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Shree Pacetronix Ltd.

BSE: 527005 Sector: Health care
NSE: N.A. ISIN Code: INE847D01010
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OPEN 11.79
CLOSE 11.23
VOLUME 959
52-Week high 12.07
52-Week low 8.92
P/E
Mkt Cap.(Rs cr) 4
Buy Price 11.79
Buy Qty 41.00
Sell Price 0.00
Sell Qty 0.00

Shree Pacetronix Ltd. (SHREEPACETRONIX) - Director Report

Company director report

To

The Members of

Shree Pacetronix Limited Pithampur-454775

Your directors are pleased to present the 28th Annual Report together with the Auditedfinancial Statement for the year ended 31st March 2016.

1. STATE OF AFFAIRS FINANCIAL PERFORMANCE AND FUTURE OUTLOOK :

1.1 Financial Results highlights and summary

(Rs. in lacs)
Particulars As on 31.03.2016 As on 31.03.2015
Total Revenue 741.25 626.91
Less : Total Expenditures 631.31 527.47
Profit before Interest Tax & Depreciation 109.94 99.44
Less : Financial Charges 35.04 40.57
Less : Depreciation 68.63 67.69
Profit/(Loss) before tax 6.27 -8.82
Less: Provision for tax-
Current Tax 11.43 6.40
Deferred Tax -4.25 -11.58
Profit/(Loss) after tax -0.91 -3.65

1.2 OPERATIONS AND FUTURE OUTLOOK:

During the year under review the Company has recorded total revenue of Rs. 741.25 Lacsagainst the total revenue of Rs. 626.91 Lacs in the Previous Financial Year registering agrowth of 18.23%. The Company has earned profit before tax of Rs. 6.27 Lacs as compared toLoss before tax of Rs. -8.82 Lacs in previous Financial Year.

At the other hand the profit of the company has been affected due to higher overheadCost manufacturing and tax expenses the bottom line of the Company remained negative andthe Company has incurred losses. However the net loss of the Company has been reduced to0.90 Lacs as compare to 3.65 Lacs in previous Financial Year.

Your directors are working hard to reduce the cost and improve the financialperformance of the Company in the years to come.

Manufacturing of Medical Device such as Pacemakers plays very crucial and importantrole in the growth structure of Pharmaceutical Industries which is not material inmonetary terms but a valuable life saving device. The R & D department of the Companyis continuously working on the development of advanced new products as well asup-gradation of existing products. With the improved quality of pacemakers the demand ofthe products manufactured by your Company is expected to grow with a faster pace whichwill lead to higher profitability in the years to come.

1.3 Change in nature of Business

During the year there was no change in business activity of the company.

1.4 Changes in Share Capital

During the Financial Year 2015-16 there was no change in capital structure of thecompany. The paid up equity capital as on March 31 2016 was Rs.359.94 Lacs. During theyear under review the company has not issued shares with differential voting rights norhas granted any stock option or sweat equity shares.

1.5 Revision of annual financial statement

There was no case of revision in financial statement during the year.

2. Transfer To Reserves

During the year the Company has not transferred any amount to the General Reserve.

3. Dividend

Your directors do not recommend any dividend due to losses in current financial year.

4. Deposits

During the year under review your Company did not accept any deposits within themeaning of provisions of Chapter V – Acceptance of Deposits by Companies of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.

5. Material changes and commitments after the end of Financial Year

There are no material changes and commitments affecting financial position of thecompany which have occurred between the end of the financial year of the company and dateof the report.

6. Subsidiary Associate Companies or Joint Venture:

The Company has one subsidiary Shree Coratomic Limited. The turnover of the SubsidiaryCompany Shree Coratomic Limited is Rs. 34.20 lacs as against Rs 51.68 lacs in the previousyear. The Company has incurred losses of Rs. 11.07 lacs as against Rs. 3.38 lacs in theprevious year. A statement pursuant to Section 129 of the Companies Act 2013 related tothe accounts of the subsidiary forms part of this Annual Report. The consolidatedfinancial statement form part of this annual report.

Policy for determining material subsidiaries of the Company is available on the websiteof the Company www.pacetronix.com

The Company does not have any associate company or any joint venture or Holdingcompany.

7. Consolidated Financial Statements

The directors also presented the audited consolidated financial statements as preparedin compliance with the Companies Act 2013 and applicable Accounting Standards. TheFinancial Statements of subsidiary Company has been prepared in the same form and manneras that of the Company.

8. Extract of Annual Return

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the extracts of the Annual Return as at March 31 2016 forms part of thisreport as Annexure I.

9. Number of Meetings of the Board

During the year under review the Board meets four times viz. May 30 2015; August10 2015; October 30 2015 and February 13 2016. The details of meetings of theBoard and the attendance of Directors are provided in the Corporate Governance Report.

