BOARD S' REPORT To, The Members of Shree Pacetronix Limited, Your directors are pleased to present the 27th Annual Report together with the Audited financial Statement for the year ended 31st March, 2015. 1.2OPERATIONS AND FUTURE OUTLOOK : During the year under review your company has recorded total turnover of Rs. 626.90 Lacs which is lower than the last year's sales, at the other hand the revenue of the company has also been effected due to lower turnover and higher overhead cost and manufacturing expenses the bottom line of the Company has turned into negative and the Company has incurred losses against the handsome profit in comparison of last few years. Your directors are working hard to reduce the cost and improve the financial performance of the Company in the years to come. Manufacturing of Medical Device such as Pacemakers plays very crucial and important role in the growth structure of Pharmaceutical Industries, which is not material in monetary terms but a valuable life saving device. The R & D department of the Company is continuously working on the development of advanced new products as well as up-gradation of existing products. With the improved quality of pacemakers, the demand of the products manufactured by your Company is expected to grow with a faster pace which will lead to higher profitability in the years to come. However, at present no one can say with absolute certainty how the financial crisis will impact the real economy and therefore, the company's performance. 1.3Change in nature of Business During the year there was no change in business activity of the company. 1.4Changes in Share Capital During the Financial Year 2014-15 there was no change in capital structure of the company. The paid up equity capital as on March 31, 2015 was Rs.359.94 Lacs. During the year under review, the company has not issued shares with differential voting rights nor has granted any stock option or sweat equity shares. 1.5Revision 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. 3.Dividend Your directors do not recommend any dividend due to losses in current financial year. However during the year the company has deposited amount of unclaimed dividend of Rs. 2,69,444/- to Investor Education and Protection Fund 4.Deposits During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies 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 the company which have occurred between the end of the financial year of the company and date of the report. 6.Subsidiary, Associate Companies or Joint Venture : The Company has one subsidiary Shree Coratomic Limited. The turnover of the Subsidiary Company Shree Coratomic Limited is Rs. 51.68 lacs as against Rs 127.52 lacs in the previous year. Profit before tax stood at Rs.(3.38) lacs as against Rs. 1.03 lacs in the previous year. A statement pursuant to Section 129 of the Companies Act, 2013 related to the accounts of the subsidiary forms part of this Annual Report. The consolidated financials form part of this annual report. Policy for determining material subsidiaries of the Company is available on the website of the Company www.pacetronix.com The Company does not have any associate company or any joint venture or Holding company. 7.Extracts of Annual Return Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return as at March 31, 2015 forms part of this report as Annexure I. 8.Number of Meetings of the Board During the year under review the Board meets five times viz. May 30, 2014; July 31, 2014; October 30, 2014, January 30, 2015 and March 30, 2015. The details of meetings of the Board and the attendance of Directors are provided in the Corporate Governance Report. 9.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 have been followed along with proper explanation relating to material departures b.The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit for the year ended on that period; c.The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities. 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 the company and that such internal financial controls are adequate and were operating effectively. f.The Directors has devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. 10.Reporting of fraud by Statutory Auditors There was no fraud in the Company; hence no reporting was made by statutory auditors of the Company under sub-section (12) of section 143 of Companies Act, 2013. 11.Appointment and Declaration by independent directors 11.1Appointment of independent directors At the Annual General Meeting held on 29.09.2014, the members approved the appointment of Mr. Sushil Patni, Mr. Praveen Badjatya and Mr. Anil Rathi as Independent Directors of the Company for a term of 5 years to hold the office till 31st March, 2019 who are not liable to retire by rotation. 11.2Declaration by independent directors All Independent Directors of your Company have given a declaration pursuant to Section 149(7) of the Companies Act, 2013 affirming compliance to the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with stock exchanges. Based on the declaration(s) of Independent Directors, the Board of Directors recorded its opinion that all Independent Directors are independent of the Management and have fulfilled the conditions as specified in the Companies Act, 2013, rules made thereunder as well as concerning provisions of Clause 49 of the Listing Agreement with stock exchanges. 11.3Meetings of Independent Directors During the year under review, a separate meeting of Independent Directors was held on March 30, 2015, interalia, to discuss: § evaluation of the performance of Non-Independent Directors and Board of Directors as a whole; § evaluation of the performance of the Chairman of the Company, taking into account the views of the Executive § evaluation of the quality, content and timelines of flow of information between the management and the Board that is necessary for the Board to effectively and necessarily perform its duties. All the Independent Directors were present at the said Meeting. 