DIRECTORS' REPORT The Members, PCS TECHNOLOGY LIMITED Your Directors of the Company are pleased to present the 34th Annual Report with the statement of audited financial accounts for the financial year ended 31st March 2015. OPERATIONS In the year under review, the Company continued to witness the challenges in the price competition. During the year under review, your Company has achieved Net Sales of Rs. 10046 lakhs as against Rs. 10060 lakhs in the previous year. As planned in the interest of the Company, the Company has started focusing more on expanding IT & Facility Management Services which is now a major key driver over IT Hardware business operations, for improvement of margins & profitability. We are pleased that with the discontinuing of the manufacturing of computer hardware related activities, the overall profitability has improved. However, the current margins will remain under pressure due to rising trend in the manpower cost in the IT industry. Adequacy of Internal Financial Control : The Company has in place adequate internal control procedures commensurate with the size of the Company and the nature of its business. SCHEME OF AMALGAMTION AND ARRANGEMENT The Scheme of Amalgamation and Arrangement between PCS International Limited, Mauritius ('PIL Mauritius' or 'the Transferor Company') and PCS Technology Limited ('PTL' or 'the Company' or 'the Transferee Company') and their respective Shareholders under Sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956 and Section 52 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 1956 and the Companies Act, 2013, ("the Scheme") has been sanctioned by the Hon'ble Bombay High Court on 8th May, 2015. The Scheme was approved by the Board of Directors in its meeting held on 21st May, 2014 and the Company received 'No Objection' letter in support of the Scheme from BSE Ltd, Pune Stock Exchange Ltd. Subsequently, the Scheme was approved by the Equity Shareholders, Secured Creditors and Unsecured Creditors of the Company on 23rd January, 2015. The Scheme inter-alia provides for the merger of PIL Mauritius into the Company and also provides for financial restructuring of the Company with respect to its unproductive activities. Accordingly, it proposed to write off certain stressed assets against the Securities Premium Account and other available reserves. The Company has submitted an authenticated copy of the Court Order approving the Scheme by the Hon'ble Bombay High Court on 8th May. 2015 with the Regulatory Authority at Mauritius for the striking off the name of PIL Mauritius from their records. The letter confirming the approval of the Registrar of Companies, Mauritius for the removal of the name of "PCS International Limited" Mauritius (PIL) from their record on 3rd June, 2015 has been received by the Company. The Appointed Date for the Scheme is 1st April 2014. Since the name of PIL has been removed by the Regulatory Authority at Mauritius and the said Bombay High Court Order has been filed by the Company with the Registrar of Companies, Pune on 18th June, 2015 the effect of the Scheme will be given in the books of Accounts of the Company for the Financial Year 2015-16 with effect from the appointed date 1st April, 2014. EXTRACTS OF ANNUAL RETURN In accordance with Section 134 (3) (a) of the Companies Act, 2013 an extracts of the Annual Return in prescribed format is annexed and marked as Annexure 1 to the Board's Report. DIVIDEND In order to conserve the resources of the Company, your Directors express their inability to recommend any dividend for the financial year ended 31st March 2015. RESERVES Since the Company do not recommend any dividend, it is not required to transfer any amount to the General Reserve of the Company for the year under review. MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITIONS OF THE COMPANY No, material changes & Commitments have occurred between the end of Financial year of the Company to which the Financial statement relates and the date of this report which affects the financial position of the Company. ANNUAL PERFORMANCE EVALUATIONS In Compliance with the Companies Act, 2013 and clause 49 of the Listing Agreement, the performance evaluation of the Board was carried out during the year under review. The criteria for performance evaluation as laid down by the Nomination Committee, and are mentioned in Corporate Governance attached to the Directors' Report of the Company. DIRECTORS Cessation Mr. Narendra Kumar Patni, (Din. 00179131) Director of the Company passed away on June 03, 2014. We condole the untimely demise of Mr. N. K. Patni and took on record the invaluable contributions made by him during his tenure as the Director towards the progress of the Company. Mr. Apoorva Patni, resigns from the Board of Directors of the Company w.e.f 22nd July, 2015. The Company takes on record the invaluable contributions made by him during his tenure as the Director towards the progress of the Company. Retirement by Rotation As per Article 135 of the Articles of Association of the Company, Mr. G. K. Patni (Din- 00014163), Director of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment on the Board of your company. Appointment Mrs. Vandana Gupta has been appointed as a Woman Director and also as an Independent Director of the Company under provision of the Companies Act, 2013 with the effect from 16th March, 2015. Mr. Yash Bhardwaj has been appointed as an additional director and designated as Executive Director of the Company under provision of the Companies Act, 2013 with the effect from 22nd July, 2015. Declaration given by Independent Director The Company has received necessary declaration from each independent director under Section 149 (7) of the Companies Act, 2013, that he/she meets criteria of independence laid down in Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. None of the independent directors are due for re-appointment. Board and Audit Meetings During the year under review, five Board Meetings and five Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes including independence of a directors of the Company. The Remuneration Policy is stated in the Corporate Governance Report. COMMITTEES OF THE BOARD Currently the Board has four committees, the Audit Committee, Stakeholders' Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee (CSR Committee). The Composition of each of the committee is mentioned in