identify such forward looking statements.
The Company assumes no responsibility to amend, modify or revise any forward looking statements, on the basis of any
subsequent developments, information or events. Besides the Company cannot guarantee that these assumptions and
expectations are accurate or will be realized and actual results, performance or achievements could thus differ materially
from those projected in any such forward looking statements.
Pearl Global Industries Limited Annual Report 2018-19 72
Auditors’ Certificate Regarding Compliance of
Auditors’ Certificate Regarding Compliance of
Conditions of Corporate Governance
Conditions of Corporate Governance
To
The Members of Pearl Global Industries Limited
1. We, B.R. Gupta & Co., Chartered Accountants, the Statutory Auditors of PEARL GLOBAL INDUSTRIES LIMITED
(“the Company”), have examined the compliance of conditions of Corporate Governance by the Company, for the year
ended on 31st March 2019, as stipulated in regulations 17 to 27 and clauses (b} to (i) of regulation 46(2) and paras C and
D of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements ) Regulations, 2015 as amended (“SEBI
Listing Regulations”).
MANAGEMENT’S RESPONSIBILITY
2. The compliance of conditions of Corporate Governance is the responsibility of the Management. This responsibility
includes the design, implementation and maintenance of internal control and procedures to ensure compliance with the
conditions of the Corporate Governance stipulated in the SEBI Listing Regulations.
AUDITORS’ RESPONSIBILITY
3. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for
ensuring compliance with the conditions of the Corporate Governance. It is neither an audit nor an expression of
opinion on the financial statements of the Company.
4. We have examined the books of account and other relevant records and documents maintained by the Company for
the purposes of providing reasonable assurance on the compliance with Corporate Governance requirements by the
Company.
5. We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note
on Certification of Corporate Governance issued by the Institute of the Chartered Accountants of India (the ICAI},
the Standards on Auditing specified under Section 143(10) of the Companies Act 2013, in so far as applicable for the
purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special Purposes (Revised 2016)
issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI.
6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality
Control for Firms that Perform Audit s and Reviews of Historical
Opinion
7. Based on our examination of the relevant records and according to the information and explanations provided to us
and the representations provided by the Management, we certify that the Company has complied with the conditions of
Corporate Governance as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and paras C and D
of Schedule V of the Listing Regulations during the year ended 31 March 2019.
8. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or
effectiveness with which the Management has conducted the affairs of the Company.
For B.R. Gupta & Co.
Chartered Accountants,
Firm’s Registration Number 008352N
(Deepak Agarwal)
Partner
(FCA-073696)
UDIN: 19073696AAAAAC5178
Place: New Delhi
Date: 28.05.2019
Pearl Global Industries Limited Annual Report 2018-19 Declaration of Compliance with Code of Conduct
of Board of Directors and Senior Management
This is to certify that as per the provisions of Regulation 26 and Schedule V of Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board Members and the Senior Management
personnel have affirmed compliance with the Code of Conduct for the financial year ended 31st March, 2019.
73
For Pearl Global Industries Limited
Pulkit Seth
Managing Director
DIN 00003044
Place: Gurugram
Date: May 28, 2019
Certification by Managing Director and Chief
Financial Officer of Pearl Global Industries Limited
We, Pulkit Seth, Managing Director and Raghav Garg, Chief Financial Officer of Pearl Global Industries Limited to the best
of our knowledge and belief certify that:
A. We have reviewed the financial statements and the Cash Flow Statement for the year ended 31st March, 2019 and to best
of our knowledge and belief:
1) these statements do not contain any materially untrue statement or omit any material fact or contain statements
that might be misleading.
2) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing
accounting standards, applicable laws and regulations.
B. We also certify that to the best of our knowledge and belief, there are no transactions entered into by Pearl Global
Industries Limited during the year, which are fraudulent, illegal or violate of the Company’s Code of Conduct.
C. We are responsible for establishing and maintaining internal controls for financial reporting and have evaluated the
effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the
Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we
are aware and the steps we have taken or propose to take to rectify these deficiencies.
D. We have indicated to the Auditors and the Audit Committee:
1) Significant changes, if any, in internal control over financial reporting during the year.
2) Significant changes, if any, in accounting policies during the year and that the same have been disclosed in the notes
to the financial statements; and
3) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management
or an employee having a significant role in the company’s internal control system over financial reporting.
Place: Gurugram
Date: May 28, 2019
(Pulkit Seth)
Managing Director
(Raghav Garg)
Chief Financial Officer
Pearl Global Industries Limited Annual Report 2018-19
74
Certificate of Non-Disqualification of Directors
(Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015)
To,
The Members of
Pearl Global Industries Limited
A-3, Community Centre,
Naraina Industrial Area, Phase-II,
New Delhi-110028
We have examined the relevant register, records, forms, returns and disclosures received from the Directors of Pearl Global
Industries Limited, having CIN L74899DL1989PLC036849 and having registered office at A-3, Community Centre,
Naraina Industrial Area, Phase-II, New Delhi-110028, (hereinafter referred to as “the Company”), produced before us by
the Company for the purpose of the issuing this Certificate, in accordance with the Regulation 34(3) read with Schedule V
Para-C clause 10(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In our opinion and to the best of our information and according to the verifications (including Director Identification
Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to us by the
Company and respective Directors, we hereby certify that none of the Directors on the Board of the Company as stated below
for the Financial Year ending on 31st March, 2019 have been debarred or disqualified from being appointed or continuing
as Directors of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other
Statutory Authority.
DIN
S.
No.
1
2
3
4
5
6
7
8
00003021
00003044
01388430
01945795
00036080
01390190
00731956
01928855
Name of Director
Mr. Deepak Seth
Mr. Pulkit Seth
Mrs. Shifalli Seth
Mr. Vinod Vaish
Mr. Chittranjan Dua
Mr. Anil Nayar
Mr. Rajendra Kumar Aneja
Mr. Abhishek Goyal
Date of appointment in Company
(DD-MM-YYYY)
22/03/1994
01/11/2004
19/01/2012
19/01/2012
12/09/2006
19/01/2012
12/09/2006
26/05/2017
Ensuring the eligibility of for the appointment / continuity of every Director on the Board is the responsibility of the
management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate
is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the
management has conducted the affairs of the Company.
For Deepak Somaiya & Co.
Company Secretaries
(CS Deepak Somaiya)
Proprietor
FCS-5845
COP-5772
Date: May 21, 2019
Place: New Delhi
Pearl Global Industries Limited Annual Report 2018-19 75
Independent Auditors’ Report
To the Members of PEARL GLOBAL INDUSTRIES LIMITED
Report on the Audit of the Consolidated Financial Statements
OPINION
We have audited the accompanying consolidated financial statements of Pearl Global Industries Limited (“the Holding
Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as ‘the Group’), which
comprise the Consolidated Balance Sheet as at March 31, 2019, the Consolidated Statement of Profit and Loss (including
Other Comprehensive Income), the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash
Flows for the year ended on that date, and notes to the consolidated financial statements, including a summary of the
significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial
statements”).
In our opinion and to the best of our information and according to the explanations given to us and based on the
consideration of reports of other auditors on separate financial statements and other information of the subsidiaries, the
aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (the “Act”) in the
manner so required and give a true and fair view in conformity with Indian Accounting Standards prescribed under section
133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended (“Ind AS”) and other
accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at March 31, 2019, the
consolidated Profit (consolidated financial performance including other comprehensive income), consolidated changes in
equity and its consolidated cash flows for the year ended on that date.
BASIS FOR OPINION
We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing (SAs)
specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s
Responsibilities for the Audit of the consolidated financial statements section of our report. We are independent of the Group
in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the
ethical requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act
and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements
and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained and the audit evidence obtained by the
other auditors in terms of their reports referred to Other Matters paragraph below is sufficient and appropriate to provide a
basis for our opinion.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements for the financial year ended March 31, 2019. These matters were addressed in the context
of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be
communicated in our report:
Key Audit Matters
S.
No.
1. Defined Benefit Plan Liabilities
Refer Note 39 to the accompanying standalone financial
statements as at March 31, 2019,
liabilities. The valuation of
As at March 31, 2019, the Group has defined benefit
plan
liability for such
defined benefit plan requires significant judgement and
expertise primarily in respect of key assumptions used
like economic assumptions, demographic assumptions,
employee attrition rate, discount rate, inflation etc. This
area was significant to our audit because:
How our audit addressed the key audit matter
Our procedures included, but were not limited to the
following:
- Obtained an external actuary’s report used in the
valuation of defined benefit plan liabilities and
reviewed the methodologies adopted by the actuary
in forming the valuation.
- Evaluated the key financial assumptions used for the
valuation of scheme liabilities including the discount
and inflation rate and also verified that whether the
same are consistent with industry practice.
Pearl Global Industries Limited Annual Report 2018-19 76
Independent Auditors’ Report
To the Members of PEARL GLOBAL INDUSTRIES LIMITED
Report on the Audit of the Consolidated Financial Statements
- the complexities involved in the valuation;
- defined benefit obligation is highly sensitive to changes
in aforesaid assumptions and a change in a number of
these key assumptions can have a material impact on
the calculation of the liability; and
- the parameter most subject to change is the discount
rate.
- Compared the assumptions in respect of increase
in salary to historic salary increase, change in
employee bases eligible for valuation, considered the
appropriateness of the mortality assumptions.
found within
the
The assumptions used were
benchmarks and were considered appropriate. We
have read the disclosures in the financial statements in
respect of defined benefit schemes and based on our
verification, found the same consistent with relevant
accounting standard.
INFORMATION OTHER THAN CONSOLIDATED FINANCIAL STATEMENTS AND AUDITOR’S REPORTS THEREON
The Holding Company’s Board of Directors is responsible for the other information. The other information comprises the
information included in the annual report, but does not include the consolidated financial statements and our auditor’s
report thereon. The information included in the annual report is expected to be made available to us after the date of the
auditor’s report.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
When we read the other information, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance and take necessary actions, as applicable under the applicable
laws and regulations.
RESPONSIBILITY OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE CONSOLIDATED
FINANCIAL STATEMENTS
The Holding Company’s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect
to preparation of these consolidated financial statements that give a true and fair view of the consolidated financial
position, consolidated financial performance, consolidated total comprehensive income, consolidated changes in equity and
consolidated cash flows of the Group in accordance with the Ind AS and other accounting principles generally accepted
in India including the Ind AS specified under Section 133 of the Act. The respective Board of Directors of the companies
included in the Group are responsible for maintenance of the adequate accounting records in accordance with the provisions
of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring
the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated
financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error,
which have been used for the purpose of preparation of the consolidated financial statements by the directors of the Holding
Company, as aforesaid.
In preparing the consolidated financial statements, the respective Board of Directors of the Company included in the Group
are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors of the companies included in the Group are also responsible for overseeing their financial
reporting process of the Group.
Pearl Global Industries Limited Annual Report 2018-19 77
Independent Auditors’ Report
To the Members of PEARL GLOBAL INDUSTRIES LIMITED
Report on the Audit of the Consolidated Financial Statements
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that
are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our
opinion on whether the Holding Company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group of which we are independent auditors to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities
included in the consolidated financial statements of which we are the independent auditors. For the other entities
included in the consolidated financial statements, which have been audited by other auditors, such other auditors
remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance of the Holding Company and such other entity included in the
consolidated financial statements of which we are the independent auditors regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
Pearl Global Industries Limited Annual Report 2018-19 78
Independent Auditors’ Report
To the Members of PEARL GLOBAL INDUSTRIES LIMITED
Report on the Audit of the Consolidated Financial Statements
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements for the financial year ended March 31, 2019 and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits
of such communication.
OTHER MATTERS
We did not audit the financial statements / financial information of four subsidiaries whose financial statements / financial
information reflects total assets (before eliminating inter – company balances ` 17,565.31 lakh) of ` 72,918.63 lakh as at
March 31, 2019 and total revenue (before eliminating inter- company transactions ` 67,645.86 lakh) of ` 164,742.28 lakh and
net cash inflows amounting to ` 19.62 lakh for the year ended March 31, 2019, as considered in the consolidated financial
statements. These financial statements and other information have been audited by other auditors whose reports have been
furnished to us by the management and our opinion on the consolidated financial results, in so far as it relates to the amounts
and disclosures included in respect of these subsidiaries, and our report in terms of sub-section (3) of Section 143 of the Act,
in so far as it relates to the aforesaid subsidiaries, is based solely on the reports of such other auditors.
Further, of these subsidiaries, three subsidiaries are located outside India whose financial statements and other financial
information have been prepared in accordance with accounting principles generally accepted in their respective countries
and which have been audited by other auditors under generally accepted auditing standards applicable in their respective
countries. The Holding Company’s Management has converted the financial statements of such subsidiaries located outside
India from accounting principles generally accepted in their respective countries to accounting principles generally accepted
in India. We have audited these conversion adjustments made by the Holding Company’s Management. Our opinion, in so
far as it relates to the financial information of such subsidiaries located outside India, is based on the reports of other auditors
and the conversion adjustments prepared by the Management of the Holding Company and audited by us.
Our opinion on the consolidated financial results is not modified in respect of this matter with respect to our reliance on the
work done by and the reports of other auditors.
Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below,
is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other
auditors and the financial statements / financial information certified by the Management.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by Section 143(3) of the Act, based on our audit and on the consideration of report of the other auditors
on separate financial statements and the other information of subsidiaries, as noted in the ‘other matter’ paragraph we
report, to the extent applicable, that:
a) We / the other auditors whose report we have relied upon have sought and obtained all the information and
explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the
aforesaid consolidated financial statements.
b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated
financial statements have been kept so far as it appears from our examination of those books and reports of the other
auditors.
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including (including Other
Comprehensive Income), Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash
Flows dealt with by this report are in agreement with the relevant books of account maintained for the purpose of
preparation of the consolidated financial statements.
Pearl Global Industries Limited Annual Report 2018-19 79
Independent Auditors’ Report
To the Members of PEARL GLOBAL INDUSTRIES LIMITED
Report on the Audit of the Consolidated Financial Statements
d) In our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified under Section 133
of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the directors of the Holding Company as on March 31,
2019 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors
of the subsidiaries companies incorporated in India, none of the directors of the Group’s companies incorporated in
India is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy and the operating effectiveness of the internal financial controls with reference to these
consolidated financial statements of the Holding Company and its subsidiaries companies incorporated in India,
refer to our separate Report in “Annexure A”.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according
to the explanations given to us and based on the report of other auditors on separate financial statements of the
subsidiaries, as noted in the ‘other matters’ paragraph:
i. The consolidated financial statements disclose impact of pending litigations on the consolidated financial
position of the Group - Refer Note No. 46 to the consolidated financial statements.
ii. The Group did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund
by the Holding Company and its subsidiaries incorporated in India.
2. With respect to the matter to be included in the Auditors’ report under Section 197(16):
In our opinion and based on the consideration of reports of other statutory auditors of the subsidiaries, the managerial
remuneration for the year ended March 31, 2019 has been paid /provided by the holding Company and its subsidiaries
incorporated in India to their directors in accordance with the provisions of section 197 read with Schedule V of the Act.
For B.R. Gupta & Co.
Chartered Accountants,
Firm’s Registration Number 008352N
(Deepak Agarwal)
Partner
Membership Number 073696
Place of Signature: Gurugram
Date: May 28, 2019
Pearl Global Industries Limited Annual Report 2018-19
80
Independent Auditors’ Report
To the Members of PEARL GLOBAL INDUSTRIES LIMITED
Report on the Audit of the Consolidated Financial Statements
Annexure ‘A’ to the Independent Auditors’ Report of even date on the Consolidated Financial Statement of Pearl
Global Industries Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act,
2013 (“the Act”)
In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March
31, 2019, we have audited the internal financial controls with reference to financial statements of Pearl Global Industries
Limited (“the Holding Company”) and its Subsidiaries which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Director of the Holding Company and its subsidiaries companies, which are companies incorporated
in India, are responsible for establishing and maintaining internal financial controls based on the internal control with
reference to these consolidated financial statement criteria established by the respective companies considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation
and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to respective company’s policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of
reliable financial information, as required under the Companies Act, 2013.
Auditors’ Responsibility
Our responsibility is to express an opinion on the internal financial controls with reference to these consolidated financial
statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial
Controls over Financial Reporting statements (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and
deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal
financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered
Accountants of India. Those Standards and the Guidance note require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference
to these consolidated financial statements was established and maintained and if such controls operated effectively in all
material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
system with reference to these consolidated financial statements and their operating effectiveness. Our audit of internal
financial controls with reference to these consolidated financial statements included obtaining an understanding of internal
financial controls with reference to these consolidated financial statements, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their
reports referred to in the other matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion
on the internal financial controls system with reference to these consolidated financial statements.
Meaning of Internal Financial Controls with reference to financial statements
A company’s internal financial control with reference to these consolidated financial statements is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal financial control with
reference to these consolidated financial statements includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company;
Pearl Global Industries Limited Annual Report 2018-19 81
Independent Auditors’ Report
To the Members of PEARL GLOBAL INDUSTRIES LIMITED
Report on the Audit of the Consolidated Financial Statements
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorisations of management and directors of the company;
(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition
of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to financial statements
Because of the inherent limitations of internal financial controls with reference to these consolidated financial statements,
including the possibility of collusion or improper management override of controls, material misstatements due to error or
fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference
to these consolidated financial statements to future periods are subject to the risk that the internal financial control with
reference to these consolidated financial statements may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion to the best of our information and according to the explanations given to us and based on the consideration of
the reports of the other auditors referred to in the Other Matters paragraph below, the Holding Company and its subsidiaries
companies which are incorporated in India, have, in all material respects, an adequate internal financial controls system with
reference to these consolidated financial statements and such internal financial controls with reference to these consolidated
financial statements were operating effectively as at March 31, 2019, based on the internal control criteria established by
the respective companies considering the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
Other Matters
Our aforesaid report under section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial
controls in so far as it relates to one subsidiary companies, which is incorporated in India and where such reporting under
section 143(3) of the Companies Ac, 2013 is applicable, is based on the corresponding report of auditor of such subsidiary
incorporated in India. Our opinion is not modified in respect of the above matters
For B.R. Gupta & Co.
Chartered Accountants,
Firm’s Registration Number 008352N
(Deepak Agarwal)
Partner
Membership Number 073696
Place of Signature: Gurugram
Date: May 28, 2019
Pearl Global Industries Limited Annual Report 2018-19 82
Consolidated Balance Sheet
as at March 31, 2019
Particulars
Assets
I.
1. Non-current assets
(a) Property, plant and equipment
(b) Capital work in progress
(c) Investment properties
(d) Goodwill
(e) Other Intangible assets
(f) Financial assets
(i) Investment
(ii) Loans
(iii) Other financial assets
(g) Deferred tax assets (net)
(h) Non current tax assets (net)
(i) Other non current assets
Total Non-current assets
2. Current assets
(a) Inventories
(b) Financial assets
(i) Investments
(ii) Trade receivables
(iii) Cash and cash equivalents
(iv) Bank balances other than cash and cash equivalents
(v) Loans
(vi) Other financial assets
II.
1.
2.
(c) Other current assets
Total current assets
Total Assets
Equity and Liabilities
Equity
(a) Equity share capital
(b) Other equity
Equity attributable to equity shareholders
Non - controlling interest
Total Equity
Liabilities
Non- current liabilities
(a) Financial liabilities
(i) Borrowings
(ii) Other financial liabilities
(b) Provisions
(c) Deferred tax liabilities
(d) Other non current liabilities
Total non- current liabilities
Current liabilities
(a) Financial liabilities
(i) Borrowings
(ii) Trade payables
Total outstanding due of micro enterprises and small enterprises
Total outstanding due of creditors other than micro enterprises and small enterprises
(iii) Other financial liabilities
(b) Other current liabilities
(c) Provisions
(d) Current tax liabilities (net)
Total Current liabilities
Total Equity and Liabilities
Summary of Significant Accounting Policies
The accompanying notes form an integral part of these consolidated financial statements
As per our Report of even date attached
For B.R. Gupta & Co.
Chartered Accountants
Firm’s Registration Number 008352N
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2018
As At
March 31, 2019
Note
No.
4
5
6
7
8
9
10
11
12
13
14
15
9
16
17
18
10
11
14
19
20
21
22
23
12
24
21
25
22
24
23
26
3
24,355.89
778.62
7,429.89
1,897.56
114.94
3,276.16
2,293.60
1,402.45
-
452.22
1,354.45
43,355.78
17,901.94
840.42
7,514.36
1,817.74
134.83
3,109.77
2,104.03
2,186.95
315.64
206.07
2,585.78
38,717.53
23,632.17
21,003.91
-
22,177.86
9,434.12
1,707.71
1,664.72
1,687.43
6,389.55
66,693.56
110,049.34
2,166.39
44,820.35
46,986.74
1,153.26
48,140.00
8,106.76
222.00
2,112.60
236.46
3,309.63
13,987.45
632.62
14,196.59
9,225.83
441.67
334.99
2,040.29
7,073.27
54,949.17
93,666.70
2,166.39
37,346.98
39,513.37
965.10
40,478.47
4,898.92
158.54
1,879.75
-
3,617.84
10,555.05
23,486.07
21,354.43
63.70
18,042.77
5,156.89
866.66
81.67
224.13
47,921.89
110,049.34
98.88
10,826.42
8,019.16
618.58
61.09
1,654.62
42,633.18
93,666.70
0
-
For & on behalf of Board of Directors of Pearl Global Industries Limited
Deepak Agarwal
Partner
Membership Number 073696
Place of Signature : Gurugram
Dated: May 28, 2019
Pulkit Seth
Managing Director
DIN 00003044
Raghav Garg
Chief Financial Officer
Deepak Seth
Chairman
DIN 00003021
Sandeep Sabharwal
Company Secretary
M. No. ACS - 8370
Pearl Global Industries Limited Annual Report 2018-19
Consolidated Statement of Profit & Loss
for the year ended March 31, 2019
83
Particulars
Revenue from operations
I
II Other income
III
IV
Total income (I+II)
Expenses
(a) Cost of materials consumed
(b) Excise duty
(c) Purchases of stock-in-trade
(d) Changes in inventories of finished goods, work in progress and stock in trade
(e) Employee benefits expense
(f) Finance costs
(g) Depreciation and amortization expense
(h) Other expenses
Total expenses
Profit/ (loss) before exceptional items and tax (III-IV)
Exceptional Items
Profit/ (loss) before tax (V-VI)
V
VI
VII
VIII Tax expense:
(a) Current tax
(b) MAT credit entitlement
(c) Deferred tax
(d) Adjustment of tax relating to earlier periods
Total tax expense
Profit/(loss) for the year (VII-VIII)
Other comprehensive income
(i) Items that will not be reclassified subsequently to profit or loss
(ii) Income tax on items that will not be reclassified subsequently to profit or loss
(i) Items that will be reclassified subsequently to profit or loss
(ii) Income tax on items that will be reclassified subsequently to profit or loss
Other comprehensive income for the year, net of tax
Total comprehensive income for the year, net of tax
Profit Attributable to:
Equity shareholders
Non-controlling interests
Other comprehensive income attributable to:
Equity shareholders
Non-controlling interests
Total comprehensive income attributable to:
Equity shareholders
Non-controlling interests
Earnings per share: (Face value ` 10 per share)
1) Basic (amount in `)
2) Diluted (amount in `)
IX
X
(A)
(B)
XII
XI
Summary of Significant Accounting Policies
The accompanying notes form an integral part of these financial statements
As per our Report of even date attached
For B.R. Gupta & Co.
Chartered Accountants
Firm’s Registration Number 008352N
Note
No.
27
28
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
149,604.01
4,756.44
154,360.45
For the year ended
March 31, 2019
175,749.78
3,392.82
179,142.60
29
30
31
32
33
34
35
36
13
37
38
3
76,107.80
-
12,954.77
(1,841.00)
36,000.15
2,871.95
2,589.48
43,887.64
172,570.79
6,571.81
(1,722.12)
8,293.93
1,278.10
(103.08)
214.98
193.01
1,583.01
6,710.92
222.67
(71.93)
1,322.21
-
1,472.95
8,183.87
6,728.02
(17.10)
1,372.01
100.94
8,100.03
83.84
31.06
31.06
67,575.26
1.58
15,834.67
(860.49)
23,725.32
2,553.28
2,263.67
40,851.11
151,944.40
2,416.05
(824.39)
3,240.44
706.90
(198.46)
257.53
165.55
931.51
2,308.93
(268.88)
30.99
67.77
-
(170.13)
2,138.80
2,408.11
(99.18)
(161.06)
(9.06)
2,247.04
(108.24)
11.12
11.12
For & on behalf of Board of Directors of Pearl Global Industries Limited
Deepak Agarwal
Partner
Membership Number 073696
Place of Signature : Gurugram
Dated: May 28, 2019
Pulkit Seth
Managing Director
DIN 00003044
Raghav Garg
Chief Financial Officer
Deepak Seth
Chairman
DIN 00003021
Sandeep Sabharwal
Company Secretary
M. No. ACS - 8370
Pearl Global Industries Limited Annual Report 2018-19
84
Consolidated Statement of Changes in Equity
for the year ended March 31, 2019
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P
Pearl Global Industries Limited Annual Report 2018-19
Consolidated Cash Flow Statement
for the year ended March 31, 2019
85
Particulars
Cash flows from operating activities
Profit before tax
Adjustments for:
Depreciation and amortization
Interest expenses and other borrowing cost
Unwinding of discount on security deposit
Sundry balances written back
Grant amortised during the year
Government grant received
Loss allowance no longer required written back
Amortisation of deferred rental income
Unwinding of discount on security deposits
Profit on sale of current investment - mutual fund
Rental income
Interest income
Lease Rent Received
Fair value loss (gain) on financial assets measured at fair value through profit
and loss
Amortisation of deferred asset - security deposit paid
Fair value loss (gain) on financial assets measured at fair value through OCI
Re-measurement gains/ (losses) on defined benefit plans
Foreign exchange translation reserve
Loss / (Profit) on mark to market forward contracts
Loss Allowance for doubtful debts
Bad debts written off
Operating profit before working capital changes
Movement in working capital:
(Increase)/decrease in trade receivables
(Increase)/decrease in other non-current financial assets
(Increase)/decrease in other current financial assets
(Increase)/decrease in other non-current assets
(Increase)/decrease in other current assets
(Increase)/decrease in Inventories
Increase/(decrease) in Trade Payables
Increase/(decrease) in other non-current financial liabilities
Increase/(decrease) in other current financial liabilities
Increase/(decrease) in non-current provisions
Increase/(decrease) in current provisions
Increase/(decrease) in other non-current liabilities
Increase/(decrease) in other current liabilities
Cash generated from operations
Tax paid on dividend
Direct tax paid (Net of refunds)
Cash flow before exceptional items
Exceptional items:
(Profit)/Loss on sale of fixed assets
Net cash inflow from/(used in) operating activities
( A )
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
8,293.93
3,240.44
2,589.48
2,845.56
26.39
(55.17)
(1.00)
-
(37.87)
(31.67)
(39.87)
(218.20)
(814.53)
(907.06)
-
133.64
42.22
(12.67)
222.67
1,160.80
(247.24)
391.92
103.78
13,445.11
(8,439.11)
876.74
(384.94)
1,210.31
683.72
(2,628.26)
7,236.34
37.07
(49.27)
232.85
20.58
(275.54)
103.46
12,069.06
89.06
2,779.47
9,200.52
(1,722.12)
7,478.40
2,263.67
2,536.12
10.67
(30.80)
(1.00)
(16.10)
(25.58)
(8.42)
(36.47)
(277.21)
(732.70)
(248.72)
-
(58.48)
36.99
(54.38)
(214.49)
67.77
904.72
23.45
117.06
7,496.52
1,630.19
915.68
564.57
7.75
(971.41)
554.26
(804.05)
(64.37)
(4,602.47)
411.79
21.18
92.71
(557.25)
4,695.10
132.31
389.97
4,172.83
(824.39)
3,348.43
Pearl Global Industries Limited Annual Report 2018-19 86
Consolidated Cash Flow Statement
for the year ended March 31, 2019
Particulars
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
(Increase)/decrease in Capital work in progress
Purchase of investment properties
Proceeds from sale of investment properties
Purchase of Intangible assets
Purchase of goodwill
(Increase)/decrease in capital advances
Increase/(decrease) in capital creditor
(Increase)/decrease in non-current Investments
(Increase)/decrease in current Investments
(Increase)/decrease in non-current Loans
(Increase)/decrease in current Loans
(Increase)/decrease in bank deposit
Interest received
Rent received
Net cash from/ (used in) investing activities
Cash flows from financing activities
Increase/ (decrease) in long term borrowings
Increase/ (decrease) in long term borrowings - Non Cash Ind AS impact
Government grant received
Increase/ (decrease) in short term borrowings
Increase/ (decrease) in unpaid dividend account
Dividend paid
Interest paid
Net cash inflow from/(used in) financing activities
Net increase (decrease) in Cash and Cash Equivalents (A+B+C)
Opening balance of cash and cash equivalents
Total Cash and cash equivalent (Note no. 17)
Components of cash and cash equivalents
Cash on hand
With banks - on current account
- on Deposits with banks
Total Cash and Cash equivalent (Note No. 17)
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
(8,930.08)
1,916.16
61.80
(1.29)
-
(27.65)
(79.82)
(21.20)
800.73
(166.39)
717.18
(189.57)
(1,329.73)
(346.99)
923.00
814.53
(5,859.32)
(381.97)
(17.49)
144.61
2,131.64
(430.97)
(2,856.62)
(1,410.79)
208.29
9,225.83
9,434.11
4,171.44
4,313.15
949.52
9,434.12
(3,482.95)
1,344.98
758.03
(67.13)
300.00
(17.33)
(1,257.06)
118.50
(227.56)
(3,023.58)
956.15
(2,085.71)
33.44
(175.36)
245.51
732.70
(5,847.37)
5,280.79
(24.53)
16.10
988.38
(640.66)
(2,536.12)
3,083.96
585.03
8,640.80
9,225.83
1,894.06
860.15
6,471.62
9,225.83
( B )
( C )
Note : The above Statement of Cash Flows has been prepared under the ‘Indirect Method’ as set out in Ind AS 7, ‘Statement of Cash Flows’.
Summary of Significant Accounting Policies
The accompanying notes form an integral part of these financial statements
3
As per our Report of even date attached
For B.R. Gupta & Co.
Chartered Accountants
Firm’s Registration Number 008352N
Deepak Agarwal
Partner
Membership Number 073696
Place of Signature : Gurugram
Dated: May 28, 2019
For & on behalf of Board of Directors of Pearl Global Industries Limited
Pulkit Seth
Managing Director
DIN 00003044
Raghav Garg
Chief Financial Officer
Deepak Seth
Chairman
DIN 00003021
Sandeep Sabharwal
Company Secretary
M. No. ACS - 8370
Pearl Global Industries Limited Annual Report 2018-19
87
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 1 : GROUP INFORMATION
Pearl Global Industries Limited is a public limited company
domiciled in India and incorporated under the provisions
of the Companies Act,1956. The Company along with its
subsidiaries (collectively referred to as “the Group”), is
primarily engaged in manufacturing, sourcing, distribution
and export of ready to wear apparels through its domestic
and global facilities and operations. The shares of the
Company are listed on BSE Limited and National Stock
Exchange of India Limited in India.
The Consolidated financial statements were authorised
for issue in accordance with a resolution of the Board of
Directors on May 28, 2019.
The Company, its subsidiaries (jointly referred to as the
‘Group’ herein under) considered in these consolidated
financial statements are:
Name of Company
Country of
incorporation
Principal
activities
Proportion (%) of equity interest
As At
March 31, 2019
As At
March 31, 2018
As At
April 01, 2017
Subsidiaries
Pearl Apparel Fashions Limited
India
Trading of
garments
100.00
100.00
100.00
Pearl Global Kausal Vikas Limited
(Formally known as Pixel Industries Ltd)
India
Skill development
100.00
100.00
100.00
Pearl Global Far East Limited
Hong Kong
Pearl Global (HK) Limited
Hong Kong
Norp Knit Industries Limited
Bangladesh
Trading of
garments
Manufacturing and
trading of garments
Manufacturing and
trading of garments
100.00
100.00
100.00
100.00
100.00
100.00
99.99
99.99
99.99
NOTE 2 : BASIS OF PREPARATION AND MEASUREMENT
Statement of Compliance: The Financial Statements
are prepared on an accrual basis under historical cost
Convention except for certain financial instruments which
are measured at fair value. These financial statements have
been prepared in accordance with the Indian Accounting
Standards (Ind AS) as prescribed under Section 133 of the
Companies Act, 2013 read with the Companies (Indian
Accounting Standards) Rules, 2015 as amended and other
relevant provisions of the Companies Act, 2013, as applicable.
The accounting policies are applied consistently to all the
periods presented in the financial statements.
Basis of Preparation and presentation:
i) These financial statements are prepared under the
historical cost convention unless otherwise indicated.
The principal accounting policies are set out below.
All assets and liabilities have been classified as current
or noncurrent according to the Company’s operating
cycle and other criteria set out in the Act. Based on the
nature of products and the time between the acquisition
of assets for processing and their realisation in cash and
cash equivalents, the Group has ascertained its operating
cycle as twelve months for the purpose of current non-
current classification of assets and liabilities.
The financial statements are presented in ` and all values
are rounded to the nearest lakh upto two decimal places
except otherwise stated.
ii) The financial statements of all reporting entities under
consolidation are drawn up to the financial year ended
March 31, 2019.
iii) The accounting policies adopted for preparation of
consolidated financial statements are consistent with
those of previous year.
Going Concern
The Board of Directors have considered the financial
position of the Group at March 31, 2019 and the projected
cash flows and financial performance of the Group for at least
twelve months from the date of approval of these financial
statements as well as planned cost and cash improvement
actions, and believe that the plan for sustained profitability
remains on course.
The Board of Directors have taken actions to ensure that
appropriate long-term cash resources are in place at the date
of signing the accounts to fund the Company’s operations.
Pearl Global Industries Limited Annual Report 2018-19
88
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
Basis of Consolidation:-
The effect of Changes in Foreign Exchange Rates
The Consolidated Financial Statements have been prepared
on the following basis:-
i) The consolidation financial statements of the Company
and its subsidiary companies have been prepared in
accordance with the Ind AS 110 “Consolidated financial
statements”, on a line-by-line basis by adding together
the book values of like items of assets, liabilities, income,
and expenses, after eliminating intra-group balances and
intra-group transactions resulting in unrealized profits
or losses. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the
policies adopted by the group.
Subsidiaries are all entities over which the group has
control. The group controls an entity when the group
is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
those returns through its power to direct the relevant
activities of the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the
group. They are deconsolidated from the date that
control ceases.
ii) The difference of the cost to the company of its
investment in subsidiaries over its share in the equity
of the investee company as at the date of acquisition of
stake is recognized in financial statements as Goodwill
or Capital Reserve, as the case may be.
iii) Non-controlling
interests
the net assets of
consolidated subsidiaries is identified and presented in
the consolidated Balance Sheet separately within equity
of the Company’s shareholders.
in
Non-controlling
interests
in
the net assets of
consolidated subsidiaries consists of:
- The amount of equity attributable to Non-
controlling interests at the date on which investment
in a subsidiary is made; and
- The Non-controlling interests share of movements
the date parent subsidiary
in equity since
relationship came into exitence. The profit and
other comprehensive income attributable to Non-
controlling
interestsof subsidiaries are shown
separately in the consolidated statement of profit
and loss, consolidated statement of changes in
equity and balance sheet respectively
iv) The Consolidated Financial Statements are presented, to
the extent possible, in the same format as adopted by the
parent company for its individual financial statements.
i) Translation of Financial Statements of Foreign
Operations
-
In view of Ind As-“21” ‘The effects of Changes in
Foreign Exchange Rates’, the operations of all the
foreign subsidiaries are identified as non integral
operations of the company in the current year and
translated into Indian Rupee.
- The Assets and Liabilities of Foreign operations,
including Goodwill/Capital Reserve arising on
consolidation, are translated in Indian Rupee (INR)
at foreign exchange rate at closing rate ruling as at
the balance sheet date and the revenue and expenses
of foreign operations are translated in Indian Rupee
(INR) at yearly average currency exchange rate, of
the respective years.
-
arising
exchange
differences
Foreign
on
translation of “Non-integral Foreign Operations”
are recognized as, ‘foreign exchange translation
reserve’ in balance sheet under the head items of
other comprehensive income as items that will be
reclassified subsequently to statement of profit and
loss.
ii) Foreign Currency Transactions
- Except in case of the parent company, the sales made
in foreign currencies are translated on exchange rate
prevailing on the date of transaction. In case of the
parent company, the sales made in foreign currency
are translated at an average monthly exchange rate
which approximates the transaction date rate.
- Gain/Loss arising out of fluctuation in the exchange
rate on settlement of the transaction is recognized
in the Statement of Profit and Loss.
- Other
transactions
foreign currency are
recognized on initial recognition at the exchange
rate prevailing at the time of transaction.
in
-
Foreign Currency monetary items are reported
using the closing rate as on balance sheet date. The
resultant exchange gain/loss is dealt with in the
Statement of Profit & Loss.
Recent accounting pronouncements
a)
Ind AS 116 Leases
On March 30, 2019, Ministry of Corporate Affairs has
notified Ind AS116, Leases. Ind AS 116 will replace the
existing leases Standard, Ind AS 17 Leases, and related
Interpretations.The Standards set out the principles
for the recognition, measurement, presentation and
Pearl Global Industries Limited Annual Report 2018-19
89
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
disclosure of leases for both parties to a contract i.e., the
lessee and the lessor. Ind AS116 introduces a single lessee
accounting model and requires a lessee to recognize
assets and liabilities for all leases with a term of more
than twelve months, unless the underlying assets of low
value. Currently, operating lease expenses are charged
to the statement of Profit & Loss. The Standard also
contains enhance disclosure requirements for lessees.
Ind AS 116 substantially carries forward the lessor
accounting requirements in Ind AS 17.
The effective date for adoption of Ind AS 116 is annual
periods beginning on or after April 1, 2019. The standard
permits two possible methods of transition:
•
Full retrospective – Retrospectively to each prior
period presented applying Ind AS 8 Accounting
Policies, Changes in Accounting Estimates and
Errors.
• Modified retrospective – Retrospectively, with the
cumulative effect of initially applying the Standard
recognized at the date of initial application.
Certain practical expedients are available under
both the methods. The Company is proposing
to use the ‘Modified Retrospective Approach’ for
transitioning to Ind AS 116, and take the cumulative
adjustment to the retained earnings, on the date
of initial application (April 1, 2019). Accordingly,
comparatives for the year ended March 31, 2019
will not be retrospectively adjusted.
The company is evaluating the requirements of the
amendment and its effect on the financial statements.
b)
Ind AS 12 Appendix C, Uncertainty over Income
Tax Treatments :
On March 30, 2019, Ministry of Corporate Affairs
has notified Ind AS 12 Appendix C, Uncertainty over
Income Tax Treatments which is to be applied while
performing the determination of taxable profit (or loss),
tax bases, unused tax losses, unused tax credits and
tax rates, when there is uncertainty over income tax
treatments under Ind AS 12. According to the appendix,
companies need to determine the probability of the
relevant tax authority accepting each tax treatment, or
group of tax treatments, that the companies have used
or plan to use in their income tax filing which has to be
considered to compute the most likely amount or the
expected value of the tax treatment when determining
taxable profit (tax loss), tax bases, unused tax losses,
unused tax credits and tax rates.
The standard permits two possible methods of transition:
i) Full retrospective approach – Under this approach,
Appendix C will be applied retrospectively to each
prior reporting period presented in accordance
with Ind AS 8 – Accounting Policies, Changes in
Accounting Estimates and Errors, without using
hindsight and
ii) Retrospectively with cumulative effect of initially
applying Appendix C recognized by adjusting
equity on initial application, without adjusting
comparatives
The effective date for adoption of Ind AS 12 Appendix
C is annual periods beginning on or after April 1, 2019.
The Company will adopt the standard on April 1, 2019
and has decided to adjust the cumulative effect in
equity on the date of initial application i.e. April 1, 2019
without adjusting comparatives.
