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PCS Technology Ltd.

BSE: 517119 Sector: Consumer
NSE: N.A. ISIN Code: INE834B01012
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OPEN 22.90
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VOLUME 6655
52-Week high 36.00
52-Week low 19.00
P/E 11.56
Mkt Cap.(Rs cr) 48
Buy Price 23.00
Buy Qty 224.00
Sell Price 23.40
Sell Qty 21.00
OPEN 22.90
CLOSE 20.10
VOLUME 6655
52-Week high 36.00
52-Week low 19.00
P/E 11.56
Mkt Cap.(Rs cr) 48
Buy Price 23.00
Buy Qty 224.00
Sell Price 23.40
Sell Qty 21.00

PCS Technology Ltd. (PCSTECHNOLOGY) - Director Report

Company director report

The Members

PCS TECHNOLOGY LIMITED

Your Directors of the Company are pleased to present you the 36th Annual Report of theCompany along with the statement of Audited Financial Statements for the financial yearended 31st March 2017.

FINANCIAL RESULTS

Key highlights of standalone Financial Results of the Company for the financial year2016-17 are tabulated below:

(Rs. In lakhs)
Particulars Financial Year ended 31.03.2017 Financial Year ended 31.03.2016
Net sales and services 2585 6323
Gross Profit 628 814
Depreciation 106 111
Profit for the year from Operations 522 703
Corporate Social Responsibility Expense 10 5
Provision for Taxation (Net) 97 140
Profit for the year / available for Appropriation 415 558
Balance of Profit/(Loss) available in Balance Sheet 2406 1983

OPERATIONS

During the year under review your Company has achieved Net Sales of Rs. 2585 lakhs asagainst Rs. 6323 lakhs in the previous year.

In the current year the Company maintained existing IT and facility management servicecontracts. However due to high servicing costs in IT technological changes the Companydid not enter for the new orders. Although this had the impact on the Total sales andservices during the current financial year the Company has maintained the Profitabilityby optimization of existing resources.

Adequacy of Internal Financial Control: The Company has in place adequate internalcontrol procedures commensurate with the size of the Company and the nature of itsbusiness.

EXTRACTS OF ANNUAL RETURN

In accordance with sub-section (3) of Section 92 in the Form MGT 9 of the CompaniesAct 2013 an extracts of the Annual Return in prescribed format is annexed and marked as Annexure1 to the Board's Report.

DIVIDEND

In order to conserve the resources of the Company your Directors express theirinability to recommend any dividend for the financial year ended 31st March 2017.

RESERVES

Since the Company do not recommend any dividend it is not required to transfer anyamount to the General Reserve of the Company for the year under review.

MATERIAL CHANGES & COMMITEMENTS AFFECTING THE FINANCIAL POSITIONS OF THE COMPANY

There have been no material changes and commitments affecting the financial positionof the Company which occurred during between the end of the financial year to which thefinancial statements relate and the date of this report.

ANNUAL PERFORMANACE EVALUATIONS

The Board evaluated the effectiveness of its functioning and that of the Committees andof individual directors by seeking their inputs on various aspects of Board/ CommitteeGovernance.

Further the Independent Directors at their meeting reviewed the performance of BoardChairman of the Board and of Non-Executive Directors

The criteria for performance evaluation as laid down by the Nomination Committee andare mentioned in Corporate Governance attached to the Directors' Report of the Company.

DIRECTORS

Retirement by Rotation

As per Article 135 of the Articles of Association of the Company Mr. G. K. Patni(Din- 00014163) Director of the Company retire by rotation at the ensuing Annual GeneralMeeting and being eligible offer himself for re-appointment on the Board of your company.

Appointment

As the term of tenure of Mrs. Vandana Gupta (Din: 07117752) had expired on 15th March2017 she has been re- Appointment as an Independent Director of the Company by Board onrecommendation of Nomination and Remuneration Committee for further period of 5 (five)years up to 15th March 2022 not liable to retire by rotation.

Cessation

Mr. D.B Engineer (Din no: 00047028) Director of the Company expired as on 30th May2016.

