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Pacific Industries Ltd.

BSE: 523483 Sector: Others
NSE: PACIFICIND ISIN Code: INE883C01025
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NSE 05:30 | 01 Jan Pacific Industries Ltd
OPEN 155.00
PREVIOUS CLOSE 155.00
VOLUME 80
52-Week high 185.00
52-Week low 114.00
P/E 11.27
Mkt Cap.(Rs cr) 21
Buy Price 146.15
Buy Qty 20.00
Sell Price 165.00
Sell Qty 500.00
OPEN 155.00
CLOSE 155.00
VOLUME 80
52-Week high 185.00
52-Week low 114.00
P/E 11.27
Mkt Cap.(Rs cr) 21
Buy Price 146.15
Buy Qty 20.00
Sell Price 165.00
Sell Qty 500.00

Pacific Industries Ltd. (PACIFICIND) - Director Report

Company director report

To

The Members of Pacific Industries Limited

The Board of Directors have pleasure in presenting their 28th Annual Report on thebusiness and operations of Pacific Industries Limited along with the Audited FinancialStatements for the Financial Year Ended March 31 2017.

1. Financial Highlights

The Standalone and ConsolidatedFinancial Results of the company for the year ended 31stMarch 2017 are as follows:

(Rs. In Lacs)

Standalone (F.Y.) Consolidated (F.Y.)
Particulars
2016-17 2015-16 2016-17 2015-16
Revenue from Operations and Other Income 6732.13 6719.49 10550.05 -
Less: Operating Cost 6111.58 5761.93 9983.08 -
Operating Profit/PBDIT 620.55 957.56 566.98 -
Less: Interest & Finance Charges 220.49 289.80 138.54 -
Less: Depreciation 550.42 368.52 -
& Amortization Expenses 368.14
117.35 59.92 -
Profit Before Tax and Exceptional Items 31.92
Add: Exceptional items - - - -
Profit Before Tax 31.92 117.35 59.92 -
Less: Provision for Tax 4.65 21.10 14.01 -
Less: Prior Period Adjustment 7.60 6.30 7.60
Profit After Tax 19.67 89.94 38.30 -
Transfer to General Reserve - - - -
Surplus carried to Balance Sheet 19.67 89.94 38.30 -

2. BUSINESS OVERVIEW

Your Company continues to maintain its reputation as one of the most reputedmanufacturers & providers of choicest and exclusive range of Indian & ImportedMarbles & Granites. The Company has strived to innovate in technology and marketingand has evolved accepting the changing customer demands and aspirations.

Aggressive marketing and rational utilization of resources by the management of theCompany has been an ongoing process as usual.

The Company has visualized on many uncharted territories in terms of creating a betterfuture for itself in terms of new products and a wider range of colors and the Company iswell positioned to capture benefits of the upturn.

Customer Relationships

Your Company believes that strengthening the relationships with its existing clients isas important as adding new names to its clientele. The Company has been exploring newopportunities with its existing clients and has also widened its client base bothgeographically and numerically during the year under review and hopes to further expand itwith the introduction of e-commerce facility on its website in the coming years.

The Company has also gained and maintained a reputation for importing and distributingonly the highest quality stone while providing clients with personalized detailedattention in selecting the right material for their projects.

Personnel & Performance

Your Company has been able to develop an environment which is conducive to high growthand performance a work culture that encourages meritocracy and rewards high performers inan adequate and fair manner.

3. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and all the subsidiaries form apart of this Annual Report and have been prepared in accordance with section 129(3)of theCompanies Act 2013. A separate statement containing salient features of the FinancialStatements in prescribed format AOC-1 is annexed as Annexure-I to this report. Thisstatement also provides the details of the performance and financial position of each ofthe Subsidiary Company.

4. DIVIDEND AND TRANSFER TO RESERVE

Your Directors have not recommended any dividend for the year 2016-2017. The Board ofDirectors didn't propose to transfer any sum to the General Reserve.

5. DETAILS OF SUBSIDIARIES

The Company has the following subsidiaries and step-down subsidiaries:

Wholly owned Subsidiaries:-

a) Gaze Fashiontrade Limited a 100% Subsidiaries of the Company situated in the stateof Karnataka.

b) Gist Minerals & technologies Limiteda 100% Subsidiaries of the Company situatedin the state of Maharashtra.