10. Directors’ Responsibility Statement

In terms of Section 134(3) (c) of the Companies Act 2013 your Directors state that:

a. In the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures

b. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit for the year ended on that period;

c. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities.

d. The Directors had prepared the annual accounts on a going concern basis.

e. The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

f. The Directors has devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.

11. Reporting of fraud by Statutory Auditors

There was no fraud in the Company; hence no reporting was made by statutory auditors ofthe Company under sub-section (12) of section 143 of Companies Act 2013.

12. Appointment and Declaration by independent directors

12.1 Declaration by independent directors

All Independent Directors of your Company have given a declaration pursuant to Section149(7) of the Companies Act 2013 affirming compliance to the criteria of Independence aslaid down under Section 149(6) of the Companies Act 2013 and under SEBI (Listingobligation & Disclosure Requirement) regulation 2015.

Based on the declaration(s) of Independent Directors the Board of Directors recordedits opinion that all Independent Directors are independent of the Management and havefulfilled the conditions as specified in the Companies Act 2013 rules made thereunder aswell as concerning provisions of SEBI (Listing obligation & Disclosure Requirement)regulation 2015.

12.2 Meetings of Independent Directors

During the year under review a separate meeting of Independent Directors was held onMarch 31 2016 interalia to:

• review the performance of Non-Independent Directors and Board of Directors as awhole;

• review the performance of the chairperson of the listed entity taking intoaccount the views of executive directors and non-executive directors

• assess the quality quantity and timeliness of flow of information between themanagement of the listed entity and the board of directors that is necessary for the boardof directors to effectively and reasonably perform their duties.

All the Independent Directors were present at the said Meeting.

12.3 Familiarization Programme

The Company shall through its Executive Directors / Senior Managerial Personnel conductprograms / presentations periodically to familiarize the Independent Directors with thestrategy operations and functions of the Company

The details of familiarization programme have been posted on the website of theCompany-http:// www.pacetronix.com

13. Nomination & Remuneration Committee and Stakeholders Relationship Committee

As per the requirement of Section 178 of the Companies Act 2013 and Regulation 19 and20 SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015 the Company hasconstituted Nomination and Remuneration Committee and Stakeholders Relationship Committee.The Composition of the above Committees their terms of reference detailed in the reportof Corporate Governance.

14. Nomination and Remuneration Policy

The Board on the recommendation of the Nomination and Remuneration Committee hasapproved and adopted a Nomination and Remuneration Policy for selection and appointment ofDirectors Senior Management personnel and their remuneration. The Nomination andRemuneration Policy of the Company forms part of this report as Annexure II.

15. Auditors

15.1 Statutory Auditor

The Members of the Company at the 26th Annual General Meeting held on 29th September2014 had appointed M/s S. R. Naredi & Co Chartered Accountants (ICAI FirmRegistration No. 002818C) Indore as Statutory Auditor of the Company to hold office fromthe conclusion of 26th Annual General Meeting till the conclusion of 29th Annual GeneralMeeting of the Company to be held in the year 2017 subject to ratification of theappointment by the Members at every Annual General Meeting of the Company.

M/s S. R. Naredi & Co Chartered Accountants vide their letter dated 2nd August2016 have tendered their resignation from the position of Statutory Auditors due to theirpre-occupation which was resulted into a casual vacancy in the office of StatutoryAuditors of the company as envisaged by section 139(8) of the Companies Act 2013.

The Board of Directors at its meeting held on 10th August 2016 as per therecommendation of the Audit Committee and pursuant to the provisions of Section 139(8)under Companies Act 2013 appointed M/s Ajay Sharma and Company Chartered Accountants(Firm Registration No: 013306C) Indore as the Statutory Auditors of the Company to fillthe casual vacancy for the financial year 2016-2017 caused by the resignation of M/s S. R.Naredi & Co Chartered Accountants subject to the approval by the members in the 28thAnnual General Meeting of the Company.

Further the Board has recommended the appointment of M/s Ajay Sharma and CompanyChartered Accountants (Firm Registration No. 013306) Indore as Statutory Auditors of theComapny to hold office for five years from the conclusion of the 28th Annual GeneralMeeting till the conclusion of the 33rd Annual General Meeting of the Company to be heldin the year 2021 to conduct the statutory audit for the financial year 2016-2017 to2020-2021 (subject to ratification of the appointment by the Members at every AnnualGeneral Meeting).

Explanation to Auditor’s Remark

The Board has duly reviewed the Auditors Report on the financial statement of Companyfor financial year ending on 31.03.2016. The observation made in the Auditors’ Reportread together with relevant notes thereon are self explanatory and hence do not call forany further comments under Section 134 of the Companies Act 2013.

