Sub: Submission of Annual Report as per Reg. 34(1) under SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015

Transcription

1 PEARL ENGINEERING Polymers Limited (CIN NO. L25209PN1992PLC012701) Head Office : Rohit House, 3, Tolstoy Marg, New Delhi , INDIA Tel.No : , Fax, , pearl@pearlpet.net Regd.Office & Works: Plot No.D-17, M.I.D.C., Kurkumbh , Tal:Daund, Dist: Pune, INDIA Tel: , , Fax: , kurkumbh@pearlpet.net ISO 9001 ISO Certified Firm PEPL/SD/ Dated: 21 st October, 2016 The Secretary, Bombay Stock Exchange Ltd. Phiroze Jeejeebhoy Towers, 25 th Floor, Dalal Street, Mumbai (Stock Code: ) Dear Sir/ Madam, Sub: Submission of Annual Report as per Reg. 34(1) under SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 Dear Sir/ Madam, Pursuant to Regulation 34(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing herewith the 22 nd Annual Report of M/s. Pearl Engineering Polymers Limited for Financial Year You are requested to kindly take the same on record. Thanking you, Yours sincerely, FOR PEARL ENGINEERING POLYMERS LIMITED HARISH SETH CHAIRMAN & MANAGING DIRECTOR (DIN: )

2 22 ND ANNUAL REPORT

3 NOTICE NOTICE is hereby given that the 22nd (Twenty Second) Annual General Meeting of Pearl Engineering Polymers Limited will be held on Friday, the 30th day of September, 2016 at 3.00 P.M at the Registered Office of the Company at D-17, MIDC Industrial Area, Kurkumbh, Taluk Daund Dist. Pune , Maharashtra, to transact the following business:- Ordinary Business 1. To receive, consider and adopt the Audited Financial Statements of the Company for the financial year ended March 31, 2016 together with the Reports of the Board of Directors and Auditors thereon. 2. To appoint a Director in place of Mr. Harish Seth (DIN: ), who retires by rotation and, being eligible, offers himself for re-appointment. 3. To ratify the appointment of Statutory Auditors and fix their remuneration and, in this regard to consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: RESOLVED that pursuant to Section 139, 142 and all other applicable provisions, if any, of the Companies Act, 2013 read with Rule 3 of the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, the Company hereby ratifies the appointment of M/s. Sehgal Mehta & Co., Chartered Accountants (Firm Registration No N), as the Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting (AGM) till the conclusion of the Twenty-Third AGM, to examine and audit the accounts of the Company for Financial Year , on such remuneration as may be agreed upon by the Board of Directors in consultation with the Auditors. Special Business 4. To determine fee for service of documents on member(s) through a requested mode and to consider, and if thought fit, to pass with or without modifications, the following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to provisions of Section 20 and other applicable provisions, if any, of the Companies Act, 2013 and relevant rules prescribed there under, the consent of the members of the Company be and is hereby accorded to charge from a member in advance, a sum equivalent to the estimated actual expenses of delivery of the documents through a particular mode, if any request has been made by such member for delivery of such document to him through such mode of service, provided such request along with the requisite fee has been duly received by the Company at least one week in advance of the dispatch of the document by the Company.

4 RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to do all such acts and take all such steps as may be deemed necessary, proper or expedient to give effect to this resolution. Place: Mumbai Date: 12 th August, 2016 For Pearl Engineering Polymers Limited Sd/- Harish Seth Chairman & Managing Director DIN: Registered Office: D-17, M.I.D.C. Industrial Area Kurkumbh, Taluk Daund, Dist. Pune , Maharashtra NOTES: 1. An Explanatory Statement as required under Section 102 of the Companies Act, 2013 in respect of the business specified above is annexed hereto. 2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE AGM IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF, AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. The instrument appointing a Proxy in order to be effective, must be deposited at the registered office of the Company duly completed and signed, not less than 48 hours before the commencement of the Annual General Meeting. A Person can act as a Proxy on behalf of members not exceeding fifty (50) members and holding in the aggregate not more than 10% of the total voting share capital of the Company. However, a single person may act as a proxy for a member holding more than 10% of the total voting share capital of the Company provided that such person shall not act as a proxy for any other person. 3. Corporate members intending to send their authorised representatives to attend the Meeting are requested to send to the Company a certified copy of the Board Resolution authorising their representative to attend and vote on their behalf at the Meeting. 4. Members holding shares in the dematerialized form are requested to mention their Client ID/DP ID and those holding shares in physical form are requested to mention their Folio Nos. on the Attendance slip and hand over the same at the entrance of the Meeting Hall for attending the Meeting. 5. Members/proxies/authorised representative should bring the duly filled attendance slip to attend the Meeting.

5 6. In accordance with the provisions of Section 152(6) of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Harish Seth (DIN ), Director, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. The Board of Directors of the Company commends his re-appointment. 7. The Register of Members and Share Transfer Books of the Company will remain closed from Monday, the 26th day of September, 2016 to Friday, the 30th day of September, 2016 (both days inclusive) for the purpose of AGM. 8. Members can inspect the Register of director and Key Managerial Personnel and their shareholding, required to be maintained under Section 170 of the Act during the course of the meeting at the venue. 9. All documents referred to in the notice will be available for inspection at the Company s registered office during normal business hours on all working days (except Saturdays and Sundays) upto the date of AGM. 10. Members holding shares in physical form either in multiple folios with identical names or joint holdings in the same order are requested to send their Share Certificates to the Company or M/s MAS Services Limited, Registrar and Share Transfer Agent of the Company for consolidation into a single folio. 11. The Company's shares are admitted in both the Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for custody and dematerialization of securities. Members can avail of the depository facilities by approaching any of the Depository Participants (DPs) of NSDL or CDSL or by approaching the RTA of the Company. 12. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit their PAN to their Depository Participant(s) with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN to the Company/RTA. 13. In case of change in postal address or any incompleteness/ incorrectness in address mentioned in any correspondence by the Company, the shareholders are requested to intimate the correct/ complete postal address (including PIN Code) to the Company or to the RTA at the earliest to ensure proper delivery of documents. If the shares are held in dematerialized form, information may be sent to the DP concerned and the RTA. 14. The Annual Report of the Company for the financial year is being sent to all members, whose Ids are registered with the Company or the Depository Participant(s) unless any member has requested for hard copy of the same. For members who have not registered their Ids, physical copy of the Annual Report is being sent in permitted mode. 15. With a view to using natural resources responsibly, we request shareholders to update their Ids with the Depositories (in case of Demat Holding) and the Company or RTA (in case of Physical holding) to send communication electronically.

6 16. The shareholders are requested to send their queries on annual report to the Company, not less than 7 days before the date of meeting, so that the requisite information/ explanations can be provided in time. 17. Pursuant to BIFR Order, the Share Capital of the Company was reduced by 60% and consequently, the Company issued new share certificates in exchange of the old certificates held by the shareholders. The old certificates are no more tradable in the market and are not accepted for dematerialization by the Depositories. Accordingly, the holders of such certificates who have not exchanged their share certificates may surrender the old certificates to the Company or the RTA to enable the Company to issue new certificate in exchange thereof as per the entitlement. 18. As per requirement of Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements), 2015 the particulars of a Director retiring by rotation and eligible for reappointment are given herein below : S.No Particulars Details 1 Name of the Director Mr. Harish Seth 2 DIN Date of Birth October 27, Brief profile/ Nature of Expertise Mr. Harish Seth is a chemical Engineer from IIT (Madras) and M.Tech from U.S.A. He has a rich experience of 44 years in the field of polymers. In addition he is one of the promoters of the Company. Having specialization in the field ideally suited to the nature of the Industry, he has enormously contributed towards best interests of the Company. 5 Directorship held in other Listed Company 6 Membership/Chairmanship of Committee of Listed entities (includes only Audit Committee and Stakeholder s Relationship Committee) 7 Number of Equity Shares held in the Company 8 Relationship Between directors interse NIL Pearl Engineering Polymers Limited None

7 Item No. 4 EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 Pursuant to the provisions of Section 20 of the Companies Act, 2013 and the Rules made thereunder, a document may be served on any member by sending the same to him by Post or by Registered post or by Speed post or by Courier or by delivering at his office or address or by such electronic or other mode as may be prescribed. Further, proviso to sub-section (2) of Section 20 states that a member may request for delivery of any document through a particular mode, for which he/she shall pay such fees in advance as may be determined by the Company in its AGM. Accordingly, the Board of Directors in their meeting held on 12 th August, 2016 has proposed that a sum equivalent to the estimated actual expenses of delivery of the documents through a particular mode, if any request has been made by any member for delivery of such documents to him through such mode of service, be taken to cover the cost of such delivery. None of the Directors or Key Managerial Personnel including their relatives is concerned or interested, financially or otherwise, in the said resolution. The Board recommends the Ordinary Resolution at item no. 4 of the accompanying notice, for the approval of the members of the Company. Place: Mumbai Date: 12 th August, 2016 For Pearl Engineering Polymers Limited Sd/- Harish Seth Chairman & Managing Director DIN: Registered Office: D-17, M.I.D.C. Industrial Area Kurkumbh, Taluk Daund, Dist. Pune , Maharashtra

