pearl global industries ltd share price Directors report


DIRECTORS REPORT

To the Members,

Your Directors are pleased to present the 33rd Annual Report and Audited Financial Statements for the financial year ended March 31, 2022, together with the Auditors Report thereon.

WORKING RESULTS OF THE COMPANY

(Rs in Lakhs)

Particulars Standalone Consolidated
2021-22 2020-21 2021-22 2020-21
Income from operations 93,377.06 77,140.04 2,71,352.90 1,49,092.65
Other Income 3,204.83 2,408.39 3,345.94 2,350.49
Profit before Tax 3,610.59 (919.52) 8,581.82 1,135.56
Provision for Tax 894.81 (996.92) 1,570.94 (612.76)
Profit After 2,715.78 77.40 7,010.88 1,748.32
Other comprehensive income 260.26 706.70 1,405.26 (86.91)
Total comprehensive income 2,976.04 784.10 8,416.14 1,661.41
Earnings per share 12.54 0.36 31.46 7.97

STATE OF THE AFFAIRS OF THE COMPANY

During the year, your Companys consolidated income from operations was 2,71,352.90 Lakhs as against 1,49,092.65 Lakhs in the previous year and Net Profit 7,010.88 Lakhs as against Net Profit1,748.32 Lakhs in the previous year.

The income from operations for the year under review for the Company on Standalone basis was 93,377.06 Lakhs as compared to 77,140.04 Lakhs in the previous year and Net Profit 2,715.78 Lakhs as compared to Net Profit 77.40 Lakhs in the previous year.

Pearl Global Industries Limited (PGIL) is one of the Indias 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.

Pearl Global Industries Limited, is a worldwide clothing manufacturing corporation that provides end-to-end supply chain solutions to global brands with its integrated production capabilities centered on Design and Development, Global Manufacturing, Marketing and Distribution, and Sourcing and Supply Chain. The Company develops apparels for all genders and age groups across locations and style preferences. The

Company has 21 state-of-the-art manufacturing plants across four countries including India (Gurgaon, Chennai and Bengaluru), Indonesia, Bangladesh, Vietnam and has design centres India, Indonesia, Bangladesh, Vietnam, U.S.A, Spain,

Hong Kong and U.K.

Our product portfolio includes outer wear, active wear, childrens wear, denim (for both men and women. We are a well-diversified Company with a de-risked manufacturing base having multinational presence. Our business is primarily focused on export services, with USA contributing the highest amongst all countries Marquee Clientele includes Kohls, Macys, Tommy Hilfiger, Gap, Old Navy,

NEXT, Nordstrom among others.MANGO, TALBOTS, TARGET, Kmart, MARKS & SPENCER, LANE BRYANT, LOFT,

ANN TAYOR, We have a total capacity to manufacture 80+ Million garments per annum including own and outsourced facilities.

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.

TRANSFER TO GENERAL RESERVES

The Board of Directors do not propose to transfer any amount to Reserve.

DIVIDEND

The Board of Directors have in its meeting held on May 25, 2022, declared interim dividend of 5/- per equity share of face value of 10/- each, total outgo amounting to 10,83,19,685/- for the financial year 2021-22. The record date to determine eligibility of members was June 8, 2022 and payment of said dividend have been made to the members within the prescribed time after deduction of tax in terms with the provisions of Income Tax Act.

DIVIDEND DISTRIBUTION POLICY

The Company has in place Dividend Distribution Policy as required under Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.

The Dividend Distribution Policy may be accessed on the Companys website at https://www.pearlglobal.com/ investor-relations/corporate-governance/

DIRECTORS AND KEY MANAGERIAL PERSONNEL Change in Directors during 2021-22

During the year Mr. Uma Shankar Kaushik, Whole-Time

Director has resigned from the Board of the Company with effect from January 10, 2022, due to personal reasons. Mr. Pulkit Seth and Mrs. Shifalli Seth, resigned from the office of Managing Director and Whole-Time Director, respectively, with effect from close of business hours on March 31, 2022, due to shifting in USA. Mr. Pulkit Seth and Mrs. Shifalli Seth is continuing as Non-Executive and Non-Independent Directors.

The Board of Directors have in its meeting held on February

14, 2022, on the recommendation of Nomination and

Remuneration Committee appointed Mr. Deepak Kumar

(DIN 09497467) as Whole-Time Director and Mr. Pallab

Banerjee, Joint Managing Director as Managing Director of the Company with effect from February 14, 2022 and April 1,

2022, respectively.

The Company has also obtained shareholders approval for appointment of Mr. Deepak Kumar and Mr. Pallab Banerjee through Postal Ballot conducted during the period from

March 2, 2022 to March 31, 2022. The result of Postal Ballot was declared on March 31, 2022.

