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Directors Report of Pearl Global Industries Ltd.

Mar 31, 2015

The Directors are pleased to present the 26th Annual Report and Audited Financial Statements for the year ended 31st March 2015, together with the Auditors' Report thereon.

WORKING RESULTS OF THE COMPANY (STANDALONE)

(Rs,in crore )

Particulars 2014-15 2013-14

Income from operations 623.99 663.44

Other Income 27.82 22.04

Profit before Tax 15.17 15.47

Provision for Tax 4.95 0.75

Profit After Tax 10.22 14.72

Transfer to General Reserves -- 1.10

WORKING RESULTS OF THE COMPANY (CONSOLIDATED) (Rs,in crore)

Particulars 2014-15 2013-14

Income from operations 1,023.74 4,698.95

Other Income 24.05 65.28

Profit before Tax 34.21 50.76

Provision for Tax 9.90 06.70

Profit After Tax 24.31 44.06

Minorities Share in (Profit)/Loss 0.75 (5.42)

Profit for the year 25.06 38.64

Consolidated results for the year ended 2013-14 are prior to Scheme of Arrangement for demerger with PDS Multinational Fashions Limited. Hence figures for 2014-15 are not comparable with previous year.

STATE OF THE AFFAIRS OF THE COMPANY

Pearl Global Industries Limited is one of India's largest listed garment exporters, manufacturing from multiple sourcing regions within India and countries within South Asia. A preferred long- term vendor to most leading global brands, we are amongst the leading players in our industry. Our mainstay business is to create value from competitively manufacturing and exporting fashion garments to leading global brands. We have now also ventured into e-retail through established digital channels and our own e-com portal "Sbuys.in", giving consumers access to global fashion at attractive values.

Our product range includes knits, woven and bottoms (basic and complex designs) across men, women and kids wear segments. We have a well-diversified and de-risked manufacturing base across India, Indonesia and Bangladesh. We have a total capacity to manufacture around 5 million garments per month (including own and outsourced facilities). Our revenue structure is primarily export based, with a major contribution coming from exports to the United States. We provide total supply chain solutions to customers – value retailers and high-end fashion brand retails in the United States and Europe. Our business model enables us to offer superior quality products across various countries, catering to all kinds of consumers. Our esteemed global clientele include premium retailers in USA and Europe, including GAP, Banana Republic, Kohl's, Macy, Ralph Lauren, Tom Tailor and Next, among others.

We strive to be the most preferred vendor to the top global apparel brands and be ranked amongst the top garment manufacturers in the world, in terms of quality, service standards and ultimately - customer satisfaction, keeping in line with our broader vision. With additional capacities and promising growth in new markets and geographies, we bettered our operational performance during the year. We continued to amplify our strengths, while diversifying our footprint in the global market.

Currently, ~90% of our sales are accounted by United States. However, the seasonal decline in sales of wovens during the fall season (August-November) results in lower capacity utilization at our Indian facilities. Hence, we are continuously endeavoring to diversify our sales to newer geographies in Australia, UK, Germany, Canada, Mexico, Chile and South Africa.

Our Manufacturing Facilities

Country Name Factories Capacity Mn Pieces / Month Machines

India Pearl Global 7 1.68 4,500

Bangladesh Norp Knit 5 1.8 3,400

Indonesia PT Pinnacle 2 0.35 1,100

Our Capabilities

- Fabric Development Centers

We have Fabric Development Centre's in China and India as well as Design and Product Development teams across the globe. Our Fabric Development teams circulate the latest fabric ideas amongst the designers, who develop a product profile. This profile is shared with manufacturing facilities for the purpose of product development. Our design and product development teams support all three streams of our business across all the locations.

- In-house hand-work set up in North India and Bangladesh

We have one of the largest in-house embroidery facility with a capacity of 500 installed heads in North India and another 100 installed heads in Bangladesh.

- In-house washing capacity

Our in-house washing capacity is established in North India and Bangladesh with a capacity of 50,000 pieces a day and 35,000 pieces a day, respectively.

- Garment dyeing facility

A garment dyeing facility has been established in Bangladesh, with a capacity of 10,000 pieces a day.

Multi-Specialty Manufacturing:

We have a strong foothold in the prominent garment manufacturing hubs - in India and across the globe. This enables us to diversify our manufacturing capabilities and to customize our products to market needs.

Location of Facility

India -> Rajasthan (Access through third parties)

India -> NCR, Delhi

India -Bangalore & Chennai

Bangladesh

Indonesia

Specialization

Hand-block printing, hand embroidery, bead work

High fashion cotton knitwear and wovens

Basic & fashion woven and knitwear Knitwears,

basic shirts, jackets, bottom

weights High fashion polyester

knitwear and wovens

DIVIDEND

Your Directors have recommended dividend Rs. 2.25/- per Equity Share of Rs. 10/- each (Previous year Rs. 2/- per equity share) for the financial year 2014-15, amounting Rs. 584.90 Lacs (inclusive of tax on dividend). The dividend payout is subject to approval of the members at the ensuing Annual General Meeting.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of your Company, Mr. Deepak Seth, Chairman and Mr. Pulkit Seth, Vice-Chairman and Managing Director would retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The Board of Directors of your Company met four times on May 26, 2014, August 14, 2014, November 14, 2014 and February 13, 2015, during the financial year 2014-15.

The Board has appointed Mr. Raj Kumar Chawla as Chief Financial Offer of the Company with effect from 26th May, 2014.

Mr. Sandeep Sabharwal is Company Secretary of the Company since 1st May, 2008.

The Board has re-appointed Mr. Vinod Vaish and Mrs. Shefali Seth as Whole-Time Director of the Company with effect from 19th January, 2015. The Resolutions for their re-appointment are being proposed in the Notice calling this Annual General Meeting.

DIRECTORS' IDENTIFICATION NUMBER (DIN)

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

Mr. Deepak Seth - 00003021 Mr. Chittranjan Dua - 00036080

Mr. Pulkit Seth - 00003044 Mr. Samar Ballav Mohapatra - 00327410

Mrs.Shefali Seth - 01388430 Mr. Rajendra Kumar Aneja - 00731956

Mr. Anil Nayar - 01390190 Mr. Vinod Vaish - 01945795

The Company has received necessary declaration from each independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence as laid down in Section 149(6) of the Companies Act, 2013.

