Mar 31, 2018
REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS
We have audited the accompanying Standalone Ind AS financial statements of Pearl Global Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
MANAGEMENTâS RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit & loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards (Ind AS) specified under Section 133 of the Act read with the companies (Indian accounting Standards) Rules, 2015 as amended.
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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on Ind AS financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2018 and its Profit (including other comprehensive income), its cash flows and the changes in the equity for the year ended on that date.
OTHER MATTERS
The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by predecessor auditor whose report for the year ended March 31, 2017 & March 31, 2016 dated May 26, 2017 and May 25, 2016 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us. Our opinion is not modified in respect of above matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by section 143(3) of the Act, 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), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Companies (Indian Accounting Standards) Rules, 2015 specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure-A
(g) With respect to the other matters to be included in the Auditorâs 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 no pending litigations which could impact its financial position in its financial statements- refer note number 46 to the financial statements
ii According to the information provide and explanation provided to us, the company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses- refer note number 41 to the financial statements.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-Section (11) of section 143 of the Act, we give in the Annexure- âBâ, a statement on the matters specified in the paragraph 3 and 4 of the order.
Annexure âAâ to the Independent Auditorsâ Report of even date on the 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 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Pearl Global Industries Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 companyâs 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) 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 over financial reporting 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 over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditorâs 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companyâs internal financial control over financial reporting 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 companyâs internal financial control over financial reporting 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 companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting 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 over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on âthe internal control over financial reporting 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.
The Annexure referred to in independent Auditorsâ Report to the members of the Company on the standalone Ind AS financial statements for the year ended March 31, 2018; we report that:
i) In respect of fixed assets:
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.
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, since the Company has not accepted any deposits therefore the question of the compliance of any directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under does not arise.
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 (Auditorâs 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, Employeesâ State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, duty of Customs, duty of Excise, Value Added 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, Employeesâ State Insurance, Income Tax, Sales Tax, Goods and Service Tax, Service Tax, duty of Customs, duty of Excise, Value Added Tax, Cess and any other material statutory dues in arrears as at March 31, 2018 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 Goods and Service Tax or Service Tax or duty of Customs or duty of Excise or Value Added Tax which have not been deposited on account of any dispute except for the following:
S. No. |
Name of the Statute |
Nature of Dues |
Amount Rs. in lakhs |
Period to which amount relates |
Forum where dispute is pending |
1. |
Income Tax Act, 1961 |
Income Tax Demand |
1.25 |
A.Y 2014-15 |
Demand Received as per Sec 143 (1) of the Income Tax Act, 1961 |
2. |
Income Tax Act, 1961 |
Income Tax Demand |
396.77 |
A.Y 2015-16 |
Demand Received as per Sec 143 (1) of the Income Tax Act, 1961 |
3. |
Income Tax Act, 1961 |
Income Tax Demand |
258.55 |
A.Y2016-17 |
Demand Received as per Sec 143 (1) of the Income Tax Act, 1961 |
4. |
Income Tax Act, 1961 |
Tax Deductible At Source |
5.57 |
Prior to A.Y2015-16 |
Demand as per TDS (Traces) portal - CPC |
5. |
Income Tax Act, 1961 |
Tax Deductible At Source |
9.22 |
A.Y 2015-16 to A.Y 2018-19 |
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. However, the term loans taken during the year were applied for the purpose for which the same has been raised.
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, where 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 (Auditorâs 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,
Firmâs Registration Number 008352N
(Deepak Agarwal)
Partner
Membership Number 073696
Place of Signature: Gurugram
Date: May 29, 2018
Mar 31, 2015
We have audited the accompanying financial statements of Pearl Global
Industries Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 2015, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these financial statements that
give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the Ac-
counting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding 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 financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
AUDITORS' RESPONSIBILITY
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be in- cluded
in the audit report under the provisions of the Act and the Rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2015 and its profit and cash fows for the year ended on
that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. As required by section 143(3) of the Act, 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 ex- amination of
those books and further proper returns adequate for the purpose of
audit has been received from the branches not visited by us;
c. The Balance Sheet, the Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e On the basis of written representations received from the directors
as on March 31, 2015 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015 from being
appointed as a director in terms of Section 164 (2) of the Act; and
f. 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 representation received from the management
of the Company, no significant litigation is pending against the
Company's which would impact its financial position;
ii. The Company has entered into derivative contracts, as required
under the applicable law or accounting standards, for material
foreseeable losses (net), on foreign currency exposure(s)- Refer Note
12 to the financial statements
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
The Annexure referred to in our Independent Auditors' Report to the
members of the Company on the financial statements for year ended March
31, 2015, we report that:
i) 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 in a phased manner. In
accordance with this programme, certain fixed assets are verified
during the year and no material discrepancies were noticed on such
verification. In our opinion, this periodicity of physical verification
is reasonable having regard to the size of the Company and nature of
its assets.
ii) a) On the basis of information and explanation provided by the
management, the inventory has been physically verified during the year
by the management except for inventories in transit.