Step Down Subsidiaries:-

a) Biswas Solar Instrument Private Limited a wholly owned step-down subsidiary of theCompany.

b) Blood hound Security Company Pvt. Ltd. a wholly owned step-down subsidiary of theCompany.

c) Radhika vyapaar Pvt. Ltd. a wholly owned step-down subsidiary of the Company.

d) Saha Coloured & falvour Spirit manufacture Pvt. Ltd. a wholly owned step-downsubsidiary of the Company.

There is no associate company within the meaning of section 2(6) of the Companies Act2013. There has been no material change in the nature of the business of the Subsidiaries.

6. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT

The Company has incorporated Following Two wholly owned subsidiary company:-

(i) Gaze fashion trade Limited in the state of Karnataka.

(ii) Gist Minerals Technologies Limited in the state of Maharashtra.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act 2013 and in terms of theArticles of Association of the Company Mrs. Geeta Devi Agarwal is liable to retire byrotation at ensuing Annual General Meeting and being eligible offer himself forreappointment.

8. DECLARATION OF INDEPENDENT DIRECTORS

All the Independent Directors have submitted declaration that they meet the criteria ofindependence as provided in section 149 (6) of the Companies Act 2013 and Regulation16(1)(b) of SEBI (Listing and Disclosure Requirements) 2015 and there has been no changein the circumstances which may affect their status as independent director during theyear.

9. Credit Rating

The Credit Rating has been affirmed for long-term rating of ICRA - BB and forshort-term rating of ICRA - A4 on the bank facilities of the Company.

10. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) of the Companies Act 2013 readwith rule 5 (1) of the Companies (Appointment and Remuneration of ManagerialPersonnel)Rules2014 as amended from time to time has been given in the Annexure

11. NUMBER OF THE MEETINGS OF THE BOARD OF DIRECTORS

The Company had four (4) Board Meetings during the Financial Year under review. TheBoard Meetings were held in Compliance with the Companies Act 213. The details of thesame provided in the Corporate Governance Report.

12. EVALUATION OF THE BOARD'S PERFORMANCE

In compliance with the requirements of Section 134(3) (p) of the Companies Act 213 andSEBI(LODR) Regulations2015 the Board has carried out an annual evaluation of its ownperformance performance of the Directors as well as the evaluation of working of itsCommittee.

In a separate meeting of independent directors performance of non-independentdirectors and the Board as a whole was reviewed. Further performance of the chairman wasalso evaluated taking into account the views of executive directors and non-executivedirectors.

The evaluation of all the directors and board as a whole was conducted based on thecriteria and framework adopted by the Board. The evaluation process has been explained inthe Corporate Governance Report.

13. COMPANY'S POLICY RELATING TO DIRECTOR'S APPOINTMENT PAYMENT OF

REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Board has framed a policy relating to appointment of Directors payment ofManagerial remuneration Director's qualifications positive attributes independence ofDirectors and other related matters as provided under section 178(3) of the Companies Act2013 based on the recommendation of Nomination and Remuneration Committee. The details ofthis policy is explained in the Corporate Governance Report.

14. COMMITTEES OF THE BOARD

There are currently four Committee of the Board which are as follows: a) AuditCommittee b) Nomination & Remuneration Committee c) Corporate Social Responsibility(CSR) Committee d) Stakeholders' Relationship Committee

Details of all the Committees along with their composition charters and meetings heldduring the year are provided in the "Report on Corporate Governance" whichforms part of this Annual Report.

15. DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors acknowledge the responsibility for ensuring compliances with theprovisions of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 andstate that :

a. In the preparation of the annual accounts for the financial year ended 31st March

2017 the applicable accounting standards have been followed along with properexplanation relating to material departures;

b. such accounting policies as mentioned in note 1 to the financial statements havebeen selected and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of Financial year on 31st March 2017 and of profit and loss of theCompany for that period;

c. proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d. The annual accounts have been prepared on a going concern basis;

e. Proper internal financial controls have been laid down which are adequate and wereoperating effectively.

f. Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.15.

Particulars of loans guarantees and investments

16. RELATED PARTY TRANSACTIONS

All related party transactions entered into during the financial year were on an arm'slength basis and were in the ordinary course of business. There are no materialsignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons and their relatives which may have apotential conflict with the interest of the Company at large. Particulars of contracts orarrangements with related parties referred to Section 188(1) of the Companies Act 2013 inthe form AOC 2 is annexed herewith as Annexure 3.The Board has also framed a policy onrelated party transactions and the same is available on Company's website i.e.www.pacificindustriesltd.com

17. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism / Whistle Blower Policy to deal withinstances of fraud and mismanagement if any. The Policy has a systematic mechanism fordirectors and employees to report concerns about unethical behaviour actual or suspectedfraud or violation of the Company's Code of Conduct or policy. The policy is alsoavailable on the Company's website i.e. www.pacificindustriesltd.com

18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has well defined mechanisms in place to establish and maintain adequateinternal controls over all operational and financial functions considering the naturesize and complexity of its business.

