37 th annual report · mr. rahul goenka chairman mr. anant kanoi chairman ... scanned copy (pdf/jpg...

2015 - 2016

Annual Report th37

"we always know who we're working for”

MO

VI N

G

AH

EA

D

Annual Report 2015-16 1

CONTENTS

Board of Directors & Committees : 02

Notice of Annual General Meeting : 03

Report of Director’s : 06

Annexure to the Report of the Directors : 13

Report on Corporate Governance : 26

Report of the Auditors : 40

Balance Sheet Abstract : 46

Profit & Loss Account : 47

Cash Flow Statement : 48

Notes to the Accounts : 49

BOARD OF DIRECTORS & COMMITTEES

Board of Directors Audit Committee

Stakeholders Grievance Committee Nomination and Remuneration Committee

Lt. Gen. (Dr.) Rajesh Pant (Retd.) Chairman Mr. S.K. Kataria ChairmanMr. Ashok K Kanodia Managing Director Mr. Suresh Vyas MemberMr. Anant Kanoi Director Mr. Anant Kanoi MemberMr. Suresh Vyas Director Mr. Deepto Roy MemberMr. S.K. Kataria DirectorMr. Deepto Roy DirectorMr. Pradeep Kumar Kanodia DirectorMr. Rahul Goenka Director

Ms. Ranjna Gudoo Director

Mr. Rahul Goenka Chairman Mr. Anant Kanoi ChairmanMr. Suresh Vyas Member Mr. Suresh Vyas MemberMr. S.K. Kataria Member Mr. S.K. Kataria Member

Ms. Ranjna Gudoo Member Mr. Deepto Roy Member

COMPANY SECRETARY AUDITORS

Ms. Veenita Puri M/s Rajendra K. Goel & CompanyJ-288, Ground Floor,Saket, New Delhi - 110017

REGISTRAR & TRANSFER AGENT

Skyline Financial Services Pvt. Ltd.D-153/A First Floor,Okhla Industrial Area, Phase - INew Delhi - 110 020Contact No. - 011-64732681

BANKER OF THE COMPANY

Punjab National Bank, Noida Branch

LISTED ON

Bombay Stock Exchange

CORPORATE IDENTITY NUMBER (CIN)

L32104DL1979PLC009590

ISIN No.

INE143C01024

STOCK CODE

517258

PLANTS

At Noida

D-10, Sector-3, Gautam Budh Nagar,Noida-201301, (U.P.)

At Roorkee

Plot No. 9 & 10, KIE Industrial Estate,Village Mundiyanki (Manglore), Roorkee, Haridwar-249406, Uttrakhand (India)

REGISTERED OFFICE

D-1081, New Friends Colony,

New Delhi-110025

CORPORATE OFFICE

D-10, Sector-3, Gautam Budh Nagar,

Noida-201301, (U.P.)

Annual Report 2015-162

THNOTICE OF THE 37 ANNUAL GENERAL MEETING

thNOTICE is hereby given that the 37 Annual General Meeting of Precision Electronics Ltd. (the Company) will be held onThursday, September 15, 2016 at 03.00 p.m. at Bipin Chandra Pal Memorial Auditorium, A - 81, C.R Park, New Delhi totransact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Financial Statements for the year ended on March 31, 2016 and the Reports ofBoard of Directors and the Auditor’s thereon.

2. To re-appoint Ms. Ranjna Gudoo who retires by rotation and being eligible, offers herself for reappointment.

3. To ratify the appointment of M/s Rajendra K. Goel & Co., Chartered Accountants (F.R.N. 01457N) as StatutoryAuditors of the Company, who were appointed at the AGM held on September 27, 2014 for a period of three year

thupto the conclusion of 38 Annual General Meeting to be held in the year 2017.

SPECIAL BUSINESS:

4. NOT TO FILL UP VACANCY CREATED BY RETIREMENT OF MR. PRADEEP KUMAR KANODIA.

To consider and if thought fit, to pass with or without modification, the following Resolution as an OrdinaryResolution:

“RESOLVED THAT pursuant to Section 152 (7) of the Companies Act, 2013, vacancy caused on the Board of the Company, by retirement of Mr. Pradeep Kumar Kanodia (holding DIN: 00002561), a Director liable to retire byrotation, who retires by rotation and does not offer himself for re-appointment, be not filled up.”

By Order of the BoardFor Precision Electronics Limited

Sd/-Place: Noida Veenita PuriDate: August 8, 2016 Company Secretary

Notes

Precision Electronics Limited, being a listed Company and having more than 1000 shareholders, is compulsorily requiredto provide e-voting facility to members in terms of Section 108 of the Companies Act, 2013 read with rule 20 of TheCompanies (Management and Administration) Rules, 2014 and Regulation 44 of SEBI (Listing Obligations and Disclosure

thRequirements) Regulations, 2015, voting by show of hands will not be available to the members at the 37 AGM in view ofthe further provisions of Section 107 read with Section 114 of the Act.

1. The Explanatory statement pursuant to section 102 of the Companies act, 2013 which sets out details relating tospecial business to be transacted at the meeting is given below.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXYTO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND PROXY NEED NOT BE A MEMBER OFTHE COMPANY. PROXIES, IN ORDER TO BE EFFECTIVE, MUST BE RECEIVED AT THE REGISTEREDOFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE TIME OF THE MEETING.

3. A person can act as proxy on behalf of members not exceeding fifty (50) and holding in the aggregate not more tenpercent of the total share capital of the Company. A Proxy appointed by a member holding more than 10 percent ofthe total share capital of the Company carrying voting rights shall not act as proxy for any other member.

4. Corporate members are requested to send a duly certified copy of the Board Resolution authorizing theirrepresentative(s) to attend and vote at the annual general meeting.

5. Members/proxies should bring the attendance slips duly filled-in for attending the meeting and deliver the same atthe entrance of the meeting place. Members who hold shares in dematerialized form are requested to bring theirClient ID and DP ID number for easy identification of attendance at the meeting.

6. The Register of Members and the Share Transfer Books of the Company will remain closed from September 9, 2016to September 15, 2016 (both inclusive).

PRECISION ELECTRONICS LIMITED CIN: L32104DL1979PLC009590

Regd. Office: D-1081, New Friends Colony, New Delhi - 110025 Phone: 120 2551556/7, Fax: 120 2524337

Email: [email protected], Website: www.pel-india.com


7. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are therefore, requestedto submit the PAN to their Depository Participants with whom they are maintaining their demat accounts.Members holding shares in physical form can submit their PAN details to the Company.

8. Members seeking further information about the accounts are requested to write at least 7days before the date of themeeting so that it may be convenient to get the information ready at the meeting.

9. Members are requested to inform the Company’s Registrar and Share Transfer Agent i.e. Skyline Financial ServicesstPrivate Limited, D-153/A, 1 Floor, Okhla Industrial Area, Phase – I, New Delhi- 110020 about the changes, if any, in

their registered address along with Pin Code, quoting their Folio number and DP ID. All correspondence relating totransfer of shares may be sent directly to the aforesaid Registrar and Share Transfer Agent of the Company.

10. Members are requested to bring their copies of Annual Report to the meeting, as the same will not be supplied againat the meeting as a measure of environment protection.

11. Route map of the venue of the meeting is attached herewith.

12. Pursuant to Rule 18(3)(i) of the Companies (Management and Administration) Rules, 2014, Members arerequested to furnish or update their e-mail IDs with the Registrar and Share Transfer Agent for sending the softcopies of the Annual Report of the Company .

th13. 37 Annual Report for the year 2015-16 is also available on the website of the Company www.pel-india.com.

14. Voting through electronics means/Postal Ballot

a. In Compliance with provisions of section 108 of the Companies Act, 2013 read with Rule 20 of the Companies(Management and Administration) Rules, 2014 and Regulation 44 of SEBI (Listing Obligations andDisclosure Requirements) Regulations, 2015 , the Company is pleased to provide e-voting facility to themembers of the Company whose name appears on the Register of Members as on September 8, 2016 being thecut off date fixed for the purpose, to exercise their right to vote in respect of the resolutions to be passed at the

th37 Annual General Meeting.

b. Instructions for e-voting are as under-

I. Launch internet browser by typing the following URL: https://www.evoting.nsdl.com

II. Click on Shareholder – Login

III. Enter your User ID and existing password. The User-id is your Demat account number which is (DP-ID + CLENT – ID)

IV. Click login

V. Password change menu appears. Change the password/PIN with new password of your choice withminimum 8 digits/characters or combination thereof. Note new password. It is stronglyrecommended not to share your password with any other person and take utmost care to keep yourpassword confidential.

VI. Home Page of e-voting-Active Voting Cycles opens.

VII. Select E-voting Event Number (Even) of Precision Electronics Limited for casting vote in favour oragainst the Item(s) of business. (Kindly note that vote once caste cannot be modified. For an EVEN,you can log-in any number of times on e-voting platform of NSDL till you have voted on the resolutionor till the end date of voting period i.e. up to 05:00 PM on September 14, 2016, whichever is earlier).

VIII. Now you are ready for e-voting as ‘Caste Vote’ page opens.

IX. Cast your vote by selecting appropriate option and click on “Submit” and also “confirm” whenprompted.

X. Upon confirmation, the message “Vote cast successfully” will be displayed.

XI. Once you have voted on the resolution, you will not be allowed to modify your vote.

XII. Institutional Shareholders (i.e. other than Individuals, HUF, NRI etc.) are also required to sendscanned copy (PDF/JPG format ) of the relevant Board resolution/Authority letter etc. together withattested specimen signature of the duly authorised signatory(ies) who are authorized to vote, to the Scrutinizer through email [email protected] with a copy marked to [email protected].

XIII. In case of any queries, you may refer the Frequently Asked Question (FAQ) – Shareholders and e-voting manual on the website of e-voting agency.

c. The e-voting period shall commence on September 12, 2016 (09:00 AM) to September 14, 2016 (05:00 PM).During this period the members of the Company, holding shares either in physical form or in dematerializedform, as on September 8, 2016 (cut-off date) may cast their vote electronically. Thereafter, the portal shall bedisabled by the NSDL for voting.


d. Any person, who acquires shares of the Company and become member of the Company after dispatch of theNotice of AGM and holding shares as of the cut-off date i.e. September 8, 2016, may obtain the login ID andpassword by sending a request at [email protected] or contact Registrar and Transfer Agent (SkylineFinancial Services Private Limited). However, if you are already registered with NSDL for remote e-votingthen you can use your existing user ID and password for casting your vote. If you forgot your password, youmay generate new password by using “Forgot User Details/Password” option available onwww.evoting.nsdl.com.

e. A member may participate in the AGM even after exercising his right to vote through remote e-voting but shall not be allowed to vote again at the AGM.

f. A person, whose name is recorded in the register of members or in the register of beneficial ownersmaintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting at the AGM through ballot paper .

g. The Board of Directors has appointed M/s. Munish K Sharma & Associates, Company Secretaries, as theScrutiniser for conducting the e-voting process in a fair and transparent manner.

h. The Chairman shall, at the AGM, at the end of discussion on the resolutions on which voting is to be held, allow voting with the assistance of scrutinizer, by use of “Ballot Paper” for all those members who are presentat the AGM but have not casted their votes by availing the remote e-voting facility. Persons who have notcasted their votes shall be able to exercise their right at the meeting.

i. The Scrutinizer shall after the conclusion of voting at the AGM, will first count the votes casted at the meetingand thereafter unblock the votes casted through remote e-voting in the presence of at least two witnesses notin the employment of the Company and shall make, not later than two days of the conclusion of the AGM, aconsolidated scrutinizer’s report of the total votes casted in favour or against, if any to the Chairman or aperson authorized by him in writing, who shall countersign the same and declare the result of the votingforthwith.

j. The results declared alongwith the report of the Scrutinizer shall be placed on the Company’s websitewww.pel-india.com and on the website of the NSDL immediately after the declaration of result by theChairman or a person authorized by him in writing. The result shall also be intimated to the Bombay StockExchange within 48 hours of the conclusion of the AGM.

Pursuant to Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the brief profileof Director eligible for re-appointment vide item no. 2 is as follows:

Item No. 2:

Name of Director DIN Date of Birth Date of Number of SharesAppointment held in the Company

Ms. Ranjna Gudoo 06956595 19.10.1949 27.09.2014 Nil

Ms. Ranjna Gudoo is a graduate with BA, LLB. She has retired as DGM – Law of Power Grid Corporation of India Ltd(PGCIL) and has been an in-house lawyer for twenty seven years in the Power Sector with NTPC and PGCIL. She has actedas Borrower’s Counsel to Indian Financial Institutions, International Banks, and Multilateral agencies including WorldBank and ADB for financial closure of the projects. She has extensive experience in drafting of commercial contracts andhas handled litigation matters on behalf of PGCIL. She was appointed in the Company as Non-Executive Director and herknowledge on legal issues is well appreciated by the other members of the Board.

Explanatory Statement pursuant to section 102(1) of the Companies Act, 2013

Item No. 4:

Mr. Pradeep Kumar Kanodia (DIN 00002561) retires by rotation at this Annual General Meeting but has not offeredhimself for reappointment. Board recommends that, since Board of Company is fairly balanced and even after retirementof Mr. Pradeep Kumar Kanodia, the Board’s composition is in compliance with Companies Act, 2013 and SEBI (LODR)Regulations, 2015, resulting vacancy may not be filled up for the time being.

Mr. Pradeep Kumar Kanodia is holding 3104235 equity shares of the Company and is brother of Mr. Ashok KumarKanodia, Managing Director of the Company.

By Order of the BoardFor Precision Electronics Limited

Sd/-Place: Noida Veenita PuriDate: August 8, 2016 Company Secretary


DIRECTORS’ REPORT

To

The Members of

Precision Electronics Ltd.,

thYour Directors have pleasure in presenting the 37 Annual Report on the business and operations of the Company

along with the Audited Statements of Accounts for the Financial Year ended March 31, 2016.

1. FINANCIAL HIGHLIGHTS

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

(Rs. in million)

PARTICULARS CURRENT YEAR PREVIOUS YEAR(FY 2015-16) (FY 2014-15)

Revenue* 260.1 277.9

Profit before Depreciation, Interest, & Tax (2.4) 25.7

Depreciation 11.7 15.4

Finance Cost 10.5 8.2

Net profit before Tax (24.6) 2.1

Provision for Tax (5.1) (.4)

Net profit after tax (19.5) 2.5

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

DIVIDEND

In view of conservation of financial resources of the Company, your Directors do not recommend any dividend for thefinancial year under review.

TRANSFER TO RESERVE

Amount transferred to the general reserve is nil.

2. REVIEW OF OPERATION AND STATE OF COMPANY AFFAIR

Overall revenue of the company for the year ended March 31, 2016 was recorded at about Rs.260.1 million whichis 6.4% less as compared to previous financial year (2014-15) revenue of Rs.278 million. The Company incurred aloss of Rs. 19.50 million as against net profit after tax of Rs. 2.5 million in the previous year (2014-15).The revenuewas less due to delay in execution of contracts which resulted in cost overruns. The delay was due to site specificconditions that were beyond our control. In addition, expected business did not materialize as some RFPs werewithdrawn and in some the company’s bid was not the lowest. All this worsened the cash crunch scenario.

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

Telecom division revenue during the year ended March 31, 2016 is Rs. 125.28 million as against Rs. 136.51million in the previous year (2014-15). Manufacturing plants are located at Noida UP (in the NCR region) andRoorkee (Uttarakhand)

2.2 Infrastructure Division

Infrastructure division revenue during the year ended March 31, 2016 is Rs.132.13 million as against Rs.139.05million in the previous year (2014-15). The division undertakes turnkey assignments of civil, electrical andnetworking works and turnkey installation and commissioning of radars, sensors, data links and the commandand control room at defence airfields and harbors.


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

3. MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Defence Procurement Procedure 2016 has released an industry friendly document that provides impetus forindigenous design and manufacturing which enhances the role of MSMEs and introduces flexibility in decisionmaking to ensure that the defence procurement is fair, swift and the concept of “Make in India” is promoted.

India is following a Preferential Market Access (PMA) policy to promote local development and manufacture oftelecom equipment. This has opened huge market opportunities for PEL as it has products that qualify under thescheme norms.

OPPORTUNITIES, THREATS, RISK & CONCERNS

Opportunities

The defence and the civil telecom sector, both of them together present a huge business opportunity to MSMECompany like ours due to “Make in India” initiative of the Prime Minister and policies that have been aligned toachieve this objective. Our Company is poised to take full benefit from these policies. Programs that were put “onhold” wherein the Company had significant orders are now under execution.

Threats, Risk & Concerns

Main Business Risks and Concerns are due to the fact that your Company’s major portion of business is dependent onthe end customer which is none other than Government of India. The business is thus tender oriented, takes long timeto fructify and in this business the lowest bidder wins the tender. The tender condition mandate “no cost nocommitment” technical evaluation and therefore the Company has to bear the cost associated with technicalevaluation and acceptance of the equipment by the customer.

Since we are in Technology intensive sector, funds are required to keep pace with the technology developments and toretain highly trained manpower. Availability of liquidity for a unit like ours is a challenge.

PRODUCT WISE PERFORMANCE

The Company has a well-balanced product portfolio of in-house designed and engineered products that are qualifiedby both defence and the civil sector customers. In the Electronics & Telecommunication Division, key PEL products include:

I. Wire-line

a. Digital multiplexer with capabilities to provide turnkey voice and data communications for last milenetwork: In the year under review, the company executed orders for multiplexers with variety ofinterface cards, converters and modems.

b. Line modems (G.SHDSL)

c. Protocol Converters (Serial-to-Ethernet)

d. Media Converters (optical-to-copper)

II. Wireless

a. Unlicensed band (5.8GHz) IP radio: PEL is proposing this radio in several tenders of Telecom customersand hopes to achieve success.

b. High Capacity Radio Relay Systems: PEL is offering its in-house designed and engineered sub-systemsagainst this requirement of Indian Army.