The company is evaluating the requirements of the
amendment and its effect on the financial statements.
c)
Ind AS 12 – Income taxes:
On March 30, 2019, Ministry of Corporate Affairs issued
amendments to the guidance in Ind AS 12, ‘Income
Taxes’, in connection with accounting for dividend
distribution taxes.
The amendment clarifies that an entity shall recognise
the income tax consequences of dividends in profit or loss,
other comprehensive income or equity according to where
the entity originally recognised those past transactions or
events.
d) Amendment to Ind AS 19 – plan amendment,
curtailment or settlement
On March 30, 2019, Ministry of Corporate Affairs
issued amendments to Ind AS 19, ‘Employee Benefits’,
in connection with accounting for plan amendments,
curtailments and settlements.
The amendments require an entity:
•
•
to use updated assumptions to determine current
service cost and net interest for the remainder of
the period after a plan amendment, curtailment or
settlement; and
to recognise in profit or loss as part of past service
cost, or a gain or loss on settlement, any reduction
in a surplus, even if that surplus was not previously
recognised because of the impact of the asset ceiling.
Effective date for application of this amendment is
annual period beginning on or after April 1, 2019.
The company is evaluating the requirements of the
amendment and its effect on the financial statements.
Pearl Global Industries Limited Annual Report 2018-19
90
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
Application of New Accounting Pronouncements
The
following Ind As pronouncements pursuant to
issuance of the Companies (Indian Accounting Standards)
Amendment Rules 2018, were applied by the Company
during the year:
Ind As 115, Revenue from Contracts with Customers with
effect from April 1, 2018
Appendix B to Ind AS 21, Foreign Currency Transactions
and advance consideration with effect from April 1, 2018.
NOTE 3 : SIGNIFICANT ACCOUNTING POLICIES
a) Significant accounting judgements, estimates and
assumptions
The preparation of financial statements in conformity
with Ind AS requires management to make judgements,
estimates and assumptions that affect the application
of accounting policies and the reported amount of
assets, liabilities, income, expenses and disclosures
of contingent assets and liabilities at the date of these
financial statements and the reported amount of
revenues and expenses for the years presented. Actual
results may differ from the estimates.
Estimates and underlying assumptions are reviewed
at each balance sheet date. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised and future periods affected.
Judgements:
The estimates and judgments used in the preparation
of the financial statements are continuously evaluated
by the Group and are based on historical experience
and various other assumptions and factors (including
expectations of future events) that the Group believes
to be reasonable under the existing circumstances.
Differences between actual results and estimates are
recognised in the period in which the results are known/
materialised.
The said estimates are based on the facts and events,
that existed as at the reporting date, or that occurred
after that date but provide additional evidence about
conditions existing as at the reporting date.
Revenue recognition and presentation
The group assesses its revenue arrangements against
specific criteria, i.e. whether it has exposure to transfer
the control associated with the sale of goods or the
rendering of services, in order to determine if it is
acting as a principal or as an agent. The Company has
concluded that they operating on a principal to principal
basis in all its revenue arrangements.
When deciding the most appropriate basis for presenting
revenue, both the legal form and substance of the
agreement between the Company and its customers are
reviewed to determine each party’s respective role in the
transaction.
Interest income
Interest income is recognised using the effective interest
method. The ‘effective interest rate’ is the rate that
exactly discounts estimated future cash receipts through
the expected life of the financial instrument or shorter
period, where appropriate, to the gross carrying amount
of the financial asset. When calculating the effective
interest rate, the Company estimates the expected
cash flows by considering all the contractual terms of
the financial instrument (for example, prepayment,
extension, call and similar options) but does not
consider the expected credit losses.
Useful lives of property, plant and equipment
The Company reviews the useful life of property, plant
and equipment at the end of each reporting period.
This reassessment may result in change in depreciation
expense in future periods.
Estimates and assumptions:
The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described
below. The Company based its assumptions and
estimates on parameters available when the financial
statements were prepared. Existing circumstances and
assumptions about future developments, however, may
change due to market changes or circumstances arising
that are beyond the control of the Group. Such changes
are reflected in the assumptions when they occur.
Income taxes
The Group is subject to income tax laws as applicable tax
rate. Significant judgment is required in determining
provision for income taxes. There are many transactions
and calculations for which the ultimate tax determination
is uncertain during the ordinary course of business.
The Company recognises liabilities for anticipated
tax issues based on estimates of whether additional
taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially
recorded, such differences will impact the income tax
and deferred tax provisions in the period in which such
determination is made.
Pearl Global Industries Limited Annual Report 2018-19
91
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
Recoverability of deferred taxes
Liabilities:
In assessing the recoverability of deferred tax assets,
management considers whether it is probable that
taxable profit will be available against which the losses
can be utilised. The ultimate realisation of deferred tax
assets is dependent upon the generation of future taxable
income during the periods in which the temporary
differences become deductible. Management considers
the projected future taxable income and tax planning
strategies in making this assessment.
Defined benefit plans
The present value of the gratuity is determined using
actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from
actual developments in the future. These include
the determination of the discount rate, future salary
increases and mortality rates. Due to the complexities
involved in the valuation and its long-term nature, a
defined benefit obligation is highly sensitive to changes
in these assumptions. All assumptions are reviewed at
each reporting date.
The parameter most subject to change is the discount
rate. In determining the appropriate discount rate for
plans operated in India, the management considers
the interest rates of government bonds in currencies
consistent with the currencies of the post-employment
benefit obligation. The mortality rate is based on publicly
available mortality tables for the specific countries.
Those mortality tables tend to change only at interval
in response to demographic changes. Future salary
increases and gratuity increases are based on expected
future inflation rates for the respective countries.
b) Current versus non-current classification
The Group presents assets and liabilities in the balance
sheet based on current/ non-current classification.
Assets:
An asset is treated as current when it is:
A liability is current when:
(a) It is expected to be settled in normal operating cycle
(b) It is held primarily for the purpose of trading
(c) It is due to be settled within twelve months after the
reporting period, or
(d) There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-
current assets and liabilities.
Operating cycle: The operating cycle is the time
between the acquisition of assets for processing and
their realisation in cash and cash equivalents. The Group
has identified twelve months as its operating cycle.
c) Property, Plant and Equipment
Property, plant and equipment and capital work in
progress are stated at cost less accumulated depreciation
and accumulated impairment losses, if any. Such cost
includes expenditure that is directly attributable to the
acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct services,
any other costs directly attributable to bringing the
assets to its working condition for their intended use
and cost of replacing part of the plant and equipment
and borrowing costs for long-term construction projects
if the recognition criteria are met.
An item of property, plant and equipment and any
significant part initially recognised is de-recognised
upon disposal or when no future economic benefits
are expected from its use. Any gain or loss arising on
de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying
amount of the asset) is included in the statement of
profit and loss within other income.
a) Expected to be realised or intended to be sold or
consumed in normal operating cycle.
Regulatory Assets:
b) Held primarily for the purpose of trading
c) Expected to be realised within twelve months after
the reporting period, or
d) Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period.
Depreciation on Property, plant and equipment in
respect of electricity business of the Company covered
under Part B of Schedule II of the Companies Act,
2013, has been provided on the straight line method
at the rates using the methodology as notified by the
respective regulators.
Non Regulatory Assets:
All other assets are classified as non-current.
Depreciation is recognised so as to write off the cost of
Pearl Global Industries Limited Annual Report 2018-19
92
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
assets (other than freehold land and properties under
construction) less their residual values over their useful
lives, using the straight-line method. The estimated
useful lives, residual values and depreciation method
are reviewed at the end of each reporting period, with
the effect of any changes in estimate accounted for on a
prospective basis.
Depreciation is provided on a pro-rata basis on the
straight-line basis on the estimated useful life prescribed
under Schedule II to Companies Act , 2013 with the
following exception :
-
-
-
Fixed asset costing upto ` 5000 has been fully
depreciated during the financial year
Leasehold land has been amortised over the lease
term.
Freehold Land is not depreciated.
Subsequent costs: The cost of replacing a part of an
item of property, plant and equipment is recognised
in the carrying amount of the item of property,
plant and equipment, if it is probable that the future
economic benefits embodied within the part will flow
to the Company and its cost can be measured reliably
with the carrying amount of the replaced part getting
derecognised. The cost for day-to-day servicing of
property, plant and equipment are recognised in
statement of profit and loss as and when incurred.
Decommissioning Costs : The present value of the
expected cost for the decommissioning of an asset, if
any, after its use is included in the cost of the respective
asset if the recognition criteria for a provision are met.
Capital work in progress: Capital work in progress
comprises the cost of fixed assets that are not ready for
their intended use at the reporting date.
Elimination: Property, plant and equipments are
eliminated from financial statements, either on disposal
or when retired from active use. Losses/gains arising
in case retirement/disposals of property, plant and
equipment are recognized in the statement of profit and
loss in the year of occurrence.
Goodwill: Goodwill is initially measured at cost,
being the excess of the aggregate of the consideration
transferred, the amount recognised for non-controlling
interests and any fair value of the Group’s previously
held equity interests in the acquiree over the identifiable
net assets acquired and liabilities assumed. If the sum of
this consideration and other items is lower than the fair
value of the net assets acquired, the difference is, after
reassessment, recognised in the profit or loss as a gain
on bargain purchase.
Transition to Ind AS: On transition to Ind AS, the
Group has elected to continue with the carrying value
of all its property, plant and equipment as at 1 April
2016, measured as per the previous GAAP, and use that
carrying value as the deemed cost of such property,
plant and equipment.
d)
Investment Properties
Property that is held for rental yields or for capital
appreciation or both, and that is not occupied by the
Group, is classified as investment property. Investment
property is measured at its cost, including related
transaction costs and where applicable borrowing costs
less depreciation and impairment if any.
The Group, based on technical assessment made by
management, depreciates the building over estimated
useful life of 60 years. The management believes that
these estimated useful lives are realistic and reflect fair
approximation of the period over which the assets are
likely to be used.
Transition to Ind AS: On transition to Ind AS, the
Group has elected to continue with the carrying value of
all its investment properties as at 1 April 2016, measured
as per the previous GAAP, and use that carrying value as
the deemed cost of such investment properties.
e)
Intangible assets
Recognition and measurement
Intangible assets that are acquired by the Group are
measured initially at cost. Intangible assets with finite
useful lives are measured at cost less accumulated
amortisation and accumulated impairment losses, if
any. All expenditures, qualifying as Intangible Assets
are amortized over estimated useful life. Specialized
softwares are amortized over a period of 3 years or
license period whichever is earlier.
Transition to Ind AS
On transition to Ind AS, the Group has elected to
continue with the carrying value of all its intangible
assets recognized as at 1 April 2016, measured as per
the previous GAAP, and use that carrying value as the
deemed cost of such intangible assets.
Amortisation and useful lives: Intangible assets with
finite lives are amortised over the useful life and assessed
for impairment whenever there is an indication that
the intangible asset may be impaired. The amortisation
period and the amortisation method for an intangible
asset with a finite useful life are reviewed at least at the
end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of
Pearl Global Industries Limited Annual Report 2018-19
93
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
future economic benefits embodied in the asset are
considered to modify the amortisation period or method,
as appropriate, and are treated as changes in accounting
estimates. The amortisation expense on intangible assets
with finite lives is recognised in the statement of profit
and loss unless such expenditure forms part of carrying
value of another asset. Amortisation is calculated over
the cost of the asset, or other amount substituted for
cost.
f) Borrowing costs
the borrowing of
Borrowing costs consists of interest and amortization
of ancillary costs that an entity incurs in connection
with
funds. Borrowing costs
directly attributable to the acquisition, construction
or production of an asset that necessarily takes a
substantial period of time to get ready for its intended
use or sale are capitalised as part of the cost of the asset.
All other borrowing costs are expensed in the period in
which they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with
the borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as an
adjustment to the borrowing costs.
Interest income earned on the temporary investment
of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs
eligible for capitalisation.
g) Foreign currencies
Functional and presentational currency
The Consolidated financial statements are presented in
Indian Rupees (`), the functional currency of the group.
Items included in the Consolidated Financial statements
of the Group are recorded using the currency of the
primary economic environment in which the Group
operates (the ‘functional currency’).
Transactions and balances
Transactions in foreign currencies are recognised at
the prevailing exchange rates on the transaction dates.
Realised gains and losses on settlement of foreign
currency transactions are recognised in the Statement
of Profit and Loss. Monetary foreign currency assets and
liabilities at the year-end are translated at the year-end
exchange rates and the resultant exchange differences
are recognised in the Statement of Profit and Loss.
Group Companies
The results and financial position of foreign operations
from
that have a
the presentation currency are translated into the
presentation currency as follows:
functional currency different
•
•
assets and liabilities are translated at the closing rate
at the date of that balance sheet
income and expenses are translated at average
exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case
income and expenses are translated at the dates of
the transactions), On Consolidation, all resulting
exchange differences on translation are recognised
in other comprehensive income, that will be
reclassified subsequently to statement of profit and
loss.
h) Revenue Recognition
The Group derives revenues primarily from sale of
manufactured goods and traded goods
Effective 01 April 2018, the Company has adopted Indian
Accounting Standard 115 (Ind AS 115) -’Revenue from
contracts with customers’ The effect on adoption of Ind-
AS 115 was insignificant.
Revenue from contract with customer
Revenue from contract with customers is recognised
when control of the goods or services are transferred to
the customer at an amount that reflects the consideration
to which the company expects to be entitled in exchange
for transferring distinct goods or services to a customer
as specified in the contract, excluding the amount
collected on behalf of third parties(for example, taxes
and duties collected on behalf of government) and net
of returns & discounts. The company has concluded that
it is acting as principal in its revenue arrangements.
The Company considers whether there are other
promises in the contract that are separate performance
obligations to which a portion of the transaction
price needs to be allocated. In determining the
transaction price for the sale of products, the Company
considers the effect of variable consideration, the
existence of significant financing component, non-
cash consideration, and consideration payable to the
customer (if any).
Following are the specific revenue recognition criteria:
(i) Sale of products
Revenue from sale of products is recognised at the
point in time when control of product is transferred
to the customer. In case of Export sale it is on the
basis of date of airway bill/bill of lading
(ii) Job work income
Revenue from
job work on the product
is
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to the Consolidated Financial Statements for the year ended March 31, 2019
recognised at the point in time when control of
services is transferred to the customer, generally on
the delivery of the product after completion of job
work.
(iii) Export incentives
Export Incentives under various schemes are
accounted in the year of export.
(iv) Other income
(a) Sale of software/ SAP income is recognized
at the delivery of complete module & patches
(through
group
companies).
reimbursement
from
b) Rental Income is recognized on accrual basis as
per the terms of agreement.
c)
In respect of interest income, revenue is
recognised on the time proportion basis, taking
into account the amount outstanding and the
rate of interest applicable.
d) Dividend Income is recognized when the right
to receive is established.
Variable Consideration
If the consideration in a contract includes a
variable amount, the Company estimates the
amount of consideration to which it will be entitled
in exchange for transferring the goods to the
customer. The variable consideration is estimated
at contract inception and constrained until it is
highly probable that a significant revenue reversal
in the amount of revenue recognised will not occur
when the associated uncertainty with the variable
consideration is subsequently resolved.
Significant Financing Component
Generally, the Group does not receive short term
or long term advances from its customers except
in certain scenarios. Using the practical expedient
in Ind AS 115, the Company does not adjust the
promised amount of consideration for the effects
of a significant financing component if it expects,
at contract inception, that the period between the
transfer of promised good or service to the customer
and when the customer pays for good or service will
be one year or less. The company does not expect
to have any contracts where the period between
the transfer of promised goods and services to the
customer and payment by the customer exceeds
one year. As a consequence, it does not adjust any of
the transaction prices for the time value of money.
Contract balances
Contract assets
A contract asset is the right to consideration in
exchange for goods or services transferred to the
customer. If the Company performs by transferring
goods or services to a customer before the
customer pays consideration or before payment is
due, a contract asset is recognised for the earned
consideration that is conditional.
Trade receivables
A receivable represents the Company’s right to an
amount of consideration that is unconditional (i.e.,
only the passage of time is required before payment
of the consideration is due). Refer to accounting
policies of financial assets in section Financial
instruments – initial recognition and subsequent
measurement.
Contract liabilities
A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received consideration (or an amount
of consideration is due) from the customer. If a
customer pays consideration before the Company
transfers goods or services to the customer, a
contract liability is recognised when the payment is
made or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue when
the Company performs under the contract.
Cost to obtain a contract
The Company does not capitalise costs to obtain a
contract because majorly the contracts have terms
that do not extend beyond one year. The Company
does not have a significant amount of capitalized
costs related to fulfilment.
i)
Inventories
i)
Inventories of finished goods manufactured by the
company are valued style-wise and at lower of cost
and estimated net realizable value. Cost includes
material cost on weighted average basis and
appropriate share of overheads incurred in bringing
them to their present location and condition. In
the case of manufactured inventories and work-in-
progress, cost includes an appropriate share of fixed
production overheads based on normal operating
capacity..
ii) Inventories of finished goods (traded) are valued
at lower of procurement cost (FIFO method) or
estimated net realizable value.
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iii) Inventories of raw material, work in progress,
accessories & consumables are valued at cost
(weighted average method) or at estimated net
realizable value whichever is lower. WIP cost
includes appropriate portion of allocable overheads.
Raw materials and other supplies held for use in the
production of finished products are not written
down below cost except in cases where material
prices have declined and it is estimated that the
cost of the finished products will exceed their net
realisable value.
iv) Net realizable value is the estimated selling price
in the ordinary course of business, less estimated
costs of completion and estimated costs necessary
to make the sale.
j) Leases
The determination of whether an arrangement is
(or contains) a lease is based on the substance of
the arrangement at the inception of the lease. The
arrangement is, or contains, a lease if fulfilment of the
arrangement is dependent on the use of a specific asset
or assets and the arrangement conveys a right to use the
asset or assets, even if that right is not explicitly specified
in an arrangement.
A lease is classified at the inception date as a finance lease
or an operating lease. A lease that transfers substantially
all the risks and rewards incidental to ownership to the
Group is classified as a finance lease. All the lease other
than Finance lease are classified as operating lease.
For arrangements entered into prior to the Ind AS
transition date i.e. April 01, 2016, the Group has
determined whether the arrangement contain lease on
the basis of facts and circumstances existing on the date
of transition.
Company as a lessor
Finance lease: Amounts due from lessees under finance
leases are recognised as receivables at the amount of
the Group net investment in the leases. Finance lease
income is allocated to accounting periods so as to reflect
a constant periodic rate of return on the Company’s net
investment outstanding in respect of the leases.
Operating lease: Rental income from operating leases is
recognised on a straightline basis over the term of the
relevant lease. Where the rentals are structured solely
to increase in line with expected general inflation to
compensate for the Company’s expected inflationary
cost increases, such increases are recognised in the
period in which such benefits accrue.
Company as a lessee
Finance lease
Finance leases are capitalised at the commencement of
the lease at the inception date fair value of the leased
property or, if lower, at the present value of the minimum
lease payments. Lease payments are apportioned
between finance charges and reduction of the lease
liability so as to achieve a constant rate of interest on
the remaining balance of the liability. Finance charges
are recognised in finance costs in the statement of profit
and loss. Contingent rentals are recognised as expenses
in the periods in which they are incurred.
A leased asset is depreciated over the useful life of the
asset. However, if there is no reasonable certainty that
the Group will obtain ownership by the end of the lease
term, the asset is depreciated over the shorter of the
estimated useful life of the asset and the lease term.
Operating lease
A lease where risks and rewards incidental to ownership
of an asset substantially vest with the lessor is classified
as operating lease. Lease payments under operating
leases are recognised as an expense in the statement
of profit and loss on a straight line basis over the lease
term.
The Group has ascertained that the payments to the
lessor are structured to increase in line with expected
general inflation to compensate for the lessor’s expected
inflationary cost increases and therefore are not straight-
lined. Hence, the lease payments are recognised on an
accrual basis as per terms of the lease agreement.
k) Employee’s benefits
Short term employee benefits: All employee benefits
expected to be settled wholly within twelve months
of rendering the service are classified as short-term
employee benefits. When an employee has rendered
service to the Group during an accounting period, the
Group recognises the undiscounted amount of short-
term employee benefits expected to be paid in exchange
for that service as an expense unless another Ind AS
requires or permits the inclusion of the benefits in the
cost of an asset. Benefits such as salaries, wages and
short-term compensated absences, bonus and ex-gratia
etc. are recognised in statement of profit and loss in
the period in which the employee renders the related
service.
A liability is recognised for the amount expected
to be paid after deducting any amount already paid
under short-term cash bonus or profit-sharing plans
if the Company has a present legal or constructive
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to the Consolidated Financial Statements for the year ended March 31, 2019
obligation to pay this amount as a result of past service
provided by the employee, and the obligation can be
estimated reliably. If the amount already paid exceeds
the undiscounted amount of the benefits, the Company
recognises that excess as an asset /prepaid expense to
the extent that the prepayment will lead to, for example,
a reduction in future payments or a cash refund.
Defined contribution plan
A defined contribution plan is a post-employment
benefit plan under which an entity pays fixed
contributions to a statutory authority and will have no
legal or constructive obligation to pay further amounts.
Retirement benefits in the form of Provident Fund is a
defined contribution scheme and contributions paid/
payable towards Provident Fund are recognised as
an expense in the statement of profit and loss during
the period in which the employee renders the related
service. There are no other obligations other than the
contribution payable to the respective trusts.
Defined benefit plan
A defined benefit plan is a post-employment benefit
plan other than a defined contribution plan.
The Group has an obligation towards gratuity, a defined
benefit retirement plan covering eligible employees.
The plan provides for a lump sum payment to vested
employees at retirement, death while in employment
or on termination of employment of an amount based
on the respective employee’s salary and the tenure
of employment. Vesting occurs upon completion
of five years of service. The Group accounts for the
liability for gratuity benefits payable in future based
on an independent actuarial valuation report using the
projected unit credit method as at the year end.
The obligations are measured at the present value of
the estimated future cash flows. The discount rate is
generally based upon the market yields available on
Government bonds at the reporting date with a term
that matches that of the liabilities.
Re-measurements, comprising actuarial gains and
losses, the effect of the changes to the asset ceiling (if
applicable) and the return on plan assets (excluding
interest and if applicable), is reflected immediately
in Other Comprehensive Income in the statement of
profit and loss. All other expenses related to defined
benefit plans are recognised in statement of profit and
loss as employee benefit expenses. Re-measurements
recognised in Other Comprehensive Income will not
be reclassified to statement of profit and loss hence it
is treated as part of retained earnings in the statement
of changes in equity. Gains or losses on the curtailment
or settlement of any defined benefit plan are recognised
when the curtailment or settlement occurs. Curtailment
gains and losses are accounted for as past service costs.
Other long term employee benefits
As per the Group policy, eligible leaves can be
accumulated by the employees and carried forward to
future periods to either be utilised during the service,
or encashed. Encashment can be made during the
service, on early retirement, on withdrawal of scheme,
at resignation by employee and upon death of employee.
The scale of benefits is determined based on the seniority
and the respective employee’s salary. The Company
records an obligation for such compensated absences in
the period in which the employee renders the services
that increase this entitlement. The obligation is measured
on the basis of independent actuarial valuation using
the projected unit credit method.
Re-measurements, comprising actuarial gains and
losses, the effect of the changes to the asset ceiling (if
applicable) and the return on plan assets (excluding
interest and if applicable), is reflected immediately
in Other Comprehensive Income in the statement of
profit and loss. All other expenses related to defined
benefit plans are recognised in statement of profit and
loss as employee benefit expenses. Re-measurements
recognised in Other Comprehensive Income will not
be reclassified to statement of profit and loss hence it
is treated as part of retained earnings in the statement
of changes in equity. Gains or losses on the curtailment
or settlement of any defined benefit plan are recognised
when the curtailment or settlement occurs. Curtailment
gains and losses are accounted for as past service costs.
l) Provisions
General
Provisions are recognised when the Group has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the
amount of the obligation.
When the Company expects some or all of a provision
to be reimbursed, the reimbursement is recognised as
a separate asset, but only when the reimbursement is
virtually certain.
The expense relating to a provision is presented in the
statement of profit and loss, net of any reimbursement.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the
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Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
liability. The unwinding of discount is recognised in the
statement of profit and loss as a finance cost.
Provisions are reviewed at the end of each reporting
period and adjusted to reflect the current best estimate.
If it is no longer probable that an outflow of resources
would be required to settle the obligation, the provision
is reversed.
m) Financial instruments
A financial instrument is a contract that gives rise to
a financial asset for one entity and a financial liability
or equity instrument for another entity.Financial assets
and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the
instruments.
(a) Financial assets
Initial recognition and measurement
A financial asset is initially recognised at fair value.
In case of financial assets which are recognised at fair
value through profit and loss (FVTPL), its transaction
cost are recognised in the statement of profit and loss.
In other cases, the transaction cost are attributed to the
acquisition value of the financial asset.
Subsequent measurement
give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Financial asset at fair value through profit and loss
(FVTPL)
A financial asset which is not classified in any of the
above categories are subsequently fair valued through
profit or loss.
De-recognition
A financial asset (or, where applicable, a part of a
financial asset) is primarily derecognised (i.e. removed
from the Group Balance Sheet) when:
(i) The contractual rights to receive cash flows from
the asset has expired, or
(ii) The Company has transferred its contractual rights
to receive cash flows from the financial asset or has
assumed an obligation to pay the received cash flows
in full without material delay to a third party under
a ‘pass-through’ arrangement; and either (a) the
Company has transferred substantially all the risks
and rewards of the asset, or (b) the Company has
neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred
control of the asset.
For purposes of subsequent measurement, financial
assets are classified in three categories:
(b) Financial liabilities
-
-
-
Financial Asset carried at amortised cost
Financial Asset at
comprehensive income (FVTOCI)
fair value through other
Financial Asset at fair value through profit and loss
(FVTPL)
Financial asset carried at amortised cost
A financial asset is subsequently measured at amortised
cost if it is held within a business model whose objective
is to hold the asset in order to collect contractual cash
flows and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Financial asset at fair value through other
comprehensive income (FVTOCI)
A financial asset is subsequently measured at fair value
through other comprehensive income if it is held within
a business model whose objective is achieved by both
collecting contractual cash flows and selling financial
assets and the contractual terms of the financial asset
Initial recognition and measurement
Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or loss.
All financial liabilities are recognised initially at fair
value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Group financial liabilities include borrowings, trade
and other payables, security deposits received etc.
Subsequent measurement
For purposes of subsequent measurement, financial
liabilities are classified in two categories:
-
Financial liabilities at amortised cost
Financial liabilities at fair value through profit and
-
loss (FVTPL)
Financial liabilities at amortized cost
Loans and borrowings
Borrowings are initially recognised at fair value, net
of transaction costs incurred. After initial recognition,
interest-bearing loans and borrowings are subsequently
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to the Consolidated Financial Statements for the year ended March 31, 2019
measured at amortised cost using the EIR method.
Gains and losses are recognised in the statement of
profit or loss when the liabilities are derecognised as
well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation
is included as finance costs in the statement of profit and
loss. This category generally applies to borrowings.
De-recognition
A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by
another from the same lender on substantially different
terms or the terms of an existing liability are substantially
modified, such an exchange or modification is treated
as the de-recognition of the original liability and
the recognition of a new liability. The difference in
the respective carrying amounts is recognised in the
statement of profit and loss.
(c) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the
net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognized
amounts and there is an intention to settle on a net
basis, to realize the assets and settle the liabilities
simultaneously.
(d) Derivative financial instruments
The Group uses derivative financial instruments, such
as forward currency contracts, interest rate swaps, full
currency swaps and forward commodity contracts, to
hedge its foreign currency risks, interest rate risks and
commodity price risks, respectively. Such derivative
financial instruments are initially recognized at fair
value on the date on which a derivative contract is
entered into and are subsequently remeasured at fair
value. Derivatives are carried as financial assets when
the fair value is positive and as financial liabilities when
the fair value is negative. Embedded derivatives are
separated from the host contract and accounted for
separately if the host contract is not a financial asset and
certain criteria are met. Any gains or losses arising from
changes in the fair value of derivatives are taken directly
to statement of profit and loss.
n)
Impairment of financial assets
The Company measures the expected credit loss
associated with its assets based on historical trend,
industry practices and the business environment in
which the entity operates or any other appropriate basis.
The impairment methodology applied depends on
whether there has been a significant increase in credit
risk.
o)
Impairment of non-financial assets
The carrying amounts of the Group non-financial assets,
other than deferred tax assets, are reviewed at the end of
each reporting period to determine whether there is any
indication of impairment. If any such indication exists,
then the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating
unit (‘CGU’) is the greater of its value in use or its
fair value less costs to sell. In assessing value in use,
the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that
reflects current market assessments of the time value of
money and the risks specific to the asset or CGU. For
the purpose of impairment testing, assets that cannot
be tested individually are grouped together into the
smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash
inflows of other assets or groups of assets (‘CGU’).
An impairment loss is recognized, if the carrying
amount of an asset or its CGU exceeds its estimated
recoverable amount and is recognised in statement of
profit and loss.
Impairment losses recognised in prior periods are
assessed at end of each reporting period for any
indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has
been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed
only to the extent that the asset’s carrying amount does
not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
p) Fair value measurement
Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at
the
measurement date. The fair value measurement is based
on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
(a) In the principal market for the asset or liability, or
(b) In the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market must
be accessible by the Group. The fair value of an asset
or a liability is measured using the assumptions that
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Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
market participants would use when pricing the asset or
liability, assuming that market participants act in their
economic best interest.
A fair value measurement of a non-financial asset takes
into account a market participant’s ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate
in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of
relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable
For assets and liabilities that are recognised in the
financial statements on a recurring basis, the Group
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each
reporting period.
q) Taxes
Current income tax
Current tax assets are offset against current tax liabilities
if, and only if, a legally enforceable right exists to set off
the recognised amounts and there is an intention either
to settle on a net basis, or to realise the asset and settle
the liability simultaneously.
Deferred tax
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realised or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively
enacted at the reporting date.
Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are
recognised to the extent that it is probable that taxable
profit will be available against which the deductible
temporary differences, and the carry forward of unused
tax credits and unused tax losses can be utilised.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply to the period when
the asset is realized or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date. Tax
relating to items recognized directly in equity/other
comprehensive income is recognized in respective head
and not in the statement of profit & loss.
The carrying amount of deferred tax assets is reviewed
at each balance sheet date and is adjusted to the extent
that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the asset to be
recovered.
Deferred tax assets and deferred tax liabilities are offset
if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred
taxes relate to the same taxable entity and the same
taxation authority.
Deferred tax relating to items recognised outside profit
or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Deferred tax
items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset
if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred
taxes relate to the same taxable entity and the same
taxation authority.
Minimum Alternate Tax
Minimum Alternate Tax (MAT) paid in the year is
charged to the Statement of Profit and Loss as current
tax. The Company recognises MAT credit available
as an asset only to the extent that there is convincing
evidence that the Company will pay normal income tax
during the specified period, i.e., the period for which
MAT credit is allowed to be carried forward. In the year
in which Company recognises MAT credit as an asset
in accordance with the Guidance Note on Accounting
for Credit Available in respect of Minimum Alternate
Tax under the Income Tax Act, 1961, the said asset is
created by way of credit to the Statement of Profit and
Loss and shown as “MAT Credit Entitlement “. The
Company reviews the “MAT Credit Entitlement” asset
at each reporting date and writes down the asset to the
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100
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
extent the Company does not have convincing evidence
that it will pay normal tax during the specified period.
In accordance with Ind AS 12 Company is grouping
MAT credit entitlement with Deferred Tax Assets /
Liability (Net).
r) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise
cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are
subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash
and cash equivalents consist of cash balance on hand,
cash balance at banks and short-term deposits, as
defined above, net of outstanding bank overdrafts as
they are considered an integral part of the Group cash
management.
- Unallocated items
Revenue,expenses,assets and liabilities which relate
to the Group as a whole and are not allocable to
segments on reasonable basis have been included
under ‘unallocated revenue / expenses / assets /
liabilities’.
u) Government grants
Grants from the government are recognised at their
fair value where there is reasonable assurance that the
grant will be received and the Group will comply with
all attached conditions.
Government grants relating to the purchase of property,
plant and equipment are included in non-current
liabilities as deferred income and are credited to Profit
and Loss on a straight - line basis over the expected lives
of related assets and presented within other income.
s) Earnings per share (EPS)
v) Contingent liabilities and contingent assets
Basic EPS amounts are calculated by dividing the profit
for the year attributable to the shareholders of the
Company by the weighted average number of equity
shares outstanding as at the end of reporting period.
Diluted EPS amounts are calculated by dividing the profit
attributable to the shareholders of the Company by the
weighted average number of equity shares outstanding
during the year plus the weighted average number of
Equity shares that would be issued on conversion of all
the dilutive potential equity shares into equity shares.
t) Operating segments:
The managing committee is considered to be the ‘Chief
Operating Decision Maker’ (CODM) as defined in IND
AS 108. The Chief Operating Decision Maker (CODM)
evaluates the Company’s performance and allocates
resources based on an analysis of various performance
indicators by geographic segments. The accounting
principles used in the preparation of the financial
statements are consistently applied to record revenue
and expenditure in individual segments, and are as set
out in the significant accounting policies.
- Allocation of common costs
Common allocable costs are allocated to each
segment according to the relative contribution of
each segment to the total common costs.
-
Inter Segment transfers
Inter Segment revenue has been accounted for
based on the transaction price agreed to between
segments which is based on current market prices.
A contingent liability exists when there is a possible
but not probable obligation, or a present obligation
that may, but probably will not, require an outflow
of resources, or a present obligation whose amount
cannot be estimated reliably. Contingent liabilities do
not warrant provisions, but are disclosed unless the
possibility of outflow of resources is remote. Contingent
assets are neither recognised nor disclosed in the
financial statements. However, contingent assets are
assessed continually and if it is virtually certain that
an inflow of economic benefits will arise, the asset and
related income are recognised in the period in which the
change occurs.
w) Research & development costs
Research and development costs that are in nature
of tangible assets and are expected to generate
probable future economic benefits are capitalised as
tangible assets. Revenue expenditure on research and
development is charged to the statement of profit and
loss in the year in which it is incurred.
x) Exceptional items
When items of income and expense within statement
of profit and loss from ordinary activities are of such
size, nature or incidence that their disclosure is relevant
to explain the performance of the enterprise for the
period, the nature and amount of such material items
are disclosed separately as exceptional items.
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
101
NOTE 4 : PROPERTY, PLANT
AND EQUIPMENT
Land-
Freehold
Land-
Leasehold
Buildings
(Amount in ` ‘Lakhs’ unless otherwise stated)
Total
Furniture
and Fixtures
Plant and
Equipment
Vehicles
Leasehold
Improvements
Gross carrying amount
(At Deemed cost)
As at April 01, 2017
Add: Acquisition of subsidiary
Add: Additions made during the year
Less: Disposals/adjustments during the year
Reclassification to other assets
Add: Exchange realignment
Add: Currency translation reserve
1,647.34
58.32
4,731.39
91.58
10,471.76
918.96
962.66
18,882.02
35.74
687.01
-
688.84
-
33.99
1,445.57
-
-
-
0.03
0.36
137.80
542.28
-
0.61
8.09
378.18
2,009.15
136.85
297.35
2,959.32
298.64
27.17
165.10
1,033.18
1.59
0.60
-
-
-1.59
0.53
1.53
-
1.76
41.35
0.09
30.08
1.20
As at March 31, 2018
1,647.34
94.45
5,022.63
469.84
12,903.37
1,029.83
1,129.38
22,296.84
Add: Additions made during the year
Less: Disposals/adjustments during the year
Reclassification to other assets
Add: Exchange realignment
Add: Currency translation reserve
41.43
76.47
-
-
-
2,764.85
1,647.76
252.20
3,796.54
206.92
220.38
8,930.08
-
-
(0.98)
-
-
-
(65.99)
32.84
-
155.76
4.33
26.80
263.36
(95.04)
(18.13)
(1.41)
95.04
(28.78)
316.74
-
-
-
-
(1.94)
(49.83)
18.04
17.52
317.74
As at March 31, 2019
1,612.30
2,792.33
6,703.23
607.46
16,927.15
1,250.46
1,338.54
31,231.47
Accumulated depreciation
As at April 01, 2017
Add: Acquisition of subsidiary
Add: Depreciation charge for the year
Less: Disposals/adjustments during the year
Reclassification to other assets
Add: Exchange realignment
Add: Currency translation reserve
As at March 31, 2018
Add: Depreciation charge for the year
Less: Disposals/adjustments during the year
Reclassification to other assets
Add: Exchange realignment
Add: Currency translation reserve
As at March 31, 2019
Net Carrying Amount
As at March 31, 2019
As at March 31, 2018
0.34
177.11
23.94
1,094.35
157.15
155.05
1,607.95
16.33
257.93
-
645.70
-
26.37
946.33
1.37
239.14
56.85
1,522.39
130.99
177.42
2,128.16
-
-
0.01
0.16
28.72
-
0.25
3.33
167.45
7.57
102.53
306.27
0.07
0.60
-
-
-0.07
0.02
0.17
-
0.88
17.85
0.14
13.44
0.62
18.21
649.03
80.94
3,109.09
281.19
256.44
4,394.90
19.66
217.62
135.71
1,739.10
152.94
191.15
2,456.18
-
-
(0.49)
-
-
-
-
(19.87)
50.03
19.87
(8.20)
(17.63)
1.74
17.56
69.33
-
-
-
-
(0.42)
(26.74)
0.66
23.54
0.62
89.67
4.81
1.27
120.57
38.04
890.19
189.20
4,890.07
437.21
430.88
6,875.58
1,612.30
2,754.28
5,813.04
418.26
12,037.08
813.26
907.66
24,355.89
1,647.34
76.23
4,373.60
388.90
9,794.28
748.64
872.94
17,901.94
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Pearl Global Industries Limited Annual Report 2018-19
102
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
a) The above assets includes Gross block of land of ` 83.08 lakh (March 31, 2018: ` 159.54 lakh) situated at Narshingpur,
Tehsil District Gurgaon(Haryana). Out of this Gross block of land of ` 47.03 lakh (March 31, 2018: ` 47.52 lakh) for
which the company has executed a construction project agreement with DLF Retail Developers Limited on November
30, 2007. However, as certified by the Management, the work has not started during the financial year 2018-19 due to
pending receipt of license from the concerned authority.
b) For Information on Property, plant and equipment pledged as security by the company refer Note No-21
c)
In case of Pearl Global (HK) Limited, as at May 01, 2017, property plant and equipment of net carrying amount of
` 499.24 lakh were acquired by acquisition of a subsidiary.
d) The above property, plant and equipment includes assets given on lease given in the below table:
As at March 31, 2019
Gross carrying amount
Accumulated depreciation
Net carrying amount
As at March 31, 2018
Gross carrying amount
Accumulated depreciation
Net carrying amount
NOTE 5 : CAPITAL WORK IN PROGRESS
Capital work in progress
a) Breakup of capital work in progress is as follows:
Building
Plant and machinery
Furniture and Fittings
Lease Hold Improvement
Other expenses
(Amount in ` ‘Lakhs’ unless otherwise stated)
Plant and
Equipment
Furniture and
Fixtures
Total
27.77
13.59
14.17
27.77
10.59
17.18
21.22
9.16
48.99
22.76
12.06
26.23
21.22
6.11
48.99
16.70
15.11
32.29
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
778.62
778.62
840.42
840.42
As At
March 31, 2019
As At
March 31, 2018
632.56
38.38
46.59
54.98
6.11
778.62
544.77
294.51
-
-
1.15
840.42
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
103
NOTE 6 : INVESTMENT PROPERTIES
Gross carrying amount
(At Deemed cost)
As at April 01, 2017
Add: Additions made during the year
Less: Disposals/adjustments during the year
As at March 31, 2018
Add: Additions made during the year
Less: Disposals/adjustments during the year
As at March 31, 2019
Accumulated depreciation
As at April 01, 2017
Add: Depreciation charge for the year
Less: Disposals/adjustments during the year
As at March 31, 2018
Add: Depreciation charge for the year
Less: Disposals/adjustments during the year
As at March 31, 2019
Net carrying amount
As at March 31, 2019
As at March 31, 2018
Land freehold Land leasehold
(Amount in ` ‘Lakhs’ unless otherwise stated)
Total
Building
3,018.37
67.13
-
3,085.50
1.29
-
3,086.79
-
-
-
-
-
-
-
3,086.79
3,085.50
112.60
-
102.24
10.36
-
-
10.36
4,580.71
-
4,580.71
-
-
4,580.71
5.55
3.01
8.56
-
-
-
-
76.46
85.76
-
162.22
85.76
-
247.97
7,711.68
67.13
102.24
7,676.57
1.29
-
7,677.86
82.01
88.77
8.56
162.22
85.76
-
247.97
10.36
10.36
4,332.74
4,418.49
7,429.89
7,514.36
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
(a) Amounts recognized in statement of profit and loss for
investment properties
Rental Income
Direct operating expenses of property that generated rental income
Direct operating expenses of property that did not generated rental
income
Income arising from Investment properties before charging
depreciation
Depreciation
Income from Investment properties (net)
(b) Fair value of investment properties
Estimation of fair value
814.53
53.62
77.46
683.45
732.70
25.52
68.30
638.89
85.76
597.69
11,378.15
85.76
553.14
11,548.24
“The fair valuation is based on current prices in the active market for similar properties. The main inputs used are
quantum, area, location, demand, restrictive entry to the complex,age of building and trend of fair market rent in
village panchpakhadi area.
