BOARD'S REPORT The Board of Directors of your company presents their 27th Annual Report together with the audited accounts for the financial year ended 31st March 2015. PERFORMANCE OF THE COMPANY The Sales and other income during the year had considerably increased to Rs. 189.77 million compared to Rs. 165.15 million during the year ended 2014. Your company is proud to present much better result due to introduction of various cost cutting measures, productivity enhancement measures and scrap generation control measures. Your company is also proud to present the financial figures without obtaining any debt waivers or otherwise, from its parent group to prepare the accounts on Going Concern basis, which was otherwise, customary practice in past. This itself will be proving the efficiency, effectiveness and pro-active commitment of the present management. The present management is confident of moving further forward to convert the company into profitable position. AUDITOR'S QUALIFICATION 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 as "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 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 has broken even and made profit. Your company continues to focus on the current good work being done on operational side, cost cutting measures and increasing the productivity. Your company is contemplating on adding new products in the product department proximity (sensor). Your company is also working out various measures to upgrade the machineries and equipment by adopting itself to latest technologies. MANUFACTURING FACILITIES IN YOUR COMPANY The company is into the manufacturing of Electronic components 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. However, a little Research & Development is being done in the Badalex and Semi automatic department to keep pace with technological up-gradation. INFORMATION SYSTEMS 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. DEPOSITS The Company has neither invited nor accepted any deposits during the year. DIRECTORS Pursuant to provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Robert P. Romano retires by rotation at the ensuing Annual General Meeting. Pursuant to provisions of Companies Act, 2013 and Articles of Association of the Company, Ms. Mary Patricia Galasso retires at the ensuing AGM. Pursuant to provisions of Companies Act, 2013 and Articles of Association of the Company, Mr. A.Jeyaganesan Muthiah retires at the ensuing AGM. Further, Mr. P. Ramesh- Managing Director having already completed his 1st Term of Appointment offers himself for reappointment as Managing Director of the Company for another term of 5 years being eligible for the same. KEY MANAGERIAL PERSONNEL Your Company has Mr. P. Ramesh, Managing Director in the category of Key Managerial Personnel as mandated by the provisions of Section 203 of the Companies Act, 2013. The Company is taking sincere efforts to appoint Whole Time Company Secretary and Chief Financial Officer to comply with the said provisions of the Act at the earliest, provided always subject to financial viability of your company. It will not be out 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 due to financial constraints. That is the reason for your company to bring in the option of de-listing the equity shares of the company from Bombay stock exchange. SECRETARIAL AUDIT REPORT Your Company has appointed Ms. U. Veena Iyer, Company Secretary in Whole Time Practice vide Board Resolution as Secretarial Auditor of the Company to give Secretarial Audit Report for FY 2014-15. As per the provisions of section 204 of the Companies Act, 2013, the Secretarial Audit Report from Ms.U. Veen Iyer, Practicing Company Secretary has been obtained and the same is attached as Annexure F to this report. STATUTORY AUDITORS Statutory Auditors of the Company, M/s. M.L.Srinivasan & Associates, Chartered Accountants reappointment for FY 2015-16 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. COST AUDITOR Your Company has appointed Mr.CMA.John D. Nevin as Cost Auditor of the Company under the provisions of the Companies Act, 2013 for FY 2014-15.They are required to submit the report to the Central Government within 180 days from the end of the accounting year. AUDIT COMMITTEE The Audit Committee of your company consisted of 02 Directors as at 31st March, 2015. The Committee has reviewed the Accounts for the year ended March 31, 2015. The members of the Audit Committee are Mr. John D Rollo and Mr. P.Ramesh. 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. As required under the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ('Act'), your Company has constituted an Internal Complaints Committee. 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. PERSONNEL The industrial relations continued to remain cordial throughout the period. 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 and the listing fees due to date have been paid. 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) That 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) That proper systems are in place to ensure compliance of all laws applicable to the Company and that such systems are adequate and operating effectively. CORPORATE GOVERNANCE 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 '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 09 times during the year under review. The details of Board meetings and the attendance of the Directors are provided in the Corporate Governance Report. (d) Loans, Guarantees & Investments 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 on an arm's length basis 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. Prior approval of the Audit Committee was obtained for those transactions. 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 has 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. If any member is interested in obtaining a copy thereof, such member may write to the Compliance Officer, whereupon a copy would be sent. (g) Risk Management Your Company had formed a Risk Management Committee consisting of the Managing Director and other 2 Directors. The Committee identifies, evaluate business risks and opportunities. This Committee has formulated and implemented a policy on risk management to ensure that the company's reporting system is reliable and that the company complies with relevant laws and regulations. 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 2014-15 is given in 'Annexure E' attached and forms part of this Report. (i) Financials There are 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. There are no qualifications, reservations or adverse remarks in the Auditors Report. With respect to the qualifications made in the Secretarial Audit Report for the financial year 201415, the Board wishes to offer the following clarifications with respect to each qualification 1. With respect to Appointment of Women Director, the company was under legal advice that it is not bound to have woman director as per the law. Accordingly company has replied vide its letter dated 25/03/2015 &15/04/2015 to Bombay Stock Exchange and letter dated 13/07/2015 to Registrar of Companies, Chennai. Nevertheless, a woman director had been appointed on 17.06.2015 2. With respect to Appointment of Key Managerial Personnel, i.e. appointment of whole time Company Secretary and a Chartered Accountant as Chief Financial Officer, the Company is and has been on its best possible efforts to appoint them, subject to the financial viability of the company. However, as there are lot of practical difficulties in scouting for a candidate with suitable qualifications, experience and financial constraints faced by the company to offer to the proposed candidates, the appointment is yet to be made. However, the Board assures that this issue will be resolved at the earliest. 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 JOHN D.ROLLO Chairman Date : 24th July 2015 Place : Chennai |