Precision Electronics Ltd Directors Report.

To

The Members of

Precision Electronics Ltd.,

Your Directors have pleasure in presenting the 40 Annual Report on the business and operations of the Company along with the Audited Statements of Accounts for the Financial Year ended March 31, 2019.

1. FINANCIAL HIGHLIGHTS

Your Company’s performance during the year as compared with that during the previous year is summarized below:

(Rs. in million)

PARTICULARS CURRENT YEAR PREVIOUS YEAR
(FY 2018-19) (FY 2017-18)
Revenue* 290.4 355.4
Profit before Depreciation, Interest, & Tax (23.2) 2.2
Depreciation 8.5 9.3
Finance Cost 21.6 14.8
Net profit before Tax (53.3) (21.9)
Provision for Tax (5.9) (6.7)
Net profit after tax (47.4) (15.2)

*Revenue is net of Excise duty, VAT, Sales tax & Service Tax.

DIVIDEND

As the Company did not earn any profit during the financial year 2018-19, the Board does not recommend payment of any dividend for the financial year under review.

TRANSFER TO RESERVE

The Board does not recommend to transfer any amount to the general reserve.

2. REVIEW OF OPERATION AND STATE OF COMPANY AFFAIR

Overall revenue of the Company for the year ended March 31, 2019 was recorded at about Rs.290.4 million which is 18.3% less as compared to previous financial year (2017-18) revenue of Rs.355.4 million, on account of various delays in the projects due to stressed market conditions resulting in slow off take which affected the Companys performance. Consequently, PEL incurred a loss of Rs.47.4 million as against loss of Rs.15.2 million in the previous year (2017-18). Due to limited fund allocation by the Government the industry as a whole suffered and incurred losses. PEL being a MSME unit has been hit hard and it’s overdue reached to about Rs.85 million which in turn resulted in a liquidity crunch for the Company.

There is no change in the nature of business of the Company which is segmented in two business divisions; ‘Electronics & Telecommunication’ and ‘Infra services’.

2.1 Electronics & Telecommunication Division

Electronics & Telecom division revenue during the year ended March 31, 2019 is Rs.263.30 million as against Rs.175.60 million in the previous year (2017-18). Manufacturing plants are located at Noida UP (in the NCR region) and Roorkee (Uttarakhand)

2.2 Infrastructure (Works Contract) Division

Infrastructure division revenue during the year ended March 31, 2019 is Rs.26.20 million as against Rs.178.90 million in the previous year (2017-18). The division undertakes turnkey assignments of civil, electrical, networking and turnkey installation and commissioning of radars, sensors, data links and setting up the command and control room at defence establishments.

No material changes and commitments have occurred after the close of the financial year till the date of this report, which affect the financial position of the Company.

3. MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

Government continues to support its ‘Make in India’ initiative with renewed focus and are engaging all the stakeholders to ensure effective implementation at the ground level. MSME sector continues to be the focus sector and additional policy instruments are being worked upon to make the sector more cost competitive. The Company will continue to leverage its presence, expertise and partnerships to enhance its revenues and profitability in the sector

1. Telecom: Government plan to provide Wi-Fi connectivity at the Gram Panchayat level under the Universal Service Obligation (USO) is moving at the brisk pace. The Company has developed product especially to provide the digital connectivity and significant orders have been executed during the year under consideration.

2. Healthcare: Your Company is a part of the strategic supply chain of GE Healthcare and has been recognised with a "Quality Award" for supply of power distribution unit for their Super Value CT scan machine. We are continuously developing products that will expand our product offering in this segment.

3. Oil & Gas: PEL is actively engaged in the sector to provide customised communication systems on a turnkey basis. Good opportunities are on the anvil and the Company is working closely on the technical solution that meets the customer requirement.

Opportunities, Threats, Risk & Concerns

Opportunities

Sizable business opportunities exist in all the sectors wherein your company has a market presence. Government is proactively promoting and supporting the indigenous industry with focus on the MSME sector and its policies and procedures are geared to create a robust hi-tech industry in India. Further the company is widening its product portfolio to address diversified markets.

