TO THE MEMBERS
The Directors have pleasure in presenting the 22nd Annual Report of yourCompany together with its Audited Financial Statements for the financial year ended March31 2017.
1. PERFORMANCE / FINANCIAL RESULTS
The financial performance of the Company for the year ended March 31 2017 issummarized below:
|Particulars ||2016 2017 ||2015 2016 |
| ||Rs. in lacs ||Rs. in lacs |
|Gross Income ||680.86 ||3202.03 |
|Profit Before Interest and Depreciation ||(172.73) ||(789.85) |
|Finance Charges ||- ||- |
|Gross Profit ||(172.73) ||(789.85) |
|Provision for Depreciation ||54.61 ||63.03 |
|Net Profit Before Tax ||(227.34) ||(852.88) |
|Provision for Tax ||(8.48) ||(10.19) |
|Net Profit After Tax ||(218.86) ||(842.69) |
|Balance of Profit brought forward ||(218.86) ||(842.69) |
|Balance available for appropriation ||(218.86) ||(842.69) |
|Proposed Dividend on Equity Shares ||- ||- |
|Tax on proposed Dividend ||- ||- |
|Transfer to General Reserve ||- ||- |
|Surplus carried to Balance Sheet ||(218.86) ||(842.69) |
2. Business Overview:
During the last few years the telecom industry has been adversely affected by thegeneral economic slowdown and various other factors such as slower growth of 3Gtechnology; failure of spectrum auctions and inflationary costs of power & fuel. Thishas resulted into substantial erosion of the Company's net worth and the Company hasincurred cash losses. The Company continues to take various measures such as costoptimization improving operating efficiency renegotiation of contracts with customers toimprove Company's operating results and cash flows. However the management of the Companyis confident on achieving better results in the upcoming years.
3. General Reserve and Dividends:
Taking into account overall financial performances of the Company Your Directors do notrecommend any dividend for the financial year ended on March 31 2017. Consequentlygeneral compliance has been made with respect to the transfer to General Reserve Account.
4. Transfer of Unclaimed Dividend to Investor Education and Protection Fund:
During the year under review the Company has not transferred any amount to InvestorEducation and Protection Fund.
5. Subsidiaries Associates and Joint Ventures
The Company has 6 subsidiaries namely: M/s. Gemini Traze RFID Private Limited ChennaiM/s. Point Red Telecom Limited Bangalore M/s. Gemini Geoss Energy Private LimitedChennai M/s. Gemini Infotech Limited Hong Kong M/s. PR Wireless Tech Limited Hong Kongand M/s. Gemini FTZ Dubai.
As required under the Listing Agreements entered into with the Stock Exchanges aconsolidated financial statement of the Company and all its subsidiaries is attached. Theconsolidated financial statements have been prepared in accordance with the relevantaccounting standards as prescribed under norms of the Companies Act 2013 and rules madethereof.
6. Capital Structure:
During the year under review the Company has not issued Bonus shares. The Company hasnot issued shares with differential voting rights. It has neither issued employee stockoptions nor sweat equity shares. The Company has not bought back any of its equity shares.
7. Material Events Occurring After Balance Sheet Date
There were no material changes and commitments affecting the financial position betweenthe end of the Financial Year and the date of this Report.
8. Public Deposits
In terms of the provision of Sections 73 and 74 of the Companies Act 2013 read withthe relevant rules your Company has not accepted any public deposits during the yearunder review.
9. Statutory Auditors
Pursuant to Section 139 of the Act and Rules made thereunder M/s. V Viswanathan& Associates Chartered Accountants Chennai were appointed as Statutory Auditorsof the Company at the Annual General Meeting held on September 29 2014. Further theirappointment was ratified by the shareholders of the Company at the Annual General Meetingheld on September 30 2015. Accordingly your directors recommend for the ratification ofthe appointment of M/s. V Viswanathan & Associates Chartered Accountants Chennai asStatutory Auditors of the Company from the conclusion this Annual General Meeting till theconclusion of the next Annual General Meeting.
10. Explanation to Qualification / remark in the Auditors' Report
Replies to the emphasis of matters stated in the Auditors Report:
a) The company is taking the necessary step to close the issue.
b) The general economic slowdown has affected the telecom industry.