III. Power Systems

a. Power Supplies for Military and Industrial applications: PEL’s dedicated team for power suppliesdevelops a range of “on-board” as well as stand-alone power supplies for conditioning, conversion,distribution and charging.

b. Power Distribution Systems for Healthcare: PEL designed power supply is being used by a world leadinghealthcare equipment manufacturer in their new product launch which is a grand success. It has become aproduction item at the Roorkee facility.


IV. Data Logger for Indian Railways: PEL successfully executed its first PO for supply and installation of DataLoggers for Ajmer Railway station this FY.

V. Voice Logger: PEL developed voice loggers are deployed in all the Air Traffic Control towers of the IAF andArmy aviation bases. In addition, security agencies are using an advanced variant of this product.

VI. Telescopic Masts: PEL designed and manufactured electromechanical and pneumatic masts are the preferred choice of the customers in both the defence as well as civil segments. The masts are being produced at the Noidafacility and additional volume orders are expected during the year.

In the Services segment, PEL’s revenue buckets include:

I. EPC contracts: PEL has undertaken Civil, Electrical and Networking responsibilities as a subcontractor to LargePrime Contractors in the FY for major programs such as Airfield Modernization and Harbour Security. Thecompany is actively competing in various similar opportunities which are in RFI/RFP stage presently.

II. Infrastructure Services: PEL is a regular supplier of highly precise concrete blocks that are used by Defenceagencies for testing explosive power of ammunitions.

III. Hi-Tech Installation & Commissioning: The Company is providing technical support on behalf of CDoT toensure trouble free commissioning of the core ATM based network switch and network termination units on allthe new build ships of the Indian Navy. PEL teams are stationed at several shipyards across the country.

IV. Maintenance Repair and Overhaul (MRO) Services: PEL has undertaken contracts in the FY for Israeli majors tosupport UAV (Unmanned Aerial Vehicle) ground equipment at all military bases across India. Further PEL hassupported the maintenance of Integrated Electronic Warfare systems and Precision Guided Munitions suppliedby Israeli companies to the Indian Military.

OUTLOOK

PEL has established competences in areas of design, manufacturing, turnkey solution provider and has a nationwidefootprint both in defence and the civil segments. It’s partnerships with global majors and Indian primes are expected tobear fruit and take the company forward. Company has invested and created additional manufacturing capacity at itsRoorkee plant to take care of volume production and the same is approved by the customers. In the year underconsideration (2015-16) both the product mix as well as customer base was widened, the effect of which will be felt inthe current financial year.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to financial statements. During the yearno reportable material weakness in the system was observed.

HUMAN RESOURCE DEVELOPMENT

The Company has been successful in building a performance oriented culture with high levels of engagement andempowerment in an environment of teamwork. The focus has been on creating reserves through cross functional andinterdisciplinary exposure at all levels to ensure redundancy and robustness in the organization. The morale of theteam is kept high by boosting employee morale at different levels, engaging them in different activities than their work,arranging different programs for the employees at all levels.

FINANCIAL FACILITIES

The Company continues to enjoy the support of its Banker Punjab National Bank (PNB), Noida Branch for both fundand 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 herebyconfirmed:


sta) that in the preparation of the accounts for the Financial Year ended 31 March, 2016, the applicable AccountingStandards 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 theCompany 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 inaccordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and forpreventing 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 internalfinancial 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 lawsand 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 andDisclosure Requirements) Regulations, 2015, a separate report on Corporate Governance along with thecertificate from M/s Munish K Sharma & Associates, Company Secretaries on its compliance forms a part the Annual Report.

6. CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

7. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

There were no contracts or arrangement with related parties referred to in Section 188 (1) of the Companies 2013during the financial year. However, Form AOC-2 is attached herewith as Annexure I to show the continuedrelated party transactions from previous years.

8. RISK MANAGEMENT

Your Company has formulated a Risk Assessment and Management plan which includes procedures to assessand curtail risk. A “Risk Management Committee” has been constituted which has been entrusted with theresponsibility 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, MrJagjit Singh Chopra and Ms Puneet Arora. In the opinion of the Board there is no risk which may threaten theexistence of the Company.

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Lt Gen (Dr.) Rajesh Pant PVSM, AVSM, VSM (Retd.) was appointed as the Non Executive Chairman of theCompany w.e.f July 27, 2015. It is indeed a matter of pride to have such a decorated and distinguished officer asthe leader of PEL team. His induction has enhanced the image of the company in the eyes of our customers,highlighting our credibility, capability and capacity to meet their requirements, besides providing an impetus tothe ‘Offset’ business which is being earnestly targeted. Precision will benefit immensely from his wisdom,guidance and experience.

The Board is well balanced with professionals, legal experts and persons with business background who areconnected 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 as appointed by the Board ofDirectors are; Mr Ashok K Kanodia (Managing Director), Mr Jagjit Singh Chopra (Chief Financial Officer) andMs Veenita Puri (Company Secretary and Compliance Officer). Ms. Veenita Puri has been appointed as theCompany Secretary and Compliance Officer of the Company w.e.f January 16, 2016 and Mr. Gurvinder SinghMonga resigned from the position of Company Secretary w.e.f December 22, 2015.


Mr. Pradeep Kumar Kanodia and Ms. Ranjna Gudoo, Directors, will retire by rotation at the ensuing AnnualGeneral Meeting of the Company. Ms. Ranjna Gudoo, Director has offered herself for reappointment. Mr.Pradeep Kumar Kanodia has neither offered himself for reappointment nor any communication is receivedfrom him in any form showing his willingness to be re-appointed in the ensuing Annual General Meeting of theCompany; Board recommends not filling the resulting vacancy for the time being.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board confirming that they continue to fulfillall the requirements to qualify for their appointment as Independent Director under the provisions of theCompanies Act, 2013 and SEBI (LODR) Regulations, 2015. No independent director is due for re-appointmentduring the year.

BOARD EVALUATION

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

A meeting of Independent Director was held on February 5, 2016 without the attendance of other directors(Non-Independent) to review the performance of Non-Independent Directors, the Board as a Whole, theChairman of the Company and to assess the flow of information between Company Management and theBoard.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

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

10. AUDITORS AND AUDITOR’S REPORT

STATUTORY AUDITOR

At the Annual General Meeting held on September 27, 2014, M/s Rajendra K. Goel & Co., CharteredthAccountants, were appointed as statutory auditors of the Company to hold office till the conclusion of the 38

Annual General Meeting. 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 General Meeting. Accordingly, theappointment of M/s Rajendra K. Goel & Co., Chartered Accountants, as statutory auditors of the Company, isplaced for ratification by the shareholders.

The notes on financial statements referred to in the Auditor’s report are self-explanatory and do not call for anyfurther 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 SecretarialAudit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31, 2016 isannexed herewith marked as Annexure II to this Report. The observations contained in the Secretarial AuditReport are self explanatory.

11. DISCLOSURES

VIGIL MECHANISM

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

AUDIT COMMITTEE

The Audit Committee comprises of three Independent Directors namely Mr. S. K. Kataria (Chairman), Mr.Anant Kanoi, Mr. Suresh Vyas and one Non Independent Director, Mr. Deepto Roy. All the recommendationsmade by the Audit Committee are accepted by the Board. Four Audit committee meetings were held during thefinancial year dated May 28, 2015, August 14, 2015, October 31, 2015 and February 5, 2016.


NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee consists of following members and during the Financial Year 2015-16, two meetings of the committee were convened and one resolution dated December 29, 2015 was passedby circulation:

S. No. Name of Directors Category Status Meeting Attended

1. Mr. Anant Kanoi NEID Committee Chairman 1

2. Mr. Sharvan Kumar Kataria NEID Member 2

3. Mr. Suresh Vyas NEID Member 2

4. Mr. Deepto Roy NED Member 2

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

MEETINGS OF THE BOARD

The Board of Directors met six times on May 28, 2015, July 27, 2015, August 14, 2015, October 31, 2015, January16, 2016 and February 5, 2016 during the financial year 2015-16. For further details, please refer report onCorporate 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.

EXTRACT OF THE ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act, 2013 and rule12(1) of the Companies (Managementand Administration) Rules, 2014, an extract of annual return in MGT 9 forms part of this Annual Report asAnnexure III.

PARTICULARS OF CONSERVATION OF ENERGY, ABSORPTION OF TECHNOLOGY AND FOREIGNEXCHANGE 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, areprovided 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 Section197(12) of the Companies Act 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial 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 ofremuneration 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. Thelist of top ten employees of the Company in terms of their remuneration is as follows:

Mr. Ajay Goel (54), General Manager, 17.12.2005, 23,10,000/- B.E (E & C) (26), Punjab Wireless system Ltd., Mr.Amit Mittal (46), Deputy General Manager, 14.02.2006, 15,44,786/-, B.E (E & C) (22), Punjab Wireless systemLtd., Mr. Ashok K Kanodia (65), Managing Director, 01.05.1979, 22.3% equity shares, 19,68,240/-, B.E. Electrical(37). Mr. Bhaskar Biswas (54), Deputy General Manager, 28.07.2011, 18,18,960/-, B.E (E & C) (25), IndianAirforce. Mr. Deepak Jagga (44), Vice President, 01.04.2002, 23,91,749/-, B.E (Electronics) (26), Mr. Jagjit SinghChopra (47), Chief Financial Officer, 25.04.2014, 18,00,000/-, Chartered Accountant (18), Blessings advertisingPvt. Ltd., Mr. Nikhil Kanodia (39), President & Chief Technical Officer, 29.10.2002, 0.59% equity shares,32,68,776/-, M.S. Electrical & Computer Engineering (18), Fujitsu Network Communications, Son of Mr. AshokK Kanodia, Managing Director, Mr. Sandeep Chawla (47), Deputy General Manager, 20.04.2009, 24,42,000/-,B.E (E & C) (22), Wipro Technology, Mr. Sanjay Chandra (54), Senior Vice President, 10.06.2009, 33,88,004/-,M.Sc (Electronics) (29), Indian Army, Mr. Vinay Kumar (45), General Manager, 24.01.2011, 20,99,989/-, B. Tech(Civil) (20), Raus Infra Limited.

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 noamount of principal or interest was outstanding as of the Balance Sheet date.

SIGNIFICANT & MATERIAL ORDERS:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the goingconcern status and Company’s operations in future.

Mr. Pradeep Kumar Kanodia along with his son and family HUF has filed a civil suit CS(COMM) 104/2016seeking recovery or damages from Mr. Ashok Kanodia and Ors in the Delhi High Court. In this suit, theCompany has been made a party. The first hearing was held on February 12, 2016 the Hon’ble Judge passed anex-parte order that restricts the right to transfer the shares of the Company by various Defendants and subjectedthe Company’s land situated at D-10 & 11, Sector-3 to lis pendence. The reliefs sought in the Suit include specificperformance of a private arrangement executed between Mr. Pradeep Kumar Kanodia and Mr. Ashok Kanodia;to which the Company is not a party, nor can the Company be bound by the same. The said Suit is pendingadjudication before the Hon’ble Delhi High Court.

Mr. Pradeep Kumar Kanodia, along with his son and family HUF, had previously filed a Company petitionbefore the Hon’ble Company Law Board under Sections 397 and 398 of the Companies Act, 1956, being PradeepKanodia & Others v. Precision Electronics Ltd. & Others, C.P. No. 162/ND of 2013. The CLB has been replacedby the NCLT as per Notification of the Ministry of Corporate Affairs dated 01.06.2016 bearing F. No. A-45011/14/2016-Ad. IV. In the Petition, the Petitioners have leveled allegations of oppression andmismanagement against the Company and its Board of Directors. The Petitioners had previously also filed asimilar petition in 2012, being C.P.No.123/ND/2012 raising similar allegations. That Petition was dismissed aswithdrawn by Order of the Hon’ble CLB on 14.11.2012. Certain appeals/ applications in this respect are pendingbefore the Hon'ble Delhi High Court.

The allegations raised by Mr. Pradeep Kumar Kanodia in the Company Petition as also the Civil Suit are totallyunfounded and misplaced; the Company has sought legal advice on the issues raised and is vigorouslydefending the same. The Board of Directors have empowered independent Directors Mr. Suresh Vyas and Mr.S.K. Kataria to take decisions on all legal actions that are necessary to protect the best interest of the Companyand its shareholders.

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 sexualharassment. Committee meetings are held at regular intervals and employees are sensitized on the issue onregular interval. No case was reported and/or filed during the year under the aforesaid Act.

12. 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 thefinancial year 2016-17 to BSE.

13. ENVIRONMENTAL PROTECTION, HEALTH AND SAFETY

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

The Company continues to maintain excellent track record on safety. The site had no accidents during the year2015-16. PEL also has a Workman Safety Committee under section 41G of Factories Act 1948.This Committeemeets at regular intervals to take measures for worker’s protection in order to make PEL a safe place to work.

14. 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 themeaning of applicable laws & regulations. Actual results may differ from such expectations, projections etc.whether express or implied.


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

16. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES / JOINTVENTURES / ASSOCIATE COMPANIES DURING THE YEAR

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

17. CAPITAL STRUCTURE:

The paid up share capital of the Company is Rs. 13,84,87,620/- (Rupees Thirteen Crore Eighty Four LakhsEighty Seven Thousand Six Hundred and Twenty Only) comprising of 1,38,48,512 fully paid up equity shares ofRs. 10/- each amounting to Rs. 13,84,85,120/- and Rs. 2500/- on account of forfeited shares. The Company hasneither made any issue/allotment nor made any buy back of securities during the Financial Year 2015-16.

18. ACKNOWLEDGMENTS

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

FOR AND ON BEHALF OF THE BOARD

Place: Noida

Date: August 08, 2016 Chairperson

Annexure-I

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 contracts/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.

Details of contracts or arrangements or transactions at Arm’s length basis.

SL. No. Particulars Details

1 Name (s) of the related party & Mr. Nikhil Kanodia, relative of Mr. Ashok K Kanodia, Managingnature of relationship Director.

2 Natureofcontract/arrangement/ Salary paid to Mr. Nikhil Kanodia, President of the Company,transaction pursuant to order dated October 5, 2005 passed by Department of

Company Affairs, Ministry of Corporate affairs, Government ofIndia in the scale of Rs. 1,25,000-1,50,000-2,00,000-2,50,000 permonth

3 Duration of the contracts/ That any other increase in remuneration except as in point 2 abovearrangements/transaction will be subject to the approval of the Central Government

4 Salient terms of the contracts or Same as abovearrangements or transactionincluding the value, if any

5 Date of approval by the Board Board resolution dated May 28, 2005 and Special Resolution passedin the Annual General Meeting held on August 8, 2005

6 Amount paid as advances, if any None


ANNEXURE-II

Form No. MR-3

SECRETARIAL AUDIT REPORT

STFOR THE FINANCIAL YEAR ENDED 31 MARCH, 2016

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies

(Appointment and Remuneration Personnel) Rules, 2014]

To,

The Members,

PRECISION ELECTRONICS LIMITED

(CIN: L32104DL1979PLC009590)


New Delhi-110065

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to

good corporate practices by PRECISION ELECTRONICS LIMITED (hereinafter called “the Company”). Secretarial

Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory

compliances and expressing my opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records

maintained by the Company and also the information provided by the Company, its officers, agents and authorized

representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has,stduring the audit period covering the financial year ended on 31 March, 2016 complied with the statutory provisions

listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the

extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by thestCompany for the financial year ended on 31 March, 2016 according to the provisions of:

(i) The Companies Act, 2013 (‘the Act’) and the rules made thereunder;

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

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

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign

Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

(v) The following Regulations and Guidelines, to the extent applicable, prescribed under the Securities and

Exchange Board of India Act, 1992 (‘SEBI Act’):-

a) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)

Regulations, 2015;

b) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,

2011;

c) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

d) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,

2009;

e) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,

1993 regarding the Companies Act and dealing with client;

(vi) Apprenticeship Act, 1961


(vii) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

(viii) Employee State Insurance Act, 1948

(ix) The Equal Remuneration Act, 1976

(x) The Payment of Gratuity Act, 1972

(xi) The Minimum Wages Act, 1948

(xii) The Payment of Wages Act, 1936

(xiii) Industrial Employment (Standing Orders) Act, 1946

(xiv) Factories Act, 1948

(xv) Environmental Laws

(xvi) Service Tax Act, 1994

(xvii) Income Tax Act, 1961

(xviii) The Maternity Benefit Act, 1961

(xix) Excise Act, 1944

(xx) Customs Act, 1962

(xxi) Central Sales Tax & State VAT

(xxii) The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

(xxiii) The Contract Labour (Regulation and Abolition) Act, 1970

(xxiv)The Payment of Bonus Act, 1965

(xxv) The Official Secrets Act, 1923

(xxvi)The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959

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

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreements entered into by the Company with Bombay Stock Exchange.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations,thGuidelines, Standards, etc. mentioned above. Further, the Company had borrowed loan amounting to Rs. 22 Lakhs dated 30

thSeptember 2015 for purchase of vehicles. The Board in the meeting held on 16 January, 2016 has authorised Managing Director to

borrow up to Rs. 20 Crore. The Company has duly created charge on the vehicles within prescribed time.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive

Directors and Independent Directors. The changes in the Composition of the Board of Directors that took place during

the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were

sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications

on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the

minutes.

We further report that there are adequate systems and processes in the company commensurate with the size and

operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.