The Company had already constituted Nomination and Remuneration Committee as required under Sub-Section (1) of Section 178 of the Companies Act, 2013 Comprising three non- executive Independent Directors Mr. S.B. Mohapatra, Chairman, Mr. Rajendra Kumar Aneja and Mr. Anil Nayar, Members of the Committee. The Company has also formulated a Policy for performance evaluation of Board, Committees, Independent Directors and other individual Directors which included criteria for performance evaluation of the non-executive Directors and executive Directors.

The Nomination and Remuneration Policy of the Company is annexed herewith as Annexure-I with this report.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, committees and individual Directors pursuant to the provisions of the Companies Act, 2013 and Rules made there under.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of non-independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and individual Directors was also discussed.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

AUDIT COMMITTEE

The Audit Committee comprises two Independent Directors, namely Mr. Anil Nayar, Chairman, Mr. S.B. Mohapatra, Member and one executive Director, Mr. Vinod Vaish, as Member of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

VIGIL MECHANISM

The Company has set up a Vigil Mechanism, which also incorporates a whistle blower policy in terms of Listing Agreement. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone no. or a letter through to the Vigilance Offer or to the Chairman of the Audit Committee. The policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at the link: http://pearlglobal.com/ investors-policy.asp

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility Committee of the Company has formulated a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.

The CSR Policy may be accessed on the Company's website at http://pearlglobal.com/investors-policy.asp

Your Company has identified an area of education for underprivileged children for engagement under CSR activities. The Company has earmarked Rs. 15.00 Lakh for spending on the area of education, out of which Rs. 4.00 Lakh have already been spent.

The Annual Report on CSR activities is annexed herewith as Annexure-II.

SUBSIDIARY COMPANIES

During the year under review, Companies listed in Annexure-III to this report have become or ceased to be Company's subsidiaries, joint ventures or associates Companies.

Pursuant to Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of the subsidiary companies is attached to the Financial Statements in Form AOC-1. The Company will make available the said financial statements and related detailed information of the subsidiary companies upon the request by any member of the Company. These financial statements will also be kept open for inspection by any member at the Registered Office of the Company.

The financial statements of the Company, consolidated financial statements along with the relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.

The Policy of determining material subsidiaries as approved may be accessed on the Company's website at http://pearlglobal.com/ investors-policy.asp

AUDITORS

In terms of Section 139 of the Companies Act, 2013, M/s S. R. Dinodia & Co. LLP, Chartered Accountants, (Regn. No. 001478N/ N500005), New Delhi, were appointed by the Members in its 25th Annual General Meeting held on 26th September, 2014 as Statutory Auditors of the Company for a period of three years. A Resolution for ratification of their appointment as Statutory Auditors is proposed in the Notice calling the Annual General Meeting.

SECRETARIAL AUDITOR

The Board has appointed Mr. Deepak Somaiya, Practicing Company Secretary, proprietor of M/s. Deepak Somaiya & Co. Company Secretary, to conduct Secretarial Audit for the financial year 2014- 15. The Secretarial Audit Report for the financial year 2014-15 is annexed herewith as Annexure-IV. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

COST AUDITOR

The Board has appointed M/s. D A & Associates, Cost Accountants, for conducting the audit of cost records of the Company for the financial year 2014-15.

INTERNAL AUDITOR

The Board has appointed M/s. Narula & Gupta, Chartered Accountants, New Delhi (FRN 013532N), as Internal Auditor for the financial year 2014-15.

EXTRACTS OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith as Annexure-V to this Report.

RELATED PARTY TRANSACTIONS

Particulars of Contracts or Arrangements with Related Parties referred to in Section 188(1) of the Companies Act, 2013 in Form AOC-2 is annexed as Annexure-VI.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 is annexed as Annexure- VII.

FIXED DEPOSITS

Your Company has not accepted any Fixed Deposits from Public or Shareholders during the year, nor has any unclaimed or unpaid deposits at the end of the financial year.

RISK MANAGEMENT

The Company has implemented procedures and policies in place for risk management including identifying risk which may threaten the existence/operations of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, your Directors state that:

a) in the preparation of the annual accounts for the financial year ended 31st March 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures. There are no material departures from the same;

b) the Directors have selected such accounting policies and ap- plied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the fnancial year 31st March, 2015 and of the profit and loss of the Company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe- guarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a 'going concern' basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

LISTING

The shares of your Company are listed at BSE Limited, Mumbai and National Stock Exchange of India Limited, Mumbai. The listing fees to the Stock Exchanges for the year 2014-15 have been paid.

REGISTRAR AND SHARE TRANSFER AGENT

Link In time India Pvt. Ltd is Company's Registrars and Share Transfer Agent (RTA) as common agency both for physical and demat shares, as required under Securities Contract (Regulation) Act, 1956. The detail of RTA forms part of the Corporate Governance Report.

CORPORATE GOVERNANCE

Report on Corporate Governance along with the certificate of the Auditors, confirming compliance of conditions of Corporate

Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual report.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of operations, performance and future outlook of the Company is given separately under the head "Management Discussion and Analysis".

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The details as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-VIII to this report.

Particulars of employees as required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-IX to this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section 134(3)(m) is annexed as Annexure-X to this report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

REPORT ON SEXUAL HARASSMENT-INTERNAL COMPLAINTS COMMITTEE

Pursuant to the provisions of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received during the financial year 2014-15.

ACKNOWLEDGEMENT

The Directors of your Company are thankful to Bankers, Business Associates, Customers, Members, Government Bodies & Regulators for the continuous support received from them and place on record their appreciation for the sincere services rendered by the employees at all level.

For and on behalf of the Board

for PEARL GLOBAL INDUSTRIES LIMITED



(VINOD VAISH) (PULKIT SETH)

Whole-Time Director Managing Director

DIN 01945795 DIN 00003044

Place: Gurgaon

Date: May 22, 2015


Mar 31, 2014

To the Members,

The Directors are pleased to present the 25th Annual Report and Audited Accounts for the year ended 31st March 2014, together with the Auditors'' Report thereon.