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of business.
c) In our opinion, the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
iii) The Company has granted unsecured loan to a company covered in the
register maintained under section 189 of the Companies Act, 2013
amounting to Rs. 30,000,000. The maximum amount of loan outstanding
during the year was Rs. 30,044,383.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory, fixed assets and for the sale of goods. The
activities of the Company do not involve sale of services. Further, on
the basis of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing
practices, there is no continuing failure to correct the weaknesses in
the aforesaid internal control systems.
v) In our opinion and according to the information and explanation
given to us, since the Company has not accepted any deposits therefore
the question of the compliance of any directives issued by the Reserve
Bank of India and the provisions of sections 73 to 76 or any other
relevant provisions of the Companies Act and the rules framed there
under does not arise.
vi) There are no cost records prescribed by the Central Government
under sub section (1) of section 148 Companies Act 2013 for operations
carried on by the Company. Therefore, the provisions of (Clause vi) of
the Company's (Audit Report) order 2015 are not applicable to the
Company.
vii) (a) According to the information and explanation given to us and
on the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including provident fund, employees' state insurance,
income tax, sales tax, wealth tax, service tax, duty of customs, value
added tax, cess and other material statutory dues have been generally
regularly deposited during the year by the Company with the appropriate
authorities. As explained to us, the Company did not have any dues on
account of duty of excise.
According to the information and explanation given to us, no undisputed
amounts payable in respect of outstanding statutory dues were in
arrears as at March 31, 2015 for a period of more than six months from
the date they became payable.
(b) According to the information and explanation given to us, there are
no material dues of income tax, sales tax, VAT, wealth tax, service tax
and cess which have not been deposited with the appropriate authorities
on account of any dispute.
(c) According to the information and explanations given to us the
amounts which were required to be transferred to Investor Education and
Protection Fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made there under has been
transferred to such fund within time.
viii) The Company does not have any accumulated losses at the end of
the financial year and has not incurred cash losses in the current
financial year and in the immediately preceding financial year.
ix) Based on our audit procedures and according to the information and
explanations given to us, the Company has not defaulted in repayment of
dues to banks and financial institutions during the year. There were no
dues payable to debenture holders.
x) According to the information and explanations given to us, the
Company has given the guarantees for loans taken by others from Banks
or financial institutions. According to the information and
explanations given to us, we are of the opinion that terms and
conditions thereof are not prima facie prejudicial to the interests of
the Company.
xi) In our opinion and according to the information and explanation
given to us, the term loans were applied for the purposes for which the
loans were obtained.
xii) During the course of our examination of the books and records of
the Company carried out in accordance with the generally ac- cited
auditing practices in India and according to the information and
explanation given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year nor have we been informed of such case by the management.
For S.R. Dinodia & Co. LLP,
Chartered Accountants
Firm's Registration Number: 001478N/N500005
sd/-
(Sandeep Dinodia)
Partner
Membership No. 083689
Place: New Delhi
Date: May 22nd, 2015
Mar 31, 2014
We have audited the accompanying financial statements of M/S PEARL
GLOBAL INDUSTRIES LIMITED, ("the Company"), which comprise the Balance
Sheet as at 31st March, 2014, and the Statement of Profit and Loss and
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements Management is
responsible for the preparation of these financial statements that give
a true and fair view of the financial position, financial performance,
and cash flows of the Company in accordance with the Accounting
Standards notified under the Companies Act 1956 ("the Act") read with
the General Circular No. 8/2014 dated 4th April 2014 issued by Ministry
of Corporate Affairs. This responsibility includes the design,
implementation, and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2014;
(b) in the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
Attention is invited to the following:
"Pursuant to the approval of the scheme of arrangement between Pearl
Global Industries Limited (Transferor Company) and PDS Multinational
Fashions Limited (Transferee Company) for demerger of Sourcing,
Distribution and Marketing business of transferor company (Demerged
Undertaking) by order of Honble High Court of Delhi vide its order
dated March 10,2014 u/s 394(2) of the Companies Act, 1956 and
subsequent filing of said Order with the Registrar of Companies, NCT of
Delhi & Haryana on May 13,2014 being the ''Effective Date'', the attached
financial statements excludes financial statements of demerged
undertaking w.e.f. appointed date i.e. April 1st, 2012. The extraction
and compilation of financial statements of demerged undertaking from
books of accounts is as envisaged in the scheme and is based on several
allocations made by the Management on reasonable basis and have been
relied by us."
