Switching Technologies Gunther Ltd Directors Report

BOARDS REPORT

The Board of Directors of your Company take pleasure in presenting the 36^th Annual Report together with the Audited Financial Statements for the financial year ended 31st March 2024.

FINANCIAL RESULTS

	Year ended 31.03.2024	Year ended 31.03.2023
	(Rs.)	(Rs.)
Sales and other Income	91,903,864	115,303,913
Profit before Interest and Depreciation	(87,285,083)	(101,199,594)
Interest	-	-
Profit before depreciation	(87,285,083)	(101,199,594)
Depreciation	787,553	643,835
Profit before taxation and exceptional item	(88,072,636)	(101,843,429)
Exceptional item	(56,153,932)	(215,205,223)
Profit before taxation after exceptional item	(31,918,704)	113,361,794
Provision for taxation
- Current tax	-	-
- Deferred tax	-	-
Profit / (Loss) after taxation and exceptional item	(31,918,704)	113,361,794

PERFORMANCE OF THE COMPANY

The Sales and Other Income during the year had decreased to Rs.91.904 million in the FY ending 31st March, 2024 compared to Rs.115.304 million during the FY ended 31st March, 2023. Your company has earned a loss of Rs.31.918 million for the FY ending 31st March, 2024. Your company had an exceptional income during Q4 of 2023-24 which represents the write back of credit balances in respect of purchase of raw materials, consumables, etc payable to Group Companies amounting to Rs.561.54 lakhs. The Companys accumulated losses as at 31st March, 2024 aggregate to Rs.812.49 lakhs mainly to reduction in sales orders throughout the financial year over which your companys management has no control. Nevertheless, your company is proud to present the results on "Going Concern" basis due to the introduction of various cost cutting measures, productivity enhancement measures and scrap generation control measures. Besides the Company on a trial basis is trying to use a substitute cheaper raw material Ruthinium in place of costlier raw material viz., Rodium which if it proves to be successful then the company will be in a position to earn profits and wipe out all the accumulated losses going forward.

DEPOSITS

During the year under review, the Company has not accepted any deposits within the meaning of the provisions of Companies Act 2013 and Companies (Acceptance of Deposits) Rules, 2014. As on 31st March, 2024 the Company did not have any outstanding Public Deposit.

DIVIDEND AND TRANSFER TO RESERVES

Considering the growth plans and the consequential need to conserve resources, the directors have decided not to recommend any dividend for the financial year 2023-24. The directors also do not recommend any transfer to reserves.

ANNUAL RETURN

Draft Annual Return in Form MGT-7 as on 31st March, 2024 is available in the Companys Website at www.switchingtechnologiesguntherltd.com

HOLDING COMPANY

Your Company is a Subsidiary of M/s Gunther America Inc which holds 61.22% of Equity shares in your company. Your Company doesnt have any subsidiary company.

MANAGEMENT DISCUSSION AND ANALYSIS

The details pertaining to the Management Discussion and Analysis have been given as Annexure A forming part of the Annual Report.

FUTURE PROSPECTS/FINANCIAL POSITION

It has been a difficult year as the operations of the Company were still affected due to insufficient business orders. The prices of the main raw materials had increased particularly Gold and Rodium whose prices had increased manifold and infact sky rocketed but the Company could not pass on the proportionate increase in sale prices to the end consumer. In this context, the company on a trial basis is trying to use a substitute cheaper raw material Ruthinium in place of Rodium, and if it proves to be successful then the Company will be in a position to earn profits and wipe out the losses going forward. The Company is also undergoing several cost cutting measures to bring down the losses. The Company believes it to be a temporary phenomenon and the Management is confident of reviving the company and the ability to continue as a going concern.

MANUFACTURING FACILITIES

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.

DIRECTORS

Mr. K. Manoharan, Executive Director, retired by rotation, and being eligible was re-appointed as Executive Director in the Annual General Meeting held on 29th September, 2023.

The extended term of Mr. Kanthimathinathan Chocalingam, Independent Director, and Ms. Gayathri M N, Independent Woman Director ends on 20th September, 2024. The Board of Directors in their meeting held on 7th August, 2024 had proposed the appointment of Mr. Sharanabasaveshwar Hiremath as Independent Non Executive Director and Ms. Saimathy Soupramanien as Independent Non Executive Woman Director in the ensuing Annual General Meeting of the Company.

Declaration by Independent Directors

The Independent Directors have submitted their disclosures to the Board confirming that they fulfill the requirements enumerated under section 149(6) of the Companies Act, 2013 and Regulation 25 of the Securities Exchange Board of India (LODR) Regulations, 2015.

Secretarial Standards

The Company complies with all the applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

Corporate Social Responsibility (CSR)

Pursuant to the provisions of Section 135 of the Companies Act, 2013 the threshold limit for the applicability of Corporate Social Responsibility (CSR) to any company is (a) net worth of the company is Rs.500 crores or more; (b)turnover of the company is Rs.1000 crores or more; or (c) net profit of the company is Rs.5 crores or more.

As the company does not come under any of the threshold limits and has earned loss in year ending March 31, 2024, there is no requirement to make any CSR contribution in FY 2023-24.

Change in nature of business

There was no change in the nature of the business of the Company during the year under review. Material Changes

No material changes or commitments affecting the financial position of the Company occurred between the end of the financial year (i.e., 31st March, 2024) and the date of this report.

KEY MANAGERIAL PERSONNEL

Your Company has Mr. C. Chandrachudan, Managing Director, Mr. K. Manoharan, Executive Director, Mrs. T. Nirmala, Chief Financial Officer and Mr. S. Ramesh, Company Secretary in the category of Key Managerial Personnel as mandated by the provisions of Section 203 of the Companies Act, 2013.