The Company maintains adequate internal control systems that provide among otherthings reasonable assurance of recording the transactions of its operations in allmaterial respects and of providing protection against significant misuse or loss ofCompany assets. Mr. Ravi Sharma Chartered Accountant was appointed as an Internal Auditorof the Company. The Internal Auditors independently evaluate adequacy of internal controlsand audit the majority of the transactions undertaken by the Company. Post audit reviewsare carried out to ensure that audit recommendations have been implemented.

The Audit Committee of the Board of Directors which comprises of majority ofIndependent Directors inter alia reviews the adequacy and effectiveness of internalControl and monitors implementation of Internal Audit observations.

19. AUDITORS AND AUDITORS' REPORT

A. Statutory Auditors

The board has appointed of M/s Ravi Sharma & Co. Chartered Accountant Jaipur(Firm Registration No. 015143C) as Statutory Auditors of the Company for Five (5) yearsbeginning form the conclusion of ensuing 28th AGM to till the Conclusion of ensuing 33rdAGM subject to ratification of their appointment at every AGM in place of existingStatutory Auditors M/s A. Bafna & Co. Chartered Accountants Jaipur in compliancewith the mandatory rotation of Auditors under the Companies Act 2013 at their meetingheld on 30.05.2017.

There is qualification or adverse remark contained in the Statutory Auditors' Reportattached to Balance Sheet as at 31st March 2017. Information referred in Auditors' Reportare self-explanatory and do not call for any further comments.

B. Secretarial Auditor

The board has appointed M/s Saroj Hirawat & Associates Practising CompanySecretaries as secretarial auditor of the Company for the FY 2016-17 as per theprovisions of Section 204 of Companies Act 2013 and rules made thereunder.

The Secretarial Audit Report for the financial year 2016-17 is attached herewith as

Annexure 4. There is no reservation qualification or adverse remark contained in theSecretarial Auditor Report..

20. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The particulars of loans guarantees and investments made under section 186 of theCompanies Act 2013 by the company to other Body Corporates or persons have beendisclosed in notes to the financial statements.

21. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

22. EXTRACT OF ANNUAL RETURN

As provided under section 92(3) of the Companies Act 2013 the extract of annual returnis given in Annexure-5 in the prescribed form MGT-9 which forms part of this report.

23. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As required under Section 135 of the Companies Act 2013 the Board of Directors hasconstituted a Corporate Social Responsibility (CSR) Committee to formulate and recommendto the Board a Corporate Social Responsibility (CSR) Policy which shall indicate theactivities to be undertaken by the Company as specified in Schedule VII of the CompaniesAct 2013 to recommend the amount of expenditure to be incurred on the activities and tomonitor the Corporate Social Responsibility Policy of the Company from time to time. Thecomposition of CSR Committee has been given in Annual Report on CSR activities.

The Annual Report on CSR activities is annexed herewith as Annexure- 6.

24. PREVENTION OF INSIDER TRADING

In compliance with the provisions of Securities Exchange Board of India (Prohibition ofInsider Trading) Regulations 2015 the Board has adopted a code of conduct and code ofpractices and procedures for fair disclosure of unpublished price sensitive information topreserve the confidentiality of price sensitive information prevent misuse thereof andregulate the trading by Insiders.The code of practice and procedures for fair disclosureof unpublished price sensitive information is also available on the Company's website i.e.www. pacificindustriesltd.com.

25. RISK MANAGEMENT

Your Directors wish to place on record their sincere appreciation for the continuedsupport and co-operation of Financial Institutions Banks Government Authorities andother stakeholders. Your Directors also acknowledge sincere appreciation on the commitmentand hard work put in by the management and all the employees of the company.

The Company has framed and implemented a Risk Management Policy to identify the variousbusiness risks. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company's competitive advantage. The riskmanagement policy defines the risk management approach across the enterprise at variouslevels including documentation and reporting.

26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report of the financial condition and results ofoperations of the Company for the year under review as required regulation 34(2)(e) ofSEBI (Listing and Disclosure Requirements) Regulations 2015 is being given separately andforms part of this Annual Report.

27. CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements as stipulated underthe Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 with the stock exchanges. A separate section on corporate governancealong with certificate from the auditors confirming the compliance is annexed and formspart of the annual report. The Chairman & Managing Director has confirmed and declaredthat all the members of the Board and the Senior Management have affirmed compliance withthe code of conduct.

28. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS AND OUTGO

The Information relating to conservation of energy technology absorption and foreignexchange earnings and outgo as per section 134(3)(m) of the Companies Act2013 read withrule 8(3) of the Companies (Accounts) Rules2014 is appended as Annexure 7 and forms partof the Report.

29. GREEN INITIATIVES

As in the previous years this year too Electronic copies of the annual Report 2016-17and the notice of the 28th Annual General Meeting are sent to all members whose emailaddresses are registered with the Company/ Depository Participant(s). For the members whohave not registered their email addresses physical copies are sent in the permitted mode.

30. ACKNOWLEDGEMENTS

Your Company will soon complete 28 eventful years of the existence in this country.

Your Directors are proud of this rich heritage and thank to all our stakeholders whohave contributed to the success or your country.

Your Directors wish to place on record their sincere appreciation for the continuedsupport and co-operation of Financial Institutions Banks Government Authorities andother stakeholders. Your Directors also acknowledge sincere appreciation on the commitmentand hard work put in by the management and all the employees of the company.

Annexure - 1

FORM NO. AOC -1

(Pursuant to first proviso to sub-section (3) of section 129 read with Rule 5 of theCompanies (Accounts) Rules 2014.

Statement containing salient features of the Financial Statements ofSubsidiaries/Associate Companies/ Joint Ventures

Part "A": Subsidiaries

Particulars

Subsidiaries

Step-Down Subsidiaries

Name of Subsidiary Gaze Fashiontrade Ltd. Gist Minerals & technologies Limited Biswas Solar Instrument Pvt. Ltd. Blood hound Security Company Pvt. Ltd. Radhika vyapaar Pvt. Ltd. Saha Coloured & falvour Spirit manufacture Pvt. Ltd.
The date since when subsidiary was acquired 21st October 2016 07th November2016 15 th March 2017 15 th March 2017 15th March2017 15th March2017
Reporting period for the Subsidiary Concerned if different frosm the holding company's reporting period 01st April 2016 to 31 st March 2017 01st April 2016 to 31st March 2017 01 st April 2016 to 31 st March 2017 01 st April 2016 to 31st March 2017 01st April 2016 to 31st March 2017 01st April 2016 to 31st March 2017
Share Capital 1000000 1000000 7902000 6002000 5000000 1050000
Reserve & Surplus -340.00 -259996 772341282 584244396 235244596 900975931
Total Assets 19345280 67885904 780250379 590266326 394795530 1074624578
Total 18345620 67145900 7097 19930 154550935 172598647
Liabilities
Investments 5921250 25601350 - 284234150 - 197600000
Turnover 804847 - 32000 28000 174846393 214275685
Profit before taxation -340.00 -259996 -22 1413 1639224 1418763
Provision for - - 451 699 490648 444964
Taxation Profit after taxation -340.00 -259.996 -473 714 1148576 973799
Proposed dividend - - - - - -
% of Shareholding 100 100 99.98 99.96 99.96 100

Notes:

1. Name of Subsidiaries which are yet to commence operation: NA

2. Name of Subsidiaries which have been liquidated or sold during the year:NIL

Part "B": Associates and Joint Ventures

Statement pursuant to section 129(3) of the Companies Act 2013 related to AssociateCompanies and Joint ventures There is no Associates and Joint Ventures as on 31st March2017.

For and on behalf of the board
Sd/- Sd/-
J. P. Agarwal Kapil Agarwal
Chairman & Managing Director Director
(DIN:00386183) (DIN: 00386298)
Place: Udaipur
Date: 30.05.2017

Particulars of Employees

1. Information as per Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

A. Remuneration paid to Whole Time Director

Name of Director Remuneration in FY 2016-17 Remuneration in FY 2014-15 % Inc./ (Dec) in Remuneration Ratio of Remuneration to
MRE
Mr. J.P Agarwal Rs.24.00 Lacs Rs.24.00 Lacs 0.00 15.03
Mr. Kapil Agarwal Rs.24.00 Lacs Rs.24.00 Lacs 0.00 15.03

B. Remuneration paid to KMPs

Name of Director Remuneration Remuneration % Inc./ (Dec) Ratio of
in FY 2016-17 in FY 2014-15 in Remuneration
Ms. Khushbu Sethi – NA Remuneration
2.94 Lacs* NA 1.84
Company Secretary

*based on annualized salary MRE – Median Remuneration of Employees

C. The median remuneration of employees was Rs. 159660/- in financial year

2016-17 and Rs. 158052/- in financial year 2015-16. There was Increase in MRF infinancial year 2016-17 of 1.01% as compared to financial year 2015-16.` D. Number ofpermanent employees on the rolls of Company was 293 employees as on 31.03.2017.