We further report that during the audit period the company has no specific events / actions having a major bearing on

the company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc. referred to

above.

For Munish K. Sharma & Associates

Company Secretaries

Sd/-Munish Kumar Sharma

Company Secretary

M. No.: F6031thDate: 6 August, 2016 C.P. No. 6460

Place: Kaushambi, GZB, UP.

Note: This report is to be read with our letter of even date which is annexed as ‘ANNEXURE A’ and forms an integral part of this

report.

‘Annexure A’

To,

The Members,

PRECISION ELECTRONICS LIMITED

(CIN: L32104DL1979PLC009590)


New Delhi-110065

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility isto express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about thecorrectness of the contents of the Secretarial records. The verification was done on test basis to ensure that correctfacts are reflected in Secretarial records. We believe that the processes and practices, we followed provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of theCompany.

4. Where ever required, we have obtained the Management representation about the compliance of laws, rules andregulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is theresponsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or

effectiveness with which the management has conducted the affairs of the Company.

For Munish K. Sharma & Associates

Company Secretaries

Munish Kumar Sharma

Company Secretary

M. No.: F6031thDate: 6 August, 2016 C.P. No. 6460


Sd/-


Annexure-III

FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN

As on financial year ended on 31.03.2016

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.

I. REGISTRATION & OTHER DETAILS:

1 CIN L32104DL1979PLC009590

2 Registration Date 01.05.1979

3 Name of the Company Precision Electronics Limited

4 Category/Sub-category of the Company Company Limited by Shares/Indian Non-Government Company

5 Address of the Registered office & contact D-1081, New Friends Colony, New Delhi – 110025

details Tel: 120 2551556/7, 120 2555176/7, Fax No. 120 252 4337

6 Whether listed company Yes

7 Name, Address & contact details of the Skyline Financial Services Private LimitedRegistrar & Transfer Agent, if any. D-153A, 1st Floor, Okhla Industrial Area, Phase –I, New Delhi-110 020

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

(All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

Sr. No. Name and Description of main products / services NIC Code of % to total turnoverthe Product / Service of the Company

1 Communication Equipments 2630 39.12%

2 Services 29278 & 32208 10.20%

3 Infra Services (works contracts) 45202 & 45203 50.68%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SN Name and address of the Company CIN/GLN Holding/ Subsidiary/ % of shares held ApplicableAssociate Section

1

2 N.A.

3

IV. SHARE HOLDING PATTERN

(Equity share capital breakup as percentage of total equity)

(i) Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year

[As on 01-04-2015] [As on 31-03-2016] % Change during the

Demat Physical Total % of Total Demat Physical Total % of Total yearShares Shares

A. Promoters

(1) Indian

a) Individual/ HUF 6,801,047 29,017 6,830,064 49.32% 6,801,047 29,017 6,830,064 49.32% 0.00%

b) Central Govt - - - 0.00% - - - 0.00% 0.00%

c) State Govt(s) - - - 0.00% - - - 0.00% 0.00%

d) Bodies Corp. 133,896 - 133,896 0.97% 133,896 - 133,896 0.97% 0.00%

e) Banks / FI - - - 0.00% - - - 0.00% 0.00%

f) Any other - - - 0.00% - - - 0.00% 0.00%

Sub Total (A) (1) 6,934,943 29,017 6,963,960 50.29% 6,934,943 29,017 6,963,960 50.29% 0.00%

No. of Shares held at the end of the year


(2) Foreign

a) NRI Individuals - - - 0.00% - - - 0.00% 0.00%

b) Other Individuals - 189,730 189,730 1.37% - 189,730 189,730 1.37% 0.00%

c) Bodies Corp. - 3,179,905 3,179,905 22.96% - 3,179,905 3,179,905 22.96% 0.00%

d) Banks/ FI 0.00% 0.00% 0.00%

e) Any other - - - 0.00% - - - 0.00% 0.00%

Sub Total (A) (2) - 3,369,635 3,369,635 24.33% - 3,369,635 3,369,635 24.33% 0.00%

TOTALSHAREHOLDING

OF PROMOTER

(A)=(A)(1)+(A)(2) 6,934,943 3,398,652 10,333,595 74.62% 6,934,943 3,398,652 10,333,595 74.62% 0.00%

B. Public Shareholding

1. Institutions

a) Mutual Funds 7,840 860 8,700 0.06% 7,840 860 8,700 0.06% 0.00%

b) Banks / FI 100 2,950 3,050 0.02% 100 2,950 3,050 0.02% 0.00%

c) Central Govt - - - 0.00% - - - 0.00% 0.00%

d) State Govt(s) - - - 0.00% - - - 0.00% 0.00%

e) Venture Capital Funds - - - 0.00% - - - 0.00% 0.00%

f) Insurance Companies - - - 0.00% - - - 0.00% 0.00%

g) FIIs - - - 0.00% - - - 0.00% 0.00%

h) ForeignVentureCapitalFunds - - - 0.00% - - - 0.00% 0.00%

i) Others (specify) - - - 0.00% - - - 0.00% 0.00%

Sub-total (B)(1):- 7,940 3,810 11,750 0.08% 7,940 3,810 11,750 0.08% 0.00%

2. Non-Institutions

a) Bodies Corp.

i) Indian 132,815 7,745 140,560 1.01% 332,183 7,730 339,913 2.45% 1.44%

ii) Overseas - - - 0.00% 0 0 0 0.00% 0.00%

b) Individuals

i) Individual shareholders holding nominal share capital upto Rs. 1 lakh 543,508 287,731 831,239 6.00% 599,029 281,352 880,381 6.36% 0.35%

ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh 1,143,571 1,099,730 2,243,301 16.20% 1,009,872 1,099,730 2,109,602 15.23% -0.97%

c) Others (specify) 0.00% 0.00% 0.00%

Non Resident Indians 913 382 1,295 0.01% 3568 382 3950 0.03% 0.02%

Overseas Corporate Bodies - - - 0.00% 0 0 0 0.00% 0.00%

Foreign Nationals - - - 0.00% - - 0 0.00% 0.00%

HUF 286,724 _ 286,724 2.07% 169,221 - 169,221 1.22% -0.85%

Clearing Members 48 _ 48 0.00% 100 - 100 0.00% 0.00%

Trusts - - - 0.00% _ _ - 0.00% 0.00%

Foreign Bodies - D R - - - 0.00% _ _ - 0.00% 0.00%

Sub-total (B)(2):- 2,107,579 1,395,588 3,503,167 25.30% 2,113,973 1,389,194 3,503,167 25.30% 0.00%

Total Public (B) 2,115,519 1,399,398 3,514,917 25.38% 2,121,913 1,393,004 3,514,917 25.38% 0.00%

C. Shares held by Custodian

for GDRs & ADRs - - - 0.00% - - - 0.00% 0.00%

Grand Total (A+B+C) 9,050,462 4,798,050 13,848,512 100.00% 9,056,856 4,791,656 13,848,512 100.00% 0.00%



(ii) Shareholding of Promoter

SN Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year

No. of % of total % of Shares No. of % of total % of Shares % changeShares Shares of Pledged/ Shares Shares of Pledged/ in

the encumbered the encumbered shareholdingcompany to total company to total during

the year

1 Knowledge Holdings &

Investments Pte. Ltd. 3,179,905 22.96% _ 3,179,905 22.96% _ 0.00%

2 Hans-Jurgen Wagner

Prop. Wagner 189,730 1.37% _ 189,730 1.37% _ 0.00%

3 Ashok Kumar Kanodia 3,087,734 22.30% _ 3,087,734 22.30% _ 0.00%

4 Pradeep Kanodia 3,104,235 22.42% _ 3,104,235 22.42% _ 0.00%

5 Ashok Kanodia 80,042 0.58% _ 80,042 0.58% _ 0.00%

6 Pradeep Kanodia 87,682 0.63% _ 87,682 0.63% _ 0.00%

7 Kunal Kanodia 79,079 0.57% _ 79,079 0.57% _ 0.00%

8 Alka Kanodia 78,547 0.57% _ 78,547 0.57% _ 0.00%

9 Manjari Kanoi 29,017 0.21% _ 29,017 0.21% _ 0.00%

10 Nikhil Kanodia 81,519 0.59% _ 81,519 0.59% _ 0.00%

11 Veena Kanodia 87,527 0.63% _ 87,527 0.63% _ 0.00%

12 Gauri Kanodia 20,085 0.15% _ 20,085 0.15% _ 0.00%

13 Vidur Kanodia 94,597 0.68% _ 94,597 0.68% _ 0.00%

14 SNK Farms Pvt. Ltd. 43,880 0.32% _ 43,880 0.32% _ 0.00%

15 Advance Plantations Pvt. Ltd. 5,067 0.04% _ 5,067 0.04% _ 0.00%

16 Manjari Farms Pvt. Ltd. 44,607 0.32% _ 44,607 0.32% _ 0.00%

17 V M Farms Pvt. Ltd. 15,125 0.11% _ 15,125 0.11% _ 0.00%

18 SNK Electronics (P) Ltd. 6,467 0.05% _ 6,467 0.05% _ 0.00%

19 Linkers Advertising &

Marketing Pvt. Ltd. 18,750 0.14% _ 18,750 0.14% _ 0.00%

(iii) Change in Promoters’ Shareholding (please specify, if there is no change) No Change

SN Particulars Date Reason Shareholding at the Cumulative Shareholding beginning of the year during the year

No. of shares % of total No. of shares % ofshares total shares

At the beginning of the year 1/4/2015 10,333,595 74.62% 10,333,595 74.62%

Changes during the year 0.00% 0.00%

At the end of the year 31/03/2016 10,333,595 74.62% 10,333,595 74.62%

(iv) Shareholding Pattern of top ten Shareholders

(Other than Directors, Promoters and Holders of GDRs and ADRs)

SN For each of the Top Date Reason Shareholding at the Cumulative Shareholding 10 shareholders beginning of the year during the year

No. of shares % of total No. of shares % ofshares total shares

1 Gaurav Saraf

At the beginning of the year 1/4/2015 275,000 1.99% 275,000 1.99%


At the end of the year 31/03/2016 275,000 1.99% 275,000 1.99%

2 Vanita Saraf




3 Sushma Saraf




4 Vaibhav Saraf




5 Lalitesh Katragadda

At the beginning of the year 1/4/2015 - 0.00% - 0.00%

increase 27/11/2015 Transfer 229,900 1.66% 229,900 1.66%


6 Pari Vishal Seth


Decrease 25/12/2015 Transfer (130,000) -0.94% - 0.00%

Increase 31/12/2015 Transfer 130,000 0.94% 130,000 0.94%


7 Gunrekha Banka


Decrease 20/11/2015 Transfer (20,000) -0.14% 125,000 0.90%


8 Chitra Ramesh Seth




9 Manoj Kumar Banka





10 Rajasthan Global Securities Pvt. Ltd.

At the beginning of the year 1/4/2015 - 0.00% 0.00%


increase 30/10/2015 Transfer 914 0.01% 50,000 0.36%



decrease 26/02/2016 Transfer (2,081) -0.02% 109,293 0.79%

decrease 18/03/2016 Transfer (15,486) -0.11% 93,807 0.68%


:



(v) Shareholding of Directors and Key Managerial Personnel:

SN Shareholding of eachDirectors and each Key beginning of the year during the yearManagerial Personnel

No. of shares % of total No. of shares % of totalshares shares

1 Lt. Gen. (Dr.) Rajesh Pant* (Retd.)



At the end of the year 31/03/2016 - 0.00% - 0.00%

2 Mr. Ashok Kanodia




3 Mr. Pradeep Kanodia




4 Mr. Suresh Vyas




5 Mr. S. K. Kataria




6 Mrs. Ranjna Gudoo




7 Mr. Deepto Roy


Changes during the year - 0.00% 0.00%

At the end of the year 1/03/2016 - 0.00% 0.00%

8 Mr. Anant Kanoi


Changes during the year - 0.00% - 0.00%


9 Mr. Rahul Goenka




10 Mr. Jagjit Singh Chopra




11 Ms. Veenita Puri*




*Lt. Gen. (Dr.) Rajesh Pant (Retd.) Joined the Company on 27.07.2015 and Ms. Veenita Puri on 16.01.2016

Date Reason Shareholding at the Cumulative Shareholding

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment.

(Amt. Rs./Lacs)

Particulars Secured Loans Unsecured Deposits Totalexcluding deposits Loans Indebtedness

Indebtedness at the beginning of the

financial year

i) Principal Amount 46,156,944.00 22,375,570.00 - 68,532,514.00

ii) Interest due but not paid - 3,294,076.00 - 3,294,076.00

iii) Interest accrued but not due - - - -

Total (i+ii+iii) 46,156,944.00 25,669,646.00 - 71,826,590.00

Change in Indebtedness during the financial year

* Addition 4,171,672.00 11,628,832.00 - 15,800,504.00

* Reduction 5,720,113.00 1,936,685.00 - 7,656,798.00

Net Change (1,548,441.00) 9,692,147.00 - 8,143,706.00

Indebtedness at the end of the financial year

i) Principal Amount 44,608,503.00 29,438,885.00 - 74,047,388.00

ii) Interest due but not paid - 5,922,908.00 - 5,922,908.00

iii) Interest accrued but not due - - - -

Total (i+ii+iii) 44,608,503.00 35,361,793.00 - 79,970,296.00

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

SN. Particulars of Remuneration Name of MD/WTD/ Manager Total Amount

Name Mr. Ashok K Kanodia Mr. Pradeep K Kanodia (Rs/Lac)

Designation Managing Director Whole Time Director

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 1,495,110.00 251,733.00 1,746,843.00

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 159,600.00 - 159,600.00

(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961

2 Stock Option

3 Sweat Equity

4 Commission (1% of Profit)

- as % of profit

- others, specify

5 Others, please specify

Total (A) 1,654,710.00 251,733.00 1,906,443.00

Ceiling as per the Act 4,200,000 4,200,000

* Mr. Pradeep K Kanodia cesaed to be the Whole Time Director of the Company w.e.f. June 4, 2015



B. Remuneration to other Directors

SN. Particulars of Remuneration Name of Directors Total Amount

Dr. Rajesh Mr. S.K. Mr. Suresh Mr. Anant Ms. Ranjna Mr. Deepto Mr. Rahul Mr. Pradeep (Rs/Lac)Pant Kataria Vyas Kanoi Gudoo Roy Goenka K Kanodia

1 Independent Directors

Fee for attending board committee meetings - 235,000 225,000 80,000 - - - - 540,000

Commission

Others, please specify

Total (1) - 235,000 225,000 80,000 - - - - 540,000

2 Other Non-Executive Directors

Fee for attending board committee meetings 40,000 - - - 180,000 77,500 137,500 - 435,000

Commission

Others, please specify

Total (2) 40,000 - - - 180,000 77,500 137,500 - 435,000

Total (B)=(1+2) 40,000 235,000 225,000 80,000 180,000 77,500 137,500 - 975,000

TotalManagerialRemuneration* - - - - - - - - -

Overall Ceiling as per the Act - - - - - - - - -

Total Remuneration to Managing Director, Whole Time Directors and other Directors(being the total of A & B).

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

SN. Particulars of Remuneration Name of Key Managerial Personnel Total Amount

Name Ashok K Jagjit Singh Veenita Puri (Rs/Lac)Kanodia Chopra

Designation MD/CEO CFO CS*

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 1,495,110 1,625,432 556,242 3,676,784

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 159,600 23,400 - 183,000

(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 - - - -

2 Stock Option -

3 Sweat Equity -

4 Commission

- as % of profit -

- others, specify -

5 Others, please specify -

Total 1,654,710 1,648,832 556,242 3,859,784

* Mr. Gurvinder Singh Monga resigned as company Secretary of the Company w.e.f 22.12.2015 and Ms. Veenita Puri joined the Company as CompanySecretary on 16.01.2016.

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of theCompanies Act Description Punishment/ NCLT/ COURT] if any (give

Compounding Details)fees imposed

A. COMPANY

Penalty

Punishment NIL

Compounding

B. DIRECTORS

Penalty

Punishment NIL

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

Punishment NIL

Compounding

Brief Details of Penalty / Authority [RD / Appeal made,

ANNEXURE-IV

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE:

Information as required under the Companies Act, 2013 is given hereunder:

(A) CONSERVATION OF ENERGY

1) The Steps taken or impact on conservation of energy :

The Company continues to follow a regular schedule of preventive maintenance and servicing of all itsenergy intensive machine and equipment to ensure their optimum operation. Conventional tube lights arebeing replaced by highly efficient LED lights in a phased manner.

2) The Steps taken by the company for utilizing alternate sources of energy:

Company is studying the roof top model of solar energy generation at its facilities.

3) The Capital investment on energy conservation equipments:

Energy conservation measures undertaken during the year include maintaining the power factor towardsunity to ensure better power quality to the sensitive equipment installed.

(B) TECHNOLOGY ABSORPTION

1) Efforts, in brief

Our design and development efforts are geared towards increasing the local content in all our products.

TSEC evaluation for an advanced ISM band radio is being undertaken. Design validation for lattice mastsbeing developed for the telecom sector is also under process as per TSEC standards.

2) Benefits

i. Our product offering to telecom service providers both in Public as well as private sector wouldincrease.

ii. Increasing the local content will result in decrease in cost and a more responsive supply chainsupport.

iii. With the implementation of the Preferential Market Access policy of the Department ofTelecommunication, new avenues are opening up in the telecom sector. Having TSEC qualifiedproducts will enhance our offering to the large telecom companies bidding for these newopportunities.

3) Information regarding technology imported during last 3 years:

No new technology has been imported during the last 3 years.