We condole the untimely demise of Mr. D.B Engineer and took on record the invaluablecontributions made by him during his tenure as the Director towards the progress of theCompany

Declaration given by Independent Director

The Company has received necessary declaration from each independent director underSection 149 (7) of the Companies Act 2013 that he/she meets criteria of independencelaid down in Section 149 (6) of the Companies Act 2013 and Regulation 16 (1)(b) ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.

Board and Audit Meetings

During the year under review four Board Meetings and four Audit Committee Meetingswere convened and held. The details of which are given in the Corporate Governance Report.The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.

Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy on directors' appointment and remuneration including criteria fordetermining qualifications positive attributes including independence of a directors ofthe Company.

The Remuneration Policy is stated in the Corporate Governance Report.

COMMITTEES OF THE BOARD

Currently the Board has four Committees the Audit Committee Stakeholders'Relationship Committee Nomination and Remuneration Committee and Corporate SocialResponsibility Committee (CSR Committee). The Composition of each of the committee ismentioned in the Annexure 2 of the Boards' Report.

STATUTORY AUDITOR

In view of Completion of three years Audit period of M/S. S.C Bandi & Co.Chartered Accountants at the 36th Annual General Meeting your Directors at its Boardmeeting held on 10th August 2017 appointed M/s. Vinod K. Mehta & Co. CharteredAccountant (Firm Registration No. 111508W) as Statutory Auditors of the Company for a termof 5 years pursuant to the Amended provisions of the Companies Act 2013 from theconclusion of 36th Annual General Meeting. Your Directors recommend appointment of M/s.Vinod K. Mehta & Co. Chartered Accountants as Statutory Auditor of the Company at the36th Annual general Meeting.

SECRETARIAL AUDITOR

Mr. Bhavesh Desai of M/s. B. Desai & Associates Practicing Company Secretary wasappointed to conduct the secretarial audit of the Company for the financial year 2016-17as required under Section 204 of the Companies Act 2013 and Rules thereunder. TheSecretarial Audit report for FY 2016-17 forms part of the Annual report as Annexure 3to the Board's Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There have been no significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and Company's operations.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to sub-section (3C) of Section 134 of the Companies Act 2013 the Board ofDirectors of the Company hereby confirms that:

1. In the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures; 2.Appropriate accounting policies have been selected and applied consistently and have madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company as at 31st March 2017 and of the profit ofthe company for the said year; 3. Proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;

4. Annual Accounts have been prepared on a going concern basis.

5. Internal Financial controls are followed by the Company in adequate manner and areoperating effectively.

6. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In view of the provisions relating to CSR contained in new Companies Act 2013 theBoard of Directors of your Company has set up a CSR Committee comprising four directorsviz. Mr. G M Dave a Non-Executive Independent Director Mr. G. K. Patni Non-ExecutiveDirector Mr. A. K. Patni Non-Executive Director and Mr. H. C. Tandon Managing Directorand CEO of the Company. The Committee will oversee and monitor its CSR activities in linewith the CSR policy of the Company in compliance with the provisions of the Companies Act2013

CRS has been integral part of the Company. The CSR policy on the Company is displayedon Company‘s website www.pcstech.com. CSR report along with the CSR activates areannexed herewith in the report and marked as Annexure 4. Initiations taken byCompany for CSR :

The Balance amount of Rs. 2442271 (Rupees Twenty Four Lakhs Forty Two Thousand TwoHundred and Seventy one only) will be contributed by the Company in the next financialyear 2017-18

CORPORATE GOVERANCE

A report on Corporate Governance and Management Discussion Analysis is included as apart of the Annual Report along with a Certificate from the Statutory Auditors of theCompany regarding compliance of conditions of Corporate Governance as stipulated underRegulation 27 of SEBI (LODR) Regulation 2015. Corporate Governance report annexedherewith and marked as Annexure 5.

SUBSIDIARY COMPANY

In accordance with Section 129(3) of the Companies Act 2013 a statement containingsalient features of the financial statements of the subsidiary companies for the financialyear ended 31st March 2017 of PCS Technology USA. INC PCS Positioning Systems (India)Limited and PCS Infotech Limited in Form AOC-1 is annexed an marked as annexure-6(A)ofthe Annual Report.