This valuation is based on valuations performed by an accredited independent valuer. Fair valuation is based on
replacement cost method. The fair value measurement is categorised in level 2 fair value hierarchy.”
In the earlier years, the Company had initiated the process of converting its leasehold land (situated at Plot A-3,
Naraina, New Delhi) into freehold land. However, the deed is yet to be transferred in the name of the Company as at
March 31, 2019.
c)
Pearl Global Industries Limited Annual Report 2018-19 104
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 7 : GOODWILL
Goodwill on acquisition of subsidiaries
NOTE 8 : OTHER INTANGIBLE ASSETS
Gross carrying amount
(At Deemed cost)
As at April 01, 2017
Add: Additions during the year
Less: Disposals / adjustments during the year
As at March 31, 2018
Add: Additions during the year
Less: Disposals / adjustments during the year
As at March 31, 2019
Amortisation and impairment
As at April 01, 2017
Add: Amortisation charge for the year
Less: On disposals / adjustments during the year
As at March 31, 2018
Add: Amortisation charge for the year
Less: On disposals / adjustments during the year
As at March 31, 2019
Net Carrying Amount
As at March 31, 2019
As at March 31, 2018
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
1,897.56
1,897.56
1,817.74
1,817.74
(Amount in ` ‘Lakhs’ unless otherwise stated)
Computer Software
Total
202.55
17.33
202.55
17.33
-
219.88
219.88
27.65
-
27.65
-
247.53
247.53
38.32
46.74
-
85.06
47.54
-
38.32
46.74
-
85.06
47.54
-
132.60
132.60
114.94
134.83
114.94
134.83
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
105
NOTE 9 : INVESTMENT
Non- current
A.
Equity Instruments
Fair value through profit and loss
(Quoted)
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2018
As At
March 31, 2019
PDS Multinational Fashions Limited, India
50,000 (March 31, 2018: 50,000) Equity Shares of ` 10/- each fully paid up
133.50
133.50
143.00
143.00
B.
Investments in structured product - (Unquoted)
Fair value through other comprehensive income
(Unquoted)
Investment in structured product
C.
Investments in Government securities - (Unquoted)
At amortised cost
Investments in key man insurance policy (Refer ‘b’ below)
Investments in Government securities
- National Saving Certificate (NSC) (Refer ‘c’ below)
- Gold Sovereign Bond- 37 units of 2 gram each issued by Reserve Bank of India
Total (A + B + C)
Current
A.
Investments in mutual funds - (Quoted)
Investments carried at Fair value through profit and loss
Franklin India corporate bond
Nil Units of Face Value of ` 10 per unit (March 31 , 2018 : 702,286.65 units)
ICICI PRU Equity arbitrage fund regular
Nil units of Face Value of ` 10 per unit (March 31, 2018: 504,149.36 units)
UTI short term income fund
Nil units of Face Value of ` 10 per unit (March 31, 2018 : 924,908.95 units)
ICICI PRU Corporate bond
Nil units of Face Value of ` 10 per unit (March 31, 2018: 462,943.67 units)
Principal balances Fund - Regular Plan Growth
Nil units of of Face Value of ` 10 per unit ( March 31 , 2018 : 82,349.77 units)
1,312.68
1,312.68
1,245.92
1,245.92
1,828.35
1,719.19
-
1.63
1,829.98
3,276.16
0.04
1.63
1,720.86
3,109.77
As At
March 31, 2019
As At
March 31, 2018
-
-
-
-
132.33
115.97
195.36
125.20
63.76
a)
632.62
775.62
775.62
2,966.77
-
2,966.77
b) The Investments in key man insurance policy has been pledged to bank to secure for banking facilities granted to subsidiary- Pearl
Aggregate book value of quoted investments
Aggregate market value of quoted investments
Aggregate value of unquoted investments
Aggregate amount of impairment in value of unquoted investments
Aggregate value of unquoted investments (net of impairment)
-
133.50
133.50
3,142.66
-
3,142.66
Global (HK) Limited (Refer note 21).
c) The National Saving Certificate(s) were pledged with Sales Tax Authorities in India.
Pearl Global Industries Limited Annual Report 2018-19 106
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE10 : LOANS
(Unsecured, considered good unless
otherwise stated)
Loans to employees
Loans to related parties (Refer note 47)
Loans to others
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non - current
Current
March 31, 2019
March 31, 2018
March 31, 2019
March 31, 2018
18.10
-
2,275.50
2,293.60
12.09
-
2,091.94
2,104.03
49.63
300.00
1,315.09
1,664.72
34.99
300.00
-
334.99
Break-up :
Non - current
Current
March 31, 2019
March 31, 2018
March 31, 2019
March 31, 2018
Loans considered good - Secured
-
-
-
Loans considered good - Unsecured
2,293.60
2,104.03
1,664.72
Loans which have significant increase in
credit risk
Loans - credit impaired
Total
Less: Loss allowance
Total Loans
-
-
-
-
-
-
2,293.60
2,104.03
1,664.72
334.99
-
-
-
-
2,293.60
2,104.03
1,664.72
334.99
-
334.99
-
-
(Refer note no. 44 For information about credit and market risk for loans)
NOTE 11 : OTHER FINANCIAL ASSETS
(Unsecured, considered good unless
otherwise stated)
Security deposits (Refer ‘a’ below)
Interest accrued but not due on
- Term deposits and others
- Loan to related parties (Refer note 47)
Deposits with original maturity of more
than 12 months (Refer note 18)
Mark to market forward contracts
Other receivable
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non - current
Current Current
March 31, 2019
March 31, 2018
March 31, 2019
March 31, 2018
948.10
572.57
176.71
26.11
0.80
-
452.48
-
1.07
0.64
-
400.27
-
1,213.47
2,186.95
45.64
6.66
761.27
462.80
234.35
54.94
13.46
1,730.21
215.57
-
1,687.43
2,040.29
Total (A)
1,402.45
a) Security deposits are not in the nature of loans hence classified as part of other financial assets.
Pearl Global Industries Limited Annual Report 2018-19 107
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 12 : INCOME TAX
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
The major components of income tax expense for the years ended March 31, 2019
and March 31, 2018 are:
Statement of profit and loss:
Profit or loss section
Tax Expense:
a) Current tax
b) Adjustments in respect of current income tax of previous year
c) Deferred tax
Income tax expense reported in the statement of profit or loss
OCI section
Deferred tax related to items recognised in OCI during the year:
Net loss/(gain) on remeasurements of defined benefit plans
Income tax charged to OCI
1,175.02
193.01
214.98
1,583.01
508.43
165.55
257.53
931.51
As At
March 31, 2019
As At
March 31, 2018
(71.93)
(71.93)
30.99
30.99
Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for March 31,
2019 and March 31, 2018.
Accounting profit before tax from continuing operations
Accounting profit before income tax
As At
March 31, 2019
As At
March 31, 2018
6.710.92
2,308.93
At India’s statutory income tax rate of 34.944% (March 31, 2018: 33.063%)
Adjustments in respect of current income tax of previous years
2,345.06
193.01
763.40
165.55
Tax effect of the amounts which are Non-deductible/(taxable) for tax
purposes:
Expenses not deducted for tax purposes
Income exempted from income tax
Impact of tax at different tax rate and Others
At the income tax rate of 34.944% (March 31, 2018: 34.063%)
Income tax expense reported in the statement of profit and loss
Variance
591.58
(684.86)
(861.78)
1,583.01
1,583.01
-
53.55
(213.39)
162.40
931.51
931.51
-
Pearl Global Industries Limited Annual Report 2018-19 108
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
DEFERRED TAX:
Deferred tax assets relates to the following:
Provision for employee benefits
Expenses allowed in the year of payment
Unabsorbed Losses
Others
MAT Credit
Deferred tax liability relates to the following:
Property, plant and equipment
Fair valuation of mutual fund
Borrowing (EIR)
Others
Total deferred tax assets/(liabilities) (Net)
Deferred tax expense/income:
Deferred tax assets relates to the following :
Provision for employee benefits
Expenses allowed in the year of payment
Unabsorbed losses
Others
Deferred tax liability relates to the following :
Property, plant and equipment
Fair valuation of mutual fund
Borrowing (EIR)
Others
Net deferred tax charge
Recognised in statement of profit and loss
Recognised in other comprehensive income
Balance sheet
As At
March 31, 2019
As At
March 31, 2018
489.60
134.25
543.17
79.02
266.07
1,512.11
1,424.05
-
9.23
315.29
1,748.57
(236.46)
475.15
14.91
742.57
68.89
531.26
1,832.78
1,359.96
33.84
11.80
111.55
1,517.15
315.64
Statement of profit and loss
As At
March 31, 2019
As At
March 31, 2018
14.44
119.34
(199.40)
10.13
(55.49)
64.09
(33.84)
(2.57)
203.74
231.42
286.91
214.98
71.93
100.18
3.14
43.15
4.55
151.02
408.89
(40.66)
0.83
8.50
377.56
226.54
257.53
(30.99)
The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax
authority.
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
109
NOTE 13 : NON CURRENT TAX ASSET
Advance income tax
(Net of provision of ` 1,032.42 lakhs (March 31, 2018 : ` 1,639.78)
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
As At
March 31, 2018
March 31, 2019
452.22
206.07
452.22
206.07
(Amount in ` ‘Lakhs’ unless otherwise stated)
NOTE 14 : OTHER ASSETS
(Unsecured, considered good, unless otherwise
stated)
Capital advances (Refer note no. 46(b) for capital
commitments)
Balance with government authorities
Balance with government authorities -
considered doubtful
Less: Loss allowance (Refer ‘a’ below)
Prepaid expenses
Export incentive receivable
Advances to related parties (Refer note no. 47)
Advances to suppliers
Other receivables
Non - current
Current
March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018
204.44
183.24
-
-
153.62
1,593.89
1,569.04
128.86
22.74
(22.74)
985.26
-
-
-
-
-
610.90
-
-
-
-
-
767.10
1,817.61
4.29
1,109.86
1,096.80
6,389.55
-
-
440.87
2,233.42
-
1,154.76
1,675.18
7,073.27
Total (A)
35.89
1,354.45
1,638.02
2,585.78
a) The movement in loss allowance is as follows:
Balance as at beginning of the year
Allowance for doubtful balance during the
year
Amount written off / written back during the
year
Balance as at the end of the year
-
22.74
-
22.74
-
-
-
-
NOTE 15 : INVENTORIES
Raw materials
Good in transit- raw material
Work in progress
Finished goods
Stores spares & others
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
10,518.28
10,585.74
39.91
8,368.47
4,669.49
36.01
23,632.17
89.39
6,299.74
4,002.41
26.63
21,003.91
(a) For information on inventories pledged as security by the group (refer note 21).
Pearl Global Industries Limited Annual Report 2018-19 110
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 16 : TRADE RECEIVABLES
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
As At
March 31, 2018
March 31, 2019
-
-
14,196.59
22,177.86
-
-
374.33
34.42
(34.42)
(374.33)
14,196.59
22,177.86
Considered good - secured
Considered good - unsecured
Trade receivables which have significant increase in credit risk
Trade receivables - credit impaired
Less: Loss allowance
Total (A+B)
a) The movement in loss allowance is as follows:
Balance as at beginning of the year
Loss allowance during the year
Trade receivables written off / written back during the year
Balance as at the end of the year
b) Trade receivables are non-interest bearing and are generally on terms of 45 - 65 days.
c) The Group exposure to credit and currency risk, and loss allowances related to trade receivables are disclosed in note 44.
d) For information on trade receivables pledged as security by the Group companies refer Note 21
e) Due from related parties is ` 4.29 lakh (March 31, 2018: ` 11.06 lakh) (Refer note no. 47).
5.15
369.18
-
374.33
21.92
0.20
(16.97)
5.15
NOTE 17 : CASH AND CASH EQUIVALENTS
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
As At
March 31, 2018
March 31, 2019
Balances with banks:
- Current account
- Deposits with original maturity of less than 3 months (Refer note 18(a))
Cash on hand
Cheque/drafts on hand
4,313.15
949.52
2,929.17
1,242.27
9,434.12
6,471.62
860.15
45.80
1,848.26
9,225.83
a) For the purpose of the statement of cash flow, the cash and cash equivalent are same given above.
NOTE 18 : OTHER BANK BALANCE
Earmarked balances with banks
Unpaid dividend account
Deposits with original maturity of more than 3
months but less than 12 months (Refer ‘a’ below)
Deposits with original maturity of more than 12
months (Refer ‘a’ below)
Balance with bank (Considered doubtful)
Less: Loss allowance
Less: Amount disclosed under “ Other financial
assets” (Refer note 11)
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non - current
Current
March 31, 2019
March 31, 2018
March 31, 2019
March 31, 2018
-
-
-
-
26.83
1,680.88
24.53
417.15
452.48
400.27
761.27
1,730.21
-
-
452.48
452.48
-
-
400.27
400.27
0.03
(0.03)
2,468.98
761.27
0.03
(0.03)
2,171.88
1,730.21
-
-
1,707.71
441.67
a) Out of the total Fixed Deposits, the fixed deposit with carrying value of ` 2,994.13 lakh (March 31, 2018 ` 1,922.63 lakh)
are pledged as security with various banks.
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
111
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
As At
March 31, 2018
March 31, 2019
NOTE 19 : SHARE CAPITAL
a) Reconciliation of authorised, issued and subscribed share capital:
Authorised Share Capital
5,14,40,000* (March 31, 2018: 5,14,40,000) equity shares of ` 10 each
10,000* (March 31, 2018: 10,000) 4% Non Cumulative
Redeemable Preference Shares of ` 10 each
3,256,000* (March 31, 2018: 3,256,000) 10.5% Non Cumulative
Redeemable Preference Shares of ` 100 each
Issued, subscribed and paid up
21,663,937* (March 31, 2018: 21,663,937) Equity Shares of ` 10 each fully paid up
* Number of Shares are given in absolute numbers.
i. Reconciliation of issued and subscribed share capital as at year end :
Equity Share of ` 10 each
Balance as at April 1, 2017
Changes during the year
Balance as at March 31, 2018
Changes during the year
Balance as at March 31, 2019
5,144.00
1.00
5,144.00
1.00
3,256.00
3,256.00
8,401.00
8,401.00
2,166.39
2,166.39
2,166.39
2,166.39
No. of shares
(in ‘Lakhs’)
Amount
(` in Lakhs)
216.64
2,166.39
-
-
216.64
2,166.39
-
-
216.64
2,166.39
b) Terms/ rights attached to equity shares:
The Company has only one class of equity shares having a par value of `10 per share. Each holder of equity shares is
entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year
ended March 31, 2019, the amount of per share dividend proposed as distributions to equity shareholders was ` 3.00 per
share (March 31, 2018: ` 2.00 per share).In the event of liquidation of the Company, the holders of equity shares will be
entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be
in proportion to the number of equity shares held by the shareholders.
c) Details of shareholders holding more than 5% shares in the company
Name of Party
Mrs. Payel Seth
Mr. Deepak Seth
Mr. Pulkit Seth
Total
As at March 31, 2019
As at March 31, 2018
No. of shares
Holding % No. of shares
Holding %
4,413,635
2,862,145
6,947,621
20.37
13.21
32.07
4,413,635
2,862,145
6,947,621
14,223,401
65.65
14,223,401
20.37
13.21
32.07
65.65
Pearl Global Industries Limited Annual Report 2018-19 112
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 20 : OTHER EQUITY
General Reserve
Securities Premium
Capital Redemption Reserve
Amalgamation Reserve
Foreign Currency Translation Reserve
Change in investment through other comprehensive income
Retained Earnings
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
4,204.36
4,204.36
17,103.90
17,103.90
95.00
625.95
2,036.96
(67.05)
95.00
625.95
802.04
(54.38)
20,821.23
14,570.12
44,820.35
37,346.98
I. For Movement during the period in Other Equity, refer “Statement of Changes in Equity”.
II. Nature and purpose of reserves
a) General reserve
The Company has transferred a portion of the net profit of the Company before declaring dividend to general
reserve pursuant to the earlier provisions of Companies Act, 1956.Mandatory transfer to general reserve is not
required under the Companies Act, 2013.
b) Securities Premium
The amount received in excess of face value of the equity shares is recognised in securities premium.
c) Capital Redemption Reserve
This Reserve has been created at the time of merger of other companies in earlier years in accordance with the
provisions of the Companies Act, 2013.
d) Amalgamation Reserve
This Reserve has been created at the time of merger of other companies in earlier years in accordance with the
provisions of the Companies Act, 2013.
e) Foreign currency translation reserve
Foreign currency translation reserve is created on translation of financial statements of non integral foreign operation
at the reporting date.
f) Retained Earnings
Retained earnings are the profits that the Group has earned till date, less any transfers to general reserve, dividends
or other distributions paid to shareholders.
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
113
NOTE 21 : BORROWINGS
From banks (secured)
- Corporate Loan (Refer a(i), a(ii),a(iii),a(iv) &
a(v) below)
- Vehicle Loans (Refer a(vi) below)
From financials institutional (secured)
- Vehicle loans (Refer ‘a(iv)’ below)
From others - unsecured
Working capital loan from banks(secured)
- Rupee loan (Refer ‘d’ below)
Less: Amount disclosed under other financial
liabilities as ‘Current maturities of long-term
borrowings’ (Refer note 22)
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non current
As At
March 31, 2019
As At
March 31, 2018
Current
As At
March 31, 2019
As At
March 31, 2018
7,819.91
4,740.86
1,560.70
5,156.81
48.93
107.05
81.29
38.91
-
70.10
61.27
-
51.01
-
-
4,898.92
-
23,486.07
25,166.96
1,680.89
21,354.43
26,642.61
5,288.18
106.50
131.42
-
8,106.76
-
8,106.76
4,898.92
23,486.07
21,354.43
a) The nature of security for secured loans are :
(i) Corporate Term Loan (Kotak Bank) is secured by charge over fixed assets and plant and machinery and 100% FDR of
` 760.00 lakh under lien. The loan is also secured by personal guarantee of the Promoter Director.
(ii) Corporate Term Loan (Andhra Bank) is secured by first and exclusive charge on the entire fixed assets including
machineries and building at Chennai and Bangalore Plant of the Company. In addition, Equitable Mortgage of Land
& Building located at Survey No- 262A in Aryapakkam Village at Kancheepuram measuring 4.8053 acre in Company’s
name.
(iii) Corporate Term Loan (HDFC Bank) is secured by exclusive charge over movable fixed aseets of the Company, both
present and future. The loan is also secured by personal guarantee of one of the Promoter Director of the Holding
Company and exclusive charge by way of equitable mortagage on industrial plot no.446, Udyog Vihar, Phase- V,
Gurugram, Haryana.
(iv) BDT Term Loan from HSBC in case of Norp Knit Industries Limited) are secured by first charge over Company’s plant &
machinery, stocks of raw material, wip, finished goods, book debts & receivables, charge over deposits & stand by letter
of credit from Holding Company.
(v) The loan facilities (in case Pearl Global (HK) Limited) are secured by the Group’s machineries and equipment, inventories,
trade receivables together with director’s personal guarantee.
(vi) Vehicle loans are secured against hypothecation of respective vehicles.
b) Maturity profile- secured loans
Maturity profile of secured term loans is as set out below :
2019-20
2020-21
2021-22
Beyond
2022-23
Term loan from banks are repayable in monthly/quarterly/yearly
instalments
Vehicle loans from banks and financial institutions are repayable in
monthly instalments
Maturity profile of unsecured term loans is as set out below :
1,560.70
1,978.49
1,969.11
3,872.31
120.19
105.37
40.68
9.38
Loan from others
-
131.42
-
-
Pearl Global Industries Limited Annual Report 2018-19 114
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
c) The term loan(s) carries rate of interest ranging between 9.75% to 12.00% per annum.
d) The nature of Security for short term borrowings are as under:
-
First pari-passu charge on movable fixed assets and whole of current assets including stocks of raw material, semi
finished goods, finished goods, book debts, consumable stores and spares.
- Equitable mortgage of the leasehold property situated at Plot No. H -597-603, RICCO Industrial Area, Bhiwadi,
Distt. Alwar, Rajasthan and property situated at Plot No 16 - 17, Phase VI, Udyog Vihar,Gurgoan (Haryana).
-
Fixed Deposit of ` 58.00 lakh (March 31, 2018: ` 79.47 lakh).
- Personal Guarantee by the promoter director of the respective companies.
NOTE 22 : OTHER FINANCIAL
LIABILITIES
Non - current
Current
March 31, 2019 March 31, 2018
March 31, 2019
March 31, 2018
(Amount in ` ‘Lakhs’ unless otherwise stated)
Security deposit
Book overdraft
Current maturities of long-term borrowings
(Refer note 21)
Interest accrued but not due on borrowings
Unpaid dividends (Refer ‘a’ below)
Creditors for capital goods
Others
222.00
158.54
-
-
-
-
-
-
-
-
-
-
-
150.48
19.24
-
1,680.89
5,288.18
24.67
26.83
849.25
35.73
24.53
48.52
2,424.77
2,602.96
222.00
158.54
5,156.89
8,019.16
(a) There are no amounts due for payment to the Investor Education and Protection Fund under Section 125 of the
Companies Act, 2013 as at the year end.
(b) The company’s exposure to market and liquidity risk related to other financial liabilities is disclosed in note 44.
NOTE 23 : PROVISIONS
Provision for employee benefits
Provision for compensated absences
(Refer note 39)
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non - current
Current
March 31, 2019 March 31, 2018
March 31, 2019 March 31, 2018
717.05
436.88
23.02
11.39
Provision for gratuity (Refer note 39)
1,345.93
1,395.02
Other employee benefits
49.62
47.85
2,112.60
1,879.75
58.65
-
81.67
49.70
-
61.09
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 24 : OTHER LIABILITIES
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non - current
Current
March 31, 2019 March 31, 2018
March 31, 2019 March 31, 2018
115
Advance received against sale of land
3,010.49
3,400.00
Deferred government grant
Deferred rental income
Statutory dues
Advance from customers
Others
NOTE 25 : TRADE PAYABLE
9.58
56.88
-
-
10.58
50.92
-
-
232.67
156.33
-
145.61
32.56
678.55
-
9.93
-
1.00
25.43
541.08
38.88
12.19
3,309.63
3,617.84
866.66
618.58
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
Total outstanding dues of Micro and Small enterprises
63.70
98.88
Total outstanding due of creditors other than micro enterprises and small enterprises
18,042.77
10,826.42
18,106.47
10,925.30
a) Trade payable are generally on a credit of not more than 90 days.
b) This amount includes amount due to related parties is ` 16.85 lakh (March 31, 2018: ` 20.45 lakh ) (refer note 47)
c) The Group’s exposure to market and liquidity risk related to trade payables is disclosed in note 44.
NOTE 26 : LIABILITIES FOR CURRENT TAX (NET)
Provision for income tax
(net of advance tax Rs. 1,053.97 lakh (March 31, 2018 Nil))
NOTE 27 : REVENUE FROM OPERATIONS
Sale of product
Job receipts
Other operating revenues
Revenue from operations
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
224.13
1,654.62
224.13
1,654.62
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
170,770.02
143,586.32
66.57
4,913.19
149.18
5,868.51
175,749.78
149,604.01
Pearl Global Industries Limited Annual Report 2018-19 116
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
a) Consequent to the introduction of goods and services Tax (GST) with effect from 1 July 2017, VAT/Sales Tax, Excise Duty
etc. have been subsumed into GST and accordingly the GST is not recognised as part of revenue from operations and
excise duty as a separate expense line item as per the requirements of Ind AS. This has resulted in lower reported revenue
from operations in the current year in comparison to the revenue from operations reported under the pre-GST structure
of indirect taxes. Accordingly, the Revenue from operations for the year ended March 31, 2019 are not comparable with
year ended March 31, 2018 presented in the financial results which are reported inclusive of Excise Duty. The following
additional information is being provided to facilitate such understanding:
Revenue from operations (gross of excise duty)
Excise duty
Revenue from operations (exclusive of excise duty)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
175,749.78
149,605.59
-
1.58
175,749.78
149,604.01
b) Performance obligation
Revenue is recognised upon transfer of control of products and customers.
During the year, The Company has not entered into long term contracts with Customers and accordingly disclosure of
unsatisfied or remaining performance obligation (which is affected by several factors like changes in scope of Contracts,
periodic revalidations, adjustment for revenue that has not been materialized, tax laws etc.) is not applicable to the
Company. This is in line with practical expedient applied as per Para 121 of Ind AS 115.
c) Disaggregation of revenue
Revenue based on Geography
India
Outside India
Revenue from operations
d) Reconciliation of revenue from operations with
contracted price
Contracted Price
Less:
Rebates and discounts
Sales return
For the year ended
March 31, 2019
For the year ended
March 31, 2018
6,019.11
169,730.67
175,749.78
6,766.91
142,837.10
149,604.01
For the year ended
March 31, 2019
For the year ended
March 31, 2018
175,759.55
149,606.92
0.10
9.67
175,749.78
2.75
0.16
149,604.01
e) Revenue of ` 38.88 lakhs recognised for the year ended March 31, 2019 that was included in the contract liability balance
(advance from customers) at the beginning of the year.
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
117
NOTE 28 : OTHER INCOME
Interest Income
- On fixed deposits
- On loans and advances
- On income tax refund
Other non-operating income:
Rental income
Foreign exchange fluctuation
Sundry balances written back
Grant amortised during the year
Government grant received
Loss allowance no longer required written back
Amortisation of deferred rental income
Unwinding of discount on security deposits
Profit on sale of current investment - mutual fund
Profit on mark to market forward contracts
Fair value gain on investments measured at fair value through profit
and loss (net)
Miscellaneous income
NOTE 29 : COST OF MATERIAL CONSUMED
Raw Material
Balance at the beginning of the Year
Add:- Purchases during the year
Less:- Balance at the end of the Year
Total raw material consumption
NOTE 30 : PURCHASE OF STOCK IN TRADE
Purchases during the year
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
750.51
156.55
-
814.53
715.64
55.17
1.00
-
37.87
31.67
39.87
218.20
247.24
-
125.39
123.33
88.42
732.70
2,977.02
30.80
1.00
16.10
25.58
8.42
36.47
277.21
-
58.48
324.58
3,392.82
255.51
4,756.44
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
10,585.74
76,040.34
86,626.08
10,518.28
11,928.62
66,232.38
78,161.00
10,585.26
76,107.80
67,575.26
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
12,954.77
12,954.77
15,834.67
15,834.67
Pearl Global Industries Limited Annual Report 2018-19 118
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 31 : CHANGES IN INVENTORIES OF FINISHED GOODS,
WORK IN PROGRESS AND STOCK IN TRADE
For the year ended
March 31, 2019
For the year ended
March 31, 2018
(Amount in ` ‘Lakhs’ unless otherwise stated)
Change in Inventories of finished goods
Opening stock
Add: Impact of exchange fluctuation & reinstatement (net)
Less: Closing stock
Change in Inventories of work-in-progress
Opening stock
Add: Impact of exchange fluctuation & reinstatement (net)
Less: Closing stock
(Increase) / decrease in inventory (A + B)
(A)
(B)
NOTE 32 : EMPLOYEE BENEFITS EXPENSE
Salaries, Wages & Bonus
Contribution to Provident and Other fund
Gratuity expense (Refer note no. 39)
Compensated absences (Refer note no. 39)
Staff Training & Welfare Expenses
NOTE 33 : FINANCE COST
Interest Expense
- On Term loans,Cash Credit & Working Capital Facilities
- Delayed Payment of Taxes
- Others
Unwinding of discount on security deposit
Other borrowing cost
4,002.41
385.75
4,669.49
(281.34)
6,299.74
509.06
8,368.47
(1,559.67)
(1,841.00)
4,075.07
34.76
4,002.41
107.43
5,285.95
45.87
6,299.74
(967.92)
(860.49)
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
33,619.69
21,906.52
810.19
552.14
661.36
356.78
860.35
417.39
261.79
279.27
36,000.15
23,725.32
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
2,279.95
15.09
118.79
26.39
431.73
2,871.95
2,224.71
2.41
4.09
10.67
311.40
2,553.28
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
119
NOTE 34 : DEPRECIATION AND AMORTISATION EXPENSE
Depreciation & amortisation- property, plant and equipment (refer note
no. 4)
Depreciation & amortisation of investment properties (refer note no. 6)
Amortisation of intangible assets (refer note no. 8)
NOTE 35 : OTHER EXPENSES
Manufacturing expense
Consumption of stores & spare parts
Power & fuel
Rent (Refer ‘d’ below)
Rates & taxes
Travelling & conveyance
Freight & clearing charges
Claim to buyers
Repair & maintenance
Plant & machinery
Buildings
Other
Commission
Legal & professional expenses
Security charges
Bank charges
Insurance expenses
Payment to the auditors (Refer ‘a’ below)
Bad debts and doubtful advances written off
Loss Allowance for doubtful debts
Corporate social responsibility (Refer ‘b’ below)
Loss on mark to market forward contracts
Fair value loss on financial assets measured at fair value through profit
and loss
Amortisation of deferred asset - security deposit paid
Miscellaneous Expenses
Total
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
2,456.18
85.76
47.54
2,589.48
2,128.16
88.77
46.74
2,263.67
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
18,571.61
1,126.02
2,375.82
2,383.03
193.18
1,462.23
4,715.33
1,428.01
100.14
14.77
959.66
596.22
5,048.38
428.24
1,382.04
290.26
58.22
103.78
391.92
22.76
-
133.64
16,641.57
1,608.57
2,124.85
1,950.04
114.47
1,334.08
4,097.55
1,017.28
113.85
11.03
727.21
776.11
4,392.39
431.50
1,236.52
337.41
64.06
117.06
23.45
27.00
904.72
101.36
42.22
2,060.16
43,887.64
36.99
2,662.04
40,851.11
Pearl Global Industries Limited Annual Report 2018-19 120
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
a) Details of payment made to auditors is as follows:
Payment to auditors
As auditor:
- Statutory audit fee
- Other Services
- Reimbursement of expenses
b) Operating Lease
(i) Asset Given on Lease
For the year ended
March 31, 2019
For the year ended
March 31, 2018
43.66
7.44
7.12
58.21
36.41
22.37
5.28
64.06
- Minimum Lease Payments Receivables
The company has given certain assets on operating lease and lease rent (income) amounting to ` 814.53 lakh (March
31, 2018 ` 732.70 lakh) has been credited in the Statement of Profit & Loss. The future minimum lease payments
Receivable and detail of assets as at March 31, 2019 are as under :
Particulars
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Total
(ii) Asset taken on Lease
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2018
As At
March 31, 2019
923.92
1,951.26
523.71
3,398.89
164.25
598.53
-
762.78
The Group has taken certain assets on non cancellable operating lease and lease rent charged to Statement of Profit
& Loss amounts to ` 2,383.03 lakh (March 2018 ` 1,950.04 lakh). The details of future minimum lease payments is
as under :
Particulars
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Total
c)
Finance lease
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2018
As At
March 31, 2019
1,861.50
6,424.74
6,077.00
14,363.24
1,495.17
4,983.94
3,376.16
9,855.27
The carrying amount of the obligation under finance lease at the end of reporting period is analysed as follows:
Particulars
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Total
As At
March 31, 2019
As At
March 31, 2018
15.91
2.65
18.57
15.66
27.13
42.79
Pearl Global Industries Limited Annual Report 2018-19
121
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 36 : EXCEPTIONAL ITEMS
(Profit)/loss on sale of fixed assets (Refer ‘a’ below)
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
(1,722.12)
(1,722.12)
(824.39)
(824.39)
a) Profit on sale of fixed assets includes profit on account of compulsory acquisition of land by the Central Government
under National Highway Act,1956 of ` 1,756.25 lakh and loss of sale of tangible assets of ` 34.13 lakh.
NOTE 37 : COMPONENTS OF OTHER COMPREHENSIVE INCOME
A (i) Items that will not be reclassified subsequently to profit or loss
Re-measurement gains/ (losses) on defined benefit plans
Fair valuation of investment in structured product
Income tax expense
B (i) Items that will be reclassified subsequently to profit or loss
Foreign exchange translation reserve
Fair valuation of investment in structured product
Income tax expense
NOTE 38 : EARNINGS PER SHARE (EPS)
Profit attributable to the equity shareholders (A)
Number/Weighted average number of equity shares outstanding at
the end of the year (B)
Nominal value of equity shares
Basic/Diluted earning per share (A/B) (in `)
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
222.67
-
(71.93)
1,334.88
(12.67)
-
1,472.95
(214.49)
(54.38)
30.99
67.77
-
-
(170.13)
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
6,728.02
21,663,937
` 10
31.06
2,408.11
21,663,937
` 10
11.12
NOTE 39 : GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS
a) Defined contribution plans
The Group makes contribution towards Employees Provident Fund and Employee’s State Insurance scheme. Under the
rules of these schemes, the Group is required to contribute a specified percentage of payroll costs. The Group during
the year recognised the following amount in the Statement of profit and loss account under company’s contribution
to defined contribution plan.
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
Employer’s Contribution to Provident Fund/ Pension Fund
Employer’s Contribution to Employee State Insurance
Employer’s Contribution to Welfare Fund
Total
The contribution payable to these schemes by the Group are at the rates specified in the rules of the schemes.
492.36
268.79
49.04
810.19
575.25
241.12
43.98
860.35
Pearl Global Industries Limited Annual Report 2018-19 122
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
b) Defined benefit plans
In accordance with Ind AS 19 “Employee benefits”, an actuarial valuation on the basis of “Projected Unit Credit
Method” was carried out, through which the Group is able to determine the present value of obligations. “Projected
Unit Credit Method” recognizes each period of service as giving rise to additional unit of employees benefit entitlement
and measures each unit separately to built up the final obligation.
Gratuity scheme
i)
The Group provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Under the act,
employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends
on the member’s length of service and salary at retirement age.
a) Gratuity in case of Gurgaon Division (Funded & maintained by Life Insurance Corporation of India)
b) Gratuity in case of Chennai & Banglore Division (Unfunded)
Other long term employee benefits
ii)
As per the Group policy, eligible leaves can be accumulated by the employees and carried forward to future periods
to either be utilised during the service, or encashed. Encashment can be made during the service, on early retirement,
on withdrawal of scheme, at resignation by employee and upon death of employee. The scale of benefits is determined
based on the seniority and the respective employee’s salary. The Group records an obligation for such compensated
absences in the period in which the employee renders the services that increase this entitlement. The obligation is
measured on the basis of independent actuarial valuation using the projected unit credit method.
Re-measurements, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable)
and the return on plan assets (excluding interest and if applicable), is reflected immediately in Other Comprehensive
Income in the statement of profit and loss. All other expenses related to defined benefit plans are recognised in statement
of profit and loss as employee benefit expenses. Re-measurements recognised in Other Comprehensive Income will
not be reclassified to statement of profit and loss hence it is treated as part of retained earnings in the statement of
changes in equity. Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the
curtailment or settlement occurs. Curtailment gains and losses are accounted for as past service costs.
c) The following tables summarize the components of net benefit expense recognised in the Statement of profit and
loss and the funded status and amounts recognised in the balance sheet for the defined benefit plan (viz. gratuity
and compensated absences).Leave encashment include earned leaves and sick leaves. These have been provided on
accrual basis, based on year end actuarial valuation.
Change in benefit obligation
Particulars
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Opening defined benefit obligation
672.77
877.11
448.27
519.18
975.91
548.34
Adjustment in opening obligation
Interest cost
Service cost
Past Service cost
Benefits paid
Foreign currency translation reserve
-
51.87
125.98
-
(90.48)
-
Actuarial (gain) / loss on obligations
(142.59)
-
77.36
305.04
-
(50.69)
33.09
(66.48)
-
13.92
180.16
-
-
(391.02)
39.15
99.28
23.60
149.63
116.64
-
(377.73)
(71.28)
(119.33)
8.17
467.28
-
62.84
(5.98)
151.27
-
11.79
157.96
-
(346.67)
(15.20)
92.04
Present value of obligation as at the end
of the year
617.55
1,175.43
740.07
672.77
877.11
448.27
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
d. The following tables summarise the components of net benefit expense recognised in the Statement of profit or
loss and the funded status and amounts recognised in the balance sheet for the respective plans:
123
Cost for the year included
under employee benefit
Current service cost
Past service cost
Interest cost
Expected return on plan assets
Actuarial (gain) / loss
Net cost
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
125.98
305.04
-
51.87
(8.11)
-
-
77.36
-
-
169.74
382.40
180.16
-
13.92
99.28
23.60
39.15
-
(10.90)
467.28
661.36
-
151.13
266.26
116.64
-
149.63
-
-
157.96
-
11.79
-
92.04
261.79
e. Changes in the fair value of the plan assets are as follows:
Particulars
Fair value of plan assets at the beginning
Difference amount in opening fund
Expected return on plan assets
Contributions
Employee’s Contribution
Benefits paid
Actuarial gains / (losses) on the plan assets
Fair value of plan assets at the end
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
105.16
-
8.11
352.00
-
(90.48)
13.60
388.39
-
-
-
-
-
-
-
-
-
144.55
-
-
-
-
-
-
-
-
10.90
5.87
-
(55.77)
(0.39)
105.16
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
f. Detail of actuarial gain/loss recognised in OCI is as follows:
Particulars
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Actuarial gain / (loss) for the year –
obligation
Actuarial gain / (loss) for the year - plan
assets
Total gain / (loss) for the year
Actuarial gain / (loss) recognised in the
year
Unrecognised actuarial gains /
(losses) at the end of year
142.59
66.48
13.60
-
-
-
-
-
156.19
66.48
-
-
-
-
-
(62.84)
(151.27)
(0.39)
-
-
-
-
-
(63.23)
(151.27)
-
-
-
-
-
Pearl Global Industries Limited Annual Report 2018-19 124
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
g. Principal actuarial assumptions at the balance sheet date are as follows:
Particulars
Economic assumptions
1. Discount rate
2. Rate of increase in compensation
levels
Demographic assumptions
1. Expected average remaining
working lives of employees
2. Retirement Age (years)
3. Mortality Rate
Withdrawal Rate
1. Ages up to 30 Years
2. Ages from 30-44
3. Above 44 years
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
8.00%
6.00%
7.60% to
8.70%
3.00% to
6.00%
7.60% to
8.00%
8.00%
6.00%
6.00%
7.11% to
8.00%
3.00% to
6.00%
7.11% to
8.00%
6.00%
20.19
26.02
24.29
20.43
26.70
24.61
58
55 - 60
58 - 60
58
55 - 60
58 - 60
Indian Assured Lives Mortality
(2006-08) (modified) ultimate
Indian Assured Lives Mortality
(2006-08) (modified) ultimate
0.03
0.02
0.01
0.04
0.04
0.03
0.04
0.03
0.03
0.03
0.02
0.01
0.03
0.02
0.01
0.03
0.02
0.01
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion
and other relevant factors, such as supply and demand in the employment market.
h. Net (assets) / liabilities recognized in the Balance Sheet and experience adjustments on actuarial gain / (loss)
for benefit obligation and plan assets.
