Pacific Industries Ltd Directors Report.

To,

The Members of Pacific Industries Limited,

The Board of Directors have pleasure in presenting their 30th Annual Report on the business and operations of Pacific Industries Limited along with the Audited Financial 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 31st March, 2019 are as follows:

(Rs. In Lacs)

Particulars

Standalone (F.Y.)

Consolidated (F.Y.)

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 Gazette dated 16th February, 2015, notified the Indian Accounting Standards (IND AS) which has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014. Pursuant to the above said notification, the Indian Accounting Standards (IND AS) is applicable on the Company for the accounting periods beginning on or after 1st April, 2017.

2. BUSINESS OVERVIEW

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

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

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

Your Company is presently engaged in production and export of polished granite slabs, cut-to-size polished granite tiles, polished marble slabs and polished natural stones. It also trades and export in granite/marble slabs & tiles, rough granite/marble blocks, sand stone, slate stone and all other kinds of stone. Our Company is now venturing into new Quartz project.

Customer Relationships

Your Company believes that strengthening the relationships with its existing clients is as important as adding new names to its clientele. The Company has been exploring new opportunities with its existing clients and has also widened its client base both geographically and numerically during the year under review and hopes to further expand it with 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 distributing only the highest quality stone while providing clients with personalized, detailed attention in selecting the right material for their projects.

Personnel & Performance

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

3. CONSOLIDATED FINANCIAL STATEMENTS

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

4. DIVIDEND AND TRANSFER TO RESERVE

Your Directors have not recommended any dividend for the year 2018-2019. The Board of Directors didnt 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 state of Karnataka.

b) Gist Minerals & technologies Limited, a 100% Subsidiaries of the Company situated in the state of Maharashtra.

Step Down Subsidiaries:-

a) Biswas Solar Instrument Private Limited,, a wholly owned step-down subsidiary of the Company.

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

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-down subsidiary of the Company.

There is no associate company within the meaning of section 2(6) of the Companies Act, 2013. 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 the Company. Further, the Company has not issued any shares. However, the company has submitted the Offer Letter to BSE for Right Issue, which has been approved on 16th May, 2019.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the financial year:

1. Mr. Sagarmal Agarwal,, Non-Executive Independent Director, Mr, Jayanti Hiralal Oza Non-Executive Independent Director on the Board of the Company has resigned w.e.f 18th February, 2019 has placed on record its warm appreciation of the rich contribution made by the above Director.

2. Mr. Sumeet Agarwal Non executive Non Independent Director of the company has resigned from The Board of Directors of the company w.e.f 30.06.2018 has placed on record its warm appreciation of the rich contribution made by the above Director

3. Mr Vikas Misra and Mr. Pradeep Kumar Jain appointed as Additional Non Executive Independent Director of the Company w.e.f. 17.12.2018

Further, Mrs. Khusbhu Sethi Resigned from Company secretary and Compliance officer of the Company w.e.f. 01.06.2018 and in her place Mr. Sachin Shah Appointed as Company Secretary 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 the Articles of Association of the Company, Mrs. Geeta Devi Agarwal is liable to retire by rotation at ensuing Annual General Meeting and being eligible offer himself for reappointment.

4. DECLARATION OF INDEPENDENT DIRECTORS

All the Independent Directors have submitted declaration that they meet the criteria of independence as provided in section 149 (6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing and Disclosure Requirements), 2015 and there has been no change in the circumstances which may affect their status as independent director during the year.

5. Credit Rating

The Credit Rating has been affirmed for CARE RATING restated the Long term Rating CARE BB-,Stable, Short term rating CARE A4 and long term bank facilities/ short term bank facilities 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 read with rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014, 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. The Board Meetings were held in Compliance with the Companies Act, 2013. The details of the same provided in the Corporate Governance Report.

8. EVALUATION OF THE BOARDS PERFORMANCE

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, its committees and individual directors. The criteria of evaluation is described in the “Report on Corporate Governance”, a part of this Annual Report.

The Nomination and Remuneration Policy of the Company, containing criteria of performance evaluation of directors and payment of remuneration, has been designed to keep pace with the dynamic business environment and market-linked positioning. The policy has been duly approved and adopted by the Board, pursuant to the recommendations of the Nomination, Remuneration and Compensation Committee of the Board, which is available on the Companys website, i.e. http://www.pacificindstriesltd.com.

9. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Board has framed a policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under section 178(3) of the Companies Act, 2013 based on the recommendation of Nomination and Remuneration Committee. The details of this 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 held during the year, are provided in the “Report on Corporate Governance”, which forms part of this Annual Report.

11. DIRECTORS RESPONSIBILITY STATEMENT

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

a. In the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. such accounting policies as mentioned in note 1 & 2 to the financial statements have been selected and applied 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 Financial year on 31st March, 2019 and of profit and loss of the Company for that period;

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

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

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

f. Proper systems have been devised to ensure compliance with the provisions of all applicable 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 arms length basis and were in the ordinary course of business. There are no material significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons and their relatives which may have a potential conflict with the interest of the Company at large. Particulars of contracts or arrangements with related parties referred to Section 188(1) of the Companies Act, 2013 in the form AOC 2 is annexed herewith as Annexure 3.

