The Members of Pacific Industries Limited
The Board of Directors have pleasure in presenting their 30th Annual Reporton the business and operations of Pacific Industries Limited along with the AuditedFinancial Statements for the Financial Year Ended March 31 2019.
1. FINANCIAL HIGHLIGHTS
The Standalone and Consolidated Financial Results of the company for the year ended 31stMarch 2019 are as follows:
| || || |
(Rs. In Lacs)
|Particulars || |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue from Operations and Other Income ||10347.24 ||6936.52 ||10837.81 ||7425.16 |
|Less: Operating Cost ||9361.80 ||6162.43 ||10243.27 ||6761.14 |
|Operating Profit/PBDIT ||985.44 ||774.09 ||594.54 ||664.02 |
|Less: Interest & Finance Charges ||393.11 ||337.16 ||137.77 ||266.37 |
|Less: Depreciation & Amortization Expenses ||434.84 ||333.22 ||435.24 ||333.49 |
|Profit Before Tax and Exceptional Items ||157.49 ||103.71 ||21.53 ||64.16 |
|Add: Exceptional items ||- ||- ||- ||- |
|Profit Before Tax ||157.49 ||103.71 ||21.53 ||64.16 |
|Less: Provision for Tax ||27.32 ||20.34 ||33.90 ||28.94 |
|Less: Prior Period Adjustment ||- ||- ||- ||- |
|Profit After Tax ||130.17 ||83.37 ||-12.37 ||35.22 |
|Other Comprehensive Income ||28.66 ||50.37 ||9.98 ||-57.46 |
|Surplus carried to Balance Sheet ||158.83 ||133.74 ||-16.71 ||-22.24 |
Indian Accounting Standards
The Ministry of Corporate Affairs (MCA) vide its notification in the official Gazettedated 16th February 2015 notified the Indian Accounting Standards (IND AS) which hasreplaced the existing Indian GAAP prescribed under Section 133 of the Companies Act 2013read with rule 7 of the Companies (Accounts) Rules 2014. Pursuant to the above saidnotification the Indian Accounting Standards (IND AS) is applicable on the Company forthe accounting periods beginning on or after 1st April 2017.
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.
Your Company is presently engaged in production and export of polished granite slabscut-to-size polished granite tiles polished marble slabs and polished natural stones. Italso trades and export in granite/marble slabs & tiles rough granite/marble blockssand stone slate stone and all other kinds of stone. Our Company is now venturing intonew Quartz project.
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. TheCompany has also gained and maintained a reputation for importing and distributing onlythe highest quality stone while providing clients with personalized detailed attention inselecting 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 2018-2019. 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 Limited a 100% Subsidiaries of the Companysituated in 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. CHANGE IN CAPITAL STRUCTURE
During the year there has been no change in the authorized share capital of theCompany. Further the Company has not issued any shares. However the company hassubmitted the Offer Letter to BSE for Right Issue which has been approved on 16thMay 2019.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the financial year:
1. Mr. Sagarmal Agarwal Non-Executive Independent Director Mr Jayanti Hiralal OzaNon-Executive Independent Director on the Board of the Company has resigned w.e.f 18thFebruary 2019 has placed on record its warm appreciation of the rich contribution made bythe above Director.
2. Mr. Sumeet Agarwal Non executive Non Independent Director of the company hasresigned from The Board of Directors of the company w.e.f 30.06.2018 has placed on recordits warm appreciation of the rich contribution made by the above Director
3. Mr Vikas Misra and Mr. Pradeep Kumar Jain appointed as Additional Non ExecutiveIndependent Director of the Company w.e.f. 17.12.2018
Further Mrs. Khusbhu Sethi Resigned from Company secretary and Compliance officer ofthe Company w.e.f. 01.06.2018 and in her place Mr. Sachin Shah Appointed as CompanySecretary and compliance officer of the Company w.e.f 10.06.2018.
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.
4. 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.
5. Credit Rating
The Credit Rating has been affirmed for CARE RATING restated the Long term Rating CAREBB-Stable Short term rating CARE A4 and long term bank facilities/ short term bankfacilities CARE BB-; Stable/CARE A4 on the bank facilities of the Company.
6. 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 Managerial Personnel)Rules2014 as amended from time to time has been given in the Annexure 2.
7. NUMBER OF THE MEETINGS OF THE BOARD OF DIRECTORS
The Company had Eight (8) Board Meetings during the Financial Year under review. TheBoard Meetings were held in Compliance with the Companies Act 2013. The details of thesame provided in the Corporate Governance Report.
8. EVALUATION OF THE BOARD'S PERFORMANCE
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance its committees and individualdirectors. The criteria of evaluation is described in the Report on CorporateGovernance a part of this Annual Report.
The Nomination and Remuneration Policy of the Company containing criteria ofperformance evaluation of directors and payment of remuneration has been designed to keeppace with the dynamic business environment and market-linked positioning. The policy hasbeen duly approved and adopted by the Board pursuant to the recommendations of theNomination Remuneration and Compensation Committee of the Board which is available onthe Company's website i.e. http://www.pacificindstriesltd.com.