8 Dear Members, DIRECTORS REPORT Your Directors have pleasure in presenting the 22nd Annual Report of the Company together with the audited financial statements for the Financial Year ended March 31, FINANCIAL HIGHLIGHTS The financial performance of the Company for the financial year is tabulated below: (Amount in `) Particulars For Financial Year For Financial Year Net Sales - - Other Income 26,821,691 2,787,049 Total Income 26,821,691 2,787,049 Total Expenditure 9,088,884 52,426,807 Profit/Loss before Extraordinary Items, Finance 17,732,807 (49,639,758) costs, Depreciation and Taxes Extra-Ordinary Items 0 0 Profit/(Loss) Before Finance Costs, 17,732,807 (49,639,758) Depreciation -Depreciation -Finance Cost 5,003,899 3,375,697 6,178,837 4,378,692 Profit before prior period items & tax 9,353,211 (60,197,288) Prior period expense 373,532 1,246,563 Tax expense 0 0 Net Profit/ (Loss) after Tax 8,979,679 (61,443,851) Since the Company s manufacturing plant got temporarily shut down in March 2012 due to financial problems, there was no significant development during under review affecting the operations of the Company. DIVIDEND Your directors are of the opinion of retaining the profits for within the Company, and thus have not recommended any dividend on Equity Shares for ended March 31, MATERIAL CHANGES AND COMMITMENTS There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this Report. SHARE CAPITAL The Authorised Share Capital of the Company is Rs Lakhs. The issued, subscribed & paid up capital of

9 the Company was Rs Lakhs as on 31 March, 2016 consisting of 30,412,560 Equity Shares of Rs. 10/- each and 7,06,000 Preference shares of Rs. 100 each. During under review the Company has not altered its share capital. SUBSIDIARY COMPANIES, JOINT VENTURES AND ASSOCIATE COMPANIES As on 31 st March, 2016, the Company does not have any subsidiary Company, associate Company or any Joint Venture. DIRECTORS AND KEY MANAGERIAL PERSONNEL Pursuant to the provisions of Section 149 of the Companies Act, 2013 ( the Act ), Mr. Ramesh Mehra and Mr. Brijesh Bansi Mathur were appointed as independent directors at the annual general meeting of the Company held on 30 th September, They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during. In terms of the provisions of Section 152(6) of the Act, and Articles of Association of the Company, Mr. Harish Seth (DIN ), retires by rotation at the ensuing Annual General Meeting and being eligible, seeks reappointment. The Board recommends his re-appointment. Brief resume of the Directors proposed to be re-elected is included in the Notice for the ensuing Annual General Meeting. PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulations The evaluation framework for assessing the performance of Directors comprised of criteria like contribution in Board process, time devoted for the Company, attendance of Board Meetings and Committee Meetings and commitment to shareholder and other stakeholder interests. Using appropriate criteria, the performance of the various Committees was separately evaluated by the Board. AUDITORS & AUDITORS REPORT Pursuant to the provisions of section 139 of the Act and the rules framed thereafter, M/s Sehgal Mehta & Co., Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the twentieth annual general meeting (AGM) of the Company held on September 30, 2014 till the conclusion of the twenty fifth AGM to be held in 2019, subject to ratification of their appointment at every AGM. Accordingly, the appointment of M/s. Sehgal Mehta & Co., Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the shareholders. The Company has received confirmation from the Statutory Auditors regarding their consent and eligibility under Sections 139 and 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 for appointment as the Auditors of the Company. The auditors report does not contain any qualifications, reservations or adverse remarks.

10 BOARD MEETINGS Six meetings of the board were held during. The details of the Board meetings and attendance of the Directors are provided in the Corporate Governance Report COMMITTEES OF THE BOARD The Board has constituted various committees in accordance with the requirements of Companies Act, The Board has following committees: a. Audit Committee b. Stakeholders & Relationship Committee c. Committee of Directors Details of the above committee along with the composition and meetings held during under review are provided in the Report on Corporate Governance forming part of this Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The Company has not made any loans to any persons within the meaning of Section 186 of the Companies Act, 2013 and has also not given any guarantees/securities or made any investment within the meaning of that section. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial Year were at an arm's length basis and were in the ordinary course of business. Hence, there are no transactions to be reported in Form AOC- 2. There were no materially significant related party transactions made by the Company that would have required members' approval under SEBI (Listing Obligations and Disclosure Requirements) Regulations, Further, details of Related Party Transactions as required to be disclosed by Accounting Standard AS-18 on Related Party Transactions are given in Note no. 25 of Notes to the Financial Statements. PUBLIC DEPOSITS The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. EXTRACT OF ANNUAL RETURN The extract of Annual Return as provided under sub-section (3) of section 92 of the Companies Act, 2013, in the prescribed Form MGT-9 is annexed to this Report as Annexure I. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS The Company has an Internal Control Framework which is commensurate with the size, scale and complexity of its operations. This framework ensures adequate safeguards and processes to address the evolving business requirements.

11 CORPORATE SOCIAL RESPONSIBILITY The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within purview of Section 135(1) of the Companies Act, 2013 and hence it is not required to formulate policy on corporate social responsibility. CLARIFICATION TO REMARKS CONTAINED IN THE AUDITORS REPORT Report on other legal and Regulatory requirements Clause 2 (d) & (e) of the Auditors Report: As per the legal opinion given by the legal advisors of the Company, the Foreign Financial Institution (AFIC) or its Assignee, cannot enforce any outstanding against the Company in any court of law despite existence of debt, as the same has become a time barred debt under provisions of the Limitations Act, Based on the said opinion of the advisors. Clause 2 (d) of the Auditors Report : No provision has been made for interest, in respect of the foreign currency loan of Rs thousands; and Clause 2 (e) of the Auditors Report: The outstanding by way of secured and unsecured loan and interest aggregating to Rs thousands thereon (shown as an Erstwhile loan barred by limitation in the Balance Sheet of the Company for the financial year ended March 31, 2016) have not been reinstated, as required under Accounting Standard (AS11) on the effects of changes in foreign exchange rates notified in the Companies (Accounting Standards) Rule Clause 2 (f) of the Auditors Report: It is not possible to ascertain the loss. However, the loss will be calculated on completition of sale of assets. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that: a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) they have selected such accounting policies and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the financial year and of the profit of the Company for ended march 31, 2016; c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the annual financial statements have not been prepared on going concern assumption/basis; e) they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

12 REGULATORY ORDERS There are no significant and material orders passed by the regulators or courts or tribunals that could impact the going concern status and operations of the Company in future. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO During the period under review, the Company has not carried out any activity. Therefore, a statement giving details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as prescribed under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, does not form part of this report. PARTICULARS OF EMPLOYEES During the financial year ended March 31, 2016, none of the employee was in receipt of remuneration exceeding the limit specified under Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered Office of the company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Secretarial Department of the Company in advance. CORPORATE GOVERNANCE As required under Regulation 17 to Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed report on Corporate Governance has been provided in a separate section which forms part of this annual report. ACKNOWLEDGEMENTS Your Directors would like to place on record their gratitude for the cooperation recieved from lenders, our valued customers and shareholders. The Board, in specific, wishes to place on record its sincere appreciation of the contribution made by all the employees towards growth of the Company. On Behalf of the Board of Directors For Pearl Engineering Polymers Limited Place: New Delhi Date: 12 th August, 2016 Sd/- Harish Seth Chairman & Managing Director DIN NO:

13 Form No. MGT-9 ANNEXURE I EXTRACT OF ANNUAL RETURN As on the financial year ended on March 31, 2016 [Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014] I. REGISTRATION & OTHER DETAILS: S No. Particulars Details 1. CIN L25209PN1992PLC Registration Date 14/07/ Name of the Company Pearl Engineering Polymers Limited 4. Category/Sub-category of the Company Public Listed Company having Share Capital 5. Address of the Registered office & contact details 6. Whether Listed Company Yes 7. Name, Address & contact details of the Registrar & Transfer Agent D-17, M.I.D.C Industrial Area, Kurkumbh, Taluk Daund, Distt. Pune , Contact No M/S. MAS SERVICES LIMITED T-34, 2nd Floor, Okhla Industrial Area, Phase-II, New Delhi Ph: /82/83 Fax: mas_serv@yahoo.com II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated: Not Applicable III. IV. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES: Not Applicable SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) a) Category-wise Share Holding Category of Shareholders A. Promoters (1) Indian a) Individual/ HUF No. of Shares held at the beginning of the year [As on ] Demat Physical Total % of Total Shares No. of Shares held at the end of [As on ] Demat Physical Total % of Total Shares % Change during the year b) Central Govt c) State Govt(s) d) Bodies Corp (4.97)

