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Switching Technologies Gunther Ltd.

BSE: 517201 Sector: Engineering
NSE: N.A. ISIN Code: INE311D01017
BSE 00:00 | 06 Jul 35.30 -2.50
(-6.61%)
OPEN

41.35

HIGH

41.35

LOW

34.10

NSE 05:30 | 01 Jan Switching Technologies Gunther Ltd
OPEN 41.35
PREVIOUS CLOSE 37.80
VOLUME 265
52-Week high 91.70
52-Week low 30.05
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 41.35
CLOSE 37.80
VOLUME 265
52-Week high 91.70
52-Week low 30.05
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Switching Technologies Gunther Ltd. (SWITCHINGTECH) - Director Report

Company director report

The Board of directors of your Company take pleasure in presenting the 33rd AnnualReport together with the Audited Financial Statements for the financial year ended 31stMarch 2021.

FINANCIAL RESULTS

Year ended 31.03.2021 Year ended 31.03.2020
(Rs) (Rs)
Sales and other Income 109851171 132595169
Profit before interest and Depreciation (39360929) (14438074)
Interest - -
Profit before depreciation (39360929) (14438074)
Depreciation 972003 1272428
Profit before taxation and exceptional item (40332932) (15710502)
Exceptional item - -
Profit before taxation after exceptional item (40332932) (15710502)
Provision for taxation
- Current tax - -
- Deferred tax - -
Profit / (Loss) after taxation and exceptional item (40332932) (15710502)

EXTRACT OF ANNUAL RETURN

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 decreased to Rs 109.851 million in theFY ending 31st March 2021 compared to Rs 132.595 million during the FY ended 31st March2020. Thus the company has made an operational loss during the financial year underreporting. Your company has incurred a loss of Rs 40332932 due to exchange fluctuationloss and reduction in sales orders throughout the financial year due to recession inEuropean Market over which your company's management had no control. Nevertheless yourcompany is proud to present the results on "Going Concern" basis due tointroduction of various cost cutting measures productivity enhancement measures and scrapgeneration control measures.

The management's tight efficiency effectiveness and pro-active commitment and controlof cost measures and other related activities helped the present management to keep thelosses at lower end. The present management is confident of moving further forward toconvert the company into profitable position yet again in the ensuing future.

DEPOSITS

During the year under review the Company has not accepted any deposits in terms ofprovisions of Companies Act 2013 or Chapter V there under. This disclosure is made asrequired under Rule 8(5)(v) of Chapter IX of the Companies Act 2013.

DIVIDEND

Your company in order to conserve the resources and to fund the repair &maintenance cum replacement of plant and machineries which are more than 38 years old nowand to keep pace with the latest technologies has not declared any dividend for theFinancial Year 2020-21.

TRANSFER TO RESERVES (Section 134 (3)(j))

An amount of ' (40332932) 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.

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

It had been a difficult year as the operations of the Company were affected due toCovid. There were no sufficient business orders and supplies were also affected due tologistics issues. The prices of the raw materials had increased particularly Rodium whoseprices had sky rocketed but the Company could not pass on the proportionate increase inprices to the end consumer.. However the Company had undergone cost cutting measures tobring down the losses. In this context we also wish to inform that the sales of theCompany had come down due to the above factors in particular due to the unexpected Covidpandemic last year which is a temporary phenomenon. As

a result the operational loss amounted to Rs 40332932/- However the Management isconfident of reviving the business of the company in the years to come through costcutting measures and increasing the productivity and by adding new products.

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.

INFORMATION SYSTEMS

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. DIRECTORS

During the year under review Mr.Kanthimathinathan Chocalingam and Ms.Gayathri M N wereappointed as Independent Directors with effect from 11th November 2020.

KEY MANAGERIAL PERSONNEL

Your Company has Mr. P. Ramesh Managing Director Mr. A. Jeya Ganesan MuthiahMr.C.Chandrachudan Chief Financial Officer and Mr.S.Ramesh Company Secretary in thecategory of Key Managerial Personnel as mandated by the provisions of Section 203 of theCompanies Act 2013.

SECRETARIAL AUDIT REPORT

Your Company has appointed M/s. GSR & Co. Company Secretaries in Whole TimePractice as Secretarial Auditor of the Company to give Secretarial Audit Report for FY2020-21. As per the provisions of section 204 of the Companies Act 2013 the SecretarialAudit Report from M/s. GSR & Co. Company Secretaries has been obtained and the sameis attached as Annexure F to this report. The Secretarial Auditor in his attached reporthas made an observation which is self explanatory.