WORKING RESULTS OF THE COMPANY (CONSOLIDATED)

During the year under review, the consolidated Income of your Company is Rs.4,698.95 crore against previous year Rs. 3,820.24 crore. (Rs. in Crore)

Particulars 2013-14 2012-13

Income from operations 4,698.95 3,820.24

Other Income 65.28 30.49

Profit before Tax 50.76 48.54

Provision for Tax 06.70 18.21

Provision for Bad debt 0.38 0.50

Profit After Tax 44.06 30.33

EPS (in Rs. 17.84 10.98

Transfer to General Reserves - -

WORKING RESULTS OF THE COMPANY (STANDALONE)

(Rs. in Crore)

Particulars 2013-14 2012-13

Income from operations 663.44 557.69

Other Income 22.04 14.29

Profit before Tax 15.47 4.03

Provision for Tax 0.75 0.14

Provision for Bad debt 0.38 0.50

Profit After Tax 14.72 3.89

Transfer to General Reserves - -

BUSINESS AND OPERATIONS

The garment exports from India for the Financial Year 2013-14 has increased by 15.5 percent over the same period of previous fiscal and reached to USD 14.94 billion, despite the shrinking of traditional markets and uncertain global economic scenario. In the first half of this financial year, India exported apparel worth $7.9 billion, a rise of 13 per cent over the year-ago period. India''s apparel exports are rising, partially because the country is able to penetrate into the markets of neighboring China and Bangladesh. Exports from India have also been aided by the falling rupee. Currently, China is facing high labour costs and rising currency, and this is working in India''s favor. The estimates for 2014-15 are USD 20 billion.

Garment Industry has huge potential to shift the additional unutilized labor out of agriculture and lift the large population above the empowerment line. To jumpstart job creation, India will need to improve its business and investment climate especially the labor incentive sector like the garment Industry.

Your company, due to its long established presence and commitment to deliver, has been able to achieve consistent growth on year to year with challenging global conditions.

The growth was evident with proactive business approach to adapt to the changes swiftly and respond positively in varying customer perception while resorting to production efficiency, value addition and cost optimization.

The year ahead continues to be challenging with a cautious optimism for growth projections. Your company is fully equipped to forge ahead on the growth path with a focused attention towards its customer deliverables, product development and the value perceptions attained through strong supply chain arrangements, innovative product designs and creations, production and sourcing efficiency, constant compliances adherence (in-house and outsourced), economy of scale and cost effectiveness.

Consolidated total revenue of the company is Rs. 4,764 crore, up by Rs.913 crore representing more than 24% in financial year 2013-14 as compared to Rs. 3,846 crore during the previous year. The consolidated Profit after Tax of the company is Rs. 44.06 crore compared to profit of Rs.30.33 crore during the previous year. The above consolidated results (Profit after Tax) increased by an extra-ordinary item of Rs. 14.85 crore.

Your company expects that the new business initiatives with focused approach will start yielding increased consolidated revenue and improved consolidated profit in the year ahead.

SCHME OF ARRANGEMENT

The Hon''ble High Court of Delhi has vide its order dated 10th March, 2014, sanctioned the Scheme of Arrangement between the Company and PDS Multinational Fashions Limited (PDS) whereby the Demerged undertaking of the company stand demerged / hived off and merged with PDS. The Scheme has become effective with effect from May 2014, upon filing of the Court order with Registrar of Companies, NCT of Delhi and Haryana. With this, the Sourcing, Distribution and Marketing business of the company stand divested into PDS together with investment of the company in its wholly owned subsidiary Multinational Textile Group Limited. CORPORATE SOCIAL RESPONSIBILITY

The company has been taking up and fulfilling its fundamental responsibility towards society. Little People Educational Society, set up by the Promoter group has been imparting employment oriented higher education. ARPAN and SOHAM are helping underprivileged children, studying in 1st to 5th level financially and also supporting the school system.

The company is formulating a formal Corporate Social Responsibilities (CSR) Policy keeping in tune with its overall business policy and goals.

DIVIDEND

The Directors recommend dividend Rs. 2/- Per Equity Share for the year 2013-14. DIRECTORS

Mr. Pallak Seth and Dr. A. P Bhupatkar, Directors have resigned from the Board of your company w.e.f. 12th May 2014. Your Board of Directors places on record its appreciation to their contributions during their tenure.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of your Company Mrs. Shefali Seth and Mr. Vinod Vaish, Whole Time Directors would retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointme nt.

In terms of applicable provisions of Companies Act, 2013 and Rules made thereunder, Mr. S. B. Mohapatra, Mr. Chittranjan Dua, Mr. Rajendra K. Aneja and Mr. Anil Nayar, Independent Directors of your company will be appointed as Independent Directors for a tenure of Five years in the ensuing Annual General Meeting.

DIRECTORS'' IDENTIFICATION NUMBER (DIN)

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

Mr. Deepak Seth - 00003021 Mr. Chittranjan Dua - 00036080

Mr. Pulkit Seth - 00003044 Mr. Samar Ballav Mohapatra - 00327410

Mrs.Shefali Seth - 01388430 Mr. Rajendra Kumar Aneja - 00731956

Mr. Anil Nayar - 01390190 Mr. Vinod Vaish - 01945795

SUBSIDIARY COMPANIES

In line with the requirements of Accounting Standards AS - 21 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its Subsidiaries. As required under Section 212 of the Companies Act, 1956, the statement in respect of the Subsidiary companies is annexed herewith and forms an integral part of this Annual Report.

AUDITORS

The Auditors, M/s S. R. Dinodia & Co., LLP Chartered Accountants, (Regn. No. 001478N/ N500005), New Delhi, retires at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

FIXED DEPOSITS

Your Company has not accepted any Fixed Deposits from Public or Shareholders. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended 31st March 2014, the applicable accounting standards issued by the Institute of Chartered Accountants of India have been followed. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

ii) That the Directors have adopted such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended 31st March 2014 as a ''going concern'' and on accrual basis.

LISTING

The shares of your Company are listed at Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited, Mumbai. The listing fees to the Stock Exchanges for the year 2013-14 have been paid.

REGISTRAR AND SHARE TRANSFER AGENT

Link Intime India Pvt. Ltd has been appointed as Registrars and Share Transfer Agent (RTA) as common agency both for physical and demat shares, as required under Securities Contract (Regulation) Act, 1956. The detail of RTA forms part of the Corporate Governance Report.

CORPORATE GOVERNANCE

Report on Corporate Governance along with the certificate of the Auditors, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual report.

CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009

The company is in the process of considering adoption of Corporate Governance Voluntary Guidelines, 2009 (the Guidelines) and formulating relevant policies/codes.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of operations, performance and future outlook of the Company is given separately under the head "Management Discussion and Analysis".

NOTES TO ACCOUNTS

The observations of the Auditors, if any have been adequately explained in Notes to Accounts and need no further clarification.

PARTICULARS OF EMPLOYEES

Particulars of employees required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is nil.