15.2 Secretarial Auditor

The Board had appointed Ms. Shraddha Jain Practicing Company Secretary to conductSecretarial Audit for the financial year 2015-16. The Secretarial Audit Report for thefinancial year ended March 31 2016 is annexed herewith marked as Annexure III tothis Report.

In reply to the qualification made by the Secretarial Auditor the Board of Directorsstated-

a) That they have not found any suitable candidate for the post of the CompanySecretary however the Board of Director is looking for a suitable candidate for theposition of Company Secretary as Key Managerial Personnel and willing to appoint the samein compliance of provision of section 203 of Companies act 2013; and

b) The particulars of creation of charge with respect to two term loan secured byhypothecation of vehicle were not filed due to inadvertence as the Bank in normal courseis arranging to file such forms but it is not nature to prejudice the position ofcreditors.

However other comments are self explanatory and do not call for any furtherexplanation.

The Board in its meeting held on 10.08.2016 has appointed Ms. Shraddha Jain PracticingCompany Secretary as Secretarial Auditor of the Company to conduct Secretarial Audit forthe financial year 2016-17.

15.3 Cost Record and Cost Audit

Your company does not falls within the provisions of Section 148 of Companies Act 2013read with the Companies (Cost records & Audit) Rules 2014 therefore no such recordsrequired to be maintained.

16. Particulars of loans guarantees or investments

Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to the financial statements.

17. Particulars of contracts or arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm’slength basis. During the year the Company had not entered into any contract / arrangement/ transaction with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. Accordingly information in FormAOC-2 is not annexed

All Related Party Transactions are placed before the Audit Committee or board forconsideration or approval.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company’s website atwww.pacetronix.com

Suitable disclosures as required under AS-18 have been made in the Notes to thefinancial statements.

18. Conservation of Energy technology absorption foreign exchange earnings and outgo

The particulars in respect of conservation of energy technology absorption foreignexchange earnings and outgo as required under sub-section (3) (m) of section 134 of theCompanies Act 2013 read with Rule (8)(3) of the Companies (Accounts) Rules 2014 aregiven as under :

A. Conservation of Energy :

i. The steps taken or impact on conservation of energy

Company ensures that the manufacturing operations are conducted in the manner wherebyoptimum utilization and maximum possible savings of energy is achieved.

Upgradation of Machineries and installation of new machineries based on fuel or powerefficiency.

Monitoring the maximum demand and power load factor on daily basis.

Replacement of inefficient motors with energy efficient motors.

ii. The steps taken by the Company for utilizing alternate sources of energy: Noalternate sources of energy used in 2015-16

iii. Capital Investment on Energy Conservation Equipments: NIL

B. Technology Absorption

i. The efforts made towards technology absorption

Research & Development activities are being carried out as part of theCompany’s normal business activities. The Company is regular in adding new equipmentsfor testing.

ii. The benefits derived like increase in productivity and cost reduction.

iii. In case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year) – NIL

iv. Expenditure on R&D– During the year the Company has made noinvestment towards Research and Development.

C. Foreign exchange earnings and Outgo-

(Rs. in Lacs)
Particulars 31.03.2016 31.03.2015
1. Foreign Exchange earned:
- Value of Exports 50.55 64.26
- Technology fee received - 18.81
2. Foreign Exchange outgo:
- CIF Value of import of Raw Materials 124.31 155.51
- Foreign Travels 0.91 5.01
- Technical services fees 1.13 2.50

19. Corporate Social Responsibility

Your company does not meet the requirements of Section 135 of Companies Act 2013 forestablishing Corporate Social responsibility (CSR) committee; therefore no such committeewas established by the Board.

20. Performance Evaluation of the Board

Pursuant to the provisions of section 134 of Companies Act 2013 and Regulation 25 ofSEBI (Listing Obligation and Disclosure Requirement) Regulation 2015 the Board hascarried out an annual evaluation of its own performance performance of the Directors aswell as the evaluation of the working of its Committees.

Review of performance of non independent directors and the board as a whole is done byindependent director in their meeting. The performance evaluation of the IndependentDirectors was carried out by the entire Board excluding the Director being evaluated.

The Nomination and Remuneration Committee has defined the evaluation criteria for thePerformance Evaluation process for the Board its Committees and Director including theIndependent Directors

The statement indicating the manner in which formal annual evaluation of the Directorsthe Board and Board level Committees are given in detail in the report on CorporateGovernance which forms part of this Annual Report.

21. Directors and Key Managerial Personnel

In terms of section 196 197 203 read with schedule V and other applicable provisionsif any of the Companies Act 2013 Mr. Atul Kumar Sethi (Din-00245685) Managing Directorof the Company was re-appointed (Subject to the approval of Members in general meeting)for further period of 3 years commencing from 1st December 2016 to 30th November 2019.