4) Expenditure on R&D:

(a) Capital Rs. NIL

(b) Recurring Rs. 172.09L

(c) Total Rs. 172.09L

Total R&D as a Percentage of total turnover: 6.62%

(D) FOREIGN EXCHANGE EARNINGS AND OUTGO:

The detailed information in respect of Foreign Exchange Earnings and Outgo has been given in 'Note onAccounts' forming part of “Annual Accounts 2015-16”.



ANNEXURE -V

DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THECOMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

i. The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretaryduring the financial year 2015-16, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2015-16 are as under:

S.No. Name ofDirector/KMP and of Director/ of to each Director/KMPDesignation KMP for remuneration to median remuneration

FY 2015-16 in FY 2015-16 of employees

1 Mr. Ashok K Kanodia, Managing Director 16,15,110 12.87% 4.01

2 Mr. Pradeep K Kanodia*, Whole Time Director 2,51,733 NIL 0.63

3 Mr. Jagjit Singh Chopra, Chief Finance Officer 16,40,432 20.00% 4.13

4 Mr. G. S. Monga**,Company Secretary 4,23,944 04.00% 1.07

5 Ms. Veenita Puri**,Company Secretary 1,32,298 NIL 0.33

th*Mr. Pradeep K Kanodia term as a Whole Time Director expired on 4 June 2015 by efflux of time

**Mr. G.S. Monga has resigned from the position of Company Secretary w.e.f December 22, 2015 and Ms. VeenitaPuri has joined the company as Company Secretary cum Compliance Officer on January 16, 2016.

ii. The median remuneration of employees of the Company during the financial year was Rs. 3.97L

iii. In the financial year, there was an increase of 14.41 % in the median remuneration of employees;

iv. There were 113 permanent employees on the rolls of Company as on March 31, 2016;

v. Average percentage increase made in the salaries of employees other than the managerial personnel in the lastfinancial year i.e. 2015-16 was 3.0%.

Increase in remuneration of Mr. Ashok K Kanodia, Managing Director of the Company is on account of his re-appointment as Managing Director of the Company and which is revised after ten years of his contract. Further,increase in remuneration of Mr. Jagjit Singh Chopra is on account of his appointment terms as he was appointedat a rate lower than the industrial practice. Depending upon his performance and to keep parity with theindustrial standards, his remuneration was increased by 20.00%.

vi. Remuneration paid is as per remuneration policy of the Company.

Remuneration % of increase Ratio of remuneration

CORPORATE GOVERNANCE REPORT

Corporate Governance is a code of conduct which guides and instructs the Board of Directors of the Company togovern the affairs of the Company in a manner most beneficial to the interest of the Shareholders, the Creditors, the Government and the Society at large.

A. MANDATORY DISCLOSURES

1. PRECISION’S PHILOSOPHY ON CORPORATE GOVERNANCE

As a good corporate citizen, your Company is committed to good corporate governance and believes inattainment of highest level of transparency, accountability, integrity in all its operation and places emphasis onresponsible conduct. Disclosure relating to Company’s operation and financial performance are made tostakeholders.

2. BOARD OF DIRECTORS

Composition

The composition of the Board of Directors of the Company is guided by the requirements of Companies Act 2013and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Companyhas an optimum combination of Executive and Non-Executive Directors. As on March 31, 2016, the Board of theCompany consists of Nine (9) Directors comprising of one executive director, five non-executive directorsincluding a woman director and three non executive independent directors. The ratio between executive and non-executive director is 1:8. Lt Gen (Dr.) Rajesh Pant PVSM, AVSM, VSM (Retd.) has been appointed as the non-executive chairman of the Company w.e.f July 27, 2015 and is actively involved and is contributing in developingand promoting the interests of the Company.

None of the Directors on the Board is a Member of more than 10 Committees or Chairman of more than 5Committees (pursuant to requirement of Regulation 26 of Listing Regulations, 2015) across all the publicCompanies in which he/she is a Director. Necessary disclosures regarding Committee positions in other publicCompanies for the year ended March 31, 2016 have been made by the Directors and taken on note in the Board meeting held on May 21, 2016.

The composition of the Board of Directors along with their brief resume as on March 31, 2016 is given as under:

Lt. Gen. (Dr.) Rajesh Pant PVSM, AVSM, VSM (Retd.)

Lt. Gen. (Dr) Rajesh Pant PVSM, AVSM, VSM (Retd.) is Ph D in Information Security Metrics (2014), M. Tech inTelecom & Remote Sensing from IIT Kharagpur, Master of Management Studies from Osmania University,Hyderabad, M. Phil in National Security from Chennai University. He undertook an Independent DirectorsCourse from MDI, Gurgaon in 2014.

Over forty years of unblemished and disciplined service to the Nation as a Leader and Mentor in the gloriousIndian Army. He is a renowned techno-scholar-warrior with experience of Sri Lanka and Kargil operations andhas processed three patents in previous establishment through visionary and innovative academic leadership. Heis a Founder member of India’s indigenous Electronic Warfare (EW) programme, author of Indian Army’sInformation Warfare Doctrine (2004) and has evaluated EW Systems in France, Israel, South Africa, Argentina. Heis also an initiator of Battlefield Management Systems for entire Indian Army, second largest in world andmanaged projects of over Rs 5,000 crore value. He displayed outstanding integrity and superannuated afterreaching highest rank of Lieutenant General in Signals on June 30, 2014.

He has been awarded on Jan 26, 2000 - Vishisht Sewa Medal (VSM) by President of India, Jan 26, 2013 - Ati VishishtSewa Medal (AVSM) by President of India, July 20, 2013 - IETE National Award for ICT & Cyber TrainingInitiatives, Jan 15, 2014 - Unit Citation (of excellence) for leadership of previous technical training organization,Military College of Telecom Engineering, Mhow (MP), Jan 26, 2015– Awarded Param Vishisht Sewa Medal(PVSM) by President for distinguished service of the most exceptional order.

He has been a Non-Executive Chairman of the Company w.e.f. July 27, 2015.

Mr. Ashok Kumar Kanodia – Managing Director

Mr. Ashok K Kanodia has over 37 years of experience in the field of Electronics and is the founder, promoter



director of “Precision Electronics Ltd.”. He completed B.Sc with Physics honours from St Xavier College, Kolkata(Calcutta University) in 1970 and thereafter went for higher education to the prestigious Massachusetts Instituteof Technology (MIT), USA where he graduated in Electrical Engineering and Business Management. He hasalways been associated with various committees formulated for policy making. His leadership extends to shapingNational Policies and Regulations as Member of the IT/Telecom Hardware Task Force set up by the PrimeMinister of India and as President of the Telecommunication Equipment Manufacturers Association (TEMA) ofIndia, the only Government recognized association of domestic telecom equipment manufacturers. He servedback-to-back terms from 1999-2001.

He was one of the four industry representatives in the “Kelkar Committee” set up by the Defence Minister‘Towards strengthening self-reliance in Defence preparedness’, where the focus of the committee was torecommend policy measures and procedures to facilitate participation of the Private industry in National Defencecapability building.

He is currently the Chairman of the Specialist group on Defence MSME in the Confederation of Indian Industry(CII) and a National Defence Committee Member of the Federation of Indian Chambers of Commerce andIndustry (FICCI) and Associated Chambers of Commerce (ASSOCHAM), apex Forums for Industry in India andhas made several contributions as industry representative in Defence international seminars, exhibitions and ledindustry delegations around the world. He is an acknowledged spokesperson of the Defence MSME units inIndia. He was a panel member of the MSME Ministry for the “Make in India” program of the Prime Minister,member of the Joint Working Group on Electronics System design & Manufacturing [ESDM] and a GoverningCouncil member of Technology Development Center [TDC] under the MSME Ministry. He is highly qualified andextremely well regarded in the industry, both in India as well as internationally.

He was reappointed as the Managing Director and Key Managerial Personnel of the Company in the AnnualGeneral Meeting held on September 26, 2015 for a period of 5 years w.e.f. August 14, 2015.

Mr. Pradeep Kumar Kanodia – Non Executive Director

Mr. Pradeep Kumar Kanodia is a graduate with Honours degree in Commerce from St Xavier’s College Kolkata.He draws upon his prior experience of managing an export house in Calcutta. He served as Whole Time Directorof the Company and his term expired on June 4, 2015 by efflux of time. He is liable to retire by rotation atforthcoming Annual General Meeting but has not offered himself for reappointment.

Mr. Rahul Goenka – Non Executive Director

Mr. Rahul Goenka has been a Director on the Board of the Company since September 25, 2004. He is a Commercegraduate and an MBA from Clark University, Worcester, USA having over 2 years of work experience withConsultants Inc., Boston USA one of the leading Technology Solutions Provider in the world. Presently he is aDirector with Apparel & Textiles manufacturing and export company that employs over a 1000 people across 3manufacturing sites and exports their products to some of the best known brands in UK. Mr. Rahul Goenka has indepth knowledge and experience of manufacturing and international trade.

Mr. Deepto Roy – Non Executive Director

Mr. Deepto Roy is a graduate with BA, LLB Hons from the West Bengal National University of Juridical Sciencesand has been admitted to the Bar Council of Maharashtra and Goa since 2005. He is a corporate lawyerspecializing in projects, infrastructure, Companies Law and Foreign Direct Investment. His acumen on his subjectproved highly beneficial during his span of association with the Company.

Ms. Ranjna Gudoo – Non Executive Director

Ms. Ranjna Gudoo is a graduate with BA, LLB. She has retired as DGM – Law of Power Grid Corporation of IndiaLtd (PGCIL) and has been an in-house lawyer for twenty seven years in the Power Sector with NTPC and PGCIL.She has acted as Borrower’s Counsel to Indian Financial Institutions, International Banks, Multilateral agencies including World Bank and ADB for financial closure of the projects. She has extensive experience in drafting ofcommercial contracts and has handled litigation matters on behalf of PGCIL. She is liable to retire by rotation atforthcoming Annual General Meeting and being eligible has offered herself for reappointment.

Mr. Anant Kanoi – Non Executive Independent Director

Mr. Anant Kanoi is a graduate from the University of Michigan and specializes in Industrial & Operations

Engineering and has more than 10 years of work experience with various international companies like Pepsi andFord Motors. He is an active member of the Entrepreneur’s Organization (EO), New Delhi and is currently servingon the Board of the EO in a leadership position as the Learning Chair.

Mr. Suresh Vyas – Non Executive Independent Director

Mr. Suresh Vyas is a Fellow Member of the Institute of Chartered Accountant of India having an experience ofaround 29 years in the industry and is handling various projects at national and international level. He hasmastered the activities relating to corporate world such as corporate law matter, acquisitions and mergers, liaisonwith Government agencies etc.

Mr. Sharvan Kumar Kataria – Non Executive Independent Director

Mr. Sharvan Kumar Kataria is a practicing Chartered Accountant since 1983 and has an expertise in CorporateLaws, Income Tax, Direct Taxes, Indirect Taxes, Accounts and Audit Laws, Tax Planning, Tax management andTax Jurisprudence and has many publications to his credit in the above subjects.

Meetings & Attendance

Dates of Board Meetings are fixed in advance and agenda papers are circulated to Directors within time asstipulated under various provisions of Companies Act, 2013.

During the financial year 2015-16 Six (6) Board Meetings were held: May 28, 2015, July 27, 2015, August 14, 2015,October 31, 2015, January 16, 2016 and February 5, 2016. The intervening period between the Board Meetings werewithin the maximum time gap prescribed under Companies Act, 2013 and Listing Regulations, 2015.

Directors’ Attendance Records and Directorships held:

Name of Directors Category No. of Attended No. of No of otherBoard last other Board Committees

Meeting AGM Director- in which heAttended ships is member/

Chairperson.

Chairman Member

Lt. Gen. (Dr.) Rajesh Pant (Retd.)* Chairman(NED) 4 Yes - - -

Mr. Ashok Kumar Kanodia MD 6 Yes - - -

Mr. Pradeep Kumar Kanodia** NED 1 No - - -

Mr. Rahul Goenka NED 4 No - 1 -

Mr. Deepto Roy NED 4 No - - 1

Mrs. Ranjna Gudoo NED 6 Yes - - 1

Mr. Sharvan Kumar Kataria NEID 6 Yes - 1 1

Mr. Anant Kanoi NEID 4 No - - 1

Mr. Suresh Vyas NEID 5 Yes - - 2

* Appointed as Non Executive Chairman w.e.f. July 27, 2015.

**Change in Designation from Whole Time Director to Non Executive Director w.e.f. June 4, 2015

Note 1: MD-Managing Director, NED-Non-Executive Director & NEID- Non-Executive Independent Director.

Note 2: Number of other directorship includes directorship in other listed companies only and other committees refers to their position as chairman / member in audit / stakeholder committees only.

The last Annual General Meeting was held on September 26, 2015.

During the year, all the relevant information required to be placed before the Board of Directors as per SEBI (LODR)Regulations, 2015 are considered and taken on record/approved by the Board. Further, the Board periodically reviews



Compliance Reports in respect of laws and regulations applicable to the Company.

Mr. Ashok K Kanodia and Mr. Pradeep Kumar Kanodia are brothers.

As on March 31, 2016 Mr. Pradeep Kumar Kanodia, Non-Executive Director of the Company was holding 3104235equity shares of the Company.

The details of familiarisation programmes imparted to independent directors is given at company’s website atwww.pel-india.com

3. AUDIT COMMITTEE

Powers

• To investigate any activity within its terms of reference.

• To seek information from any employee.

• To obtain outside legal or other professional advice.

• To secure attendance of outsiders with relevant expertise, if it considers necessary.

Terms of Reference

The Audit Committee has been entrusted with the job of reviewing the reports of the Internal Auditors and theStatutory Auditors periodically and discussing their findings and suggesting corrective measures. The role of theAudit Committee is as follows:

• Oversight of the Company’s financial reporting process and the disclosure of its financial information toensure that the financial statement is correct, sufficient and credible.

• Recommending for the appointment, remuneration and terms of appointment of the auditor.

• Approval of payment to statutory Auditors for any other services rendered by the statutory Auditors.

• Reviewing with the management, the Annual Financial Statements before submission to the Board forapproval, with particular reference to :

a. Matters required to be included in the Directors responsibility Statements to be included in the Board’sreport in terms of Clause(c) of sub-section 3 of Section 134 of the Companies Act, 2013.

b. Changes, if any, in accounting policies and practices and reasons for the same.

c. Major accounting entries involving estimates based on the exercise of judgement by management.

d. Significant adjustments made in the financial statements arising out of audit findings.

e. Compliance with listing and other legal requirements relating to financial statements.

f. Disclosure of any related party transactions.

g. Qualifications in the draft audit report.

• Reviewing, with the management, the quarterly Financial Statements before submission to the Board forapproval.

• Reviewing with the management, the statement of uses/application of funds raised through an issue (publicissue, right issue, preferential issue, etc.), the statement of funds utilized for purposes other than those statedin the offer document/prospectus/notice and the report submitted by the monitoring agency monitoringthe utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Boardto take up steps in this matter.

• Reviewing and monitor the auditor’s independence and performance, and effectiveness of audit process.

• Approval or any subsequent modification of transactions of the Company with related parties.

• Scrutiny of inter-corporate loans and investments.

• Valuation of undertakings or assets of the Company, wherever it is necessary.

• Evaluation of internal financial controls and risk management systems.

• Reviewing with the management, performance of statutory and internal auditors, adequacy of the internal

control systems.

• Reviewing the adequacy of internal audit function, if any, including the structure of the internal auditdepartment, staffing and seniority of the official heading the department, reporting structure coverage andfrequency of Internal Audit.

• Discussing with Internal Auditors any significant findings and follow up thereon.

• Reviewing the findings of any internal investigations by the Internal Auditors into matters where there issuspected fraud or irregularity or a failure of internal control systems of a material nature and reporting thematter to the Board.

• Discussing with statutory Auditors before the Audit commences, about the nature and scope of Audit as wellas post-audit discussion to ascertain any area of concern.

• Looking into the reasons for substantial defaults in the payment to the depositors, debenture holders,shareholders (in case of non payment of declared dividends) and creditors.

• Reviewing the functioning of the Whistle Blower mechanism.

• Approval of appointment of CFO (i.e. the whole-time Finance Director or any other person heading thefinance or discharging that function) after assessing the qualifications experience and background, etc. of thecandidate.

• Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

Review of information by Audit Committee

The Audit Committee reviews the following information:

• Management discussion and analysis of financial condition and results of operations;

• Statement of significant related party transactions (as defined by the Audit Committee) submitted bymanagement;

• Management letters/letters of internal control weakness issued by the statutory auditors;

• Internal auditors reports relating to internal control weakness; and

• The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to reviewby the Audit Committee.

• Statement of deviations:

(a) Quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted tostock exchange(s) in terms of Regulation 32(1) of SEBI (LODR) Regulations, 2015.

(b) Annual statement of funds utilized for purposes other than those stated in the offerdocument/prospectus/ notice in terms of Regulation 32(7) of SEBI (LODR) Regulations, 2015.

Meetings and Attendance

During the year 4 (Four) Audit Committee meetings were held i.e. May 28, 2015, August 14, 2015, October 31, 2015 andFebruary 5, 2016. The time gap between two meetings of the Committee was not more than four months..

Composition and Attendance of each member at the Audit Committee Meetings:

S. No. Name of Directors Category Status Attended

1. Mr. Sharvan Kumar Kataria NEID Committee Chairman 4

2. Mr. Anant Kanoi NEID Member 2



The Company Secretary acted as Secretary to the Committee.

The Committee is vested inter alia with the aforesaid powers and terms of references as prescribed under relevant



provisions of the Companies Act, 2013 and Listing Regulations, 2015.