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.

In accordance with the provisions of the Companies Act,

2013 and the Articles of Association of your Company,

Mrs. Shifalli Seth and Mr. Shailesh Kumar, 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 five times on May 25, 2021, June 21, 2021, August 14, 2021, November 13, 2021, and February 14, 2022 during the financial year 2021-22.

DIRECTORS IDENTIFICATION NUMBER (DIN)

The following are the Directors Identification Number (DIN) of your Directors:

Name DIN Name DIN
Mr. Deepak - 00003021 Mr. Chittranjan - 00036080
Seth Dua
Mr. Pulkit Seth - 00003044 Mr. Abhishek - 01928855
Goyal
Mrs. Shifalli - 01388430 Mr. Rajendra - 00731956
Seth Kumar Aneja
Mr. Pallab - 07193749 Mr. Anil Nayar - 01390190
Banerjee
Mr. Shailesh - 08897225 Mrs. Madhulika - 08712718
Kumar Bhupatkar
Mr. Deepak - 09497467 Ms. Neha - 03477800
Kumar Khanna

Change in Key Managerial Personnel

Mr. Mayank Jain who was appointed by the Board of

Directors in its meeting held on June 21, 2021 as Company Secretary and Compliance officer from the office of the Company Secretary and Compliance officer on November 8, 2021 due to personal reasons.

Mr. Ravi Arora who was appointed by the Board of Directors in its meeting held on February 14, 2022 as Company Secretary and Compliance from the office of the Company Secretary and Compliance officer on June 28, 2022 due to personal reasons

The Board of Directors have in its meeting held on August

13, 2022, designated Mr. Sanjay Gandhi, Group CFO as Key

Managerial Personnel. Mr. Sanjay Gandhi, Group CFO has been managing/overseeing finance functions of the Pearl

Group (i.e. Company including its overseas subsidiaries).

BOARD EVALUATION

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 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.

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.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy of the Company is annexed herewith as Annexure-I with this report and also available on the website of the Company at https://www. pearlglobal.com/investor-relations/corporate-governance/

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 current composition of the Audit Committee comprises four Non-executive Independent Directors, namely Mr. Anil Nayar, Chairman, Mr. Abhishek Goyal, Mr. Rajendra Kumar Aneja and Mrs. Madhulika Bhupatkar, as Members of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

VIGIL MECHANISM

The Company has 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 a letter 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 Companys website at the link: https://www.pearlglobal.com/investor-relations/ corporate-governance/. During the year, no complaint is received.

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 Companys website at https://www.pearlglobal.com/investor-relations/ corporate-governance/

Your Company has identifiedan hostel for women vocational training and education education and health care activities for the financial year 2021-22. The prescribed CSR amount for the financial year 2021-22 was 23.92. However, the Company has spent 76.30 Lakhs during the financial year 2021-22.

The Annual Report on CSR activities is annexed herewith as

Annexure-II.

SUBSIDIARY COMPANIES

During the year under review, Pearl Global USA Inc., USA has become a wholly owned subsidiary of the Company and one subsidiary Pearl Global (Changzhou) Textile Technolgy Co. Ltd., China, has voluntary liquidated.

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.

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 Companys website at https://www. pearlglobal.com/investor-relations/corporate-governance/

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 September 28, 2017, for a period of five years, with effect from financial year 2017-18.

The Board of Directors have in its meeting held on August

13, 2022, on the recommendation of Audit Committee, approved and recommended appointment of M/s. S.R. Dinodia & Co. LLP, Chartered Accountants, New Delhi (Regn.

No. 001478N/N500005) as Statutory Auditors in the first term of five years, effective from financial year 2022-23.

M/s. S.R. Dinodia & Co. LLP is eligible to be appointed as Statutory Auditors of the Company. Necessary resolution for their appointment and payment of remuneration is proposed in the Notice calling 33rd Annual General Meeting for approval of the shareholders.

STATUTORY AUDITORS REPORT

The Auditors Reports (Consolidated & Standalone) for the financial year ended March 31, 2022 do not contain any qualification, reservation or adverse remark. The Auditors Reports are enclosed with the financial statements in this

Annual Report.

SECRETARIAL AUDITOR

Mr. Jayant Sood, Practising Company Secretary, proprietor of M/s Jayant Sood & Associates (Company Secretaries) was appointed by the Board to conduct Secretarial Audit for the financial year 2021-22. The Secretarial Audit Report for the financial year 2020-21 is annexed herewith as

Annexure-III. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

INTERNAL AUDITOR

M/s. S.S. Kothari Mehta & Company, Chartered Accountants,

New Delhi (FRN. 000756N) was appointed by the Board, as Internal Auditor for the financial year 2021-22.