9. COMPANY'S POLICY RELATING TO DIRECTOR'S APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE 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.
10. COMMITTEES OF THE BOARD
There are currently four Committee of the Board which are as follows:
a) Audit Committee
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.
11. 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 March2019 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
b. such accounting policies as mentioned in note 1 & 2 to the financial statementshave been 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 2019 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.
12. 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.
All related party transactions is placed before the Audit Committee as well as theBoard of Directors. The Audit Committee has granted omnibus approval for related partytransactions as per the provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015. The Board has also framed a policy on related party transactions andthe same is available on the Company's website i.e. www.pacificindustriesltd.com.
13. 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
14. 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.
15. LISTING OF SHARES
The shares of the Company are listed on BSE Limited and the listing fee for the year201920 has been duly paid.
16. AUDITORS AND AUDITORS' REPORT
A. Statutory Auditors
The board has appointed of M/s Ravi Sharma & Co. Chartered Accountants 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 by the Shareholders at every interveningAnnual General Meeting.
Pursuant to the provisions of Companies (Amendment) Act 2017 as notified on 7th May2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors is notrequired to be ratified at every intervening Annual General Meeting (AGM). Accordingly inline with the aforesaid provisions and pursuant to the resolution passed at 28th AGM theCompany at ensuing AGM is proposing to ratify the appointment of auditors from theconclusion of 29th AGM till the conclusion of 33rd AGM to conduct the statutory audit ofthe Company without further annual ratification by members at every subsequent AGM.
The statutory auditors of the Company have submitted Auditors' Report on the financialstatements (standalone and consolidated) of the Company for the financial year ended 31stMarch 2019. There is qualification or adverse remark contained in the Statutory Auditors'Report attached to Balance Sheet as at 31st March 2019. Information referred in Auditors'Report are self-explanatory and do not call for any further comments.
B. Secretarial Auditor
The board has appointed M/s B K Sharma & Associates Practising CompanySecretaries as secretarial auditor of the Company for the FY 2018-19 as per theprovisions of Section 204 of Companies Act 2013 and rules made thereunder.
The Secretarial Audit Report for the financial year 2018-19 is attached herewith asAnnexure 4. The report does not contain any reservation qualification or adverse remarkexcept delay in submission of documents with BSE as per SEBI (LODR) Regulations 2015.Information referred in the Secretarial Auditor Report are selfexplanatory and do not callfor any further comments.
Secretarial Audit of Material Unlisted Indian Subsidiary
M/s Biswas Solar Instrument Private Limited and M/s Saha Coloured and Flavored SpiritManufacturer Private Limited a material subsidiary of the Company undertakes SecretarialAudit under Section 204 of the Companies Act 2013. The Secretarial Audit of M/s BiswasSolar Instrument Private Limited and M/s Saha Coloured and Flavored Spirit ManufacturerPrivate Limited for the Financial Year 2018-19 was carried out pursuant to Section 204 ofthe Companies Act 2013 and Regulation 24A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Secretarial Audit Report of M/s Biswas SolarInstrument Private Limited and M/s Saha Coloured and Flavored Spirit Manufacturer PrivateLimited submitted by M/s B K Sharma & Associates Practising Company Secretaries doesnot contain any qualification reservation or adverse remark or disclaimer
17. 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.
The Company has neither accepted nor renewed any deposits during the year under review.
19. 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.
20. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate Social Responsibility is not applicable to our company because the companynot having net worth of rupees five hundred crore or more or turnover of rupees onethousand crore or more or a net profit of rupees five crore or more during Proceedingfinancial year 2017-18.
21. 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.
22. RISK MANAGEMENT
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.
23. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
Your Company is fully committed to uphold and maintain the dignity of women working inthe Company. Pursuant to the provisions of Section 21 of the Sexual Harassment of Women atthe Workplace (Prevention Prohibition Redressal) Act 2013 the Company formulated anAnti-Sexual Harassment policy. All employees (permanent contractual temporary andtrainees) are covered under this policy. An Internal Complaints Committee (ICC) was set upwhich is responsible for redressal of complaints related to sexual harassment at theworkplace. During the year under review the Company has not received any complaintpertaining to sexual harassment.
24. 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.
25. 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.
26. SECRETARIAL STANDARDS
During the year the Company has complied with all applicable secretarial standards.
27. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
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.
28. GREEN INITIATIVES
As in the previous years this year too Electronic copies of the annual Report 2017-18and the notice of the 30th Annual General Meeting are sent to all members whoseemail addresses are registered with the Company/ Depository Participant(s). For themembers who have not registered their email addresses physical copies are sent in thepermitted mode.
Your Company will soon complete 30 eventful years of the existence in the country. YourDirectors are proud of this rich heritage and thank to all our stakeholders who havecontributed to the success of your company.
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.
| ||By Order of the Board of Directors || |
| ||Pacific Industries Limited || |
|Place : Udaipur ||J. P. Agarwal ||Kapil Agarwal |
|Date: 30th May2019 ||Chairman ||Executive Director |
| ||& Managing Director ||DIN:00386298 |
| ||DIN:00386183 || |