Particulars
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Present value of obligation
617.55
1,175.43
740.07
672.77
877.11
448.27
Less: Fair value of plan assets
388.39
-
-
105.16
-
-
Net assets /( liability)
(229.15)
(1,175.43)
(740.07)
(567.60)
(877.11)
(448.27)
i. Expected contribution for the next year is ` 1,066.26 Lakh (March 31, 2018: ` 870.14 Lakh) in respect of gratuity
j. A quantitative sensitivity analysis for significant assumptions is as shown below:
A. Discount rate
(Amount in ` ‘Lakhs’ unless otherwise stated)
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Effect on DBO due to 0.5% increase in Discount Rate
(59.83)
(510.28)
(425.20)
(34.22)
(380.11)
(264.17)
Effect on DBO due to 0.5% decrease in Discount Rate
70.24
490.18
431.66
37.11
465.05
310.97
Pearl Global Industries Limited Annual Report 2018-19 125
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
B. Salary escalation rate
Effect on DBO due to 0.5% increase in Salary Escalation
Rate
Effect on DBO due to 0.5% decrease in Salary Escalation
Rate
C. Withdrawal Rate
Effect on DBO due to 5% increase in Withdrawal Rate
Effect on DBO due to 5% decrease in Withdrawal Rate
D. Mortality rate
Effect on DBO due to 10% increase in mortality rate
Effect on DBO due to 10% decrease in mortality rate
(Amount in ` ‘Lakhs’ unless otherwise stated)
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
70.80
619.47
523.59
37.55
465.36
311.15
(61.30)
(510.52)
(425.58)
(34.90)
(380.02)
(251.41)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sensitivities due to mortality & withdrawals are not material & hence impact of change due to these not calculated.
k. Risk
Discount Rate
Reduction in discount rate in subsequent valuations can increase the liability.
Salary Increases
Withdrawals
Actual salary increases will increase the defined benefit liability. Increase in salary increase rate assumption
in future valuations which in turn also increase the liability.
Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawals rates at
subsequent valuations can impact defined benefit liability.
Morality and disability
Actual details and disability cases proving lower or higher than assumed in the valuation can impact the
liabilities.
l. Maturity profile of defined benefit obligation is as follows:
(Amount in ` ‘Lakhs’ unless otherwise stated)
Particulars
0 to 1 years
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
50.2
29.8
52.7
58.9
52.4
9.6
12.0
18.3
30.0
52.8
44.77
11.62
11.61
19.39
15.97
5.04
4.67
5.76
6.64
10.28
from 5 years onwards
822.3
3,534.9
569.41
2,298.31
NOTE 40 : CAPITAL MANAGEMENT
For the purpose of capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to
the equity holders of the parent. The primary objective of the capital management is to maximise the shareholder value.
The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the
financial covenants. To maintain or adjust the capital structure, the Group may return capital to shareholders or issue new shares. The
Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt,
interest bearing borrowings, trade and other payables, less cash and cash equivalents.
Pearl Global Industries Limited Annual Report 2018-19 126
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
Particulars
Borrowings (Refer note no. 21)
Current maturity of long term loans (Refer note no. 22)
Trade payables (Refer to note no. 25)
Other payables (Refer note no. 22 and 24)
Less: cash and cash equivalents (Refer note no. 17)
Net debt
Equity share capital (Refer note no. 19)
Other equity (Refer note no. 20)
Total Capital
Capital and net debt
Gearing ratio
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2018
As At
March 31, 2019
31,592.83
1,680.89
18,106.47
7,874.29
(9,434.12)
49,820.36
2,166.39
44,820.35
46,986.74
96,807.10
51.46%
26,253.35
5,288.18
10,925.30
7,125.94
(9,225.83)
40,366.94
2,166.39
37,346.98
39,513.37
79,880.31
50.53%
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2019 and March 31, 2018.
In order to achieve this overall objective, the capital management, amongst other things, aims to ensure that it meets financial covenants
attached to the interest-bearing loans and borrowings that define capital structure requirements.
NOTE 41 : DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE
Forward currency contracts
a) For the year ended March 31, 2019, the Group has outstanding mark to market forward contracts amount to ` 462.80
lakh (March 31, 2018: ` 215.57 lakh) relating to derivative financial instruments. These commitments with respect
to foreign currency forward contracts have been entered into by the Company to hedge against future receipts from
customers in the ordinary course of business. These arrangements are designed to address significant exchange exposures
and are reviewed/ renewed by the Management on a revolving basis as required.
b) The following table represents the aggregate contracted principal amount of derivative contracts outstanding:
Particulars
Forward foreign exchange contract
As At March 31, 2019
As At March 31, 2018
USD 267.37 lakhs
USD 295.50 lakhs
(Equivalent to ` 19,229.16
lakhs)
(Equivalent to ` 20,687.90
lakhs)
c) Particulars of Unhedged foreign currency exposures:
Particulars
As At March 31, 2019
As At March 31, 2018
Foreign currency receivable
Foreign currency payable
Foreign Currency
in lakh
HKD 25.37
IDR 36,333.72
EUR 4.25
GBP 0.00
VND 25,430.25
CNY 0.54
HKD 181.63
IDR -
VND 122,327.45
USD 6,875,405
` in lakh
223.51
176.79
330.46
0.10
75.83
5.52
1,600.42
-
364.74
4,755.72
Foreign Currency
in lakh
HKD 14.83
IDR 110,234.82
EUR 7.56
GBP 0.01
VND -
CNY -
HKD 1.88
IDR 5,835.49
VND 79,591.62
USD 11,246,484
` in lakh
122.86
504.34
556.32
1.06
-
-
15.57
26.70
223.15
7,315.17
Derivative financial instruments such as foreign exchange forward contracts are used for hedging purposes and not as trading or
speculative instruments.
Pearl Global Industries Limited Annual Report 2018-19
127
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
(Amount in ` ‘Lakhs’ unless otherwise stated)
NOTE 42 : FAIR VALUES
Set out below, is a comparison by class of the carrying amounts and fair value of the financial instruments, other than those
with carrying amounts that are reasonable approximations of fair values:
a) Fair value of financial assets:
As At
March 31, 2019
As At
March 31, 2018
As At
March 31, 2019
As At
March 31, 2018
Carrying values
Fair values
Financial assets measured at fair value
through profit or loss
Investment in equity instruments
Investment in mutual fund
Financial assets measured at fair value
through other comprehensive income
Investment in mutual fund
Financial assets measured at amortised cost
Investment in government securities
Security deposits
Interest accrued on fixed deposits
Mark to market forward contracts
Deposits with original maturity of more
than 12 months
Loans to related parties
Loans to others parties
Interest accrued on loan to related parties
Others
Trade receivable
Cash and cash equivalents
Other bank balances
133.50
-
133.50
143.00
632.62
775.62
133.50
-
133.50
143.00
632.62
775.62
1,312.68
1,312.68
1,245.92
1,245.92
1,312.68
1,312.68
1,245.92
1,245.92
1,829.98
1,124.81
46.45
462.80
1,720.86
598.68
55.58
215.57
1,829.98
1,124.81
46.45
462.80
1,720.86
598.68
55.58
215.57
1,213.74
2,130.47
1,213.74
2,130.47
300.00
3,658.32
6.66
235.42
22,177.86
9,434.12
1,707.71
300.00
2,139.02
13.46
1,213.47
14,196.59
9,225.83
441.67
300.00
3,658.32
6.66
235.42
22,177.86
9,434.12
1,707.71
300.00
2,139.02
13.46
1,213.47
14,196.59
9,225.83
441.67
42,197.88
32,251.21
42,197.88
32,251.21
Total (A+B)
43,644.06
34,272.75
43,644.06
34,272.75
Pearl Global Industries Limited Annual Report 2018-19
128
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
b) Fair value of financial liabilities:
As At
March 31, 2019
Carrying values
As At
March 31, 2018
As At
March 31, 2019
Fair values
As At
March 31, 2018
Financial liabilities measured at
amortised cost
Borrowings
Security Deposit
Book Overdraft
Unpaid Dividend
Current maturity of long term loans
Trade payables
Interest accrued but not due on borrowings
Creditors for capital expenditure
Others
31,592.83
222.00
150.48
26.83
1,680.89
18,106.47
24.67
849.25
2,424.77
26,253.35
177.78
-
24.53
5,288.18
10,925.30
35.73
48.52
2,602.96
31,592.83
222.00
150.48
26.83
1,680.89
18,106.47
24.67
849.25
2,424.77
26,253.35
177.78
-
24.53
5,288.18
10,925.30
35.73
48.52
2,602.96
45,356.35
Management has assessed that trade receivables, cash and cash equivalents, other bank balances, trade payables, Interest
accrued on borrowings and current maturities of long term borrowings approximate their carrying amounts largely due
to the short-term maturities of these instruments.
55,078.18
55,078.18
45,356.35
Long-term borrowing includes vehicle loan and corporate loans obtained from banks and Financial institutions .
Management determines vehicle loan and corporate loan to be at the market rate of interest as at the reporting date,
accordingly, the carrying value of such long-term borrowing approximates fair value.
c) Discount rate used in determining fair value
The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing
rate of borrower which in case of financial liabilities is average market cost of borrowings and in case of financial asset
is the average market rate of similar credit rated instrument. The Group maintains policies and procedures to value
financial assets or financial liabilities using the best and most relevant data available.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
i) Fair values of the interest-bearing borrowings and loans are determined by using DCF method using discount rate that
reflects the rate as at the end of the reporting period.
ii) Fair value for security deposits paid & received (other than perpetual security deposits) has been presented based on the
discounting factor as at the reporting date.
iii) Fair value for all other non-current assets and liabilities is equivalent to the amortised cost, interest rate on them is
equivalent to the market rate of interest.
iv) For other financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
v) Specific valuation techniques used to value financial instruments include:
- The fair values of investments In mutual fund units is based on The net asset value (‘NAV’) as stated by the issuers
of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which
The issuer will issue further units of mutual fund and The price at which issuers will redeem such units from the
investors.
Investment in quoted equity instruments of entities other than subsidiaries has been determined on the basis of
quoted rates available from securities markets in India.
-
- The fair value of derivative financial instruments (forward exchange contract) has been determined on the basis of
mark to market valuation.
Pearl Global Industries Limited Annual Report 2018-19
129
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
(Amount in ` ‘Lakhs’ unless otherwise stated)
NOTE 43 : FAIR HIERARCHY
All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are
observable, either directly or indirectly.
“Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement
is not based on observable market data.
The following table provides the fair value measurement hierarchy of the assets and liabilities
a) Quantitative disclosures fair value measurement hierarchy for assets as at March 31, 2019:
Fair Value
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Total
As At
March 31, 2019
Amortised
Cost
Financial assets measured at fair value
through profit or loss
Investment in equity instruments
Investment in mutual fund
Financial assets measured at fair value
through other comprehensive income
Total A
133.50
-
133.50
Investment in mutual fund
Total B
1,312.68
1,312.68
-
-
-
-
Financial assets measured at amortised cost
Investment in government securities
Security deposits
Interest accrued on fixed deposits
Mark to market forward contracts
Deposits with original maturity of more
than 12 months
Loans from related parties
Loans from others parties
Interest accrued on loan to related parties
Other
Trade receivable*
Cash and cash equivalents*
Other bank balances*
Total C
Total (A+B+C)
1,829.98
1,829.98
1,124.81
1,124.81
46.45
462.80
46.45
-
1,213.74
1,213.74
300.00
300.00
3,658.32
3,658.32
6.66
6.66
235.42
235.42
22,177.86
22,177.86
9,434.12
9,434.12
1,707.71
42,197.88
1,707.71
41,735.08
Quoted
prices in
active
markets
(Level 1)
133.50
-
133.50
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,312.68
1,312.68
-
-
-
462.80
-
-
-
-
-
-
-
462.80
43,644.06
41,735.08
133.50
1,775.48
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
133.50
-
133.50
1,312.68
1,312.68
1,829.98
1,124.81
46.45
462.80
1,213.74
300.00
3,658.32
6.66
235.42
22,177.86
9,434.12
1,707.71
-
- 42,197.88
- 43,644.06
Pearl Global Industries Limited Annual Report 2018-19
130
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
b) Quantitative disclosures fair value measurement hierarchy for liabilities as at March 31, 2019:
Fair Value
Financial liabilities measured at amortised
cost
Borrowings
Security deposit
Book overdraft
Unpaid dividend
Trade payables*
Interest accrued but not due on borrowings*
Creditors for capital expenditure*
Others
As At
March 31, 2019
Amortised
Cost
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Total
33,273.72
222.00
150.48
26.83
18,106.47
24.67
849.25
2,424.77
55,078.18
33,273.72
222.00
150.48
26.83
18,106.47
24.67
849.25
2,424.77
55,078.18
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,273.72
222.00
150.48
26.83
18,106.47
24.67
849.25
2,424.77
55,078.18
c) Quantitative disclosures fair value measurement hierarchy for assets as at March 31, 2018:
Fair Value
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Assets measured at fair value through profit
or loss
Investment in equity instruments
Investment in mutual fund
Total A
Financial assets measured at fair value
through other comprehensive income
Investment in mutual fund
Total B
Financial assets measured at amortised cost
Investment in government securities
Security deposits
Interest accrued on fixed deposits
Mark to market forward contracts
Deposits with original maturity of more than 12
months
Loans from related parties
Loans from others parties
Interest accrued on loan to related parties
Others
Trade receivable*
Cash and cash equivalents*
Other bank balances*
Total C
Total (A+B+C)
As At
March 31, 2018
Amortised
Cost
143.00
632.62
775.62
1,245.92
1,245.92
1,720.86
598.68
55.58
215.57
2,130.47
300.00
2,139.02
13.46
1,213.47
14,196.59
9,225.83
441.67
32,251.21
34,272.75
-
-
-
1,720.86
598.68
55.58
-
2,130.47
300.00
2,139.02
13.46
1,213.47
14,196.59
9,225.83
441.67
32,035.64
32,035.64
Quoted
prices in
active
markets
(Level 1)
143.00
632.62
775.62
-
-
-
-
-
-
-
-
-
-
-
-
1,245.92
1,245.92
-
-
215.57
-
-
-
-
-
-
-
-
775.62
-
-
-
215.57
1,461.49
Total
143.00
632.62
775.62
1,245.92
1,245.92
1,720.86
598.68
55.58
215.57
2,130.47
-
-
-
-
-
-
-
-
-
-
-
300.00
2,139.02
13.46
1,213.47
14,196.59
-
9,225.83
-
-
441.67
- 32,251.21
- 34,272.75
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
d) Quantitative disclosures fair value measurement hierarchy for liabilities as at March 31, 2018:
As At
March 31, 2018
Amortised
Cost
Fair Value
Quoted
prices in
active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
131
Total
Financial liabilities measured at amortised
cost
Borrowings
Security deposit
Book overdraft
Unpaid dividend
Trade payables*
Interest accrued but not due on borrowings*
Creditors for capital expenditure*
Others
31,541.53
177.78
-
24.53
10,925.30
35.73
48.52
2,602.96
45,356.35
* Management has assessed that trade receivables, cash and cash equivalents, other bank balances, trade payables, Interest accrued on borrowings
and current maturities of long term borrowings approximate their carrying amounts largely due to the short-term maturities of these instruments.
There have been no transfers between Level 1 and Level 2 during the period.
Specific valuation techniques used to value financial instruments. (refer note 42 c(v))
31,541.53
177.78
-
24.53
10,925.30
35.73
48.52
2,602.96
45,356.35
31,541.53
177.78
-
24.53
10,925.30
35.73
48.52
2,602.96
45,356.35
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(Amount in ` ‘Lakhs’ unless otherwise stated)
NOTE 44 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group principal financial liabilities comprises of trade and other payables, borrowings, current maturity of borrowings,
interest accrued and capital creditors. The main purpose of these financial liabilities is to finance the operations and to
provide guarantees to support its operations.
The Group principal financial assets includes Investment in mutual funds, loans to related parties, security deposits, trade
receivables, cash and cash equivalents, deposits with bank, interest accrued in deposits, receivables from related and other
parties and interest accrued thereon.
The Group is exposed to credit risk, liquidity risk and market risk. The senior level management oversees the management
of these risks and is supported by Treasury department that advises on the appropriate financial risk governance framework.
A. Market risk
i)
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as
equity price risk. Financial instruments affected by market risk borrowings, short term deposits and derivative financial
instruments.
The sensitivity analyses in the following sections relate to the position as at March 31, 2019 and March 31, 2018.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. The Group exposure to the risk of changes in market interest rates relates primarily to the long-term
debt obligations with floating interest rates.
The Group main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to interest
rate risk. The Group manages its net exposure to interest rate risk related to borrowings, by balancing a proportion of fixed
rate and floating rate borrowing in its total borrowing portfolio. To manage this portfolio mix, the Group may enter into
currency rate swap arrangements and/ or interest rate swap arrangements, which allows the Group to exchange periodic
payments based on a notional amount and agreed upon fixed and floating interest rates.
Pearl Global Industries Limited Annual Report 2018-19
132
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the portion of borrowings
affected. With all other variables held constant, the Group profit before tax is affected through the impact on floating rate
borrowings, as follows:
March 31, 2019
March 31, 2018
Increase or decrease
in basis points
+50
-50
+50
-50
Decrease / (increase) in
profit
16.20
(16.20)
14.21
(14.21)
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market
environment, showing a significantly higher volatility than in prior years.
ii) Foreign currency risk
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in exchange
rates. Foreign currency risk sensitivity is the impact on the profit before tax is due to changes in the fair value of monetary assets and
liabilities on unhedged exposures. The following tables demonstrate the sensitivity to a reasonably possible change in USD, EURO
and GBP exchange rates, with all other variables held constant.
March 31, 2019
March 31, 2018
B. Credit risk
Changes in Exchange
rate
+5%
Decrease / (increase)
in profit before tax
295.43
-5%
+5%
-5%
(295.43)
319.79
(319.79)
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to
a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing
activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
i) Trade receivables
Customer credit risk is managed by each business unit subject to the Group established policy, procedures and control relating
to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating. Outstanding
customer receivables are regularly monitored.
The ageing analysis of trade receivables as of the reporting date is as follows:
An impairment analysis is performed at each reporting date on an individual basis for major clients. The calculation is based on
historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets
disclosed in Note 42. The Group does not hold collateral as security. The Group evaluates the concentration of risk with respect to
trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.
Particulars
Trade receivables as of March 31, 2019
Trade receivables as of March 31, 2018
Neither
past
due nor
impaired
6,865.15
6,177.48
Less
than 30
days
(Amount in ` ‘Lakhs’ unless otherwise stated)
Total
30 to 90
days
90 to 180
days
More
than 180
days
7,576.27
5,353.12
7,571.51
2,037.90
13.97
129.00
150.96 22,177.86
499.09 14,196.59
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
133
ii) Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the treasury department in accordance
with the policy. Investments of surplus funds are made only with approved counterparties and within credit limits
assigned to each counterparty. Counterparty credit limits are reviewed by the Board of Directors on an annual basis,
and may be updated throughout the year subject to approval of the finance committee. The limits are set to minimise the
concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.
C. Liquidity risk
Liquidity risk is the risk that the Group may not be able to meet its present and future cash and collateral obligations
without incurring unacceptable losses.
The objective is to, maintain optimum levels of liquidity to meet its cash and collateral requirements. The Group
closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources
of financing including loans from banks at an optimised cost.
The table below summarises the maturity profile of the financial liabilities based on contractual
undiscounted payments.
(Amount in ` ‘Lakhs’ unless otherwise stated)
As at March 31, 2019
Less than 3
months
3 to 12
months
1 to 5 years
> 5 years
Total
Borrowings
23,486.07
-
8,106.76
Current maturities of long-term
borrowings
Trade payables
Other financial liabilities
Total
As at March 31, 2018
420.22
1,260.67
18,106.47
3,543.07
-
-
-
-
154.93
45,555.83
1,260.67
8,261.69
Less than 3
months
3 to 12
months
1 to 5
years
-
-
-
67.07
67.07
31,592.83
1,680.89
18,106.47
3,698.00
55,078.18
> 5 years
Total
Borrowings
21,354.43
-
4,441.78
457.14
Current maturities of long-term
borrowings
Trade payables
Other financial liabilities
1,322.04
3,966.14
10,925.30
2,730.98
-
-
-
-
158.54
-
-
-
26,253.35
5,288.18
10,925.30
2,889.52
Total
36,332.75
3,966.14
4,600.32
457.14
45,356.35
Pearl Global Industries Limited Annual Report 2018-19 134
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 45 : SEGMENT INFORMATION
a) The Company’s operating segments are established on the basis of those components of the group that are evaluated
regularly by the Executive Committee (the ‘Chief Operating Decision Maker’ as defined in Ind AS 108 - ‘Operating
Segments’), in deciding how to allocate resources and in assessing performance. The Company has presented segment
information on geographical basis in the consolidated financial statements.
Summary of segment Information as at and for the year ended March 31, 2019 and March 31, 2018 is as follows:
Particulars
Segment Sales
(Amount in ` ‘Lakhs’ unless otherwise stated)
Bangladesh Hong Kong
India
Others
Total Elimination
Total
9,853.87
70,457.39
79,676.26
15,762.27
175,749.78
(7,092.47)
(72,863.43)
(69,341.68)
(306.44)
(149,604.01)
-
-
175,749.78
(149,604.01)
Inter Segment Sales
49,897.16
17,748.70
4,401.20
-
72,047.07
72,047.07
(42,780.52)
(1,374.00)
(1,802.55)
(13,866.88)
(59,823.95)
(59,823.95)
-
-
Total Segment Sales
59,751.02
88,206.10
84,077.46
15,762.27
247,796.84
72,047.07
175,749.78
(49,872.99)
(74,237.43)
(71,144.22)
(14,173.32)
(209,427.95)
(59,823.95)
(149,604.01)
Other Income
560.74
462.16
2,683.87
(10.34)
(356.61)
(4,801.73)
-
-
3,706.77
313.95
3,392.82
(5,168.68)
(412.24)
(4,756.44)
Total Segment Revenue
60,311.77
88,668.25
86,761.33
15,762.27
251,503.61
72,361.01
179,142.60
(49,883.33)
(74,594.03)
(75,945.95)
(14,173.32)
(214,596.63)
(60,236.18)
(154,360.45)
Total Revenue of each segment as
a percentage of total revenue of all
segment
23.98
35.26
34.50
6.27
100.00
(23.25)
(34.76)
(35.39)
(6.60)
(100.00)
Total Segment Operative Profit
3,524.76
1,286.82
7,905.74
1,038.03
13,755.36
Depreciation
896.66
114.56
1,290.15
288.12
2,589.48
(3,000.76)
(633.25)
(3,662.12)
(761.27)
(8,057.39)
Unallocated Expenses
(752.10)
(51.30)
(1,274.79)
(185.47)
(2,263.67)
-
-
-
-
-
-
-
-
-
-
Total Segment Result before Interest
& Taxes
2,628.10
1,172.27
6,615.59
749.91
11,165.87
(2,248.66)
(581.94)
(2,387.32)
(575.80)
(5,793.72)
23.54
10.50
59.25
6.72
100.00
(38.81)
(10.04)
(41.21)
(9.94)
(100.00)
Total EBIT of each segment as
a percentage of total EBIT of all
segment
Net Financing Cost
Income Tax Expenses
Profit for the Year
-
-
-
-
-
-
-
-
13,755.36
(8,057.39)
2,589.48
(2,263.67)
-
-
11,165.87
(5,793.72)
2,871.95
(2,553.28)
1,583.01
(931.51)
6,710.91
(2,308.93)
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
135
Particulars
Segment Assets
Bangladesh
Hong Kong
India
Others Un-allocable
Total Elimination
Total
(Amount in ` ‘Lakhs’ unless otherwise stated)
17,903.18
23,791.26
54,032.10
8,933.31
5,389.48
110,049.34
(28,143.22)
(27,363.30)
(51,617.89)
(5,624.56)
-
(112,748.97)
-
-
-
-
-
-
-
-
-
-
110,049.34
(112,748.97)
61,909.33
(43,862.28)
48,140.00
(68,886.69)
8,897.21
(4,921.26)
2,589.48
(2,263.67)
Segment Assets as a percentage of
Total assets of all segments
16.27
21.62
49.10
8.12
4.90
100.00
(24.96)
(24.27)
(45.78)
(4.99)
-
(100.00)
Segment Liabilities
11,120.43
1,707.93
13,762.46
1,584.21
33,734.31
61,909.33
(13,676.92)
(16,775.02)
(12,340.37)
(1,069.97)
-
(43,862.28)
Segment Liabilities as a percentage of
Total Liabilities of all segments
17.96
2.76
22.23
2.56
54.49
100.00
(31.18)
(38.24)
(28.13)
(2.44)
-
(100.00)
Segment Capital Employed
6,782.75
22,083.33
40,269.65
7,349.11
(28,344.84)
48,140.00
(14,466.30)
(10,588.28)
(39,277.52)
(4,554.59)
-
(68,886.69)
Segment Capital Employed as a
percentage of Total capital employed
of all segments
14.09
45.87
83.65
15.27
(58.88)
100.00
(21.00)
(15.37)
(57.02)
(6.61)
-
(100.00)
Capital Expenditure
1,244.68
4,694.66
2,042.59
915.28
Segment Capital Expenditure
as a percentage of Total capital
expenditure of all segments
(484.68)
(3,196.30)
(1,093.81)
(146.46)
13.99
52.77
22.96
10.29
(9.85)
(64.95)
(22.23)
(2.98)
Depreciation
896.66
114.56
1,290.15
288.12
(752.10)
(51.30)
(1,274.79)
(185.47)
8,897.21
(4,921.26)
100.00
(100.00)
2,589.48
(2,263.67)
b) The Company revenue from sale of garments to external customer are as follows:
Particulars
India
Outside India
c) Non- current assets are located within India and outside India:
Particulars
Non Current Assets
- within India
- outside India
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
6,019.11
164,750.91
6,766.91
136,819.41
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
22,380.64
20,522.93
21,696.21
16,499.61
d) Revenue from major customer: During the year the Company generates 90% of its external revenues from twenty one (23) customers.
Pearl Global Industries Limited Annual Report 2018-19
136
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 46 : CONTINGENT LIABILITIES AND COMMITMENTS
a) Contingent liabilities (to the extent not provided for)
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
I The Company has reviewed all its pending claims, litigations and other proceedings and has adequately provided for
wherever required. However, wherever it is difficult for the Company to estimate the timings of cash outflows, if any, in
respect of the above as it is determinable only on receipt of judgement/decisions pending with various forums/authorities,
the Company has disclosed the same as Contingent Liabilities (pending resolution of the respective proceedings).
The Company does not expect the outcome of these proceedings to have a material or adverse effect on financial position of
the Company. Also, the Company does not expect any reimbursements in respect of the above contingent liabilities.
i) Claims against the Company not acknowledged as debts corresponding
to :
-Tax Demand as per Sec 143(1) of Income Tax act , 1961 (with respect to
Assessment Year 2014-15)
-Tax Demand as per Sec 143(1) of Income Tax act , 1961 (with respect to
Assessment Year 2015-16)
-Tax Demand as per Sec 143(1) of Income Tax act , 1961 (with respect to
Assessment Year 2016-17) - Rectification application has been filled with
A.O
-TDS demand as per TRACES
1.25
98.01
38.83
1.25
396.77
258.55
18.43
14.79
ii) Several Legal Cases of labour pending at labour Court, Civil Court and High Court.
iii) As per the order dated July 13, 2016 issued by Hon’ble Madras High Court, minimum wages shall be paid to the
employees retrospectively from December 2014 to June 2016. However, the management is of the view that the
wages have to be paid only to the employees working presently in the company and also no PF & ESI is required
to be deducted . Accordingly, the minimum wages, ESI and PF of past employees of ` 288.51 lakh, ` 8.06 lakh and
` 69.25 lakh respectively has not been recorded in books of account. Further, Company has also not accounted
for the PF contribution of ` 65.33 lakh and ESI contribution of ` 12.88 lakh due on the wage arrears paid to the
present employees during the year ended March 31, 2017
Irrevocable letter of credit (net of margin) outstanding with banks
II
III Bank guarantee given
IV Counter guarantees given by the Company to the Sales Tax Department over
11,569.88
147.06
11,818.06
74.71
which Key Managerial Personnel have Significant influence
- For enterprise
- For others
1.00
0.50
V The Company is in the process of evaluating the impact of the recent Supreme Court Judgment in case of “Vivekananda
Vidyamandir and Others Vs The Regional Provident Fund Commissioner (II) West Bengal” and the related circular
(Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees’
Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of “basic wages”
of the relevant employees for the purposes of determining contribution to provident fund under the Employees’
Provident Funds & Miscellaneous Provisions Act, 1952.
1.00
0.50
b) Commitments
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
As At
March 31, 2018
March 31, 2019
i) Capital Commitment: Estimated amount of contracts remaining to be executed
99.44
164.80
on the capital account (net of capital advances)
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 47 : RELATED PARTY TRANSACTIONS
137
a) List of related parties
Nature of Relationship
Enterprise over which Key
Managerial Personnel exercise
Significant influence
Name of the Related Party
Domestic
Pearl Wears
Creative Arts Education Society
PS Arts Private Limited
PDS Multinational Fashions Limited
Little People Education Society
Vau Apparels LLP
Nim International Commerce LLP
PSS Estates LLP
Overseas
Grupo Extremo SUR S.A
SACB Holdings Limited
JSM Trading (FZE.)
Transnational Textile Group Limited
Superb Mind Holdings Limited
Global Textiles Group Limited
Multinational Textile Group Limited
Casa Forma Limited
PDS Asia Star Corporation Limited
Simple Approach Limited
Zamira Fashion Limited
PG Group Limited
Techno Design HK Limited (Formerly DPOD Manufacturing Limited
Norwest Industries Limited
Poeticgem International Limited
Multinational OSG Services Bangladesh Limited
Nor Delhi Manufacturing Limited
Techno Design Gmbh
Poetic Brands Limited
Poeticgem Limited
PDS Trading (Shanghai) Company Limited
Simple Approach (Canada) Limited
Zamira Denim Lab Limited
Pearl Global Industries Limited Annual Report 2018-19 138
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
PG Home Group Limited
PG Shanghai Mfg Company Limited
Sourcing Solutions Limited
Razamtazz Limited
Krayon Sourcing Limited (Formerly Souring Solutions HK Limited)
Design Arc Asia Limited [(Formerly Design Arc. Limited) ( Design Arc. Limited
Formerly Nor France Manufacturing Company Ltd)]
Nor Lanka Manufacturing Limited
Design Arc Europe Limited (Formerly Nor Europe Manufacturing Limited
Kleider Sourcing Hongkong Limited
Rising Asia Star Hongkong Limited (Formerly Techno Manufacturing Limited)
Nor India Manufacturing Company Limited
Spring Near East Manufacturing Company Limited
DS Manufacturing Limited (Formerly Designed and Sourced Limited)
FX Import Hongkong Limited
Poetic Knitwear Limited
Pacific Logistics Limited
PG Home Group SPA (Formerly Pearl GES Home Group SPA)
Nor Lanka Manufacturing Colombo Limited
Nor Europe SPA
FX Import Company Limited
MultiTech Venture Ltd(Mauritius)
Redwood Internet Ventures Limited
Digital Internet Technologies Limited
Progress Manufacturing Group Ltd
Progress Apparels(Bangladesh) Ltd
Norlanka Progress Pvt.Ltd
Green Apparel Industries Ltd
JJ Star Industrial Limited
Twin Asia Limited
Grupo Sourcing Limited (Hongkong)
Blueprint Design Limited
Design Arc UK Limited
Grupo Sourcing Limited
Fareast Vogue Limited
PDS Far-east Limited
Kindred Brands Ltd (Formerly NW Far-east Limited)
Styleberry Limited
PDS Global Investments Limited
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
139
Green Smart Shirts Limited
Kleider Sourcing Limited
Sourcing Solutions Limited
PDS Far East USA Inc.
Smart Notch Industrial Limited
Fabric & Trims Limited
Parc Designs Pvt. Limited
Digital Ecom Techno Private Limited
Sourcing East West Limited
360 Notch Ltd (Formerly known as Poeticgem Australia Ltd)
Smart Notch Limited (w.e.f. 20.04.2018)
Jcraft Array Limited (w.e.f. 12.04.2018)
Kindred Fashion Limited (w.e.f. 23.10.2018)
Recovered Clothing Limited (w.e.f 24.07.2018)
PDS Ventures Limited (w.e.f. 03.07.2018)
Design Arc FZCO (W.e.f 17.01.2019)
Spring Near East FZCO (w.e.f. 17.01.2019)
Kleider Sourcing FZCO (w.e.f 17.01.2019)
Twin Asia FZCO (w.e.f. 17.01.2019)
Technocian Fashion Private Limited (w.e.f. 20.03.2019)
Key Management Personnel
(KMP)
Mr. Deepak Seth
Mr. Pulkit Seth
Mrs. Shifalli Seth
Mr. Vinod Vaish
Chairman
Vice Chairman & Managing Director
Whole-Time Director
Whole-Time Director
Mr. Raj Kumar Chawla upto 25.01.2019 Chief Financial Officer
Mr. Raghav Garg (from 12.02.2019)
Chief Financial Officer
Mr. Sandeep Sabharwal
Company Secretary
Mr. Chittranjan Dua
Independent Director
Mr. Rajendra Kumar Aneja
Independent Director
Mr. Anil Nayar
Mr. Abhishek Goyal
Independent Director
Independent Director
Pearl Global Industries Limited Annual Report 2018-19 140
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
B. Disclosure of Related Parties Transactions:
(i) Enterprise over which KMP has Significant Influence
Particulars
Expenses paid by the Company on their behalf
Reimbursement of expenses
Interest income
Closing Balance
Trade receivable
Loan receivable (including interest)
(ii) Key Management Personnel
Particulars
Remuneration paid
EPF paid
Expenses paid by the Company on their behalf
Expenses incurred by them on behalf of the Company
Directors sitting fees
Closing Balance
Trade payable
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
0.61
4.37
30.00
3.88
20.90
30.00
As At March 31, 2019
As At March 31, 2018
4.29
306.66
11.06
313.46
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
277.89
1.11
-
42.31
1.50
217.43
1.08
5.08
24.60
1.43
As At March 31, 2019
As At March 31, 2018
16.85
20.45
C. Disclosure of Material Transactions: Related Parties having more than 10% interest in each transaction in the
ordinary course of business.
(i) Enterprise over which KMP has significant influence
Particulars
Expenses paid by the Company on their behalf
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
Norwest Industries Limited
Reimbursement of expenses
Poeticgem
PDS Multinational Fashion Limited
Interest income
PDS Multinational Fashion Limited
Closing Balance
Norwest Industries Limited
Multinational Textiles Group Limited
PDS Multinational Fashion Limited
0.61
-
4.37
30.00
-
4.29
306.66
3.88
17.90
3.00
30.00
6.51
4.55
313.46
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
141
(ii) Key Management Personnel
Particulars
Remuneration paid
Mr.Pulkit Seth
Mrs. Shifalli Seth
Mr. Rajkumar Chawla
Mr. Vinod Vaish
Mr. Sandeep Sabharwal
Mr. Raghav Garg
EPF paid
Mr.Pulkit Seth
Mrs. Shifalli Seth
Mr. Rajkumar Chawla
Mr. Vinod Vaish
Mr. Sandeep Sabharwal
Mr. Raghav Garg
Expenses paid by the Company on their behalf
Mr. Deepak Seth
Expenses incurred by them on behalf of the Company
Mr. Raj Kumar Chawla
Mr. Vinod Vaish
Mr. Sandeep Sabharwal
Mr. Raghav Garg
Directors sitting Fees:
Mr. Deepak Seth
Mr. Anil Nayar
Mr. CR Dua
Mr. Abhishek Goyal
Mr. Rajendra Aneja
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
120.00
75.00
44.88
16.44
15.63
5.94
0.22
0.22
0.18
0.22
0.22
0.05
-
22.60
12.34
6.35
1.02
0.10
0.40
0.40
0.50
0.10
106.70
66.25
18.35
12.36
13.77
-
0.22
0.22
0.22
0.22
0.22
-
5.00
11.92
7.94
4.74
-
0.10
0.62
0.32
0.40
-
(iii) Terms and conditions of transactions with related parties
All the transaction with the related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Outstanding balances at the year-end are unsecured and interest free except the interest bearing loan
and settlement occurs in cash.
(iv) The remuneration of Key Managerial Personnel does not include amount in respect of gratuity and leave encashment
payable as the same are not determinable as individual basis for the KMP. The liabilities of gratuity and leave
encashment are provided for company as whole.
Pearl Global Industries Limited Annual Report 2018-19
142
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
NOTE 48 :
(a) For Disclosures mandated by Schedule III of Companies Act 2013, by way of additional information, refer below:
Name of the Entities
Parent:
Pearl Global Industries Limited
Subsidiary:
- Indian
Pearl Global Kausal Vikas Limited
Pearl Apparel Fashions Limited
- Foreign
Norp Knit Industries Limited
Pearl Global Far East Limited
Pearl Global (HK) Limited
Subtotal
Intercompany Elimination & Consolidation
Adjustments
Total
Non Controlling Interest in subsidiaries
Grand Total
(Amount in ` ‘Lakhs’ unless otherwise stated)
2017-18
Net Assets i.e. total assets
minus total liabilities
As a % of
consolidated
net assets
Amount
Share in profit /(loss)
Share in other
Comprehensive Income
Share in total
Comprehensive Income
As a % of
consolidated
Profit
Amount
As a % of
consolidated
Profit
Amount
As a % of
consolidated
Profit
Amount
75.57
29,858.77
11.54
266.38
24.93
(42.41)
10.47
223.97
0.01
0.49
-
22.67
12.52
18.89
(30.13)
2.00
192.03
8,956.79
4,947.66
7,462.30
51,419.55
(11,906.20)
39,513.36
965.10
40,478.46
(0.01)
(1.77)
62.41
21.22
6.72
(0.10)
(0.26)
(40.90)
1,440.91
489.97
155.16
2,311.26
(2.33)
2,308.93
99.18
2,408.11
-
-
43.80
(10.49)
41.76
-
-
-
(74.52)
17.84
(71.04)
(170.13)
-
(170.13)
9.06
(161.07)
(0.01)
(1.91)
63.89
23.74
3.93
(0.11)
(0.26)
(40.90)
1,366.39
507.81
84.12
2,141.13
(2.33)
2,138.80
108.24
2,247.04
(b) For Disclosures mandated by Schedule III of Companies Act 2013, by way of additional information, refer below:
Name of the Entities
Parent:
Pearl Global Industries Limited
Subsidiary:
- Indian
Pearl Global Kausal Vikas Limited
Pearl Apparel Fashions Limited
- Foreign
Norp Knit Industries Limited
Pearl Global Far East Limited
Pearl Global (HK) Limited
Subtotal
Intercompany Elimination &
Consolidation Adjustments
Total
Non Controlling Interest in subsidiaries
Grand Total
(Amount in ` ‘Lakhs’ unless otherwise stated)
2018-19
Net Assets i.e. total assets
minus total liabilities
Share in profit /(loss)
Share in other
Comprehensive Income
As a % of
consolidated
net assets
Amount
As a % of
consolidated
Profit
Amount
As a % of
consolidated
Profit
Amount
Share in total
Comprehensive Income
Amount
As a % of
consolidated
Profit
80.02
31,618.47
93.12
2,150.19
(77.51)
131.87
106.70
2,282.06
0.00
0.07
-
29.33
15.43
21.58
11,587.79
6,095.14
8,528.04
57,858.40
(27.51) (10,871.66)
46,986.74
1,153.26
48,140.00
1.32
27.64
(0.03)
(13.40)
(0.68)
(309.34)
-
-
-
-
(0.03)
(14.46)
(0.68)
(309.34)
80.93
42.13
16.94
70.96
1,868.69
972.68
391.03
5,072.57
1,638.35
6,710.92
17.10
6,728.02
(320.01)
(166.36)
(301.90)
-
544.43
283.03
513.62
1,472.95
-
1,472.95
(100.94)
1,372.01
112.83
58.71
42.30
76.60
2,413.12
1,255.71
904.65
6,545.52
1,638.35
8,183.87
(83.84)
8,100.03
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Consolidated Financial Statements for the year ended March 31, 2019
143
NOTE 49 : EVENT OCCOURRING AFTER BALANCE SHEET DATE
a) Dividend paid and proposed: (Amount in ` ‘Lakhs’ unless otherwise stated)
Year ended
March 31, 2018
Year ended
March 31, 2019
Particulars
i. Declared and paid during the year:
Final dividend for the financial year 2017-18: ` 2.00 per share (2016-17: `
3.00 per share) Including dividend distribution tax of ` 89.06 lakh for the
fanancial year 2017-18 ( ` 132.31 lakh for the financial year 2016-17)
ii. Proposed for approval at the Annual General Meeting (not
recognised as a liability)
522.34
782.23
Final Dividend for financial year 2018-19: ` 3.00 per share (2017-18: ` 2.00
per share)
649.92
433.28
Dividend distribution tax
89.06
b) No material events have occurred between the balance sheet date to the date of issue of these financial statements that
132.31
could affect the values stated in the financial statements.