Threats, Risk & Concerns

Significant portion of the Company’s revenues are dependent on the Government and their undertakings. Procurement and payments are linked to the funds available to them. Public Sector Undertakings are also facing liquidity crunch due to which they are unable to honour their dues in time. The Company is being cautious and is selective in its dealings.

PRODUCT WISE PERFORMANCE

The Company has a well-balanced product portfolio of in-house designed and engineered products that are qualified by both defence and the civil sector customers. SATCOM products are being added in the product portfolio and sizable business opportunities are under consideration.

In the Services segment, PEL’s revenue bucket includes:

I. EPC contracts: PEL has undertaken Civil, Electrical and Networking responsibilities as a subcontractor to

Large Prime Contractors for major MoD programs wherein funding is not dependent on central government budgetary allocation. In addition, the Company has diversified in the Oil & Gas sector and has undertaken a sizable contract in the North East region.

II. Hi-Tech Installation & Commissioning: PEL teams are stationed at several naval shipyards across the country to provide technical assistance to the customer to ensure trouble free commissioning of the core ATM based network switch and network termination units on all the new build ships of the Indian Navy. In addition Company is participating in establishing a SATCOM network to connect far flung regions of the Country.

III. Maintenance Repair and Overhaul (MRO) Services: PEL has undertaken contracts for Israeli majors to support UAV (Unmanned Aerial Vehicle) ground equipment at military bases across India. Further PEL has supported the maintenance of Integrated Electronic Warfare systems and Precision Guided Munitions supplied by Israeli companies to the Indian Forces.

OUTLOOK

Your company has a positive outlook in the market segments the company is engaged. Its market access and human resources are capable to take full advantage of the Government policies. Due to temporary business fluctuation and market uncertainties, the Company has incurred losses and therefore the Company proposes to monetize its underutilized assets at Noida and Roorkee to generate funds. PEL is aware of the budgetary constraints prevailing in its Telecom & Defence sectors and to mitigate the risk has added new products to address customers in market segment that hereto were not addressed. This is expected to generate additional revenues for the company in the current FY 2019-2020.

The following are the significant changes in the key financial ratios:

Sl. No. Particulars Financial Year 2018-19 Financial Year 2017-18 Explanation Thereof
1 Debt Equity Ratio 0.76 0.51 The company policy is to remain within 2.00 the normal prevalent standard. The main factor behind the change is higher debt taken during the financial year.
2 Inventory Turnover Ratio 1.26 0.72 The company is having a higher Inventory turnover ratio indicating company turning its inventory into sales more effectively
3 Net Profit Margin Ratio (16.30) (4.29) The company has incurred losses due to fall in revenue on account of stressed market conditions resulting in slow off take which affected the Company’s performance.
4 NET WORTH 1,402.77 1,884.41 The net worth of the company has decreased due to the losses incurred.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to financial statements. During the year no reportable material weakness in the system was observed. The Company has adopted IND-AS for the financial year 2018-19.

HUMAN RESOURCE DEVELOPMENT

The total number of employees of the Company as on 31st March 2019 stood at 151.

Your Company believes that employees are the most valuable assets of an organization and the optimum utilization of the skill, knowledge and attitude they possess are instrumental to the growth of the organization. Your Company has lived and encouraged meritocracy, entrepreneurship, teamwork and performance driven culture. The focus has been on creating reserves through cross functional and interdisciplinary exposure at all levels to ensure redundancy and robustness in the organization.

FINANCIAL FACILITIES

The Company continues to enjoy the support of its bankers South Indian Bank, Noida branch for both fund and non-fund based facilities.

4. DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013 with respect to Directors Responsibility Statement, it is hereby confirmed:

a) that in the preparation of the annual accounts for the Financial Year ended 31 March, 2019, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

b) that 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 and Loss of the Company for the year under review;

c) that the Directors have 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 fraud and other irregularities;

d) that 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 the Company and that such internal financial controls are adequate and are operating effectively; and

f) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

5. CORPORATE GOVERNANCE

In compliance with the requirements of Regulation 34(3) read with schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on Corporate Governance along with the certificate from M/s Munish K Sharma & Associates, Company Secretaries on its compliance forms a part the Annual Report.