14 e) Banks / FI f) Any other Sub Total (A)(1): (2) Foreign a) NRIs- Individuals b) Other Individuals c) Bodies Corp. d) Banks/ FI e) Any Other Sub-Total (A)(2) Total Shareholding of Promoter (A)= (A)(1)+(A)(2) B. Public Shareholding 1)Institutions a) Mutual Funds b) Banks / FI c) Central Govt d) State Govt(s) e) Venture Capital Funds f) Insurance Companies g) FIIs h) Foreign Venture Capital Funds i) Others (specify) Sub-total (B)(1): ) Non- Institutions a) Bodies Corporate i) Indian

15 ii) Overseas b) Individuals i) Individual shareholders holding nominal share capital up to Rs. 1 lakh ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh c) Others (specify) Non Resident Indians/ Overseas Corporate Bodies Foreign Nationals Clearing Members Trusts Foreign Bodies - D R Sub-total (B)(2): Total Public Shareholding (B)=(B)(1)+ (B)(2) C. Shares held by Custodian for GDRs & ADRs Grand Total (A+B+C)

16 b) Shareholding of Promoters- S. No Shareholder s Name Shareholding at the beginning of (As on ) No. of Shares % of total Shares of the company % of Shares Pledged / encumbere d to total shares Shareholding at the end of (As on ) No. of Shares % of total Shares of the company %of Shares Pledged / encumbere d to total shares % change in sharehold ing during 1. Mr. Chand Seth Mrs. Suneeta Seth Mr. Nakul Seth Mr. Udit Seth Mr. Mahesh K Seth Mr. Harish Seth Mr. Krishen Seth Mrs. Nidhi Choudhari 9. Mr. Arjun Seth Mr. Varun Seth Mrs. Madhu Seth Mr. Amit Seth Pacific Pearl Finance & Leasing Ltd 14. Pearl Polymers Ltd (4.96) 15. Pearl Telefonics Ltd Beta Finance And Trading Pvt. Ltd 17. Gama Investments Pvt. Ltd 18. Theta Investments Pvt. Ltd 19. Pearl International Tours & Travels Ltd TOTAL

17 c) Change in Promoter s Shareholding S.No Name of the shareholder Shareholding Cumulative Shareholding during (from to ) No. of shares % of total shares of the company No. of shares % of total shares of the company 1. Mr. Chand Seth At the beginning of Promoters Shareholding during At the End of Mrs. Suneeta Seth At the beginning of Promoters Shareholding during At the End of Mr. Nakul Seth At the beginning of Promoters Shareholding during At the End of Mr. Udit Seth At the beginning of Promoters Shareholding during At the End of Mr. Mahesh K Seth At the beginning of Promoters Shareholding during At the End of Mr. Harish Seth At the beginning of Promoters Shareholding during At the End of Mr. Krishen Seth At the beginning of Increase in shareholding due to transfer of shares on July 29, At the End of Mrs. Nidhi Choudhari At the beginning of Promoters Shareholding during At the End of Mr. Arjun Seth At the beginning of

18 Promoters Shareholding during At the End of Mr. Varun Seth At the beginning of Promoters Shareholding during At the End of Mrs. Madhu Seth At the beginning of Promoters Shareholding during At the End of Mr. Amit Seth At the beginning of Promoters Shareholding during At the End of Pacific Pearl Finance & Leasing Ltd At the beginning of Promoters Shareholding during At the End of Pearl Polymers Limited At the beginning of Promoters Shareholding during ( ) (4.96) At the End of Pearl Telefonics Limited At the beginning of Promoters Shareholding during At the End of Beta Finance And Trading Private Limited At the beginning of Promoters Shareholding during At the End of Gama Investments Private Limited At the beginning of Promoters Shareholding during At the End of Theta Investments Private Limited

19 At the beginning of Promoters Shareholding during At the End of Pearl International Tours & Travels Limited At the beginning of Promoters Shareholding during At the End of d) Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters and Holders of GDRs and ADRs): S. no Name of Shareholders Shareholding Cumulative Shareholding during ( to ) No. of shares % of total shares of the company No. of shares % of total shares of the Company 1. Anand Fashions International LLC At the beginning of Promoters Shareholding during At the End of Aashray Portfolio Private Limited At the beginning of Promoters Shareholding during At the End of Interstar Financial Services Limited At the beginning of Promoters Shareholding during At the End of Dinesh Chandra Kothari At the beginning of Promoters Shareholding during At the End of Sunita Santosh Goenka At the beginning of Promoters Shareholding during At the End of Santosh S Goenka At the beginning of

20 Promoters Shareholding during At the End of Sadhana Balkrishna Patil At the beginning of Promoters Shareholding during At the End of Prem Trupti Builders And Developers Pvt. Ltd. At the beginning of Promoters Shareholding during At the End of Santosh Sitaram Goenka At the beginning of Promoters Shareholding during At the End of Shweta Balkrishna Patil At the beginning of Promoters Shareholding during At the End of

21 e) Shareholding of Directors and Key Managerial Personnel: S No. Shareholding of each Directors and each Key Managerial Personnel No. of shares Shareholding % of total shares of the company Cumulative Shareholding during ( to ) No. of shares % of total shares of the company 1. Mr. Harish Seth At the beginning of Shareholding during At the end of Mr. Ramesh Mehra At the beginning of Shareholding during At the end of Mr. B. B Mathur At the beginning of Shareholding during At the end of - -

22 V. INDEBTEDNESS Indebtedness of the Company including interest Outstanding/Accrued but not due for payment Particulars Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness Indebtedness at the beginning of the financial year i) Principal Amount - 24,900,000-24,900,000 ii) Interest due but not paid - 3,580,579-3,580,579 iii) Interest accrued but not due Total (i+ii+iii) - 28,480,579-28,480,579 Change in Indebtedness during the financial year Addition - 3,370,667-3,370,667 -Reduction - 20,870,417-20,870,417 Net Change - (17,499,750) - (17,499,750) Indebtedness at the end of the financial year i) Principal Amount - 5,900,000-5,900,000 ii) Interest due but not paid - 5,080,829-5,080,829 iii) Interest accrued but not due Total (i+ii+iii) - 10,980,829-10,980,829 VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL: i. Remuneration to Managing Director, Whole-time Directors and/or Manager- Nil ii. Remuneration to other Directors- Independent Directors Particulars of Remuneration Fee for attending board/committee meetings Mr. Ramesh Mr. B.B Total Mehra Mathur Amount Commission Others, please specify - - Total (1) Total Managerial Remuneration Overall ceiling as per the Act - - -

23 iii. Remuneration To Key Managerial Personnel other than MD/Manager/WTD- Nil VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: During , there were no penalties/punishment/compounding of offences under Companies Act, 2013.

24 REPORT ON CORPORATE GOVERNANCE This Report has been prepared and presented in compliance of the conditions of Corporate Governance laid down in Securities and Exchange Board of India (SEBI) under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter in this Report referred to as "SEBI (LODR) Regulations, 2015 ) and Clause 49 of the erstwhile Listing Agreement. 1. COMPANY S PHILOSOPHY ON CORPORATE GOVERNANCE Company s philosophy of Corporate Governance aims at establishing and practicing a system of good Corportae governance which will assist the management in managing the Company s Business in an efficient and transparent manner. Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ( SEBI Listing Regulations ) the Company has executed fresh Listing Agreements with BSE Limited and the National Stock Exchange of India Limited (NSE). 2. BOARD OF DIRECTORS Composition of Board The strength of the Board of Directors as on 31st March, 2016 was 3 Directors. The Board comprises of one executive Director designated as Chairman & Managing Director. The rest are Non-executive Independent Directors. No woman Director is appointed on the Board. The Board s composition, attendance and their Directorship/ Committee membership, Chairmanship in other Public Companies as on 31st March, 2016 is given below: Name of Director DIN Designation *No. of directorship in other Public Companies as on Executive Director Mr. Harish Seth Non Executive Director Mr. B. B. Mathur Mr. Ramesh Mehra Notes: Chairman & Managing Director Independent Director Independent Director ** No. of Committee positions held as on Member Chairman *The Directorships held by Directors as mentioned above do not include Directorships in Foreign Companies, Companies registered under Section 8 of the Companies Act, 2013 and Private Limited Companies.