In accordance with third proviso to Section 136(1) of the Companies Act 2013 theAnnual Report of your Company containing therein its audited financial statementstogether with related information and other reports of each of the subsidiary companieshave also been placed on the website of the Company at www. pcstech.com

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188 IN THE PRESCRIBED FORM

The Particulars of contracts or arrangements with related parties referred to inSection 188(1) as prescribed in Form AOC-2 of the rules prescribed under Chapter IXrelating to Accounts of Companies under the Companies Act 2013 of the Annual Report isannexed and marked as Annexure- 6(B).

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has put in place a Policy on Prevention of Sexual Harassment in line withthe provisions of The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules made thereunder. Internal Complaints Committee (ICC)has been set up to redress complaints if any received regarding sexual harassment. Allemployees whether permanent contractual temporary etc have been covered under thisPolicy.

The Policy is gender neutral. During the year under review no complaints allegingsexual harassment were received by the Company.

RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties as defined under the Companies Act2013 and pursuant to Regulation 23 of securities and exchange board of India (listingobligations and disclosure requirements) regulations 2015 during the financial year werein compliance to the provisions of Section 188 of the Companies Act 2013. There were nomaterially significant transactions with related parties during the financial year whichwere in conflict with the interest of the Company. Suitable disclosure as required by theAccounting Standards (AS18) has been made in the notes to the Financial Statements. TheBoard has approved a policy for related party transactions which has been uploaded on theCompany's website.

DEPOSITS

Your Company has neither invited nor accepted any deposits from the public so far.

CODE OF CONDUCT

The Board of Directors has approved a Code of Business Conduct which is applicable tothe Members of the Board and all employees. The Code has been posted on the Company'swebsite www. pcstech.com. The Code lays down the standard of conduct which is expected tobe followed by the Directors and the designated employees in their business dealings andin particular on matters relating to integrity in the work place in business practicesand in dealing with stakeholders. The Code gives guidance through examples on the expectedbehavior from an employee in a given situation and the reporting structure. All the BoardMembers and the Senior Management personnel have confirmed compliance with the Code.

CONSOLIDATED FINANCIAL STATEMENT

The consolidated Financial Statements have been prepared in accordance with theprovisions of Section 129 of the Companies Act 2013 applicable Accounting Standards andthe provisions of the Listing Agreement with Stock Exchange and forms part of this AnnualReport.

PARTICULARS OF EMPLOYEES

The table containing the names and other Particulars of employees in accordance withthe provisions of Section 197 (12) of the Companies Act 2013 read with Rule 5 (1) of theCompanies (Appointment and Remuneration of Managerial Personnel ) Rules 2014 is appendedas Annexure 7 to the Board's Report. During the financial year there were noemployees drawing remuneration in excess of the monetary ceiling prescribed under Section197 read with Rule 5 (2) of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO

The Information required under the above heads in accordance with the provision ofsection 134(3) (m) of the Companies Act 2013 read with the Companies (Disclosure ofParticulars in the Report of the Board of Directors) Rules 1988 are given in Annexure‘8' to this report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Particulars of loans guarantees given and Investments made during the year underreview under Section 186 of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 are annexed to this report and marked as Annexure9.

ACKNOWLEDGEMENTS

Your Directors express their warm appreciation to all the employees at various unitsfor their diligence and contribution made towards the growth of the Company. The Board ofDirectors place on record their appreciation for the un-stinted support by the Bankers andFinancial Institutions and confidence given by the

Customers Suppliers and Shareholders at all levels towards the growth and developmentof the Company.