(c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards notified
under the Companies Act 1956 ("the Act") read with the General Circular
No. 8/2014 dated 4th April 2014, issued by Ministry of Corporate
Affairs.
(e) On the basis of written representations received from the directors
as on 31st March 2014 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March 2014
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
(f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO THE AUDITORS'' REPORT (Referred to in Paragraph 1 under the
heading of "Report on Other Legal & Regulatory Requirements" of our
report of even date) RE: M/S PEARL GLOBAL INDUSTRIES LIMITED
i) In respect of its fixed assets:
a) The Company has maintained adequate records showing particulars of
fixed assets including quantitative details and situation, which needs
further updation.
b) As explained to us, all the fixed assets have been physical verified
by the management in a phased manner, which in our opinion is
reasonable, having regard to the size of the Company and nature of its
assets. The discrepancies noticed during verification were not
material.
c) In our opinion, during the year the Company has not disposed off
substantial part of its fixed assets and going concern status of the
Company is not affected.
ii) In respect of its inventories:
a) On the basis of information and explanation provided by the
management, the inventory has been physically verified during the year
by the management except the inventories in transit. In our opinion the
frequency of physical verification followed by the management is
reasonable.
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c) In our opinion, the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
iii) In respect of loans, secured or unsecured, granted or taken by the
Company to/ from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The company has given unsecured loan to its one subsidiary. In
respect of said loan, the maximum amount outstanding at any time during
the year was Rs. 59,375,000 and the year end balance was Rs. 62,777,483.
b) In our opinion and according to the explanations given to us, the
rate of interest and other terms and conditions of the loan given by
the Company are not prime facie prejudicial to the interest of the
Company
c) In respect of the aforesaid, the amount are repayable on demand,
hence there is no overdue amounts.
d) The Company had taken any loan amounting to Rs. 40,000,000 during the
year from the companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
e) The rate of interest and other terms and conditions on which such
loan was taken are not prime facie prejudicial to the interest of the
company
f) In respect of the aforesaid loan, the year end balance outstanding
is Rs. 29,578,870.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, carried out in accordance with the generally
accepted auditing practices, there is no continuing failure to correct
the weaknesses in the aforesaid internal control systems.
v) In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance to the contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to explanation given to us, the
transactions made in pursuance of such contracts or arrangements
entered in the register maintained u/ s 301 of the Companies Act, 1956
and exceeding values of Rs 500,000 in respect of each party during the
year have been made at prices which appear reasonable as per the
information available with the Company
vi) According to the information and explanations given to us, the
Company has not accepted any deposits within the meaning of section
58A, 58AA and the other relevant provisions of the Companies Act, 1956
and rules framed thereunder.
vii) In our opinion, the Company has an internal audit system which
still needs to be further strengthened.
viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209 (1) (d) of the
Companies Act,1956 and are of the opinion that, prime facie, the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
ix) In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
as applicable have been generally regularly deposited with the
appropriate authorities.
b) According to the records of the Company examined by us and the
information and explanations given to us, there were no undisputed
amounts payable in respect of Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other
material statutory dues as applicable in arrears as at March 31,2014
for a period of more than six months from the date they became payable.
c) On the basis of our verification of records and information and
explanations provided, the detail of disputed statutory dues
aggregating amounting to Rs 1,061,474 that have not been deposited on
account of matters pending before appropriate authorities are as under:
Name of the statue Nature Amount Period to Forum where
of Dues in RS. which Amount dispute is
Relates pending
Employee State
Insurance E.S.I 219,281 2006 E.S.I court
Apparel Export
Promotion Penalty 842,193 1999 High court,
Council New Delhi
x) The Company does not have any accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
xi) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to banks during the year. There were
no dues payable to any financial institution or debenture holders.
xii) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of clause 4(xii) of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the Company
xiii) The Company is not a chit fund or a nidhi mutual benefit fund
society Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the Company.
xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the Company
xv) The Company has given the guarantees for loans taken by others from
Banks & financial institutions. According to the information &
explanations given to us, we are opinion that the terms & conditions
thereof are not prima facie prejudicial to the interest of the Company.
xvi) On the basis of information and explanation given to us, we are of
opinion that the term loans were applied for the purposes for which the
loans were obtained.
xvii) According to the information and explanations given to us and on
the basis of an overall examination of the balance sheet of the
Company, in our opinion, funds raised on short term basis have not been
used for long term investments.
xviii) During the year, the Company has not allotted shares on
preferential basis to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the year.
