The Board of directors of your Company take pleasure in presenting the 31st Annual Report together with the Audited Financial Statements for the year ended 31st March 2019.
|Financial results||Year ended 31.03.2019||Year ended 31.03.2018|
|Sales and other Income||186744291||156228984|
|Profit before interest and Depreciation||6497612||576648|
|Profit before depreciation||6497612||576648|
|Profit before taxation and exceptional item||5112715||(795948)|
|Profit before taxation after exceptional item||5112715||(795948)|
|Provision for taxation||-||-|
|- Current tax||347844||-|
|- Deferred tax|
|Profit / (Loss) after taxation and exceptional item||4764871||(795948)|
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 increased to 186.744 million in the FY ending 31st March 2019 compared to the decrease in sales income by 156.228 million during the FY ended 31st March 2018. Thus the company has made an operational profit during the financial year under reporting. Your company has incurred an operational profit of ' 4764871 despite recession in European Market over which your company's management had no control. Nevertheless your company is proud to present the results on Going Concern basis due to introduction of various cost cutting measures productivity enhancement measures and scrap generation control measures.
The management's tight efficiency effectiveness and pro-active commitment and control of cost measures and other related activities helped the present management to keep the losses at lower end. The present management is confident of moving further forward to convert the company into profitable position yet again in the ensuing future.
During the year under review the Company has not accepted any deposits in terms of the provisions of Companies Act 2013 or Chapter V thereunder. This disclosure is made as required under Rule 8(5)(v) of Chapter IX of the Companies Act 2013.
Your company has not declared any dividend for the Financial Year 2018-19 since the company has to fund the repair & maintenance cum replacement of plant and machineries which are more than 37 years old now to keep pace with the latest technologies. It will not be out of place to mention herein on record that your company has managed to overcome the loss position of the previous FY 2017-18 and managed to generate operational profit of' 4764871 in the FY 2018-19.
Hence your Directors did not recommend any dividend on equity shares for the year under review.
TRANSFER TO RESERVES (Section 134 (3)(j))
An amount of' 4764871 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 the Company 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 Equity shares 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 as Annexure A to this Report.
FUTURE PROSPECTS/FINANCIAL POSITION
Your company had broken even and made profit during FY 2014-15. Unfortunately in FY 201516 your company incurred loss due to non receipt of expected sales orders. The recession in European markets continued for the products of your company. Hence due to non receipt of sales orders your company continued to incur loss in the FY 2016-17 and 2017-18 respectively. Further the operational loss for the FY 2017-18 increased due to unforeseen exchange fluctuation loss and depreciation losses besides reduced sales orders in the European market due to ongoing recession. Nevertheless your company continued to focus on the good work being done on operational side cost cutting measures and increasing the productivity. Your company had added new products in product departments which enabled the company to continue earning revenue despite the fact that there was near nil demand for reed switches which is the back bone of your company. Your company had worked out various measures to upgrade the machineries and equipment by adopting itself to latest technologies during the year under review. All these steps had resulted in presenting of operational profit of' 4764871 during the FY 2018-19 under reporting.
MANUFACTURING FACILITIES IN YOUR COMPANY
The company is into the manufacturing of Electronic components viz. Reed Switches Proximity Sensors Ball Switches etc.
In this regard the specialist machineries like automatic sealing machines called as Badalex and semi-automatic Sealing machines Bihler Press automatic and manual Plating line besides ancillary equipments are used in various process departments.
RESEARCH & DEVELOPMENT
No major Research and development activities are carried out except for a Minor Research & Development in the Badalex and Semi automatic departments to keep pace with technological up-gradation.
Your Company has adequate and proper information systems in place and it has taken proper measures to safeguard all electronic data and information to the best possible level it can.
BUSINESS RESPONSIBILITY REPORT
The details pertaining to Business Responsibility have been given in Annexure B to this Report. DIRECTORS
There were no changes in respect of the appointment or resignation of directors during the year under review. None of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors.Pursuant to the applicable provisions of the Companies Act 2013 and the Articles of Association of the Company Mr. Jeya Ganesan Muthiah Executive Director retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.