4.

Terms of Reference

The role of the committee shall inter alia, include the following:

• Formulation of the criteria for determining qualification, positive attributes and independence of a

director and recommend to the Board a policy, relating to the remuneration of the directors, key

managerial personnel and other employees.

• Formulation of criteria for evaluation of Independent Director and the Board.

• Devising a policy on Board diversity.

• Indentifying persons who are qualified to become directors and who may be appointed in senior

management in accordance with the criteria laid down, and recommend to the Board their appointment

and removal.

• Whether to extend or continue the term of appointment of independent directors, on the basis of report of

performance evaluation of independent directors.

REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

1. INTRODUCTION

1.1 Precision Electronics Limited (PEL) recognizes the importance of aligning the business objectives with specific

and measureable individual objectives and targets. The Company has therefore formulated the remuneration

policy for its directors, key managerial personnel and other employees keeping in view the following objectives:

1.1.1. Ensuring that the level and composition of remuneration is reasonable and sufficient to attract, retain and

motivate, to run the company successfully.

1.1.2. Ensuring that relationship of remuneration to performance is clear and meets the performance benchmarks.

1.1.3. Ensuring that remuneration involves a balance between fixed and incentive pay reflecting short and long term

performance objectives appropriate to the working of the company and its goals.

1.1.4 Ensuring that Remuneration and Compensation offered by the Company is in compliance with Companies Act,

2013, SEBI (LODR) Regulations, 2015 and other relevant regulations.

2. Scope and Exclusion:

This Policy sets out the guiding principles for the Nomination and Remuneration Committee for recommending

to the Board the remuneration of the directors, key managerial personnel and other employees of the Company.

3. Terms and References:

In this Policy, the following terms shall have the following meanings:

3.1 “Director” means a director appointed to the Board of the Company.

3.2 “Key Managerial Personnel” means

i. Managing Director, or Chief Executive Officer or Manager and in their absence, a Whole-Time Director;

ii. Company Secretary

NOMINATION AND REMUNERATION COMMITTEE

iii. Chief Finance Officer

3.3 Nomination and Remuneration Committee means the committee constituted by PEL’s Board in accordance with

the provisions of Section 178 of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

4. Remuneration to Managing Director and Key Managerial Personnel

4.1.1 The Board, on the recommendation of the Nomination and Remuneration Committee, shall review and approve

the remuneration payable to the Managing Director and other Whole Time Director of the Company within the

overall limits approved by the shareholders

4.1.2 The Board, on the recommendation of the Nomination and Remuneration Committee, shall also review and

approve the remuneration payable to the Key Managerial Personnel of the Company as per provisions of the

Companies Act, 2013.

4.1.3 The Nomination and Remuneration Committee shall carry out evaluation of performance of Executive Director

and Key Managerial Personnel yearly as may be considered necessary.

4.2 Remuneration to Non-Executive/Independent Directors

The Non-Executive Directors and Independent Directors may receive sitting fees as per section 197(5) of the

Companies Act, 2013 and such other remuneration as permissible under the provisions of Companies Act, 2013.

The amount of sitting fees shall be approved by the Board of Directors.

4.3 Remuneration to other employees

Employees shall be assigned objectives according to their qualifications and work experience, competencies as

well as their roles and responsibilities in the organization. Individual remuneration shall be determined within

the appropriate objectives and shall be based on various factors such as job profile, skill sets, seniority, experience

and prevailing remuneration levels for equivalent jobs.

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”.

Nomination and Remuneration Committee has formulated criteria for evaluation of Board as a whole and every

director including independent directors. The criteria has been approved by the Board and an external agency,

namely, Munish K Sharma & Associates, Company Secretaries is engaged for assisting in performance evaluation

and collation of results.

During the year 2015-16, 2 (Two) Nomination and Remuneration committee meetings were held i.e. July 18, 2015

and August 14, 2015 and one resolution dated December 29, 2015 was passed by circulation for the appointment of

Ms. Veenita Puri, Company Secretary cum compliance officer of the Company.

The Nomination and Remuneration Committee consists of following members:


1. Mr. Anant Kanoi NEID Chairman 1






Details of remuneration and perquisites paid to directors for the year 2015-16

(In `)

Directors Salary Perquisites Commission Sitting Fees Total

Lt. Gen. (Dr.) Rajesh Pant (Retd.) Nil Nil Nil 40,000 40,000

Mr. Ashok Kumar Kanodia 14,95,110 1,20,000 - - 16,15,110

Mr. Pradeep Kumar Kanodia** 2,51,733 - - - 2,51,733

Mr. Rahul Goenka Nil Nil Nil 1,37,500 1,37,500

Mr. Anant Kanoi Nil Nil Nil 80,000 80,000

Mr. Sharvan Kumar Kataria Nil Nil Nil 2,35,000 2,35,000

Mr. Suresh Vyas Nil Nil Nil 2,25,000 2,25,000

Mr. Deepto Roy Nil Nil Nil 77,500 77,500

Mrs. Ranjna Gudoo Nil Nil Nil 1,80,000 1,80,000

Elements of Mr. Ashok Kumar Kanodia’s salary, the Managing Director of the Company:

Salary: Rs. 19,68,240 per annum.

In addition to Salary, they shall be entitled to the following facilities:

1. Medical reimbursement: Medical expenses incurred for self and his family, as per rules of the Company; howevernot exceeding Rs. 1,20,000/- per year.

2. Leave Travel Allowance: For self and his family, as per rules of the Company; however not exceeding Rs. 2,50,000once in two years.

Managing Director/Whole Time Director shall also be eligible to the following perquisites, which shall not be includedin the computation of the ceiling on remuneration specified as above:

1. Contribution to provident fund, superannuation fund or annuity fund to the extent these are not taxable under theIncome Tax Act 1961.

2. Gratuity payable at the rate not exceeding half a month’s salary for each completed year of service,

3. Encashment of leave at the end of tenure.

4. Provision for use of chauffeur driven Company car for official duties and cellular phone (including payment forlocal and overseas official calls) shall not be included in the computation of perquisites for the purpose ofcalculating the said ceiling.

5. He will be entitled for Reimbursement of expenses incurred for the business of the Company in any mannerwhatsoever.

Note: For aforesaid purpose a family means the spouse, dependent children. The perquisites to be evaluated as perIncome Tax Rules wherever applicable.

10% per annum increase in salary subject to Nomination and Remuneration Committee recommendation and Boardof Directors approval.

**pecuniary relationship of non-executive director: Mr. Pradeep Kumar Kanodia, Non-Executive Director of theCompany has served as the whole time director of the Company till June 4, 2015. His office as whole time directorvacated on June 4, 2015 by efflux of time and thereafter he continued as Non-Executive Director of the Company. Apartfrom this he is younger brother of the promoter Managing Director of the Company, Mr. Ashok K Kanodia and isholding more than 2% of equity share capital of the Company. Like any other non-executive director he is also entitledto sitting fees for attending Board Meeting of the Company.

5. STAKEHOLDERS GRIEVANCE COMMITTEE

During the year, 48 (Forty Eight) meetings of the Shareholder's Grievance Committee Meeting were held. Thecomposition and Attendance of Share Transfer and Investor Grievance Committee as on March 31, 2016 is asfollows:


1. Mr. Rahul Goenka NED Committee Chairman 35



4. Mrs. Ranjna Gudoo NED Member 48

Transfer requests and complaints from the shareholders were attended and responded promptly by Company'sRegistrar & Transfer Agent as and when they were received.

Name and designation of Compliance Officer: Ms. Veenita Puri, Company Secretary cum Compliance Officer

Analysis of Complaints:

The Complaints received during the year are as follows:

PARTICULARS Q1 Q2 Q3 Q4 TOTAL

NUMBER OF COMPLAINTS

At the beginning of the quarter 0 0 0 0 0

Received during the quarter 1 1 0 1 3

Resolved during the quarter 1 1 0 1 3

At the end of the quarter 0 0 0 0 0

All complaints have been solved to the satisfaction of the complainants within the prescribed time.

6. GENERAL MEETINGS OF SHAREHOLDERS

Details of the location of the last three Annual General Meeting and details of the resolutions passed or to bepassed by Postal Ballot:

Financial Year Date Time Venue SpecialResolution

Passed

2012-2013 21.09.2013 10:30A.M. B.C .Pal Memorial Auditorium, A-81, Chittaranjan Park, New Delhi – 110019 No

2013-2014 27.09.2014 10:30A.M. B.C .Pal Memorial Auditorium, A-81, Chittaranjan Park, New Delhi – 110019 No

2014-2015 26.09.2015 02:00P.M. B.C .Pal Memorial Auditorium, A-81, Chittaranjan Park, New Delhi – 110019 No

• No Special resolution was passed in the previous three AGMs.

• No special resolution passed last year through postal ballot

- No Special Resolution is proposed to be conducted through postal ballot in ensuing AGM.

8. MEANS OF COMMUNICATION

a) The quarterly, half yearly and annual financial results of the Company were published in The BusinessStandard (English and Vernacular Language) till December, 2015 and for the quarter ended March, 2016 in“Mint” in English and “Naya India” in vernacular language. The results are made available on Company’swebsite www.pel-india.com



b) The Company keeps on updating its website to provide comprehensive relevant information. The Companybelieves that all the stakeholders should have access to adequate information about the Company and intoday’s electronics age website is the best media for such dissemination of information. All information,which could have a material bearing on the share prices, is released at the earliest.

c) The Company has not made any formal presentations to the institutional investors or to the analysts duringthe year.

9. GENERAL SHAREHOLDER INFORMATION

i) AGM -Date, Time and Venue : September 15, 2016, 03.00 p.m.B. C. Pal Memorial Auditorium, A-81, Chittaranjan Park, New Delhi – 110019

ii) Financial Year: 2015- 16

iii) Dividend payment : No Dividend is declared.

v) Listing on Stock Exchanges : Equity Shares are listed on The Bombay Stock Exchange Mumbai.The Company has paid the Listing fee for the period Apr. 1, 2016to Mar. 31, 2017

vi) Stock Code : 517258

Vii) Share Price Data : High, Low during last year

Month BSE INDEX PRECISION

High Low High Price Low Price(In Rs.) (In Rs.)

Apr-15 29094 26897 41.00 26.30

May-15 28071 26423 42.00 28.00

Jun-15 27968 26307 32.75 25.90

July-15 28578 27416 55.00 26.70

Aug-15 28417 25298 52.20 30.40

Sep-15 26471 24833 38.45 28.70

Oct-15 27618 26168 44.45 31.30

Nov-15 26824 25451 47.60 33.00

Dec-15 26256 24867 53.00 40.00

Jan-16 26197 23839 56.00 41.05

Feb-16 25002 22494 51.90 34.75

Mar-16 25479 23133 45.35 34.00

Share Price Performance of Precision Electronics Limited (PEL) in comparison with BSE Sensex

for the period April 1, 2015 to March 31, 2016

BSE High

PEL High

(vii) Registrar Transfer Agent : Skyline Financial Services Pvt. Ltd.

D- 153/A First Floor Okhla Industrial Area Phase – 1

New Delhi - 110020

(viii)Share Transfer System: The Company's shares are traded in the stock exchange(s) in demat as well as physical mode. All valid transfers lodged with the Company/Registrar and Transfer Agent are processed and returned tothe Shareholders within the stipulated period.

(ix) Distribution of shareholding: Shareholding Pattern as on March 31, 2016.

Category Code Category of Shareholder Number. of Total number of shareholders shares

(A) Promoter and Promoter Group

(1) Indian

(a) Individuals / Hindu Undivided Family 11 6830064

(b) Central Government / State Government(s) 0 0

(c) Bodies Corporate 6 133896

(d) Financial Institutions / Banks 0 0

(e) Any Other (specify) 0 0

Sub-Total (A)(1) 17 6963960

(2) Foreign

(a) Individuals (Non Resident Individuals/

Foreign Individuals) 1 189730

(b) Bodies Corporate 1 3179905

(c) Institutions 0 0

(d) Any Other (specify) 0 0

Sub-Total (A)(2) 2 3369635

Total Shareholding of Promoter and

Promoter group (A)= (A)(1)+(A)(2) 19 10333595

(B) Public shareholding

(1) Institutions

(a) Mutual Funds 4 8700

(b) Venture Capital funds 0 0

(c) Alternative investment funds 0 0

(d) Foreign Venture Capital Investors 0 0

(e) Foreign portfolio investors 0 0

(f) Financial institutions/ banks 5 3050

(g) Insurance Companies 0 0

(h) Provident fund/ pension funds 0 0

Any other specify

Sub-Total (B)(1) 9 11750

Central Government / State Government(s)/

president of India 0 0

Sub-Total (B)(2) 0 0

2 Non-Institutions

(a) Individual shareholders holding nominal share

capital up to Rs. 2 lakh. 14090 1042287



ii. Individual shareholders holding nominal share

capital in excess of Rs. 2 lakh. 16 2120867

(b) NBFCs registered with RBI 1 47432

Employee trusts 0 0

Overseas depositories (holding DRs) (balancing figure) 0 0

Any other specify 99 292581

Sub-Total (B)(3) 14206 3503167

Total Public Shareholding (B) = (B)(1) + (B)(2) + (B)(2) 14215 3514917

Total (A) + (B) 14234 13848512

x) As on March 31, 2016 of the total eligible shares 9056856 were held in dematerialized form and the balance4791656 shares in physical form.

xi) Out standing GDR/ADR: NIL

xii) Commodity Price Risk or Foreign Exchange Risk and hedging activity: NIL

xiii) Plant Location : a) Noida Plant

D-10, Sector-3, Gautam Budh Nagar, Noida - 201301

b) Roorkee Plant

Plot No. 9&10, KIE Industrial Estate, Village Mundiyaki(Manglore), Roorkee Haridwar-249406. Uttrakhand.

xiv) Address for correspondence : Registered Office:

D-1081, New Friends Colony, New Delhi-110025

Corporate Office:

D-10, Sector-3, Gautam Budh Nagar, Noida-201301

10. OTHER DISCLOSURES

a) There is no material significant related party transaction with related parties that may have potentialconflict with the interest of the Company at large.

b) There were no instances of non-compliance by the Company or penalties, strictures imposed on theCompany by the Stock exchanges or SEBI or any other statutory authority on any matter related to thecapital markets during the last three years.

c) The Company has formulated and implemented a Whistle Blower Policy and no personnel is denied accessto the audit committee.

d) The company has complied with all the mandatory requirements of SEBI (LODR) Regulations 2015 andfollowing non-mandatory requirements are complied with:

• Company has appointed separate persons as Chairman and Managing Director.

• Internal auditor may report directly to the audit committee.

e) Demat Suspense Account-Nil

f) The Company does not have any subsidiary. Shareholders can reach for company’s policies and thebusiness information at www.pel-india.com, which is regularly updated in order to meet the corporategovernance requirement and for the benefit of shareholders/ investors.

DECLARATION ON COMPLIANCE WITH THE CODE OF CONDUCT

Dear Members,

Pursuant to Regulation 26(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, yourDirectors have laid down a Code of Conduct for Directors and Senior Management. The same has been posted on thewebsite of the Company.

It is hereby certified that the members of the Board and the Senior Management personnel have confirmed theircompliance with the “Code of Conduct for Members of the Board and Senior Management except Mr. Pradeep KKanodia, Director of the Company. He has expressed as follows:

“I cannot undertake to comply with “the Code” since this is total contradiction/conflict with the settlement Agreementdated 23.01.2013. Therefore, I request the Board to grant me the waiver from code of conduct as per Clause 16 of theCode of Conduct.”

FOR AND ON BEHALF OF THE BOARD

Sd/-Place: Noida Veenita PuriDate: 21-05-2016 Company Secretary

CERTIFICATION UNDER REGULATION 17(8) AND PART B OF SCHEDULE II OF SEBI(LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

We, Ashok K Kanodia, Managing Director and Jagjit Singh Chopra, Chief Finance Officer, responsible for the financefunction certify that:

a) We have reviewed financial statements and the cash flow statement for the year ended March 31, 2016 and that tothe best of their knowledge and belief:

i. these statements do not contain any materially untrue statement or omit any material fact or containstatements that might be misleading;

ii. these statements together present a true and fair view of the Company’s affairs and are in compliance withexisting accounting standards, applicable laws and regulations.

b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the yearended March 31, 2016 are fraudulent, illegal or violative of the Company’s code of conduct.

c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that theyhave evaluated the effectiveness of the internal control systems of the Company and they have disclosed to theauditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify these deficiencies.

d) We have indicated to the auditors and the Audit committee:

i. There has not been any significant changes in internal control during the year;

ii. There has not been any significant changes in accounting policies during the year and that the same havebeen disclosed in the notes to the financial statements; and

iii. We are not aware of any instances of significant fraud of which they have become aware and theinvolvement therein, if any, of the management or an employee having a significant role in the Company’sinternal control system over financial reporting..

For And On Behalf Of The Board

Place: Noida Sd/- Sd/-Date: 20.05.2016 Ashok K Kanodia Jagjit Singh Chopra

Managing Director Chief Finance Officer



To,The Members,

PRECISION ELECTRONICS LIMITED(CIN: L32104DL1979PLC009590)D-1081, New Friends Colony,New Delhi-110065

We have examined the compliance of conditions of Corporate Governance by Precision Electronics Limited (‘thestCompany’) for the year ended on 31 March, 2016 as stipulated in Clause 49 of the Listing Agreement of the Company

with the Stock Exchanges (“Listing Agreement”) for the period April 1, 2015 to November 30, 2015 and Regulations 17to 20, 22, 23, 25, 26, 27 and clauses (b) to (g), (i) of sub-regulation (2) of Regulation 46 and para C, D & E of Schedule V ofRegulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations, 2015 (“SEBI Listing Regulations”) for the period December 1, 2015 to March 31, 2016.

The Compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination waslimited to review of procedures and implementations thereof, as adopted by the Company for ensuring thecompliances of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on thefinancial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representationsmade the directors and the management, we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in the above-mentioned Listing Agreement and SEBI Listing Regulations for the respectiveperiod as mentioned above except that Shri Pradeep Kumar Kanodia, Non- Executive Director has expresses asfollows:

“I cannot undertake to comply with “the Code” since this is total contradiction/conflict with the settlement Agreement dated23.01.2013. Therefore, I request the Board to grant me the waiver from code of conduct as per Clause 16 of the Code of Conduct.”

We have to state that, no investor grievance is pending for a period exceeding one month against the Company as perthe information furnished by the Company’s Registrar, otherthan those which are a subject matter of litigation.

We further state that such compliance is neither an assurance as to the future viability of the Company nor theefficiency or effectiveness with which the management has conducted the affairs of the Company.

For Munish K. Sharma & AssociatesCompany Secretaries

Sd/-Munish Kumar Sharma

Company SecretaryM. No.: F6031

C.P. No. 6460ndDate: 2 August, 2016


CORPORATE GOVERNANCE CERTIFICATE


INDEPENDENT AUDITORS’ REPORT

To

The Members of

Precision Electronics LimitedD-1081, New Friends ColonyNew Delhi-110025

Report on the Financial Statements

We have audited the accompanying financial statements of Precision Electronics Limited (“the company”), whichstcomprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year

then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financialposition, financial performance and cash flows of the Company in accordance with the accounting principles generallyaccepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of theCompanies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internalfinancial controls, that were operating effectively for ensuring the accuracy and completeness of the accountingrecords, relevant to the preparation and presentation of the financial statements that give a true and fair view and arefree from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risksof material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal financial control relevant to the Company’s preparation of the financial statements thatgive true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on whether the company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accounting estimates made byCompany’s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financialstatements, give the information required by the Act in the manner so required and give a true and fair view in

stconformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31March, 2016, and its Loss and its cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements


1. As required by the Companies (Auditor’s Report) Order, 2016 (‘the order’), issued by the Central Government ofIndia in terms of Sub Section (11) of Section 143 of the Act, we give in the Annexure – ‘A’ statement on the mattersspecified in paragraph 3 & 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as itappears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Reportare in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified underSection 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

ste) On the basis of written representations received from the directors as on 31 March, 2016, taken on record bystthe Board of Directors, none of the directors is disqualified as on 31 March, 2016, from being appointed as a

director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the company andthe operating effectiveness of such controls, refer to our separate Report in “Annexure B”

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information andaccording to the explanations given to us, we report that:

i. The Company has disclosed the impact of pending litigations on its financial position in its financialstatements – Refer Note 27.1 to the financial statements,

ii. The Company did not have any long-term contracts including derivatives contracts for which there were anymaterial foreseeable losses.

iii. There were no amounts which were required to be transferred, to the Investor Education and ProtectionFund by the Company.

For Rajendra K. Goel & Co.Chartered Accountants

FRN-001457N

Place: New Delhi R.K Goelst

Date : 21 May, 2016 (Partner)Membership No: 006154


ANNEXURE – A TO INDEPENDENT AUDITORS REPORT

Referred to in paragraph 1 under the heading ‘Report on Other Legal & Regulatory Requirement’ of our report of evendate to the financial statements of the Company for the year ended March 31, 2016:

i) (a) The Company has maintained proper records showing full particulars, including quantitative details andsituation of fixed assets;

(b) The fixed assets have been physically verified by the management in a phased manner, designed to cover allthe items over a period of three years, which in our opinion, is reasonable having regard to the size of thecompany and nature of its business. Pursuant to the program, a portion of fixed asset has been physicallyverified by the management during the year and no material discrepancies between the books records andphysical fixed assets have been noticed.

(c) The title deeds of immovable properties are held in the name of the company.

ii) (a) The inventories excluding material in transit have been physically verified during the year by themanagement. In our opinion, the frequency of such verification is reasonable.

(b) The discrepancies noticed on physical verification of Inventory as compared to books records which hasbeen properly dealt with in the books of account were not material.

iii) The Company has not granted any loans, secured or unsecured, to the companies, firms, Limited LiabilityPartnerships or other parties covered in the Register maintained under Section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) to (c) of the order are not applicable to the company and hence not commented upon.

iv) In our opinion and according to the information and explanations given to us, the company has complied with theprovisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, andsecurity.

v) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bankof India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies(Acceptance of Deposits) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

vi) We have broadly reviewed the accounts and records maintained by the company pursuant to the rule made by thecentral government for maintenance of cost records under sub section (1) of section 148 of companies Act, and arethe opinion that the prima facie the prescribed accounts and record have been made and maintained. However wehave not made a detailed examination of the record with a view to determining whether they are accurate andcomplete;

vii) (a) According to information and explanations given to us and on the basis of our examination of the books ofaccount, and records, the company has been generally regular in depositing undisputed statutory duesincluding Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Duty ofCustoms, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriateauthorities. According to the information and explanations given to us, no undisputed amounts payable in

strespect of the above were in arrears as at 31 March 2016 for a period of more than six months from the date onwhen they become payable.

(b) According to the information and explanations given to us, there are disputed dues of Income Tax, ServicestTax, Entry Tax & Cess aggregating to Rs. 5,84,391 which have not been deposited as at 31 March, 2016 are

mentioned hereunder:

Name of the Nature of Dues Period / Year Amount Forum Before whichStatute (Rs. in Lakhs) dispute is pending

The Central Excise Availment of 04/2009 – 03/2011 1,89,918 Custom Excise andAct 1944 Cenvat Credit Service Tax Appellate

Tribunal

Central Sales Tax Central Sales Tax 2010-2011 34,473 AdditionalAct 1956 Commissioner Sales

Tax Appeals


Central Sales Tax Central Sales Tax 2011-2012 1,25,000 AdditionalAct 1956 Commissioner Sales

Tax Appeals

The Uttar Pradesh Value Added Tax 2011-2012 2,35,000 AdditionalValue Added Tax Commissioner SalesAct, 2008 Tax Appeals

viii) In our opinion and according to information and explanations given to us, the company has not defaulted inrepayment of dues to banks or financial institution;

ix) Based upon the audit procedures performed and the information and explanation given by the management, thecompany has not raised moneys during the year by way of initial public offer or further public offer includingdebt instruments and term loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to thecompany and hence not commented upon.

x) Based upon the audit procedures performed and the information and explanation given by the management, wereport that no fraud by the company or on the company by its officers or employees has been noticed or reportedduring the year.

xi) Based upon the audit procedures performed and the information and explanation given by the management, themanagerial remuneration has been paid or provided in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act.

xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order arenot applicable to the Company.

xiii) In our opinion, all transactions with related parties are in compliance with section 177 and 188 of the CompaniesAct, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accountingstandard.

xiv) Based upon the audit procedures performed and the information and explanation given by the management, thecompany has not made any preferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review. Accordingly, the provision of clause 3 (xiv) of the Order are notapplicable to the company and hence not commented upon.

xv) Based upon the audit procedures performed and the information and explanation given by the management, thecompany has not entered into any non-cash transactions with directors or persons connected with him.Accordingly, the provision of clause 3 (xv) of the Order are not applicable to the company and hence notcommented upon.

xvi) In our opinion, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act,1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the company and hence notcommented upon.


FRN-001457N




ANNEXURE - B TO THE INDEPENDENT AUDITOR’S REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act,

2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Precision Electronics Limited (“the

Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year

ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the

internal control over financial reporting criteria established by the Company considering the essential components of

internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by

the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and

maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and

efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the

prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely

preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based

on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls

Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be

prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial

controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered

Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and

plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over

financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial

controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over

financial reporting included obtaining an understanding of internal financial controls over financial reporting,

assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of

internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit

opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of financial statements for external purposes in

accordance with generally accepted accounting principles. A company’s internal financial control over financial

reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable

detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles, and that receipts and expenditures of the company are

being made only in accordance with authorizations of management and directors of the company; and (3) provide

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the

company’s assets that could have a material effect on the financial statements.


Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of

collusion or improper management override of controls, material misstatements due to error or fraud may occur and

not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future

periods are subject to the risk that the internal financial control over financial reporting may become inadequate

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial

reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016,

based on the internal control over financial reporting criteria established by the Company considering the essential

components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial

Reporting issued by the Institute of Chartered Accountants of India.


FRN-001457N




BALANCE SHEET AS AT MARCH 31, 2016(Amount in Rs.)

Particulars Note No. As at As at31.03.16 31.03.15

EQUITY AND LIABILITIES

Shareholders’ Funds

Share Capital 2 138,487,620 138,487,620

Reserves and Surplus 3 143,948,549 164,909,675

282,436,169 303,397,295

Non Current Liabilities

Long-term borrowings 4 29,211,473 22,375,570

Long-term provisions 5 7,054,705 7,066,917

36,266,178 29,442,487

Current Liabilities

Short-term borrowings 6 42,818,039 46,028,328

Trade payables 7 66,825,517 54,839,378

Other current liabilities 8 22,538,172 14,944,197

Short-term provisions 9 1,127,223 864,696

133,308,951 116,676,599

TOTAL 452,011,298 449,516,381

ASSETS

Non-Current Assets

Fixed assets

- Tangible assets 10 182,583,393 194,973,853

- Intangible assets 10 25,405 41,608

- Capital work-in-progress 10 - -

Deferred tax assets (Net) 11 29,977,622 24,782,718

Long-term loans and advances 12 9,587,216 9,678,297

Other non-current assets 13 396,653 69,278

222,570,289 229,545,754

Current Assets

Inventories 14 123,386,240 117,684,890

Trade receivables 15 84,527,507 75,455,989

Cash and Bank balances 16 5,315,845 11,289,975

Short-term loans and advances 17 10,675,330 10,803,433

Other current assets 18 5,536,087 4,736,340

229,441,009 219,970,627

TOTAL 452,011,298 449,516,381

Significant Accounting Policies andNotes on Financial Statements 1 to 27

As per our Report of even date attached For and on behalf of the boardto the Balance Sheet

For Rajendra K. Goel & Co.(Chartered Accountants)F.R.N. 001457N Ashok Kanodia Sharvan Kumar Kataria Suresh Vyas

Managing Director Director Director(R.K. Goel) DIN: 00002563 DIN: 03399949 DIN: 00085571PartnerM.No. 006154Place: New Delhi Jagjit Singh Chopra Veenita Puri

stDated: 21 May, 2016 Chief Finance Officer Company Secretary


STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED MARCH 31, 2016

(Amount in Rs.)

Particulars Note No. For the Year ended For the Year ended 31.03.2016 31.03.2015

INCOME

Revenue from Operations 19 287,642,107 297,802,078

Less: Excise duty, VAT, Sales tax and Service tax 29,923,945 22,175,425

Revenue from Operations (Net) 257,718,162 275,626,653

Other Income 20 2,363,420 2,243,054

TOTAL 260,081,582 277,869,707

EXPENSES

Cost of material consumed 21 77,242,852 92,460,923

Purchases of Traded goods (Telecom Products) 1,897 1,283,004

Change in inventories of finished goods,

work in progress and traded goods 22 4,561,812 (1,942,994)

Employee benefits expenses 23 74,008,132 68,646,321

Labour Charges for Infra Services 54,889,658 40,493,453

Finance costs 24 10,551,805 8,176,982

Depreciation and amortization expenses 10 11,709,719 15,439,044

Other expenses 25 52,144,828 51,145,231

TOTAL 285,110,703 275,701,964

Profit before Prior period items and Tax (25,029,121) 2,167,743

Prior period items 26 (335,205) 111,782

Profit before tax (24,693,916) 2,055,961

Tax expenses :

- Current Tax - 423,000

- Wealth Tax - 18,500

- Earlier year Taxes - -

- Wealth Tax (Earlier year) - -

- Mat Credit Entitlement - (423,000)

- Deferred Tax 11 (5,194,904) (430,611)

Profit for the year (19,499,012) 2,468,072

Earning per equity share 27.6

- Basic (1.41) 0.18

- Diluted (1.41) 0.18

Significant Accounting Policies and

Notes on Financial Statements 1 to 27






CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016

Particulars Year ended Year ended31.03.2016 31.03.2015

A Cash Flow from Operating Activities

Net Profit/(Loss) before Tax, Extraordinary Items and Prior Period Items (25,029,121) 2,167,743

Adjustment for :

Depreciation and Amortisation 11,709,719 15,439,044

Provision for Doubtful debts Advances 283,820 -

Provision for Trade receivables 621,381 115,418

Interest Income (707,895) (1,133,613)

Finance Cost 10,551,805 8,176,982

(Profit)/Loss on sale of fixed assets (Net) 60,015 132,913

Operating Profit/(Loss) before Working Capital Changes (2,510,276) 24,898,487

Adjustment for:

(Increase)/Decrease in Trade Receivable (9,692,900) (47,273,470)

(Increase)/Decrease in Loans & Advances, Other non current

assets and Other current assets (1,370,252) 1,911,469

(Increase)/Decrease in Inventories (5,701,350) (3,614,795)

Increase/(Decrease) in Trade Payable & Other Liabilities 17,963,620 (13,064,870)

Cash inflow from Operations before prior period adjustment. (1,311,158) (37,143,181)

Prior period adjustment (Net) (335,205) 111,782

Income Tax 1,011,065 (6,267,722)

Net Cash inflow/(outflow) from Operating Activities (A) (1,987,018) (30,987,241)

B Cash Flow from Investing Activities

(Purchase) of Fixed Assets (847,635) (2,743,359)

Sale of Fixed Assets - 69,384

Interest Received 1,897,454 281,630

Net Cash inflow/(outflow) from Investing Activities (B) 1,049,819 (2,392,345)

C Cash Flow from Financing Activities

Proceeds/ (Repayment) of Borrowings (Net) 5,514,874 37,722,126

Finance Charges Paid (10,551,805) (8,176,982)

Net Cash inflow/(outflow) from Financing Activities (C) (5,036,931) 29,545,144

Net Increase/(Decrease) in Cash & Cash Equivalent (A+B+C) (5,974,130) (3,834,442)

Cash & Cash Equivalent at the beginning of the year 11,289,975 15,124,417

Cash & Cash Equivalent at the end of the year 5,315,845 11,289,975






Note1 to the Financial StatementsSignificant Accounting Policies

1.1. General

i) The accounts are prepared on historical cost convention, on accrual basis and on the principal of goingconcern.

ii) Accounting policies not specifically referred to otherwise, are consistent and in accordance with Indiangenerally accepted accounting practices comprising of the mandatory Accounting Standard, Guidancenotes and other pronouncements issued by ICAI and the provision of the Companies Act, 2013.

1.2. Use of Estimates

The preparation of financial statement require estimates and assumption that affect the reported amounts ofincome and expenses of the period, the reported amounts of assets and liabilities and disclosers relating tocontingent liabilities as on the date of financial statements. Difference between the actual result and estimated arerecognized in the period in which the result are known/materialized.

1.3. Fixed Assets:

i) Fixed Assets are stated at cost of acquisition less cenvat if any and subsequent improvements theretoincluding taxes, duties, freight and other incidental expenses related to acquisition and installation exceptin the case of Leasehold land which has been revalued as on 31.3.2006.

ii) Fixed Assets are stated at cost less accumulated depreciation. Depreciation is provided based on useful lifeof the assets as prescribed in Schedule II to the Companies Act, 2013, except software having futureeconomic benefits more than a year, to be amortized in two to three years.

iii) Leasehold land is amortized over the years of lease.

iv) Fixed Assets costing below Rs. 5,000 is fully depreciated in year of purchase.

1.4. Trade receivable:

Trade receivables are stated after making adequate provision for doubtful debts, if any.

1.5. Loans & Advances:

Loans and Advances are stated after making adequate provision for doubtful advances, if any.

1.6. Contingent Liabilities:

Contingent liabilities are not provided for in the accounts and are shown separately in Notes on Accounts.

1.7. Revenue Recognition

i) Revenue from Infra activity.

Infra revenue and costs are recognized by reference to the stage of completion of the construction activity atthe balance sheet date, as measured by the proportion that contact costs incurred for work performed todate bear to the estimated total contract costs. Where the outcome of the infra cannot be estimated reliably,revenue is recognized to the extent of the infra costs incurred if it is probable that they will be recoverable.In the case of contracts with defined milestones and assigned prices for each milestone, it recognizesrevenue on transfer of significant risks and rewards which coincides with achievement of milestone and itsacceptance by its customers. Provision is made for all losses incurred to the balance sheet date. Any furtherlosses that are foreseen in bringing contracts to completion are also recognised. Variations in contract work,claims and incentive payments are recognised to the extent that it is probable that they will result inrevenue and they are capable of being reliably measured. Contract revenue in excess of billing is reflectedas unbilled revenue and billing in excess of contract revenue is reflected as unearned revenue.

ii) Revenue other than Infra activity.

Sales include excise duty, Sales Tax/ VAT and are net of usual trade discounts, rebates.

iii) Scrap is accounted for as and when sold.

iv) Export incentives and insurance claims are accounted for on receipt basis.

1.8. Method of valuation of inventories is as under:

i) Raw materials are valued at Cost, on weighted average basis and non-moving Items are valued at netrealizable value.


ii) Components, Stores & Spare parts are valued at cost, on FIFO basis.

iii) Finished goods and Traded Goods are valued at cost or net realizable value, whichever is lower.

iv) Goods-in-Process are valued at estimated cost.

v) Cost incurred that relate to future activities on the contract are recognized as “Contract work in progress”.Contract work in progress comprising infra costs and other directly attributable overheads is valued atlower of cost and net realizable value.