All related party transactions is placed before the Audit Committee as well as the Board of Directors. The Audit Committee has granted omnibus approval for related party transactions 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 and the same is available on the Companys website, i.e. www.pacificindustriesltd.com.

13. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism / Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The Policy has a systematic mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or policy. The policy is also available on the Companys 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 adequate internal controls over all operational and financial functions considering the nature, size and complexity of its business.

The Company maintains adequate internal control systems that provide among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Company assets. Mr. Ravi Sharma, Chartered Accountant was appointed as an Internal Auditor of the Company. The Internal Auditors independently evaluate adequacy of internal controls and audit the majority of the transactions undertaken by the Company. Post audit reviews are carried out to ensure that audit recommendations have been implemented.

The Audit Committee of the Board of Directors which comprises of majority of Independent Directors, inter alia, reviews the adequacy and effectiveness of internal Control 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 year 201920 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) years beginning form the conclusion of ensuing 28th AGM to till the Conclusion of ensuing 33rd AGM, subject to ratification of their appointment by the Shareholders at every intervening Annual General Meeting.

Pursuant to the provisions of Companies (Amendment) Act, 2017, as notified on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every intervening Annual General Meeting (AGM). Accordingly, in line with the aforesaid provisions and pursuant to the resolution passed at 28th AGM, the Company, at ensuing AGM, is proposing to ratify the appointment of auditors from the conclusion of 29th AGM till the conclusion of 33rd AGM to conduct the statutory audit of the Company, without further annual ratification by members at every subsequent AGM.

The statutory auditors of the Company have submitted Auditors Report on the financial statements (standalone and consolidated) of the Company for the financial year ended 31st March, 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 Company Secretaries, as secretarial auditor of the Company for the FY 2018-19 as per the provisions of Section 204 of Companies Act 2013 and rules made thereunder.

The Secretarial Audit Report for the financial year 2018-19 is attached herewith as Annexure 4. The report does not contain any reservation, qualification or adverse remark except 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 call for any further comments.

Secretarial Audit of Material Unlisted Indian Subsidiary

M/s Biswas Solar Instrument Private Limited and M/s Saha Coloured and Flavored Spirit Manufacturer Private Limited a material subsidiary of the Company undertakes Secretarial Audit under Section 204 of the Companies Act, 2013. The Secretarial Audit of M/s Biswas Solar Instrument Private Limited and M/s Saha Coloured and Flavored Spirit Manufacturer Private Limited for the Financial Year 2018-19 was carried out pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Secretarial Audit Report of M/s Biswas Solar Instrument Private Limited and M/s Saha Coloured and Flavored Spirit Manufacturer Private Limited submitted by M/s B K Sharma & Associates, Practising Company Secretaries, does not 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 the Companies Act, 2013 by the company, to other Body Corporates or persons have been disclosed in notes to the financial statements.

18. DEPOSITS

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 return is 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 company not having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during Proceeding financial year 2017-18.

21. PREVENTION OF INSIDER TRADING

In compliance with the provisions of Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board has adopted a code of conduct and code of practices and procedures for fair disclosure of unpublished price sensitive information to preserve the confidentiality of price sensitive information, prevent misuse thereof and regulate the trading by Insiders.The code of practice and procedures for fair disclosure of unpublished price sensitive information is also available on the Companys website i.e. www.pacificindustriesltd.com.

22. RISK MANAGEMENT

The Company has framed and implemented a Risk Management Policy to identify the various business risks. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage. The risk management policy defines the risk management approach across the enterprise at various levels 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 in the Company. Pursuant to the provisions of Section 21 of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition, Redressal) Act, 2013, the Company formulated an Anti-Sexual Harassment policy. All employees (permanent, contractual, temporary and trainees) are covered under this policy. An Internal Complaints Committee (ICC) was set up which is responsible for redressal of complaints related to sexual harassment at the workplace. During the year under review, the Company has not received any complaint pertaining to sexual harassment.

24. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

25. CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements as stipulated under the Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the stock exchanges. A separate section on corporate governance, along with certificate from the auditors confirming the compliance is annexed and forms part of the annual report. The Chairman & Managing Director has confirmed and declared that all the members of the Board and the Senior Management have affirmed compliance with the 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 AND OUTGO

The Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as per section 134(3)(m) of the Companies Act,2013 read with rule 8(3) of the Companies (Accounts) Rules,2014 is appended as Annexure 7 and forms part of the Report.

28. GREEN INITIATIVES

As in the previous years, this year too, Electronic copies of the annual Report 2017-18 and the notice of the 30th Annual General Meeting are sent to all members whose email addresses are registered with the Company/ Depository Participant(s). For the members who have not registered their email addresses, physical copies are sent in the permitted mode.

29. ACKNOWLEDGEMENTS

Your Company will soon complete 30 eventful years of the existence in the country. Your Directors are proud of this rich heritage and thank to all our stakeholders who have contributed to the success of your company.

Your Directors wish to place on record their sincere appreciation for the continued support and co-operation of Financial Institutions, Banks, Government Authorities and other stakeholders. Your Directors also acknowledge sincere appreciation on the commitment and 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 May,2019 Chairman Executive Director
& Managing Director DIN:00386298
DIN:00386183