25 2. **In accordance with SEBI Listing Regulations, Membership and Chairmanship of only Audit Committee and Stakeholder's Relationship Committee in all Public Limited Companies, whether listed or not (including Pearl Engineering Polymers Limited) have been considered. 3. None of the Directors on the Board hold directorships in more than ten public companies. Further none of them is a member of more than ten committees or chairman of more than five committees across all the public companies in which he is a Director. 4. The maximum tenure of independent directors is in compliance with the Act. All the Independent Directors have confirmed that they meet the criteria as mentioned under Regulation 16(1)(b) of the SEBI Listing Regulations read with Section 149(6) of the Act. 5. The Board periodically reviews the compliance reports of all laws applicable to the Company, prepared by the Company. Board Meetings The Board met six (6) times during the financial year on 8th May, 2015, 13th August, 2015, 15th September, 2015, 9th October, 2015, 2nd February, 2016 and 22nd March, The necessary quorum was present for all the meetings. The maximum interval between any two meetings did not exceed 120 days. As on 31 st March, 2016, attendance of each director at the Board meetings, last Annual General Meeting is provided below: Name Director of DIN Category No. of Board Meetings during Held attended Mr. Harish Seth Chairman & Managing Director Mr. Ramesh Independent Mehra Director Mr. B.B. Mathur Independent Director Relationships between Directors inter-se None of directors are related to each other. Number of shares held by Non- Executive Directors Whether attended last AGM held on 26 th September, Yes 6 6 Yes 6 3 No Mr. Ramesh Mehra, Non- Executive & Independent Director hold 1760 Equity Shares of the Company. Meeting of Independent Directors In compliance with Schedule IV to the Companies Act, 2013 during the financial year , the Independent Directors of the Company met on 2 nd February, All Independent Directors were present in the meeting and they reviewed and discussed matters as required under the Act.

26 Remuneration of Directors a) Non Executive Directors Details of the sitting fees paid to Non-Executive Directors during the financial year are given below: Name of Directors Sitting fees# Mr. Ramesh Mehra Nil Mr. Brijesh Bansi Mathur ` 15000/- # sitting fees indicated above also includes payment for Board committee meetings. There were no pecuniary relationships or transactions of the non-executive director vis-à-vis the Company during the financial year ended 31 st March, 2016 other than those disclosed in the financial statement. b) Executive Director No remuneration was paid to Mr. Harish Seth, Chairman & Managing Director of the Company during the financial year Code of Conduct The Company has adopted the revised Code of Conduct for Board members and senior management of the Company, which also includes the duties of independent directors. All the Board members and senior management personnel have affirmed compliance with the said code. A declaration to this effect signed by the Chairman and Managing Director is enclosed as Annexure I. BOARD COMMITTEES Our Board has constituted sub-committees to focus on specific areas and make informed decisions within the authority delegated to each of the Committees. Each Committee of the Board is guided by its Charter, which defines the scope, powers and composition of the Committee. We have three subcommittees of the Board as at March 31, Audit committee Stake holders relationship committee Committee of directors A. AUDIT COMMITTEE The Audit Committee is constituted in line with the provisions of Regulation 18 of SEBI Listing Regulations read with Section 177 of the Act. The Audit Committee assists the Board in the dissemination of financial information and in overseeing the financial and accounting processes in the Company. The Audit Committee met three (3) times during on 13 th August, 2015, 9 th October, 2015 and 2 nd February, 2016.

27 The composition of the Audit Committee and attendance of the members at the meeting is given below: Name of the Members Chairman/Member Category of Director No of Meetings attended 3 Independent Director 3 Independent Director Mr. B. B. Mathur Chairman Non- Executive & Mr. Ramesh Mehra Member Non- Executive & Mr. Harish Seth Member Executive Director 3 Members of the Audit Committee are eminent professionals and financially literate. The broad description of terms of reference of the Audit Committee is as follows: 1) Review the recommendation for appointment, remuneration and terms of appointment of auditors of the Company. 2) Review and monitor the auditor s independence and performance and effectiveness of audit process. 3) Examination of the financial statement and auditor s report thereon. 4) Approval or any subsequent modification of transaction of the Company with related parties. 5) Security of inter-corporate loan and investments. 6) Valuation of undertakings or assets of the Company, wherever, it is necessary. 7) Evaluation of internal financial control and risk management systems. 8) Monitoring end use of funds raised through public offer and related matters. B. STAKEHOLDERS RELATIONSHIP COMMITTEE The Stakeholders Relationship Committee is constituted in line with the provisions of Regulation 20 of SEBI Listing Regulations read with Section 178 of the Act. The Committee shall consider and resolve the grievances like share transfers, transmissions, issue of duplicate share certificates, rematerialization of shares and all other issues pertaining to shares and also to redress investor grievances like non-receipt of dividend warrants, non receipt of share certificates etc. The committee also reviews the performance of the Registrar and Share Transfer Agent. Mr. B.B Mathur, Independent Director, is the Chairman of the Stakeholders Relationship Committee. The Stakeholders Relationship Committee met three (3) times during on 13 th August, 2015, 9 th October, 2015 and 2 nd February, 2016.

28 Composition of the Stakeholders Relationship Committee and attendance of the members at the meeting is given below: Name Designation Category of Director No. of Meetings attended Mr. B. B. Mathur Chairman Independent, Non-Executive 3 Mr. Ramesh Mehra Member Independent, Non-Executive 3 Mr. Harish Seth Member Non- Independent, Executive 3 Status of Complaints received from the shareholders: The Company has attended to most of the investor s grievances/ correspondence within a period of fifteen days from the date of receipt of the same, while almost all the rest were attended to within maximum period of 30 days. As on 31 st March, 2016 there is no complaint pending against the Company. Compliance Officer The Company is not able to identify a suitable candidate having the requisite qualification for the post of Compliance Officer. C. COMMITTEE OF DIRECTORS The Company has Committee of Directors with the following members: Mr. Harish Seth, Chairman Mr. Ramesh Mehra, Member The Committee is responsible for making/reviewing banking arrangements, reviewing short-term and long-term investments, approving transfers/transmission of shares, approving allotment of shares and such other financial transactions within the limits specified by the Board. In addition to the fortnightly meetings conducted to consider and approve transfer and transmission of shares, the Committee of Directors meets as and when it is considered necessary.

29 GENERAL BODY MEETINGS: Annual General Meetings of the last three years and special resolutions, if any: YEAR Venue Date Time Special Resolution Passed D-17, MIDC Industrial Area, 30/09/ PM No Kurkumbh, Taluk Daund, Distt Pune (Maharashtra) Same as above 30/09/ PM No Same as above 26/09/ AM No Postal Ballot: The Company sought approval of the members, through Postal Ballot as per Section 110 of the Companies Act, 2013 ( the Act ), read together with the Companies (Management and Administration) Rules, 2014 as detailed hereunder: Date of Declaration of Postal Ballot Result Description of the Resolutions Sale of Assets/ Undertaking of the Company U/s 180(1)(a) of the Companies Act, Votes cast in favour of the resolution Votes cast against resolution No. of % to total No. of % to Votes valid votes Votes total valid votes % % Mr. R.S. Bhatia, Practicing Company Secretary was appointed as the Scrutinizer for the aforesaid postal ballot exercise. Procedure for Postal Ballot In compliance with Clause 35B of the Equity Listing Agreement and Section 108, 110 and other applicable provisions of the Companies Act, 2013, read with Rules 20 & 22 of the Companies (Management & Administration) Rules, 2014, the Company provides electonic voting facility to all its members, to enable them to cast their votes electronically. The Company engaged the services of National Securities Depository Limited (NSDL)/ MAS Services Limited, its Registrar and Share Transfer Agent, for the purpose of providing e-voting facility to all its members. The Members have the option to vote either by physical ballot or e-voting. The Company dispatches the Postal Ballot Notices and Forms along with postage pre-paid business reply envelopes to its members whose names appear on the Register of Members/ list of Beneficiaries as on the cut-off date. The Postal Ballot Notice is sent to Members in electronic form to the addresses registered with their depository paricipants (in case of electronic shareholding)/ the Company s Registrar and Share Transfer Agent (in case of physical shareholding). The Company also publishes notice in the newspapers mentioning the requirements as mandated under the act and applicable rules. Members desiring to exercise their votes by physical

30 postal ballot forms are requested to return the forms duly completed and signed, to the scrutinizer on or before the close of voting period. Members desiring to exercise their votes by electonic mode are requested to vote before close of busniess hours on the last date of e-voting. The scrutinizer submits his report to the Chairman cum Managing Director, after the completion of scrutiny, and the results of the voting by postal ballot are then announced by the Chairman cum Managing Director as the case may be. The Results alongwith the Report of Scrutinizer has been communicated to the Stock Exchanges, NSDL and the Registrar and Share Transfer Agent. The date of declaration of the results by the Company is deemed to be the date of passing of the resolutions. Special Resolution proposed to be conducted through Postal Ballot No Special Resolution is proposed to be conducted through Postal Ballot at the ensuing AGM. MEANS OF COMMUNICATION Quarterly results and other relevant information: The quarterly, half yearly and annual results of the Company are published in leading newspaper in India which includes Business Standard (English) / Aapla Mahanagar (Marathi) Website The Company is not maintaining any website. GENERAL SHAREHOLDER INFORMATION: Corporate Identity Number (CIN) Our Corporate Identity Number (CIN), allotted by Ministry of Company Affairs, Government of India is L25209PN1992PLC012701, and our Company Registration Number is Ensuing Annual General Meeting Annual General Meeting for ended March 31, 2016 is scheduled to be held on Friday, the 30 th day of September, 2016 at 3.00 P.M at the Registered Office of the Company at D-17, MIDC Industrial Area, Kurkumbh, Taluk Daund Dist. Pune , Maharashtra. Financial Calendar The financial year of the Company starts from on the 1 st day of April and ends on 31 st day of March of next year. Dividend payment date No dividend has been declared.