In terms of section 196 197 203 read with schedule V and other applicable provisionsif any of the Companies Act 2013 Mrs. Amita Sethi (Din- 00245722) Whole time Directorof the Company was re-appointed (Subject to the approval of Members in general meeting)for further period of 3 years commencing from 1st December 2016 to 30th November 2019.

In terms of Section(s) 149 152 and all other applicable provisions of the CompaniesAct 2013 for the purpose of determining the directors liable to retire by rotation theIndependent Directors are not included in the total number of directors of the Company.Accordingly Mrs. Amita Sethi (Din- 00245722) shall retire by rotation at the ensuingAnnual General Meeting and being eligible has offered herself for re-appointment as aDirector of the Company.

Mr. Swapnil Modi was appointed as Chief Financial officer of the company w.e.f 10thAugust 2015. Mr. Swapnil Modi has resigned from the post Chief Finance officer of thecompany w.e.f. 21st May 2016.

Mr. Ashok Atulkar has been appointed as Chief Financial officer of the company w.e.f30th May 2016.

Company is looking for a suitable candidate for the position of Company Secretary asKey Managerial Personnel.

Disqualifications of Directors

During the year declarations received from the Directors of the Company pursuant toSection 164 of the Companies Act 2013. The Board appraised the same and found that noneof the directors is disqualified for holding office as director.

22. Code Of Conduct

Board has adopted a Code of Conduct for all Directors and Senior Management of theCompany and the same has been placed on the Company’s website www.pacetronix.com .

All Directors and Senior Management personnel have affirmed compliance with the Codefor financial year 2015-16. A declaration to this effect signed by the Managing Directoris given in this Annual Report.

23. Significant and material orders passed by the regulators or courts

There are no significant or material orders passed by the Regulators / Courts whichwould impact the future operations / going concern status of the Company.

24. Internal Financial Controls and its adequacy

The Company has comprehensive internal financial controls system for all majorprocesses including financial statements to ensure reliability of reporting. The systemalso helps management to have timely data on various operational parameters for effectivereview. It also ensures proper safeguarding of assets across the Company and itseconomical use. The internal financial controls system of the Company is commensurate withthe size scale and complexity of its operations. The system and controls are periodicallyreviewed and modified based on the requirement.

The internal and operational audit is entrusted to M/s M.J. Lunkad & Co. CharteredAccountants Indore. The main thrust of internal audit is to test and review controlsappraisal of risks and business processes besides benchmarking controls with bestpractices in the industry. Based on the audit observations & suggestions follow up& remedial measures are being taken on a regular basis.

25. BUSINESS RISK MANAGEMENT:

The Company recognizes that risk is an integral and unavoidable component of businessand is committed to managing the risk in a proactive and efficient manner. The Company aspart of business strategy has in place a mechanism to identify assess monitor risks andmitigate various risks with timely action. At present the company has not identified anyelement of risk which may threaten the existence of the company.

26. AUDIT COMMITTEE

The Audit Committee comprises of Mr. Sushil Patni Chairman Mr. Praveen Badjatya andMr. Anil Rathi as members. All the recommendations made by the Audit Committee wereaccepted by the Board. The details of meetings of Audit Committee held during the yearits composition terms of reference are given in the Report on Corporate Governance.

27. VIGIL MECHANISM/WHISTLE BLOWER POLICY

Your Company has established a Vigil Mechanism/Whistle Blower Policy to enableDirectors and employees of the Company to report unethical behavior actual or suspectedfraud or violation of the Company’s Code of Conduct. The Policy provides adequatesafeguards against victimization of Directors/ employees and direct access to the Chairmanof the Audit Committee in exceptional cases.

The Vigil Mechanism/Whistle Blower Policy is available at website of Company atwww.pacetronix.com and circulated to all the Directors and employees.

28. DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL ETC.

The prescribed particulars of employees required under section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended is enclosed in Annexure IV and forms the part ofthis Board's Report.

29. PARTICULARS OF EMPLOYEES ETC.

During the year there was no employee drawing remuneration in excess of Rs.10200000/- P.A. or Rs. 850000/- P.M. Accordingly information required to be givenpursuant to provisions of Section 197(12) of the Companies Act 2013 read with Rules 5(2)and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules2014 as amended is enclosed as Annexure V and forms the part of thisBoards’ Report.

30. VOTING RIGHTS OF EMPLOYEES:

During the year under review the company has not given loan to any employee forpurchase of its own shares as per section 67 (3) (c) of Companies Act 2013. Therefore thecompany not required to made disclosure as per rule 16 (4) of Companies (Share Capital andDebentures) Rules 2014.

31. DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS

The Company does not have issued shares under employee’s stock options schemepursuant to provisions of Section 62 read with Rule 12(9) of Companies (Share Capital andDebenture Rules) 2014.

32. DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES:

The Company has not issued sweat equity shares pursuant to provisions of Section 54read with Rule 8 of Companies (Share Capital and Debenture Rules 2014) during theFinancial Year.

33. CORPORATE GOVERNANCE REPORT

A separate report on Corporate Governance as per schedule V {C} of SEBI (Listingobligations and Disclosure Requirements) Regulations 2015 is included as a part of theBoard’s Report in Annexure–VI. Auditor’s certificate confirmingcompliance of the Corporate Governance as stipulated under the said Regulations is alsoattached to this Report.

34. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis statement in pursuance of requirement of Para B ofSchedule V (Listing Obligations and Disclosure Requirements) Regulations 2015 areattached to this Report as Annexure VII.

35. LISTING AT STOCK EXCHANGE

The equity shares of the Company are listed at BSE Limited and Madhya Pradesh StockExchange Limited. However Madhya Pradesh Stock Exchange Limited (MPSE) was de- recognizedby SEBI vide its exit order no. PR No. 154/2015 dated June 9 2015.

At present the Equity shares of the company are listed with the BSE Limited and thelisting fee for the year 2016-17 has been duly paid.

36. DEPOSITORY SYSTEM

Your Company’s shares are tradable in electronic form and your Company hasconnectivity with both the Depositories i.e. National Securities Depository Limited (NSDL)and Central Depository Service (India) Limited (CDSL). In view of the numerous advantageoffered by the Depository System members are requested to avail the facility ofDematerialization of the Company’s shares on either of the Depositories mentioned asaforesaid.

37. INDUSTRIAL RELATIONS

Industrial relations remained cordial throughout the year. Your Directors recognize andappreciate the hard work loyalty dedicated efforts and contribution of all the employeesin the growth and performance of the Company during the year.

The Company continues to accord a very high priority to both industrial safety andenvironmental protection and these are ongoing processes at the Company’s plant andfacilities to maintain high awareness levels. The Company as a policy re-evaluates safetystandards and practices from time to time in order to raise the bar of safety for itspeople as well as users and customers.

38. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules made there under. The Policy aims toprovide protection to employees at the workplace and prevent and redress complaints ofsexual harassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure.

It may be noted that during the year 2015-16 no grievance / complaint from any womenemployee was reported.

39. ACKNOWLEDGEMENTS

Your Directors place on record their gratitude to all the Government and semigovernment departments and Company’s Bankers for the assistance and co-operation andencouragement they extended to the Company. Your Directors also wish to place on recordtheir sincere thanks and appreciation for the continuing support and unstinting efforts ofCustomer Vendors Employees and all other stakeholders in ensuring an excellent allaround operational performance.

By order of the Board of Directors of
PLACE : Pithampur Shree Pacetronix Limited
DATE: 29.08.2016
Registered office Atul Kumar Sethi Amita Sethi
Plot No. 15 Sector No. II Managing Director Whole time Director
Industrial Area (DIN - 00245685) (DIN - 00245722)
Pithampur 454775

ANNEXURE – II

NOMINATION AND REMUNERATION POLICY

This Nomination and Remuneration Policy is being formulated in compliance with Section178 of the Companies Act 2013 read along with the applicable rules thereto and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as amended fromtime to time. This policy on Nomination and Remuneration of Directors Key ManagerialPersonnel and Senior Management has been formulated by the Nomination and RemunerationCommittee (NRC or the Committee) and has been approved by the Board of Directors.

OBJECTIVES OF THE COMMITTEE:

The Committee shall:

i. Formulate the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to theremuneration of Directors key managerial personnel and other employees;

ii. Formulation of criteria for evaluation of Independent Directors and the Board;

iii. Devising a policy on Board diversity;

iv. Identify persons who are qualified to become Directors and persons who may beappointed in Key Managerial and Senior Management positions in accordance with thecriteria laid down in this policy;

v. Recommend to the Board appointment and removal of Director KMP and SeniorManagement Personnel.

DEFINITIONS:

"Board":-Board means Board of Directors of the Company.

"Director":-Directors means Directors of the Company.

"Committee":-Committee means Nomination and Remuneration Committee ofthe Company as constituted or reconstituted by the Board from time to time.

"Company":- Company means ‘Shree Pacetronix Limited’.