NOTE 50 :
The balances of trade receivables, trade payables, financials assets and other assets given are subject to reconciliation and
confirmation as on March 31, 2019 and have realisation in ordinary course of business atleast equal to amount at which they
are stated in the financial statements.
NOTE 51 :
Figures have been rounded off to the nearest Lakh upto two decimal places except otherwise stated.
For & on behalf of Board of Directors of Pearl Global Industries Limited
Pulkit Seth
Managing Director
DIN 00003044
Raghav Garg
Chief Financial Officer
Deepak Seth
Chairman
DIN 00003021
Sandeep Sabharwal
Company Secretary
M. No. ACS - 8370
Place of Signature : Gurugram
Dated: May 28, 2019
Pearl Global Industries Limited Annual Report 2018-19
144
Independent Auditors’ Report
To the Members of Pearl Global Industries Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Pearl Global Industries Limited (“the Company”),
which comprise the balance sheet as at March 31, 2019, the Statement of Profit and Loss (including Other Comprehensive
Income), the Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone
financial statements, including a summary of significant accounting policies and other explanatory information. (hereinafter
referred to as “the standalone financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone
financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and
give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read
with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and accounting principles generally
accepted in India, of the state of affairs of the Company as at March 31, 2019, the Profit and total comprehensive income,
changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs)
specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s
Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the
Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together
with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of
the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion on standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone
financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We
have determined the matters described below to be the key audit matters to be communicated in our report.
S.No. Key Audit Matters
How our audit addressed the key audit matter
1.
Defined Benefit Plan Liabilities
Refer Note 39
financial
to
statements
the accompanying
as
at March
standalone
2019,
31,
liabilities. The valuation of
As at March 31, 2019, the Company has defined benefit
for such
plan
defined benefit plan requires significant judgement and
expertise primarily in respect of key assumptions used
like economic assumptions, demographic assumptions,
inflation
employee
etc. This area was significant to our audit because:
rate, discount
attrition
liability
rate,
- the
complexities
involved
in
the
valuation;
- defined benefit obligation
to
in aforesaid assumptions and a change
changes
in a number of these key assumptions can have a
material impact on the calculation of the liability; and
is highly sensitive
- the parameter most subject to change is the discount rate.
Our procedures included, but were not limited
to the following:
- Obtained an external actuary’s report used in
the valuation of defined benefit plan liabilities
and reviewed the methodologies adopted by the
actuary in forming the valuation.
- Evaluated the key financial assumptions used for
the valuation of scheme liabilities including the
discount and inflation rate and also verified that
whether the same are consistent with industry
practice and SOP of the Company.
- Compared the assumptions in respect of increase
in salary to historic salary increase, change in
employee bases eligible for valuation, considered
the appropriateness of the mortality assumptions.
The assumptions used were found within the
benchmarks and were considered appropriate. We
have read the disclosures in the financial statements
in respect of defined benefit schemes and based on
our verification, found the same consistent with
relevant accounting standard.
Pearl Global Industries Limited Annual Report 2018-19 Independent Auditors’ Report
To the Members of Pearl Global Industries Limited
145
S.No. Key Audit Matters
How our audit addressed the key audit matter
2.
Adequacy and completeness of disclosures of Related
Party Transactions
Our procedures included, but were not limited
to the following:
Refer Note 47 to the accompanying standalone financial
statements as at March 31, 2019, the disclosure of related
parties and transactions with them.
The Company has related party transactions which include
among others, sale/purchase of goods to its subsidiaries and
other related parties.
This area was significant to our audit due to the following
reasons
- the significance of transactions with related parties
during the year ended March 31, 2019; and
- Related party transactions are subject to compliance
requirement under the Companies Act, 2013 and SEBI
(listing and Obligation Disclosure Requirement) 2015.
• Obtaining an understanding of the Company’s
policies and procedures in respect of identification
of related parties and transactions with them. We
also traced the related parties from declaration
given by directors, wherever applicable.
• Read the minutes of the meetings of Board of
Directors and Audit Committee.
• Obtaining an understanding of Company’s policies
and procedure in respect of evaluation of arm-
length pricing.
• Verified relevant agreements on sample basis and
approval process by audit committee and board of
directors.
• Tested material trade payables, trade receivables,
loans outstanding to evaluate existence of any
related party relationship.
• Assessment of Management
evaluation of
compliance with Companies Act, 2013 and SEBI
(LODR), 2015.
• Ensure the adequacy of the disclosures in the
standalone Ind AS financial statements.
Information Other than the Standalone Financial Statements and Auditor’s Report Thereon
The Company’s Board of Directors are responsible for the preparation of the other information. The other information
comprises the information included in the annual report, but does not include the standalone financial statements and our
auditor’s report thereon. The annual report is expected to be made available to us after the date of this auditor’s report.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent
with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
When we read the annual report, if, we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance and take necessary actions, as applicable under the applicable
laws and regulations.
Responsibility of Management and Those Charge with Governance for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the
preparation of these standalone financial statements that give a true and fair view of the financial position, financial
performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind
AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for
preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free
Pearl Global Industries Limited Annual Report 2018-19 146
Independent Auditors’ Report
To the Members of Pearl Global Industries Limited
from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the board of directors is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless board of director either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those Board of Directors are also responsible for overseeing the company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether
the company has adequate internal financial controls with reference to standalone financial statements in place and the
operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures,
and whether the standalone financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Pearl Global Industries Limited Annual Report 2018-19 147
Independent Auditors’ Report
To the Members of Pearl Global Industries Limited
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India
in terms of sub-section (11) of section 143 of the Act, we give in “Annexure A” a statement on the matters specified in
paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from
our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Change
in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account;
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of
the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the
Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in
terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of
the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”. Our
report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal
financial controls with reference to standalone financial statements.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations
given to us:
i. On the basis of written representations received from the management of the Company, the Company has
disclosed the impact of pending litigations on its financial position in its standalone financial statements- Refer
Note No. 46 to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund
by the Company.
3. With respect to the matter to be included in the Auditors’ report under Section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company
to its directors during the current year is in accordance with the provisions of section 197 of the Act. The remuneration
paid to any director is not in excess of the limit laid down under section 197 of the Act. The Ministry of Corporate Affairs
has not prescribed other details under section 197(16) which are required to be commented upon by us.
For B.R. Gupta & Co.
Chartered Accountants,
Firm’s Registration Number 008352N
(Deepak Agarwal)
Partner
Membership Number 073696
Place of Signature: Gurugram
Date: May 28, 2019
Pearl Global Industries Limited Annual Report 2018-19
148
Annexure ‘A’ To the Independent Auditors’ Report
Annexure ‘A’ to the Independent Auditors’ Report of even date on the standalone financial statements of Pearl
Global Industries Limited
The Annexure referred to in independent Auditors’ Report to the members of the Company on the standalone Ind AS
financial statements for the year ended March 31, 2019; we report that:
i)
In respect of fixed assets (including property, plant and equipment):
a) The Company has maintained proper records showing full particulars, including quantitative details and situation
of fixed assets.
b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified at
periodic intervals. In accordance with this programme for the year, no material discrepancies were noticed on such
verification. In our opinion, such periodicity of physical verification is reasonable having regard to the size of the
Company and the nature of its assets.
c) On the basis of written representation received from the Management of the Company, the title deeds of immovable
properties held in the name of the Company are mortgaged with the banks for securing the long term and short
term borrowings raised by the Company. In case of immovable properties that have taken on lease and disclosed
as property, plant and equipment in the financial statements, we report that the lease agreement are in name of the
Company.
ii) In respect of its inventory:
a) On the basis of information and explanation provided by the Management, inventories have been physically
verified by the Management during the year. In our opinion, the frequency of physical verification followed by the
Management is reasonable.
b) No material discrepancies were noticed on verification between the physical stocks and the book records.
iii) a) According to the information and explanation given to us, the Company has not granted any unsecured loan to any
company covered under register maintained under section 189 of the Companies Act, 2013 during the year.
b)&c) In respect of loans granted in earlier financial years, the schedule of repayment of principal and interest is stipulated
and there is no overdue amount as at year end. The terms and conditions of grant of such loans are not prejudicial
to the interest of the Company
iv) In our opinion and according to the information and explanations given to us, the Company has complied with the
provisions of section 185 and 186 of the Companies Act, 2013 in respect of the loans, investments, guarantees, and
security provided by it.
v) In our opinion and according to the information and explanation given to us, the Company has not accepted any deposits
from the public within the meaning of the directives issued by the Reserve Bank of India, provisions of Section 73 to 76
of the Act, any other relevant provisions of the Act and the relevant rules framed thereunder.
vi) On the basis of available information and explanation provided to us, the Central Government has not prescribed
maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013 read with Companies
(Cost Records and Audit) Amendment Rules, 2016 dated July 14, 2016 to the current operations carried out by the
Company. Accordingly, the provisions of paragraph 3(vi) of the Companies (Auditor’s Report) Order, 2016 are not
applicable to the Company.
vii) In respect of Statutory Dues:
a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees’
State Insurance, Income Tax, Goods and Service Tax, Cess and any other material statutory dues applicable to it with
the appropriate authorities. There were no undisputed amounts payable in respect of Provident Fund, Employees’
State Insurance, Income Tax, Goods and Service Tax, Cess and any other material statutory dues in arrears as at
March 31, 2019 for a period of more than six months from the date they became payable.
b) According to the records of the Company examined by us and the information and explanations given to us, there
were no dues of Income-tax or Sales tax or Service tax or Goods and Services tax or duty of Customs or duty of
Pearl Global Industries Limited Annual Report 2018-19
Annexure ‘A’ To the Independent Auditors’ Report
149
Excise or Value added tax which have not been deposited by the Company on account of disputes, except for the
following:
S.
No.
1.
2.
3.
4.
Name of the Statute Nature of
Income Tax Act, 1961
Income Tax Act, 1961
Income Tax Act, 1961
Dues
Income Tax
Demand
Income Tax
Demand
Income Tax
Demand
Amount in
` lakh
Period to which
amount relates
Forum where dispute is
pending
1.25
A.Y 2014-15 Rectification
U/s
154
-Assessing Officer
98.01
A.Y 2015-16 Commissioner of Income Tax
(Appeals)
38.83
A.Y 2016-17 Commissioner of Income Tax
(Appeals)
Income Tax Act, 1961
Tax Deductible
At Source
18.43
Prior to
A.Y2015-16
Demand as per TDS – (Traces)
portal – CPC
viii) On the basis of information and explanation provided to us, the Company has not defaulted in repayment of loans and
borrowings to financial institution and bank. The Company has not taken any loan from Government or has not issued
any debentures.
ix) The Company did not raise any money by the way of initial public or further public offer (including debt instruments)
during the year. The term loan taken during the year were applied for the purpose for which the same has been taken.
x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers
or employees has been noticed or reported during the year.
xi) The Company has paid/provided managerial remuneration in accordance with provisions of section 197 read with
Schedule V to the Companies Act, 2013 as applicable to the Company.
xii) The Company is not a Nidhi Company and hence, the provisions of paragraph 3(xii) of the Order are not applicable to
the Company.
xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with
Section 177 and 188 of the Companies Act, 2013, wherever applicable, for all transactions with the related parties and
the details of related party transactions have been disclosed in the financial statements etc.as required by the applicable
accounting standards.
xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible
debentures during the year under review. Accordingly, the provisions of paragraph 3(xiv) of the Companies (Auditor’s
Report) Order, 2016 are not applicable to the Company.
xv) The Company has not entered into any non-cash transactions with directors or persons connected with him and hence
provisions of section 192 of the Companies Act, 2013 are not applicable.
xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly,
the provisions of paragraph 3(xvi) of the Order are not applicable to the Company.
For B.R. Gupta & Co.
Chartered Accountants,
Firm’s Registration Number 008352N
(Deepak Agarwal)
Partner
Membership Number 073696
Place of Signature: Gurugram
Date: May 28, 2019
Pearl Global Industries Limited Annual Report 2018-19 150
Annexure ‘B’ To the Independent Auditors’ Report
Annexure ‘B’ to the Independent Auditors’ Report of even date on the standalone financial statement of Pearl
Global Industries Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act,
2013 (“the Act”)
We have audited the internal financial controls with reference to financial statements of Pearl Global Industries Limited
(“the Company”) as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company
for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal
control with reference to standalone financial statements criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation
and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection
of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act, 2013.
Auditors’ Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls with reference to standalone financial
statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to
be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial
controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants
of India. Those Standards and the Guidance note require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone
financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
system with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial
controls with reference to standalone financial statements included obtaining an understanding of internal financial controls
with reference to standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due
to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on
the Company’s internal financial controls system with reference to standalone financial statements.
Meaning of Internal Financial Controls with reference to standalone financial statements
A company’s internal financial control with reference to standalone financial statements is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A company’s internal financial control with reference
to standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could
have a material effect on the financial statements.
Pearl Global Industries Limited Annual Report 2018-19 Annexure ‘B’ To the Independent Auditors’ Report
151
Inherent Limitations of Internal Financial Controls with reference to standalone financial statements
Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including
the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone
financial statements to future periods are subject to the risk that the internal financial control with reference to standalone
financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to
standalone financial statements and such internal financial controls with reference to standalone financial statements were
operating effectively as at March 31, 2019, based on “the internal control with reference to standalone financial statements
criteria established by the Company considering the essential components of internal control stated in the Guidance Note
on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For B.R. Gupta & Co.
Chartered Accountants,
Firm’s Registration Number 008352N
(Deepak Agarwal)
Partner
Membership Number 073696
Place of Signature: Gurugram
Date: May 28, 2019
Pearl Global Industries Limited Annual Report 2018-19 152
Balance Sheet
as at March 31, 2019
Particulars
Assets
I. Non-current assets
(a) Property, plant and equipment
(b) Capital work in progress
(c) Investment properties
(d) Other Intangible assets
(e) Financial assets
(i) Investment in subsidiaries
(ii) Investment - others
(iii) Loans
(iv) Other financial assets
(f) Deferred tax assets (net)
(g) Non current tax assets (net)
(h) Other non current assets
Total Non-current assets
Current assets
(a) Inventories
(b) Financial assets
(i) Investments
(ii) Trade receivables
(iii) Cash and cash equivalents
(iv) Bank balances other than cash and cash equivalents
(v) Loans
(vi) Other financial assets
II.
(c) Other current assets
Total current assets
Total assets
Equity and liabilities
Equity
(a) Equity share capital
(b) Other equity
Total equity
Liabilities
Non- current liabilities
(a) Financial liabilities
(i) Borrowings
(ii) Others financial liabilities
(b) Provisions
(c) Deferred tax liabilities
(d) Other non current liabilities
Total non- current liabilities
Current liabilities
(a) Financial liabilities
(i) Borrowings
(ii) Trade payables
Total outstanding due of micro enterprises and small enterprises
Total outstanding due of creditors other than micro enterprises and small enterprises
(iii) Other financial liabilities
(b) Other current liabilities
(c) Provisions
(d) Current tax liabilities (net)
Total current liabilities
Total equity and liabilities
Summary of Significant Accounting Policies
The accompanying notes form an integral part of these financial statements
As per our Report of even date attached
For B.R. Gupta & Co.
Chartered Accountants
Firm’s Registration Number 008352N
(Amount in ` ‘Lakhs’ unless otherwise stated)
Note
As At
As At
March 31, 2018
March 31, 2019
No.
4
5
6
7
8
9
10
11
12
13
14
15
9
16
17
18
10
11
14
19
20
21
22
23
12
24
21
25
22
24
23
26
3
13,146.90
159.72
7,429.89
114.94
11,726.14
135.13
474.62
844.06
-
303.15
385.80
34,720.35
12,559.92
54.17
7,514.36
134.83
12,990.20
144.67
451.69
435.90
114.53
128.67
324.53
34,853.47
13,513.04
11,998.86
-
11,134.77
2,234.64
1,454.01
349.63
1,566.59
3,912.78
34,165.46
68,885.81
632.62
8,748.39
2,058.74
428.08
334.99
2,040.29
4,217.07
30,459.04
65,312.51
2,166.39
29,452.08
31,618.47
2,166.39
27,692.36
29,858.75
3,185.15
222.00
710.08
340.46
3,076.96
7,534.65
3,945.54
158.54
859.15
-
3,461.50
8,424.73
16,182.41
18,286.55
63.70
10,450.22
1,938.27
837.89
70.04
190.16
29,732.69
68,885.81
-
98.88
6,997.27
1,011.19
580.25
54.89
-
27,029.03
65,312.51
-
For & on behalf of Board of Directors of Pearl Global Industries Limited
Deepak Agarwal
Partner
Membership Number 073696
Place of Signature : Gurugram
Dated: May 28, 2019
Pulkit Seth
Managing Director
DIN 00003044
Raghav Garg
Chief Financial Officer
Deepak Seth
Chairman
DIN 00003021
Sandeep Sabharwal
Company Secretary
M. No. ACS - 8370
Pearl Global Industries Limited Annual Report 2018-19 Statement of Profit & Loss
for the year ended March 31, 2019
Particulars
I
II
III
IV
Revenue from operations
Other income
Total income (I+II)
Expenses
(a) Cost of materials consumed
(b) Excise duty
(c) Purchases of stock-in-trade
(d) Changes in inventories of finished goods, work in progress and stock
in trade
(e) Employee benefits expense
(f) Finance costs
(g) Depreciation and amortisation expense
(h) Other expenses
Total expenses
V
VI
VII
Profit/ (loss) before exceptional items and tax (III-IV)
Exceptional Items
Profit/ (loss) before tax (V-VI)
VIII Tax expense:
(a) Current tax
(b) MAT credit entitlement
(c) Deferred tax
(d) Adjustment of tax relating to earlier periods
Total tax expense
Profit/(loss) for the year (VII-VIII)
Other comprehensive income
(i) Items that will not be reclassified subsequently to profit or loss
(a) Re-measurement gains/ (losses) on defined benefit plans
IX
X
(A)
(ii) Income tax on items that will not be reclassified subsequently to profit or loss
(B)
(i) Items that will be reclassified subsequently to profit or loss
(ii) Income tax on items that will be reclassified subsequently to profit or loss
Other comprehensive income for the year, net of tax
XI
XII
Total comprehensive income for the year, net of tax (IX + X)
Earnings per share: (face value ` 10 per share)
1) Basic (amount in `)
2) Diluted (amount in `)
Summary of Significant Accounting Policies
153
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
Note
No.
27
28
29
30
31
32
33
34
35
36
12
37
38
3
84,025.72
2,630.62
86,656.34
26,069.98
-
16,506.39
(867.40)
13,190.64
1,987.45
1,289.07
25,575.48
83,751.61
2,904.73
(280.92)
3,185.65
825.78
(103.08)
119.75
193.01
1,035.46
2,150.19
202.70
(70.83)
-
-
131.87
2,282.06
9.93
9.93
71,077.23
4,801.99
75,879.22
21,613.04
1.58
13,423.36
(173.04)
11,960.21
1,922.93
1,273.72
25,991.99
76,013.78
(134.56)
(812.13)
677.57
192.53
(192.53)
245.64
165.55
411.19
266.38
(63.36)
20.95
-
-
(42.41)
223.97
1.23
1.23
The accompanying notes form an integral part of these financial statements
As per our Report of even date attached
For B.R. Gupta & Co.
Chartered Accountants
Firm’s Registration Number 008352N
For & on behalf of Board of Directors of Pearl Global Industries Limited
Deepak Agarwal
Partner
Membership Number 073696
Place of Signature : Gurugram
Dated: May 28, 2019
Pulkit Seth
Managing Director
DIN 00003044
Raghav Garg
Chief Financial Officer
Deepak Seth
Chairman
DIN 00003021
Sandeep Sabharwal
Company Secretary
M. No. ACS - 8370
Pearl Global Industries Limited Annual Report 2018-19
154
Statement of Changes in Equity
for the year ended March 31, 2019
(Amount in ` ‘Lakhs’ unless otherwise stated)
A. Equity Share Capital
As at April 01, 2017
Changes during the year
As at March 31, 2018
Changes during the year
As at March 31, 2019
B. Other Equity
2,166.39
-
2,166.39
-
2,166.39
Total Other
Equity
Reserve & Surplus
General
Reserve
Security
Premium
Capital
Redemption
Reserve
Amalgamation
Reserve
Retained
Earnings
Balance as at April 01, 2017
4,204.36
17,103.90
95.00
625.95
6,221.42
28,250.63
Profit / (loss) for the year
Other Comprehensive Income
Total Comprehensive Income for the year
Dividend
Dividend Distribution Tax
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
266.38
266.38
(42.41)
(42.41)
223.97
223.97
(649.92)
(649.92)
(132.31)
(132.31)
Balance as at March 31, 2018
4,204.36
17,103.90
95.00
625.95
5,663.16
27,692.36
Profit / (loss) for the year
Other Comprehensive Income
Total Comprehensive Income for the year
Dividend
Dividend Distribution Tax
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,150.19
2,150.19
131.87
131.87
2,282.06
2,282.06
(433.28)
(433.28)
(89.06)
(89.06)
Balance as at March 31, 2019
4,204.36
17,103.90
95.00
625.95
7,422.88
29,452.08
Summary of Significant Accounting Policies
The accompanying notes form an integral part of these financial statements
As per our Report of even date attached
For B.R. Gupta & Co.
Chartered Accountants
Firm’s Registration Number 008352N
For & on behalf of Board of Directors of Pearl Global Industries Limited
Deepak Agarwal
Partner
Membership Number 073696
Place of Signature : Gurugram
Dated: May 28, 2019
Pulkit Seth
Managing Director
DIN 00003044
Raghav Garg
Chief Financial Officer
Deepak Seth
Chairman
DIN 00003021
Sandeep Sabharwal
Company Secretary
M. No. ACS - 8370
Pearl Global Industries Limited Annual Report 2018-19
Cash Flow Statement
for the year ended March 31, 2019
Particulars
Cash flows from operating activities
Profit before and tax
Adjustments for:
Depreciation and amortization
Interest paid and other borrowing cost
Unwinding of discount on security deposit
Sundry balances written back
Grant amortised during the year
Government grant received
Loss allowance no longer required written back
Amortisation of deferred rental income
Unwinding of discount on security deposits
Profit on sale of current investment - mutual Fund
Rental income
Interest income
On amortisation of investment in preference shares
Fair value loss (gain) on financial assets measured at fair value through
profit and loss
Mark to market (gain) / loss on forward contract
Amortisation of deferred asset - security deposit paid
Income on corporate guarantee
Loss Allowance for doubtful debts
Bad debts written off
Operating profit before working capital changes
Movement in working capital:
(Increase)/decrease in trade receivables
(Increase)/decrease in other non-current financial assets
(Increase)/decrease in other current financial assets
(Increase)/decrease in other non-current assets
(Increase)/decrease in other current assets
(Increase)/decrease in inventories
Increase/(decrease) in trade payables
Increase/(decrease) in other non-current financial liabilities
Increase/(decrease) in other current financial liabilities
Increase/(decrease) in non-current provisions
Increase/(decrease) in current provisions
Increase/(decrease) in other non-current liabilities
Increase/(decrease) in other current liabilities
Cash generated from operations
Tax paid on dividend
Direct tax paid (net of refunds)
Cash flow before exceptional items
Exceptional items:
(Profit)/loss on sale of fixed assets
Impairment of investment in subsidiaries
Net cash inflow from/(used in) operating activities
155
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
3,185.65
1,289.07
1,961.06
26.39
(55.16)
(1.00)
-
-
(31.67)
(39.87)
(218.20)
(814.53)
(211.93)
(12.98)
133.64
(247.24)
42.22
(161.31)
391.92
1.41
5,237.47
(2,779.71)
(325.54)
(266.42)
(88.95)
304.29
(1,514.18)
3,472.93
68.74
131.24
53.63
15.15
(529.15)
258.64
4,038.15
89.06
650.10
3,298.99
(1,719.28)
1,438.36
3,018.07
677.57
1,273.72
1,907.29
10.67
(30.80)
(1.00)
(16.10)
(22.31)
(8.42)
(36.47)
(277.21)
(732.70)
(161.00)
(11.59)
42.89
904.72
36.99
(148.64)
0.20
5.55
3,413.33
148.08
188.97
(35.39)
47.44
(981.32)
2,512.09
(6,373.57)
(64.36)
(1,199.57)
164.44
14.98
50.90
(145.83)
(2,259.81)
132.31
103.77
(2,495.89)
(812.13)
-
(3,308.02)
( A )
Pearl Global Industries Limited Annual Report 2018-19 156
Cash Flow Statement
for the year ended March 31, 2019
Particulars
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
(1,296.54)
1,330.59
237.39
(67.13)
300.00
(17.33)
113.18
(227.56)
(1,290.55)
(58.48)
854.78
(12.13)
33.44
(57.44)
144.24
732.70
719.16
(1,908.09)
1,884.63
(105.55)
(1.29)
-
(27.65)
(14.54)
800.73
-
9.54
717.18
(22.93)
(14.64)
(53.43)
184.03
814.53
2,262.51
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
(Increase)/decrease in capital work in progress
Purchase of investment properties
Proceeds from sale of investment properties
Purchase of Intangible assets
(Increase)/decrease in capital advances
Increase/(decrease) in capital creditor
(Increase)/decrease in Investment in subsidiaries
(Increase)/decrease in non-current investment - Others
(Increase)/decrease in current investment - Others
(Increase)/decrease in non-current Loans
(Increase)/decrease in current Loans
(Increase)/decrease in bank deposit
Interest received
Rent received
Net Cash From/ (Used In) Investing Activities
Cash flows from financing activities
Increase/ (decrease) in non current borrowings
Increase/ (decrease) in non current borrowings - Non Cash Ind AS
impact
Government grant received
Increase/ (decrease) in current borrowings
Dividend paid
Interest paid
Net cash inflow from/(used in) financing activities
Net Increase (decrease) In cash and cash equivalents
Opening balance of cash and cash equivalents
Total cash and cash equivalent (Note no. 17)
Components of cash and cash equivalents
78.62
Cash, Cheque/drafts on hand
1,980.12
With banks - Current account
Total cash and cash equivalent (Note no. 17)
2,058.74
Note : The above Statement of Cash Flows has been prepared under the ‘Indirect Method’ as set out in Ind AS 7, ‘Statement of Cash Flows’.
Summary of Significant Accounting Policies
The accompanying notes form an integral part of these financial statements
144.61
(2,104.14)
(430.98)
(1,966.57)
(5,104.68)
175.90
2,058.74
2,234.64
16.10
3,142.13
(640.66)
(1,891.60)
2,351.72
(237.14)
2,295.88
2,058.74
247.51
1,987.13
2,234.64
1,750.28
(24.53)
( C )
(A+B+C)
(730.10)
(17.49)
( B )
3
As per our Report of even date attached
For B.R. Gupta & Co.
Chartered Accountants
Firm’s Registration Number 008352N
Deepak Agarwal
Partner
Membership Number 073696
Place of Signature : Gurugram
Dated: May 28, 2019
For & on behalf of Board of Directors of Pearl Global Industries Limited
Pulkit Seth
Managing Director
DIN 00003044
Raghav Garg
Chief Financial Officer
Deepak Seth
Chairman
DIN 00003021
Sandeep Sabharwal
Company Secretary
M. No. ACS - 8370
Pearl Global Industries Limited Annual Report 2018-19
157
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 1: CORPORATE INFORMATION
Pearl Global Industries Limited is a public limited Company
domiciled in India and has its registered office at A-3,
Community Centre, Naraina Industrial Area, Phase-II,
New Delhi-110028. The Company is primarily engaged
in manufacturing, sourcing and export of ready to wear
apparels through its facilities and operations in India and
overseas. The Company has its primary listings on BSE
Limited and National Stock Exchange of India Limited in
India.
The financial statements were authorised for issue in
accordance with a resolution of the Board of Directors on
May 28, 2019.
NOTE 2: BASIS OF PREPARATION AND MEASUREMENT
Statement of Compliance: The Financial Statements
are prepared on an accrual basis under historical cost
Convention except for certain financial instruments which
are measured at fair value. These financial statements have
been prepared in accordance with the Indian Accounting
Standards (Ind AS) as prescribed under Section 133 of the
Companies Act, 2013 read with the Companies (Indian
Accounting Standards) Rules, 2015 as amended and other
relevant provisions of the Companies Act, 2013, as applicable.
The accounting policies are applied consistently to all the
periods presented in the financial statements.
Basis of Preparation and presentation: These financial
statements are prepared under the historical cost convention
unless otherwise indicated.
The principal accounting policies are set out below.
All assets and liabilities have been classified as current or
noncurrent according to the Company's operating cycle
and other criteria set out in the Act. Based on the nature of
products and the time between the acquisition of assets for
processing and their realisation in cash and cash equivalents,
the Company has ascertained its operating cycle as twelve
months for the purpose of current non-current classification
of assets and liabilities.
The financial statements are presented in ` and all values are
rounded to the nearest lakhs upto two decimal places except
otherwise stated.
Going Concern
The Board of Directors have considered the financial position
of the Company at 31st March 2019 and the projected cash
flows and financial performance of the Company for at least
twelve months from the date of approval of these financial
statements as well as planned cost and cash improvement
actions, and believe that the plan for sustained profitability
remains on course.
The Board of Directors have taken actions to ensure that
appropriate long-term cash resources are in place at the date
of signing the accounts to fund the Company's operations.
Recent accounting pronouncements
a)
Ind AS 116 Leases
On March 30, 2019, Ministry of Corporate Affairs has
notified Ind AS116, Leases. Ind AS 116 will replace the
existing leases Standard, Ind AS 17 Leases,and related
Interpretations.The Standards set out the principles
for the recognition, measurement, presentation and
disclosure of leases for both parties to a contract i.e., the
lessee and the lessor. Ind AS116 introduces a single lessee
accounting model and requires a lessee to recognize
assets and liabilities for all leases with a term of more
than twelve months, unless the underlying assets of low
value. Currently, operating lease expenses are charged
to the statement of Profit & Loss. The Standard also
contains enhance disclosure requirements for lessees.
Ind AS 116 substantially carries forward the lessor
accounting requirements in Ind AS 17.
The effective date for adoption of Ind AS 116 is annual
periods beginning on or after April 1, 2019. The standard
permits two possible methods of transition:
•
Full retrospective – Retrospectively to each prior period
presented applying Ind AS 8 Accounting Policies,
Changes in Accounting Estimates and Errors.
• Modified retrospective – Retrospectively, with the
cumulative effect of initially applying the Standard
recognized at the date of initial application.Under
modified retrospective approach, the lessee records the
lease liability as the present value of the remaining lease
payments, discounted at the incremental borrowing rate
and the right of use asset either as:
•
Its carrying amount as if the standard had been applied
since the commencement date, but discounted at
lessee’s incremental borrowing rate at the date of initial
application or
• An amount equal to the leaseliability, adjusted by the
amount of any prepaid or accrued lease payments related
to that lease recognized under Ind AS 17 immediately
before the date of initial application.
Pearl Global Industries Limited Annual Report 2018-19 158
Notes
to the Financial Statements for the year ended March 31, 2019
Certain practical expedients are available under both
the methods. The Company is proposing to use the
'Modified Retrospective Approach' for transitioning
to Ind AS 116, and take the cumulative adjustment to
the retained earnings, on the date of initial application
(April 1, 2019). Accordingly, comparatives for the
year ended March 31, 2019 will not be retrospectively
adjusted.
The company is evaluating the requirements of the
amendment and its effect on the financial statements.
b)
Ind AS 12 Appendix C, Uncertainty over Income
Tax Treatments :
On March 30, 2019, Ministry of Corporate Affairs
has notified Ind AS 12 Appendix C, Uncertainty over
Income Tax Treatments which is to be applied while
performing the determination of taxable profit (or loss),
tax bases, unused tax losses, unused tax credits and
tax rates, when there is uncertainty over income tax
treatments under Ind AS 12. According to the appendix,
companies need to determine the probability of the
relevant tax authority accepting each tax treatment, or
group of tax treatments, that the companies have used
or plan to use in their income tax filing which has to be
considered to compute the most likely amount or the
expected value of the tax treatment when determining
taxable profit (tax loss), tax bases, unused tax losses,
unused tax credits and tax rates.
The standard permits two possible methods of transition:
i) Full retrospective approach – Under this approach,
Appendix C will be applied retrospectively to each
prior reporting period presented in accordance with
Ind AS 8 – Accounting Policies, Changes in Accounting
Estimates and Errors, without using hindsight and
ii) Retrospectively with cumulative effect of initially
applying Appendix C recognized by adjusting equity on
initial application, without adjusting comparatives
The effective date for adoption of Ind AS 12 Appendix
C is annual periods beginning on or after April 1, 2019.
The Company will adopt the standard on April 1, 2019
and has decided to adjust the cumulative effect in
equity on the date of initial application i.e. April 1, 2019
without adjusting comparatives.
The company is evaluating the requirements of the
amendment and its effect on the financial statements.
c)
Ind AS 12 – Income taxes:
On March 30, 2019, Ministry of Corporate Affairs issued
amendments to the guidance in Ind AS 12, ‘Income
Taxes’, in connection with accounting for dividend
distribution taxes.
The amendment clarifies that an entity shall recognise
the income tax consequences of dividends in profit or
loss, other comprehensive income or equity according
to where the entity originally recognised those past
transactions or events.
d) Amendment to Ind AS 19 – plan amendment,
curtailment or settlement
On March 30, 2019, Ministry of Corporate Affairs
issued amendments to Ind AS 19, ‘Employee Benefits’,
in connection with accounting for plan amendments,
curtailments and settlements.
The amendments require an entity:
•
•
to use updated assumptions to determine current service
cost and net interest for the remainder of the period
after a plan amendment, curtailment or settlement; and
to recognise in profit or loss as part of past service
cost, or a gain or loss on settlement, any reduction
in a surplus, even if that surplus was not previously
recognised because of the impact of the asset ceiling.
Effective date for application of this amendment is annual
period beginning on or after April 1, 2019. The company is
evaluating the requirements of the amendment and its effect
on the financial statements.
Application of New Accounting Pronouncements
following Ind As pronouncements pursuant to
The
issuance of the Companies (Indian Accounting Standards)
Amendment Rules 2018, were applied by the Company
during the year:
Ind As 115, Revenue from Contracts with Customers with
effect from April 1, 2018
Appendix B to Ind AS 21, Foreign Currency Transactions
and advance consideration with effect from April 1, 2018.
Pearl Global Industries Limited Annual Report 2018-19
159
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES
Interest income
a) Significant accounting judgements, estimates and
assumptions
The preparation of financial statements in conformity
with Ind AS requires management to make judgements,
estimates and assumptions that affect the application
of accounting policies and the reported amount of
assets, liabilities, income, expenses and disclosures
of contingent assets and liabilities at the date of these
financial statements and the reported amount of
revenues and expenses for the years presented. Actual
results may differ from the estimates.
Estimates and underlying assumptions are reviewed
at each balance sheet date. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised and future periods affected.
Judgements:
The estimates and judgments used in the preparation of
the financial statements are continuously evaluated by
the Company and are based on historical experience
and various other assumptions and factors (including
expectations of future events) that the Company believes
to be reasonable under the existing circumstances.
Differences between actual results and estimates are
recognised in the period in which the results are known/
materialised.
The said estimates are based on the facts and events,
that existed as at the reporting date, or that occurred
after that date but provide additional evidence about
conditions existing as at the reporting date.
Revenue recognition and presentation
The Company assesses
its revenue arrangements
against specific criteria, i.e. whether it has exposure to
transfer the control associated with the sale of goods or
the rendering of services, in order to determine if it is
acting as a principal or as an agent. The Company has
concluded that they operating on a principal to principal
basis in all its revenue arrangements.
When deciding the most appropriate basis for presenting
revenue, both the legal form and substance of the
agreement between the Company and its customers are
reviewed to determine each party’s respective role in the
transaction.
Interest income is recognised using the effective interest
method. The ‘effective interest rate’ is the rate that
exactly discounts estimated future cash receipts through
the expected life of the financial instrument or shorter
period, where appropriate, to the gross carrying amount
of the financial asset. When calculating the effective
interest rate, the Company estimates the expected
cash flows by considering all the contractual terms of
the financial instrument (for example, prepayment,
extension, call and similar options) but does not
consider the expected credit losses.
Useful lives of property, plant and equipment
The Company reviews the useful life of property, plant
and equipment at the end of each reporting period.
This reassessment may result in change in depreciation
expense in future periods.
Estimates and Assumptions:
The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described
below. The Company based its assumptions and
estimates on parameters available when the financial
statements were prepared. Existing circumstances and
assumptions about future developments, however, may
change due to market changes or circumstances arising
that are beyond the control of the Company. Such
changes are reflected in the assumptions when they
occur.
Income taxes
The Company is subject to income tax laws as
applicable in India. Significant judgment is required
in determining provision for income taxes. There are
many transactions and calculations for which the
ultimate tax determination is uncertain during the
ordinary course of business. The Company recognises
liabilities for anticipated tax issues based on estimates of
whether additional taxes will be due. Where the final tax
outcome of these matters is different from the amounts
that were initially recorded, such differences will impact
the income tax and deferred tax provisions in the period
in which such determination is made.
Pearl Global Industries Limited Annual Report 2018-19
160
Notes
to the Financial Statements for the year ended March 31, 2019
Recoverability of deferred taxes
Liabilities:
In assessing the recoverability of deferred tax assets,
management considers whether it is probable that
taxable profit will be available against which the losses
can be utilised. The ultimate realisation of deferred tax
assets is dependent upon the generation of future taxable
income during the periods in which the temporary
differences become deductible. Management considers
the projected future taxable income and tax planning
strategies in making this assessment.
Defined benefit plans
The present value of the gratuity is determined using
actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from
actual developments in the future. These include
the determination of the discount rate, future salary
increases and mortality rates. Due to the complexities
involved in the valuation and its long-term nature, a
defined benefit obligation is highly sensitive to changes
in these assumptions. All assumptions are reviewed at
each reporting date.
The parameter most subject to change is the discount
rate. In determining the appropriate discount rate for
plans operated in India, the management considers
the interest rates of government bonds in currencies
consistent with the currencies of the post-employment
benefit obligation. The mortality rate is based on publicly
available mortality tables for the specific countries.
Those mortality tables tend to change only at interval
in response to demographic changes. Future salary
increases and gratuity increases are based on expected
future inflation rates for the respective countries.
b) Current versus non-current classification
The Company presents assets and liabilities in the balance
sheet based on current/ non-current classification.
Assets:
An asset is treated as current when it is:
a) Expected to be realised or intended to be sold or
consumed in normal operating cycle.
b) Held primarily for the purpose of trading
c) Expected to be realised within twelve months after
the reporting period, or
d) Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
(a) It is expected to be settled in normal operating cycle
(b) It is held primarily for the purpose of trading
(c) It is due to be settled within twelve months after the
reporting period, or
(d) There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-
current assets and liabilities.