PARTICULARS W.R.T. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 relating to ''Energy Conservation'', ''Technology Absorption'' and Foreign Exchange earnings and outgo are provided in Annexure 1.

ACKNOWLEDGEMENT

The Directors of your Company are thankful to Bankers, Business Associates, Customers, Members, Government Bodies & Regulators for the continuous support received from them and place on record their appreciation for the sincere services rendered by the employees at all level.

For and on behalf of the Board for PEARL GLOBAL INDUSTRIES LIMITED

(VINOD VAISH) (PULKIT SETH)

WHOLE-TIME DIRECTOR MANAGING DIRECTOR DIN 01945795 DIN 00003044

Place : Gurgaon Date : 26th May, 2014


Mar 31, 2013

To the Members,

The Directors are pleased to present the 24th Annual Report and Audited Accounts for the year ended 31st March 2013, together with the Auditors'' Report thereon.

WORKING RESULTS OF THE COMPANY (CONSOLIDATED)

During the year under review, the consolidated Income of your Company is Rs. 3,820.24 crore against previous year Rs. 2,798.49 crore.

(Rs. in Crore)

2012-13 2011-12

Income from operations 3820.24 2798.49

Other Income 25.65 15.45

Profit before Tax 48.54 46.67

Provision for Tax 18.21 8.12

Provision for Bad debt 0.50 2.09

Profit After Tax 30.33 38.55

EPS (in Rs.) 10.98 14.54

Transfer to General Reserves – – WORKING RESULTS OF THE COMPANY (STANDALONE)

(Rs. In Crores)

2012-13 2011-12

Income from operations 557.69 646.70

Other Income 14.29 9.33

Profit before Tax 4.03 1.92

Provision for Tax 0.14 (1.75)

Provision for Bad debt 0.50

Profit After Tax 3.89 3.66

Transfer to General Reserves

BUSINESS AND OPERATIONS

The apparel industry as a whole experienced hard way during the financial year 2012-13 amidst continued global economic turmoil particularly in key markets of EU and the US across retailing, manufacturing and sourcing sectors with world garments exports declining to USD 12.92 billion as against USD 13.70 billion last year. However, in rupee terms garment exports registered Rs. 70,312 crore, an increase of 7% compared to last year Rs. 65,709 crore. The retail industry has witnessed significant changes in their business strategies during the year to arrest the dampening demand to grow, while impacting the sourcing and manufacturing that became very competitive to sustain.

However your company, due to its long established presence and commitment to deliver, has been able to achieve consistent growth on year to year with challenging global conditions.

The growth was evident with proactive business approach to adapt to the changes swiftly and respond positively in varying customer perception while resorting to production efficiency, value addition and cost optimization.

At the same time, your company has initiated diversification into other product line such as footwear, cosmetics and hard goods and expanded to tap the opportunities into new markets like Australia, South Africa, etc as a part of our growth strategy. Your company has also expanded its strength in China, which is a major sourcing country and also increased the direct marketing operations to its customers from China, India and Bangladesh, which has very good potential and expected to grow rapidly.

The year ahead continues to be challenging with a cautious optimism for growth projections. Your company is fully equipped to forge ahead on the growth path with a focused attention towards its customer deliverables, product development and the value perceptions attained through strong supply chain arrangements, innovative product designs and creations, production and sourcing efficiency, constant compliances adherence (in-house and outsourced), economy of scale and cost effectiveness.

Consolidated total revenue of the company is Rs. 3,846 crore, up by Rs.1,032 crore representing more than 36% in financial year 2012-13 as compared to Rs. 2,814 crore during the previous year. The consolidated Profit after Ta x of the company is Rs. 30.33 crore compared to profit of Rs. 38.55 crore during the previous year. The above consolidated results (Profit after Tax) reduced by an extra-ordinary item of Rs. 13.35 crore being loss on investment in a subsidiary due to its closure.

Your company expects that the new business initiatives with focused approach will start yielding increased consolidated revenue and improved consolidated profit in the year ahead.

CORPORATE SOCIAL RESPONSIBILITY

The company has been taking up and fulfilling its fundamental responsibility towards society. Little People Educational Society, set up by the Promoter group has been imparting employment oriented higher education. ARPAN and SOHAM are helping underprivileged children, studying in 1st to 5th level financially and also supporting the school system.

The company is formulating a formal Corporate Social Responsibilities (CSR) Policy keeping in tune with its overall business policy and goals.

DIVIDEND

The Directors recommend dividend Rs. 1/- Per Equity Share for the year 2012-13.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of your Company, Mr. Pallak Seth, Vice Chairman, Mr. S.B. Mohapatra, and Dr. A.P. Bhupatkar, Directors would retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Mr. Pulkit Seth was appointed as Managing Director of the Company on 1st June, 2008 for a period of five (5) years, i.e. upto 31st May, 2013. The Board of Directors of the Company in its meeting held on 30th May, 2013, has re-appointed to him as a Managing Director of the Company for the period of three (3) years. A necessary resolution for their re-appointment is included in the notice convening Annual General Meeting.

DIRECTORS'' IDENTIFICATION NUMBER (DIN)

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

Mr. Deepak Seth - 00003021 Dr. Ashutosh Prabhudas Bhupatkar - 00479727

Mr. Pallak Seth - 00003040 Mr. Chittranjan Dua - 00036080

Mr. Pulkit Seth - 00003044 Mr. Samar Ballav Mohapatra - 00327410

Mrs. Shefali Seth - 01388430 Mr. Rajendra Kumar Aneja - 00731956

Mr. Anil Nayar - 01390190 Mr. Vinod Vaish - 01945795

SUBSIDIARY COMPANIES

In line with the requirements of Accounting Standards AS – 21 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its Subsidiaries. As required under Section 212 of the Companies Act, 1956, the statement in respect of the Subsidiary companies is annexed herewith and forms an integral part of this Annual Report.

AUDITORS

The Auditors, M/s S. R. Dinodia & Co., Chartered Accountants, (Regn. No. 001478N), New Delhi, retires at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

FIXED DEPOSITS

Your Company has not accepted any Fixed Deposits from Public or Shareholders.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended 31st March 2013, the applicable accounting standards issued by the Institute of Chartered Accountants of India have been followed. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

ii) That the Directors have adopted such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended 31st March 2013 as a ''going concern'' and on accrual basis.

LISTING

The shares of your Company are listed at Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited, Mumbai. The listing fees to the Stock Exchanges for the year 2013-14 have been paid.