31 Listing of Shares Stock Exchanges Stock Code Address Equity ISIN BSE Limited Phiroze Jeejeebhoy Towers Dalal Street, Mumbai National Stock Exchange of India Ltd. (NSE) Annual Listing Fee PEPL Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (E), Mumbai INE843A01023 The annual Listing fees for the Financial Year has not been paid to any of the Stock Exchanges where Shares of the Company are listed. Market Price Data Due to suspension of trading of Company s shares at NSE & BSE, the stock market data of shares is not available for financial year ended on March 31, Suspension of Trading On Account of Non- Payment of fees to National Stock Exchange of India Limited (NSE) and BSE Limited, trading services has been suspended. Registrar to an issue and share transfer agents: Name: MAS Services Private Limited Address: T-34, IInd Floor, Okhla Industrial Area, Phase- II, New Delhi Phone: /82/83 Fax No.: info@masserv.com Share transfer system: All duly completed applications received for transfer of shares held in the physical form are processed and come to effect within 15 days from the date of receipt. Physical shares received for de-materialization are processed and completed within a period of 21 days from the date of receipt, provided they are complete in all respects. For matters regarding share transferred in physical form, share certificates, change of address, shareholders should communicate with our Registrar & Share Transfer Agent.

32 Shareholding Pattern as on March 31, 2016 Category of Shareholder Number of Shares held Percentage of Shareholding Promoter Group Total Promoter and Promoter Group Holding (A) Public Holding NRI / OCBs Mutual Funds, Banks, Financial Institutions Bodies Corporate Public Holding (Individuals) Clearing Members Total Public Holding (B) Total (A+B) Outstanding ADR/GDR/Warrants or any other Convertible instruments, Conversion Date and Likely Impact on Equity The Company has not subscribed in any of the Global Depository Reciepts or American Depository Receipt or warrants or any convertible instruments. Commodity Price Risk or Foreign Exchange Risk and Hedging Activities There is no commodity price risk or foreign exchange risk and hedging activities involved or applicable. Plant Locations The Company s plant is located at D-17, MIDC Industrial Area, Kurkumbh, Taluk Daund, Distt Pune (Maharashtra) Address for Correspondence: Registered Office: Head Office: D-17, MIDC Industrial Area, Kurkumbh, Taluk Daund, Distt Pune (Maharashtra) , Rohit House, 3, Tolstoy Marg, Delhi

33 Information to Shareholders A brief resume of the directors appointed/ reappointed together with the nature of their experience and details of the other directorships held by them is annexed to the Notice convening the Annual General Meeting. Any query on Annual Report: Pearl Engineering Polymers Limited , Rohit House, 3, Tolstoy Marg, New Delhi Contact No.: , Fax No.: investorhelpdesk@pearlpet.net pearl.secretarial@pearlmail.com OTHER DISCLOSURES Related Party Transactions There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Details of Non-Compliance by the Company, penalties and strictures imposed on the Company by the Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets, during the last three years. Fine of Rs. 142,000/- has been imposed by National Stock Exchange of India Limited (NSE) for nonappointment of woman director on the Board of Company in accordance with Clause 49 of the Listing Agreement. Chairman cum Managing Director Certification The Chairman cum Managing Director has issued certificate pursuant to the provision of Clause 49 of the Listing Agreement and SEBI (LODR) Regulations, 2015, certifying that the financial statements do not contain any untrue statement and these statements represent a true and fair view of the Company s affairs. A certificate to this effect signed by the Chairman cum Managing Director is enclosed as Annexure II. Risk Management The Company s risk management strategy is based on a clear understanding of various risks, disciplined risk assessment and management procedures and continuous monitoring. The Company has a risk management framework in place and business activities are undertaken within this policy framework. The Company has also established procedures to apprise the Board on the risk assessment and minimization procedures. For and on behalf of the Board of Directors For Pearl Engineering Polymers Limited Place: Mumbai Date: 12 th August, 2016 Sd/- Harish Seth Chairman & Managing Director DIN:

34 Annexure I DECLARATION ON CODE OF CONDUCT As provided under Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, I hereby confirm that all Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for the Financial Year ended March 31, Place: Mumbai Date: 12 th August, 2016 Sd/- Harish Seth Chairman & Managing Director DIN: Annexure II To The Board of Directors Pearl Engineering Polymers Limited CHAIRMAN CUM MANAGING DIRECTOR CERTIFICATION 1. We have reviewed the financial statements and the cash flow statement of Pearl Engineering Polymers Limited for the financial year ended 31 March, 2016 and that to the best of our knowledge and belief, we state that; a) These statements do not contain any materially untrue statement or omit any material fact or contain statements that may be misleading; b) These statements present a true and fair view of the Company's affairs and are in compliance with current accounting standards, applicable laws and regulations. 2. There are, to the best of our knowledge and belief, no transactions entered into by the Company during which are fraudulent, illegal or in violation of the Company's code of conduct. 3. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and steps taken or proposed to be taken for rectifying these deficiencies. 4. We have indicated to the Auditors and the Audit Committee that: a) Significant changes in the internal control over financial reporting during. b) Significant changes in accounting policies made during and that the same have been disclosed in the notes to the financial statements; and c) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company's internal control system over financial reporting. Sd/- Place: Mumbai Date: 12 th August, 2016 Harish Seth Chairman & Managing Director DIN:

35 INDEPENDENT AUDITOR'S REPORT To THE MEMBERS OF M/s PEARL ENGINEERING POLYMERS LTD. 703, ROHIT HOUSE, 3, TOLSTOY MARG NEW DELHI Dear Sir, We have audited the accompanying financial statements of M/S PEARL ENGINEERING POLYMERS LTD., which comprise the Balance Sheet as at March 31, 2016, and the Statement of Profit and Loss for ended, Cash Flow Statement of the cash flows for 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 Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 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. Auditor s 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 included 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 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

36 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 on the financial statement. Opinion Subject to Note No. 26 & 27, 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: i) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, ii) In the case of Profit & Loss Account, of the Profit of the Company for ended on that date. iii) In the case of Cash Flow Statement, of the cash flows for ended on that date. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor s Report) Order, 2016 ( the Order ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the order. 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 purpose of our audit; b) In our opinion proper books of accounts 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) Provision has not been made for interest after September 3 rd, 2009, in respect of foreign currency loan of Rs thousands, on the basis of legal advice obtained by the company that the loan has become barred by limitation. In the absence of the evidence as to confirmation and /or settlement of the liability, we are unable to form an opinion on the claim of the company, that the above loan of Rs thousands from a foreign financial institution cannot be enforced. Further the effect on Profit/Loss of the Company cannot be quantified in view of the uncertainties about repayment obligation of the Company. e) Foreign Currency Loan and Interest Liability provided in the books have not been reinstated as at March 31 st, 2013 as provided by Accounting Standards (AS) - 11, The effects on the Changes in Foreign Exchange Rates, on the basis of legal advice obtained by the company that the loan has become barred by limitation. In the absence of the evidence as to confirmation and/

37 or settlement of the liability, we are unable to form an opinion on the claim of the company that the loan cannot be enforced. Further, the effect on Profit/Loss of the Company cannot be quantified in view of the uncertainties about repayment obligation of the Company. f) We draw attention to note no. 27. We are unable to assess the loss/ Impairment on Assets held for Sale in absence of any evidence available with the company, the extent of loss and its effect on the profit & loss account cannot be ascertained. g) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, h) On the basis of written representations received from the directors as on March 31, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164 (2) of the Act. i) 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 Annexure B ; and j) 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. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note no. 24 to the financial statements; ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses; iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the company. Place: New Delhi Date: 6 th June, 2016 For Sehgal Mehta & Co. Chartered Accountants FRN N Sd/- (Naresh Khanna) Partner M.No