Operating cycle: The operating cycle is the time
between the acquisition of assets for processing and
their realisation in cash and cash equivalents. The
Company has identified twelve months as its operating
cycle.
c) Property, Plant and Equipment
Property, plant and equipment and capital work in
progress are stated at cost less accumulated depreciation
and accumulated impairment losses, if any. Such cost
includes expenditure that is directly attributable to the
acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct services,
any other costs directly attributable to bringing the
assets to its working condition for their intended use
and cost of replacing part of the plant and equipment
and borrowing costs for long-term construction projects
if the recognition criteria are met.
An item of property, plant and equipment and any
significant part initially recognised is de-recognised
upon disposal or when no future economic benefits
are expected from its use. Any gain or loss arising on
de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying
amount of the asset) is included in the statement of
profit and loss.
Depreciation is provided on a pro-rata basis on the
straight-line basis on the estimated useful life prescribed
under Schedule II to Companies Act , 2013 with the
following exception :
-
Fixed asset costing upto ` 5000 has been fully
depreciated during the financial year
Pearl Global Industries Limited Annual Report 2018-19
161
Notes
to the Financial Statements for the year ended March 31, 2019
-
-
Leasehold land has been amortised over the lease
term.
Freehold Land is not depreciated.
Subsequent costs: The cost of replacing a part of an
item of property, plant and equipment is recognised
in the carrying amount of the item of property,
plant and equipment, if it is probable that the future
economic benefits embodied within the part will flow
to the Company and its cost can be measured reliably
with the carrying amount of the replaced part getting
derecognised. The cost for day-to-day servicing of
property, plant and equipment are recognised in
statement of profit and loss as and when incurred.
Decommissioning Costs : The present value of the
expected cost for the decommissioning of an asset, if
any, after its use is included in the cost of the respective
asset if the recognition criteria for a provision are met.
Capital work in progress: Capital work in progress
comprises the cost of fixed assets that are not ready for
their intended use at the reporting date.
Elimination: Property, plant and equipments are
eliminated from financial statements, either on disposal
or when retired from active use. Losses/gains arising
in case retirement/disposals of property, plant and
equipment are recognized in the statement of profit and
loss in the year of occurrence.
Transition to Ind AS: On transition to Ind AS, the
Company has elected to continue with the carrying
value of all its property, plant and equipment as at 1
April 2016, measured as per the previous GAAP, and use
that carrying value as the deemed cost of such property,
plant and equipment.
d)
Investment Properties
Property that is held for rental yields or for capital
appreciation or both, and that is not occupied by
the Company, is classified as investment property.
Investment property is measured at its cost, including
related transaction costs and where applicable borrowing
costs less depreciation and impairment if any.
The Company , based on technical assessment made by
management, depreciates the building over estimated
useful life of 60 years. The management believes that
these estimated useful lives are realistic and reflect fair
approximation of the period over which the assets are
likely to be used.
Transition to Ind AS: On transition to Ind AS, the
Company has elected to continue with the carrying
value of all its investment properties as at 1 April 2016,
measured as per the previous GAAP, and use that
carrying value as the deemed cost of such investment
properties.
e)
Intangible assets
Recognition and measurement
Intangible assets that are acquired by the Company are
measured initially at cost. Intangible assets with finite
useful lives are measured at cost less accumulated
amortisation and accumulated impairment losses, if
any. All expenditures, qualifying as Intangible Assets
are amortized over estimated useful life. Specialized
softwares are amortized over a period of 3 years or
license period whichever is earlier.
Transition to Ind AS
On transition to Ind AS, the Company has elected to
continue with the carrying value of all its intangible
assets recognized as at April 01, 2016, measured as per
the previous GAAP, and use that carrying value as the
deemed cost of such intangible assets.
Amortisation and useful lives: Intangible assets with
finite lives are amortised over the useful life and assessed
for impairment whenever there is an indication that
the intangible asset may be impaired. The amortisation
period and the amortisation method for an intangible
asset with a finite useful life are reviewed at least at the
end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of
future economic benefits embodied in the asset are
considered to modify the amortisation period or method,
as appropriate, and are treated as changes in accounting
estimates. The amortisation expense on intangible assets
with finite lives is recognised in the statement of profit
and loss unless such expenditure forms part of carrying
value of another asset. Amortisation is calculated over
the cost of the asset, or other amount substituted for
cost.
f) Borrowing costs
the borrowing of
Borrowing costs consists of interest and amortization
of ancillary costs that an entity incurs in connection
with
funds. Borrowing costs
directly attributable to the acquisition, construction
or production of an asset that necessarily takes a
substantial period of time to get ready for its intended
Pearl Global Industries Limited Annual Report 2018-19
162
Notes
to the Financial Statements for the year ended March 31, 2019
use or sale are capitalised as part of the cost of the asset.
All other borrowing costs are expensed in the period in
which they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with
the borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as an
adjustment to the borrowing costs.
the borrowing of
Borrowing costs consists of interest and amortization
of ancillary costs that an entity incurs in connection
funds. Borrowing costs
with
directly attributable to the acquisition, construction
or production of an asset that necessarily takes a
substantial period of time to get ready for its intended
use or sale are capitalised as part of the cost of the asset.
All other borrowing costs are expensed in the period in
which they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with
the borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as an
adjustment to the borrowing costs.
g) Foreign currencies
Functional and presentational currency
The Company’s financial statements are presented in
Indian Rupees (`) which is also the Company’s functional
currency. Functional currency is the currency of the
primary economic environment in which a Company
operates and is normally the currency in which the
Company primarily generates and expends cash. All
the financial information presented in ` except where
otherwise stated.
Transactions and balances
in foreign currencies are translated
Transactions
into the functional currency of the Company at
the exchange rates at the dates of the transactions
or an average rate if the average rate approximates
the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at
the exchange rate at the reporting date. Non-monetary
assets and liabilities that are measured at fair value in
a foreign currency are translated into the functional
currency at the exchange rate when the fair value was
determined. Non-monetary assets and liabilities that are
measured in terms of historical cost are not retranslated.
Exchange differences on monetary items are recognised
in statement of profit and loss in the period in which they
arise except for exchange differences on foreign currency
borrowings relating to assets under construction for
future productive use, which are included in the cost of
those assets when they are regarded as an adjustment to
interest costs on those foreign currency borrowings.
h) Revenue Recognition
The Company derives revenue primarily from export of
manufactured and traded goods.
Effective 01 April 2018, the Company has adopted Indian
Accounting Standard 115 (Ind AS 115) -’Revenue from
contracts with customers’ The effect on adoption of Ind-
AS 115 was insignificant.
Revenue from contract with customer
Revenue from contract with customers is recognised
when control of the goods or services are transferred to
the customer at an amount that reflects the consideration
to which the company expects to be entitled in exchange
for transferring distinct goods or services to a customer
as specified in the contract, excluding the amount
collected on behalf of third parties(for example, taxes
and duties collected on behalf of government) and net
of returns & discounts. The company has concluded that
it is acting as principal in its revenue arrangements.
The Company considers whether there are other
promises in the contract that are separate performance
obligations to which a portion of the transaction
price needs to be allocated. In determining the
transaction price for the sale of products, the Company
considers the effect of variable consideration, the
existence of significant financing component, non-
cash consideration, and consideration payable to the
customer (if any).
Following are the specific revenue recognition criteria:
(i) Sale of products
Revenue from sale of products is recognised at the
point in time when control of product is transferred
to the customer. In case of Export sale it is on the
basis of date of airway bill/bill of lading.
(ii) Job work income
job work on the product
Revenue from
is
recognised at the point in time when control of
services is transferred to the customer, generally on
the delivery of the product after completion of job
work.
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Financial Statements for the year ended March 31, 2019
163
(iii) Export Incentives
Export Incentives under various schemes are
accounted in the year of export.
(iv) Other Incomes
a) Sale of software/ SAP income is recognized
at the delivery of complete module & patches
(through
group
companies).
reimbursement
from
b) Rental Income is recognized on accrual basis as
per the terms of agreement.
c)
In respect of interest income, revenue is
recognised on the time proportion basis, taking
into account the amount outstanding and the
rate of interest applicable.
d) Dividend Income is recognized when the right
to receive is established.
Variable Consideration
If the consideration in a contract includes a variable
amount, the Company estimates the amount of
consideration to which it will be entitled in exchange
for transferring the goods to the customer. The variable
consideration is estimated at contract inception and
constrained until it is highly probable that a significant
revenue reversal in the amount of revenue recognised
will not occur when the associated uncertainty with the
variable consideration is subsequently resolved.
Significant Financing Component
Generally, the Company does not receive short term or
long term advances from its customers except in certain
scenarios. Using the practical expedient in Ind AS 115,
the Company does not adjust the promised amount of
consideration for the effects of a significant financing
component if it expects, at contract inception, that
the period between the transfer of promised good or
service to the customer and when the customer pays for
good or service will be one year or less. The company
does not expect to have any contracts where the period
between the transfer of promised goods and services
to the customer and payment by the customer exceeds
one year. As a consequence, it does not adjust any of the
transaction prices for the time value of money.
Contract balances
Contract assets
A contract asset is the right to consideration in exchange
for goods or services transferred to the customer. If the
Company performs by transferring goods or services to
a customer before the customer pays consideration or
before payment is due, a contract asset is recognised for
the earned consideration that is conditional.
Trade receivables
A receivable represents the Company’s right to an
amount of consideration that is unconditional (i.e., only
the passage of time is required before payment of the
consideration is due). Refer to accounting policies of
financial assets in section Financial instruments – initial
recognition and subsequent measurement.
Contract liabilities
A contract liability is the obligation to transfer goods
or services to a customer for which the Company has
received consideration (or an amount of consideration is
due) from the customer. If a customer pays consideration
before the Company transfers goods or services to the
customer, a contract liability is recognised when the
payment is made or the payment is due (whichever is
earlier). Contract liabilities are recognised as revenue
when the Company performs under the contract.
Cost to obtain a contract
The Company does not capitalise costs to obtain a
contract because majorly the contracts have terms that
do not extend beyond one year. The Company does not
have a significant amount of capitalized costs related to
fulfilment.
i)
Inventories
i) Inventories of finished goods manufactured by the
company are valued style-wise and at lower of cost
and estimated net realizable value. Cost includes
material cost on weighted average basis and
appropriate share of overheads incurred in bringing
them to their present location and condition. In
the case of manufactured inventories and work-in-
progress, cost includes an appropriate share of fixed
production overheads based on normal operating
capacity.
ii) Inventories of finished goods (traded) are valued
at lower of procurement cost (FIFO method) or
estimated net realizable value.
Pearl Global Industries Limited Annual Report 2018-19
164
Notes
to the Financial Statements for the year ended March 31, 2019
iii) Inventories of raw material, work in progress,
accessories & consumables are valued at cost
(weighted average method) or at estimated net
realizable value whichever is lower. WIP cost
includes appropriate portion of allocable overheads.
Raw materials and other supplies held for use in the
production of finished products are not written
down below cost except in cases where material
prices have declined and it is estimated that the
cost of the finished products will exceed their net
realisable value.
iv) Net realizable value is the estimated selling price in
the ordinary course of business, less estimated costs of
completion and estimated costs necessary to make the
sale.
j) Leases
The determination of whether an arrangement is
(or contains) a lease is based on the substance of
the arrangement at the inception of the lease. The
arrangement is, or contains, a lease if fulfilment of the
arrangement is dependent on the use of a specific asset
or assets and the arrangement conveys a right to use the
asset or assets, even if that right is not explicitly specified
in an arrangement.
A lease is classified at the inception date as a finance lease
or an operating lease. A lease that transfers substantially
all the risks and rewards incidental to ownership to the
Company is classified as a finance lease.
All the lease other than Finance lease are classified as
operating lease.
For arrangements entered into prior to the Ind AS
transition date i.e. April 01, 2016, the Company has
determined whether the arrangement contain lease on
the basis of facts and circumstances existing on the date
of transition.
Company as a lessor
Finance lease: Amounts due from lessees under finance
leases are recognised as receivables at the amount of the
Company's net investment in the leases. Finance lease
income is allocated to accounting periods so as to reflect
a constant periodic rate of return on the Company's net
investment outstanding in respect of the leases.
Operating lease: Rental income from operating leases
is recognised on a straightline basis over the term of the
relevant lease. Where the rentals are structured solely
to increase in line with expected general inflation to
compensate for the Company's expected inflationary
cost increases, such increases are recognised in the
period in which such benefits accrue.
Company as a lessee
Finance lease
Finance leases are capitalised at the commencement of
the lease at the inception date fair value of the leased
property or, if lower, at the present value of the minimum
lease payments. Lease payments are apportioned
between finance charges and reduction of the lease
liability so as to achieve a constant rate of interest on
the remaining balance of the liability. Finance charges
are recognised in finance costs in the statement of profit
and loss. Contingent rentals are recognised as expenses
in the periods in which they are incurred.
A leased asset is depreciated over the useful life of the
asset. However, if there is no reasonable certainty that
the Company will obtain ownership by the end of the
lease term, the asset is depreciated over the shorter of
the estimated useful life of the asset and the lease term.
Operating lease
A lease where risks and rewards incidental to ownership
of an asset substantially vest with the lessor is classified
as operating lease. Lease payments under operating
leases are recognised as an expense in the statement
of profit and loss on a straight line basis over the lease
term.
The Company has ascertained that the payments to the
lessor are structured to increase in line with expected
general inflation to compensate for the lessor’s expected
inflationary cost increases and therefore are not straight-
lined. Hence, the lease payments are recognised on an
accrual basis as per terms of the lease agreement.
k) Employee's benefits
Short term employee benefits: All employee benefits
expected to be settled wholly within twelve months
of rendering the service are classified as short-term
employee benefits. When an employee has rendered
service to the Company during an accounting period,
the Company recognises the undiscounted amount of
short-term employee benefits expected to be paid in
exchange for that service as an expense unless another
Ind AS requires or permits the inclusion of the benefits
in the cost of an asset. Benefits such as salaries, wages
and short-term compensated absences, bonus and ex-
gratia etc. are recognised in statement of profit and loss
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Financial Statements for the year ended March 31, 2019
165
in the period in which the employee renders the related
service.
A liability is recognised for the amount expected
to be paid after deducting any amount already paid
under short-term cash bonus or profit-sharing plans
if the Company has a present legal or constructive
obligation to pay this amount as a result of past service
provided by the employee, and the obligation can be
estimated reliably. If the amount already paid exceeds
the undiscounted amount of the benefits, the Company
recognises that excess as an asset /prepaid expense to
the extent that the prepayment will lead to, for example,
a reduction in future payments or a cash refund.
Defined contribution plan
A defined contribution plan is a post-employment
benefit plan under which an entity pays fixed
contributions to a statutory authority and will have no
legal or constructive obligation to pay further amounts.
Retirement benefits in the form of Provident Fund is a
defined contribution scheme and contributions paid/
payable towards Provident Fund are recognised as
an expense in the statement of profit and loss during
the period in which the employee renders the related
service. There are no other obligations other than the
contribution payable to the respective trusts.
Defined benefit plan
A defined benefit plan is a post-employment benefit
plan other than a defined contribution plan.
The Company has an obligation towards gratuity,
a defined benefit retirement plan covering eligible
employees. The plan provides for a lump sum payment
to vested employees at retirement, death while in
employment or on termination of employment of
an amount based on the respective employee’s salary
and the tenure of employment. Vesting occurs upon
completion of five years of service. The Company
accounts for the liability for gratuity benefits payable
in future based on an independent actuarial valuation
report using the projected unit credit method as at the
year end.
The obligations are measured at the present value of
the estimated future cash flows. The discount rate is
generally based upon the market yields available on
Government bonds at the reporting date with a term
that matches that of the liabilities.
Re-measurements, comprising actuarial gains and
losses, the effect of the changes to the asset ceiling (if
applicable) and the return on plan assets (excluding
interest and if applicable), is reflected immediately
in Other Comprehensive Income in the statement of
profit and loss. All other expenses related to defined
benefit plans are recognised in statement of profit and
loss as employee benefit expenses. Re-measurements
recognised in Other Comprehensive Income will not
be reclassified to statement of profit and loss hence it
is treated as part of retained earnings in the statement
of changes in equity. Gains or losses on the curtailment
or settlement of any defined benefit plan are recognised
when the curtailment or settlement occurs. Curtailment
gains and losses are accounted for as past service costs.
Other long term employee benefits
As per the Company’s policy, eligible leaves can be
accumulated by the employees and carried forward to
future periods to either be utilised during the service,
or encashed. Encashment can be made during the
service, on early retirement, on withdrawal of scheme,
at resignation by employee and upon death of employee.
The scale of benefits is determined based on the seniority
and the respective employee’s salary. The Company
records an obligation for such compensated absences in
the period in which the employee renders the services
that increase this entitlement. The obligation is measured
on the basis of independent actuarial valuation using
the projected unit credit method.
Re-measurements, comprising actuarial gains and
losses, the effect of the changes to the asset ceiling (if
applicable) and the return on plan assets (excluding
interest and if applicable), is reflected immediately
in Other Comprehensive Income in the statement of
profit and loss. All other expenses related to defined
benefit plans are recognised in statement of profit and
loss as employee benefit expenses. Re-measurements
recognised in Other Comprehensive Income will not
be reclassified to statement of profit and loss hence it
is treated as part of retained earnings in the statement
of changes in equity. Gains or losses on the curtailment
or settlement of any defined benefit plan are recognised
when the curtailment or settlement occurs. Curtailment
gains and losses are accounted for as past service costs.
Pearl Global Industries Limited Annual Report 2018-19
166
Notes
to the Financial Statements for the year ended March 31, 2019
l) Provisions
General
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the
amount of the obligation.
When the Company expects some or all of a provision
to be reimbursed, the reimbursement is recognised as
a separate asset, but only when the reimbursement is
virtually certain.
The expense relating to a provision is presented in the
statement of profit and loss, net of any reimbursement.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the
liability. The unwinding of discount is recognised in the
statement of profit and loss as a finance cost.
Provisions are reviewed at the end of each reporting
period and adjusted to reflect the current best estimate.
If it is no longer probable that an outflow of resources
would be required to settle the obligation, the provision
is reversed.
m) Financial instruments
A financial instrument is a contract that gives rise to a
financial asset for one entity and a financial liability or
equity instrument for another entity.Financial assets and
financial liabilities are recognised when the Company
becomes a party to the contractual provisions of the
instruments.
(i) Financial assets
Initial recognition and measurement
A financial asset is initially recognised at fair value.
In case of financial assets which are recognised at fair
value through profit and loss (FVTPL), its transaction
cost are recognised in the statement of profit and loss.
In other cases, the transaction cost are attributed to the
acquisition value of the financial asset.
Subsequent measurement
For purposes of subsequent measurement, financial
assets are classified in three categories:
-
Financial Asset carried at amortised cost
-
-
fair value through other
Financial Asset at
comprehensive income (FVTOCI)
Financial Asset at fair value through profit and loss
(FVTPL)
Financial asset carried at amortised cost
A financial asset is subsequently measured at amortised
cost if it is held within a business model whose objective
is to hold the asset in order to collect contractual cash
flows and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Financial asset at fair value through other
comprehensive income (FVTOCI)
A financial asset is subsequently measured at fair value
through other comprehensive income if it is held within
a business model whose objective is achieved by both
collecting contractual cash flows and selling financial
assets and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Financial asset at fair value through profit and loss
(FVTPL)
A financial asset which is not classified in any of the
above categories are subsequently fair valued through
profit or loss.
De-recognition
A financial asset (or, where applicable, a part of a
financial asset) is primarily derecognised (i.e. removed
from the Company’s Balance Sheet) when:
(i) The contractual rights to receive cash flows from
the asset has expired, or
(ii) The Company has transferred its contractual rights
to receive cash flows from the financial asset or has
assumed an obligation to pay the received cash flows
in full without material delay to a third party under
a ‘pass-through’ arrangement; and either (a) the
Company has transferred substantially all the risks
and rewards of the asset, or (b) the Company has
neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred
control of the asset.
Pearl Global Industries Limited Annual Report 2018-19
167
Notes
to the Financial Statements for the year ended March 31, 2019
(ii) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or loss.
All financial liabilities are recognised initially at fair
value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Company’s financial liabilities include borrowings,
trade and other payables, security deposits received etc.
Subsequent measurement
For purposes of subsequent measurement, financial
liabilities are classified in two categories:
-
-
Financial liabilities at amortised cost
Financial liabilities at fair value through profit and
loss (FVTPL)
Financial liabilities at amortized cost
Loans and borrowings
Borrowings are initially recognised at fair value, net
of transaction costs incurred. After initial recognition,
interest-bearing loans and borrowings are subsequently
measured at amortised cost using the EIR method.
Gains and losses are recognised in the statement of
profit or loss when the liabilities are derecognised as
well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation
is included as finance costs in the statement of profit and
loss. This category generally applies to borrowings.
De-recognition: A financial liability is derecognised
when the obligation under the liability is discharged
or cancelled or expires. When an existing financial
liability is replaced by another from the same lender on
substantially different terms or the terms of an existing
liability are substantially modified, such an exchange
or modification is treated as the de-recognition of the
original liability and the recognition of a new liability.
The difference in the respective carrying amounts is
recognised in the statement of profit and loss.
(iii) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the
net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognized
amounts and there is an intention to settle on a net
basis, to realize the assets and settle the liabilities
simultaneously
(iv) Derivative financial instruments
The Company uses derivative financial instruments,
such as forward currency contracts, interest rate swaps,
full currency swaps and forward commodity contracts,
to hedge its foreign currency risks, interest rate risks
and commodity price risks, respectively. Such derivative
financial instruments are initially recognized at fair
value on the date on which a derivative contract is
entered into and are subsequently remeasured at fair
value. Derivatives are carried as financial assets when
the fair value is positive and as financial liabilities when
the fair value is negative. Embedded derivatives are
separated from the host contract and accounted for
separately if the host contract is not a financial asset and
certain criteria are met. Any gains or losses arising from
changes in the fair value of derivatives are taken directly
to statement of profit and loss.
n)
Impairment of financial assets
The Company measures the expected credit loss
associated with its assets based on historical trend,
industry practices and the business environment in
which the entity operates or any other appropriate basis.
The impairment methodology applied depends on
whether there has been a significant increase in credit
risk.
o)
Impairment of non-financial assets
The carrying amounts of the Company’s non-financial
assets, other than deferred tax assets, are reviewed at the
end of each reporting period to determine whether there
is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating
unit (‘CGU’) is the greater of its value in use or its
fair value less costs to sell. In assessing value in use,
the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that
reflects current market assessments of the time value of
money and the risks specific to the asset or CGU. For
the purpose of impairment testing, assets that cannot
be tested individually are grouped together into the
smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash
inflows of other assets or groups of assets (‘CGU’).
Pearl Global Industries Limited Annual Report 2018-19
168
Notes
to the Financial Statements for the year ended March 31, 2019
An impairment loss is recognized, if the carrying
amount of an asset or its CGU exceeds its estimated
recoverable amount and is recognised in statement of
profit and loss.
Impairment losses recognised in prior periods are
assessed at end of each reporting period for any
indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has
been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed
only to the extent that the asset’s carrying amount does
not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
p) Fair value measurement
Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at
the
measurement date. The fair value measurement is based
on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
(a) In the principal market for the asset or liability, or
(b) In the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market must
be accessible by the Company. The fair value of an asset
or a liability is measured using the assumptions that
market participants would use when pricing the asset or
liability, assuming that market participants act in their
economic best interest.
A fair value measurement of a non-financial asset takes
into account a market participant's ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the
use of relevant observable inputs and minimising the
use of unobservable inputs.
All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable
For assets and liabilities that are recognised in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each
reporting period.
q) Taxes
Current income tax
Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted
or substantively enacted, at the reporting date.
Current income tax relating to items recognized outside
profit or loss is recognized outside profit or loss (either
in other comprehensive income (OCI) or in equity).
Current tax items are recognized in correlation to the
underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.
Current tax assets are offset against current tax liabilities
if, and only if, a legally enforceable right exists to set off
the recognised amounts and there is an intention either
to settle on a net basis, or to realise the asset and settle
the liability simultaneously.
Deferred tax
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realised or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively
enacted at the reporting date.
Pearl Global Industries Limited Annual Report 2018-19
169
Notes
to the Financial Statements for the year ended March 31, 2019
Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are
recognised to the extent that it is probable that taxable
profit will be available against which the deductible
temporary differences, and the carry forward of unused
tax credits and unused tax losses can be utilised.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply to the period when
the asset is realized or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date. Tax
relating to items recognized directly in equity/other
comprehensive income is recognized in respective head
and not in the statement of profit & loss.
The carrying amount of deferred tax assets is reviewed
at each balance sheet date and is adjusted to the extent
that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the asset to be
recovered.
Deferred tax assets and deferred tax liabilities are offset
if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred
taxes relate to the same taxable entity and the same
taxation authority.
Deferred tax relating to items recognised outside profit
or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Deferred tax
items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset
if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred
taxes relate to the same taxable entity and the same
taxation authority.
Minimum Alternate Tax
Minimum Alternate Tax (MAT) paid in the year is
charged to the Statement of Profit and Loss as current
tax. The Company recognises MAT credit available
as an asset only to the extent that there is convincing
evidence that the Company will pay normal income tax
during the specified period, i.e., the period for which
MAT credit is allowed to be carried forward. In the year
in which Company recognises MAT credit as an asset
in accordance with the Guidance Note on Accounting
for Credit Available in respect of Minimum Alternate
Tax under the Income Tax Act, 1961, the said asset is
created by way of credit to the Statement of Profit and
Loss and shown as "MAT Credit Entitlement ". The
Company reviews the "MAT Credit Entitlement" asset
at each reporting date and writes down the asset to the
extent the Company does not have convincing evidence
that it will pay normal tax during the specified period.
In accordance with Ind AS 12 Company is grouping
MAT credit entitlement with Deferred Tax Assets /
Liability (Net).
r)
Investment in subsidiaries
Investment in subsidiaries
There is an option to measure investments in subsidiaries
at cost in accordance with Ind AS 27 at either:
(a) Fair value on date of transition; or
(b) Previous GAAP carrying values
The Company has decided to use the previous GAAP
carrying values to value its investments in its subsidiaries
as on the date of transition, April 01, 2016.
s) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise
cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are
subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and
cash equivalents consist of cash balance on hand, cash
balance at banks and short-term deposits, as defined
above, net of outstanding bank overdrafts as they are
considered an integral part of the Company’s cash
management.
t) Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit
for the year attributable to the shareholders of the
Company by the weighted average number of equity
shares outstanding as at the end of reporting period.
Diluted EPS amounts are calculated by dividing the profit
attributable to the shareholders of the Company by the
weighted average number of equity shares outstanding
during the year plus the weighted average number of
Equity shares that would be issued on conversion of all
the dilutive potential equity shares into equity shares.
Pearl Global Industries Limited Annual Report 2018-19
170
Notes
to the Financial Statements for the year ended March 31, 2019
u) Government grants
Grants from the government are recognised at their fair
value where there is reasonable assurance that the grant
will be received and the Company will comply with all
attached conditions.
Government grants relating to the purchase of property,
plant and equipment are included in non-current
liabilities as deferred income and are credited to Profit
and Loss on a straight - line basis over the expected lives
of related assets and presented within other income.
v) Contingent liabilities and contingent assets
A contingent liability exists when there is a possible
but not probable obligation, or a present obligation
that may, but probably will not, require an outflow
of resources, or a present obligation whose amount
cannot be estimated reliably. Contingent liabilities do
not warrant provisions, but are disclosed unless the
possibility of outflow of resources is remote. Contingent
assets are neither recognised nor disclosed in the
financial statements. However, contingent assets are
assessed continually and if it is virtually certain that
an inflow of economic benefits will arise, the asset and
related income are recognised in the period in which the
change occurs.
w) Research & development costs
Research and development costs that are in nature
of tangible assets and are expected to generate
probable future economic benefits are capitalised as
tangible assets. Revenue expenditure on research and
development is charged to the statement of profit and
loss in the year in which it is incurred.
x) Exceptional items
When items of income and expense within statement
of profit and loss from ordinary activities are of such
size, nature or incidence that their disclosure is relevant
to explain the performance of the enterprise for the
period, the nature and amount of such material items
are disclosed seperately as exceptional items.
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Financial Statements for the year ended March 31, 2019
171
NOTE 4 : PROPERTY, PLANT
AND EQUIPMENT
Land-
freehold
Land-
leasehold
Buildings
(Amount in ` ‘Lakhs’ unless otherwise stated)
Total
Furniture
and Fixtures
Plant and
Equipment
Vehicles
Leasehold
improvements
Gross carrying amount
(At Deemed cost)
As at April 01, 2017
1,647.34
47.74
4,342.85
62.41
6,596.01
Add: Additions made during the year
Less: Disposals/adjustments during the year
-
-
-
-
72.18
542.22
378.18
-
599.50
180.23
625.78
104.52
27.17
775.30
14,097.43
142.17
1,296.54
80.90
830.52
As at March 31, 2018
1,647.34
47.74
3,872.81
440.58
7,015.28
703.12
836.57
14,563.46
Add: Additions made during the year
Less: Disposals/adjustments during the year
41.43
76.47
-
-
37.62
-
7.99
1,550.57
101.96
168.52
1,908.09
-
108.56
2.95
20.04
208.01
As at March 31, 2019
1,612.30
47.74
3,910.43
448.57
8,457.29
802.13
985.06
16,263.54
Accumulated depreciation/amortization
As at April 01, 2017
Add: Depreciation/amortization for the year
Less: Disposals/adjustments during the year
As at March 31, 2018
Add: Depreciation charge for the year
Less: Disposals/adjustments during the year
As at March 31, 2019
Net carrying amount
As at March 31, 2019
As at March 31, 2018
-
-
-
-
-
-
-
0.34
0.34
-
131.92
149.04
28.72
6.07
47.19
-
609.96
745.32
49.54
107.61
115.17
971.07
80.00
116.32
1,138.21
7.57
19.92
105.75
0.68
252.24
53.26
1,305.73
180.04
211.58
2,003.53
0.34
151.64
-
-
62.02
-
731.46
31.00
89.58
120.73
1,155.77
0.77
10.90
42.66
1.03
403.87
115.28
2,006.20
268.85
321.41
3,116.64
1,612.30
1,647.34
46.71
3,506.56
47.06
3,620.57
333.29
387.33
6,451.09
5,709.54
533.28
523.08
663.65
13,146.90
624.99
12,559.92
a) The above assets includes Gross block of land of ` 83.08 lakhs (March 31, 2018: ` 159.54 lakhs) situated at Narshingpur,
Tehsil District Gurgaon(Haryana). Out of this Gross block of land of ` 47.03 lakhs (March 31, 2018: ` 47.52 lakhs) for
which the company has executed a construction project agreement with DLF Retail Developers Limited on November
30, 2007. However, as certified by the Management, the work has not started during the financial year 2018-19 due to
pending receipt of license from the concerned authority.
b) For Information on Property, plant and equipment pledged as security by the company refer Note 21
c) The above property, plant and equipment includes assets given on lease given in the below table:
Land-
freehold
Land-
leasehold
Buildings
Leasehold
improvements
Plant and
Equipment
Furniture and
Fixtures
Vehicles
Total
As at March 31, 2019
Gross carrying amount
Accumulated depreciation
Net carrying amount
As at March 31, 2018
Gross carrying amount
Accumulated depreciation
Net carrying amount
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27.77
13.59
14.17
27.77
10.59
17.18
21.22
9.16
12.06
21.22
6.11
15.11
-
-
-
-
-
-
48.99
22.76
26.23
48.99
16.70
32.29
Pearl Global Industries Limited Annual Report 2018-19 172
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 5 : CAPITAL WORK IN PROGRESS
Capital work in progress
a) Breakup of capital work in progress is as follows:
Building
Plant and machinery
Furniture and fixtures
Other expenses
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
159.72
159.72
54.17
54.17
As At
March 31, 2019
As At
March 31, 2018
74.75
38.38
46.59
-
159.72
48.62
4.40
-
1.15
54.17
(Amount in ` ‘Lakhs’ unless otherwise stated)
NOTE 6 : INVESTMENT PROPERTIES
Land freehold Land leasehold
Building
Total
Gross carrying amount
(At Deemed cost)
As at April 01, 2017
Add: Additions made during the year
Less: Disposals/adjustments during the year
As at March 31, 2018
Add: Additions made during the year
Less: Disposals/adjustments during the year
As at March 31, 2019
Accumulated depreciation and amortisation
As at April 01, 2017
Add: Depreciation & amortisation charge for the year
Less: Disposals/adjustments during the year
As at March 31, 2018
Add: Depreciation & amortisation charge for the year
Less: Disposals/adjustments during the year
As at March 31, 2019
Net carrying amount
As at March 31, 2019
As at March 31, 2018
3,018.37
67.13
-
3,085.50
1.29
-
3,086.79
-
-
-
-
-
-
-
112.60
4,580.71
7,711.68
-
102.24
10.36
-
67.13
4,580.71
102.24
7,676.57
-
-
1.29
-
10.36
-
4,580.71
-
7,677.86
5.55
3.01
8.56
-
-
-
-
76.46
85.76
-
162.22
85.76
-
247.97
82.01
88.77
8.56
162.22
85.76
-
247.97
3,086.79
3,085.50
10.36
4,332.74
7,429.89
10.36
4,418.49
7,514.36
Pearl Global Industries Limited Annual Report 2018-19 173
Notes
to the Financial Statements for the year ended March 31, 2019
(a) Amounts recognized in statement of profit and loss for
investment properties
Rental Income
Direct operating expenses of property that generated rental income
Direct operating expenses of property that did not generated rental
income
Income arising from Investment properties before charging
depreciation
Depreciation & amortisation
Income from Investment properties (net)
(b) Fair value of investment properties
Estimation of fair value
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
814.53
53.62
77.46
683.45
732.70
25.52
68.30
638.89
85.76
597.69
11,378.15
88.77
550.12
11,548.24
The fair valuation is based on current prices in the active market for similar properties. The main inputs used are
quantum, area, location, demand, restrictive entry to the complex,age of building and trend of fair market rent.
This valuation is based on valuations performed by an accredited independent valuer. Fair valuation is based on
replacement cost method. The fair value measurement is categorised in level 2 fair value hierarchy.
(c) In the earlier years, the Company had initiated the process of converting its leasehold land (situated at Plot A-3,
Naraina, New Delhi) into freehold land. However, the deed is yet to be transferred in the name of the Company as at
March 31, 2019.
NOTE 7 : OTHER INTANGIBLE ASSETS
At Deemed cost
Gross carrying amount
As at April 01, 2017
Add: Additions during the year
Less: Disposals / adjustments during the year
As at March 31, 2018
Add: Additions during the year
Less: Disposals / adjustments during the year
As at March 31, 2019
Accumulated amortisation
As at April 01, 2017
Add: Amortisation charge for the year
Less: On disposals/adjustments during the year
As at March 31, 2018
Add: Amortisation charge for the year
Less: On disposals / adjustments during the year
As at March 31, 2019
Net carrying amount
As at March 31, 2019
As at March 31, 2018
(Amount in ` ‘Lakhs’ unless otherwise stated)
Total
Computer Software
202.55
17.33
-
219.88
27.65
-
247.53
38.32
46.74
-
85.06
47.54
132.60
114.94
134.83
202.55
17.33
-
219.88
27.65
-
247.53
38.32
46.74
-
85.06
47.54
-
132.60
114.94
134.83
Pearl Global Industries Limited Annual Report 2018-19 174
Notes
to the Financial Statements for the year ended March 31, 2019
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
As At
March 31, 2018
March 31, 2019
NOTE 8 : INVESTMENT IN SUBSIDIARIES
Non- Current
Investments in equity shares of Subsidiaries - (unquoted)
(At Cost)
Pearl Global Far East Limited, Hong Kong
5,35,000 (March 31, 2018: 5,35,000) Equity Shares of USD
1 each fully paid up
Pearl Global (HK) Limited, Hong Kong
16,10,000 (March 31, 2018: 16,10,000) Equity Shares of USD
1 each fully paid up
Norp Knit Industries Limited, Bangladesh
3,381,211 (March 31, 2018: 3,381,211) Equity Shares of Taka
100 Each fully paid up
Pearl Apparel Fashions Limited, India
27,639,145 (March 31, 2018: 27,639,145) Equity Shares of
` 10 each fully paid up
Less: Diminution in value of investments (Refer note no. 36(b)
& note ‘c’ below)
1,648.35
1,617.20
Pearl Global Kausal Vikas Limited
50,000 (March 31, 2018: 50,000) Equity Shares of ` 10/- each fully paid up
Investment in Preference Share of Subsidiary - (Unquoted)
(At Amortised Cost)
Pearl Apparel Fashions Limited, India
3,000,000 (March 31, 2018: 3,000,000) Preference Shares of ` 10 each
fully paid up
Add: Adjustment in value of investment (Refer note no. 36(b))
121.16
178.84
a) AGGREGATE VALUE OF UNQUOTED INVESTMENTS
Aggregate amount of impairment in value of unquoted investments
Aggregate value of unquoted investments (net of impairment)
2,797.29
2,797.29
6,173.19
6,088.06
2,419.51
2,343.32
31.15
1,648.35
5.00
5.00
300.00
108.18
11,726.14
12,990.20
13,164.50
1,438.36
11,726.14
12,990.20
-
12,990.20
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Financial Statements for the year ended March 31, 2019
175
b) INFORMATION ABOUT SUBSIDIARIES
Name of Company
Subsidiaries
Pearl Apparel Fashions Limited
Pearl Global Kausal Vikas Limited
(Formally known as Pixel Industries
Limited)
Pearl Global Far East Limited
Pearl Global (HK) Limited
Norp Knit Industries Limited
Country of
incorporation
Principal activities
Porportion (%) of equity interest
As At
March 31, 2018
As At
March 31, 2019
India Trading of garments
Skill development
India
Hong Kong Trading of garments
Hong Kong Manufacturing and
trading of garments
Bangladesh Manufacturing and
trading of garments
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
99.99
c) As at March 31, 2019, the net worth of the Pearl Apparel Fashions Limited, a subsidiary company is substantially eroded.
Management decision to cease its existing business operations and erosion of its net worth indicates a possible impairment
in the carrying value of investment. Accordingly, the management with the help of a valuation specialist, has carried out
an impairment assessment and has estimated a provision of ` 1,617.20 lakhs as a diminution in the carrying value of its
investment.
Significant Estimates : The carrying value of exposure in Pearl Apparel Fashions Limited is determined by an Independent
valuer. The management has estimated the recoverable amount of its investment in the subsidiary by adjusted net asset
method using the pre-tax discount rate, which is complex and involves the use of significant management estimates and
assumptions that are dependent on expected future market and economic conditions.
NOTE 9 : INVESTMENT - OTHERS
NON- CURRENT
A. Equity Instruments
Fair value through profit and loss
(Quoted)
PDS Multinational Fashions Limited, India
50,000 (March 31, 2018: 50,000)
Equity Shares of ` 10 each fully paid up
B.
Investments in Government securities - (Unquoted)
(At Amortised cost)
Investments in Government securities
- National Saving Certificate (NSC) (Refer ‘b’ below)
- Gold Sovereign Bond- 37 units of 2 gram each issued by
Reserve Bank of India
Total (A + B)
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2018
As At
March 31, 2019
133.50
143.00
133.50
143.00
-
0.04
1.63
1.63
135.13
1.63
1.67
144.67
Pearl Global Industries Limited Annual Report 2018-19 176
Notes
to the Financial Statements for the year ended March 31, 2019
CURRENT
C.