REGISTRAR AND SHARE TRANSFER AGENT

Link Intime India Pvt. Ltd is continuing as Registrars and Share Transfer Agent (RTA) as common agency both for physical and demat shares, as required under Securities Contract (Regulation) Act, 1956. The detail of RTA forms part of the Corporate Governance Report.

CORPORATE GOVERNANCE

Report on Corporate Governance along with the certificate of the Auditors, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual report.

CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009

The company is in the process of considering adoption of Corporate Governance Voluntary Guidelines, 2009 (the Guidelines) and formulating relevant policies/codes.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of operations, performance and future outlook of the Company is given separately under the head "Management Discussion and Analysis".

NOTES TO ACCOUNTS

The observations of the Auditors, if any, have been adequately explained in Notes to Accounts and need no further clarification.

PARTICULARS OF EMPLOYEES

Particulars of employees required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is nil.

PARTICULARS W.R.T. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 relating to ''Energy Conservation'', ''Technology Absorption'' and Foreign Exchange earnings and outgo are provided in Annexure 1.

ACKNOWLEDGEMENT

The Directors of your Company are thankful to Bankers, Business Associates, Customers, Members, Government Bodies & Regulators for the continuous support received from them and place on record their appreciation for the sincere services rendered by the employees at all level.

For and on behalf of the Board

for PEARL GLOBAL INDUSTRIES LIMITED

(VINOD VAISH) (PULKIT SETH)

WHOLE-TIME DIRECTOR MANAGING DIRECTOR

DIN 01945795 DIN 00003044

Place: Gurgaon

Date: 30th May, 2013


Mar 31, 2012

The Directors of your Company have pleasure in presenting the 23rd Annual Report and Audited Accounts tor the year ended 31st March 2012, together with the Auditors' Report thereon.

MERGER OF PEARL GLOBAL LIMITED

Pearl Global Limited (PGL), the Indian subsidiary of the company has been merged with the Company, pursuant to Scheme of Amalgamation, vide order of Hon'ble High Court of Delhi dated 11.11.2011.

CHANGE OF NAME

Pearl Global Limited had a global recognition and reputation with brand "Pearl Global" and was well known global garment manufacturer and ONE STOP SHOP for reputed international buyers. Consequent upon merger of erstwhile Pearl Global Limited, with a view to retain the name - PEARL GLOBAL - of erstwhile PGL, name of the company has been changed from House of Pearl Fashions Limited to Pearl Global Industries Limited (PGIL) with effect from 20th March, 2012. CONSOLIDATED WORKING RESULTS

During the year under review, the consolidated Income of your Company is Rs. 2798.49 Crores against previous year Rs. 2251.03 Crores. (Rs. In Crores)

2011-12 2010-11

Income 2798.49 2251.03

Other Income 15.45 49.31

Profit before Tax 46.67 21.66

Provision for Tax 8.12 (1.21)

Provision for Bad debt - -

Profit After Tax 38.55 22.87

EPS (in Rs.) 14.54 10.03

Transfer to General Reserves - -

WORKING RESULTS OFTHE COMPANY (STANDALONE)

(Rs. In Crores) 2011-12 2010-11

Income 613.12 22.55

Other Income 24.66 0.04

Profit before Tax 1.95 (0.31)

Provision for Tax (1.71) (5.78)

Profit After Tax 3.66 (23.81)

Transfer to General Reserves - -

BUSINESS AND OPERATIONS

Though struggling garment export sector witnessed dampening exports during most of 2011 due to sluggish EU and US market, yet with some late recovery, the apparel exports have registered some growth during 2011-12 with exports closing to USD 13.50 billion against USD 11 billion last year. Rupee appreciation in recent time is also a concern.

Indian exporters have reached other parts of the globe as well, though major market remains EU and US. Across the globe, the demand for garments has witnessed some increase.

Your company has adopted market diversification strategy based on the changing dynamics of growth in the world economy as it is necessary to ensure sustained growth of exports. The demand in the traditional markets of the developed western world, North America and Europe, is projected to be relatively sluggish due to slowing output expansion in these economies. Against this, emerging economies are expected to grow at about 6.5%.

The core of our market strategy therefore is:

(a) Retain presence and market share in our "existing developed country markets";

(b) Move up the value chain in providing products in these developed country markets; and

(c) Open up new vistas, both in terms of markets and new products in the new markets.

We are focusing on markets in Asia (including ASEAN), Africa and Latin America. We must establish new beachheads and strengthen our presence in newly opened up markets. To establish greater credibility and acceptance of our critical export products and sectors in foreign markets, we would strengthen efforts to build up a brand image for important Indian exports, and promote a thrust for quality upgradation. Domestic standards for export related products would be raised, Differentiated strategic initiatives globally have been formulated on the basis of the critical assessment of strengths, weaknesses, opportunities and challenges being faced.

The company has continued focus on cost competitiveness and open new horizons towards Sourcing and Product Development across the globe. The company has leveraged its experience and expertise in cost competitiveness in channelising the business through its manufacturing or outsourcing activities based on buyers requirements.

Consolidated turnover of the company is Rs.2798.49 Crores, up by more than 24% in financial year 2011-12. The consolidated profit of the company is Rs.38.54 Crores compared to profit of Rs.22.87 Crores for last year. With no expected increase in fixed overheads, your company expects that the new business initiatives will start yielding increase in sales and improved consolidated profit.

CORPORATE SOCIAL RESPONSIBILITY

The company has been taking up and fulfilling its fundamental responsibility towards society. Little People Educational Society, set up by the group has been imparting employment oriented higher education and retail sector education through Indian Retail School (IRS). IRS has taken initiative to impart career oriented training in retail sector. ARPAN and SOHAM are helping underprivileged children, studying in 1st to 5th level financially and also supporting the school system.

The company is formulating a formal Corporate Social Responsibilities (CSR) Policy keeping in tune with its overall business policy and goals.

DIVIDEND

The Directors do not recommend any dividend for the year under review.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of your Company, Mr. Deepak Seth, Chairman, Mr. Pulkit Seth, Managing Director, Mr. R. K. Aneja and Mr. C R. Dua, Directors would retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Necessary resolutions for their appointment are included in the notice convening Annual General Meeting.

Mrs. Shefali Seth was a Whole Time Director in erstwhile Pearl Global Limited, heading Product Development and Design functions. The Board has appointed Mrs. Shefali Seth as an Additional Director and Whole Time Director of the Company to avail her expertise for Product Development and Design functions. The Board has also appointed Mr. Vinod Vaish as Additional Director and Whole Time Director to avail his services in Corporate and Factory administration.

