The Members of
Shree Pacetronix Limited Pithampur-454775
Your Directors have pleasure in presenting their 29th Annual Report on the business andoperation of the Company together with the Standalone and Consolidated Audited FinancialStatements for the year ended 31st March 2017.
1. STATE OF AFFAIRS FINANCIAL PERFORMANCE AND FUTURE OUTLOOK : a. FINANCIALRESULTS HIGHLIGHTS AND SUMMARY
The performance Highlights and Summarized Financial Results of the Company are givenbelow: (Rs. in lacs)
|Particulars ||Standalone ||Consolidated |
| ||Year ended ||Year ended ||Year ended ||Year ended |
| ||31st March 2017 ||31st March 2016 ||31st March 2017 ||31st March 2016 |
|Total Income ||689.42 ||741.25 ||699.71 ||745.83 |
|Total Expenditure ||729.48 ||734.98 ||744.51 ||750.62 |
|Profit/Loss before tax ||(40.06) ||6.27 ||(44.80) ||(4.80) |
|Provision for Tax || || || || |
|Current Tax ||2.07 ||11.42 ||2.07 ||11.42 |
|Deferred Tax ||(13.10) ||(4.25) ||(14.41) ||(7.67) |
|Profit/Loss after tax ||(29.02) ||(0.90) ||(32.46) ||(8.55) |
|Amount available for appropriation || || || || |
|Appropriations: || || || || |
|(a) Transferred to Statutory Reserve ||- ||- ||- ||- |
|(b)Proposed Dividend on Equity Shares ||- ||- ||- ||- |
|(c) Tax on Proposed Dividend ||- ||- ||- ||- |
|Surplus Carried to Balance Sheet || || || || |
|Paid up Equity Share Capital ||359.94 ||359.94 ||359.94 ||359.94 |
Earnings 739.66 Lacs per share on standalone basis in the (Re.1 /- each)Previous (0.81) Financial Year registering a fall of 07.52%. The overall expense (0.03)(0.90) (0.24) Basic of the Company has also decreased from Rs. 734.98 Lacs to Rs. 729.48Lacs due to decrease in depreciation cost. & Diluted (in Rs.) The Company's hasincurred a loss of Rs. 29.03 Lacs as compared to loss of Rs. 0.90 Lacs in previousFinancial Year.
b. OPERATIONS AND FUTURE OUTLOOK
During the year under review the Company has recorded total revenue of Rs. 689.42 Lacsagainst the total revenue of Rs. 741.25 Lacs in the Previous Financial Year. The Company'sProfit/Loss before tax of Rs. (40.06) Lacs as compared to Profit/Loss before tax of Rs.6.27 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. Whereas the net loss incurred by the Company is Rs. 29.02Lacs as compared to Rs. 0.90 Lacs in previous Financial Year.
The Company is augmenting its focus in the Indian as well as foreign market also TheCompany is focusing on improving the quality of revenues and earnings through a number ofinitiatives continuously taken in the researches and developments activitiessimultaneously concentrating in the direction of fulfilling responsibility towards thecountry humanity and the society to motivate and orient the employment towards our mainobjective that is to serve the society at our best. In the year ahead the Company aims tomaintain its focus to further streamline its operations to obtain cost-efficiencies.Company's mission is to provide affordable life saving devices to the world.
In the last few years the global medical devices and equipments industry has witnessedcertain challenges such as uncertain regulatory environment volatility in emergingmarkets and pricing pressure across the globe. The Company will remain focused on itsagenda of superior revenue growth cost consciousness and improving the overall marginprofile of the Company. Growth is expected in the industry with more use of advancedtechnology in coming future which would result in cost efficiency and judicious use ofassets for generating better outputs. Your During the year under review the Company hasreported a turnover of Rs. 689.42 Lacs against the turnover of Rs. directors are workinghard to reduce the operational cost and improve the financial performance of the Companyin 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 as upgradationof existing products. With the improved quality of pacemakers the demand of the productsmanufactured by your Company is expected to grow with a faster pace which will lead tohigher profitability in the years to come. Defence Research and Development Organisationhas approached to our subsidiary Company Shree Coratomic Limited to manufacture CochlearImplants. After approximately five years of laborious research and development ShreeCoratomic Limited in the process to launch this new product i.e. Cochlear Implants.
c. CHANGE IN NATURE OF BUSINESS
During the year there was no change in business activity of the company.
d. CHANGES IN SHARE CAPITAL
During the Financial Year 2016-17 there was no change in capital structure of thecompany. The paid up equity capital as on March 31 2017 is 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.
e. 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 reserves.