E. The aggregate remuneration of the employees was increased by 16.64% over theprevious financial year.

F. There was no increase in the salary of WHOLE TIME DIRECTOR. The increase inremuneration of other than KMP's was 18.36%. The increase in total remuneration of KMPsincluding whole time director was 0.59% over the previous financial year. G. AverageSalary increase of non- managerial employees was 0.59% and that of managerial employees18.36% in financial year 2016-17. There are no exceptional circumstances in increase inmanagerial remuneration.

H. Remuneration paid during the year ended 31stMarch 2017 is as per the

Remuneration Policy of the Company.

II. Information as per Rule 5(2) of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules 2014: a) Details of TopTen employee in terms of remuneration drawn during the year ended on 31.03.2017

Employee Name Designation Remuneration received (CTC*) Date of commencement of employment Educational Qualification Age (Years) Experience (in Years) Last employment
1. Mr. J.P. Agarwal Chairman &Managing Director 2400000 13.07.1989 CA (Inter) 59 28 NIL
2. Mr. Kapil Agarwal Executive Director 2400000 01.07.2005 MBA 34 12 NIL
3. Mr. Ravi Kumar Sharma Finance Controller 1260000 01.06.2013 CA & CS 29 8 Banswara Syntax Ltd
4. Mr. Anurag Jain AVP Business Management 900000 01.06.2014 MBA 33 13 Angel Broking Pvt. Ltd.
5. R. G. NAGENDRA Deputy General Manager- HR 850200 11.01.2016 Bsc Dip in Social Science PGDPM &IR Dip in IR MBA 58 01 M/s. Serenity Trades Pvt Ltd Mumbai
6. SWAMY V R Sr. 660804 11.02.1997 DME(Mech) 48 20 M/s. STI
MANAGER- FACTORY Granite India Limited Tumkur
7. SHIVARAJU G MANAGER- ELECTRICAL 539664 01.08.1996 DEE 47 21 M/s. STI Granite India Limited Tumkur
8. RAKESH TOSHNIWAL Sr. MANAGER- ACCOUNT S 537237 05.05.2005 B. Sc. 47 12 M/s. Thanuka Marbles (P) Ltd Udaipur
9. T K S PRAKASH MANAGER- GANSAW 525000 01.09.2009 BE (Mech) 42 8 M&G Impex (P) Ltd Hosur
10. J N PRASAD MANAGER- PURCHASE & MIS 512040 01.11.2008 B.Com 44 8 M&G Impex (P) Ltd Hosur

Annexure - 3 FORM NO. AOC -2 (Pursuant to clause (h) of sub-section (3) of section 134of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014.

Form for Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arm's length transaction under third provisothereto.

1. Details of contracts or arrangements or transactions not at Arm's length basis.

Particulars Details
a) Name (s) of the related party & nature of relationship -Not Applicable -
b) Nature of contracts/arrangements/transaction
c) Duration of the contracts/arrangements/transaction
d) Salient terms of the contracts or arrangements or transaction including the value if any
e) Justification for entering into such contracts or arrangements or transactions'
f) Date of approval by the Board
g) Amount paid as advances if any
h) Date on which the special resolution was passed in General meeting as required under first proviso to section 188

2. Details of contracts or arrangements or transactions at Arm's length basis.

Name (s) of related party & nature of relationship Nature of contracts/ Arrangements /transaction Duration of contracts/ arrangements /transaction Salient terms of the contracts/arrangement s or transaction including the value if any Date of approval by the Board Amount paid as advances if any
Rahul Marbles Pvt. Ltd. Sales Ongoing Sales for the business of the Company Rs. 2732377 N.A. N.A.
Rahul Marbles Pvt. Ltd. Purchase Ongoing Purchase for the business of the Company Rs. 496614
Krishna Marbles Purchase Ongoing Purchase for the business of the Company Rs. 25969189 N.A. N.A.

 

For and on behalf the Board of Directors
Sd/-
J. P. Agarwal
Chairman & Managing Director
(DIN:00386183)