The Board of Directors of your company presents their 28th Annual Report together withthe audited accounts for the financial year ended 31st March 2016.
| ||Year ended 31.03.2016 ||Year ended 31.03.2015 |
| ||(Rs.) ||(Rs.) |
|Sales and other Income ||148808662 ||189773472 |
|Profit before interest and Depreciation ||(799792) ||10409198 |
|Interest ||-- ||-- |
|Profit before depreciation ||(799792) ||10409198 |
|Depreciation ||1638348 ||2927146 |
|Profit before taxation and exceptional item ||(9636140) ||7482052 |
|Exceptional item ||-- ||-- |
|Profit before taxation after exceptional item ||(9636140) ||7482052 |
|Provision for taxation || || |
| Current tax ||-- ||2400000 |
| Deferred tax ||-- ||84504 |
|Profit / (Loss) after taxation and exceptional item ||(9636140) ||4997548 |
PERFORMANCE OF THE COMPANY
The Sales and other income during the year had reduced to Rs. 148.81 million comparedto Rs. 189.77 million during the year ended 2015. The reduction in sales income was due tounfortunate fact that your company did not receive sales orders during the months fromOctober 2015 to January 2016 due to heavy recession in European market. Nevertheless yourcompany is proud to present result on "Going Concern" basis due to introductionof various cost cutting measures productivity enhancement measures and scrap generationcontrol measures.
Your company is also proud to present the financial figures without obtaining any debtwaivers or otherwise from its parent group to prepare the accounts on Going Concernbasis which was otherwise customary practice in past. This itself will be proving theefficiency effectiveness and pro-active commitment of the present management. The presentmanagement is confident of moving further forward to convert the company into profitableposition.
NON-DECLARATION OF DIVIDEND:
Your company has incurred loss during the financial year 2015-16. Hence your companyhas not declared any dividend for the Financial Year 2015-16. The August Members willappreciate that despite incurring loss as mentioned above your company has still preparedthe accounts on "Going Concern" basis.
It is our pleasure to inform all the August Members that your auditors have notqualified any transaction. Your auditors have prepared and presented the accounts of thecompany on "Going Concern". The Leave Encashment and Gratuity Liability inrespect of the employees of the company have been made on the basis of Actuarial Valuationas mandated under Accounting Standard AS 15.
HOLDING COMPANY DETAILS
Your Company is a Subsidiary of M/s Gunther America Inc which holds 61.22% of Equityshares in your company. Your Company doesn't have any subsidiary company.
MANAGEMENT DISCUSSION AND ANALYSIS
The details pertaining to the Management Discussion and Analysis have been given asAnnexure A to this Report.
FUTURE PROSPECTS/FINANCIAL POSITION
Your company had broken even and made profit during FY 2014-15. Unfortunately in FY2015-16 your company incurred loss due to non receipt of expected sales orders. Howeveryour company continues to focus on the current good work being done on operational sidecost cutting measures and increasing the productivity. Your company is contemplating onadding new products in the product department Proximity (sensor). Your company is alsoworking out various measures to upgrade the machineries and equipment by adopting itselfto latest technologies.
MANUFACTURING FACILITIES IN YOUR COMPANY
The company is into the manufacturing of Electronic components Reed Switches ProximitySensors Ball Switches etc.
In this regard the specialist machineries like automatic sealing machines called asBadalex and semi-automatic Sealing machines Bihler Press automatic and manual Platingline besides ancillary equipments are used in various process departments.
RESEARCH & DEVELOPMENT
No major Research and development activities are carried out. However a littleResearch & Development is being done in the Badalex and Semi-automatic department tokeep pace with technological up-gradation.
Your Company has adequate and proper information systems in place and it has takenproper measures to safeguard all electronic data and information to the best possiblelevel it can.
BUSINESS RESPONSIBILITY REPORT
The details pertaining to Business Responsibility have been given in Annexure B to thisReport.
The Company has neither invited nor accepted any deposits during the financial year2015-16.
Pursuant to provisions of the Companies Act 2013 and the Articles of Association ofthe Company Mr. John D Rollo retires by rotation at the ensuing Annual General Meetingand he is eligible for re-appointment.
