The Board of Directors of your company presents their 29th Annual Report together withthe audited accounts for the financial year ended 31 st March 2017.
| ||Year ended 31.03.2017 ||Year ended 31.03.2016 |
| ||(Rs.) ||(Rs.) |
|Sales and other Income ||159246011 ||148808662 |
|Profit before interest and Depreciation ||(3440796) ||(7997792) |
|Interest || || |
|Profit before depreciation ||(3440796) ||(7997792) |
|Depreciation ||1536968 ||1638348 |
|Profit before taxation and exceptional item ||(4977764) ||(9636140) |
|Exceptional item || || |
|Profit before taxation after exceptional item ||(4977764) ||(9636140) |
|Provision for taxation || || |
|- Current tax || || |
|- Deferred tax || || |
|Profit / (Loss) after taxation and exceptional item ||(4977764) ||(9636140) |
An extract of the Annual Return in Form MGT-9 is annexed as Annexure-D to the Report.
PERFORMANCE OF THE COMPANY
The Sales and other income during the year had increased to Rs.159.25 million in the FYending 31st March 2017 compared to Rs. 148.81million during the FY ended 31st March 2016.The reduction in sales income was due to unfortunate fact that your company did notreceive sales orders during the months from 01/09/2016 to 31/03/2017 due to heavyrecession in European market. Nevertheless your company is proud to present result on"Going Concern" basis due to introduction of various cost cutting measuresproductivity enhancement measures and scrap generation control 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.
During the year under review the Company has not accepted any deposits in noncompliance of provisions of Companies Act 2013 or Chapter V there under. This disclosureis made as required under Rule 8(5)(v) of Chapter IX of the Companies Act 2013.
Your company has incurred loss during the financial year 2016-17. Hence your companyhas not declared any dividend for the Financial Year 2016-17. The August Members willappreciate that despite incurring loss as mentioned above your company still has preparedthe accounts on "Going Concern" basis.
Hence your Directors do not recommend any dividend on equity shares for the year underreview.
TRANSFER TO RESERVES (Section 134 (3)(j))
An amount of Rs. (4977764) is transferred to Reserves during the year.
MATERIAL CHANGES AND COMMITMENTS FROM THE DATE OF FINALISATION OF ACCOUNTS
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the Financial Year and the date of Report
M/s. M.L.Srinivasan & Associates Chartered Accountants Chennai are the statutoryauditors of the Company. Their appointment is subject to the ratification by the membersat this Annual General Meeting.
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.Therecession in European markets continued for the products of your company. Hence due tonon receipt of sales orders your company continued to incur loss in the FY 2016-17 aswell. However your company continues t o focus on the current good work being done onoperational side cost cutting measures and increasing the productivity. Your company hadadded new products in product departments which enabled the company to continue earningrevenue despite the fact that there was near nil demand for reed switches which is theback bone of your company. Your company is further contemplating on adding new products inthe product department Proximity (sensor). Your company is also working out variousmeasures to upgrade the machineries and equipment by adopting itself to latesttechnologies.
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.
Pursuant to provisions of the Companies Act 2013 and the Articles of Association ofthe Company Mr. Robert P. Romano retires by rotation at the ensuing Annual GeneralMeeting and he is eligible for re-appointment.
EVALUATION OF DIRECTOR MEMBERS OF THE BOARD:
The mechanism to evaluate the performance of Director Members of the Board exists inthe Compnay
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 had appointed one Mr. R.Soundara Rajan as a Whole Time Company Secretary on14-11-2016 based on his representation that he is a qualified company secretary. The saidcompany secretary resigned from the company on 09-01-2017. Since company does not havemembership number and the PAN number of the said company secretary. Hence the companycould not file DIR-12 for the said company secretary.