Therefore, the provisions of clause 4(xix) of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the Company.
xx) The Company has not raised any monies by way of public issues
during the year.
xxi) During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanation given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year nor have we been informed of such case by the management.
For S.R. DINODIA & CO.LLP
Chartered Accountants,
Regn. No.001478n/N500005
Sd/-
(Sandeep Dinodia)
Partner
M. No. 083689
Place : New Delhi
Dated : 26th May 2014
Mar 31, 2013
1. We have audited the accompanying financial statements of M/S PEARL
GLOBAL INDUSTRIES LIMITED, ("the Company"), which comprise the Balance
Sheet as at 31st March, 2013, and the Statement of Profit and Loss and
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation, and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
5. In our opinion and to the best of our information and according to
the explanations given to us, the financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2013;
(b) in the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
6. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
Further, as required by section 227(3) of the Act, we report that:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
(c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;
(e) On the basis of written representations received from the directors
as on 31st March 2013 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March 2013
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
(f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in paragraph 6 of our audit report of even date)
RE: M/S PEARL GLOBAL INDUSTRIES LIMITED
i) In respect of its fixed assets:
a) The Company has maintained adequate records showing particulars of
fixed assets including quantitative details and situation, which needs
further updation.
b) As explained to us, all the fixed assets have been physical verified
by the management in a phased manner, which in our opinion is
reasonable, having regard to the size of the Company and nature of its
assets. The discrepancies noticed during verification were not
material.
c) In our opinion, during the year the Company has not disposed off
substantial part of its fixed assets and going concern status of the
Company is not affected.
ii) In respect of its inventories:
a) On the basis of information and explanation provided by the
management, the inventory has been physically verified during the year
by the management except the inventories in transit. In our opinion the
frequency of physical verification followed by the management is
reasonable.
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c) In our opinion, the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
iii) In respect of loans, secured or unsecured, granted or taken by the
Company to/ from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The company has given unsecured loan to its one subsidiary. In
respect of said loan, the maximum amount outstanding at any time during
the year was Rs.10,514,996 and the year end balance was Rs.10,514,996.
b) In our opinion and according to the explanations given to us, the
rate of interest and other terms and conditions of the loan given by
the Company, are not prima facie prejudicial to the interest of the
Company.
c) In respect of the aforesaid, the amount are repayable on demand,
hence there is no overdue amounts.
d) The Company had not taken any loan during the year from the
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. However, the Company had
repaid during the year the loan taken in earlier years. The maximum
amount outstanding at any time during the year was Rs. 29,743,879 and the
year end balance was Rs. Nil.
e) The rate of interest and other terms and conditions on which such
loan was taken are not prima facie prejudicial to the interest of the
company.
f) In respect of the aforesaid loan, the amount was fully repaid during
the year; hence there is no overdue amount.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, carried out in accordance with the generally
accepted auditing practices, there is no continuing failure to correct
the weaknesses in the aforesaid internal control systems.
v) In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance to the contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to explanation given to us, the
transactions made in pursuance of such contracts or arrangements
entered in the register maintained u/s 301 of the Companies Act, 1956
and exceeding values of Rs. 500,000 in respect of each party during the
year have been made at prices which appear reasonable as per the
information available with the Company.
vi) According to the information and explanations given to us, the
Company has not accepted any deposits within the meaning of section
58A, 58AA and the other relevant provisions of the Companies Act, 1956
and rules framed thereunder.
vii) In our opinion, the Company has an internal audit system which
still needs to be further strengthened.
viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209 (1) (d) of the
Companies Act,1956 and are of the opinion that, prima facie, the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
ix) In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
as applicable have been generally regularly deposited with the
appropriate authorities.
b) According to the records of the Company examined by us and the
information and explanations given to us, there were no undisputed
amounts payable in respect of Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other
material statutory dues as applicable in arrears as at March 31, 2013
for a period of more than six months from the date they became payable.
c) On the basis of our verification of records and information and
explanations provided, the detail of disputed statutory dues
aggregating amounting to Rs. 1,061,474 that have not been deposited on
account of matters pending before appropriate authorities are as under:
Name of the
statue Nature Amount Period to Forum where
of Dues in Rs. which
Amount dispute is
Relates pending
Employee
State
Insurance E.S.I 219,281 2006 E.S.I court
Apparel
Export
Promotion
Council Penalty 842,193 1999 High court,
New Delhi
x) The Company does not have any accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
xi) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to banks during the year. There were
no dues payable to any financial institution or debenture holders.
xii) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of clause 4(xii) of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the Company.
xiii) The Company is not a chit fund or a nidhi mutual benefit fund
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the Company.
xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the Company.
xv) The Company has given the guarantees for loans taken by others from
Banks & financial institutions. According to the information &
explanations given to us, we are opinion that the terms & conditions
thereof are not prima facie prejudicial to the interest of the Company.
xvi) On the basis of information and explanation given to us, we are of
opinion that the term loans were applied for the purposes for which the
loans were obtained.
xvii) According to the information and explanations given to us and on
the basis of an overall examination of the balance sheet of the
Company, in our opinion, funds raised on short term basis have not been
used for long term investments.
xviii) During the year, the Company has not allotted shares on
preferential basis to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the year.