KEY MANAGERIAL PERSONNEL
Your Company has Mr. P. Ramesh Managing Director and Mr.A.Jeya Ganesan Muthiah in thecategory of Key Managerial Personnel as mandated by the provisions of Section 203 of theCompanies Act 2013. The Company is taking sincere efforts to appoint Whole Time CompanySecretary and Chief Financial Officer to comply with the said provisions of the Act at theearliest provided always subject to financial viability of your company. It will not beout of place to mention herein that company is literally reeling under financial stress.The company is not able to manage / ensure meticulous compliance of listing agreement dueto financial constraints.
SECRETARIAL AUDIT REPORT
Your Company has appointed Ms. K.J. Lakshmi Company Secretary in Whole Time Practicevide Board Resolution as Secretarial Auditor of the Company to give Secretarial AuditReport for FY 2015-16. As per the provisions of section 204 of the Companies Act 2013the Secretarial Audit Report from Ms. K.J. Lakshmi Practicing Company Secretary has beenobtained and the same is attached as Annexure F to this report.
Statutory Auditors of the Company M/s. M.L.Srinivasan & Associates CharteredAccountants' reappointment for FY 2016-17 is to be ratified at this Annual General Meetingas per the provisions of section 139 of the Companies Act 2013. A certificate from theAuditors has been received to the effect that their Re-appointment if made would bewithin the prescribed limits.
Your Company has appointed Mr.CMA.John D. Nevin as Cost Auditor of the Company underthe provisions of the Companies Act 2013 for FY 2015-16.They are required to submit thereport to the Central Government within 180 days from the end of the accounting year.
The Audit Committee of your company consisted of 03 Directors as at 31st March 2016.
The Committee has reviewed the Accounts for the year ended March 31 2016. The membersof the Audit Committee are Mr.John D Rollo Mr.P.Ramesh and A. Jeya Ganesan Muthiah.
POLICY TO PREVENT SEXUAL HARASSMENT AT WORK PLACE
Your Company is committed to creating and maintaining an atmosphere in which employeescan work together without fear of sexual harassment exploitation or intimidation. Asrequired under the provisions of Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 (Act') your Company has constituted anInternal Complaints Committee. No complaints were received by the committee during theyear under review. Since the number of complaints filed during the year was NIL theCommittee prepared a NIL complaints report. This is in compliance with section 22 of theAct.
The industrial relations continued to remain cordial throughout the period.
To facilitate the dematerialization of shares your company has appointed M/s. CameoCorporate Services Limited Chennai as Electronic Share Transfer Agent for providingelectronic connectivity with National Securities Depository Ltd. and Central DepositoryServices (India) Ltd. M/s.Cameo Corporate Services Limited Chennai is handling thedematerialization of shares and share transfers both electronic and physical.
LISTING WITH STOCK EXCHANGES
Your company's shares are listed in BSE LTD (Bombay Stock Exchange).The listingcontinued throughout the year. However the listing fees for the year 2016 have not beenpaid for want of funds.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the requirements of Section 134 of the Companies Act 2013 theDirectors confirm that: a) In the preparation of annual accounts the applicableAccounting Standards have been followed along with proper explanation relating to materialdepartures if any; b) The Directors had selected such accounting policies and haveapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and the Profit of the Company for the year.
c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
d) The Annual Accounts have been prepared on a Going Concern' basis.
e) that the proper policies and procedures have been adopted for ensuring the orderlyand efficient conduct of its business including adherence to code of conduct andpolicies the safeguarding of assets the prevention and detection of frauds and errorsthe accuracy and completeness of the accounting records and the timely preparation ofreliable financial information and that such policies and procedures are adequate and wereoperating effectively.
f) that proper systems are in place to ensure compliance of all laws applicable to theCompany and that such systems are adequate and operating effectively.
As required by the existing clause 49 of the Listing Agreement with the Stock Exchangea detailed report on Corporate Governance is included in the Annual Report. The Auditorshave certified the Company's compliance of the requirements of Corporate Governance interms of clause 49 of the Listing Agreement and the same is annexed to the Report onCorporate Governance.