Your directors do not recommend any dividend due to losses in current financial year.
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 to whichfinancial statements relate and date of the report.
6. Subsidiary Associate Companies or Joint Venture
Your Company has one subsidiary Shree Coratomic Limited. Financials to the Subsidiaryare disclosed in the Consolidated Financial Statements which forms part of this AnnualReport. A statement containing salient features of the Financial Statements of theSubsidiaries are annexed to this Report pursuant to Section 129(3) of the Companies Act2013 and the rules made there under in the prescribed form AOC-1 and hence not repeatedhere for sake of brevity. The Company does not have any joint venture or associateCompany.
In accordance with third proviso to Section 136(1) of the Companies Act 2013 theAnnual Report of your Company containing inter alia the audited standalone andconsolidated financial statements has been placed on the website of the Company atwww.pacetronix.com. Further audited financial statements together with relatedinformation Policy for determining material subsidiaries and other reports of thesubsidiary company have also been placed on the website of the Company atwww.pacetronix.com.
In terms of Section 136 of the Companies Act 2013 (the Act') financialstatements of the subsidiary companies are not required to be sent to the members of theCompany. The Company shall provide a copy of the annual accounts of its subsidiarycompanies to the members of the Company on their request. The annual accounts of itssubsidiary companies will also be kept open for inspection at the registered office of theCompany during business hours.
7. Consolidated Financial Statements
In accordance with the Companies Act 2013 and other applicable accounting standards onconsolidated financial statement your directors provide the Audited ConsolidatedFinancial statements in the Annual Report.
8. Extracts 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 2017 forms part of thisreport as Annexure I.
9. Number of Meetings of the Board its Committees & AGM
During the year under review the Board has met 6 (six) times viz. May 30 2016; August10 2016; August 29 2016; November 14 2016; February 10 2017 and March 31 2017. Thedetails of meetings of the Board and committees the attendance of Directors are providedin the Corporate Governance Report. Further Annual General Meeting of the Company forfinancial year was held on 30th September 2016.
10. Directors' Responsibility Statement
Pursuant to section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm 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 have 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 have prepared the annual accounts on a going concern basis.
e. The Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
f. The Directors have 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 subsection (12) of section 143 of Companies Act 2013.
12. Declaration by Independent Directors
a. 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 Regulation 25 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 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 and the Rules madethereunder.
b. Meetings of Independent Directors
During the year under review a separate meeting of Independent Directors was held onMarch 31 2017 The Meeting was conducted in an informal manner in the absence of Chairmanthe Whole Time Director the Non-Executive Non-Independent Directors and the ChiefFinancial Officer interalia to discuss:
??evaluation of the performance of Non-Independent Directors and Board of Directors asa whole.
??evaluation of the performance of the Chairman of the Company taking into account theviews of the Executive Directors and Non-Executive Directors.
??evaluation of the quality content and timelines of flow of information between themanagement and the Board of Directors that is necessary for the Board of Directors toeffectively and necessarily perform its duties.
All the Independent Directors were present at the said Meeting.
c. Familiarization Programme
The objective of a familiarization programme is to ensure that the non-executivedirectors are updated on the business environment and overall operations of the Company.This enables the non-executive directors to make better informed decisions in the interestof the Company and its stakeholders.
In compliance with the requirements of SEBI Regulations the Company has put in place afamiliarization programme for the Independent Directors to familiarize them with theirrole rights and responsibility as Directors the working of the Company nature of theindustry in which the Company operates business model etc.
With a view to familiarize the independent directors with the Company's operations asrequired under regulation 25(7) of the SEBI (LORD) Regulations 2015 the familiarizationprogramme has been posted on the website of the Company under the web link http://www.pacetronix.com/wp-content/uploads/2015/07/ familiarisation programme forindependent_directors.pdf
13. Nomination & Remuneration Committee and Stakeholders Relationship Committee
As per the requirement of Section 178 of the Companies Act 2013 and Regulation 19 and20 of SEBI (LODR) Regulations 2015 the Company has constituted Nomination andRemuneration Committee and Stakeholders Relationship Committee. The Composition of theabove Committees their terms of reference detailed in the report of Corporate Governance.