STATUTORY AUDITORS

The ten year term of the Statutory Auditors of the Company M/s. M.L.Srinivasan &Associates Chartered Accountants Chennai had expired on 31st March 2021. The Companyhas proposed M/s. V.V. Kale & Co. Chartered Accountants New Delhi as the newStatutory Auditors of the Company for a period of 1 year from the date of this AnnualGeneral Meeting upto the conclusion of the next Annual General Meeting subject to theapproval of the Shareholders in the ensuing Annual General Meeting.

AUDITOR'S QUALIFICATION

The Auditors have stated in their Independent Auditors' Report that the Company hasincurred net loss and the company's accumulated losses resulting in negative networth andthat the company's current liabilities exceed its current assets and as to whether thecompany would be able to continue as a going concern in the foreseeable future.

ADDENDUM TO AUDITORS' REPORT

In response to the Auditors' Qualification the management would like to bring to thenotice of all the stakeholders that it had been a difficult year as the operations of theCompany were affected due to Covid. There were no sufficient business orders and supplieswere also affected due to logistics issues. The prices of the raw materials had increasedparticularly Rodium whose prices had sky rocketed but the Company could not pass on theproportionate increase in prices to the end consumer.. However the Company had undergonecost cutting measures to bring down the losses. In this context we also wish to informthat the sales of the Company had come down due to the above factors in particular due tothe unexpected Covid pandemic last year which is a temporary phenomenon and the Managementis confident of reviving the company and the ability to continue as a going concern.

AUDIT COMMITTEE

The Audit Committee of your company consists of 3 Directors as at 31st March 2021. Themembers of the Audit Committee are Mr.P.Ramesh Mr.Kanthimathinathan Chocalingam andMrs.Gayathri M N. The Audit Committee met 4 times on 20th June 2020 8th August 202011th November 2020 and 10th February 2021. The Audit Committee has reviewed theUnaudited Quarterly Results and the Audited Yearly Accounts for the FY 2020-21.

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 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.

PERSONNEL

The industrial relations continued to remain cordial throughout the period underreview. DEPOSITORY SYSTEM

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. 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 loss 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) The proper policies and procedures have been adopted for ensuring the orderly andefficient conduct of its business including adherence to code of conduct and policiesthe safeguarding

of assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation and that such policies and procedures are adequate and were operatingeffectively.

f) Proper systems are in place to ensure compliance of all laws applicable to theCompany and that such systems are adequate and operating effectively.

CORPORATE GOVERNANCE

The norms/provisions of corporate governance is not applicable to your company as thePaid-up Equity Capital is not exceeding Rs 10 Crores and Net Worth is not exceeding Rs 25Crores as on the last day of the previous financial year i.e. 31st March 2021 as perRegulation 15(2) of SEBI (Listing Obligations & Disclosures Requirement) Regulation2015. However the essential details are furnished in the report on Corporate 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 is 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 of thisreport.

(c) Board meetings

The Board of Directors of your Company met 05 times during the year under review.

S.No. Name Number of Board Meetings held during the year 2020-21 Number of Board Meetings attended during the year 2020-21
1 Mr.P.Ramesh 5 5
2 Mr.A.Jeyaganesan Muthiah 5 5
3 Mr.Kanthimathinathan Chocalingam 5 *
4 Ms.Gayathri M N 5 *

* Mr.Kanthimathinathan Chocalingam and Ms.Gayathri M N were appointed as IndependentDirectors to the Board w.e.f. 11th November 2020.

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 at arm's length and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company. Accordingly the disclosure of Related Party Transactions asrequired under Section 134(3)(h) of the Companies Act 2013 in Form AOC 2 is notapplicable. None of the Directors has any pecuniary relationships or transactionsvis-a-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 whereupon a copy would besent.

(g) 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 2020-21 is given in‘Annexure E' attached and forms part of this Report.

(h) Material Changes affecting the Financial position of the Company

There were 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)(III) of Chapter IX) - NIL

DETAILS OF APPOINTMENT OF DIRECTORS & OTHER MANAGERIAL PERSONNEL DURING THE YEAR(RULE 8(5)(III) of Chapter IX) -

During the year under review the Company had appointed Mr.KanthimathinathanChocalingam and Ms.Gayathri M N as Independent Directors on 11th November 2020.

STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OFSUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES AOC 1 - Not Applicable

DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES DURING THE YEAR; RULE 8(1) - Not Applicable

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-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-3700 Tongeren Belgium
Comus Europe Limited Unit 7 Rice Bridge Industrial Estate Thorpe - le - Soken Essex England CO16 OHL
Comus Technology BV Jan camperstraat 11 6416 SG Heerlen The Netherlands Gunther America Inc. 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 barring a few exceptions when at times STG makes the payment directly to the vendor if the situation so warrants.
(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.

ACKNOWLEDGEMENT

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 P.RAMESH A.JEYA GANESAN MUTHIAH
Date : 14th August 2021 Managing Director Executive Director

.