The company is once again trying hard to identify whole time company secretary and alsoa Chief Financial Officer to comply with the said provisions of the Act at the earliestprovided alwayssubject o t financial viability of your company. It will not be out ofplace to mention herein that company is literally reeling under financial stress. Thecompany is finding too difficult to even manage / ensure meticulous compliance of listingagreement due to financial constraints.
SECRETARIAL AUDIT REPORT
Your Company has appointed Ms.Sowmya Parasuraman Company Secretary in Whole TimePractice as Secretarial Auditor of the Company to give Secretarial Audit Report for FY2016-17. As per the provisions of section 204 of the Companies Act 2013 the SecretarialAudit Report from Ms.Sowmya Parasuraman Practicing Company Secretary has been obtainedand the same is attached as Annexure F to this report.
Statutory Auditors of the Company M/s. M.L.Srinivasan & Associates CharteredAccountant's 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 2016-17.
The Audit Committee of your company consisted of 03 Directors as at 31st March 2017.
The Committee has reviewed the Accounts for the year ended March 31 2017. The membersof the Audit Committee are Mr.John D Rollo Mr.P.Ramesh and Mr.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. TheCompany has zero tolerance for sexual harassment at workplace and has put in place anadequate system for safeguarding the dignity of women employees on complaints if anyreceived and provide justice to the affected employees without delays required under theprovisions of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 ('Act'). No complaints were received by the committee during the yearunder review. Since the number of complaints filed during the year was NIL the Committeeprepared a NIL complaints report. This is in compliance with section 22 of the Act.
The industrial relations continued to remain cordial throughout the period underreview.
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 andphysical.
LISTING WITH STOCK EXCHANGES
Your company's shares are listed in BSE LTD (Bombay Stock Exchange).The listingcontinued throughout the year. Listing fees have been paid up to date.
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 applicable Accounting Standards have beenfollowed along with proper explanation relating to material departures if any;
b) The Directors had selected such accounting policies and have applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial 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 bythe existing clause 49 of the Listing Agreementswith the Stock Exchangesa 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 s i annexed as 'Annexure C' to this Report gives information in respect ofConservation of Energy Technology absorption and Foreign Exchange Earnings and Outgorequired under Section 134(3)(m) of the Companies Act 2013 and forms a part of theBoard'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 ofthis report.
(c) Board meetings
The Board of Directors of your Company met 07 times during the year under review.
|S.No. Name ||Number of Board Meetings held during the year 2016-17 ||Number of Board Meetings attended during the year 2016-17 |
|1 Mr.Robert P. Romano ||7 ||3 |
|2 Mr.John D. Rollo ||7 ||7 |
|3 Ms.Mary Patricia Galasso ||7 ||3 |
|4 Mr.P.Ramesh ||7 ||4 |
|5 Mr.A.Jeyaganesan Muthiah ||7 ||4 |
The above information is provided in the Corporate Governance Report as well.
(d) Particulars of Loans received from Directors and/or their relatives:
The company has not received any loans from any of its directors or their relativesduring the period under review.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS OR SECURITIES PROVIDED UNDER SECTION186 AND THE PURPOSE FOR WHICH THEY WOULD BE UTILIZED BY THE RECIPIENTS. Section 134(3)(g)-
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 not applicable. Attentionof members is also drawn to the disclosure of transactions with related parties set out inNotes t o Accounts in the Independent Auditors' Report forming part of the Annual Report.None of the Directors has any pecuniary relationships or transactions vis-a-vis theCompany.
(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 whereupon a copy would besent.
(g) Risk Management
Your Company hadformed 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 Senior Management
The details relating to ratio of the remuneration of each director to the medianremuneration of the employees of the Company for the financial year 2016-17 is given 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.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE RULE8(5)(VII) of Chapter IX)
There were no such orders passed during the year under review.
THE DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TOFINANCIAL STATEMENTS RULE 8(5)(VIII) of Chapter IX)
The Company has implemented a financial control system designed to protect the interestof the Company adequately and in ensuring the accuracy of the financial statements.