"Key Managerial Personnel":- Key Managerial Personnel (KMP) means-oManaging Director Whole-Time Director Chief Executive Officer Manager; o CompanySecretary; and o Chief Financial Officer

"Independent Director":- As provided under SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 and/or under the Companies Act 2013‘Independent director’ shall mean a non-executive director other than a nomineedirector of the company:-

a. who in the opinion of the Board is a person of integrity and possesses relevantexpertise and experience;

b. (i) who is or was not a promoter of the company or its holding subsidiary orassociate company;

(ii) who is not related to promoters or directors in the company its holdingsubsidiary or associate company;

c. who apart from receiving director’s remuneration has or had no materialpecuniary relationship with the company its holding subsidiary or associate company ortheir promoters or directors during the two immediately preceding financial years orduring the current financial year;

d. none of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two per cent. or more of its gross turnover or total income or fifty lakhrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial year;

e. who neither himself nor whose relative(s) —

i. holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of thethree financial years immediately preceding the financial year in which he is proposed tobe appointed;

ii. is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial year in which he is proposed to beappointed of —

a) a firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or

b) any legal or a consulting firm that has or had any transaction with the company itsholding subsidiary or associate company amounting to ten per cent or more of the grossturnover of such firm;

iii. holds together with his relatives two per cent or more of the total voting powerof the company; or

iv. is a Chief Executive or director by whatever name called of any non-profitorganization that receives twenty-five per cent or more of its receipts from the companyany of its promoters directors or its holding subsidiary or associate company or thatholds two per cent or more of the total voting power of the company;

v. is a material supplier service provider or customer or a lessor or lessee of thecompany;

f. who is less than 21 years of age.

"Senior Management":- The expression ‘‘seniormanagement’’ means personnel of the company who are members of its coremanagement team excluding Board of Directors comprising all members of management onelevel below the executive directors including the functional heads.

Unless the context otherwise requires words and expressions used in this policy andnot defined herein but defined in the Companies Act 2013 as may be amended from time totime shall have the meaning respectively assigned to them therein.

APPLICABILITY:-

The Policy is applicable to

• Directors (Executive and Non Executive)

• Key Managerial Personnel

• Senior Management Personnel

CONSTITUTION OF THE NOMINATION AND REMUNERATION COMMITTEE:

The Board has the power to constitute/ reconstitute the Committee from time to time inorder to make it consistent with the Company’s policy and applicable statutoryrequirement.

GENERAL APPOINTMENT CRITERIA:

i. The Committee shall consider the ethical standards of integrity and probityqualification expertise and experience of the person for appointment as DirectorIndependent Director KMP or at Senior Management level and accordingly recommend to theBoard his / her appointment.

ii. The Company should ensure that the person so appointed as Director/ IndependentDirector/ KMP/ Senior Management Personnel shall not be disqualified under the CompaniesAct 2013 rules made thereunder SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 or any other enactment for the time being in force.

iii. The Director/ Independent Director/ KMP/ Senior Management Personnel shall beappointed as per the procedure laid down under the provisions of the Companies Act 2013rules made thereunder SEBI

(Listing Obligations and Disclosure Requirements) Regulations 2015 or any otherenactment for the time being in force.

ADDITIONAL CRITERIA FOR APPOINTMENT OF INDEPENDENT DIRECTORS:

The Nomination and Remuneration Committee shall satisfy itself with regard to theindependent nature of the Directors so as to enable the Board to discharge its functionand duties effectively. Independent Director shall meet all criteria specified under theprovisions of the Companies Act 2013 and rules made there under and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Committee shall considerqualifications for Independent Directors as mentioned in herein earlier under the head‘Definitions’.

TERM / TENURE:

The Term / Tenure of the Directors shall be governed as per provisions of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 Companies Act 2013and rules made there under as amended from time to time.

POLICY ON BOARD DIVERSITY:

The Board of Directors shall have the optimum combination of Directors from thedifferent areas / fields like production Management Quality Assurance Finance Salesand Marketing Supply Chain Research and Development Human Resources etc. or as may beconsidered appropriate.

REMUNERATION CRITERIA FOR NON-EXECUTIVE DIRECTORS

The Company doesn’t pay any remuneration and/or Commission to the Non-ExecutiveDirectors.

The Company doesn’t pay sitting fee for attending meeting of the Board ofdirectors including committee meetings thereof.

The Company does not provides any ESOP etc to its directors

REMUNERATION CRITERIA FOR THE EXECUTIVE DIRECTORS AND KMP:

The objective of the policy is directed towards having a compensation philosophy andstructure that will reward and retain talent. The Remuneration Policy of the Company forDirector & Key managerial personnel is primarily based on the following criteria:Overall Performance of the Company its divisions and units Track record potential andperformance capacity and capability of individual.

The Nomination and Remuneration Committee will recommend the remuneration to be paid tothe Managing Director Whole-time Director Key Managerial Personnel and Senior ManagementPersonnel to the Board for their approval. The remuneration so determined by the Committeeshall be reasonable and sufficient to attract retain and motivate directors KeyManagerial Personnel and Senior Management of the company and to provide quality requiredto run the company successfully. The relationship of remuneration and performance shouldbe clear and meet appropriate performance benchmarks.