11.4Familiarization Programme The Company shall through its Executive Directors / Senior Managerial Personnel conduct programs / presentations periodically to familiarize the Independent Directors with the strategy, operations and functions of the Company The details of familiarization programme have been posted in the website of the Company under the web link - http://www.pacetronix.com/FamiliarisationProgrammeforIndependentDirectors.pdf 12.Nomination & Remuneration Committee and Stakeholders Relationship Committee As per the requirement of Section 178 of the Companies Act, 2013 and clause 49 of listing agreement the Company has constituted Nomination and Remuneration Committee and Stakeholders Relationship Committee. The Composition of the above Committees, their terms of reference detailed in the report of Corporate Governance. Remuneration Policy Information regarding Directors' Remuneration Policy and criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 are given in Annexure II forming part of this report. Auditors 14.1Statutory Auditor At the Annual General Meeting held on Monday, 29th September 2014, M/s. S.R Naredi & Co., Chartered Accountants (ICAI Firm Registration No. 002818C), were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s S.R Naredi Co. Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of section 141 of the Companies Act, 2013. Explanation to Auditor's Remark The Board has duly reviewed the statutory Auditors Report on the Accounts. The notes forming part of the accounts referred to in the Auditors Report of the Company are self explanatory and do not call for any further explanation 14.2Secretarial Auditor The Board has appointed Mr. Ashish Nayak, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure III to this Report. In reply to the qualification made by the Secretarial Auditor, the Board of Directors stated that they have not find any suitable candidate for the post of the Company Secretary, so there is non-compliance of Section 203 of the Companies Act, non filing of Form MGT10 was mainly due to ambiguity and uncertainty of the applicability of the same for the relevant period. However, the company would ensure in future that all the provisions are complied to the fullest extent and other comments are self explanatory and do not call for any further explanation. The Board in its meeting held on 10.08.2015 has appointed Ms. Shraddha Jain, Practicing Company Secretary as Secretarial Auditor of the Company to conduct Secretarial Audit for the financial year 2015-16. 14.3Cost Record and Cost Audit Your company does not falls within the provisions of Section 148 of Company's Act, 2013 read with the Companies (Cost records & Audit) Rules, 2014, therefore no such records required to be maintained. 15.Particulars of loans, guarantees or investments Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the financial statements. 16.Particulars of contracts or arrangements with Related Parties All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.pacetronix.com Suitable disclosures as required under AS-18 have been made in the Notes to the financial statements. 17.Conservation of Energy, technology absorption, foreign exchange earnings and outgo Information as per Companies(Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure IV forming part of this report. 18.Risk Management The Company has developed a Risk Management Policy which laid down the procedures to inform to the Board about the risk assessment and minimization procedures. The main aim to develop a risk management policy is to identify, monitor and take precautionary measures in respect of the events that may pose risks for the business. 19.Corporate Social Responsibility Your company does not meet the requirements of Section 135 of Companies Act, 2013 for establishing Corporate Social responsibility (CSR) committee; therefore no such committee was established by the Board. 20.Performance Evaluation of the Board Pursuant to the provisions section 134 of Companies Act 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees. The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The Nomination and Remuneration Committee has defined the evaluation criteria for the Performance Evaluation process for the Board, its Committees and Director including the Independent Directors The statement indicating the manner in which formal annual evaluation of the Directors, the Board and Board level Committees are given in detail in the report on Corporate Governance, which forms part of this Annual Report. 21.Directors and Key Managerial Personnel Mr. Vikas Gokhale, retires by rotation at the forthcoming Annual General Meeting, and being eligible offers himself for re-appointment. During the year under review, the members approved the appointment of Mr. Sushil Patni Mr. Praveen Badjatya and Mr. Anil Rathi as Independent Director for a term of 5 years to hold the office till 31st March, 2019 who are not liable to retire by rotation. The members have also re-appointed Mr. Vikas Gokhale as Whole Time Director, of the Company for further period of three years. Disqualifications of Directors During the year declarations received from the Directors of the Company pursuant to Section 164 of the Companies Act, 2013. Board appraised the same and found that none of the director is disqualified for holding office as director. 22.Code of Conduct The Company has laid down a code of conduct for all Board members and senior management and independent directors of the Company. All the Board members including independent directors and senior management personnel have affirmed compliance with the code of conduct. 