KEY MANAGERIAL PERSONNEL
Mr. P. Ramesh Managing Director and Mr. A. Jeya Ganesan Muthiah are the Key Managerial Personnel as mandated by the provisions of Section 203 of the Companies Act 2013.
The Company had appointed Mr. S.Ramesh ACS (KMP) as Whole Time Company Secretary on 1st April 2019 and Mr. C.Chandrachudan (KMP) as Chief Financial Officer of the Company with effect from 1st April 2019.
SECRETARIAL AUDIT REPORT
Your Company has appointed M/s. GSR & Co. Company Secretaries in Whole Time Practice as Secretarial Auditor of the Company to give Secretarial Audit Report for FY 2018-19. As per the provisions of section 204 of the Companies Act 2013 the Secretarial Audit Report from M/s. GSR & Co. Company Secretaries has been obtained and the same is attached as Annexure F to this report.
Statutory Auditors of the Company M/s. M.L. Srinivasan & Associates Chartered Accountants Chennai have been appointed for a period of five years commencing from 1st April 2016 till 31st March 2021 subject to ratification every year in the Annual General Meeting. Their continuation as statutory auditor for FY 2019-20 is to be ratified at this Annual General Meeting as per the provisions of section 139 of the Companies Act 2013. A certificate from the Auditors has been received to the effect that their Re-appointment if made would be within the prescribed limits.
It is our pleasure to inform all the August Members that your auditors have not qualified any transaction. Your auditors have prepared and presented the accounts of the company on Going Concern. The Leave Encashment and Gratuity Liability in respect of the employees of the company have been made on the basis of Actuarial Valuation as mandated under Accounting Standard AS 15.
Pursuant to Section 138 (1) of the Companies Act 2013 the Company has re-appointed M/s. R.R. Prakash & Associates Chartered Accountants Chennai (M.No.204374) to conduct Internal Audit of the functions and activities of the Company for the FY 2018-19. The Internal Auditor reports to the Managing Director and provides clarifications if any that may be required by the Directors.
Your Company has re-appointed Mr. CMA.John D. Nevin as Cost Auditor of the Company under the provisions of the Companies Act 2013 for FY 2018-19.
The Audit Committee of your company consisted of 3 Directors as at 31st March 2019. The members of the Audit Committee are Mr. John D. Rollo Mr. P.Ramesh and Ms. Mary Patricia Galasso. The Audit Committee met 4 times on 10th May 2018 15th July 2018 22nd October 2018 and 21st January 2019. The Audit Committee has reviewed the unaudited Quarterly and Audited Yearly Accounts for the FY 2018-19.
POLICY TO PREVENT SEXUAL HARASSMENT AT WORK PLACE
Your Company is committed to creating and maintaining an atmosphere in which employees can work together without fear of sexual harassment exploitation or intimidation. The Company has zero tolerance for sexual harassment at workplace and has put in place an adequate system for safeguarding the dignity of women employees on complaints if any received and provide justice to the affected employees without delays required under the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 (`Act'). No complaints were received by the committee during the year under review. Since the number of complaints filed during the year was NIL the Committee prepared a NIL complaints report. This is in compliance with section 22 of the Act.
The industrial relations continued to remain cordial throughout the period under review. DEPOSITORY SYSTEM
To facilitate the dematerialization of shares your company has appointed M/s. Cameo Corporate Services Limited Chennai as Electronic Share Transfer Agent for providing electronic connectivity with National Securities Depository Ltd. and Central Depository Services (India) Ltd. M/s.Cameo Corporate Services Limited Chennai is handling the dematerialization 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 listing continued 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 the Directors confirm that:
a) In the preparation of annual accounts the applicable Accounting Standards have been followed along with proper explanation relating to material departures if any;
b) The Directors had selected such accounting policies and have 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 the Company at the end of the financial year and the Profit of the Company for the year.
c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the 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 and efficient conduct of its business including adherence to code of conduct and policies the safeguarding of 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 and that such policies and procedures are adequate and were operating effectively.
f) Proper systems are in place to ensure compliance of all laws applicable to the Company and that such systems are adequate and operating effectively.