6. ANNUAL SECRETARIAL COMPLIANCE REPORT

In compliance with SEBI circular dated February 8, 2019, bearing reference no. CIR/CFD/CMD1/27/2019, an annual secretarial compliance report by Practicing Company Secretary M/s Munish K Sharma & Associates, Company Secretaries is attached as Annexure I.

7. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The company is not covered for Corporate Social Responsibility, pursuant to the provision of Section 135 of the Companies Act, 2013 ("the Act") read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

8. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

There were no contracts or arrangement with related parties referred to in Section 188 (1) of the Companies 2013 during the financial year under review.

However, Form AOC-2 is attached herewith as Annexure II to show the related party transactions with Victora Auto Pvt. Ltd. and Victora Automotive Inc, of which Mr. Hardeep Singh Banga is a Director. The transaction entered was on arm length basis in its normal course of business, for the period beginning from August 2018 to March 2019. The services were for repair and maintenance of CNC machines. The Service Purchase Order for Rs. 17,70,000/- p.m. has been entered with Victora Auto Private Limited and Rs. 22,30,000/- p.m. has been entered with Victora Automotive Inc.

Mr. Ashok Kumar Kanodia, Managing Director and Mr. Nikhil Kanodia, Whole Time Director cum President forms part of promoter and promoter group. The transactions with them during the financial year 2018-19 are given in Note 42 of Balance sheet.

9. RISK MANAGEMENT

Your Company has formulated a Risk Assessment and Management plan which includes procedures to assess and curtail risk. A "Risk Management Committee" has been constituted which has been entrusted with the responsibility to assist the Board in mitigating the risk faced by the Company in the ordinary course of business. The Risk Management committee comprises of Mr Nikhil Kanodia, Mr Sanjay Chandra, Mr Deepak Jagga, Mr Jagjit Singh Chopra and Ms Puneet Arora. The factors that affect the Company’s profitability and operations are regularly monitored and offers/proposals submitted by the Company to its customers are modified accordingly. In the opinion of the Board there is no risk which may threaten the existence of the Company.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board is well balanced with professionals, legal experts and persons with business background who are connected with the industry and have the requisite expertise and experience to guide the Company.

In accordance to Section 203 of the Companies Act 2013, Key Managerial Personnel of the Company are: Mr. Ashok Kumar Kanodia (Managing Director), Mr. Nikhil Kanodia (Whole Time Director cum President), Mr Jagjit Singh Chopra (Chief Financial Officer) and Ms Veenita Puri (Company Secretary and Compliance Officer).

During the year under review, Mr. Suresh Vyas has resigned from the position of Independent Director of the Company w.e.f. 11.08.2018. Lt. Gen. (Dr.) Rajesh Pant has resigned from the position of Chairman cum Independent Director of the Company w.e.f. 31.03.2019.

Mr. Neeraj Bajaj, Chartered Accountant by profession has been appointed as an Independent Director of the Company w.e.f. 27.09.2018. Mr. Hardeep Singh Banga has been appointed as Non Executive Additional Director of the Company w.e.f. 11.08.2018 and regularized in the Annual General Meeting held on 27.09.2018. Maj. Gen. Lav Bikram Chand has been appointed as an Additional Director of the Company to hold the office as Non Executive Chairperson, w.e.f 14.05.2019 upto the date of ensuing Annual General Meeting of the Company and Mr. Deepto Roy is proposed to be appointed as an Independent Director of the Company in the ensuing Annual General Meeting of the Company.

Resolution proposing the appointment of Maj. Gen. Lav Bikram Chand as a Non-Executive Chairperson, appointment of Mr. Deepto Roy as an Independent Director of the Company and re-appointment of Mr. Sharvan Kumar Kataria as an Independent Director of the Company for the another term of 5 years forms part of the notice convening the 40 Annual General Meeting. Pursuant to the provisions of Section 149 of the Companies Act, 2013 Non-Executive Independent Directors are not liable to retire by rotation. As per the disclosure received from the Directors, none of the Directors are disqualified from being appointed as Directors as specified in Section 164(2) of the Companies Act, 2013.