Therefore, the provisions of clause 4(xix) of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the Company.
xx) The Company has not raised any monies by way of public issues
during the year.
xxi) During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanation given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year nor have we been informed of such case by the management.
For S.R. DINODIA & CO.,
Chartered Accountants,
Regn. No. 001478N
Sd/-
(Sandeep Dinodia)
Place: New Delhi Partner
Dated: 30th May, 2013 M. No. 083689
Mar 31, 2012
We have audited the attached balance sheet of Pearl Global Industries
Limited (formerly known as House of Pearl Fashions Limited) as at 31st
March 2012, the statement of profit and loss and also the cash flow
statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes (a) examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statement (b) assessing the
accounting principles used in the preparation of the financial
statements (c) assessing significant estimates made by management in
the preparation of the financial statements and (d) evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
As required by the Companies (Auditor's Report) Order, 2003 [as amended
by the Companies (Auditor's Report) (Amendment) Order 2004] issued by
the Central Government of India in terms of sub-section (4A) of section
227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report
that:
(a) We have 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 appears from our examination of
those books;
(c) The Company's balance sheet, statement of profit and loss and cash
flow statement dealt with by this report are in agreement with the
books of account;
(d) In our opinion, the balance sheet, statement of profit and loss and
cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the CompaniesAct, 1956;
(e) On the basis of written representations received from the directors
as on 31st March 2012 and taken on record by the Board of Directors. We
report that none of the directors are disqualified as on 31st March
2012 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the balance sheet, of the state of affairs of the
company as at 31st March 2012;
(ii) in the case of the statement of profit and loss, the profit for
the year ended on that date; and
(iii) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
ANNEXURETOTHE AUDITORS' REPORT
(Referred to in paragraph 3 of our audit report of even date)
RE: M/S PEARL GLOBAL INDUSTRIES LIMITED
(FORMERLY KNOWN AS HOUSE OF PEARL FASHIONS LIMITED)
i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets ,which still needs updation
b) As explained to us, physical verification of major portion of fixed
assets as at 31st March 2012 was conducted by the management during the
year. In our opinion, the frequency of physical verification is
reasonable. No material discrepancies were noticed on such
verification.
c) In our opinion and according to the information and explanations
given to us, no substantial part of fixed assets has been disposed off
by the Company during the year.
ii) a) On the basis of information and explanation provided by the
management, the inventory has been physically verified during the year
by the management except the inventories in transit and lying with the
third parties. In our opinion the frequency of physical verification
followed by the management is reasonable.
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
c) In our opinion, the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
iii) a) The company has granted unsecured advances during the yearto
sixparties covered in the register maintained undersection 301 of the
CompaniesAct, 1956. The maximum balance involved in the transaction is
Rs. 443,316,397/-. (The year end balance was Rs. 408,594,070/-).
b) The rate of interest and other terms and conditions on which
advancees have been given are not prime facie prejudicial to the
interest of the company.
c) In respect of the aforesaid, all the advances were repayable on
demand
iv) a) The company had taken unsecured loans from one of the party
covered in the register maintained under section 301 of the Companies
Act, 1956. The maximum balance involved in the transaction is Rs.
29,743,879/-. (The year end balance was Rs. 29,743,879/-).
b) The rate of interest and other terms and conditions on which loan
has been taken are not prime facie prejudicial to the interest of the
company.
c) On the basis of information available, in respect of the aforesaid
loan, the principal amount has not fallen due for repayment.
v) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, carried out in accordance with the generally
accepted auditing practices, there is no continuing failure to correct
the weaknesses in the aforesaid internal control systems.
vi) a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Act have been entered in the register required to
be maintained underthat section.
b) In our opinion and according to explanation given to us, the
transactions made in pursuance of such contracts or arrangements
entered in the register maintained u/s 301 of the Companies Act, 1956
and exceeding values of Rs.5 Lacs have been made at prices which are
reasonable with regard to the prevailing market prices at the relevant
times.
vii) in our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits within the
meaning of section 58A, 58AA and the other relevant provisions of the
Companies Act, 1956 and rules framed thereunder.