DISCLOSURES AND INFORMATION UNDER THE COMPANIES ACT 2013
Pursuant to section 134 and any other applicable section of the Companies Act 2013(the Act) following disclosures and information is furnished to the shareholders:
(a) Conservation of Energy Technology absorption and Foreign Exchange Earnings andOutgo Annexure C' to this Report gives information in respect of Conservation ofEnergy Technology absorption and Foreign Exchange Earnings and Outgo required underSection 134(3)(m) of the Companies Act 2013 and forms a part of the Board's Report.
(b) Annual return
The extracts of the annual return as provided under sub section (3) of Section 92 ofthe Act is given in Form No. MGT 9 as Annexure D' attached and forms a part of thisreport.
(c) Board meetings
The Board of Directors of your Company met 08 times during the year under review. Thedetails of Board meetings and the attendance of the Directors are provided in theCorporate Governance Report.
(d) Loans Guarantees & Investments
Your Company has not lent any loan or made any investments or given any guarantees toany other entity/ body corporate. As such no disclosure is required to be made in thisReport and also in the relevant Registers.
(e) Related Party Transactions
All related party transactions entered into by your Company during the financial yearwere on an arm's length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company. Prior approval of the Audit Committee wasobtained for those transactions. Accordingly the disclosure of Related Party Transactionsas required under Section 134(3)(h) of the Companies Act 2013 in Form AOC 2 is notapplicable. Attention of members is also drawn to the disclosure of transactions withrelated parties set out in Notes to Accounts in the Independent Auditors' Report formingpart of the Annual Report. None of the Directors has any pecuniary relationships ortransactions vis--vis the Company.
(f) Particulars of Employees:
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of the Companies Act and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 has been appended as Annexure E to thisReport. The information required pursuant to Section 197 of the Companies Act read withRule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees of your Company is available for inspection by themembers at registered office of the Company during business hours on working days up tothe date of the ensuing Annual General Meeting. If any member is interested in obtaining acopy thereof such member may write to the Compliance Officer where upon a copy would besent.
(g) Risk Management
Your Company had formed a Risk Management Committee consisting of the Managing Directorand other 2 Directors. The Committee identifies evaluate business risks andopportunities. This Committee has formulated and implemented a policy on risk managementto ensure that the company's reporting system is reliable and that the company complieswith relevant laws and regulations. The Board of Directors of your Company are of theopinion that at present there are no elements of risks which may threaten the existenceof the Company.
Your Company has a vigil mechanism named Whistle Blower Policy to deal with instance offraud and mismanagement if any. (h) Nomination & Remuneration Policy for SeniorManagement The details relating to ratio of the remuneration of each director to themedian remuneration of the employees of the Company for the financial year 2015-16 isgiven in Annexure E' attached and forms part of this Report.
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year to which the financialstatement relates and the date of the report.
Qualification by Statutory Auditors:
There are no qualifications reservations or adverse remarks in the Auditors Report.
Qualification by Secretarial Auditor:
With respect to Appointment of Key Managerial Personnel i.e. appointment of whole timecompany secretary and a chartered accountant as chief financial officer the Company isand has been on its best possible efforts to appoint them subject to the financialviability of the company. You all are aware that your Company has incurred huge losses inthe Financial Year 2015-16. Nevertheless Search is on for suitable candidates who can fitinto the Company's Budget.The Company assures that this issue will be resolved oncefinancial situation of the Company improves.
It will not be out of place to mention herein that your company has incurred a lossduring the Financial Year 2015-16 as already mentioned above. Even running of operationsis becoming very difficult for want of funds. Under such circumstances as well yourcompany is not in a position to afford fat salaries demanded by the prospective keymanagerial candidates.
With respect to defaulting payment of listing fees for the year 2016 it is true thatyour company has defaulted the payment of Listing Fee for the year 2016 since your companyhas incurred loss in the financial year 2015-16. Your company does not have funds to payoff the Listing Fee. It will be the endeavor of your company to pay the Listing Fee at theearliest ones the financial position of your company improves. The default in payment ofListing Fee by your company is neither intentional nor wanton but for the reason asmentioned above.
The directors thank authorities of Madras Export Processing Zone Reserve Bank ofIndia State Bank of India HDFC Bank for the guidance and assistance rendered to thecompany and the employees for their effort and co-operation.
| ||For and on behalf of the Board |
|Place : Chennai ||JOHN D.ROLLO |
|Date : 14th July 2016 ||Chairman |