The late auction of spectrum by government and the slowdown of 3G and 4G technologieshave not brought cheer to the telecom industry. The non-payment of government receivableshas resulted into substantial erosion of the Company's net worth and the Company hasincurred cash losses. The Company continues to take various measures such as costoptimisation improving operating efficiency renegotiation of contracts with customers toimprove Company's operating results and cash flows. Further the management believes thatnew spectrum auction will result in exponential growth in 3G 4G & LTE which areexpected to generate incremental cash flows to the Company. Therefore the financialstatements are prepared on going concern basis.
c) The on-going law suits are expected to end in favorable for the Company and takingnecessary steps to regain consciousness.
11. Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed Mr. S Shreenivasan Company Secretaries in Practice(Certificate of Practice Number: 8780) Chennai to undertake the Secretarial Audit of theCompany. The report of the Secretarial Auditors is enclosed to this report. The report isself-explanatory and do not call for any further comments.
12. Compliance with Secretarial Standards:
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings and Annual General Meetings
13. Internal Audit And Internal Control Systems:
The Company continues to engage an in-house team to meet the responsibilities of theInternal Auditor. During the fiscal year the Company continued to implement theirsuggestions and recommendations to improve the control environment. Their scope of workincludes review of processes for safeguarding the assets of the Company review ofoperational efficiency effectiveness of systems and processes and assessing the internalcontrol strengths in all areas. Findings made were discussed with the process owners andsuitable corrective actions taken as per the directions of Audit Committee on an ongoingbasis to improve efficiency in operations. However the Company is still under the processof appointing an Internal Auditor as required under the norms of the Companies Act 2013and rules made thereof.
14. Significant and material Orders Passed By The Regulators or courts
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
15. Corporate Governance
Corporate Governance is the application of best management practices compliance oflaws rules regulations and adherence to ethical principles in all its dealings toachieve the objects of the Company enhance stakeholder value and discharge its socialresponsibility. The Companies Act 2013 and SEBI Listing Regulations have strengthened thegovernance regime in the country. Your Company is in compliance with the governancerequirements provided under the new law and listing regulations.
A separate Report on Corporate Governance together with Auditor's Certificateconfirming compliance with the conditions of Corporate Governance as stipulated underSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed to this Report.
16. Management Discussion and Analysis
Report on Management Discussion and Analysis as stipulated under the ListingRegulations and any other applicable law for the time being in force based on auditedconsolidated financial statements for the financial year 2016-17 forms part of this AnnualReport.
17. Directors and Key Managerial Personnel
Mr. Eswaran Annamalai Independent Director of the Company has tendered his resignationletter on 11.02.2017 and relieved from the Board on 14.02.2017. Mr. Ramamurthy RamkumarWhole Time Director of the Company has tendered his resignation and accepted the same andrelieved from the Board on 30.03.2017.
Mrs. Bhuvaneswari Karthick was appointed onto the board of the Company with effect fromOctober 30 2015 and she has not been regularized at subsequent Annual General Meetingheld on 30.09.2016. Mrs. Bhuvaneswari Karthick was again appointed onto the board of theCompany with effect from November 14 2016.
18. Independent Directors
The Independent Directors of the Company have declared that they meet the criteria ofIndependence in terms of Section 149(6) of the Companies Act 2013 and that there is nochange in their status of Independence. Separate Meeting of Independent Directors was heldon 14th November 2016.
19. Board Evaluation
During the year in the terms of the requirements of the Act and Listing Regulationsthe Board evaluation cycle was completed by the Company internally which included theEvaluation of the Board as a whole Board Committees and Directors. A structuredevaluation report was prepared after taking into consideration inputs received from theDirectors covering various aspects of the Board's functioning such as adequacy of thecomposition of the Board and its Committees Board dynamics execution and performance ofspecific duties obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directorsof the Company who are evaluated on parameters such as level of engagement andcontribution independence of judgment safeguarding the interest of the Company etc. Theperformance evaluation of the Independent Directors was carried out by the entire Board.The Directors expressed their satisfaction with the evaluation process.
20. Company Policy on Directors' Appointment and Remuneration
The Company has a Nomination and Remuneration Policy in compliance with the provisionsof Sections 134(3)(e) and 178 of the Companies Act 2013 and Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) 2015. The policy provides aframework on Director's appointment and remuneration including criteria for determiningqualifications positive attributes independence of Director and also remuneration forKey Managerial Personnel and other employees. The Nomination and Remuneration policy formsa part of Corporate Governance Report of this Annual Report.
During the year Four Board Meetings and four Audit Committee Meetings were convened andheld. For the details of the meetings of the Board and its Committees please refer to theReport on Corporate Governance which forms part of this report. The intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013.