1.9. Foreign Exchange Transactions

i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing atthe time of the transaction.

ii) Assets and liabilities relating to foreign currency transactions remaining unsettled at the end of the year aretranslated at contracted rates, when covered by foreign exchange contracts and at year end rates in all othercases.

iii) Gains and Losses on foreign exchange transaction/ translation other than those relating to fixed assets arerecognized in the Profit and Loss Account. Gain or loss on translation of long term liabilities incurred toacquire fixed assets is treated as an adjustment to the carrying cost of such fixed assets.

1.10. Research & Development

Revenue Expenditure on R&D is charged to revenue under the respective heads of accounts. Capital Expenditureon R&D is treated as addition to Fixed Assets.

1.11. Technical know-how is accounted for on payment basis and is written-off over a period of six years from the yearof payment.

1.12. Employees Benefits

The Company has taken Group Gratuity Policy with the Life Insurance Corporation of India (‘LIC’) for futurepayment of gratuities which is a defined benefit. The gratuity liability is determined based on an actuarialvaluation performed by LIC.

Provision for Leave Encashment, which is a defined benefit, is made on an actuarial valuation carried out by anindependent actuary.

Contribution to Provident Fund is accrued as per the provisions of the Employees’ Provident Fund andMiscellaneous Provisions Act 1952. Contribution payable to Provident fund is charged to Profit & Loss Account.

1.13. Provision for Current and Deferred Tax

Provision for current tax is made on the basis of estimated taxable income for the current accounting period andin accordance with the provisions as per Income Tax Act 1961.

Deferred tax resulting from “Timing Differences” between book and taxable profit for the year is accounted forusing the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet date. Thedeferred tax asset is recognized and carried forward only to the extent that there is reasonable certainty that theasset will be adjusted in the future

1.14. Segment Accounting:

i) Segment Revenue & Expenses:

Joint revenue & expenses of the segments are allocated among them on reasonable basis .All other segmentrevenue and expenses are directly attributed to the segments.

ii) Segment Assets & liabilities:

Segment assets include plant & machinery, Inventory, security deposit, earnest money and material-in-transit and segment liabilities include sundry creditors.

iii) Inter Segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions areeliminated in consolidation.

1.15 Recognition of Prior Period Expenses & Prepaid Expenses:

Prepaid expenses and prior period expenses/income of items of Rs. 10,000/- and below are charged to naturalhead of accounts.


Particulars (Amount in Rs.) (Amount in Rs.) As at As at

31.03.2016 31.03.2015

Note 2 to the financial statementsSHARE CAPITALAuthorised :

2,00,00,000 Equity Shares of Rs 10/- each (Previous

year 2,00,00,000 Equity Shares of Rs 10/- each) 200,000,000 200,000,000Issued, subscribed and paid up

1,38,48,512 Equity Shares (Previous year 1,38,48,512 Equity Shares)

of Rs 10/- each fully paid up 138,485,120 138,485,120

Add: Forfeited Shares (Amount Paid up) 2,500 2,500

Total 138,487,620 138,487,620

1. Reconcilation of no. of equity shares No. of Shares No. of Shares

Balance at the beginning of the year 13,848,512 13,848,512

Add: Shares Issued during the year - -

Less: Bought back during the year - -

Balance at the end of the year 13,848,512 13,848,512

2. The Company has only one class of Equity Shares having a par value of Rs. 10 per equity share. The holders of theequity shares are entitled to receive dividend as declared from time to time and are entitled to voting rightsproportionate to their share holding at the meeting of share holders.

3. The List of Share holders holding more than 5% shares in the company: No. of Percentage ofEquity Shares holdings

Mr. Ashok Kanodia 3,087,734 22.30%

Mr. Pradeep Kanodia 3,104,235 22.42%

Knowledge Holding and Investments Pte Ltd. 3,179,905 22.96%


31.03.2016 31.03.2015Note 3 to the financial statementsReserves & surplusA) Revaluation Reserve


Addition during the year - -

Amortisation on Revalued lease hold land 1,462,118 1,462,118

Balance at the end of the year 77,529,505 78,991,623B) General Reserve


Amount Transferred from Surplus - -

Adjustment during the year - -

Balance at the end of the year 8,408,930 8,408,930C) Surplus


Add: Amount Transferred surplus/ (Deficit) from the Statement of - -

Profit and Loss during the year (19,499,011) 2,468,072

Add: Deffered tax Adjustment from retained earning as required by

Schedule II of Companies Act, 2013 - 1,628,721

Less: Depreciation Adjustment from retained earning as required bySchedule II of Companies Act, 2013 - 5,271,192

Balance at the end of the year 58,010,114 77,509,122 Total 143,948,549 164,909,675

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDING 31ST MARCH, 2016


Particulars (Amount in Rs.) (Amount in Rs.)As at As at

31.03.2016 31.03.2015

Note 4 to the financial statements

NON CURRENT LIABILITIES

Long term borrowings

Term Loan:

Secured

Loan from Others

Kotak Mahindra Prime Ltd* 815,073 -

Loans and advance from Related Party

Unsecured

Loan from Others

Bajaj Finance Ltd.** 1,020,830 -

Loan from Director*** 27,375,570 22,375,570

Total 29,211,473 22,375,570

Security

*Hypothecation of Car

Terms of Repaymentst* The vehicle loans to be repaid upto 1 August, 2018 in equated monthly installment.th** Unsecured loan to be repaid upto 10 October, 2018 in equated monthly installment.

st*** The loan from director taken before 1 April, 2014 amounting to Rs. 22,375,570/- and taken during the yearamounting to Rs. 5,000,000/-. This Loan to be repaid on demand but not before 1st April, 2017


31.03.2016 31.03.2015


NON CURRENT LIABILITIES

Long term provisions

Provision for employee benefits* 7,054,705 7,066,917

Total 7,054,705 7,066,917

* Disclosure required by AS 15 on ‘Employee Benefits’ has been made in Note no 27.7


31.03.2016 31.03.2015


CURRENT LIABILITIES

Short Term Borrowings

Secured

Working Capital Loan from Punjab National Bank 42,818,039 46,028,328

(Against hypothecation of stock, debtors, present andfuture other current assets, fixed , movable assets,equitable mortagage of immovables of Company andpersonal guarantee of two directors) Total 42,818,039 46,028,328





31.03.2016 31.03.2015


CURRENT LIABILITIES

Trade payables

For Goods and Services* 66,825,517 54,839,378

Total 66,825,517 54,839,378

*Disclosure regarding MSMED has been made in Note no 27.3


31.03.2016 31.03.2015


CURRENT LIABILITIES

Other current liabilities

Current maturities of Long-term debts*

Term Loans:

Secured

Loan from Bank*

ICICI Bank Limited - 128,616

Loan from Others**

Kotak Mahindra Prime Ltd 975,391 -

Unsecured

Loan from Others**

Bajaj Finance Ltd. 1,042,485 -

Payable for Capital expenditures 89,900 112,350

Other Payables

Statutory dues 4,843,560 3,408,636

Others*** 15,586,836 11,294,595

Total 22,538,172 14,944,197

*Hypothecation of Car

** Refer note no. 4

*** Includes Advance from customers, payable to employees and others.


31.03.2016 31.03.2015


CURRENT LIABILITIES

Short term provisions

Provision for employee benefits* 1,018,623 756,096

Provision for Wealth tax 108,600 108,600

Total 1,127,223 864,696

* Disclosure required by AS 15 on ‘Employee Benefits’ has been made in Note no 27.7



Note No. 10 to the financial statements

Fixed Assets

Particulars Gross Block Depreciation Net Block

Cost As at Additions Deduction/ Cost As at Upto For the Deduction/ Upto As at As at 1.04.2015 Adjustment 31.03.2016 31.03.2015 Year Adjustment 31.03.2016 31.03.2016 31.03.2015

Tangible Assets

Land

- Roorkee (Freehold) 13,399,442 - - 13,399,442 - - - - 13,399,442 13,399,442

13,399,442 - - 13,399,442 - - - - 13,399,442 13,399,442

- Noida (Leasehold)* 95,024,408 - - 95,024,408 14,054,750 1,499,438 - 15,554,188 79,470,220 80,969,658

95,024,408 - - 95,024,408 12,555,312 1,499,438 - 14,054,750 80,969,658 82,469,096

Buildings 69,654,864 - - 69,654,864 26,110,404 2,093,011 - 28,203,415 41,451,449 43,544,460

69,654,864 - - 69,654,864 24,023,476 2,086,928 - 26,110,404 43,544,460 45,631,388

Buildings - Others 175,480 - - 175,480 49,097 55,648 - 104,745 70,735 126,383

- 175,480 - 175,480 - 49,097 - 49,097 126,383 -

Plant & Machinery 67,645,976 392,900 1,200,307 66,838,569 27,892,454 5,079,701 1,140,292 31,831,863 35,006,706 39,753,522

66,555,910 1,427,046 336,980 67,645,976 22,341,796 5,685,341 134,683 27,892,454 39,753,522 44,214,114

Lab Equipments and

other Fixed Assets 5,868,789 - - 5,868,789 1,864,402 661,471 - 2,525,873 3,342,916 4,004,387

5,868,789 - - 5,868,789 1,059,187 670,791 (134,424) 1,864,402 4,004,387 4,809,602

Computers 24,276,412 94,700 - 24,371,112 23,433,903 95,354 - 23,529,257 841,855 842,508

24,190,159 86,253 - 24,276,412 20,057,543 1,606,510 (1,769,850) 23,433,903 842,509 4,132,616

Office Equipments 9,929,074 176,788 - 10,105,862 7,917,229 831,184 - 8,748,413 1,357,449 2,011,845

9,612,088 316,986 - 9,929,074 3,089,988 1,567,237 (3,260,004) 7,917,229 2,011,845 6,522,100

Furniture & Fixtures 11,679,022 160,800 - 11,839,822 6,561,490 1,269,578 - 7,831,068 4,008,754 5,117,532

11,605,049 73,973 - 11,679,022 5,172,261 1,376,323 (12,906) 6,561,490 5,117,532 6,432,788

Vehicles 13,920,790 - - 13,920,790 8,945,263 1,553,374 - 10,498,637 3,422,153 4,975,527

13,920,790 - - 13,920,790 6,641,238 2,210,017 (94,008) 8,945,263 4,975,527 7,279,552

Moulds & Dies 285,600 - - 285,600 57,010 16,875 - 73,885 211,715 228,590

204,000 81,600 - 285,600 40,392 16,618 - 57,010 228,590 163,608

Plant & Machinery-

-Obsolete & Non-Serviceable - - - - - - - - - -

- - - - - - - - - -

Total 311,859,857 825,188 1,200,307 311,484,738 116,886,002 13,155,634 1,140,292 128,901,344 182,583,393 194,973,853

Previous Year 310,035,499 2,161,338 336,980 311,859,857 94,981,192 16,768,300 (5,136,509) 116,886,002 194,973,853 215,054,306

Intangible Assets

Computer software 15,591,769 - - 15,591,769 15,550,162 16,203 - 15,566,365 25,405 41,608

15,544,084 47,685 - 15,591,769 15,417,300 132,862 - 15,550,162 41,608 126,785

Total 15,591,769 - - 15,591,769 15,550,162 16,203 - 15,566,365 25,405 41,608

Previous Year 15,544,084 47,685 - 15,591,769 15,417,300 132,862 - 15,550,162 41,608 126,785

Capital Work in Progress

Capital Work in Progress

(At Roorkee) - - - - - - - - - -

- - - - - - - - - -

Total - - - - - - - - - -

Previous Year - - - - - - - - - -

Grand Total 327,451,626 825,188 1,200,307 327,076,507 132,436,164 13,171,837 1,140,292 144,467,709 182,608,798 195,015,460

Previous Year 325,579,583 2,209,023 336,980 327,451,626 110,398,492 16,901,162 (5,136,509) 132,436,164 195,015,460 215,181,090

Note: 1 Current Year Previous Year

*Depreciation for the year 13,171,837 16,901,162

Less: Additional Depreciation on revalued assets withdrawn from Capital Reserve 1,462,118 1,462,118

Depreciation charged to Profit & Loss Account 11,709,719 15,439,044

Note: 2 Current Year Previous Year

Breakup of Deduction/ Adjustment in Depreciation

Depreciation to be Charged to Retained Earning (As per Schedule II of Companies Act, 2013) - (5,271,192)

Depreciation Reversed on sales of Fixed Assets 1,140,292 134,683

Total of Deduction/ Adjustment in Depreciation 1,140,292 (5,136,509)

Note: 3

In view of the management there is no significant impairment envisaged in the recoverable amount of material fixed assets.



Particulars Amount As at During the Amount As at

01.04.2015 year 31.03.2016


Deferred Tax Assets (Net)

A) Deferred Tax Assets

Provision for doubtful receivable & Advances 664,543 279,706 944,249

Expenses disallowed u/s 43B of Income Tax Act, 1961 2,593,055 (99,326) 2,493,729

Accumulated losses and unabsorbed depreciation

as per Income Tax Act. 31,635,814 4,143,552 35,779,366

34,893,412 4,323,932 39,217,344

B) Deferred Tax Liability

Difference between WDV of Income tax

and Companies Act 10,110,694 (870,972) 9,239,722

10,110,694 (870,972) 9,239,722

C) Deferred Tax Assets/(Liability) Net (A-B) 24,782,718 5,194,904 29,977,622


31.03.2016 31.03.2015


NON CURRENT ASSETS

Long term loans and advances

(Unsecured, considered good)

Security Deposits 2,340,228 3,442,374

Other Advances

MAT Credit Entitlement 4,613,009 4,613,009

Advance Tax and TDS 3,056,979 2,045,914

Less: Provision for Income Tax 423,000 423,000

Total 9,587,216 9,678,297


31.03.2016 31.03.2015


NON CURRENT ASSETS

Other Non-Current Assets

Prepaid Expenses 396,653 69,278

Total 396,653 69,278



31.03.2016 31.03.2015


CURRENT ASSETS

Inventories*

Raw Materials & Components 62,466,238 52,192,698

Goods-in-process (Manufacturing) 55,865,141 53,930,965

Goods-in-process (Infra Services) 4,851,000 10,527,431

Finished Goods - -

Traded Goods 1,061 820,618

Stores & Spare Parts 202,800 213,177

Total 123,386,240 117,684,889

*Inventories are valued as per Significant Accounting Policy no. 1.8.


31.03.2016 31.03.2015


CURRENT ASSETS

Trade Receivables

A) Outstanding for a Period Exceeding Six months

- Unsecured - Considered good 11,854,513 8,336,905

- Unsecured - Considered doubtful 2,772,004 2,150,623

14,626,517 10,487,528

Less : Provision for Doubtful receivables 2,772,004 2,150,623

11,854,513 8,336,905

B) Others

- Unsecured - Considered good 72,672,994 67,119,084

72,672,994 67,119,084

Total 84,527,507 75,455,989


31.03.2016 31.03.2015


CURRENT ASSETS

Cash and Bank balances

Cash and Cash Equivalents

Balances with Banks

- In Current Accounts 417,859 1,161,259

Cash on Hand 144,704 299,536

Other Bank Balances

- Fixed deposits pledged with bank as security for guarantees.* 4,753,282 9,829,180

Total 5,315,845 11,289,975

*Includes Rs. 4,753,282/- (Previous year Rs. 9,289,180/-) with original maturity of more than 12 months.




31.03.2016 31.03.2015

Note 17 to the financial statementsCURRENT ASSETSShort term loans and advances (Unsecured, considered Good) Unless otherwise statedAdvance to Employees 1,623,060 977,462Other AdvancesExcise and Cenvat Recoverable 3,808,749 2,650,263Vat Recoverable 1,341,261 1,749,111Others*Unsecured - Considered good 3,902,260 5,426,597Unsecured - Considered doubtful 283,820 -

10,959,150 10,803,433Less : Provision for Doubtful receivables 283,820 -

Total 10,675,330 10,803,433

*Includes Advances to suppliers.


31.03.2016 31.03.2015


CURRENT ASSETSOther current assetsInterest Accrued on FDR’S 308,622 1,498,181Interest Accrued on Security deposit 131,320 -Security deposits - with Others (Unsecured, considered good) 865,360 453,630Un-billed Revenue* 3,223,488 1,302,054Others** 1,007,297 1,482,475

Total 5,536,087 4,736,340* Un-billed revenue relates to unbilled service income.**Includes prepaid expenses.

Particulars (Amount in Rs.) (Amount in Rs.)

For the Year ended For the Year ended 31.03.2016 31.03.2015

Note 19 to the financial statementsRevenue from Operations*Sales Manufactured Goods 91,451,480 83,957,782Sales Traded Goods 1,239 1,903,215Export Sales 20,938,009 29,064,854Service Charges 29,314,187 36,059,556Infra Service Charges 145,636,714 146,761,793

287,341,629 297,747,200Less: Sales Return - -

287,341,629 297,747,200Other Operating RevenueDuty Drawback 246,591 15,741Sales of Scrap 53,887 39,137

Total 287,642,107 297,802,078*Refer to Note no. 27.11.a.

