BOARDS' REPORT To, The Members of Pacific Industries Limited, Your Directors have pleasure in presenting their 26th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2015. 2. Performance and Financial Position of Company The Company was under expansion and made capital investment of Rs. 2749.04 Lacs to increase the production capacity. The Company had also taken Term Loan from HDFC Bank Limited to meet the fund requirement. The Profit after tax in FY 2014-15 was Rs. 314.54 Lacs in comparison to previous FY 2013-14 Rs. 746.76 Lacs. The profit of the Financial Year 2014-15 was declined due to Finance Charges of Term Loan and Depreciation on new Capital Investment. 3. Dividend and transfer to Reserve Your Directors have not recommended any dividend for the year 2014-2015 and no amount has been transferred to Reserves during the period under review. The entire surplus is proposed to be retained to give financial leverage to the Company. 4. Share Capital During the year under review, the Company has neither issued any shares with differential voting rights nor granted stock options & sweat equity. 5. Credit Rating Your Company's credit rating has been strengthened for Long term facilities from ICRA BBB (Triple B). The outlook on the long term rating is stable and for short term facilities from ICRA A3+ (A three Plus) rating to non fund based facilities of captioned LOC. In terms of requirements of Section 203 of the Companies Act, 2013, the Board of Directors designated the following persons as Key Managerial Personnel (KMP) of the Company:- i) Mr. Jagdish Prasad Agrawal - Chairman & Managing Director ii) Mr. Kapil Agarwal -CFO iii) Mr. Ineet Singh Arora - Company Secretary Mrs. Geeta Devi Agarwal was appointed as Director of the Company in terms of Section 149 (1) of the Companies Act, 2013 for Woman Director. During the year, Mr. Amit Agarwal, Independent Director resigned w.e.f 14th August, 2014. Mr. Sagarmal Agarwal, Mr. Jayanti Lal Oza and Mr. Mangi Lal Dangi are to be appointed as Independent Directors of the Company by the Shareholders in General Meeting as per requirement of Section 152 (2) of the Companies Act, 2013 for a period commencing from 30th September, 2015 to 31st March, 2018, and not liable to retire by rotation. Mr. Vinod Choudhary was appointed as Additional Director & Independent Director on 14/08/2014 and regularised in Annual General Meeting dated 30.09.2014 for a period commencing from 14th August, 2014 to 31st March, 2019 and not liable to retire by rotation. The Independent Directors have given Declaration to the effect that they meet the criteria of independence as mentioned in Section 149(6) of the Companies Act and Clause 49 of the Listing Agreement. In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and articles of Association of the Company, Mr. Kapil Agarwal, Director of the Company retire by rotation at ensuing Annual General Meeting and being eligible, offer himself for re-appointment. 7. Particulars of Employees The information required pursuant to Section 197(12) of the Companies Act, 2013 read with rules made there under, as amended from time to time, has been given in the Annexure 1. 8. Meetings of the Board of Directors During the year 6 Board Meetings and 4 Audit Committee Meetings were held. The details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement. 9. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, that of its committees and individually directors. The evaluation process has been explained in the Corporate Governance Report. 10.Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, senior management and their remuneration. The Remuneration Policy is given in the Corporate Governance Report. 11.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 e) Risk Management 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", a part of this Annual Report. 12.Directors' Responsibility Statement Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors confirm 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; b. Such accounting policies as mentioned in note 1 to the financial statements have been selected and applied them consistently and made judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the 31st March, 2015 and 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. 13.Related Party Transactions All related party transactions entered into during the financial year were on an arm's 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 2. 14.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 Company's Code of Conduct or policy. The policy is also available on the Company's website. 15.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 Accountants was appointed as an Internal Auditors 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. 16.Deposits The Company has not accepted any deposits during the year 2014-15 and, as such, no amount of principle or interest was outstanding as of the Balance Sheet date. 17.Extract of Annual Return The extract of the Annual Return as required by Section 134(3)(a) of the Companies Act, 2013 in Form MGT 9 is annexed herewith as Annexure 3. 18.Corporate Social Responsibility (CSR) As required under Section 135 of the Companies Act, 2013, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee to formulate and recommend to the Board, a Corporate Social Responsibility (CSR) Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, to recommend the amount of expenditure to be incurred on the activities and to monitor the Corporate Social Responsibility Policy of the Company from time to time. The composition of CSR Committee has been given in Annual Report on CSR activities. Your Company has contributed a sum of Rs 13.70 Lacs to various social institutions in the field mid-day, education, health and scholarship. The Annual Report on CSR activities is annexed herewith as Annexure 4. 19.Auditors and Auditors' Report A. Statutory Auditors M/s A. Bafna & Co. , Chartered Accountants, Jaipur Statutory Auditors of the Company will hold office till the conclusion of this Annual General Meeting and are eligible for reappointment. The Company received a certificate from M/s A. Bafna & Co., Chartered Accountants, Jaipur Statutory Auditors to the effect that their re-appointment, if made, would be in accordance with the provisions of Section 141 of the Companies Act, 2013. As per the provisions of Companies Act, 2013, they are being re-appointed till the conclusion of the Annual General Meeting to be held in year 2017. There is no reservation, qualification or adverse remark contained in the Statutory Auditors' Report attached to Balance Sheet as at 31st March, 2015. Information referred in Auditors' Report are self-explanatory and don't call for any further comments. B. Secretarial Auditor As per the provisions of Section 204 of Companies Act 2013 and rules made thereunder, every listed company is required to annex with its Board's Report, a Secretarial Audit Report given by a Company Secretary in practice. The Secretarial Audit Report for the financial year 2014-15 is attached herewith as Annexure 5. There is no reservation, qualification or adverse remark contained in the Secretarial Auditor Report. Information referred in Secretarial Auditor Report are self-explanatory and don't call for any further comments. 20.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 on 14th May, 2015 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 Company's website i.e. www. pacificindustriesltd.com. 21. 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 Company's competitive advantage. The risk management policy defines the risk management approach across the enterprise at various levels including documentation and reporting. 22.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 under Clause 49 of the Listing Agreement with the Stock Exchanges, is given as a separate statement forming part of this Annual Report. 23.Corporate Governance The Company has complied with the corporate governance requirements as stipulated under the Listing Agreement 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. 24.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 6 and forms part of the Report. 2 5.Acknowledgements 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. For and on behalf the Board of Directors Registered Office: Village Survey No. 13, Kempalingahalli, Nelamangala Taluk (Rural) Bangalore - 562123 (Karnataka). Sd/-J. P. Agarwal Chairman & Managing Director (DIN:00386183) Place : Bedla, Udaipur Date : 29.05.2015 |