Investments in mutual funds - (Quoted)
Investments carried at fair value through profit and loss
Franklin India corporate bond
Nil Units of Face Value of ` 10 per unit (March 31 , 2018 : 702,286.65 units)
ICICI PRU Equity arbitrage fund regular
Nil units of Face Value of ` 10 per unit (March 31, 2018: 504,149.36 units)
UTI short term income fund
Nil units of Face Value of ` 10 per unit (March 31, 2018 : 924,908.95 units)
ICICI PRU Corporate bond
Nil units of Face Value of ` 10 per unit (March 31, 2018: 462,943.67 units)
Principal balances Fund - Regular Plan Growth
Nil units of of Face Value of ` 10 per unit ( March 31 , 2018 : 82,349.77 units)
a) Aggregate book value of quoted investments
Aggregate market value of quoted investments
Aggregate value of unquoted investments
Aggregate amount of impairment in value of unquoted investments
Aggregate value of unquoted investments (net of impairment)
b) The National Saving Certificate(s) were pledged with Sales Tax Authorities
As At
March 31, 2019
As At
March 31, 2018
-
-
-
-
-
-
133.50
133.50
1.63
-
1.63
132.33
115.97
195.36
125.20
63.76
632.62
775.62
775.62
1.67
-
1.67
NOTE10 : LOANS
(Unsecured, considered good unless
otherwise stated)
Loans to employees
Loans to related parties (Refer note 47)
Break-up :
Loans considered good - Secured
Loans considered good - Unsecured
Loans which have significant increase in
credit risk
Loans - credit impaired
Total
Less: Allowance for doubtful loans
Total Loans
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non - current
Current
March 31, 2019
March 31, 2018
March 31, 2019
March 31, 2018
18.10
456.52
474.62
12.09
439.61
451.69
49.63
300.00
349.63
34.99
300.00
334.99
Non - current
Current
March 31, 2019
March 31, 2018
March 31, 2019
March 31, 2018
-
474.62
-
-
474.62
-
474.62
-
451.69
-
-
451.69
-
451.69
-
349.63
-
-
349.63
-
349.63
-
334.99
-
-
334.99
-
334.99
(Refer note no. 44 For information about credit and market risk for loans)
Pearl Global Industries Limited Annual Report 2018-19 177
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 11 : OTHER FINANCIAL ASSETS
(Unsecured, considered good unless
otherwise stated)
Security deposits (Refer ‘a’ below)
Interest accrued but not due on
- Term deposits
and others
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non - current
Current Current
March 31, 2019
March 31, 2018
March 31, 2019
March 31, 2018
744.64
379.23
55.88
26.11
-
0.13
45.64
54.94
- Loan to related parties (Refer note 47)
99.42
Deposits with original maturity of more
than 12 months (Refer note 18)
Mark to market forward contracts
Other receivable
-
-
-
55.28
1.26
-
-
6.66
761.27
462.80
234.35
13.46
1,730.21
215.57
-
844.06
435.90
1,566.59
2,040.29
a) Security deposits are not in the nature of loans hence classified as part of other financial assets.
NOTE 12 : INCOME TAX
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
The major components of income tax expense for the years ended March 31, 2019 and March 31, 2018 are:
Statement of profit and loss:
Profit or loss section
Tax Expense:
a) Current tax
b) Adjustments in respect of current income tax of previous year
c) Deferred tax
Income tax expense reported in the statement of profit or loss
OCI section
Deferred tax related to items recognised in OCI during the year:
Net loss/(gain) on remeasurements of defined benefit plans
Income tax charged to OCI
722.70
193.01
119.75
1,035.46
-
165.55
245.64
411.19
As At
March 31, 2019
As At
March 31, 2018
(70.83)
(70.83)
20.95
20.95
Pearl Global Industries Limited Annual Report 2018-19 178
Notes
to the Financial Statements for the year ended March 31, 2019
a) Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for March 31,
2019 and March 31, 2018.
Accounting profit before tax from continuing operations
Accounting profit before income tax
As At
March 31, 2019
As At
March 31, 2018
3,185.65
677.57
At India’s statutory income tax rate of 34.944% (March 31, 2018: 33.063%)
Adjustments in respect of current income tax of previous years
1,113.19
193.01
224.02
165.55
Tax effect of the amounts which are Non-deductible/(taxable) for tax
purposes:
Expenses not deducted for tax purposes
Income exempted from income tax
Impact of tax at different tax rate and Others
At the income tax rate of 34.944% (March 31, 2018: 34.063%)
Income tax expense reported in the statement of profit and loss
b) Deferred tax:
Deferred tax assets relates to the following:
Provision for employee benefits
Expenses allowed in the year of payment
Unabsorbed Losses
Others
MAT Credit
Deferred tax liability relates to the following:
Property, plant and equipment
Fair valuation of mutual fund
Borrowing (EIR)
Others
Total deferred tax assets/(liabilities) (Net)
576.44
(676.97)
(170.21)
1,035.46
1,035.46
36.99
(209.22)
193.85
411.20
411.19
Balance sheet
As At
March 31, 2019
As At
March 31, 2018
386.77
134.25
543.17
100.50
244.59
1,409.28
1,425.22
-
9.23
315.29
1,749.74
(340.46)
399.10
5.07
599.46
131.34
509.00
1,643.97
1,372.26
33.84
11.80
111.55
1,529.45
114.53
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Financial Statements for the year ended March 31, 2019
179
Deferred tax expense/income:
Deferred tax assets relates to the following :
Provision for employee benefits
Expenses allowed in the year of payment
Unabsorbed losses
Others
Deferred tax liability relates to the following :
Property, plant and equipment
Fair valuation of mutual fund
Borrowing (EIR)
Others
Net deferred tax charge
Recognised in statement of profit and loss
Recognised in other comprehensive income
Statement of profit and loss
As At
March 31, 2019
As At
March 31, 2018
(12.33)
129.18
(56.29)
(30.84)
29.72
52.96
(33.84)
(2.57)
203.75
220.30
190.58
119.75
70.83
73.20
(6.71)
62.34
1.63
130.46
386.48
(40.66)
0.83
8.50
355.15
224.69
245.64
(20.95)
c) The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets
and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same
tax authority.
d) MAT paid can be carried forward for a period of 15 years and can be set off against the future tax liabilities. MAT
is recognised as a deferred tax asset only when the asset can be measured reliably and it is probable that the future
economic benefit associated with the asset will be realised.
NOTE 13 : NON CURRENT TAX ASSET
Advance income tax
(Net of provision of ` 1,032.42 lakhs (March 31, 2018 : ` 1,639.78)
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
As At
March 31, 2018
March 31, 2019
303.15
128.67
303.15
128.67
NOTE 14 : OTHER ASSETS
(Unsecured, considered good, unless otherwise
stated)
Capital advances (Refer note no. 46(b) for capital
commitments)
Balance with government authorities
Balance with government authorities -
considered doubtful
Less: Loss allowance (Refer ‘a’ below)
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non - current
Current
March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018
56.66
42.12
-
-
128.86
22.74
(22.74)
153.61
1,593.71
1,568.87
-
-
-
-
-
-
Pearl Global Industries Limited Annual Report 2018-19 180
Notes
to the Financial Statements for the year ended March 31, 2019
200.28
128.80
-
-
-
-
-
385.80
-
22.74
-
22.74
Prepaid expenses
Export incentive receivable
Advances to related parties (Refer note no. 47)
Advances to suppliers
Other receivables
a) The movement in loss allowance is as follows:
Balance as at beginning of the year
Loss allowance during the year
Amount written off / written back during the
year
Balance as at the end of the year
NOTE 15 : INVENTORIES
Raw materials
Good in transit- raw material
Work in progress
Finished goods
Stores spares & others
NOTE 16 : TRADE RECEIVABLES
Considered good - secured
Considered good - unsecured
Trade receivables which have significant increase in credit risk
Credit impaired
Less: Loss allowance
158.37
1,817.61
95.64
180.52
66.93
94.89
2,080.91
135.06
221.05
116.29
-
-
-
-
324.53
3,912.78
4,217.07
-
-
-
-
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
5,831.14
16.81
6,234.86
1,394.21
5,193.32
17.23
3,178.48
3,583.19
36.02
13,513.04
26.64
11,998.86
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
As At
March 31, 2018
March 31, 2019
-
11,134.77
-
374.33
(374.33)
11,134.77
-
8,748.39
-
5.15
(5.15)
8,748.39
a) The movement in loss allowance is as follows:
Balance as at beginning of the year
Loss allowance during the year
Trade receivables written off / written back during the year
Balance as at the end of the year
b) Trade receivables are generally on terms of 45 - 60 days.
c) The company’s exposure to credit and currency risk, and loss allowances related to trade receivables are disclosed in note 44.
d) Due from related parties is ` 2673.53 lakhs (March 31, 2018: ` 2,129.69 lakhs) (Refer note no. 47).
5.15
369.18
-
374.33
21.92
0.20
(16.97)
5.15
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Financial Statements for the year ended March 31, 2019
181
NOTE 17 : CASH AND CASH EQUIVALENTS
Balances with banks:
- Current account
- Deposits with original maturity of less than 3 months (Refer note 18(a))
Cash on hand
Cheque/drafts on hand
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
1,937.13
1,980.12
50.00
7.96
239.55
-
7.34
71.28
2,234.64
2,058.74
a) For the purpose of the statement of cash flow, the cash and cash equivalent are same given above.
NOTE 18 : OTHER BANK BALANCE
Earmarked balances with banks
Unpaid dividend account
Deposits with original maturity of more than 3
months but less than 12 months (Refer ‘a’ below)
Deposits with original maturity of more than 12
months (Refer ‘a’ below)
Balance with bank (Considered doubtful)
Less: Loss allowance
Less: Amount disclosed under “Other financial
assets” (Refer note 11)
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non - current
Current
March 31, 2019
March 31, 2018
March 31, 2019
March 31, 2018
-
-
-
-
-
-
-
-
-
-
26.83
1,427.18
24.53
403.55
1.26
761.27
1,730.21
-
-
1.26
1.26
0.03
(0.03)
0.03
(0.03)
2,215.28
2,158.29
761.27
1,730.21
-
1,454.01
428.08
a) Out of the total Fixed Deposits held in the name of the Company the fixed deposit with carrying value of ` 1,853.28 Lakh
(March 31, 2018 ` 876.56 Lakh) are pledged as security with various banks.
Pearl Global Industries Limited Annual Report 2018-19 182
Notes
to the Financial Statements for the year ended March 31, 2019
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
As At
March 31, 2018
March 31, 2019
NOTE 19 : SHARE CAPITAL
Authorised Share Capital
5,14,40,000* (March 31, 2018: 5,14,40,000) equity shares of ` 10 each
10,000* (March 31, 2018: 10,000) 4% Non Cumulative
Redeemable Preference Shares of ` 10 each
3,256,000* (March 31, 2018: 3,256,000) 10.5% Non Cumulative
Redeemable Preference Shares of ` 100 each
Issued, subscribed and paid up
21,663,937* (March 31, 2018: 21,663,937) Equity Shares of ` 10 each fully paid up
* Number of Shares are given in absolute numbers.
a. Reconciliation of issued and subscribed share capital as at year end :
Equity Share of ` 10 each
Balance as at April 1, 2017
Changes during the year
Balance as at March 31, 2018
Changes during the year
Balance as at March 31, 2019
5,144.00
1.00
5,144.00
1.00
3,256.00
3,256.00
8,401.00
8,401.00
2,166.39
2,166.39
2,166.39
2,166.39
No. of shares
(in Lakh)
Amount
(` in Lakhs)
216.64
2,166.39
-
-
216.64
2,166.39
-
-
216.64
2,166.39
b) Terms/ rights attached to equity shares:
The Company has only one class of equity shares having a par value of `10 per share. Each holder of equity shares is
entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year
ended March 31, 2019, the amount of per share dividend proposed as distributions to equity shareholders was ` 3.00 per
share (March 31, 2018: ` 2.00 per share).In the event of liquidation of the Company, the holders of equity shares will be
entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the shareholders.
c) Details of shareholders holding more than 5% shares in the company
Name of Party
Mrs. Payel Seth
Mr. Deepak Seth
Mr. Pulkit Seth
Total
As at March 31, 2019
As at March 31, 2018
No. of shares
Holding % No. of shares
Holding %
4,413,635
2,862,145
6,947,621
20.37
13.21
32.07
4,413,635
2,862,145
6,947,621
14,223,401
65.65
14,223,401
20.37
13.21
32.07
65.65
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Financial Statements for the year ended March 31, 2019
183
NOTE 20 : OTHER EQUITY
General reserve
Securities premium
Capital redemption reserve
Amalgamation reserve
Retained earnings
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
4,204.36
4,204.36
17,103.90
17,103.90
95.00
625.95
95.00
625.95
7,422.88
5,663.16
29,452.08
27,692.36
I. For Movement during the period in Other Equity, refer “Statement of Changes in Equity”.
II. Nature and purpose of reserves
a) General reserve
The Company has transferred a portion of the net profit of the Company before declaring dividend to general
reserve pursuant to the earlier provisions of Companies Act, 1956.Mandatory transfer to general reserve is not
required under the Companies Act, 2013.
b) Securities Premium
The amount received in excess of face value of the equity shares is recognised in securities premium. The reserve will
be utilised in accordance with the provisions of the Companies Act, 2013.
c) Capital Redemption Reserve
This Reserve has been created at the time of merger of other companies in earlier years in accordance with the
provisions of the Companies Act, 2013.
d) Amalgamation Reserve
This Reserve has been created at the time of amalgamation of other companies in earlier years in accordance with
the provisions of the Companies Act, 2013.
f) Retained Earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends
or other distributions paid to shareholders. Out of the above, reserve on account of revaluation of assets of ` 396.76
lakhs (March 31, 2018 395.30 lakhs) is not avaliable for distribution.
Pearl Global Industries Limited Annual Report 2018-19
184
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 21 : BORROWINGS
From banks (secured)
- Corporate loan (Refer ‘a(i)’, ‘a(ii)’ & ‘a(iii)’
below)
- Vehicle loans (Refer ‘a(iv)’ below)
From financials institutional (secured)
- Vehicle loans (Refer ‘a(iv)’ below)
Working capital loan from banks(secured)
- Rupee loan (Refer ‘d’ below)
Less: Amount disclosed under other financial
liabilities as ‘Current maturities of long-term
borrowings’ (Refer note 22)
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non current
As At
March 31, 2019
As At
March 31, 2018
Current
As At
March 31, 2019
As At
March 31, 2018
3,029.72
3,787.48
766.84
751.81
48.93
107.05
106.50
51.01
81.29
38.91
70.10
61.27
-
3,185.15
-
-
3,945.54
-
16,182.41
17,069.45
887.04
18,286.55
19,169.72
883.17
3,185.15
3,945.54
16,182.41
18,286.55
a) The nature of security for secured loans are :
(i) Corporate Term Loan (Kotak Bank) is secured by charge over fixed assets and plant and machinery and 100% FDR of
` 760.00 lakh under lien. The loan is also secured by personal guarantee of the Promoter Director.
(ii) Corporate Term Loan (Andhra Bank) is secured by first and exclusive charge on the entire fixed assets including
machineries and building at Chennai and Bangalore Plant of the Company. In addition, Equitable Mortgage of Land
& Building located at Survey No- 262A in Aryapakkam Village at Kancheepuram measuring 4.8053 acre in Company’s
name.
(iii) Corporate Term Loan (HDFC Bank) is secured by exclusive charge over movable fixed aseets of the Company, both
present and future. The loan is also secured by personal guarantee of one of the Promoter Director of the Company and
exclusive charge by way of equitable mortagage on industrial plot no.446, Udyog Vihar, Phase- V, Gurugram, Haryana.
(iv) Vehicle loans are secured against hypothecation of respective vehicles.
b) Maturity profile- secured loans
Maturity profile of secured term loans is as set out below :
2019-20
2020-21
2021-22
Beyond
2022-23
Term loan from banks are repayable in monthly/quarterly/yearly
installments
Vehicle loans from banks and financial institutions are repayable in
monthly installments
766.84
776.96
787.74
1,465.02
120.20
105.37
40.68
9.38
c) The term loan(s) carries rate of interest ranging between 9.75% to 12.00% per annum.
d) The nature of Security for short term borrowings are as under: -
-
First pari-passu charge on movable fixed assets and whole of current assets including stocks of raw material, semi
finished goods, finished goods, book debts, consumable stores and spares.
- Equitable mortgage of the leasehold property situated at Plot No. H -597-603, RICCO Industrial Area, Bhiwadi,
Distt. Alwar, Rajasthan and property situated at Plot No 16-17, Phase VI, Udyog Vihar,Gurgoan (Haryana).
Fixed Deposit of ` 58.00 lakhs (March 31, 2018: ` 79.47 lakhs)
-
- Personal Guarantee by the promoter director of the Company
Pearl Global Industries Limited Annual Report 2018-19 185
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 22 : OTHER FINANCIAL
LIABILITIES
Non - current
Current
March 31, 2019 March 31, 2018
March 31, 2019 March 31, 2018
(Amount in ` ‘Lakhs’ unless otherwise stated)
Security deposit
Book overdraft
Current maturities of long-term borrowings
(Refer note 21)
Interest accrued but not due on borrowings
Unpaid dividends (Refer ‘a’ below)
Creditors for capital goods
222.00
158.54
-
-
-
-
-
-
-
-
-
222.00
-
158.54
-
150.48
887.04
24.67
26.83
849.25
1,938.27
19.24
-
883.17
35.73
24.53
48.52
1,011.19
(a) There are no amounts due for payment to the Investor Education and Protection Fund under Section 125 of the
Companies Act, 2013 as at the year end.
(b) The company’s exposure to market and liquidity risk related to other financial liabilities is disclosed in note 44.
NOTE 23 : PROVISIONS
Provision for employee benefits
Provision for compensated absences
(Refer note 39)
Provision for gratuity (Refer note 39)
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non - current
Current
March 31, 2019 March 31, 2018
March 31, 2019 March 31, 2018
292.34
172.04
17.59
8.44
417.74
710.08
687.11
859.15
52.45
70.04
46.45
54.89
NOTE 24 : OTHER LIABILITIES
(Amount in ` ‘Lakhs’ unless otherwise stated)
Non - current
Current
March 31, 2019 March 31, 2018
March 31, 2019 March 31, 2018
Advance received against sale of land
3,010.49
3,400.00
Deferred government grant
Deferred rental income
Statutory dues
Advance from customers
NOTE 25 : TRADE PAYABLE
9.58
56.89
-
10.58
50.92
-
-
3,076.96
-
3,461.50
-
145.61
32.56
659.72
-
837.89
-
1.00
25.43
514.94
38.88
580.25
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
As At
March 31, 2018
March 31, 2019
Total outstanding dues of Micro and Small enterprises
Total outstanding due of creditors other than micro enterprises and small enterprises
63.70
10,450.22
10,513.92
98.88
6,997.27
7,096.15
Pearl Global Industries Limited Annual Report 2018-19 186
Notes
to the Financial Statements for the year ended March 31, 2019
a) Trade payables are non-interest bearing and are normally settled within 90-day terms except for SME’s (if any) which are
settled within 45 days.
b) This amount includes amount due to related parties is ` 2,736.01 Lakh (March 31, 2018: ` 395.82 Lakh) (refer
note 47)
c) The company’s exposure to market and liquidity risk related to trade payables is disclosed in note 44.
d) As per Schedule III of the Companies Act, 2013 and notification number GSR 719 (E) dated November 16, 2007 & as
certified by the Management, the amount due to Micro, & small enterprises as defined in Micro, Small and Medium
Enterprises Development Act, 2006 is as under:
As At
March 31, 2019
As At
March 31, 2018
(i) The principal amount and the interest due thereon remaining unpaid to any
63.70
98.88
supplier at the end of
each accounting year.
(ii) The amount of interest paid by the buyer in terms of section 16 of the Micro,
Small and Medium Enterprises Development Act, 2006 (27 of 2006), along with
the amount of the payment made to the supplier beyond the appointed day
during each accounting year.
(iii) The amount of interest due and payable for the period of delay in making
payment (which has been paid but beyond the appointed day during the year)
but without adding the interest specified under the Micro, Small and Medium
Enterprises Development Act, 2006.
(iv) The amount of interest accrued and remaining unpaid at the end of each
accounting year
(v) The amount of further interest remaining due and payable even in the succeeding
year,until such date when the interest dues as above are actually paid to the small
enterprise for the purpose of disallowance as a deductible expenditure under
section 23 of the MSMED Act 2006
-
-
-
-
-
-
-
-
Disclosure of payable to vendors as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” is
based on the information available with the Company regarding the status of registration of such vendors under the said Act
and as per the intimation received from them on requests made by the Company. There are no overdue principal amounts /
interest payable amounts for delayed payments to such vendors at the Balance Sheet date except disclosed above.
NOTE 26 : CURRENT TAX LIABILITIES (NET)
Provision for income tax
(net of advance tax ` 649.73 lakhs (March 31, 2018 Nil))
(Amount in ` ‘Lakhs’ unless otherwise stated)
As At
March 31, 2019
As At
March 31, 2018
190.16
190.16
-
-
Pearl Global Industries Limited Annual Report 2018-19 187
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 27 : REVENUE FROM OPERATIONS
Sale of product
Job receipts
Other operating revenues
Revenue from operations
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
79,045.97
66.57
4,913.18
84,025.72
65,059.54
149.18
5,868.51
71,077.23
a) Consequent to the introduction of goods and services Tax (GST) with effect from 1 July 2017, VAT/Sales Tax, Excise Duty
etc. have been subsumed into GST and accordingly the GST is not recognised as part of revenue from operations and
excise duty as a separate expense line item as per the requirements of Ind AS. This has resulted in lower reported revenue
from operations in the current year in comparison to the revenue from operations reported under the pre-GST structure
of indirect taxes. Accordingly, the Revenue from operations for the year ended March 31, 2019 are not comparable with
year ended March 31, 2018 presented in the financial results which are reported inclusive of Excise Duty. The following
additional information is being provided to facilitate such understanding:
Revenue from operations (gross of excise duty)
Excise duty
Revenue from operations (exclusive of excise duty)
b) Performance obligation
Revenue is recognised upon transfer of control of products.
For the year ended
March 31, 2019
84,025.72
-
84,025.72
For the year ended
March 31, 2018
71,078.81
1.58
71,077.23
During the year, The Company has not entered into long term contracts with its customers and accordingly disclosure of
unsatisfied or remaining performance obligation (which is affected by several factors like changes in scope of contracts,
periodic revalidations, adjustment for revenue that has not been materialized, tax laws etc.) is not applicable to the
Company.
c) Disaggregation of revenue: The table below presents disaggregated revenues from contracts with customers on the basis
of geographical spread of the operations of the Company. The Company believes that this disaggregation best depicts how
the nature, amount of revenues and cash flows are affected by market and other economic factors:
Revenue based on Geography
India
Outside India
Revenue from operations
d) Reconciliation of revenue from operations with
contracted price
Contracted Price
Less:
Rebates and discounts
Sales return
For the year ended
March 31, 2019
6,019.11
78,006.61
84,025.72
For the year ended
March 31, 2018
6,766.91
64,310.32
71,077.23
For the year ended
March 31, 2019
84,035.49
For the year ended
March 31, 2018
71,080.14
2.75
0.16
71,077.23
e) Revenue of ` 38.88 lakhs recognised for the year ended March 31, 2019 that was included in the contract liability balance
0.10
9.67
84,025.72
(advance from customers) at the beginning of the year.
Pearl Global Industries Limited Annual Report 2018-19 188
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 28 : OTHER INCOME
Interest Income
- On fixed deposits
- On loans and advances
- On income tax refund
- On amortisation of investment in preference shares
Other non-operating income:
IT/ SAP income
Rental income
Foreign exchange fluctuation
Sundry balances written back
Grant amortised during the year
Government grant received
Loss allowance no longer required written back
Amortisation of deferred rental income
Unwinding of discount on security deposits
Profit on sale of current investment - mutual fund
Profit on mark to market forward contracts
Fair value gain on investments measured at fair value through profit
and loss (net)
Income on corporate guarantee
Miscellaneous income
NOTE 29 : COST OF RAW MATERIAL CONSUMED
Raw Material
Balance at the beginning of the Year
Add:- Purchases during the year
Less:- Balance at the end of the Year
Total raw material consumption
NOTE 30 : PURCHASE OF STOCK IN TRADE
Purchases during the year
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
149.14
62.79
-
12.98
92.02
814.53
742.27
55.16
1.00
-
-
31.67
39.87
218.20
247.24
-
161.31
2.44
2,630.62
102.14
58.86
88.42
11.59
81.49
732.70
3,114.38
30.80
1.00
16.10
22.31
8.42
36.47
277.21
-
58.48
148.64
12.98
4,801.99
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
5,193.32
26,707.80
31,901.12
5,831.14
7,709.94
19,096.42
26,806.36
5,193.32
26,069.98
21,613.04
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
16,506.39
16,506.39
13,423.36
13,423.36
Pearl Global Industries Limited Annual Report 2018-19 189
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 31 : CHANGES IN INVENTORIES OF FINISHED GOODS,
WORK IN PROGRESS AND STOCK IN TRADE
Inventories at the beginning of the year
Work-in-progress
Finished goods
Inventories at the end of the year
Work-in-progress
Finished goods
(Increase) / decrease in inventory (A-B)
NOTE 32 : EMPLOYEE BENEFITS EXPENSE
Salaries, wages & bonus
Contribution to provident and other fund (Refer note 39a)
Gratuity expense (Refer note 39d)
Compensated absences (Refer note 39d)
Staff training & welfare expenses
NOTE 33 : FINANCE COST
Interest expense
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
(A)
(B)
3,178.48
3,583.19
6,761.67
6,234.86
1,394.21
7,629.07
(867.40)
3,192.08
3,396.55
6,588.63
3,178.48
3,583.19
6,761.67
(173.04)
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
11,605.86
10,515.63
789.32
307.19
279.91
208.36
13,190.64
839.80
238.29
189.16
177.33
11,960.21
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
- on term loans,cash credit & working capital facilities
1,762.85
1,793.91
- delayed payment of taxes
- others
Unwinding of discount on security deposit
Other borrowing cost
NOTE 34 : DEPRECIATION AND AMORTISATION EXPENSE
Depreciation & amortization - property, plant and equipment (Refer
note no. 4 )
Depreciation & amortisation of investment properties (Refer note no. 6)
Amortisation of intangible assets (Refer note no. 7)
14.48
-
26.39
183.73
1,987.45
0.92
4.05
10.67
113.38
1,922.93
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
1,155.77
85.76
47.54
1,289.07
1,138.21
88.77
46.74
1,273.72
Pearl Global Industries Limited Annual Report 2018-19 190
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 35 : OTHER EXPENSES
Other manufacturing expense
Consumption of stores & spare parts
Power & fuel
Rent (Refer ‘c’ below)
Rates & taxes
Travelling & conveyance
Freight & clearing charges
Claim to buyers
Repair & maintenance
Plant & machinery
Buildings
Other
Commission
Legal & professional expenses
Security charges
Bank charges
Insurance expenses
Payment to the auditors (Refer ‘a’ below)
Bad debts and doubtful advances written off
Loss Allowance for doubtful debts
Corporate social responsibility (Refer ‘b’ below)
Loss on mark to market forward contracts
Fair value loss on financial assets measured at fair value through profit
and loss
Amortisation of deferred asset - security deposit paid
Miscellaneous expenses
Total
a) Details of payment made to auditors is as follows:
- Statutory audit fee
- Other Services
- Reimbursement of Expenses
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
14,673.60
305.36
1,272.60
922.24
189.92
1,270.82
2,244.25
1,428.01
100.14
14.77
298.94
28.56
458.88
283.72
583.67
85.18
21.05
1.41
391.92
22.76
-
133.64
14,642.62
333.09
1,187.03
1,087.12
110.74
1,041.26
2,460.21
1,017.28
113.85
11.03
257.30
122.29
530.03
322.47
662.38
93.58
18.80
5.55
0.20
27.00
904.72
101.36
42.22
801.82
25,575.48
36.99
905.09
25,991.99
For the year ended
March 31, 2019
For the year ended
March 31, 2018
12.40
6.00
2.65
21.05
12.40
6.10
0.30
18.80
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Financial Statements for the year ended March 31, 2019
b) Details of Corporate Social Responsibility (CSR) expenditure
i)
is as follows:
Gross amount required to be spent by the Company during the year
(i.e. 2% of Average Net profits of last three years)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
16.39
26.75
191
ii) Amount spent during the year
- Construction/acquisitions of any asset
- For purpose other than above
c) Operating lease
(i) Asset given on lease
-
22.76
-
27.00
- Minimum Lease Payments Receivables
The company has given certain assets on operating lease and lease rent (income) amounting to ` 814.53 lakhs (March
31, 2018 ` 732.70 lakhs) has been credited in the Statement of Profit & Loss. The future minimum lease payments
Receivable and detail of assets as at March 31, 2019 are as under :
Particulars
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Total
(ii) Asset taken on lease
As At
March 31, 2019
As At
March 31, 2018
923.92
1,951.26
523.71
3,398.89
164.25
598.53
-
762.78
The Company has taken certain assets on non cancellable operating lease and lease rent charged to Statement of Profit &
Loss amounts to ` 922.24 (March 31, 2018 ` 1,087.12 lakhs). The details of future minimum lease payments is as under :
As At
Particulars
March 31, 2018
As At
March 31, 2019
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Total
NOTE 36 : EXCEPTIONAL ITEMS
(Profit)/loss on sale of fixed assets (Refer ‘a’ below)
Impairment of investment in subsidiaries (Refer ‘b’ below)
994.27
3,813.11
2,065.08
6,872.46
594.7
2,478.3
526.3
3,599.2
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
(1,719.28)
1,438.36
(280.92)
(812.13)
-
(812.13)
a) Profit on sale of fixed assets includes profit on account of compulsory acquisition of land by the Central Government
under National Highway Act,1956 of ` 1,756.25 lakhs and loss of sale of tangible assets of ` 36.97 lakhs.
b) On the reporting date (i.e.March 31,2019), the management of a domestic subsidary company Pearl Apparel Fashion
Limited has decided to cease its existing business operations.Thus the Company has impaired its investments in such
subsidary and recognised the same at its recoverable amount as at March 31,2019 resulting in a net loss of ` 1,438.36
Lakhs. (Diminution in value of equity shares: ` 1,617.20 lakhs and esclation in value of investment in preference shares:
` 178.84 lakhs)
Pearl Global Industries Limited Annual Report 2018-19 192
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 37 : COMPONENTS OF OTHER COMPREHENSIVE INCOME
A (i) Items that will not be reclassified subsequently to profit or loss
Re-measurement gains/ (losses) on defined benefit plans
Income tax expense
B (i) Items that will be reclassified subsequently to profit or loss
NOTE 38 : EARNINGS PER SHARE (EPS)
Profit attributable to the equity shareholders (A)
Number/Weighted average number of equity shares outstanding at the
end of the year (B)
Nominal value of Equity shares
Basic/Diluted Earning per share (A/B) (in `)
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
202.70
(70.83)
-
131.87
(63.36)
20.95
-
(42.41)
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2018
For the year ended
March 31, 2019
2,150.19
21,663,937
266.38
21,663,937
` 10
9.93
` 10
1.23
NOTE 39 : GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS
a) Defined contribution plans
The Company makes contribution towards Employees Provident Fund and Employee’s State Insurance scheme and
other welfare scheme. Under the rules of these schemes, the Company is required to contribute a specified percentage
of payroll costs. The company during the year recognised the following amount in the Statement of profit and loss
account under company’s contribution to defined contribution plan.
Employer’s Contribution to Provident Fund/ Pension Fund
Employer’s Contribution to Employee State Insurance
Employer’s Contribution to Welfare Fund
Total
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
492.36
268.79
28.18
789.33
575.25
241.12
23.43
839.80
The contribution payable to these schemes by the Company are at the rates specified in the rules of the schemes.
b) Defined benefit plans
In accordance with Ind AS 19 “Employee benefits”, an actuarial valuation on the basis of “Projected Unit Credit
Method” was carried out, through which the Company is able to determine the present value of obligations.
“Projected Unit Credit Method” recognizes each period of service as giving rise to additional unit of employees
benefit entitlement and measures each unit separately to built up the final obligation.
Gratuity scheme
i)
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five
years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service
and salary at retirement age.
a) Gratuity in case of Gurgaon Division (Funded & maintained by Life Insurance Corporation of India)
b) Gratuity in case of Chennai & Banglore Division (Unfunded)
Pearl Global Industries Limited Annual Report 2018-19 193
Notes
to the Financial Statements for the year ended March 31, 2019
ii)
Other long term employee benefits
As per the Company’s policy, eligible leaves can be accumulated by the employees and carried forward to future
periods to either be utilised during the service, or encashed. Encashment can be made during the service, on early
retirement, on withdrawal of scheme, at resignation by employee and upon death of employee. The scale of benefits
is determined based on the seniority and the respective employee’s salary. The Company records an obligation for
such compensated absences in the period in which the employee renders the services that increase this entitlement.
The obligation is measured on the basis of independent actuarial valuation using the projected unit credit method.
Re-measurements, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable)
and the return on plan assets (excluding interest and if applicable), is reflected immediately in Other Comprehensive
Income in the statement of profit and loss. All other expenses related to defined benefit plans are recognised in
statement of profit and loss as employee benefit expenses. Re-measurements recognised in Other Comprehensive
Income will not be reclassified to statement of profit and loss hence it is treated as part of retained earnings in the
statement of changes in equity. Gains or losses on the curtailment or settlement of any defined benefit plan are
recognised when the curtailment or settlement occurs. Curtailment gains and losses are accounted for as past service
costs.
c) The following tables summarize the components of net benefit expense recognised in the Statement of profit and
loss and the funded status and amounts recognised in the balance sheet for the defined benefit plan (viz. gratuity
and compensated absences).Leave encashment include earned leaves and sick leaves. These have been provided on
accrual basis, based on year end actuarial valuation.
(Amount in ` ‘Lakhs’ unless otherwise stated)
Change in benefit obligation
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Opening defined benefit obligation
672.77
165.96
180.48
519.18
139.30
157.33
Adjustment in opening obligation
Interest cost
Service cost
Past Service cost
Benefits paid
Actuarial (gain) / loss on obligations
Present value of obligation as at the end
of the year
-
51.87
125.98
-
(90.48)
(142.59)
-
12.80
124.65
-
(15.86)
(46.51)
-
13.92
72.86
-
(150.46)
193.13
-
39.15
99.28
23.60
(71.28)
62.84
-
10.24
76.92
-
-
11.79
82.14
-
(60.64)
(166.01)
0.14
95.23
617.55
241.04
309.93
672.77
165.96
180.48
d. The following tables summarise the components of net benefit expense recognised in the Statement of profit or loss and the funded status and
amounts recognised in the balance sheet for the respective plans:
Cost for the year included under
employee benefit
Current service cost
Past service cost
Interest cost
Expected return on plan assets
Actuarial (gain) / loss
Net cost
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
125.98
-
51.87
(8.11)
-
124.65
-
12.80
-
-
169.74
137.45
72.86
-
13.92
-
193.13
279.91
99.28
23.60
39.15
(10.90)
-
76.92
-
10.24
-
-
151.13
87.16
82.14
-
11.79
-
95.23
189.16
Pearl Global Industries Limited Annual Report 2018-19 194
Notes
to the Financial Statements for the year ended March 31, 2019
e. Changes in the fair value of the plan assets are as follows:
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Fair value of plan assets at the beginning
Difference amount in opening fund
Expected return on plan assets
Contributions
Benefits paid
Actuarial gains / (losses) on the plan assets
Fair value of plan assets at the end
105.16
-
8.11
352.00
(90.48)
13.60
388.39
-
-
144.55
-
10.90
5.87
(55.77)
(0.39)
105.16
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
f. Detail of actuarial gain/loss recognised in OCI is as follows:
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Actuarial gain / (loss) for the year – obligation
142.59
46.51
(62.84)
(0.14)
Actuarial gain / (loss) for the year - plan assets
13.60
-
(0.39)
-
Recognised actuarial gains / (losses) at the end of year
156.19
46.51
(63.23)
(0.14)
g. Principal actuarial assumptions at the balance sheet date are as follows:
Economic assumptions
1. Discount rate
2. Rate of increase in compensation
levels
Demographic assumptions
1. Expected average remaining
working lives of employees (years)
2. Retirement Age (years)
3. Mortality Rate
Withdrawal Rate
1. Ages up to 30 Years
2. Ages from 30-44
3. Above 44 years
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
0.08
0.06
0.08
0.06
0.08
0.06
0.08
0.06
0.08
0.06
0.08
0.06
20.19
26.02
24.29
20.43
26.70
24.61
58
58
58
58
58
58
Indian Assured Lives Mortality (2006-
08) (modified) ultimate
Indian Assured Lives Mortality (2006-
08) (modified) ultimate
0.03
0.02
0.01
0.04
0.04
0.03
0.04
0.03
0.03
0.03
0.02
0.01
0.03
0.02
0.01
0.03
0.02
0.01
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion
and other relevant factors, such as supply and demand in the employment market.
Pearl Global Industries Limited Annual Report 2018-19 195
Notes
to the Financial Statements for the year ended March 31, 2019
h. Net (assets) / liabilities recognized in the Balance Sheet and experience adjustments on actuarial gain / (loss)
for benefit obligation and plan assets.
(Amount in ` ‘Lakhs’ unless otherwise stated)
Particulars
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Present value of obligation
617.55
241.04
309.93
672.77
165.96
180.48
Less: Fair value of plan assets
388.39
-
-
105.16
-
-
Net assets /( liability)
(229.16)
(241.04)
(309.93)
(567.60)
(165.96)
(180.48)
i. Expected contribution for the next year is ` 352.13 Lakh (March 31, 2018: ` 307.19 Lakh) in respect of Gratuity
j. A quantitative sensitivity analysis for significant assumptions is as shown below:
A. Discount rate
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
Earned leave
(Unfunded)
Effect on DBO due to 0.5% increase in Discount Rate
(59.83)
(31.94)
(35.10)
(34.22)
(12.36)
Effect on DBO due to 0.5% decrease in Discount Rate
70.24
38.86
42.08
37.11
13.74
(24.46)
12.87
B. Salary escalation rate
Effect on DBO due to 0.5% increase in Salary Escalation
Rate
Effect on DBO due to 0.5% decrease in Salary Escalation
Rate
C. Withdrawal Rate
Effect on DBO due to 5% increase in Withdrawal Rate
Effect on DBO due to 5% decrease in Withdrawal Rate
D. Mortality rate
Effect on DBO due to 10% increase in mortality rate
Effect on DBO due to 10% decrease in mortality rate
70.80
39.38
42.50
37.55
13.97
13.04
(61.30)
(32.80)
36.00
(34.90)
(12.66)
(11.92)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sensitivities due to mortality & withdrawals are not material & hence impact of change due to these not calculated.
k. Risk
Discount Rate
Reduction in discount rate in subsequent valuations can increase the liability.
Salary Increases
Withdrawals
Actual salary increases will increase the defined benefit liability. Increase in salary increase rate assumption
in future valuations which inturn also increase the liability.
Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawals rates at
subsequent valuations can impact defined benefit liability.
Morality and disability
Actual details and disability cases proving lower or higher than assumed in the valuation can impact the
liabilities.
Pearl Global Industries Limited Annual Report 2018-19 196
Notes
to the Financial Statements for the year ended March 31, 2019
l. Maturity profile of defined benefit obligation is as follows:
Particulars
0 to 1 years
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
from 5 years onwards
As at March 31, 2019
As at March 31, 2018
Gratuity
(Funded)
Gratuity
(Unfunded)
Gratuity
(Funded)
Gratuity
(Unfunded)
50.15
29.75
52.65
58.90
52.38
3.06
5.18
11.52
22.56
43.20
44.77
11.62
11.61
19.39
15.97
1.68
1.25
1.96
2.69
5.97
822.27
518.11
569.41
152.41
(Amount in ` ‘Lakhs’ unless otherwise stated)
NOTE 40 : CAPITAL MANAGEMENT
For the purpose of Company’s capital management, capital includes issued equity capital, share premium and all other equity
reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximise the
shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Company may return capital to
shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total
capital plus net debt. The Company includes within net debt, interest bearing borrowings, trade and other payables, less cash
and cash equivalents.