viii) In our opinion, the company has an internal audit system
commensurate with the nature and size of its business.
ix) The Central Government has not prescribed the maintenance of cost
records under section 209 (1) (d) of the Companies Act 1956, for any of
the products of the company.
x) a) According to the information and explanation given to us, the
company is regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education
protection fund, employees' state insurance, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess and other
material statutory dues as applicable to it.
b) According to the records of the Company examined by us and the
information and explanations given to us, there is no amount
outstanding in respect of aforesaid statutory dues on account of any
dispute as at 31st March, 2012.
c) On the basis of our verification of records and information and
explanations provided, the detail of disputed statutory dues
aggregating amounting to Rs 1,061,474 which have not been deposited on
account of matters pending before appropriate authorities are as under:
Name of the
statue Nature of Amount Period to Forum where
Dues in Rs. which Amount dispute is
Relates pending
Employee
State E.S.I 219,281 - E.S.I court
Insurance
Apparel
Export Penalty 842,193 1999 High court.New
Promotion
Council Delhi
xi) The company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and in the immediately preceding financial
year.
xii) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
banks during the year.There were no dues payable to any financial
institution or debenture holders.
xiii) The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of clause 4(xii) of the Companies (Auditor's
Report) Order, 2003 are not applicable to the company.
xiv) The company is not a chit fund or a nidhi mutual benefit fund
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor's Report) Order, 2003 are not applicable to the company.
xv) The company is not dealing ortrading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the company.
xvi) In our opinion and on the basis of information and explanation
given to us, the company has given the guarantees as mentioned in the
Note 29(a) for loans taken by others from banks or financial
institutions.
xvii) On the basis of information and explanation given to us, we are
of opinion that the term loans were applied for the purposes for which
the loans were obtained.
xviii) According to the information and explanations given to us and on
the basis of an overall examination of the balance sheet of the
company, in our opinion, funds raised on short term basis have not been
used for long term investments.
xix) During the year, the company has not allotted shares on
preferential basis to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956. However
during the year, the company has issued shares to parties covered in
the register maintained under section 301 of the Companies Act, 1956 in
terms of order of Hon'ble High Court of Delhi approving scheme of
amalgamation of the company. The price at which the shares have been
issued is not prejudicial to the interest of the company.
xx) The Company has not issued any debentures during the year.
Therefore, the provisions of clause 4(xix) of the Companies (Auditor's
Report) Order, 2003 are not applicable to the Company.
xxi) We have verified the end use of money raised by the public issue
as declared by the management in prospectus filed with "The
Securities and Exchange Board of India" and as appearing in the Note
No.35 of Notes forming part of the financial statements
xxii) During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanation given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year nor
have we been informed of such case by the management.
For S.R.DINODIA & CO.,
CHARTERED ACCOUNTANTS
Regn No. 001478N
(SANDEEP DINODIA)
Place: New Delhi PARTNER
Date: 29th May 2012 M.NO. 083689
Mar 31, 2011
We have audited the attached balance sheet of House of Pearl Fashions
Limited as at 31st March 2011, the profit and loss account and also the
cash flow statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes (a) examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statement (b) assessing the
accounting principles used in the preparation of the financial
statements (c) assessing significant estimates made by management in
the preparation of the financial statements and (d) evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
As required by the Companies (Auditor's Report) Order, 2003 [as amended
by the Companies (Auditor's Report) (Amendment) Order 2004] issued by
the Central Government of India in terms of sub-section (4A) of section
227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report
that:
(a) We have 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 appears from our examination of
those books;
(c) The Company's balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
(e) On the basis of written representations received from the directors
as on 31st March 2011 and taken on record by the Board of Directors. We
report that none of the directors are disqualified as on 31st March
2011 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the balance sheet, of the state of affairs of the
company as at 31st March 2011;
(ii) in the case of the profit and loss account, the loss for the year
ended on that date; and
(iii) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of our audit report of even date)
RE: M/S HOUSE OF PEARL FASHIONS LIMITED
i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) As explained to us, physical verification of major portion of fixed
assets as at 31st March 2011 was conducted by the management during the
year. In our opinion, the frequency of physical verification is
reasonable. No material discrepancies were noticed on such
verification.
c) In our opinion and according to the information and explanations
given to us, no substantial part of fixed assets has been disposed off
by the Company during the year.
ii) a) The inventory has been physically verified during the year by
the management. In our opinion the frequency of verification is
reasonable.