38 Annexure - A to the Auditors Report The Annexure referred to in Independent Auditors Report to the members of the Company on the financial statements for ended 31 March 2016, we report that: i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) As explained to us, all the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification. (c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company. ii) There are no inventories in the company. iii) As explained to us, the company has not granted any loans to companies, firms or other parties covered in the register maintained under Section 189 of Act, and therefore, the matter referred in Paragraph 3 (iii) of the Companies (Auditor s Report) Order, 2016 are not applicable. iv) The company has not granted any loan, made any investments, provided any guarantee and security within the meaning of section 185 and 186 of the Companies Act, v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits in contravention of Directives issued by Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under, where applicable. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal. vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the activities such as engaged in the production of goods or providing services by the Company. vii) (a) According to the information and explanations 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, income-tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues have been regularly deposited during by the Company with the appropriate authorities. (b) According to the information and explanations given to us, and the records of the

39 companies examined by us, there are no disputed dues of sales tax, income tax, custom duty, service tax, wealth tax, Value added tax, excise duty and cess which have not been deposited. Name of the Statute Custom & Central Excise Act Nature of the Dues Custom Duty Demand on Technical Know- how Fee Amount (`In 000s) Period which amount relates to the 36, CEGAT do----- Customs Duty 3, CESAT Forum where the dispute is pending viii) According to the information and explanations given to us, and the records of the companies examined by us, the Company has not defaulted in repayment of loans or borrowings to a financial institution and banks. ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instrument) and term loans. x) Based upon the audit procedures performed and according to the information and explanations given to us, no fraud by the company or any fraud on the company by its officers or employees has been noticed or reported during the course of our audit, that causes the financial statements to be materially misstated. xi) No Managerial Remuneration has been paid or provided. xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable. xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards. xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during. xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

40 xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act Place: New Delhi Date: 6 th June, 2016 For Sehgal Mehta & Co. Chartered Accountants FRN N Sd/- (Naresh Khanna) Partner M.No

41 Annexure - B to the Auditors Report Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ( the Act ) We have audited the internal financial controls over financial reporting of M/s Pearl Engineering Polymers Limited ( the Company ) as of 31 March 2016 in conjunction with our audit of the financial statements of the Company for ended on that date. Management s Responsibility for Internal Financial Controls The Company s management is responsible for establishing and maintaining internal financial controls based on the internal control 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 company s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, Auditors Responsibility Our responsibility is to express an opinion on the Company's 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 Guidance Note ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls 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 auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company s internal financial controls system over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A company's 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 company's 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

42 principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and 3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. 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 31 March 2016, 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. Place: New Delhi Date: 6 th June, 2016 For Sehgal Mehta & Co. Chartered Accountants FRN N Sd/- (Naresh Khanna) Partner M.No

43 I BALANCE SHEET AS AT MARCH 31, 2016 PARTICULARS Note As at As at No. 31 st March st March 2015 (Rs) (Rs) EQUITY AND LIABILITIES Shareholders' Funds (a) Share Capital 2 374,725, ,725,600 (b) Reserve and Surplus 3 (481,266,427) (490,246,106) (106,540,827) (115,520,506) ERSTWHILE LOAN BARRED BY LIMITATION 161,923, ,923,901 Non-current liabilities (c) Other Long-Term Liabilities 4 10,980,829 44,817,975 10,980,829 44,817,975 II Current liabilities (a) Trade Payables 5 517, ,996 (b) Other Current Liabilities 6 2,529,905 2,992,131 3,047,227 3,706,127 TOTAL 69,411,130 94,927,497 ASSETS Non-current assets (a) Fixed assets (i) Tangible Assets 7(i) 37,642,038 42,477,333 (ii) Intangible Assets 7(ii) 17,142 42,319 37,659,180 42,519,652 (b) Assets held for Sale 8 24,365,934 36,185,950 (c) Long-Term Loans and Advances 9 1,287,615 1,287,615 (d) Other Non-Current Assets ,549 6,525,174 26,216,098 43,998,739 Current assets (a) Current Investments 11 4,000,000 6,441,884 (b) Trade Receivables 12 (c) Cash and Cash Equivalents 13 1,058,031 1,743,163 (d) Short-Term Loans and Advances 14 18,416 12,366 (e) Other Current Assets , ,693 5,535,852 8,409,106 TOTAL 69,411,130 94,927,497 Significant Accounting Policies 1 The accompaying notes are an integral part of the financial statements As per our report of even date For Sehgal Mehta & Co. Chartered Accountants F.R.N: N For and on behalf of the board of directors Sd/- Sd/- Sd/- Naresh Khanna HARISH SETH RAMESH MEHRA Partner Chairman & Managing Director Director M.No DIN No DIN No Place: New Delhi Place: New Delhi Place: New Delhi Date : 6th June 2016 Date : 6th June 2016 Date : 6th June 2016

44 STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016 For the For the PARTICULARS Note year ended year ended No. 31 st March st March 2015 (Rs.) (Rs.) Income Other Income 16 26,821,691 2,787,049 Total Revenue (I) 26,821,691 2,787,049 Expenses Cost of Materials Sold/Consumed Employees Benefits Expnese 18 3,594, ,994 Other Expenses 19 5,493,925 52,281,813 Total Expenses (II) 9,088,884 52,426,807 Earnings before interest, tax, depreciation and amortixation (EBITDA) [I-II] 17,732,807 (49,639,758) Depreciation and Amortization Expense 20 5,003,899 6,178,837 Finance Costs 21 3,375,697 4,378,692 Profit Before Prior Period items & Tax 9,353,211 (60,197,288) Prior Period Expense ,532 1,246,563 Profit Before Tax 8,979,679 (61,443,851) Tax Expenses: Current Tax - - Deferred Tax - - Profit/(loss) for 8,979,679 (61,443,851) Earning per equity share: 23 Basic 0.30 (2.02) Diluted 0.30 (2.02) Significant Accounting Policies 1 The accompaying notes are an integral part of the financial statements As per our report of even date For Sehgal Mehta & Co. Chartered Accountants F.R.N: N For and on behalf of the board of directors Sd/- Sd/- Sd/- Naresh Khanna HARISH SETH RAMESH MEHRA Partner Chairman & Managing Director Director M.No DIN No DIN No Place: New Delhi Place: New Delhi Place: New Delhi Date : 6th June 2016 Date : 6th June 2016 Date : 6th June 2016

45 CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH31, 2016 Particulars For Ended March 31, 2016 (Rs.) For Ended March 31, 2016 (Rs.) A. Cash flow from operating activities: Net (loss)/profit before tax 8,979,678 (61,443,851) Adjustments for : Depreciation/Amortisation 5,003,899 6,178,837 Impairment of Asset - 1,212,873 Interest Expense 3,372,627 4,378,692 Interest Income 121,759 (38,785) Dividend Income - - (Profit)/loss on sale of assets (17,443,760) (2,525,027) (Profit)/loss on sale of Shares/Investment (67,075) (164,043) Operating profit before working capital changes (32,872) (52,401,303) Adjustments for changes in working capital : - (Increase)/Decrease in Sundry Debtors - 6,195,894 - (Increase)/Decrease in Other Receivables 5,708,863 36,531,599 - (Increase)/Decrease in Inventories Increase/(Decrease) in Trade and Other Payables (658,900) 1,093,352 Cash generated from operations 5,017,091 (8,580,458) - Taxes (Paid) / Received - - Net cash from operating activities (a) 5,017,091 (8,580,458) B. Cash flow from Investing activities: Additions during the period (1,150,866) (18,911) Proceeds from Sale of fixed assets 30,271,216 9,177,087 Purchase of Investment - (18,954,322) Sale of Investment 2,508,959 13,566,862 Interest Received (Revenue) (121,759) 38,785 Net cash used in investing activities (b) 31,507,549 3,809,502 C. Cash flow from financing activities: Share capital redeemed - - Proceeds from Long Term Borrowings (17,499,750) (9,185,113) Proceeds from Other Long Term Liability (16,337,396) 16,337,396 Proceeds from Short Term Borrowing - - Interest Paid (3,372,627) (4,378,692) Dividend Paid (including dividend Tax) - - Net cash used in financing activities ( c) (37,209,773) 2,773,591 Net Increase/(Decrease) in Cash & Cash Equivalents (a+b+c) (685,133) (1,997,366) Cash and cash equivalents in the opening 1,743,164 3,740,530 Cash and cash equivalents in the end 1,058,031 1,743,164 Cash and cash equivalents comprise Cash in hand 65,252 55,061 Balance with Scheduled Banks 992,780 1,688,103 1,058,031 1,743,164 Notes : 1 The above Cash flow statement has been prepared under the indirect method setout in AS-3 notified in the Companies 2 Figures in brackets indicate cash outgo. 3 Previous year figures have been regrouped wherever necessary to conform to the current year's classification. This is the Cash Flow Statement referred to in our report of even date For Sehgal Mehta & Co. Chartered Accountants F.R.N: N For and on behalf of the board of directors Sd/- Sd/- Sd/- Naresh Khanna HARISH SETH RAMESH MEHRA Partner Chairman & Managing Director Director M.No DIN No DIN No Place: New Delhi Place: New Delhi Place: New Delhi Date : 6th June 2016 Date : 6th June 2016 Date : 6th June 2016