Particulars
Borrowings (Refer note no. 21)
Current maturity of long term loans (Refer note no. 22)
Trade payables (Refer to note no. 25)
Other payables (Refer note no. 22 and 24)
Less: cash and cash equivalents (Refer note no. 17)
Net debt
Equity share capital (Refer note no. 19)
Other equity (Refer note no. 20)
Total Capital
Capital and net debt
Gearing ratio
As At
March 31, 2019
As At
March 31, 2018
19,367.56
887.04
10,513.92
5,188.08
(2,234.64)
33,721.96
2,166.39
29,452.08
31,618.47
65,340.43
51.61%
22,232.09
883.17
7,096.15
4,328.31
(2,058.74)
32,480.98
2,166.39
27,692.36
29,858.75
62,339.73
52.10%
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2019
and March 31, 2018.
In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it
meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.
Pearl Global Industries Limited Annual Report 2018-19 197
Notes
to the Financial Statements for the year ended March 31, 2019
(Amount in ` ‘Lakhs’ unless otherwise stated)
NOTE 41 : DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE
Forward currency contracts
a) For the year ended March 31, 2019, the Company has outstanding mark to market forward contracts amount to
` 462.80 lakhs (March 31, 2018: ` 215.57 lakhs) relating to derivative financial instruments. These commitments with
respect to foreign currency forward contracts have been entered into by the Company to hedge against future receipts
from customers in the ordinary course of business. These arrangements are designed to address significant exchange
exposures and are reviewed/ renewed by the Management on a revolving basis as required.
b) The following table represents the aggregate contracted principal amount of Company’s Derivative contracts outstanding:
Particulars
As At
March 31, 2019
As At
March 31, 2018
Forward foreign exchange contract
USD 295.50 lakhs
(Equivalent to `
20,687.90 lakhs)
Derivative financial instruments such as foreign exchange forward contracts are used for hedging purposes and not
as trading or speculative instruments.
USD 267.37 lakhs
(Equivalent to `
19,229.16 lakhs)
c) Particulars of Unhedged foreign currency exposures:
Particulars
Foreign currency receivable
Foreign currency payable
Foreign currency loan receivable
$6,875,405
$803,799
NOTE 42 : FAIR VALUES
As At March 31, 2019
As At March 31, 2018
Foreign
Currency
Document Currency
(Amount ` in lakhs)
Foreign
Currency
Document Currency
(Amount ` in lakhs)
-
-
- EUR 48,514.05
-
GBP 1,000
4,755.72
$11,246,484
555.99
$760,899
39.11
0.92
7,315.17
494.92
(Amount in ` ‘Lakhs’ unless otherwise stated)
Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments,
other than those with carrying amounts that are reasonable approximations of fair values:
a) Fair value of financial assets:
Carrying values
Fair values
As At
March 31, 2019
As At
March 31, 2018
As At
March 31, 2019
As At
March 31, 2018
Financial assets measured at fair
value through profit or loss
Investment in equity instruments
Investment in mutual fund
Total - A
Financial assets measured at
amortised cost
Investment in equity & preference
instruments
133.50
-
133.50
143.00
632.62
775.62
133.50
-
133.50
143.00
632.62
775.62
11,726.14
12,990.20
11,726.14
12,990.20
Pearl Global Industries Limited Annual Report 2018-19 198
Notes
to the Financial Statements for the year ended March 31, 2019
Investment in Government Securities
Security deposits
Interest accrued on fixed deposits
Mark to Market Forward Contracts
Deposits with original maturity of more
than 12 months
Loans to related parties
Loans to others parties
Interest accrued on loan to related
parties
Other receivables
Trade receivable
Cash and cash equivalents
Other bank balances
Total - B
Total (A+B)
1.63
800.52
45.64
462.80
761.27
756.52
67.73
106.07
234.35
11,134.77
2,234.64
1,454.01
29,786.09
29,919.59
1.67
405.35
55.06
215.57
1,731.47
739.61
47.08
68.74
-
8,748.39
2,058.74
428.08
27,489.96
28,265.58
1.63
800.52
45.64
462.80
761.27
756.52
67.73
106.07
234.35
11,134.77
2,234.64
1,454.01
29,786.09
29,919.59
1.67
405.35
55.06
215.57
1,731.47
739.61
47.08
68.74
-
8,748.39
2,058.74
428.08
27,489.96
28,265.58
b) Fair value of financial liabilities:
Financial liabilities measured at
amortised cost
Borrowings
Security Deposit
Book Overdraft
Unpaid Dividend
Trade payables
Interest accrued but not due on
borrowings
Creditors for capital expenditure
Carrying values
Fair values
As At
March 31, 2019
As At
March 31, 2018
As At
March 31, 2019
As At
March 31, 2018
20,254.60
23,115.26
20,254.60
23,115.26
222.00
150.48
26.83
24.67
177.78
-
24.53
7,096.15
35.73
222.00
150.48
26.83
10,513.92
24.67
177.78
-
24.53
7,096.15
35.73
849.25
21,527.83
48.52
30,497.97
849.25
32,041.75
48.52
30,497.97
Management has assessed that trade receivables, cash and cash equivalents, other bank balances, trade payables,
Interest accrued on borrowings and current maturities of long term borrowings approximate their carrying amounts
largely due to the short-term maturities of these instruments.
Long-term borrowing includes vehicle loan and corporate loans obtained from banks and Financial institutions.
Management determines vehicle loan and corporate loan to be at the market rate of interest as at the reporting date,
accordingly, the carrying value of such long-term borrowing approximates fair value.
c) Discount rate used in determining fair value
The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing
rate of borrower which in case of financial liabilities is average market cost of borrowings of the Company and in case
of financial asset is the average market rate of similar credit rated instrument. The company maintains policies and
procedures to value financial assets or financial liabilities using the best and most relevant data available.
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Financial Statements for the year ended March 31, 2019
199
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
i) Fair values of the Company’s interest-bearing borrowings, loans and investment in preference shares in subsidiary
are determined by using DCF method using discount rate that reflects the rate as at the end of the reporting period.
ii) Fair value for security deposits paid & received (other than perpetual security deposits) has been presented based
on the discounting factor as at the reporting date.
iii) Fair value for all other non-current assets and liabilities is equivalent to the amortised cost, interest rate on them is
equivalent to the market rate of interest.
iv) For other financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair
values.
v) Specific valuation techniques used to value financial instruments include:
- The fair values of investments In mutual fund units is based on The net asset value (‘NAV’) as stated by the issuers
of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which
the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the
investors.
- Investment in quoted equity instruments of entities other than subsidiaries has been determined on the basis of
quoted rates available from securities markets in India.
- The fair value of derivative financial instruments (forward exchange contract) has been determined on the basis of
mark to market valuation.
(Amount in ` ‘Lakhs’ unless otherwise stated)
NOTE 43 : FAIR HIERARCHY
All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as
follows, based on the lowest level input that is significant to the fair value measurement as a whole.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are
observable, either directly or indirectly.
Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not
based on observable market data.
The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities
a) Quantitative disclosures fair value measurement hierarchy for assets as at March 31, 2019:
As At
March 31, 2019
Amortised
Cost
Quoted prices in
active markets
(Level 1)
Significant
observable
inputs (Level 2)
Significant
unobservable
inputs (Level 3)
Total
Fair Value
Assets measured at fair value
through profit or loss
Investment in equity instruments
Investment in mutual fund
Total A
133.50
-
133.50
-
-
-
133.50
-
133.50
-
-
-
-
-
-
133.50
-
133.50
Pearl Global Industries Limited Annual Report 2018-19
200
Notes
to the Financial Statements for the year ended March 31, 2019
Financial assets measured at
amortised cost
Investment in equity & preference
instruments
Investment in Government
Securities
Security deposits
Interest accrued on fixed deposits
Mark to Market Forward Contracts
Deposits with original maturity of
more than 12 months
Loans to related parties
Loans to others parties
Interest accrued on loan to related
parties
Other receivables
Trade receivable*
Cash and cash equivalents*
Other bank balances*
Total A
Total (A+B)
11,726.14
11,726.14
1.63
1.63
800.52
45.64
462.80
761.27
756.52
67.73
106.07
800.52
45.64
-
761.27
756.52
67.73
106.07
234.35
234.35
11,134.77
11,134.77
2,234.64
2,234.64
1,454.01
29,786.09
1,454.01
29,323.29
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29,919.59
29,323.29
133.50
-
-
-
-
462.80
-
-
-
-
-
-
-
-
462.80
462.80
-
11,726.14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.63
800.52
45.64
462.80
761.27
756.52
67.73
106.07
234.35
11,134.77
2,234.64
1,454.01
29,786.09
29,919.59
b) Quantitative disclosures fair value measurement hierarchy for liabilities as at March 31, 2019:
As At
March 31, 2019
Amortised
Cost
Quoted prices in
active markets
(Level 1)
Significant
observable
inputs (Level 2)
Significant
unobservable
inputs (Level 3)
Total
Fair Value
Financial liabilities
measured at amortised cost
Borrowings
Security Deposit
Book Overdraft
Unpaid Dividend
Trade payables*
Interest accrued but not due on
borrowings*
Creditors for capital expenditure*
20,254.60
222.00
150.48
26.83
10,513.92
24.67
20,254.60
222.00
150.48
26.83
10,513.92
24.67
849.25
32,041.75
849.25
32,041.75
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,254.60
222.00
150.48
26.83
10,513.92
24.67
849.25
32,041.75
Pearl Global Industries Limited Annual Report 2018-19 201
Notes
to the Financial Statements for the year ended March 31, 2019
c) Quantitative disclosures fair value measurement hierarchy for assets as at March 31, 2018:
As At
March 31, 2018
Amortised
Cost
Quoted prices in
active markets
(Level 1)
Significant
observable
inputs (Level 2)
Significant
unobservable
inputs (Level 3)
Total
Fair Value
Assets measured at fair value
through profit or loss
Investment in equity instruments
Investment in mutual fund
Total A
Financial assets measured at
amortised cost
Investment in equity & preference
instruments
Investment in Government
Securities
Security deposits
Interest accrued on fixed deposits
Mark to Market Forward Contracts
Deposits with original maturity of
more than 12 months
Loans to related parties
Loans to others parties
Interest accrued on loan to related
parties
Trade receivable*
Cash and cash equivalents*
Other bank balances*
Total A
Total (A+B)
143.00
632.62
775.62
-
-
143.00
632.62
775.62
12,990.20
12,990.20
1.67
1.67
405.35
55.06
215.57
405.35
55.06
-
1,731.47
1,731.47
739.61
739.61
47.08
68.74
47.08
68.74
8,748.39
8,748.39
2,058.74
2,058.74
428.08
27,489.96
428.08
27,274.39
-
-
-
-
-
-
-
-
-
-
-
-
-
28,265.58
27,274.39
775.62
-
-
-
-
-
-
-
215.57
-
-
-
-
-
-
-
215.57
215.57
-
-
-
143.00
632.62
775.62
-
12,990.20
-
-
-
-
-
-
-
-
-
-
-
-
-
1.67
405.35
55.06
215.57
1,731.47
739.61
47.08
68.74
8,748.39
2,058.74
428.08
27,489.96
28,265.58
d) Quantitative disclosures fair value measurement hierarchy for liabilities as at March 31, 2018:
As At
March 31, 2018
Amortised
Cost
Quoted prices in
active markets
(Level 1)
Significant
observable
inputs (Level 2)
Significant
unobservable
inputs (Level 3)
Total
Fair Value
Financial liabilities measured at
amortised cost
Borrowings
Security Deposit
Book Overdraft
23,115.26
23,115.26
177.78
177.78
-
-
-
-
-
-
-
-
-
-
-
23,115.26
177.78
-
Pearl Global Industries Limited Annual Report 2018-19
202
Notes
to the Financial Statements for the year ended March 31, 2019
Unpaid Dividend
Trade payables*
Interest accrued but not due on
borrowings*
Creditors for capital expenditure*
24.53
24.53
7,096.15
7,096.15
35.73
35.73
48.52
30,497.97
48.52
30,497.97
-
-
-
-
-
-
-
-
-
-
-
-
-
24.53
7,096.15
35.73
-
-
48.52
30,497.97
* Management has assessed that trade receivables, cash and cash equivalents, other bank balances, trade payables, Interest accrued
on borrowings and current maturities of long term borrowings approximate their carrying amounts largely due to the short-term
maturities of these instruments.
There have been no transfers between Level 1 and Level 2 during the period.
Specific valuation techniques used to value financial instruments. (refer note 42 c(iv))
(Amount in ` ‘Lakhs’ unless otherwise stated)
NOTE 44 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company’s principal financial liabilities comprises of trade and other payables, borrowings, current maturity
of borrowings, interest accrued and capital creditors. The main purpose of these financial liabilities is to finance the
Company’s operations and to provide guarantees to support its operations.
The Company’s principal financial assets includes Investment in mutual funds, loans to related parties, security
deposits, trade receivables, cash and cash equivalents, deposits with bank, interest accrued in deposits, receivables
from related and other parties and interest accrued thereon.
The Company is exposed to credit risk, liquidity risk and market risk. The Company’s senior level management oversees
the management of these risks and is supported by finance department that advises on the appropriate financial risk
governance framework.
A. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such
as equity price risk. Financial instruments affected by market risk borrowings, short term deposits and derivative
financial instruments.
The sensitivity analyses in the following sections relate to the position as at March 31, 2019 and March 31, 2018.
i)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates
primarily to the Company’s long-term debt obligations with floating interest rates.
The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company
to interest rate risk. The Company manages its net exposure to interest rate risk related to borrowings, by balancing a
proportion of fixed rate and floating rate borrowing in its total borrowing portfolio. To manage this portfolio mix, the
Company may enter into currency rate swap arrangements and/ or interest rate swap arrangements, which allows the
company to exchange periodic payments based on a notional amount and agreed upon fixed and floating interest rates.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the portion of
borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the
impact on floating rate borrowings, as follows:
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Financial Statements for the year ended March 31, 2019
203
March 31, 2019
March 31, 2018
Increase or decrease
in basis points
Decrease / (increase)
in profit before tax
+50
-50
+50
-50
10.84
(10.84)
10.34
(10.34)
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable
market environment, showing a significantly higher volatility than in prior years.
ii)
Foreign currency risk
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes
in exchange rates. Foreign currency risk senstivity is the impact on the Company’s profit before tax is due to changes in
the fair value of monetary assets and liabilities on unhedged exposures. The following tables demonstrate the sensitivity
to a reasonably possible change in USD, EURO and GBP exchange rates, with all other variables held constant.
Particulars
March 31, 2019
March 31, 2018
B. Credit risk
Changes in
exchange rate
Decrease / (increase)
in profit before tax
+5%
-5%
+5%
-5%
209.99
(209.99)
339.01
(339.01)
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily
trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and
other financial instruments.
i)
Trade receivables
Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and
control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive
credit rating. Outstanding customer receivables are regularly monitored.
The ageing analysis of trade receivables as of the reporting date is as follows:
An impairment analysis is performed at each reporting date on an individual basis for major clients. The calculation is
based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class
of financial assets disclosed in Note 42. The Company does not hold collateral as security. The Company evaluates the
concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and
operate in largely independent markets.
Pearl Global Industries Limited Annual Report 2018-19
204
Notes
to the Financial Statements for the year ended March 31, 2019
Particulars
Neither past due
nor impaired
Less than
30 days
30 to 90
days
90 to 180
days
More than
180 days
Total
Trade Receivables as of March 31, 2019
3,712.62
3,250.65
2,324.81
423.30
1,423.39
11,134.77
Trade Receivables as of March 31, 2018
1,854.30
3,195.16
2,701.23
352.96
644.74
8,748.39
ii)
Financial instruments and cash deposits
Credit risk from balances with banks, investment in mutual funds and loan to related parties is managed by the
Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only
with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are
reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to
approval of the Company’s finance committee. The limits are set to minimise the concentration of risks and therefore
mitigate financial loss through counterparty’s potential failure to make payments.
C.
Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations
without incurring unacceptable losses.
The Company’s objective is to, maintain optimum levels of liquidity to meet its cash and collateral requirements. The
Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate
sources of financing including loans from banks at an optimised cost.
The table below summarises the maturity profile of the Company’s financial liabilities:
As at March 31, 2019
Borrowings
Less than 3
months
3 to 12
months
1 to 5
years
16,182.41
-
3,185.15
Current maturities of long-term borrowings
230.90
656.14
> 5 years
Total
-
-
-
19,367.56
887.04
10,513.92
-
-
10,513.92
1,051.23
27,978.46
-
656.14
154.93
3,340.08
67.07
67.07
1,273.23
32,041.75
Trade payables
Other financial liabilities
Total
As at March 31, 2018
Less than 3
months
3 to 12
months
1 to 5
years
> 5 years
Total
Borrowings
18,286.55
-
3,488.40
457.14
22,232.09
Current maturities of long-term borrowings
220.79
662.38
Trade payables
Other financial liabilities
Total
7,096.15
128.02
25,731.51
-
-
-
-
883.17
7,096.15
-
662.38
158.54
3,646.94
-
457.14
286.56
30,497.97
-
-
Pearl Global Industries Limited Annual Report 2018-19 205
Notes
to the Financial Statements for the year ended March 31, 2019
NOTE 45 : SEGMENT INFORMATION
a) The Company’s operating segments are established on the basis of those components of the group that are evaluated
regularly by the Executive Committee (the ‘Chief Operating Decision Maker’ as defined in Ind AS 108 - ‘Operating
Segments’), in deciding how to allocate resources and in assessing performance. The Company has presented segment
information on geographical basis in the consolidated financial statements.
b) The Company revenue from operations to external customers are as follows:
(Amount in ` ‘Lakhs’ unless otherwise stated)
Particulars
India
Outside India
c) All non- current assets are located within India:
Particulars
As At
March 31, 2019
As At
March 31, 2018
6,019.11
78,006.61
6,766.91
64,310.32
As At
March 31, 2019
As At
March 31, 2018
Non Current Assets
34,610.27
d) Revenue from major customer: During the year the Company generates 90% of its external revenues from eleven (11)
34,417.20
customers.
NOTE 46 : CONTINGENT LIABILITIES AND COMMITMENTS
(Amount in ` ‘Lakhs’ unless otherwise stated)
a) Contingent liabilities (to the extent not provided for)
As At
March 31, 2019
As At
March 31, 2018
I. The Company has reviewed all its pending claims, litigations and other proceedings and has adequately provided for
wherever required. However, wherever it is difficult for the Company to estimate the timings of cash outflows, if any, in
respect of the above as it is determinable only on receipt of judgement/decisions pending with various forums/authorities,
the Company has disclosed the same as Contingent Liabilities (pending resolution of the respective proceedings).
The Company does not expect the outcome of these proceedings to have a material or adverse effect on financial position of
the Company. Also, the Company does not expect any reimbursements in respect of the above contingent liabilities.
i) Claims against the Company not acknowledged as debts corresponding to :
- Tax Demand as per Sec 143(1) of Income Tax Act , 1961 (with respect to
1.25
1.25
Assessment Year 2014-15)
- Tax Demand as per Sec 143(1) of Income Tax Act , 1961 (with respect to
Assessment Year 2015-16)
- Tax Demand as per Sec 143(3) of Income Tax Act , 1961 (with respect to
Assessment Year 2016-17) - Rectification application has been filled with A.O
98.01
38.83
396.77
258.55
- Demand as per TDS (TRACES) portal - CPC
ii) Several Legal Cases of labour pending at labour Court, Civil Court and High Court.
iii)As per the order dated July 13, 2016 issued by Hon’ble Madras High Court, minimum wages shall be paid to the
employees retrospectively from December 2014 to June 2016. However, the management is of the view that the
wages have to be paid only to the employees working presently in the company and also no PF & ESI is required to
be deducted . Accordingly, the minimum wages, ESI and PF of past employees of ` 288.51 lakhs, ` 8.06 lakhs and
` 69.25 lakhs respectively has not been recorded in books of account. Further, Company has also not accounted for
the PF contribution of ` 65.33 lakhs and ESI contribution of ` 12.88 lakhs due on the wage arrears paid to the present
employees during the year ended March 31, 2017
18.43
14.79
Pearl Global Industries Limited Annual Report 2018-19 206
Notes
to the Financial Statements for the year ended March 31, 2019
Irrevocable letter of credit (net of margin) outstanding with banks
II
III Bank Guarantee given to government authorities (net of margin)
IV Counter Guarantees given by the Company to the Sales Tax Department over
5,701.06
34.20
3,767.03
-
which Key Managerial Personnel have Significant influence
- For enterprise
- For others
1.00
0.50
1.00
0.50
V Corporate Guarantee given by the Company (as per Section 186(4) of the Companies Act 2013)
• To Standard Chartered Bank, Hongkong Branch for securing credit facilities to its wholly owned subsidiary Pearl
Global (HK) Limited, Hong Kong for USD 120.00 lakhs equivalent to ` 7,800.04 Lakh (March 31, 2018 USD 120.00
lakhs equivalent to ` 7,804.80 Lakh)
• To Standard Chartered Bank, Bangladesh Branch for securing credit facilities to its subsidiary Norp Knit Industries
Limited, Bangladesh for BDT 9,000.00 Lakh equivalent to ` 7,389.08 Lakh (March 31, 2018 : BDT 9,000.00 Lakh
equivalent to ` 6,930.00 Lakh).
Above Corporate Guarantees have been given for business purpose.
VI The Company is in the process of evaluating the impact of the recent Supreme Court Judgment in case of “Vivekananda
Vidyamandir and Others Vs The Regional Provident Fund Commissioner (II) West Bengal” and the related circular
(Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees’
Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of “basic wages” of
the relevant employees for the purposes of determining contribution to provident fund under the Employees’ Provident
Funds & Miscellaneous Provisions Act, 1952.
b) Commitments
i) Capital Commitment: Estimated amount of contracts remaining to be executed
on the capital account (net of capital advances)
NOTE 47 : RELATED PARTY TRANSACTIONS
a) List of related parties
As At
March 31, 2019
As At
March 31, 2018
99.44
164.80
Nature of Relationship
Subsidiary (Direct / Indirect)
Name of the Related Party
Domestic
Pearl Apparel Fashions Limited (Formerly known as Lerros Fashions India Limited)
Pearl Global Kaushal Vikas Limited (Formerly known as Pixel Industries Limited)
Overseas
Norp Knit Industries Limited
Pearl Global Fareast Limited
Pearl Global (HK) Limited
DSSP Global Limited
PT Pinnacle Apparels (Formerly known as PT Norwest Industry)
Prudent Fashions Limited
A & B Investment Limited
Vin Pearl Global Vietnam Limited
Pearl Global F.Z.E.
PGIC Investment Limited
Pearl Grass Creations Limited (Formerly known as Pearl Tiger HK Limited)
Pearl Global Vietnam Company Limited
Pearl Global(Chang Zhou) Textile Technology Company Limited
Pearl Global Industries Limited Annual Report 2018-19 Notes
to the Financial Statements for the year ended March 31, 2019
207
Enterprise over which Key
Managerial Personnel exercise
Significant influence
Domestic
Pearl Wears
Creative Arts Education Society
PS Arts Private Limited
PDS Multinational Fashions Limited
Little People Education Society
Vau Apparels LLP
Nim International Commerce LLP
PSS Estates LLP
Overseas
Grupo Extremo SUR S.A
SACB Holdings Limited
JSM Trading (FZE.)
Transnational Textile Group Limited
Superb Mind Holdings Limited
Global Textiles Group Limited
Multinational Textile Group Limited
Casa Forma Limited
PDS Asia Star Corporation Limited
Simple Approach Limited
Zamira Fashion Limited
PG Group Limited
Techno Design HK Limited (Formerly DPOD Manufacturing Limited
Norwest Industries Limited
Poeticgem International Limited
Multinational OSG Services Bangladesh Limited
Nor Delhi Manufacturing Limited
Techno Design Gmbh
Poetic Brands Limited
Poeticgem Limited
PDS Trading (Shanghai) Company Limited
Simple Approach (Canada) Limited
Zamira Denim Lab Limited
PG Home Group Limited
PG Shanghai Mfg Company Limited
Sourcing Solutions Limited
Razamtazz Limited
Krayon Sourcing Limited (Formerly Souring Solutions HK Limited)
Design Arc Asia Limited [(Formerly Design Arc. Limited) ( Design Arc. Limited
Formerly Nor France Manufacturing Company Ltd)]
Nor Lanka Manufacturing Limited
Design Arc Europe Limited (Formerly Nor Europe Manufacturing Limited
Kleider Sourcing Hongkong Limited
Rising Asia Star Hongkong Limited (Formerly Techno Manufacturing Limited)
Nor India Manufacturing Company Limited
Spring Near East Manufacturing Company Limited
Pearl Global Industries Limited Annual Report 2018-19
208
Notes
to the Financial Statements for the year ended March 31, 2019
DS Manufacturing Limited (Formerly Designed and Sourced Limited)
FX Import Hongkong Limited
Poetic Knitwear Limited
Pacific Logistics Limited
PG Home Group SPA (Formerly Pearl GES Home Group SPA)
Nor Lanka Manufacturing Colombo Limited
Nor Europe SPA
FX Import Company Limited
MultiTech Venture Ltd(Mauritius)
Redwood Internet Ventures Limited
Digital Internet Technologies Limited
Progress Manufacturing Group Ltd
Progress Apparels(Bangladesh) Ltd
Norlanka Progress Pvt.Ltd
Green Apparel Industries Ltd
JJ Star Industrial Limited
Twin Asia Limited
Grupo Sourcing Limited (Hongkong)
Blueprint Design Limited
Design Arc UK Limited
Grupo Sourcing Limited
Fareast Vogue Limited
PDS Far-east Limited
Kindred Brands Ltd (Formerly NW Far-east Limited)
Styleberry Limited
PDS Global Investments Limited
Green Smart Shirts Limited
Kleider Sourcing Limited
Sourcing Solutions Limited
PDS Far East USA Inc.
Smart Notch Industrial Limited
Fabric & Trims Limited
Parc Designs Pvt. Limited
Digital Ecom Techno Private Limited
Sourcing East West Limited
360 Notch Ltd (Formerly known as Poeticgem Australia Ltd)
Smart Notch Limited (w.e.f. 20.04.2018)
Jcraft Array Limited (w.e.f. 12.04.2018)
Kindred Fashion Limited (w.e.f. 23.10.2018)
Recovered Clothing Limited (w.e.f 24.07.2018)
PDS Ventures Limited (w.e.f. 03.07.2018)
Design Arc FZCO (W.e.f 17.01.2019)
Spring Near East FZCO (w.e.f. 17.01.2019)
Kleider Sourcing FZCO (w.e.f 17.01.2019)
Twin Asia FZCO (w.e.f. 17.01.2019)
Technocian Fashion Private Limited (w.e.f. 20.03.2019)
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Financial Statements for the year ended March 31, 2019
209
Key Management Personnel (KMP)
& their relative
Chariman
Mr. Deepak Seth
Vice Chairman & Managing Director
Mr. Pulkit Seth
Whole-Time Director
Mrs. Shifalli Seth
Mr. Vinod Vaish
Whole-Time Director
Mr. Raj Kumar Chawla (till 25.01.2019) Chief Financial Officer
Chief Financial Officer
Mr. Raghav Garg (from 12.02.2019)
Company Secretary
Mr. Sandeep Sabharwal
Independent Director
Mr. Chittranjan Dua
Independent Director
Mr. Rajendra Kumar Aneja
Independent Director
Mr. Anil Nayar
Independent Director
Mr. Abhishek Goyal
B. Disclosure of Related Parties Transactions:
(i) Subsidiary Companies
Particulars
Purchase of goods
Sale of goods - raw material
Sale of goods – readymade garments
Source support income
Income on corporate guarantee
Expenses paid by them on behalf of the Company
Expenses paid by the Company on their behalf
SAP income
Investment in equity shares
Interest income
Impairment of investment in subsidiaries
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
11,185.41
14,606.50
249.19
131.30
1,469.07
4,199.04
292.72
-
148.64
161.31
1,273.99
529.71
1,710.21
1,298.37
92.02
81.49
1,290.55
-
27.20
29.68
-
1,438.36
The company has given the corporate guarantees to banks on behalf of its foreign subsidiaries. (Refer note no 46 a(viii))
Closing Balance
Particulars
Loan given to subsidiary (inclusive of interest)
Trade receivable
Trade payable
(ii) Enterprise over which KMP has Significant Influence
Particulars
Expenses paid by the company on their behalf
Expenses paid by them on behalf of the Company
Interest income
Closing Balance
Trade receivable
Loan receivable (including interest)
As At
March 31, 2019
As At
March 31, 2018
555.93
2,669.24
2,719.16
494.89
2,118.63
375.37
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
3.88
0.61
20.90
4.37
30.00
30.00
As At
March 31, 2019
4.29
306.66
As At
March 31, 2018
11.06
313.46
Pearl Global Industries Limited Annual Report 2018-19 210
Notes
to the Financial Statements for the year ended March 31, 2019
(iii) Key Management Personnel
Particulars
Remuneration paid
EPF paid
Expenses paid by the Company on their behalf
Expenses incurred by him on behalf of the Company
Directors sitting fees
Closing Balance
Trade payable
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
277.89
1.11
-
42.31
1.50
As At
March 31, 2019
217.43
1.08
5.08
24.60
1.43
As At
March 31, 2018
16.85
20.45
C. Disclosure of Material Transactions: Related Parties having more than 10% interest in each transaction in the
ordinary course of business
(i) Subsidiary Companies
Particulars
Purchase of goods
Norp Knit Industries Limited
Sale of goods - raw material
Norp Knit Industries Limited
Pearl Apparel Fashions Limited
Sale of goods - readymate garments
Pearl Global Far East Limited
Pearl Global (HK) Limited
DSSP Global Limited
Source support income
Norp Knit Industries Limited
Income on corporate guarantee
Norp Knit Industries Limited
Pearl Global (HK) Limited
Expenses paid by them on behalf of the Company
Norp Knit Industries Limited
Pearl Global (HK) Limited
Expenses paid by the Company on their behalf
Pearl Global (HK) Limited
Investment in equity shares
Pearl Global (HK) Limited
SAP income
Pearl Global Far East Limited
Pearl Global (HK) Limited
Interest income
Pearl Global Far East Limited
Impairment of investment in subsidiaries
Pearl Apparel Fashions Limited
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
14,023.75
10,032.24
202.16
47.03
608.67
2,328.32
1,262.05
-
76.18
85.13
820.44
453.55
70.40
60.90
855.40
584.03
292.72
70.59
78.05
22.19
489.46
1,184.86
1,626.18
-
1,290.55
33.10
48.58
29.68
1,438.36
26.17
52.60
25.52
-
Pearl Global Industries Limited Annual Report 2018-19
Notes
to the Financial Statements for the year ended March 31, 2019
(ii) Enterprise over which KMP has significant influence
(Amount in ` ‘Lakhs’ unless otherwise stated)
211
Particulars
Expenses paid by the company on their behalf
Norwest Industries Limited
Expenses paid by them on behalf of the Company
Poetic gem
PDS Multinational Fashion Limited
Interest income
PDS Multinational Fashion Limited
(iii) Key Management Personnel
Particulars
Remuneration paid
Mr.Pulkit Seth
Mrs. Shifalli Seth
Mr. Rajkumar Chawla
Mr. Vinod Vaish
Mr. Sandeep Sabharwal
Mr. Raghav Garg
EPF paid
Mr.Pulkit Seth
Mrs. Shifalli Seth
Mr. Rajkumar Chawla
Mr. Vinod Vaish
Mr. Sandeep Sabharwal
Mr. Raghav Garg
Expenses paid by the Company on their behalf
Mr. Deepak Seth
Expenses incurred by him on behalf of the Company
Mr. Raj Kumar Chawla
Mr. Vinod Vaish
Mr. Sandeep Sabharwal
Mr. Raghav Garg
Directors sitting Fees:
Mr. Deepak Seth
Mr. Anil Nayar
Mr. Chittranjan Dua
Mr. Abhishek Goyal
Mr. Rajendra Aneja
For the year ended
March 31, 2019
For the year ended
March 31, 2018
0.61
-
4.37
30.00
3.88
17.90
3.00
30.00
(Amount in ` ‘Lakhs’ unless otherwise stated)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
120.00
75.00
44.88
16.44
15.63
5.94
0.22
0.22
0.18
0.22
0.22
0.05
-
22.60
12.34
6.35
1.02
0.10
0.40
0.40
0.50
0.10
106.70
66.25
18.35
12.36
13.77
-
0.22
0.22
0.22
0.22
0.22
-
5.00
11.92
7.94
4.74
-
0.10
0.62
0.32
0.40
-
Pearl Global Industries Limited Annual Report 2018-19
212
iv) Terms and conditions of transactions with related parties
All the transaction with the related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Outstanding balances at the year end are unsecured and interest free except the interest bearing loan
and settlement occurs in cash.
v) The remuneration of Key Managerial Personnel does not include amount in respect of gratuity and leave encashment
payable as the same are not determinable as individual basis for the KMP. The liabilities of gratuity and leave
encashment are provided for company as whole on the basis of acturial valuation.
NOTE 48 : DISCLOSURES PURSUANT TO SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS
AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 AND SECTION 186 OF THE COMPANIES
ACT, 2013.
(Amount in ` ‘Lakhs’ unless otherwise stated)
Year ended
March 31, 2019
Year ended
March 31, 2018
(a) Loans to subsidiaries
Loan to wholly owned subsidiary: Pearl Global Fareast Limited
Balance as at the year end
Maximum amount outstading at any time during the year
456.52
456.52
439.61
439.61
(Pearl Global Fareast Limited has utilised the loan for meeting working capital
requirements. It is repayable after March 31, 2020 and carries an average rate of
interest at 6.5% (2017-18: 6%)
(b)
Investments made are given under the respective heads (Refer note no. 8)
11,726.14
12,990.20
(c) Corporate guarantees given are disclosed in note 46 a(viii).
15,189.12
14,734.80
NOTE 49 : EVENT OCCOURRING AFTER BALANCE SHEET DATE
a) Dividend paid and proposed:
Particulars
i. Declared and paid during the year:
Final dividend for the financial year 2017-18: ` 2.00 per share
(2016-17: ` 3.00 per share) Including dividend distribution tax
of ` 89.06 Lakh for the fanancial year 2017-18 ( ` 132.31 Lakh
for the financial year 2016-17)
ii. Proposed for approval at the Annual General Meeting (not
recognised as a liability)
(Amount in ` ‘Lakhs’ unless otherwise stated)
Year ended
March 31, 2019
Year ended
March 31, 2018
522.34
782.23
Final Dividend for financial year 2018-19: ` 3.00 per share (2017-18:
649.92
433.28
` 2.00 per share)
Dividend distribution tax
89.06
b) No material events have occurred between the balance sheet date to the date of issue of these financial statements that
132.31
could affect the values stated in the financial statements.
Pearl Global Industries Limited Annual Report 2018-19
213
NOTE 50 :
Pursuant to transfer pricing legislations under the Income-tax Act, 1961, the Company is required to use specified methods
for computing arm’s length price in relation to specified international transactions with its associated enterprises. Further, the
Company is required to maintain prescribed information and documents in relation to such transactions. The appropriate
method to be adopted will depend on the nature of transactions/ class of transactions, class of associated persons, functions
performed and other factors, which have been prescribed.The Company is in the process of updating its transfer pricing
documentation for the current financial year. Based on the preliminary assessment, the management is of the view that
the update would not have a material impact on the tax expense recorded in these financial statements. Accordingly, these
financial statements do not include any adjustments for the transfer pricing implications, if any.
NOTE 51 :
The balances of trade receivables, trade payables, financials assets and other assets given are subject to reconciliation and
confirmation as on March 31, 2019 and have realisation in ordinary course of business atleast equal to amount at which they
are stated in the financial statements.
NOTE 52 :
Figures have been rounded off to the nearest Lakh upto two decimal places except otherwise stated.
Place of Signature : Gurugram
Dated: May 28, 2019
For & on behalf of Board of Directors of Pearl Global Industries Limited
Pulkit Seth
Managing Director
DIN 00003044
Raghav Garg
Chief Financial Officer
Deepak Seth
Chairman
DIN 00003021
Sandeep Sabharwal
Company Secretary
M. No. ACS - 8370
Pearl Global Industries Limited Annual Report 2018-19
NOTES
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PEARL GLOBAL INDUSTRIES LIMITED
Registered Office: A-3, Community Centre, Naraina Industrial Area, Phase-II, New Delhi-110028
Corp. Office: Pearl Tower, Plot No. 51, Sector-32, Gurugram-122001 (Haryana)
Tel: 0124-4651000, Fax: 0124-4651010, Website: www.pearlglobal.com; e-mail: investor.pgil@pearlglobal.com
CIN: L74899DL1989PLC036849
FORM NO. MGT-11
PROXY FORM
[Pursuant to Section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]
CIN
Name of the Company
Registered Office
:
:
:
L74899DL1989PLC036849
PEARL GLOBAL INDUSTRIES LIMITED
A-3, COMMUNITY CENTRE, NARAINA INDUSTRIAL AREA
PHASE-II, NEW DELHI-110028
Name of the Member(s) :
...................................................................................................................................................................................................................................................
Registered Address :
...................................................................................................................................................................................................................................................
E-mail ID :
...................................................................................................................................................................................................................................................
Folio No./Client ID:
...................................................................................................................................................................................................................................................
...................................................................................................................................................................................................................................................
DP ID:
I/We, being the member(s) of……..................................................................................................….equity shares of Rs.10/each of PEARL GLOBAL INDUSTRIES LIMITED, hereby appoint
(i) Name ....................................................................................................Address ...................................................................................................................................................................................
...................................................................................................................................................................................................................................................................................................................
E-Mail ............................................................................................... Signature ....................................................................................................................................................or failing him/her
(ii) Name ....................................................................................................Address ...................................................................................................................................................................................
.................................................................................................................................................................................................................................................................................................................
E-Mail ............................................................................................... Signature ....................................................................................................................................................or failing him/her
(iii) Name ....................................................................................................Address ...................................................................................................................................................................................
.................................................................................................................................................................................................................................................................................................................
E-Mail ............................................................................................... Signature ...................................................................................................................................................................................
As my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 30th Annual General Meeting of the Company, to be held on 24th September, 2019
at 10:30 A.M. at Sri Sathya Sai International Centre, Pragati Vihar (Near Pragati Vihar Hostel), Lodhi Road, New Delhi-110003 and at any adjournment thereof in respect of
such resolutions as indicated below:
Resolution Number
Description
No of Shares held
by me
Optional*
I assent to the
resolution
(For)
I dissent from
the resolution
(Against)
Ordinary Business
1
2
3
4
Special Business
To receive, consider and adopt the Standalone and Consolidated Audited Financial Statements of the
Company for the financial year ended March 31, 2019 including the Reports of the Board of Directors and
Auditors thereon.
To declare dividend on Equity Shares for the financial year ended March 31, 2019.
To appoint a Director in place of Mr. Deepak Seth (DIN 00003021), who retires by rotation and being
eligible, offers himself for re-appointment.
To appoint a Director in place of Mr. Pulkit Seth (DIN 00003044), who retires by rotation and being eligible,
offers himself for re-appointment.
5
6
7
8
9
10
To approve revision in remuneration of Mr. Vinod Vaish (DIN: 01945795), Whole-Time Director.
To re-appoint Mr. Pulkit Seth (DIN: 00003044) as Managing Director.
To re-appoint Mr. Anil Nayar (DIN: 01390190) as an Independent Director.
To re-appoint Mr. Chittranjan Dua (DIN: 00036080) as an Independent Director.
To re-appoint Mr. Rajendra Kumar Aneja (DIN: 00731956) as an Independent Director.
To approve related party transactions for the financial year 2020-2021.
Signed this…………….day of……………………2019
Signature of the Shareholder(s)…………………..……
Signature of the Proxy holder(s)………………………
Note:
1. This form of proxy in order to be effective should be duly completed and deposited at the registered office of the company, not less than 48 hours before the Commencement of
the meeting.
*It is optional to put ’√’ in the appropriate column blank against any or all resolutions indicated in the Box. If you leave the ’For’ or ‘Against’ any or all resolution, your proxy will
be entitled to vote in the manner as he/she thinks appropriate.
In case of Joint holders, the signature of any one holder will be sufficient, but names of all the shareholders should be stated.
2.
3.
Affix
Revenue
Stamp
Route map to the venue of the 30 Annual General
Meeting of Pearl Global Industries Limited
th
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