The remuneration should also involve a balance between fixed and incentive payreflecting short and long-term performance objectives appropriate to the working of thecompany and its goals.

The Company doesn’t pay sitting fee for attending meeting of the Board ofdirectors including committee meetings thereof. The Company do not provides any ESOP etcto its directors

CRITERIA FOR EVALUATION OF PERFORMANCE OF INDEPENDENT DIRECTORS AND THE BOARD OFDIRECTORS; For Executive Directors:

The criteria for evaluation of Executive Directors inter alia includes his ability toconduct meetings ability to elicit inputs from all members ability to table and openlydiscuss challenging matters attendance at meetings assistance to board in formulatingpolicies and setting standards accessibility ability to analyze strategic situationsability to protect positive image of the Company compliance with regulatory requirementsmonitor the performance of management and satisfy himself with integrity of the financialcontrols.

For Non-Executive Directors (including Independent Directors) :

The criteria for evaluation of Non-Executive Directors inter alia includes attendanceand contribution of Directors at Board and Committee meetings study of agenda and activeparticipation discharge of other function and responsibilities prescribed under lawMonitoring the effectiveness of corporate governance practice contribution to discussionon strategy participate constructively and actively in committees of the Board exerciseof skills and diligence with due and reasonable care and to bring independent judgment tothe Board ability to bring in best practices from his/her experience adherence to thecode of conduct.

For Board as a whole:

The criteria for evaluation of the Board inter alia includes composition anddiversity induction programme No. of meetings held team work performance culture riskmanagement and financial controls integrity credibility trustworthiness active andeffective participation by members.

REMOVAL:

Due to reasons for any disqualification mentioned in the Companies Act 2013 rulesmade there under or under any other applicable law rules and regulations or any otherreasonable ground the Committee may recommend to the Board for removal of a Director KMPor Senior Management Personnel subject to the provisions and compliance of the said Actrules and regulations.

AMENDMENT

Any change in the Policy shall on recommendation of Nominations and RemunerationCommittee be approved by the Board of Directors of the Company. The Board of Directorsshall have the right to withdraw and / or amend any part of this Policy or the entirePolicy at any time as it deems fit or from time to time and the decision of the Boardin this respect shall be final and binding.

By order of the Board of Directors of
PLACE : Pithampur
DATE: 29.08.2016 Shree Pacetronix Limited
Registered office
Plot No. 15 Sector No. II Atul Kumar Sethi Amita Sethi
Industrial Area Managing Director Whole time Director
Pithampur 454775 (DIN - 00245685) (DIN - 00245722)

ANNEXURE – III

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016

[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]

To

The Members

SHREE PACETRONIX LIMITED Plot No. 15 Sector II Industrial Area PithampurDistt.-Dhar MP

I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Shree Pacetronix Limited(hereinafter called the company). Secretarial Audit was conducted in a manner thatprovided me a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.

Based on my verification of the Company’s books papers minute books forms andreturns filed and other records maintained by the company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the company has duringthe audit period covering the financial year ended on 31st March 2016 complied with thestatutory provisions listed hereunder and also that the Company has proper Board-processesand compliance- mechanism in place to the extent in the manner and subject to thereporting made hereinafter:

I have examined the books papers minute books forms and returns filed and otherrecords maintained by Shree Pacetronix Limited ("the Company") for thefinancial year ended on 31st March 2016 according to the provisions of:

(i) The Companies Act 2013 (the Act) and the rules made thereunder; ;(in so far asthey are made applicable

(ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade thereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings; which is not applicable to the Company

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):-

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 and The Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015 in so far as they are made applicable from time to time;

c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009; which is not applicable to the Company

d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999; which is not applicable to theCompany

e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; which is not applicable to the Company

f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009; and which is not applicable to the Company during the Audit Period and

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998; which is not applicable to the Company during the Audit Period and

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of Indiawhich made applicable from 1st July 2015.

(ii) The Listing Agreements entered into by the Company with BSE Limited and SEBI(Listing obligation and disclosure Requirement) Regulations 2015; (in so far as they aremade applicable from time to time)

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above except;

1. The Company has not appointed the Company Secretary as one of the KeyManagerial Personnel under Section 203 of the Companies Act 2013.

2. The Company has not filled Form CHG-1 for Creation of Charge with respect totwo term loan secured by hypothecation of vehicle.

I further report that

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of Board of Directors that took place during the period under review werecarried out in compliance with the provision of the Act.

Adequate notice is given to all the directors to schedule the Board meeting agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

All decisions at Board Meeting and Committee(s) Meetings are carried throughunanimously as recorded in the meetings of the Board and committee(s) if the Board as thecase may be.