46 Notes to financial statements for ended March 31, 2016 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS I. SIGNIFICANT ACCOUNTING POLICIES: i) BASIS FOR PREPARATION OF ACCOUNTS: The financial statements are prepared and presented under the historical cost convention on accrual basis of accounting in accordance with the generally accepted accounting principles in India ( GAAP ), applicable Accounting Standards issued by The Institute of Chartered Accountants of India and under the historical cost convention, on accrual basis. ii) FIXED ASSETS: Fixed assets are stated at cost of acquisition (net of Modvat / Cenvat, wherever applicable) less accumulated depreciation. Cost includes freight, duties, taxes and their incidental expenses related to acquisition and installation of the fixed assets. iii) DEPRECIATION: Depreciation on fixed assets is provided on Straight-Line Method at the rates, and in the manner prescribed under Schedule II to the Companies Act, 2013 except for leasehold land, which is amortised over the period of the lease and capital spares which are being depreciated on the remaining useful life of the machines to which they relate. iv) INVESTMENTS: Current investments are stated at lower of cost or fair value. Long Term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if, in the opinion of the management, such decline is other than temporary, v) INCOME: Sale of goods is recognised at the point of despatch to the customer vi) INVENTORIES: Raw & Packing material are valued at lower of weighted average cost and net realisable value. Stores & spares are valued at lower of cost determined on a First in First out basis and net realisable value. vii) TRANSLATION OF FOREIGN CURRENCY ITEMS: Transactions denominated in foreign currencies are recorded at exchange rate prevailing at the date of transaction. Foreign currency monetary items are translated at period end rates unless otherwise stated in the report. Exchange differences arising on settlement of transactions and translation of monetary items (including forward contracts) are recognised as income or expense in the period in which they arise. viii) BORROWING COST: All the borrowing costs are charged to Profit & Loss Account.

47 ix) LEASES: Lease of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating lease. Payments made under operating lease are charged to Profit & Loss Account on a "Straight-Line Basis" over the period of lease. Rentals payable under operating lease are charged to Profit & Loss Account as incurred. x) TAXATION: Tax expense for the period, comprising Current Tax and Deferred Tax is included in determining the net profit / (loss) for. The provision for current taxation is based on assessable profits of the Company as determined under the Income Tax Act, Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets and liabilities are recognized for all timing differences. Deferred tax assets are recognized based on prudence and are carried forward to the extent it is certain that future taxable profit will be available against which such deferred tax assets can be realized. The Deferred Tax asset on account of unabsorbed losses has not been created in view of discontinued operation. xi) PROVISIONS AND CONTINGENCIES: The company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.

48 31 st March st March 2015 (Rs) (Rs) 2 SHARE CAPITAL AUTHORISED CAPITAL 42,000,000 (Previous Year-42,000,000) equity shares of Rs. 10/- each. 420,000, ,000, ,000(Previous Year-8000,000) Redeemable Preference Shares of 80,000,000 80,000,000 Rs.100/- each 500,000, ,000,000 ISSUED, SUBSCRIBED & PAID UP 30,412,560(Previous year-30,412,560) Equity Shares of Rs. 10/-.each 304,125, ,125, ,000(Previous year-706,000) 0.01%RedeemmablePreference Shares of 70,600,000 70,600,000 Rs. 100/-.each. (Redeemable Preference Shares were to be redeemed at par in three annual installments on 30th Seprember, 2012,2013,&2014) Total issued, subscribed and paid-up capital 374,725, ,725,600 Details of shareholders holding more than 5% shares of the company No. of Shares % holding No. of Shares % holding Name of Share Holder in class (in lakhs) in class Pacific Pearl Finance & Leasing Ltd 2,615, ,615,906 9 Pearl Polymers Ltd 5,492, ,000, Pearl Telefonics Ltd 2,509, ,509,160 8 Krishen Seth 1,591, Harish Seth 1,713, ,713,560 6 Anand Fashions International LLC 1,600, ,600,000 5 Reconciliation of the shares outstanding at the beginning and at the end of the reporting period Equity Shares No. Rs. No. Rs. At the beginning of the period 30,412, ,125,600 30,412, ,125,600 Issued during the period Outstanding at the end of the period 30,412, ,125,600 30,412, ,125,600 Preference Shares No. Rs. No. Rs. At the beginning of the period 706,000 7,060, ,000 7,060,000 Issued during the period ,000 7,060, ,000 7,060,000 Less : Redeemed during the period Outstanding at the end of the period 706,000 7,060, ,000 7,060,000 3 RESERVE AND SURPLUS SURPLUS Balance as per last financial statements (490,246,106) (428,802,255) Add:Surplus during 8,979,679 (481,266,427) (61,443,851) (490,246,106) Total Reserve and Surplus (481,266,427) (490,246,106) 4 Other Long Term Liabilities Advance against Assets - 16,337,396 Inter Corporate Deposits Received 10,980,829 28,480,579 Total Other Long Term Liabilities 10,980,829 44,817,975

49 31 st March st March 2015 (Rs) (Rs) 5 Trade Payables Due to Micro & Small & Medium Enterprises * Others- Creditors for Other Service 517, , , ,996 Total Trade Payables 517, ,996 * This information as required to be disclosed has been determined to the extent such parties have been indentified on the basis of information available with the Company. 6 Other Current Liabilities TDS Payable 188, ,211 CST Payable 591,088 - Other Payables 1,749,896 2,600,920 Total Other Short Term Liabilities 2,529,905 2,992,131 Non-Current Assets 7 Fixed Assets i Tangible Assets (Ref details below) 37,642,038 42,477,333 ii Intangible Assets (Ref details below) 17,142 42,319 Total Nons Current Assets 37,659,180 42,519,652 8 Assets held for Sale Following Assets are transferred to Assets held for Sale:- Plant & Machinery 33,404,825 33,404,825 Stores & Spares 8,878,405 8,878,405 42,283,230 42,283,230 Less: Scrap Realised 17,917,296 6,097,280 Total "Assets held for Sale" 24,365,934 36,185,950 9 Long Term Loans and advances Security Deposits (Unsecured, Considered Good) 1,287,615 1,287,615 Total Long Term Loans and advances 1,287,615 1,287, Other Non-current Assets Advances Recoverable in cash or in kind-unsecured-considered good 15,290,288 26,413,951 Provision made against Advances Recoverable (15,279,885) 10,403 (21,440,923) 4,973,028 Amount Recoverable from LIC (Considered Good) 552, ,146 Balance Recoverable from Sales Tax Department (Considered Good) - 2,041,982 Provision made against recoverable with Sales Tax Department - (1,041,982) 1,000,000 Balance Recoverable from Excise Department (Considered Good) 8,084,958 9,562,460 Provision made against recoverable with Excise Department (8,084,958) - (9,562,460) - Balance Recoverable from Excise Department (Doubtful) 5,000,000 5,000,000 Provision made against deposit with customs (5,000,000) - (5,000,000) - Total Other Non-current Assets 562,549 6,525, Current Investments (OTHER THAN TRADE) Mutual Fund -Unquoted 0 units of ICICI Pru Equity Income-Reg (G) (P.Y units) - 1,000,000 0 units of ICICI Pru Savings Fund-Reg (G) (P.Y units) - 468, units of Reliance Capital Builder ii-sr.c (G) (P.Y units) 4,000,000 4,000,000 0 units of Reliance Mid & Small Cap Fund (G) (P.Y units) - 973,011 6,441,884 4,000,000 Total Current Investments 4,000,000 6,441,884