On behalf of the Board of Directors
G.K. Patni
Chairman
Mumbai August 10 2017

Annexure 2

Audit Committee Composition of the Committee
Name of the Director Status
Mr. Satish Ajmera Non-executive/ Independent Director- Chairman
Mr. K. K. Barjatya Non-executive/ Independent Director
Mr. G. M. Dave Non-executive/ Independent Director
Mr. H. C. Tandon Managing Director & CEO
Stakeholders Relationship Committee
Name of the Director Status
Mr. G. K Patni Non-Executive/ Promoter Director
Mr. A.K Patni Non-Executive /Promoter Director
Mr. Satish Ajmera Non-executive/ Independent Director-Chairman
Mr. K. K. Barjatya *Appointed w.e.f. 20/07/16 Non-executive/ Independent Director
Nomination and Remuneration Committee
Name of the Director Status
Mr. K. K. Barjatya Non-executive/ Independent Director
Mr. G. M. Dave Non-executive/ Independent Director
Mr. Satish Ajmera Non-executive/ Independent Director
Mr. A. K. Patni Non-Executive /Promoter Director
Corporate Social Responsibility Committee (CSR Committee)
Name of the Director Status
Mr. G.K Patni Non-executive/ Promoter Director
Mr. A.K Patni Non-executive/ Promoter Director
Mr. G. M. Dave Non-executive/ Independent Director
Mr. H.C.Tandon Managing Director & CEO

Annexure 6(A)

Form AOC-I

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)

Statement containing salient features of the financial statement of subsidiaries as on31st March 2017 Part "A": Subsidiaries

(Information in respect of each subsidiary presented with amounts in Rupees)

Name of the Subsidiaries companies
Particulars PCS Positioning Systems (India) Ltd. PCS Infotech Limited PCS Technology USA Inc.
1 Reporting period for the subsidiary concerned if different from the holding company's reporting period Same as holding company's reporting period Same as holding company's reporting period Same as holding company's reporting period
2 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. Rupees Rupees US Dollar
3 Share capital 17600000 500000 217850
4 Reserves & surplus -51538578 3021350 -4685580
5 Total assets 3020014 8212182 34704227
6 Total Liabilities 3002014 8212182 34704227
7 Investments 0 0 0
8 Turnover 0 0 0
9 Profit before taxation -26539 753893 -43130
10 Provision for taxation 0 191125 0
11 Profit after taxation -26539 562768 -43130
12 Proposed Dividend 0 0 0
13 % of shareholding 100% 100% 100%

Notes:

1. Names of subsidiaries which are yet to commence operations: Not Applicable

2. Names of subsidiaries which have been liquidated or sold during the year: NotApplicable

Annexure 6(B)

FORM NO. AOC -2

Particulars of contracts/arrangements made with related parties

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014.

This Form pertains to disclosure of Particulars of contracts/arrangements entered intoby the company with related parties referred to in sub section(1) of section 188 of theCompanies Act 2013.

Name of related party Nature of Relationship Duration of contract Salient terms (1) Amount (Rupees)
Nature of Contract
Kalpavruksh Systems Limited Group Company April 2014 Not applicable 2383930/-
Rendering sales and services like Facility Management Services etc.. Ongoing
Patni Healthcare Limited Affiliates April 2014 Not applicable 6360/-
Rendering sales and services like Facility Management Services etc.. Company Ongoing
Taking on Leave and License basis the office premises Situated at 12th Floor 1201-1205 of Technocity Building Mahape Navi Mumbai owned by Mr.Apoorva Patni Relative of Director & shareholder of the Company. Relative of Director & shareholder of the Company 10 months Rent paid Rs. 25000/- per month (from 01.04.2016- 31.01.2017) 250000/-
Taking on Leave and License basis the residential premises situated in building known as "Trishul Gold Coast" Navi Mumbai owned by Mr. Ashok Kumar Patni Director of the Company. Director of the Company 2 Years Rent paid Rs. 18000/- per month 216000/-
(1) Appropriate approvals have been taken for related party transactions.

Annexure 7

Particulars of employees DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION197(12) OF THE COMPANIES ACT 2013 READ WITH RULE 5(1) OF CHAPTER XIII THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

i. The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2016-17 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2016-17 and the comparison of remuneration