Ms. Ranjna Gudoo, Non-Executive Director, retires by rotation and has not offered herself for re-appointment. The Board recommends for not filling the vacancy.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board confirming that they continue to fulfill all the requirements to qualify for their appointment as Independent Director under the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. Mr. Sharvan Kumar Katria is due for re-appointment during the year. Therefore, Resolution proposing his re-appointment as a Non-Executive Independent Director for another period of 5 years shall be taken up in the ensuing AGM by means of special resolution. Also, resolution proposing the appointment of Mr. Deepto Roy as a Non-Executive Independent Director for a period of 5 years shall be taken up in the ensuing AGM by means of ordinary resolution.

BOARD EVALUATION

The Board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors which include criteria for performance evaluation of the Non-Executive Directors and Executive Directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities & Exchange Board of India (SEBI) under SEBI (LODR) Regulations, 2015. The Company has devised an evaluation matrix for the performance evaluation and an external consultant "M/s Munish K Sharma & Associates" was engaged to collate and evaluate the results.

A meeting of Independent Director was held on July 03, 2019 without the attendance of other directors (Non-Independent) to review the performance of Non-Independent Directors, the Board as a Whole and the Chairman of the Company and to assess the flow of information between Company Management and the Board.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The requisite details as required by Section 134(3)(e) is disclosed under the Corporate Governance Report.

11. AUDITORS AND AUDITOR’S REPORT

STATUTORY AUDITOR

At the Annual General Meeting held on September 25, 2017 M/s Nemani Garg Agarwal, & Co. , Chartered Accountants, bearing (F.R.N. 010192N) were appointed as statutory auditors of the Company to hold office till the conclusion of the 43 Annual General Meeting.

The notes on financial statements referred to in the Auditor’s report are self-explanatory and do not call for any further comments. The Auditor’s Report does not contain any qualification, reservation or adverse remark.

SECRETARIAL AUDITOR

The Board has appointed M/s Munish K Sharma & Associates, Company Secretaries to conduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the financial year ended March 31, 2019 is annexed herewith marked as Annexure III to this Report and the qualifications thereof are explained with the Management comments.

INTERNAL AUDITORS

The Board of Directors has pursuant to Section 138 of the Companies Act, 2013 and on recommendation of the Audit Committee has appointed M/s Rajendra K. Goel & Co., Chartered Accountants, as the Internal Auditors of the Company for the financial year 2018-19.

12. DISCLOSURES

VIGIL MECHANISM

A vigil mechanism of the Company which also includes a Whistle Blower Policy pursuant to Section 177(9) & 10 of Companies Act, 2013, has been established and can be accessed on the Company website www.pel-india.com.

AUDIT COMMITTEE

The Audit Committee comprises of following three Independent Directors and one Non-Executive Director and during the Financial Year 2018-19, four meeting(s) of the committee were convened, the attendance record of members of the committee is as follows:

S. No. Name of Directors

Category

Status

Meeting Attended

1. Mr. Sharvan Kumar Kataria NEID Chairman 4
2. Mr. Neeraj Bajaj NEID Member 3
3. Mr. Suresh Vyas* NEID Member 2
4. Mr. Deepto Roy NED Member 1

*Mr. Suresh Vyas has resigned from the Board and its committee’s w.e.f 11.08.2018

The recommendations, if any made to the Board by the Audit Committee during the year under review were accepted.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee consists of following members and during the Financial Year 2018-19 one meeting of the committee was convened the attendance record of members of the committee are as follows:

S. No. Name of Directors

Category

Status

Meeting Attended

1. Mr. Suresh Vyas* NEID Chairman -
2. Mr. Neeraj Bajaj NEID Member 1
3. Mr. Sharvan Kumar Kataria** NEID Member 1
4. Mr. Deepto Roy NED Member -

*Mr. Suresh Vyas resigned w.e.f. 11.08.2018.

**Mr. Sharvan kumar Kataria has been appointed as the Chairperson of the Committee in the Board meeting held on 14.11.2018.