50 31 st March st March 2015 (Rs) (Rs) 12 Trade Receivables Debts outstanding for a period exceeding six months from the date they are due for payment Unsecured Considered Good From Others 6,188,990 6,188,990 Less: Provision for Doubtful Debts (6,188,990) - (6,188,990) - Unsecured Considered Doubtful (Other than related parties) 8,353,017 8,353,017 Less: Provision for Doubtful Debts (8,353,017) - (8,353,017) - Total Trade Receivables Cash and Cash Equivalents Cash in hand 65,252 55,060 Current Accounts 992,780 1,688,103 Other Fixed Deposits matured but not realised - 1,058,031-1,743,163 (Fixed Deposit are for maturity period of less than one year) Total Cash and Cash Equivalents 1,058,031 1,743, Short Term Loan and Advances Others than related Parties Advances Recoverable in cash or in kind-unsecured-considered good 18,416 12,366 Total Short Term Loan and Advances 18,416 12, Other current Assets Prepaid Expenses 3,527 - Interest Accrued on Deposits and Advances 108,745 80,557 Advance Tax /Tax Deducted at Source 347, ,136 Total Other Non Current Assets 459, ,693 Current Assets, Loans and advances : In the opinion of the Board, the Current Assets, Loans and advances have a value on realization in the ordinary course of business, equal to the amount stated in the Balance Sheet Balances of Sundry Debtors, Loans & advances and Sundry Creditors are subject to confirmation by the parties 16 Other Income Interest Income 31,475 38,785 Profit on Sales on Investments 67, ,043 Profit on Sale of Fixed Assets 17,443,760 2,525,027 Provision written back 8,680,522 20,000 Scrap Sale 56,190 - Balances written back 113,000 19,581 Misc. Income 429,669 19,613 Total Other Income 26,821,691 2,787, Cost of Raw Materials and Components Sold/ Consumed Raw Materials Inventory at the beginning of - 1,111,205 Add: Purchase - - Less: Impairment - (1,111,205) Less: Inventory at the end of Packing Materials Inventory at the beginning of - 101,668 Add: Purchase - - Less: Impairment - (101,668) Less: Inventory at the end of Total Cost of Raw Materials and Components Sold/ Consumed - -

51 31 st March st March 2015 (Rs) (Rs) 18 Employee benefit Expenses Salary, Wages, Bonus & Other Allowance 3,593, ,628 Staff Welfare expenses 1,166 13,366 Total Employee benefit Expenses 3,594, , Other Expenses Power and Fuel 12, ,160 Advertisement, Publicity & Selling expenses 10,294 18,344 Printing, Stationery, Postage, Telephone & Telex 190,677 67,420 Rent 300,000 1,200,000 Repairs & Maintenance-Others - 150,293 Insurance - 184,252 Rates & Taxes - 97,630 Conveyance & Travelling expenses 1,076,409 2,940,954 Legal & Professional Fees 1,714,348 5,507,354 Payment to Auditors (Refer details below)* 117, ,360 Provision for Doubtful Debts - 6,188,990 Provison made against recoverable with Sales Tax Department - 1,041,982 Provision for advances recoverable - 21,440,923 Provision made for recoverable with Excise Department - 9,562,460 Security Expense 1,527,658 1,641,253 Impairment Loss (Refer details below)** - 1,212,873 Miscellaneous expenses 544, ,565 Total Other Expenses 5,493,925 52,281,813 * Details of Payment to Auditors is as under: Audit Fees 117, ,360 Tax Audit Fees - - Total Payment to Auditors 117, ,360 * Details of Impairment Loss is as under: Raw Material 1,111,205 Packing Material 101,668 Total - 1,212, Depreciation and Amortization Depreciation (as per details) 4,960,722 6,116,822 Amortization (as per details) 43,177 62,015 Total Depreciation and Amortization 5,003,899 6,178, Finance Costs Others Interest Others 3,372,627 4,373,653 Other Finance Charges Bank Charges 3,070 5,039 Total Finance Costs 3,375,697 4,378, Prior Period Adjustment Prior Period Expenses Water Charges 111,409 1,246,563 Depository Fees 262,123 - Total 373,532 1,246,563 Net Prior Period Adjustment 373,532 1,246, Earning per share (EPS) The following reflects the profit and share data used in the basic and Diluted EPS computations : Total operations for Net Profit/(Loss) after tax Amount (Rs in Thousands) for allocation of basics EPS 8,979,679 (61,443,851) Weighted average number of equity shares of Rs. 10 each, in calculating basic EPS 30,412,560 30,412,560 Basic Earning per share (Rs.) 0.30 (2.02) Total No of weighted average Equity Shares including diluted potential Equity Shares outstanding during. 30,412,560 30,412,560 Diluted Earning per share (Rs.) 0.30 (2.02)

52 31 st March st March 2015 (Rs) (Rs) 24 Contingent Liabilities i) Custom Duty Demand (other than Penalty if any,which is not quantifiable at this stage) 36,812 36,812 ii) Custom Duty Demand (other than i above) 3,103 3,103 iii) All the workers were retrenched in the last year and were paid retrenched benefit.however the workers have filled case in the Labour court asking for reinstatement and compensation.(the amount payable if any, can not be quantified, at this stage.) 25 Related party disclosures Name Rent Paid Madhu Seth 300,000 1,200,000 Closing Balance Madhu Seth ERSTWHILE LOAN BARRED BY LIMITATION The Company has been legally advised that, in view of Foreign Financial Institution's Advocate Letter dates 4th October, 2006 recalling the entire outstanding loan amount under the Loan Agreement of 1993, enforcement of such recall in law could take place within 3 years of the termination of the Amended Loan Agreement of 2003 with effect from Under the circumstances, Foreign Financial Institution or its Assignee, if any, cannot enforce any outstanding against the Company in any court of law post despite the existence of debt. Accordingly interest in respect of above loan after , has not been provided in the books. Further, the outstanding by way of secured & unsecured loan and interest aggregating to Rs. 1,61,924 Thousand was shown as "Erstwhile Loan Barred By Limitation" in the previous year. There is no change in the current year. 27 Discontinuing Activity The Company has discontinued its manufacturing activity since February 2013 in view of adverse market conditions and continuous losses. During, the manufacturing operation of the company remained suspended and the company is exploring various options for sale of its Immovable Assets. Due to this, the company is not viewed as a going concern. The Movable Assets of the company has been marked to market & the Impairment at Rs. 12,12,873/- had been provided in the profit & loss account of the company in the previous year ending 31st March The Immovable Assets of the company has been dismantled, few of them were sold as scrap and the realised amount has been reduced from asset under the head shown as "Assets held for Sale" in the books. After dismantling the immovable property it is not possible to identify individual assets, so we are unable to find out profit/(loss) on sale of individual assets. The Profit/(loss) in respect of "Assets Held for Sale" shall be accounted for after the transaction is complete. 28 Previous Year Figures Previous period figures have been regrouped wherever necessary to make them compareable with the current year figures. The accompaying notes are an integral part of the financial statements As per our report of even date For Sehgal Mehta & Co. Chartered Accountants F.R.N: N For and on behalf of the board of directors Sd/- Naresh Khanna Partner M.No Place: New Delhi Date : 6th June 2016 Sd/- RAMESH MEHRA Director DIN No Sd/- HARISH SETH Chairman & Managing Director DIN No Place: New Delhi Date : 6th June 2016 Place: New Delhi Date : 6th June 2016

53 Form No. MGT-11 Proxy form [Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014] Name of the member(s): Registered address: Id: Folio No/ DP & Client Id: I/We, being the member (s) of shares of the above named company, hereby appoint 1. Name: Address: Signature:, or failing him 2. Name: Address: Signature:, or failing him 3. Name: Address: Signature: as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 22 nd Annual General Meeting of the company, to be held on Friday the 30 th day of September, 2016 at 3.00 P.M. at the registered of the Company at D-17, MIDC Industrial Area, Kurkumbh, Taluk Daund, Dist. Pune , Maharashtra, and at any adjournment thereof in respect of such resolutions as are indicated below: 1. To receive, consider and adopt the Audited Financial Statements for the Financial Year ended March 31, 2016 and Reports of Board of Directors of the Company and Auditors thereon. 2. To appoint a Director in place of Mr. Harish Seth (DIN: ), who retires by rotation and being eligible offers himself for re-appointment. 3. To ratify the appointment of M/s. Sehgal Mehta & Co., Chartered Accountants, New Delhi (Registration No N) and to fix the remuneration as thereof.

54 4. To determine fee for service of documents on member(s) through a requested mode. Signed this day of Signature of shareholder Affix Revenue Stamp of Re. 1/- value Signature of Proxy holder(s) Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company at D-17, MIDC Industrial Area, Kurkumbh, Taluk Daund, Dist. Pune , Maharashtra, not less than 48 hours before the commencement of the Meeting.

55 ATTENDANCE SLIP 22 nd Annual General Meeting 30 th September, 2016 Registered Folio No. Number of Shares held I hereby record my presence at the 22 nd Annual General Meeting of the Company at the D-17, M.I.D.C. Kurkumbh, Tal Daund, Pune , on Friday the 30 th day of September, 2016, at 3.00 P.M. Name of the member/ proxy (In BLOCK letters) Signature of the members/ proxy Note: Please fill up this attendance slip and hand it over at the entrance of the meeting hall. Members are requested to bring their copies of the Annual Report to the AGM.

56 LOCATION TO THE ANNUAL GENERAL MEETING (PEARL ENGINEERING POLYMERS LIMITED)