I further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

SHRADDHA JAIN
Place: Indore PRACTICING COMPANY SECRETARY
Date: 29.08.2016 ACS 39488/ CP 14717

Annexure – IV

DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014 AS AMENDED FROM TIME TO TIME-

(i) The percentage increase in remuneration of each Director Chief Financial Officerduring the financial year 2015-16 ratio of the remuneration of each Director to themedian remuneration of the employees of the Company for the financial year 2015-16 are asunder:

Name of Director/KMP Designation Remuneration of Director/KMP for financial year 2015-16 (In Rs.) % increase in Remuneration in the Financial Year 2015-16 Ratio of Remunera- tion of each Director to median remunera- tion of employees
1. Mr. Atul Kumar Sethi Managing Director 2630400 0.00% 20.03
2. Mrs. Amita Sethi Whole Time Director 657600 0.00% 5.00
3. Mr. Vikas Gokhale Whole Time Director 975504 0.24% 7.43
4. Mr. Pravin Kumar Badjatya Independent Director
5. Mr. Sushil Kumar Patni Independent Director
6. Mr. Anil Rathi Independent Director
7. Mr. Swapnil Modi CFO 116577 NA

Note

None of the Independent Directors of the Company received any remuneration during thefinancial year 2015-16.

(ii) The percentage increase in the median remuneration of employees in the financialyear - 7.98%

(iii) The number of permanent employees on the rolls of Company as on March 31 2016 - 46.

(iv) Average percentile increase made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2015-16 was 7.68% whereas theincrease in the managerial remuneration for the same financial year was 0.24%. There areno exceptional circumstances for increase in the managerial remuneration.

(v) The key parameters for any variable component of remuneration availed by thedirectors are approved by the Board of Directors based on the recommendation of Nomination& Remuneration Committee.

(vi) It is hereby affirmed that the remuneration paid is as per the Nomination andRemuneration Policy for Directors Key Managerial Personnel and other Employees.

PLACE : Pithampur By order of the Board of Directors of
DATE: 29.08.2016 Shree Pacetronix Limited
Registered office
Plot No. 15 Sector No. II Atul Kumar Sethi Amita Sethi
Industrial Area Managing Director Whole time Director
Pithampur 454775 (DIN - 00245685) (DIN - 00245722)

Annexure – V

DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(2) & 5 (3) OF COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014 AS AMENDED FROM TIME TO TIME FOR THE YEAR ENDED 31STMARCH 2016.

Name Designation Remuneration received During the Financial Year (In Rs.) Qualification and Experience Date of Joining Age
1 Mr. Atul Kumar Sethi Managing Director 2630400 MBA (Marketing) 20 years of experience 11.01.1988 54 Years
2 Mr. Vikas Gokhale Whole Time Director 975504 M tech 15 years 30.01.2012 41 years
3 Mrs. Amita Sethi Whole Time Director 657600 MA 14 years of experience 01.12.2010 50 years
4 Mr. Mayur Dilip Bhusari General Manager production 625788 Graduate 10 years 01.01.2006 42 years
5 Mr. Murtaza Faizee Regional Sales Manager 442496 Graduate 22 years 01.01.1994 42 years
6 Mr. Subhashish Basu Regional Marketing Manager 424456 Graduate 1 years 01.01.2015 50 years
7 Mr. Rupak Kumar Das Regional Marketing Manager 396000 Graduate 13 years 01.04.2003 55 years
8 Mr. Indranil Gupta Regional Marketing Manager 396000 Graduate 12 years 01.03.2004 48 years
9 Mr. Sumit Chakarbarti Regional Marketing Manager 377496 Graduate 19 years 01.12.1997 60 years
10 Ms. Pinaki Roy Regional Marketing Manager 353700 Graduate 7 years 01.05.2009 47 years
11 Mr. Rabin Chakraborty Sales Manager 341600 Graduate 13 years 01.06.2003 52 years
12 Mr. Rajesh Bhauraoji Wath Temp Pacemaker QC Manager 284303 Graduate 17 years 01.07.1999 47 years
13 Mr. Pradip Tyagi Assistant Quality control 284073 Graduate 9 years 19.03.2007 31 years
14 Mr. Vijay Kumar Soni Lead QC Manager 265375 Graduate 20 years 01.09.1996 42 years
15 Mr. Kaushik Biswas Sales Manager 212400 Graduate 5 years 01.04.2011 41 years

1. None of the employees within the meaning of clause (iii) of sub rule (2) of Rule-5of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

2. Mr. Atul Kumar Sethi and Mrs. Amita Sethi are spouse.

3. All the above employees are permanent employees of the Company.

PLACE : Pithampur By order of the Board of Directors of
DATE: 29.08.2016 Shree Pacetronix Limited
Registered office Amita Sethi
Plot No. 15 Sector No. II Atul Kumar Sethi Whole time Director
Industrial Area Managing Director (DIN - 00245722)
Pithampur 454775 (DIN - 00245685)