22. Committees of the Board
The details of the powers functions composition and meetings of the Committees of theBoard held during the year are given in the Report on Corporate Governance section formingpart of this Annual Report.
The Board has constituted Audit Committee as per the provisions of Section 177 of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The details pertaining to the composition terms of reference etc. ofthe Audit Committee of the Company and the meetings thereof held during the financial yearare given in the Report on Corporate Governance section forming part of this AnnualReport. The recommendations of the Audit Committee were accepted by the Board of Directorsof the Company from time to time.
Nomination and Remuneration Committee
The details pertaining to the composition terms of reference etc. of the Compensationand Remuneration Committee of the Board of Directors of the Company and the meetingsthereof held during the financial year are given in the Report on Corporate Governancesection forming part of this Annual Report.
Stakeholders Relationship Committee
The details pertaining to the composition terms of reference etc. of StakeholdersRelationship Committee of the Company and the meetings thereof held during the financialyear are given in the Report on Corporate Governance section forming part of this AnnualReport.
23. Vigil Mechanism (Whistle Blower Policy)
The Company has taken steps to establish the Vigil Mechanism/Whistle Blower Policy asis stipulated in the Listing Agreement and Pursuant to Section 177(9) & 177(10) of theCompanies Act 2013. This provides a mechanism to raise concerns about actual or suspectedfrauds unethical behavior safeguards against victimization of employees and etc. andthe same has been posted in the official website of the Company.
24. Particulars of Loans given Guarantees given and Investments made
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
25. Related Party Transactions
All transactions entered by the Company with Related Parties were in the ordinarycourse of business and at arms' length basis and that provisions of Section 188 of theCompanies Act 2013 are not attracted. Hence the disclosure in form AOC-2 is not required.
Further there are no material related party transactions during the year under reviewwith the promoters directors or key managerial personnel.
26. Extract of Annual Return
Pursuant to the provisions of the Section 92(3) of the Companies Act 2013 read withRule 12(1) of the Companies (Management and Administration) Rules 2014 the extract ofAnnual return of the Company for the financial year ended on March 31 2017 is enclosed inthe Annual Report.
27. Conservation Of Energy & Technology absorption and (R&D)
Your Company's power requirements are very minimal. Your Company however takes everypossible step to make optimum utilization of energy and avoid unnecessary wastage ofpower.
Your Company keeps itself updated with the latest technology available in the market.Your company aims at providing future-proof and future adaptable technologies to all itsclients.
28. Foreign Exchange Earnings and Outgo
During the year there were no foreign exchange earnings and expenses during financialyear ended on March 31 2017.
29. Directors Responsibility Statement
The Directors hereby confirm that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and that no material departures have been made from the same;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the Loss ofthe Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) they have prepared the Annual Accounts on a going concern basis;
e) they have laid down internal financial controls for the Company and such internalfinancial controls are adequate and operating effectively; and
f) they have devised proper system to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
30. Details of Policy Developed and Implemented By the Company on Its Corporate Social
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.
31. Particulars Of Employees:
No employee throughout the financial year was in receipt of remuneration of Rs. 60lakhs or more or employed for part of the year and in receipt of Rs. 5 lakhs or more amonth under Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
32. Listing with the Stock Exchanges
The Equity Shares of the Company are listed on BSE Limited (BSE) and National StockExchange of India Limited (NSE) and Listing fees for 2016-17 have been paid to BSE.
33. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
The Company has in place an Anti-Sexual Harassment Policy in line with requirements ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. All employees (permanent contractual temporary trainees) are covered under thispolicy. Internal Complaints Committee(s) (ICC) has been set up to redress complaintsreceived regarding sexual harassment. During the year there was no case ofanti-harassment reported to the Committee(s).
The Directors are thankful to the Members and Investors for their confidence andcontinued support. The Directors are grateful to the Central and State Government StockExchanges Securities & Exchange Board of India Reserve Bank of India SoftwareTechnology Parks of India Lenders FCCBs holders and last but not the least its trustedclients for their continued support.
The Directors would like to express their gratitude for the profuse support andguidance received from alliance partners and vendors. The Directors would also like toexpress their sincere thanks and appreciation to all the employees for their commendablework and professionalism.
| || ||For and on behalf of the Board of Directors |
| || ||For Gemini Communication Limited |
| ||Sd/- ||Sd/- |
| ||V. J. Chandran ||R. Vijaykumar |
| ||Director ||Chairman & Managing Director |
| ||DIN 06523768 ||DIN 00158328 |
|Place: Chennai || || |
|Date: August 14 2017 || || |