The recommendations, if any made to the Board by the Nomination and Remuneration Committee during the year under review were accepted. Also Nomination and Remuneration Policy of the Company can be accessed on the Company website at www.pel-india.com.

Your Board has approved policy on the terms and conditions of appointment of independent directors which is available on Company’s website "www.pel-india.com".

MEETINGS OF THE BOARD

The Board of Directors met four times on 28.05.2018, 11.08.2018, 14.11.2018 and 14.02.2019 during the financial year 2018-19. For further details, please refer report on Corporate Governance of this Annual Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS.

There was no transaction of the nature covered under Section 186 of the Companies Act, 2013.

ANNUAL RETURN

As required pursuant to section 134 of the Companies Act, 2013, Annual Return in MGT 7 shall be available at the Company’s website at www.pel-india.com.

PARTICULARS OF CONSERVATION OF ENERGY, ABSORPTION OF TECHNOLOGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, as required to be disclosed under the Act, is provided in Annexure IV to this Report.

PARTICULARS OF EMPLOYEES

The table containing the names and other particulars of employees in accordance with the provisions of 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 appended as Annexure V to this Report.

The Company does not have any employees employed throughout the financial year and in receipt of remuneration of Rs. 1.02 crore, or employed for part of the year and in receipt of Rs. 8.50 Lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The list of top ten employees of the Company in terms of their remuneration is as follows:

Mr. Ajay Goel (57), General Manager (Engineering), 17.12.2005, 24,25,500/- B.E (E & C) (29), Punjab Wireless system Ltd., Mr. Amit Mittal (49), Senior Deputy General Manager, 14.02.2006, 19,20,000/-, B.E (E&C) (25), Punjab Wireless system Ltd., Mr. Ashok Kumar Kanodia (68), Managing Director, 01.05.1979, 0.74% equity shares, 23,81,570/-, B.E. Electrical (40), Mr. Ashok Verma (47) AGM (Design), 17.12.2007, 18,00,000/-, B.E (E & C) (18), Copper Connections, Mr. Bhaskar Biswas (57), Senior Deputy General Manager (Services), 28.07.2011, 20,00,856/-, B.E (E & C) (28), Indian Air Force, Mr. Deepak Jagga (47), Senior Vice President Marketing, 01.04.2002, 26,30,916/-, B.E (Electronics) (29), Mr. Jagjit Singh Chopra (50), Chief Financial Officer, 25.04.2014, 23,79,996/-, Chartered Accountant (21), Blessings Advertising Pvt. Ltd., Mr. Nikhil Kanodia (42), President & Chief Technical Officer, 29.10.2002, 24.67% equity shares, 57,71,688/-, M.S. Electrical & Computer Engineering (21), Fujitsu Network Communications, Son of Mr. Ashok K Kanodia, Managing Director, Mr. Phani Bhushan Chetri, (44), General Manager (Infra), 23.08.2018, 20,40,000/-, B.E (Electrical Engineering) (19), Idea Cellular Infrastructure Services Limited, Mr. Sanjay Chandra (57), Senior Vice President (New Product Development), 10.06.2009, 33,87,996/-, M.Sc (Electronics) (32), Indian Army.

Please note that none of the above employee is employed on contractual basis.

FIXED DEPOSITS

The Company has not invited or accepted any deposits during the year under review or in the past and hence no amount of principal or interest was outstanding as of the Balance Sheet date.

SIGNIFICANT & MATERIAL ORDERS:

Application for re-classification of Promoter & Promoter group dated October 10, 2018, necessitated due to exit of Mr Pradeep Kumar Kanodia and his Associates from the Company, filed under Regulation 31A of SEBI (LODR) Regulations, 2015, has been approved by BSE vide their letter bearing ref. no. LIST/COMP/PC/1098/2018-19 dated 04.02.2019.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013.

The company has constituted Internal Complain Committee for reporting of cases, if any, related to sexual harassment. Committee meetings are held at regular intervals and employees are sensitized on the issue on regular interval. No case was reported and/or filed during the year under the aforesaid Act.