23.Significant and material orders passed by the regulators or courts There are no significant or material orders passed by the Regulators / Courts which would 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 major processes including financial statements to ensure reliability of reporting. The system also helps management to have timely data on various operational parameters for effective review. It also ensures proper safeguarding of assets across the Company and its economical use. The internal financial controls system of the Company is commensurate with the size, scale and complexity of its operations. The system and controls are periodically reviewed and modified based on the requirement. The internal and operational audit is entrusted to M/s Lunkad & Co, Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry. Based on the audit observations & suggestions, follow up & remedial measures are being taken on a regular basis. 25.Audit Committee The Audit Committee comprises of Mr. Sushil Patni, Chairman, Mr. Praveen Badjatya and Mr. Anil Rathi as members. All the recommendations made by the Audit Committee were accepted by the Board. The details of meeting of Audit Committee held during the year, its composition, terms of reference are given in the Report on Corporate Governance. 26.Whistle Blower/Vigil Mechanism Policy Your Company has established a Whistle Blower/ Vigil Mechanism Policy to enable Directors and employees of the Company to report unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct. The Policy provides adequate safeguards against victimization of Directors/ employees and direct access to the Chairman of the Audit Committee in exceptional cases. The Whistle Blower Policy has been disclosed on the Company's at www.pacetronix.com and circulated to all the Directors and employees. 27.Disclosure of ratio of remuneration of Directors and Key Managerial Personnel, etc. The prescribed particulars of employees required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure V and forms the part of this Directors Report. 28.Particulars of Employees etc. During the year, there was no employee drawing remuneration in excess of Rs. 60,00,000/- p.a. or Rs. 5,00,000/ - p.m. Accordingly, information required to be given pursuant 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) Rules,2014, has not been given here. 29.Voting Rights of employees: During the year under review the company has not given loan to any employee for purchase of its own shares as per section 67 (3) (c) of Companies Act, 2013. Therefore the company not required to made disclosure as per rule 6 (4) of Companies (Share Capital and Debentures) Rules, 2014. 30.Disclosure regarding issue of Employee Stock Options The Company does not have issued shares under employee's stock options scheme pursuant to provisions of Section Rule 12(9) of Companies (Share Capital and Debenture Rules, 2014). 31.Disclosure regarding issue of Sweat Equity Shares: The Company has not issued sweat equity shares pursuant to provisions of Section 54 read with Rule 8 of Companies (Share Capital and Debenture Rules, 2014) during the Financial Year. 32.Corporate Governance Report Report on Corporate Governance as required under the Listing Agreement with the Stock Exchange along with the certificate of the Auditors, M/s. S.R Naredi & Co, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange are attached to this report as Annexure VI. 33.Management Discussion and Analysis Statement Management Discussion and Analysis statement as required under the Listing Agreement with the Stock Exchange are attached to this report as Annexure - VII. 34.Listing At Stock Exchange The Equity shares of the Company are listed with BSE Limited, Mumbai and Madhya Pradesh Stock Exchange Limited, Indore. However Madhya Pradesh Stock Exchange Limited (MPSE) was de- recognized by 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 the listing fee for the year 201516 has been duly paid. 35.Consolidated Financial Statements The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries and joint venture and as prepared in compliance with the Companies Act, 2013, Accounting Standards and the Listing Agreement as prescribed by SEBI. A separate statement containing the salient features of its subsidiaries in the prescribed form (AOC-1) is annexed separately. 36.Depository System Your Company's shares are tradable compulsorily in electronic form and your Company has connectivity with both the Depositaries i.e. National Securities Depository Limited (NSDL) and Central Depository Service (India) Limited (CDSL). In view of the numerous advantage offered by the Depository System, members are requested to avail of the facility of Dematerialization of the Company's shares on either of the Depositories mentioned as aforesaid. 37.Industrial Relations Industrial relations remained cordial throughout the year. Your Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees in the growth and performance of the Company during the year. The Company continues to accord a very high priority to both industrial safety and environmental protection and these are ongoing process at the Company's plant and facilities to maintain high awareness levels. The Company as a policy re-evaluates safety standards and practices from time to time in order to raise the bar of safety for its people as well as users and customers. 38.Disclosure under the sexual harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. Internal Complaines Committee has been setup to redress complaints received regarding sexual harassment. It may be noted that during the year 2014-15, no grievance / complaint from any women employee was reported. 39.Acknowledgements Your Directors place on record their gratitude to all the Government and semi government departments and Company's Bankers, for the assistance and co-operation and encouragement they extended to the Company. Your Directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of Customer, Vendors, Employees and all other stakeholders in ensuring an excellent all around operational performance. By order of the Board of Directors of Shree Pacetronix Limited Registered office Plot No. 15, Sector No. II Industrial Area Pithampur, 454775 Atul Kumar Sethi Managing Director PLACE: Pithampur DATE: 10 08 2015 |