14. Remuneration Policy
The Board on the recommendation of the Nomination and Remuneration Committee hasapproved and adopted a Remuneration Policy for selection and appointment of DirectorsSenior Management personnel and their remuneration. The Remuneration Policy of the Companyforms part of this report as Annexure II. 15. Auditors a. STATUTORY AUDITOR
Pursuant to the provisions of section 139 of the Act and the rules framed there underat the Annual General Meeting held on 30th September 2016 Ajay Sharma & CompanyChartered Accountants (ICAI Firm Registration No. 013306C) were appointed as StatutoryAuditors of the Company to hold office till the conclusion of the Annual General Meetingto be held in the calendar year 2021.
In terms of the first proviso to section 139 of the Companies Act 2013 theappointment of the auditors shall be placed for ratification at every Annual GeneralMeeting. Accordingly the appointment of Ajay Sharma & Company as Statutory Auditorsof the Company is placed for ratification by the shareholders. In this regard theCompany has received a certificate from the auditors to the effect that if they arereappointed it would be in accordance with the provisions of section 141 of the CompaniesAct 2013.
Explanation to Auditor's Remark
The Auditors in their report have referred to the notes forming part of the Accountswhich are self-explanatory and does not contain any qualification reservation or adverseremark or disclaimer.
Further there was no fraud in the Company which was required to report by statutoryauditors of the Company under sub-section (12) of section 143 of Companies Act 2013.
b. SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed Ms.Shraddha Jain Practicing Company Secretary to conduct Secretarial Audit forthe financial year 2016-17. The Secretarial Audit Report for the financial year endedMarch 31st 2017 is annexed herewith marked as Annexure III to this Report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
The Board in its meeting held on 11.08.2017 has appointed Ms.Shraddha Jain PracticingCompany Secretary as Secretarial Auditor of the Company to conduct Secretarial Audit forthe financial year 2017-18.
c. COST RECORD AND COST AUDIT
Your company does not fall within the provisions of Section 148 of Company's 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
In accordance with the provisions of Section 188 of the Companies Act 2013 and rulesmade thereunder the transactions entered into with related parties are in the ordinarycourse of business and on an arm's length pricing basis the details of which are includedin the notes forming part of the financial statements. There are no material contracts orarrangements or transactions during the year. Accordingly information in Form AOC-2 isnot annexed.
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 athttp://www.pacetronix.com/wp-content/uploads/2016/02/ Policy for Determination ofMateriality pdf
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
Information as per Companies (Disclosure of particulars in the Report of Board ofDirectors) Rules 1988 relating to conservation of energy technology absorption foreignexchange earnings and outgo are given in Annexure IV forming part of this report.
19. 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.
20. 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 committee was established bythe Board.
21. Performance Evaluation of the Board-
Pursuant to the provisions of section 134 of Companies Act 2013 and Regulation 25(4)(a) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Boardof Directors has carried out an annual performance evaluation of its own performance theDirectors individually including Independent Directors. The manner in which the evaluationhas been carried out is explained in the Corporate Governance Report.
22. Directors and Key Managerial Personnel
Mr. Vikas Gokhale has been re-appointed as Whole Time Director of the Company hejoined the Board with effect from 30th January 2012 as Whole-time Director of the Companyand his tenure shall be expired on 29th January 2018 upon completion of 3 years of hisappointment. Therefore upon the recommendation of the Nomination and RemunerationCommittee Mr. Vikas Gokhale has been re-appointed for a further period of three yearscommencing from 30th January 2018 to 29th January 2021 pursuant to the provisions ofsections 196 197 203 and applicable provisions if any of companies act 2013.
In addition to the details of Directors hereinabove given it is brought to the noticeof shareholders that Mr. Swapnil Modi who was designated as Chief Financial officer (CFO)of the Company has resigned from the post due to some other pre occupations and otherpersonal engagements therefore Mr. Ashok Atulkar has been appointed as Chief Financialofficer (CFO) in place of Mr. Swapnil Modi with effect from 30th May 2016 and Ms. PriyaSingh has been appointed as Company Secretary of the company to be designated as one ofthe Key Managerial Personnel of the Company with effect from 31st March 2017.