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
c) In our opinion, the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were immaterial.
iii) a) The company has granted unsecured loans and advances during the
year to eight parties covered in the register maintained under section
301 of the Companies Act, 1956. The maximum balance involved in the
transaction is Rs.823,314,760 (The year end balance was
Rs.797,225,226).
b) The rate of interest and other terms and conditions on which loan
and advances have been given are not prime facie prejudicial to the
interest of the company.
c) In respect of the aforesaid loan, all the loans were repayable on
demand.
d) The company had not taken any unsecured loans from the companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Therefore, the provisions of clause
(iii) (e) to
(g) of the Companies (Auditors Report) Order, 2003 are not applicable
to the company.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods.
Further, on the basis of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices, there is no continuing failure to correct the
weaknesses in the aforesaid internal control systems.
v) a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Act have been entered in the register required to
be maintained under that section.
b) In our opinion and according to explanation given to us, the
transactions made in pursuance of such contracts or arrangements
entered in the register maintained u/s 301 of the Companies Act, 1956
and exceeding values of Rs.5 Lacs have been made at prices which are
reasonable with regard to the prevailing market prices at the relevant
times.
vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits within the
meaning of section 58A, 58AA and the other relevant provisions of the
Companies Act, 1956 and rules framed thereunder.
vii) In our opinion, the company has an internal audit system
commensurate with the nature and size of its business.
viii) The Central Government has not prescribed the maintenance of cost
records under section 209 (1) (d) of the Companies Act 1956, for any of
the products of the company.
ix) a) According to the information and explanation given to us, the
company is generally regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education
protection fund, employees' state insurance, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess and other
material statutory dues as applicable to it.
b) According to the records of the Company examined by us and the
information and explanations given to us, there is no amount
outstanding in respect of aforesaid statutory dues on account of any
dispute as at 31st March, 2011.
x) The Company has accumulated loss at the end of the financial year.
The Company has not incurred cash loss during the financial year
covered by our audit but in immediately preceding financial year, the
company has incurred cash loss.
xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
banks during the year. There were no dues payable to any financial
institution or debenture holders.
xii) The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of clause 4(xii) of the Companies (Auditor's
Report) Order, 2003 are not applicable to the company.
xiii) The company is not a chit fund or a nidhi mutual benefit fund
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor's Report) Order, 2003 are not applicable to the company.
xiv) The company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the company.
xv) In our opinion and on the basis of information and explanation
given to us, the company has given the guarantees as mentioned in the
point no. 1 of Schedule 16 for loans taken by others from banks or
financial institutions.
xvi) On the basis of information and explanation given to us, we are of
opinion that the term loans were applied for the purposes for which the
loans were obtained.
xvii) According to the information and explanations given to us and on
the basis of an overall examination of the balance sheet of the
company, in our opinion, funds raised on short term basis have not been
used for long term investments.
xviii) During the year, the Company has not allotted any shares on
preferential basis to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the year.
Therefore, the provisions of clause 4(xix) of the Companies (Auditor's
Report) Order, 2003 are not applicable to the Company.
xx) We have verified the end use of money raised by the public issue as
declared by the management in prospectus filed with "The Securities and
Exchange Board of India" and as appearing in the Note No.18 of Schedule
16 Ã Notes to Account forming part of the financial statements.
xxi) During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanation given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year nor
have we been informed of such case by the management.
For S.R.DINODIA & CO.
Chartered Accountants
Regn. No. 01478N
(SANDEEP DINODIA)
Place: New Delhi Partner
Date: 30th May, 2011 M.No. 083689
Mar 31, 2010
We have audited the attached balance sheet of House of Pearl Fashions
Limited as at 31st March 2010, the profit and loss account and also the
cash flow statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit in
accordance with the auditing standards generally accepted in India.
Those Standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes
(a) examining, on a testbasis, evidence supporting the amounts and
disclosures in the financial statement
(b) assessing the accounting principles used in the preparation of the
financial statements
(c) assessing significantestimates made by management in the preparation
of the financial statements and
(d) evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion. As
required by the Companies (Auditors Report) Order, 2003 [as amended by
the Companies (Auditors Report) (Amendment) Order 2004] issued by the
Central Government of India in terms of sub-section (4A) of section 227
of the Companies Act, 1956, we enclose in the Annexure a statement on
the matters specified in paragraphs 4 and 5 of the said Order. Further
to our comments in the Annexure referred to above, we report that:
(a) We have 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 appears from our examination of
those books;
(c) The Companys balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
(e) On the basis of written representations received from the directors
as on 31st March 2010 and taken on record by the Board of Directors. We
report that none of the directors are disqualified as on 31" March 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the balance sheet, of the state of affairs of the
company as at 31" March
2010; (ii) in the case of the profit and loss account, the profit for
the year ended on that date; and (iii) in the case of the cash flow
statement, of the cash flows for the year ended on that date.