The Board has also appointed Mr. Anil Nayar as Additional Director - being an independent Director on the Board. Mr. Nayar was also an independent Director on the Board of erstwhile Pearl Global Limited. The aforesaid additional Directors are liable to retire at the ensuing Annual General Meeting. The company has received notices from shareholders proposing the reappointment of Additional Directors. DIRECTORS' IDENTIFICATION NUMBER (DIN)

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

Mr. Deepak Seth - 00003021 Dr. Ashutosh Prabhudas Bhupatkar - 00479727

Mr. Pallak Seth - 00003040 Mr. Chittranjan Dua - 00036080

Mr. Pulkit Seth - 00003044 Mr. Samar Ballav Mohapatra_- 00327410

Mrs.Shefali Seth - 01388430 Mr. Rajendra Kumar Aneja_- 00731956

Mr. Anil Nayar - 01390190 Mr. Vinod Vaish - 01945795

SUBSIDIARY COMPANIES

In line with the requirements of Accounting Standards AS - 21 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its Subsidiaries. As required under Section 212 of the Companies Act, 1956, the statement in respect of the Subsidiary companies is annexed herewith and forms an integral part of this Annual Report.

AUDITORS

The Auditors, M/s S. R. Dinodia & Co., Chartered Accountants, (Regn. No. 001478N), New Delhi, retires at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

FIXED DEPOSITS

Your Company has not accepted any Fixed Deposits from Public or Shareholders.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended 31st March 2012, the applicable accounting standards issued by the Institute of Chartered Accountants of India have been followed. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

ii) That the Directors have adopted such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended 31st March 2012 as a 'going concern' and on accrual basis.

LISTING

The shares of your Company are listed at Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited, Mumbai. The listing fees to the Stock Exchanges for the year 2012-13 have been paid.

REGISTRAR AND SHARETRANSFER AGENT

Link Intime India Pvt. Ltd (formerly known as Intime Spectrum Registry Limited) has been appointed as Registrars and Share Transfer Agent (RTA) as common agency both for physical and demat shares, as required under Securities Contract (Regulation) Act, 1956. The detail of RTA forms part of the Corporate Governance Report.

CORPORATE GOVERNANCE

Report on Corporate Governance along with the certificate of the Auditors, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual report.

CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009

The company is in the process of considering adoption of Corporate Governance Voluntary Guidelines, 2009 (the Guidelines) and formulating relevant policies/codes.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of operations, performance and future outlook of the Company is given separately underthe head "Management Discussion and Analysis".

NOTES TO ACCOUNTS

The observations of the Auditors, if any, have been adequately explained in Notes to Accounts and need no further clarification.

PARTICULARS OF EMPLOYEES

Particulars of employees required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is nil.

PARTICULARS W.R.T. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 relating to 'Energy Conservation', 'Technology Absorption' and Foreign Exchange earnings and outgo are provided in Annexure 1.

ACKNOWLEDGEMENT

The Directors of your Company are thankful to Bankers, Business Associates, Customers, Members, Government Bodies & Regulators for the continuous support received from them and place on record their appreciation for the sincere services rendered by the employees at all level.

For and on behalf of the Board

for PEARL GLOBAL INDUSTRIES LIMITED

Sd/-

(DEEPAK SETH)

Place: Gurgaon CHAIRMAN

Date : 29th May, 2012 (DIN - 00003021)


Mar 31, 2011

To the Shareholders,

The Directors of your Company have pleasure in presenting the 22nd Annual Report and Audited Accounts for the year ended 31st March 2011, together with the Auditors' Report thereon.

CONSOLIDATED WORKING RESULTS

During the year under review, the consolidated Income of your Company is Rs.226,445.79 Lacs against previous year Rs.187,737,07 Lacs.

2010-2011 2009-2010

Income 223,206.77 183,204.86

Other Income 3,239.02 4,532.21

Profit before Tax & Adjustments 2,825.95 1,624.25

Provision for Tax 119.28 199.87

Provision for Bad debt - -

Profit After Tax 2,287.53 1,413.75

EPS (in Rs.) 10.03 4.53

Transfer to General Reserves - -

WORKING RESULTS OF THE COMPANY (STANDALONE)

2010-2011 2009-2010

Income 2,258.97 4,484.25

Other Income 1,204.79 1,117.45

Profit before Tax (30.63) (421.39)

Provision for Tax 575.99 5.87

Profit After Tax (2,380.73) (404.67)

Transfer to General Reserves - -

BUSINESS AND OPERATIONS

With US and European countries coming out of recession, India's garment exports have steadily increased since over a year. Across the globe, the demand for garments has been steadily increasing. With the recent trends, the future of the garment business look quite promising.

Indian share in global textile and apparel trade has potential to increase from its current level of 4.5% to 8% by 2020. However rising cost of cotton and labour cost is a cause of concern. Overall raw material is getting expensive and it is likely to impact consumption pattern also.

The company has extended its Sourcing and Development activities to new countries in Asia. Wherever possible, we have focused on cost competitiveness and open new horizons towards Sourcing and Product Development across the globe. The company has leveraged its experience and expertise in cost competitiveness in channelising the business through its manufacturing or outsourcing activities based on buyers requirements.

Over the last five years, your company through its subsidiaries has been able to add more capacities, acquires strategic companies, set up new divisions, expand into new geographies, strengthen its design infrastructure, implement SAP and has now reached an enviable position of "One Stop Shop" destination for its customers. Today, your company offers almost all categories of garments, manufactured either in its own or outsourced from the most cost effective locations.

Consolidated turnover of the company is Rs.2264.46 Crore, up by more than 20%. in financial year 2010-11. The consolidated profit of the company is Rs.22.87 Crore compared to profit of Rs.14.14 Crore for last year. With no expected increase in fixed overheads, your company expects that the new business initiatives will be start yielding increase in sales and improved consolidated profit.

Considering the growing demand, the company has enhanced manufacturing capacities at Gurgaon, Chennai and Bangladesh during the financial year 2010-11.

CORPORATE SOCIAL RESPONSIBILITY

The company has been taking up and fulfilling its fundamental responsibility towards society. Little People Educational Society, set up by the group has been imparting employment oriented higher education and retail sector education through Indian Retail School (IRS). IRS has taken initiative to impart career oriented training in retail sector. ARPAN and SOHAM are helping underprivileged children, studying in 1st to 5th level financially and also supporting the school system.