As required by the existing clause 49 of the Listing Agreements with the Stock Exchanges a detailed report on Corporate Governance is included in the Annual Report. The Auditors have certified the Company's compliance of the requirements of Corporate Governance in terms of clause 49 of the Listing Agreement and the same is annexed to 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 and Outgo is annexed as `Annexure C' to this Report gives information in respect of Conservation of Energy Technology absorption and Foreign Exchange Earnings and Outgo required under Section 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 of the Act is given in Form No. MGT 9 as `Annexure D' attached and forms a part of this report.
(c) Board meetings
The Board of Directors of your Company met 07 times during the year under review.
|Name||Number of Board Meetings held during the year 2017-18||Number of Board Meetings attended during the year 2017-18|
|1 Mr. Robert P. Romano||7||6|
|2 Mr. John D. Rollo||7||7|
|3 Ms. Mary Patricia Galasso||7||6|
|4 Mr. P.Ramesh||7||1|
|5 Mr. A.Jeyaganesan Muthiah||7||1|
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 relatives during the period under review.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS OR SECURITIES PROVIDED UNDER SECTION 186 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 to any other entity/ body corporate. As such no disclosure is required to be made in this Report and also in the relevant Registers.
(e) Related Party Transactions
All related party transactions entered into by your Company during the financial year were at arm's length and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters Directors Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company. Accordingly the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act 2013 in Form AOC 2 is not applicable. Attention of members is also drawn to the disclosure of transactions with related parties set out in Notes to Accounts in the Independent Auditors' Report forming part of the Annual Report. None of the Directors had any pecuniary relationships or transactions vis-a-vis the Company.
(f) Particulars of Employees:
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 has been appended as Annexure E to this Report. The information required pursuant to Section 197 of the Companies Act read with Rule 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 the members at registered office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting.
(g) Risk Management
Your Company had formed a Risk Management Committee consisting of Mr.P.Ramesh Mr. John D.Rollo and Mr. Robert P.Romano. The Risk Management Committee does not apply to the Company. The Board of Directors of your Company are of the opinion that at present there are no elements of risks which may threaten the existence of the Company.
Your Company has a vigil mechanism named Whistle Blower Policy to deal with instance of fraud and mismanagement if any.
(h) Nomination & Remuneration Policy for Senior Management
The details relating to ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year 2018-19 is given in `Annexure E' attached and forms part of this Report.
(i) Material Changes affecting the Financial Position of the Company
There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statement relates and the date of the report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE RULE 8(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 TO FINANCIAL STATEMENTS RULE 8(5)(VIII) of Chapter IX)
The Company has implemented a financial control system designed to protect the interest of 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) -
DETAILS OF APPOINTMENT OF DIRECTORS & OTHER MANAGERIAL PERSONNEL DURING THE YEAR (RULE 8(5)(III) of Chapter IX) -
STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES AOC 1
DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR; RULE 8(1)
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED 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-3700 Tongeren Belgium
Comus Europe Limited
Unit 7 Rice Bridge Industrial Estate
Thorpe - le - Soken
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.|
Qualification by Statutory Auditors
There are no qualifications reservations or adverse remarks in the Auditors Report.
Qualification by Secretarial Auditor
There are no qualifications reservations or adverse remarks in the Auditors Report. ACKNOWLEDGEMENT
The directors thank authorities of Madras Export Processing Zone Reserve Bank of India State Bank of India HDFC Bank for the guidance and assistance rendered to the company and the employees for their effort and co-operation.
For and on behalf of the Board
Place : Chennai
Date : 23rd May 2019