-



Particulars (Amount in Rs.) (Amount in Rs.) For the Year ended For the Year ended

31.03.2016 31.03.2015


Other Income

Interest on Deposits 707,895 1,133,613

Interest on Income Tax Refund - 976,371

Interest others 93,089 -

Insurance Claimed Received 1,363,873 -

Other income 27,252 -

Foreign exchange fluctuation gain 171,311 133,070

Total 2,363,420 2,243,054


31.03.2016 31.03.2015


Cost of material consumed*

Opening Stock 52,192,698 50,522,925

Purchases 87,516,392 94,130,696

Closing Stock 62,466,238 52,192,698

Material Consumed** 77,242,852 92,460,923

* Refer to Note no. 27.11.b

** Inculdes Material Consumed for Infra Services Rs. 23,401,154/- (Previous year Rs. 37,121,069/-)


31.03.2016 31.03.2015


Change in inventories of finished goods, work in

progress and traded goods

Opening Stock

- Finished Goods (Manufacturing) - -

- Traded Goods 820,618 820,618

- Goods-in-process (Manufacturing) 53,930,965 52,852,058

- Goods-in-process (Infra Services) 10,527,431 9,663,344

Closing Stock

- Finished Goods (Manufacturing) - -

- Traded Goods 1,061 820,618

- Goods-in-process (Manufacturing) 55,865,141 53,930,965

- Goods-in-process (Infra Services) 4,851,000 10,527,431

Total 4,561,812 (1,942,994)-



NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDING 31ST MARCH, 2016Particulars (Amount in Rs.) (Amount in Rs.)

For the Year ended For the Year ended 31.03.2016 31.03.2015


Employee benefits expenses

Salaries, wages and allowances 69,917,220 65,001,131

Contribution to Provident and ESI Funds 1,821,386 1,257,371

Workmen and staff welfare expenses 2,269,526 2,387,819

Total 74,008,132 68,646,321

Particulars (Amount in Rs.) (Amount in Rs.)For the Year ended For the Year ended

31.03.2016 31.03.2015


Finance costs

Interest on Loans 8,807,615 6,466,712

Other Borrowing Costs 1,744,190 1,710,270

Total 10,551,805 8,176,982


31.03.2016 31.03.2015


Other expenses

Consumption of stores and spare parts 752,495 282,866

Power and fuel 5,812,534 5,662,523

Rent 120,000 120,000

Security Services 1,555,927 1,620,067

Repairs & Maintenance

- Building 105,326 236,306

- Plant & Machineries 1,063,230 998,681

- Others 647,575 626,442

Insurance 2,440,599 1,346,758

Legal and professional fee 3,225,611 3,720,980

Technical Consultancy 4,638,243 4,371,834

Testing fee 1,028,371 2,270,663

Auditor fees

Statutory Audit 376,875 375,000

Tax audit 55,275 55,000

Other matters 70,350 70,000

Reimbursement of expenses - -

Travelling expenses (including foreign travel) 9,028,003 8,715,237

Marketing & Distribution expenses 6,464,820 7,253,696


Loss on sales/ written off of Fixed assets 60,015 132,913

Vehicle Running Maintenance 2,619,767 2,588,169

Miscellaneous expenses 11,174,611 10,582,678

Provision for Trade receivables 621,381 115,418

Provision for Doubtful debts Advances 283,820 -

Total 52,144,828 51,145,231


31.03.2016 31.03.2015


PRIOR PERIOD EXPENSES/(INCOME) NET

Interest Income on Security deposit with Electricity department (377,244) -

Power and fuel (109,761) -

Testing fee 27,000 -

Legal and professional fee 87,000 15,000

Miscellaneous expenses 37,800 96,782

Total (335,205) 111,782


Note no. 27 to the financial statements:

27.1 Contingent Liabilities, Capital and Other CommitmentsAmount as at Amount as at

31.03.2016 31.03.2015

A. Contingent Liabilities not provided for:

i) Guarantees and LC 36,505,752 48,484,648

ii) Disputed Demands in respect of Central Sales Tax and Value Added Tax 3,94,473 4,71,673

iii) Disputed Demands in respect of Central Excise 1,89,918 1,89,918iv) Legal Proceedings:

Mr. Pradeep Kanodia, along with his son and family HUF, have filed a Company petition before the Hon’ble CompanyLaw Board under Sections 397 and 398 of the Companies Act, 1956, being Pradeep Kanodia & Others v. PrecisionElectronics Ltd. & Others, C.P. No. 162/ND of 2013. In the Petition, the Petitioners have leveled allegations ofoppression and mismanagement against the Company and its Board of Directors. It may be noticed that the Petitionershad previously also filed a similar petition in 2012, being C.P.No.123/ND/2012 raising similar allegations. ThatPetition was dismissed as withdrawn by Order of the Hon’ble CLB on 14.11.2012. The said Company Petition ispending adjudication before the Hon’ble CLB as also the Hon’ble Delhi High Court.

Mr. Pradeep Kanodia, along with his son and family HUF have also filed a Civil Suit being CS (OS) Comm No 104/2016against the Company and some of its shareholders in the Hon’ble Delhi High Court. The reliefs sought in the Suitinclude specific performance of a private arrangement executed between Mr. Pradeep Kanodia and Mr. AshokKanodia; to which the Company is not a party, nor can the Company be bound by the same. The said Suit is pendingadjudication before the Hon’ble Delhi High Court.

The allegations raised by Mr. Pradeep Kanodia in the Company Petition as also the Civil Suit are totally unfounded and misplaced; the Company has sought legal advice on the issues raised and is vigorously defending the same. TheBoard of Directors have empowered independent Directors Mr. Suresh Vyas and Mr. S.K. Kataria to take decisions onall legal actions that are necessary to protect the best interest of the Company and its shareholders.

Amount as at Amount as at31.03.2015 31.03.2014

B. Commitments

i) Capital Commitments net of Advances - -

ii) Other Commitments - -



27.2 Balances of Trade Receivables, Short Term Loan & Advances, Long Term Loan & Advances, Other Current Assetsand Trade Payables are subject to confirmation from the parties.

27.3 The Micro, small and medium enterprises to whom the company owes more than Rs. 1 Lac and outstanding for more than 30 days as under:

Particulars Current Year Previous Year

(Rs.) (Rs.)

Total outstanding dues to Micro,

Small and medium enterprises 6,592,683 5,911,447

There is no liability for interest which would be payable as Interest on delayed payments as per the Micro, small andmedium enterprises Development Act 2006 as the company does not receive any claims in respect of interest.

27.4 Segment Reporting:

a) Business Segments: Based on guiding principles given in Accounting Standard-17 "Segment Reporting "issuedby the Institute of Chartered Accountants of India, The Company's Business Segments include: Telecom and InfraServices.

b) Geographical Segments: Since the companies activities / operations are primarily within the Country &considering the nature of the products/services it deals in, the risk & returns are the same as such there is only onegeographical segment.

c) Information about business segments

TELECOM INFRA SERVICES TOTAL

Particulars Current Year Previous Year Current Year Previous Year Current Year Previous Year

Segment revenue

External sales* 125,280,726 136,519,381 132,136,958 139,052,394 257,417,684 275,571,775

Inter segment sales - - - - - -

Total revenue 125,280,726 136,519,381 132,136,958 139,052,394 257,417,684 275,571,775

Segment results (32,852,875) (26,851,173) 22,756,057 39,647,427 (10,096,818) 12,796,254

Unallocated(expenses)/Income (4,846,277) (4,673,295)

Operating(loss)/profit (14,943,095) 8,122,959

Finance expenses 10,551,805 8,176,982

Interest income 800,984 2,109,984

Profit/(Loss) before taxation (24,693,916) 2,055,961

Wealth tax, Earlier years tax & Mat Credit Entitlement - (404,500)

Deferred. Tax Assets (5,194,904) (430,611)

Provision for income Tax - 423,000

Net profit after tax (19,499,012) 2,468,072

Segment assets 365,560,411 377,291,860 56,473,264 47,441,803 422,033,676 424,733,663

Unallocated assets 29,977,622 24,782,718

Total assets 452,011,298 449,516,381

Segment Liabilities 70,509,105 63,558,702 26,061,121 14,027,870 96,570,226 77,586,572

Share Capital 138,487,620 138,487,620

Secured & Unsecured Loans 73,004,903 68,532,514

Unallocated Liabilities - -

Reserve & surplus 143,948,549 164,909,675

Total liabilities 452,011,298 449,516,381

Depreciation 10,982,963 14,675,531 726,756 763,513 11,709,719 15,439,044

* Telecom sales include service receipts.


27.5 Related Party Disclosure:

Information about Related Parties as required by Accounting Standard -18.

A) List of Related Party

i) Relative of the Key Management Personnel and their Enterprises/ Associates where the Transactionhas been taken place.

a) Ashok Kanodia (HUF) - (HUF of Managing Director)

b) Mr. Pradeep Kanodia - (Executive Director and Brother of Managing Director)*

c) Mr. Nikhil Kanodia - (Son of Managing Director)

ii) Key Management Personnel

a) Mr. Ashok Kanodia - (Managing Director of the Company)

b) Mr. Jagjit Singh Chopra (Chief Financial Officer of the Company)

c) Mr. Gurvinder Singh Monga (Company secretary of the Company)**

d) Miss. Veenita Puri (Company secretary of the Company)***

*Ceased to be Executive Director w.e.f. 04.06.2015

** Ceased to be Company Secretary w.e.f. 22.12.2015

*** Appointed as Company Secretary w.e.f. 16.01.2016

B) Transactions with Related Parties

(Fig. in ‘000)

i) Relative of the Key Management Personnel and their Current Year Previous Year

Enterprises/Associates where the transaction have

been taken place.

Rent 120 120

Salary including Perquisites 2945 4110

Amount Payable 227 265

ii) Key Management Personnel

Remuneration including Perquisites 1615 1431

Interest 2921 2613

Salary including Perquisites 2197 1436

Unsecured loan taken during the year 6500 400

Unsecured loan Repaid during the year 1500 400

Unsecured loan at the year 27375 22375

Amount Payable other then Unsecured loan 6046 3534

27.6 Earning Per Share (EPS)

A. Before Prior Period Items: Year Ended Year Ended31.03.2016 31.03.2015

i) Number of Equity Share outstanding : (Face value of Rs.10 Each)

Number of Shares at the Beginning of the year 13848512 13848512

Number of Shares at the End of the year 13848512 13848512

ii) Net Profit/(loss) after taxation as per Profit & Loss A/c (19,834,217) 2,759,854

iii) Basic & Diluted Earnings (in Rupees) Per Share (1.43) 0.20

B. After Prior Period Items: Year Ended Year Ended

31.03.2016 31.03.2015

i) Number of Equity Share outstanding : (Face value of Rs.10 Each)

Number of Shares at the Beginning of the period 13848512 13848512

Number of Shares at the Close of the period 13848512 13848512

ii) Net Profit/(loss) after prior period items and

taxation as per Profit & loss Account (19,499,012) 2,468,072

iii) Basic & Diluted Earnings (in Rupees) Per Share (1.41) 0.18



27.7 Report Under AS -15 Employee Benefits (Revised 2005)

1. Actuarial Assumptions

Particulars Gratuity Leave Encashment

Current year Previous year Current year Previous year

Discount Rate 8.00% 8.00% 7.80% 7.85%

Salary Escalation 7.00% 8.00% 10.00% 10.00%

Mortality Table 2006-08 (IAL 2006-08 (IAL

Ultimate) Ultimate)

The Present value of Obligation is as per Projected Unit Credit Method.

2. Table showing changes in present value of obligations



Present value of obligations as at

beginning of year 8,097,674 7,386,429 2,143,620 1,711,606

Interest cost 647,814 590,914 160,291 125,425

Current Service Cost 1,219,278 1,055,541 1,438,896 1,277,352

Benefits Paid 533,477 300,693 (177,227) (227,675)

Actuarial (gain)/Loss on Obligations (940,586) (634,517) (1,175,048) (743,088)

Present value of obligations as at end of year 8,490,703 8,097,674 2,390,532 2,143,620

3. Table showing changes in the fair value of plan assets



Fair value of plan assets at beginning of years 3,174,377 2,335,000 - -

Expected return on plan assets 263,426 206,686 - -

Contributions 922,204 933,384 - -

Benefits paid 533,477 300,693 (177,227) (227,675)

Actuarial (gain)/Loss on Plan Assets - - - -

FairvalueofPlanassetsasat endofyear 3,826,530 3,174,377 - -

4. Table showing fair value of plan assets



Fair value of plan assets at beginning of years 3,174,377 2,335,000 - -

Actual return on plan assets 263,426 206,686 - -

Contributions 922,204 933,384 - -

Benefits paid 533,477 300,693 (177,227) (227,675)

FairvalueofPlanassetsasat endofyear 3,826,530 3,174,377 - -

PresentValueofobligationattheyearend - - 2,390,532 2,143,620

Funded Status (4,664,173) (4,923,297) (2,390,532) (2,143,620)

Excess of actual over estimated return on Plan Assets. - - - -



5. Actuarial Gain/Loss recognize



Actuarial gain/Loss for the year Obligations 940,586 634,517 1,175,048 743,088

Actuarial gain/Loss for the year Plan assets - - - -

Total (gain) /Loss for the year (940,586) (634,517) (1,175,048) (743,088)

Actuarial Gain/Loss recognized In the year (940,586) (634,517) (1,175,048) (743,088)

Unrecognized Actuarial (Gain)/Loss at

the end of the IVP - - - -

6. The amount to be recognized in the balance sheet



Present value of obligations as at 8,490,703 8,097,674 2,390,532 2,143,620the end of year

Fair value of plan assets as at the end of the year 3,826,530 3,174,377 - -

Funded status (4,664,173) (4,923,297) (2,390,532) (2,143,620)

Net assets/ (liability) recognized In the (4,664,173) (4,923,297) 2,390,532* 2,143,620*

balance sheet

7. Expenses Recognized in statement of Profit & Loss



Current Service cost 1,219,278 1,055,541 1,438,896 1,277,352

Interest Cost 647,817 590,914 160,291 125,425

Expected return on plan assets 263,426 206,686 - -

Net Actuarial (gain)/Loss recognized (940,586) (634,517) (1,175,048) (743,088)in the year

Expenses recognized in statement of 663,079 805,252 424,139** 659,689**Profit & Loss

* This pertains to long term liability worked in respect of deferred leave only. Expected short term liability of Rs.

1,018,623/- (Previous year Rs. 756,096/-) will be added to this figure.

** This pertains to long term liability only. Actual payments (under the various heads) incurred over the intervaluation period should be added to this figure.

27.8 All the figures have been rounded off to the nearest rupees other than specifically stated.

27.9 Current year figures are shown in bold letter.

27.10 Previous year’s figures have been regrouped / rearranged & reclassified where ever necessary to make themcomparable with the current year.

d



27.11. a) Revenue from Operations

Particulars Sales Value

Current Year Previous YearRupees Rupees

Multiplexers, Interface Card, Converter, Modem &

Routers, Digital Radio System, Digital Voice Data

Recorder, Encryptors, Mast, Antenna and power

supply and others 91,451,480 83,957,782

Export Sale Telecom 20,938,009 29,064,854

PCM-Trading Goods 1,239 1,903,215

Services 29,314,187 36,059,556

Infra Service Charges 145,636,714 146,761,793

Total 287,341,629 297,747,200

Less: Sales Return - -

287,341,629 297,747,200

Other Operating Revenue

Duty Drawback 246,591 15,741

Sale of Scrap 53,887 39,137

Total 287,642,107 297,802,078

27.11.b) Raw Material Consumed

Particulars VALUE

Current Year Previous YearRupees Rupees

Elect. Compo. & Modules 34,349,393 44,035,376

Mechanical H/W & Sub system 1,974,848 1,538,955

Others 17,517,457 9,765,523

Infra Service -Material 23,401,154 37,121,069

Total 77,242,852 92,460,923

27.11.c) Value of Imported and Indigenous material consumed


Percent Value Percent ValueRupees Rupees

Raw Material & Components

Imported 19.75 15,253,916 20.62 19,069,086

Indigenous 80.25 61,988,936 79.38 73,391,837

Stores and Spares

Imported - - - -

Indigenous 100.00 752,495 100.00 282,866

Total 77,995,347 92,743,789

Consumption of Imported Spares & Parts does not include spare parts amounting Rs. 13,887/-

(Previous Year Rs.NIL) used for repairs.




27.11.d) Value of imports on CIF basis

Particulars Current Year Previous YearRupees Rupees

Raw Material and Components 17,282,734 19,413,459

Capital Goods 142,294 -

Raw Material Traded Goods - 97,931

Total 17,425,028 19,511,390

27.11.e) Earnings in Foreign Exchange


Rupees Rupees

Export of Goods of F.O.B. 20,938,009 29,064,854

Others

-Domestic Sales in Foreign Currency 6,151,632 54,786,936

-Domestic Services in Foreign Currency 53,810,701 56,533,473

Total 80,900,342 140,385,263

27.11.f) Expenditure in Foreign Currency

Particulars Current Year Previous YearRupees Rupees

Technical Services 4,638,243 4,371,834

Others

-Travelling 2,554,281 2,805,213

Total 7,192,524 7,177,047





Route Map For AGM Venue


Roorkee Unit:

Plot No.9&10, K.I.E Industrial Estate,

Roorkee 249406, (Uttrakhand), India

Tel: +91-1332-229154/55,

Fax: +91-1332-229155

PEL NOIDA & ROORKEE BUILDING

INFRASTRUCTURE

SERVICES & CAPABILITIES

PROJECTS

PRODUCTS

Tel: +91-120-2551556 / 1557,

Corporate Office & Noida Unit:

D-10, Sector-3, Noida 201301,

Gautam Budh Nagar,UP, India

Fax: +91-120-2524337 "we always know who we're working for”

E-mail: [email protected], Website: www.pel-india.com

37 th annual report · mr. rahul goenka chairman mr. anant kanoi chairman ... scanned copy (pdf/jpg...

Documents