Name of Director/KMP and Designation Remuneration of Director/ KMP for financial year 2016-17(Rs. in Lacs) % increase in Remuneration in the Financial Year 2016-17 Ratio of remuneration of each Director/ to median remuneration of employees Comparison of the Remuneration of the KMP against the performance of the Company
1 Gajendrakumar Patni - - - -
Chairman & Non-Executive Director
2 Ashokkumar Patni - - - -
Vice-Chairman & Non-Executive Director
3 Harish Chandra Tandon 27.53 - 7.22% The profit before tax decreased by 26% and Profit after tax decreased by 25.62%
Managing Director & CEO
4 Mr. Yash Bhardwaj 23.70 8.52% The profit before tax decreased by 26% and Profit after tax decreased by 25.62%
Executive &Whole-Time Director
5 Mr. G. M. Dave - - - -
Non-Executive Independent Director
6 Mr. K. K. Barjatya - - - -
Non-Executive Independent Director
7 Mr. Satish Ajmera - - - -
Non-Executive Independent Director
8 Mrs. Vandana Gupta - - - -
Non-Executive Independent Director
9 Mr. M. P. Jain Rs. 15.95 _ N. A The profit before tax decreased by 26% and Profit after tax decreased by 25.62%
CFO
10 Mr. Bhaskar Patel Rs. 12.91 - N. A.
Company Secretary

* Independent Directors are paid only sitting fees and not considered as part ofremuneration

** Non-Executive Directors are neither paid any remuneration or sitting fees

ii. The median remuneration of employees of the Company during the financial year wasRs. 202649 (Previous year 192758/-)

iii. In the financial year there was an increase of 5.1% in the median remuneration ofemployees

iv. There were 553 permanent employees on the rolls of the Company as on March 31 2017

v. Relationship between average increase in remuneration and company performance: Theprofit before Tax for the financial year ended March 31 2017 decreased by 26% whereas theincrease in median remuneration was 5.10%.

vi. Comparison of Remuneration of the Key Managerial Personnel(s) against theperformance of the Company.

There is no increase in remuneration of the Key Managerial Personnel and as the Profitbefore tax decreased by 26% to Rs. 522 lakhs in 2016-17 (Rs. 703 lakhs in 2015-16).

vii. a) Variation in the Market Capitalization of the Company: The marketcapitalization as on March 31 2017 was Rs. 55.51 crore (Rs. 48.71 crore as on March 312016)

b) Price Earning ratio of the Company was 13.38 as at March 31 2017 (Previous Year8.74 as at March 31 2016) viii. Average percentage increase made in the salaries ofemployees other than the managerial personnel in the last financial year i.e. 2016-17 was0.58% whereas there is no increase in the managerial remuneration for the same financialyear.

ix. The key parameters for the variable component of remuneration availed by thedirectors are considered by the Board of Directors based on the recommendation of theNomination and Remuneration Committee as per the Remuneration Policy for Directors KeyManagerial Personnel and other Employees.

x. The ratio of remuneration of the highest paid Director to that of the employees whoare not Directors but receive remuneration in excess of the Highest paid Director duringthe year Not Applicable

xi. It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employees.

Annexure 8

Particulars required under the Companies (Accounts) Rules 2014.

(A) Conservation of Energy

Your Company consumes electricity only for in-house operations of Computers. Though theconsumption of electricity is negligible as compared to the Total turnover of the Companyyour Company has taken effective steps at every stage to reduce consumption ofelectricity.

(B) Technology Absorption

Not applicable

(C) Foreign Exchange Earnings/Outgo

Your Company has earned foreign exchange worth 65.57 lakhs and has spent foreignexchange worth Rs. 18.81 lakhs under the following heads.

Particulars: (Rs. in Lacs)
(i) Stores & Spares -
(ii) Capital Goods -
(iii) Other Expenses 18.81
Total 18.81

On behalf of the Board of Directors

G.K. Patni

Chairman

Mumbai May 17 2017

Annexure 9

Particulars of Loans Guarantee or Investments pursuant to Section 134(g) of theCompanies Act 2013

A. Amount outstanding as on March 31 2017:

Particulars Amount (Rs. In millions)
Loans given Nil
Guarantee given Nil
Investments Made 271182940

B. Loans Guarantee and Investments made during financial year 2017:

Name of entity Relation Amount Particulars of Loans guarantees given or Investments made Purpose for which loans guarantees and Investments are proposed to be utilized
(in Rs.)
- - - - -
- - - - -

 

On behalf of the Board
G. K Patni
Mumbai May 17 2017 Chairman