The company is formulating a formal Corporate Social Responsibilities (CSR) Policy keeping in tune with its overall business policy and goals.

DIVIDEND

The Directors do not recommend any dividend for the year under review.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of your Company, Dr. Ashutosh P Bhupatkar and Mr. S.B. Mohapatra, would retire by Rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Necessary resolutions for their appointment are included in the notice convening Annual General Meeting.

DIRECTORS IDENTIFICATION NUMBER (DIN)

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

Mr. Deepak Seth - 00003021

Dr. Ashutosh Prabhudas Bhupatkar - 00479727

Mr. Pallak Seth - 00003040

Mr. Chittranjan Dua - 00036080

Mr. Pulkit Seth - 00003044

Mr. Samar Ballav Mohapatra - 00327410

Mr. Sanjay Pershad - 00003054

Mr. Rajendra Kumar Aneja - 00731956

SUBSIDIARY COMPANIES

In line with the requirements of Accounting Standards AS – 21 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its Subsidiaries. As required under Section 212 of the Companies Act, 1956, the statement in respect of the Subsidiary companies is annexed herewith and forms an integral part of this Annual Report.

During the year four companies changed their names from Magic Global Fashions Limited to Nor Delhi Manufacturing Limited, Poetic Hong Kong Limited to Nor Lanka Manufacturing Limited, Pearl GES Group Ltd. to PG Group Ltd. and Pearl GES Home Group Ltd. to PG Home Group Ltd.

AUDITORS

The Auditors, M/s S. R. Dinodia & Co., Chartered Accountants, (Regn. No. 001478N), New Delhi, retires at the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment.

FIXED DEPOSITS

Your Company has not accepted any Fixed Deposits from Public or Shareholders.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended 31st March 2011, the applicable accounting standards issued by the Institute of Chartered Accountants of India have been followed. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

ii) That the Directors have adopted such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended 31st March 2011 as a 'going concern' and on accrual basis.

LISTING

The shares of your Company are listed at Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited, Mumbai. The listing fees to the Stock Exchanges for the year 2011-12 have been paid.

REGISTRAR AND SHARE TRANSFER AGENT

Link Intime India Pvt. Ltd (formerly known as Intime Spectrum Registry Limited) has been appointed as Registrars and Share Transfer Agent (RTA) as common agency both for physical and demat shares, as required under Securities Contract (Regulation) Act, 1956. The detail of RTA forms part of the Corporate Governance Report.

CORPORATE GOVERNANCE

Report on Corporate Governance along with the certificate of the Auditors, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual report.

CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009

The company is in the process of considering adoption of Corporate Governance Voluntary Guidelines, 2009 (the Guidelines) and formulating relevant policies/codes.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of operations, performance and future outlook of the Company is given separately under the head "Management Discussion and Analysis".

NOTES TO ACCOUNTS

The observations of the Auditors, if any, have been adequately explained in Notes to Accounts and need no further clarification.

PARTICULARS OF EMPLOYEES

Particulars of employees required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is nil.

PARTICULARS W.R.T. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 relating to 'Energy Conservation' and 'Technology Absorption' are not applicable.

Foreign Exchange Earnings and Outgo

Information pertaining to activities relating to exports, initiative taken to increase exports, development of new export markets and exports plans is as follows:

The Company through subsidiaries is into export of garments to various countries and has taken various initiatives for increasing exports like strengthening design & development, outsourcing garments from cost effective locations and increasing manufacturing capacities. The Company and subsidiaries have explored new markets in South America, Africa and sourcing partners in Sri Lanka. The Company has valued buyers across the globe and plans to cater to new markets and also to cater to 'A category of International buyers especially through Chennai unit of its subsidiary.

Total Foreign Exchange used and earned (in Rs.):

ACKNOWLEDGEMENT

The Directors of your Company are thankful to Bankers, Business Associates, Customers, Members, Government Bodies & Regulators for the continuous support received from them and place on record their appreciation for the sincere services rendered by the employees at all level.

For and on behalf of the Board

for HOUSE OF PEARL FASHIONS LIMITED

(DEEPAK SETH)

Place: Gurgaon Chairman

Date: 30th May, 2011 (DIN - 00003021)


Mar 31, 2010

The Directors of your Company have pleasure in presenting the 21st Annual Report and Audited Accounts for the year ended 31st March 2010, together with the Auditors Report thereon.

CONSOLIDATED WORKING RESULTS

During the year under review, the consolidated Income of your Company is Rs.190447.67 Lacs against previous year Rs.1,48,273.60 Lacs.

(Rs. in Lacs)

2009-2010 2008-2009

lncome 183204.86 144790.93

Other Income 4532.89 3482.68

Profit before Tax & Adjustments 1613.62 179.43

Provision for Tax 199.87 41.43

Provision for Bad debt - (5.79)

Profit After Tax 1413.75 132.21

EPS (in Rs.) 4.53 2.76

Transfer to General Reserves

WORKING RESULTS OF THE COMPANY (STANDALONE)

(Rs. In Lacs)

2009-20101 2008-2009

Income 4484.25 2283.25

Other Income 1117.45 2025.46

Profit before Tax (410.55) 1188.73

Provision for Tax 5.87 272.08

Profit After Tax (404.68) 916.66

Transfer to General Reserves - -

BUSINESS AND OPERATIONS

Over the last three years, your company through its subsidiaries and joint ventures has been able to add more capacities, acquires strategic companies, set up new divisions, expand into new geographies, strengthen its design infrastructure, implement ERP and has now reached an enviable position of "One Stop Shop" destination for its customers. Today, your company through its subsidiaries and joint ventures offers almost all categories of garments, manufactured either in its own or outsourced from the most cost effective locations on either FOB or LDP terms to its customers.

In the industry scenario, where most of the top retailers of the world are consolidating their vendor base, stand alone vendors are going out of business and their share are being taken over by companies which can provide one Stop Shop Solutions. Vendors that are able to offer value addition in terms of design input, provide different sourcing options and have the operational and financial resources to meet retailers increasing requirements are being categorized as their "Preferred Vendors". This gives the vendor an edge over the competition. Due to all its investments over the last couple of years, your company through subsidiaries has already been categorized as Preferred Vendor by various big Retailers in US and Europe. This together with strategic acquisitions, helps the company to retain and grow its market share and add new customers and enter new geography.