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 director is disqualified for holding office as director.
23. Code of Conduct
The Company has laid down a code of conduct for all Board members and senior managementand Independent Directors of the Company. All the Board members including independentdirectors and senior management personnel have affirmed compliance with the code ofconduct.
24. 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.
25. 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.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.
26. Audit Committee
The Audit Committee comprises of Mr. Sushil Kumar Patni as Chairman Mr. Praveen KumarBadjatya and Mr. Anil Rathi as members. All the recommendations made by the AuditCommittee were accepted by the Board. The details of meetings of Audit Committee heldduring the year its composition terms of reference are given in the Report on CorporateGovernance.
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 behaviour 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 Whistle Blower Policy has been disclosed on the Company's websitewww.pacetronix.com and circulated to all the Directors and employees.
28. Commission received by directors from holding/subsidiary Company.
The directors are not receiving any commission from the holding/subsidiary Company.However the Company has one subsidiary Shree Coratomic Limited.
29. Disclosure of ratio of remuneration of Directors and Key Managerial Personnel
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 as Annexure V and forms the part ofthis Board Report.
30. Particulars of Employees
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 has not been given here.
Further the particulars of top ten employees in terms of remuneration drawn requiredunder section 197(12) of the Companies Act 2013 read with Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended is enclosedas Annexure VI and forms the part of this Board Report.
31. CEO/CFO Certification
As required under Regulation 17(8) of the Listing Regulations the Whole Time Directorand Chief Financial Officer of the Company have certified to the Board regarding theFinancial Statements for the year ended 31st March 2017.
32. Code for prohibition of Insider Trading Practices:
Your Company has adopted the code as per SEBI (Prohibition of Insider Trading)Regulations 2015 which has been effective from 15th May 2015. The Details of the saidcode is available on website of the Company i.e www.pacetronix.com.
33. 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.
34. Disclosure regarding issue of Employee Stock Options
The Company has not issued shares under employee's stock options scheme pursuant toprovisions of Section 62 read with Rule 12(9) of Companies (Share Capital and Debenture)Rules 2014.
35. 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.
36. Corporate Governance Report
Your Company and its Board has been complying with Corporate Governance Practices asset out in a separate report in pursuance of requirement of para C of Schedule V SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as Annexure VII.Auditor's certificate confirming compliance of the Corporate Governance as stipulatedunder the said Regulations is also attached to this Report.
37. Management Discussion and Analysis Statement
Management Discussion and Analysis Statement in pursuance of requirement of para B ofSchedule V SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 areattached to this report as Annexure VIII.
38. Listing at Stock Exchange
The Equity shares of the Company are listed with BSE Limited Mumbai and the ListingFee for the year 2017-18 has been duly paid.
The Company's assets are adequately insured against the loss of fire and other risksas consider necessary by the Management from time to time. The Company has also takeninsurance cover for any claims/losses arising out of its core business of securitybroking.
40. Business Responsibility Report:
The Business Responsibility Reporting as required by Regulation 34(2)(f) of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 is not applicableto your Company for the financial year ending March 31 2017.
41. Depository System
Your Company's shares are tradable compulsorily 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 advantagesoffered by the Depository System members are requested to avail the facility ofDematerialization of the Company's shares on either of the Depositories mentioned asaforesaid.
42. Environment and Safety
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances environmental regulations and preservation ofnatural resources.
43. Industrial Relations
Industrial relations remained cordial throughout the year. Your Directors recognize andappreciate the sincere hard work loyal dedicated efforts and contribution of all theemployees in 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.
44. 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. Internal ComplaintsCommittee has been set up to redress complaints received regarding sexual harassment.
It may be noted that during the year 2016-17 no grievance / complaint from any womenemployee was reported.
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 SHREE PACETRONIX LIMITED
| ||Amita Sethi |
|Atul Kumar Sethi || |
| ||Whole time Director |
|Managing Director || |
| ||(DIN - 00245722) |
|(DIN - 00245685) || |
PLACE: Pithampur DATE: 11.08.2017