the Annexure 2 of the Boards' Report. STATUTORY AUDITOR The Company's Auditor, Mr. S. C Bandi of Messrs S.C Bandi & Co. , Chartered Accountants, Mumbai who have been appointed at the Annual General Meeting of the Company held on 17th September, 2014 for the period of three Consecutive years. As required under Clause 49 of the Listing Agreement, the auditors has also confirmed that he hold a valid certificate issued by the Institute of Chartered Accountants of India. SECRETARIAL AUDITOR Mr. Bhavesh Desai of M/s. B. Desai & Associates, Practicing Company Secretary was appointed to conduct the secretarial audit of the Company for the financial year 2014-15 as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The Secretarial Audit report for FY 2014-15 forms part of the Annual report as Annexure 3 to the Board's Report. SIGNIFICANT AND MATERIAL ORDERS There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concerns status and company's operations in future. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to sub-section (3C) of Section 134 of the Companies Act, 2013, the Board of Directors of the Company hereby confirms that: 1. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; 2. Appropriate accounting policies have been selected and applied consistently and have 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 as at 31st March, 2015 and of the profit of the company for the said year; 3. Proper and sufficient care has been taken 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; 4. Annual Accounts have been prepared on a going concern basis. 5. Internal Financial controls are followed by the Company in adequate manner and are operating effectively, and. 6. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. CORPORATE SOCIAL RESPONSIBILITY (CSR) In view of the provisions relating to CSR contained in new Companies Act, 2013, the Board of Directors of your Company has set up a CSR Committee comprising four directors viz. Mr. G. K. Patni, Non-Executive Director, Mr. A. K. Patni, Non-Executive Director, Mr. G M Dave, a Non-Executive Independent Director, and Mr. H. C. Tandon, Managing Director and CEO of the Company. The Committee will oversee and monitor its CSR activities in line with the CSR policy of the Company in compliance with the provisions of the Companies Act, 2013 CRS has been integral part of the Company. The CSR policy on the Company is displayed on Company's website www.pcstech.com . CSR report along with the CSR activates are annexed herewith in the report and marked as Annexure 4. Initiations taken by Company for CSR: During the year under review the Company has contributed Rs. 10 lakhs to the Chief Minister Flood Relief Fund, Jammu & Kashmir in the month of September 2014. The Company has contributed in CSR activities as prescribed u/s 135 (5) of Companies Act, 2013. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS All the Details regarding Loans, Guarantees and Investments as required under provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. All the Related party transactions are presented to the Audit Committee and the Board approval is obtained for the transactions made by the Company. Investment by the Company During the year under review, the Company has subscribed to the Equity Share Capital of the Company's wholly owned subsidiary company PCS Infotech Limited, for cash at par for an aggregate investment amount of Rs. 45,00,000/- (Rupees Forty Five Lakhs only). RELATED PARTY TRANSACTIONS All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in compliance to the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. The Board has approved a policy for related party transactions which has been uploaded on the Company's website. CORPORATE GOVERANCE A report on Corporate Governance and Management Discussion Analysis is included as a part of the Annual Report along with a Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the amended Listing Agreement. Corporate Governance report is annexed herewith and marked as Annexure 5. DEPOSITS Your Company has neither invited nor accepted any deposits from the public so far. CODE OF CONDUCT The Board of Directors has approved a Code of Business Conduct which is applicable to the Members of the Board and all employees. The Code has been posted on the Company's website www.pcstech.com . The Code lays down the standard of conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. SUBSIDIARY COMPANY As required under Section 129 of the Companies Act, 2013 the Audited Balance sheet and Profit & Loss Account and the respective reports of the Board of Directors' and Auditors' for the financial year ended 31st March 2015 of PCS International Limited, Mauritius, PCS Technology USA., Inc., PCS Positioning Systems (India) Limited and PCS Infotech Limited are annexed. Pursuant to the first proviso to sub section (3) of Section 129 to be read with Rule 5 of the Companies (Accounts) Rules, 2014 of the Companies Act, 2013 the statement containing the salient features of the financial statement of each of the subsidiary company are also annexed and marked as Annexure 6. CONSOLIDATED FINANCIAL STATEMENT The consolidated Financial Statements have been prepared in accordance with the provisions of Section 129 of the Companies Act, 2013, applicable Accounting Standards and the provisions of the Listing Agreement with Stock Exchanges and forms part of this Annual 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 7 to the Board's Report. During the financial year, there were no employees drawing remuneration in excess of the monetary ceiling prescribed under Section 197 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO The Information required under the above heads in accordance with the provision of section 134(3) (m) of the Companies Act, 2013 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are given in Annexure '8' to this report. ACKNOWLEDGEMENTS Your Directors express their warm appreciation to all the employees at various units for their diligence and contribution made towards the growth of the Company. The Board of Directors place on record their appreciation for the un-stinted support by the Bankers and Financial Institutions and confidence given by the Customers, Suppliers and Shareholders at all levels towards the growth and development of the Company. On behalf of the Board of Directors G.K. Patni Chairman Mumbai, July 22, 2015 |