Consolidated turnover of the company is Rs.1832.05 Crore, up by more than 26% in financial year 2009-10. The consolidated profit of the company is Rs.14.14 Crore compared to profit of Rs.1.32 Crore for last year. With no expected increase in fixed overheads, your company expects that the new business initiatives will be start yielding increase in sales and improved consolidated profit.

Considering the growing demand, the company plans to enhance manufacturing capacities at Gurgaon, Chennai and Bangladesh during the financial year 2010-11. Companys subsidiary, House of Pearl Fashions (US) Limited has acquired license for Geoffrey Benne in US market and look to evaluate this model to see future prospects. For this we have built a strong team in New York for managing replenishment process. In our warehouse in New Jersey, we are developing ability to manage pick and pack services. The company is looking at 3-5 year strategy to form strategic alliance/JVs with mills for woven bottoms and knit fabrics and evaluating opportunities in Duty free countries such as Egypt.

CORPORATE SOCIAL RESPONSIBILITY

The company has been taking up and fulfilling its fundamental responsibility towards society.

Little Pearl Educational Society, set up by the group has been imparting employment oriented higher education through Pearl Academy of Fashion (PAF) and retail sector education through Indian Retail School (IRS). EAE, a pioneering institute of fashion technology has been imparting quality education in fashion for more than a decade. IRS has taken initiative to impart career oriented training in retail sector. ARPAN is helping underprivileged chitdreh, studying in 1sl to 5* level financially and also supporting the school system. The company is formulating a formal Corporate Social Responsibilities (CSR) Policy keeping in tune with its overall business policy and goals. AWARDS AND RECOGNITION

Pearl Global Limited, the Indian subsidiary, received "AEPC Export Award" for the year 2006- 07 and 2007-08 in the category "Highest Exports in Woven Garments" on 2nd December, 2009.

Lerros Fashions India Ltd., Indian subsidiary in retail chain, won award for best new brand launch for 2008 at the Images Fashions Awards 2009, recognized by the International Council of Shopping Centre (ICSC). DIVIDEND

The Directors do not recommend any dividend for the year under review. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of your Company, Mr. Pallak Seth and Mr. Sanjay Pershad, would retire by Rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Necessary resolutions for their appointment are included in the notice convening Annual General Meeting.

DIRECTORS IDENTIFICATION NUMBER (DIN)

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

Mr. Deepak Seth -00003021 Dr. Ashutosh Prabhudas Bhupatkar -00479727

Mr. Pallak Seth -00003040 Mr. Chittranjan Dua -00036080

Mr. Pulkit Seth -00003044 Mr. Samar Ballav Mohapatra -00327410

Mr. SanjayPershad- 00003054 Mr. Rajendra Kumar Aneja -00731956

SUBSIDIARY COMPANIES

In line with the requirements of Accounting Standards AS - 21 issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company include the financial information of its Subsidiaries. As required under Section 212 of the Companies Act, 1956, the statement in respect of the Subsidiary companies is annexed herewith and forms an integral part of this Annual Report.

AUDITORS

The Auditors, M/s S. R. Dinodia & Co., Chartered Accountants, (Regn. No. 001478N), New

Delhi, retires at the conclusion of the ensuing Annual General Meeting and are eligible for

re-appointment.

FIXED DEPOSITS

Your Company has not accepted any Fixed Deposits from Public or Shareholders.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with

respect to Directors Responsibility Statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended 31st March 2Q10, the applicable accounting standards issued by the Institute of Chartered Accountants of India have been followed. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

ii) That the Directors have adopted such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the accounts for the financial year ended 31st March 2010 as a going concern and on accrual basis.

LISTING

The shares of your Company are listed at Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited, Mumbai. The listing fees to the Stock Exchanges for the year 2010-11 have been paid.

REGISTRAR AND SHARE TRANSFER AGENT

Link Intime India Pvt. Ltd (formerly known as Intime Spectrum Registry Limited) has been appointed as Registrars and Share Transfer Agent (RTA) as common agency both for physical and demat shares, as required under Securities Contract (Regulation) Act, 1956.

The detail of RTA forms part of the Corporate Governance Report.

CORPORATE GOVERNANCE

Report on Corporate Governance along with the certificate of the Auditors, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual report.

CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009

The company is in the process of considering adoption of Corporate Governance Voluntary Guidelines, 2009 (the Guidelines) and formulating relevant policies/codes. The subject being at inception/ planning level, will take its shape in due course.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of operations, performance and future outlook of the Company is given

separately under the head "Management Discussion and Analysis".

NOTES TO ACCOUNTS

The observations of the Auditors, if any, have been adequately explained in Notes to Accounts and need no further clarification

PARTICULARS OF EMPLOYEES

A statement showing particulars of employees required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is annexed hereto as Annexure I and forms an integral part of the Report.

PARTICULARS W.R.T. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 217(1 )(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988

Relating to Energy Conservation and Technology Absorption are not applicable.

Foreign Exchange Earnings and Outgo

Information pertaining to activities relating to exports, initiative taken to increase exports, development of new export markets and exports plans is as follows:

The Company through subsidiaries is into export of garments to various countries and has taken various initiatives for increasing exports like strengthening design & development, outsourcing garments from cost effective locations and increasing manufacturing capacities. The Company and subsidiaries have explored new markets in South America, Africa and sourcing partners in Sri Lanka. The Company has valued buyers across the globe and plans to cater to new markets and also to cater to A category of International buyers especially through Chennai unit of its subsidiary. Total Foreign Exchange used and earned (in Rs.):

Foreign Exchange Earnings

Particulars 2009-101 2008-09 Export of Goods- FOB basis 433,077,525 215,827,507

Interest Income 16,273,983 -

SAP/Mgmt Charges 19,874,074 -

Others 5,727,910 -

Total 474,953,492 215,827,507

Foreign Exchange Outgo

Particulars 2009-10 2008-09

Foreign Travelling 554,377 4,474,073

Advertisement Expenses 517,064 -

Commission 429,157 2,151,273

Sampling Expenses 8,803,391 -

Others 1,789,711 -

Total 12,093,700 6,625,346

ACKNOWLEDGEMENT

The Directors of your Company are thankful to Bankers, Business Associates, Customers, Members, Government Bodies & Regulators for the continuous support received from them and place on record their appreciation for the sincere services rendered by the employees at all level.

For and on behalf of the Board

for House Of Pearl Fashions Limited

Deepak Seth

Place : Gurgaon Chairman

Date : 29.05.2010 (DIN-00003021)

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