13. LISTING OF SECURITIES

The Shares of the Company are listed with The Bombay Stock Exchange Limited, Pheroze Jeejeebhoy Towers, Dalal Street, Mumbai. (Scrip Code: 517258). It is confirmed that the Company has paid Annual Listing Fee for the financial year 2018-19 to BSE.

14. ENVIRONMENTAL PROTECTION, HEALTH AND SAFETY

The Safety & Health of employees and external stakeholders are embedded in the core organizational values of the Company. This aims to ensure safety of public, employees, plant & equipment, ensure compliance with all statutory rules and regulations, imparting training to its employees, carrying out safety audits of its facilities, and promoting eco - friendly activities.

The Company continues to maintain excellent track record on safety. The site had no accidents during the year 2018-19. PEL also has a Workman Safety Committee under section 41G of Factories Act 1948.This Committee meets at regular intervals to take measures for worker’s protection in order to make PEL a safe place to work.

15. CAUTIONARY STATEMENT

Certain Statements made in Management Discussion & Analysis Report relating to the Company objectives, projections, outlook, expectations, estimates etc. may constitute ‘forward looking statements’ within the meaning of applicable laws & regulations. Actual results may differ from such expectations, projections etc. whether express or implied.

16. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB- SECTION (12) OF SECTION 143

As per the explanations given by the Auditors in their report no material fraud on or by the Company or any fraud in the Company by its officers or employees has been noticed or reported during the year.

17. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES / JOINT VENTURES / ASSOCIATE COMPANIES DURING THE YEAR

No Company has become or ceased to be subsidiary/joint venture/associate company of the Company during the year under review. Hence, Form AOC 1 containing salient features of the subsidiary/joint venture/associate company is not required.

18. CAPITAL STRUCTURE:

The paid up share capital of the Company is Rs. 13,84,87,620/- (Rupees Thirteen Crore Eighty Four Lakhs Eighty Seven Thousand Six Hundred and Twenty Only) comprising of 1,38,48,512 fully paid up equity shares of Rs. 10/- each amounting to Rs. 13,84,85,120/- and Rs. 2500/- on account of forfeited shares. The Company has neither made any issue/allotment nor made any buy back of securities during the Financial Year 2018-19.

19. COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company has duly complied with the provisions of applicable secretarial standards as issued by Institute of Company Secretaries of India.

20. MAINTENANCE OF COST RECORDS:

As per the provisions of Section 148(1) of the Companies Act, 2013 and Rules made thereunder, the Company was not required to make a disclosure of maintenance of cost records as specified by the Central Government.

21. RECEIPT OF AMOUNT FROM DIRECTORS:

During the Financial Year 2018-19, the Company has received following amounts from the Directors as referred in sub-clause (viii) of clause (c) of sub-rule (1) of Rule 2 of Companies (acceptance of Deposits) Rules, 2014 along with declarations thereof:

S. No. Name of Director Amount Received by the Company Date of Receipt
1. Mr. Ashok Kumar Kanodia Rs. 25,00,000 25.03.2019
Rs. 25,00,000 29.03.2019
2. Mr. Nikhil Kanodia Rs. 30,00,000 29.03.2019

22. ACKNOWLEDGMENTS:

Your Directors express their deep appreciation and gratitude for the valuable support received from South Indian Bank, Noida branch, its Customers, Business Associates, Government Departments and Shareholders and look forward to similar support and co-operation in future. Your directors appreciate the sincere efforts put in by the employees at all levels.

FOR AND ON BEHALF OF THE BOARD
Place: Noida Ashok Kumar Kanodia Nikhil Kanodia
Date: 10.08.2019 Managing Director Whole Time Director cum
DIN: 00002563 President
Add: D-1081, New Friends DIN: 03058495
Colony, Delhi -110025 Add: D-1081, New Friends
Colony, Delhi -110025

Annexure-II

FORM NO. AOC -2

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

Form for Disclosure of particulars of Ccontracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arm’s length basis:

Name(s) of the related party and nature of relationship
Nature of contract/arrangements/transactions
Duration of contract/arrangements/transactions
Salient terms of contract or Arrangements or transactions including value, if any Justification for entering in to such contract or Arrangements or transactions Date(s) of approval by the Board Amount paid as advance, if any NIL
Date on which special resolution was passed in General Meeting as required under first proviso to section 188