DETAILS OF CESSATION OF DIRECTORS & OTHER MANAGERIAL PERSONNEL DURING THE YEAR(RULE 8(5)(lll) of Chapter IX) -
DETAILS OF APPOINTMENT OF DIRECTORS & OTHER MANAGERIAL PERSONNEL DURING THE YEAR(RULE 8(5)(lll) of Chapter IX) -
STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OFSUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES AOC1 -
DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES DURING THE YEAR; RULE 8(1) -
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIESREFERRED TO IN SUB-SECTION(1) OF SECTION 188 INCLUDING JUSTIFICATION FOR ENTERING INTO SUCH CONTRACTS. (AOC 2)
|1. Details of contracts or arrangements or transactions not at arm's length basis || |
|(a) Name(s) of the related party and nature of relationship || |
|(b) Nature of contracts/arrangements/ transactions || |
|(c) Duration of the contracts / arrangements/transactions || |
|(d) Salient terms of the contracts or arrangements or transactions including the value if any ||NIL |
|(e) Justification for entering into such contracts or arrangements or transactions || |
|(f) date(s) of approval by the Board || |
|(g) Amount paid as advances if any: || |
|(h) Date on which the special resolution was passed in general meeting as required under first proviso to Section 188 || |
|2. Details of material contracts or arrangement or transactions at arm's length basis || |
|(a) Name(s) of the related party and nature of relationship ||Comus International 454 Allwood Rd Clifton |
| ||New Jersey 07012 |
| ||USA |
| ||Comus Belgium BVBA |
| ||Overhaamlaan 40 |
| ||B-3700Tongeren |
| ||Belgium |
| ||Comus EuropeLimited |
| ||Unit 7 Rice Bridge Industrial Estate |
| ||Thorpe - le - Soken |
| ||Essex England |
| ||CO16OHL |
| ||Comus Technology BV |
| ||Jan camperstraat 11 |
| ||6416 SG Heerlen |
| ||The Netherlands |
| ||Gunther AmericaInc. |
| ||454 Allwood Rd. Clifton |
| ||New Jersey 07012 |
| ||USA |
| ||Comus International is the Parent Company. |
| ||Comus Belgium Comus Europe are direct subsidiary of Comus International. Gunther America is holding 61.22 % shares in STG Ltd. Gunther America is subsidiary of Comus International. Hence STG is also subsidiary of Comus International. |
|(b) Nature of contracts/arrangements/ transactions ||Import / Export marketing agreement executed between the group companies. Raw materials are supplied duty free to STG Ltd by overseas group companies. STG Ltd converts the raw materials and supplies back finished goods to group companies. Payment to the overseas vendors of raw material is paid by overseas group companies directly and the raw material costs are adjusted against the sales invoices for finished goods of STG Ltd. |
|(c) Duration of the contracts / arrangements/transactions ||Contract termination is at will. |
|(d) Salient terms of the contracts or arrangements or transactions including the value if any: ||As mentioned in Para-(b) above. |
|(e) Date(s) of approval by the Board if any: ||The agreement is from the inception of STG Ltd. |
|(f) Amount paid as advances if any: ||STG has not paid any advance to its group companies. |
Qualification by Statutory Auditors:
There are no qualifications reservations or adverse remarks in the Auditors Report.
Qualification by Secretarial Auditor:
The Learned Company secretary has observed in her secretarial audit report that DIR-12in respect of one Mr.Soundara Rajan Company Secretary was not filed. In this regard itis submitted that the Company had appointed one Mr. R.Soundara Rajan as a Whole TimeCompany Secretary on 14-11-2016 based on his representation that he is a qualified companysecretary. The said company secretary resigned from the company on 09-01-2017. Sincecompany does not have membership number and the PAN number of the said company secretary.Hence the company could not file DIR-12 for the said company secretary.
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 : 28th July 2017 ||Chairman |