COST AUDIT

Maintaining of cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013 is not applicable to your Company.

ANNUAL RETURN

Pursuant to the Section 92(3) of the Companies Act, 2013, read with the Companies (Management and Administration)

Rules, 2014, Annual Return of the Company for the financial year 2021-22 in the prescribed Form MGT-7 is available on the website of the Company at https://www.pearlglobal. com/investor-relations/corporate-governance/

RELATED PARTY TRANSACTIONS

All related party transactions entered during the financial year were in ordinary course of the business and on arms length basis. Details of material related party transaction entered during the financial year by the Company is annexed in Form AOC-2 as Annexure-IV.

Members may refer to Note 46 to the standalone financial statement which sets out related party disclosures pursuant to Ind AS-24.

.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 forms part of the notes to the standalone financial statements.

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.

RISK MANAGEMENT

Pursuant to Regulation 21 and other applicable

Regulations of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015, as amended from time to time, the Company has Risk Management Committee with following members and Risk Management Policy.

Name Designation
Mr. Pallab Banerjee Chairman
Mr. Abhishek Goyal Member
Ms. Neha Khanna Member

During the financial year Risk Management Committee met two times on November 13, 2021 and February 14, 2022.

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 March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures.

There are no material departures from the same; 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 March 31, 2022 and of the profit and loss of the Company for that period; c) the Directors have taken proper and sufficient care for the maintenance of 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) 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 f) 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 2021-22 have been paid.

REGISTRAR AND SHARE TRANSFER AGENT

Link Intime India Private Ltd is Companys Registrars and Share Transfer Agent (RTA) as common agency both for physical and demat shares, as required under Securities

Contract (Regulation) Act, 1956. The detail of RTA forms part of the Corporate Governance Report.

CORPORATE GOVERNANCE

Report on Corporate Governance along with the certificate from the Practicing Company Secretary, 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".

BUSINESS RESPONSIBILITY REPORT

As per Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Business

Responsibility Report is attached and forms part of this Annual Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

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-V to this report.

Particulars of employees as required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014, as amended from time to time, is annexed as Annexure- VI to this report.

EMPLOYEE STOCK OPTION PLAN-2022

The Company has structured this Plan for its employees, whose present and potential contributions are important to the success of the Company, by offering them an opportunity to participate in the Companys future and also acquire a proprietary interest in the Company by award of Options. The objectives of this Plan are as under: a) Alignment of employees gains with Companys performance b) Enhancing shareholders value c) Creation of employee wealth d) Driving performance of the key employees e) Retaining/motivating/attracting the best talent within the Company f) Creating commonality of interest between employees and shareholders In order to reward and retain the employees and to create a sense of ownership and participation amongst them, the Board of Directors has in its meeting held on June 30, 2022, approved Pearl Global Industries Limited Employee Stock Option Plan 2022 ("Plan or ESOP 2022"), subject to approval of the shareholders.

The Company is seeking shareholders approval by Postal

Ballot (e-voting), which is being conducted from July 29, 2022 to August 28, 2022 and its results will be declared on August 29, 2022.

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-VII to this report.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has transferred unclaimed/unpaid dividend amounting to 3,49,788/- during the financial year 2021-

22 to Investor Education and Protection Fund (IEPF) established by the Central Government, in compliance with the Companies Act, 2013. The above said amount represents unclaimed dividend for the financial year 2013-

14 which was lying with the Company for a period of seven years. Further, the Company has transferred 3,950 shares to Investor Education and Protection Fund Authority established by the Central Government, in compliance with the Companies Act, 2013.

Any shareholder whose shares or unclaimed dividend have been transferred to the IEPF, may claim the shares under provision to Section 124(6) or apply for refund under Section 125(3) as the case may be, to the Authority by making an application in Web Form IEPF 5 available on website www. iepf.gov.in.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE by theNo significant regulators or courts or tribunals impacting the going concern status and Companys operations in future.

REPORT ON SEXUAL HARASSMENT-INTERNAL COMPLAINTS COMMITTEE

Pursuant to the provisions of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaint received during the financial year 2021-22.

SECRETARIAL STANDARDS

The Company has complied with applicable Secretarial Standards issued by the Institute of the Company Secretaries of India.

ACKNOWLEDGEMENT

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

(Pallab Banerjee) (Pulkit Seth)
Managing Director Vice-Chairman
DIN 07193749 DIN 00003044
Place: Gurugram
Date: August 13, 2022