2. Details of contracts or arrangements or transactions at Arms length basis.

SL. No. Particulars Details
1 Name (s) of the related party & nature of relationship Mr. Hardeep Singh Banga, Managing Director of Victora Auto Pvt. Ltd. and partner in Victora Automotive Inc.
2 Nature of contract/arrangement /transaction The services were for repair and maintenance of CNC machines
3 Duration of the contracts/ arrangements/transaction August 2018 to March 2019
4 Salient terms of the contracts or arrangements or transaction including the value, if any The Service Purchase Order for Rs. 17,70,000/- p.m. has been entered with Victora Auto Private Limited and Rs. 22,30,000/- p.m. has been entered with Victora Automotive Inc.
5 Date of approval by the Board NA
6 Amount paid as advances, if any -

Annexure-I

Secretarial Compliance Report of Precision Electronics Limited for the year ended 31 March, 2019

We, M/s. Munish K Sharma & Associates, Practising Company Secretaries have examined:

(a) all the documents and records made available to us and explanation provided by Precision Electronics Limited ("the listed entity"),

(b) the filings/ submissions made by the listed entity to the stock exchanges,

(c) website of the listed entity,

(d) any other document/ filing, as may be relevant, which has been relied upon to make this certification,

for the year ended 31 March, 2019 ("Review Period") in respect of compliance with the provisions of:

(a) the Securities and Exchange Board of India Act, 1992 ("SEBI Act") and the regulations, circulars, guidelines issued thereunder; and

(b) the Securities Contracts (Regulation) Act, 1956 ("SCRA"), rules made thereunder and the regulations, circulars, guidelines issued thereunder by the Securities and Exchange Board of India ("SEBI");

The specific regulations, whose provisions and the circulars/ guidelines issued thereunder, have been examined, include:-

(a) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

(b) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;

(c) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(d) Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018;

(e) Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

(f) Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(g) Securities and Exchange Board of India (Issue and Listing of Non-Convertible and Redeemable Preference Shares) Regulations, 2013;

(h) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(i) Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018, and circulars/ guidelines issued thereunder; and based on the above examination, We hereby report that, during the Review Period:

(a) The listed entity has complied with the provisions of the above regulations and circulars/ guidelines issued thereunder, except in respect of matters specified below:-

Sr. No. Compliance Requirement (Regulations/ circulars/ guidelines including specific clause) Deviations Observations/ Remarks of the Practicing Company Secretary
1. Regulation 34(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Low The Company has not submitted the Annual Report for the FY 2017-18 to the stock exchange within twenty one working days from the date of Annual General Meeting. However, the Company has submitted the same to the stock exchange on 15 January, 2019.
2. Regulation 31(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 High Shares held by Hans Jurgen Wagner and Knowledge Holdings & Investments Pte. Ltd. (Promoter and Promoter Group) are not in dematerialized form.

(b) The listed entity has maintained proper records under the provisions of the above Regulations and circulars/ guidelines issued thereunder insofar as it appears from our examination of those records.

(c) The following are the details of actions taken against the listed entity/ its promoters/ directors/ material subsidiaries either by SEBI or by Stock Exchanges (including under the Standard Operating Procedures issued by SEBI through various circulars) under the aforesaid Acts/ Regulations and circulars/ guidelines issued thereunder:

Sr. No Action taken by Details of violation Details of action taken E.g. fines, warning letter, debarment, etc. Observations/ remarks of the Practicing Company Secretary, if any.
Nil

(d) The listed entity has taken the following actions to comply with the observations made in previous reports:

Sr. No Observations of the Practicing Company secretarial Secretary in the previous reports Observations made in the compliance report for the year ended… (The years are to be mentioned) Actions taken by the listed entity, if any Comments of the Practicing Company Secretary on the actions taken by the listed entity
Not Applicable

 

For Munish K. Sharma & Associates
Company Secretaries
Vijay Kumar Sharma
Company Secretary
Place: Kaushambi, Ghaziabad M. No.: F9924
Date: 23 May, 2019 C.P. No. 12387