ANNEXURE TO THE AUDITORS HtHUHl
(Referred to in paragraph 3 of our audit report of even date) RE: M/S
HOUSE OF PEARL FASHIONS LIMITED
i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) As explained to us, physical verification of major portion of fixed
assets as at 31 æ March 2010 was conducted by the management during the
year. In our opinion, the frequency of physical verification is
reasonable. No material discrepancies were noticed on such
verification.
c) In our opinion and according to the information and explanations
given to us, no substantial part of fixed assets has been disposed off
by the Company during the year.
ii) a) The inventory has been physically verified during the year by
the management. In our opinion the frequency of verification is
reasonable.
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
c) In our opinion, the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were immaterial.
iii) a) The company has granted unsecured loans during Die year to six
parties covered in the register maintained under section 301 of the
Companies Act, 1956. The maximum balance involved in the transaction is
Rs. 911,402,512. (The year end balance was Rs. 790,809,954).
b) The rate of interest and other terms and conditions on which loan
has been given are not prime facie prejudicial to the interest of the
company.
c) In respect of the aforesaid loan, all the loans were repayable on
demand.
d) The company had not taken any unsecured loans from the companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Therefore, the provisions of clause
(iii) (e) to (g) of the Companies (Auditors Report) Order, 2003 are
not applicable to the company.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with
regard to purchase of inventory and fixed assets and for the
sale of goods. Further, on the basis of our examination of the books
and records of the Company, carried out in accordance with the
generally accepted auditing practices, there is no continuing failure
to correct the weaknesses in the aforesaid internal control systems.
v) a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Act have been entered in the register required
to be maintained under that section.
b) In our opinion and according to explanation given to us, the
transactions made in pursuance of such contracts or arrangements
entered in the register maintained u/s 301 of the Companies Act, 1956
and exceeding values of Rs.5 Lacs have been made at prices
which are reasonable with regard to the prevailing market prices at the
relevant times.
vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits within the
meaning of section 58A, 58AA and the other relevant provisions of the
Companies Act, 1956 and rules framed thereunder.
vii) In our opinion, the company has an internal audit system
commensurate with the nature and size of its business.
viii) The Central Government has not prescribed the maintenance of
cost records under section 209 (1) (d) of the Companies Act 1956, for
any of the products of the company.
ix) a) According to the information and explanation given to
us, the company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education protection fund, employees state insurance, income
tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess
and other material statutory dues as applicable to it.
b) According to the records of the Company examined by us and the
information and explanations given to us, there is no amount
outstanding in respect of aforesaid statutory dues on account of any
dispute as at 31st March, 2010.
x) The Company does not have any accumulated losses at the end of
the financial year. The Company has incurred cash losses during the
financial year covered by our audit but not in immediately preceding
financial year.
xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
banks during the year. There were no dues payable to any financial
institution or debenture holders.
xii) The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of clause 4(xii) of the Companies (Auditors
Report) Order, 2003 are not applicable to the company.
xiii) The company is not a chit fund or a nidhi mutual benefit fund
society. Therefore, the provisionsof clause .
(xiii) of the Companies (Auditors Report) Order, 2003 are
not applicable to the company.
xiv) The company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause 4
(xiv) of the Companies (AuditorsReport) Order, 2003 are not applicable
to the company.
xv) In our opinion and on the basis of information and explanation
given to us, the company has given the guarantees as mentioned in
the point no. 1 of Schedule 16 forloans taken by others from banks
financial institutions.
xvi) On the basis of information and explanation given to us, we
are of opinion that the term loans were applied for the purposes
for which the loans were obtained.
xvii) According to the information and explanations given to us and on the
basis of an overall examination of the balance sheet of the company,
in our opinion, funds raised on short term basis have not been used
for long term investments.
xviii) During the year, the Company has not allotted any shares on
preferential basis toparties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the year.
Therefore, the provisionsof clause 4
(xix) of the Companies (Auditors Report) Order, 2003 are
not applicable to the Company.
xx) We have verified the end use of money raised by the
public issue as declared by the management. in prospectus filed with
The Securities and Exchange Board of India" and as appearing in the
Note No.18 of Schedule 16 - Notes to Account forming part of the
financial statements.
xxi) During the course of our examination of the books and
records of the Company carried out in accordance with the
generally accepted auditing practices in India and according to the
information and explanation given to us, we have neither come across
any instance of fraud on or by the Company, noticed or reported during
the year nor have we been informed of such case by the management.
ForS.R. OINODIA&CO.
Chartered Accountants
Regn. No. 01478N
(SANDEEP DINODIA)
Place : New Delhi Pamter
Date : 29.05.2010 M.NO. 083689