STATUTORY AUDITORS

The Company had appointed M/s. V.V. Kale & Co., Chartered Accountants, New Delhi as the Statutory Auditors of the Company for a period of five years starting from the Financial Year 202223 to Financial Year 2026-27 which was approved by the Shareholders in the Annual General Meeting (AGM) of the company held on 28th September, 2022.

AUDITOR S OBSERVATION

Emphasis of Matter

(i) Material uncertainty related to Going Concern

We draw attention to Note 6 in the Financial Results. The Companys accumulated losses as at March 31, 2024 aggregate to Rs.812.49 Lakhs resulting in complete erosion of its net worth. Further, as of that date, Companys current liabilities exceeded its current assets 79.89 Lakhs. These factors along with other matters as set forth in said notes cast material uncertainty about the Companys ability to continue as a going concern in the foreseeable future. However, the Companys financial statement has been prepared on going concern basis as disclosed by management in said note. Our opinion is not modified in respect of this matter.

(ii) Exceptional Income from write back of credit balances worth Rs. 561.54 Lakhs

We draw attention to the Note 7 in the Financial Results. The Company has recorded exceptional income during Q4 2023-24. This represents write back of credit balances in respect of purchase of raw materials, consumables etc payable to Group Companies amounting to Rs. 561.54 Lakhs. The write back has been approved by the Board in its meeting dated May 29, 2023 and is in the process of intimation to the AD Bank as per prevailing regulations as applicable. Further, the Management confirms that no interest / penal charge is being made by the Group Company on account of such write back.

ADDENDUM TO AUDITORS OBSERVATION

It has been a difficult year as the operations of the Company were still affected due to insufficient business orders. The prices of the main raw materials had increased particularly Gold and Rodium whose prices had increased manifold and infact sky rocketed but the Company could not pass on the proportionate increase in sale prices to the end consumer. In this context, the company on a trial basis is trying to use a substitute cheaper raw material Ruthinium in place of Rodium, and if it proves to be successful then the Company will be in a position to earn profits and wipe out the losses going forward. The Company is also undergoing several cost cutting measures to bring down the losses. The Company believes it to be a temporary phenomenon and the Management is confident of reviving the company and the ability to continue as a going concern.

SECRETARIAL AUDIT REPORT

Your Company had appointed Ms. Shweta Singh, Company Secretary in Whole Time Practice, as Secretarial Auditor of the Company for a period of one year to give Secretarial Audit Report and Secretarial Compliance Report. As per the provisions of section 204 of the Companies Act, 2013, the Secretarial Audit Report from Ms. Shweta Singh, Practising Company Secretary, has been obtained and the same is attached as Annexure E to this report.

ADDENDUM TO SECRETARIAL AUDIT REPORT

The Management and the concerned Secretarial Department has taken note of the observations as cited in the Secretarial Audit Report and will ensure it is rectified and complied going forward.

The policies as mentioned in the Report have been placed and approved in the Board Meeting.

The Company has been registered under the Factories Act and is of the opinion that the Tamil Nadu Shops and Establishments Act, 1947 will not apply to the company, however the company will check the applicability and if applicable will register with it at the earliest.

The Company has started entering the time of conclusion of the committee meetings and the date of entry of minutes in the minutes books from this financial year.

The Audit Committee and the Board has approved the related party disclosures pertaining to the related party transactions. All the related party transactions were at arms length and in the usual course of business.

AUDIT COMMITTEE

The Audit Committee of your company consists of 3 Directors. At present the members of the Audit Committee are Mr. C. Chandrachudan, Mr. Kanthimathinathan Chocalingam and Ms. Gayathri M N. The Audit Committee met 4 times on 29th May, 2023, 11th August 2023, 8th November, 2023 and 12th February, 2024. The Audit Committee has reviewed the Unaudited Quarterly Results and the Audited Yearly Accounts for the FY 2023-24 besides the Related Party Transactions.

PREVENTION OF 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 company during the year under review.

PERSONNEL

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 the Registrar and Share Transfer Agent (RTA) of the company handling the dematerialization of shares, issue of duplicate share certificates, share transfers (both electronic and physical), transmission of shares and transposition of shares, etc.

LISTING WITH STOCK EXCHANGES

Your companys 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 loss 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.

CORPORATE GOVERNANCE

The norms/provisions of corporate governance is not applicable to your company as the Paid-up Equity Capital is not exceeding Rs.10 Crores and Net Worth is not exceeding Rs. 25 Crores, as on the last day of the previous financial year, i.e. 31st March 2024 as per Regulation 15(2) of SEBI (Listing Obligations & Disclosures Requirement) Regulation, 2015. However as a matter of prudent business practice certain essential details for the sake of shareholders are reported in a separate Annexure F.

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 given in ‘Annexure C and forms part of the Boards Report.

(b) Board meetings

The Board of Directors of your Company met 04 times during the year under review.

S.No. Name	Number of Board Meetings held during the year 2023-24	Number of Board Meetings attended during the year 2023-24
1 Mr. C. Chandrachudan	4	4
2 Mr. K. Manoharan	4	4
3 Mr. Kanthimathinathan Chocalingam	4	4
4 Ms. Gayathri M N	4	4

(c) 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.

(d) Related Party Transactions

All related party transactions entered into by your Company during the financial year were at arms 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 is given below in Form AOC 2. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

(e) 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 Rs.to this Report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

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

The Company has in place a financial control system designed to protect the interest of the Company adequately and in ensuring the accuracy of the financial statements.

STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES/ ASSOCIATE COMPANIES/JOINT VENTURES AOC 1:-

Not Applicable

DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR; RULE 8(1):

Not Applicable.

Disclosure in respect of related party-wise transactions is given under Note-35 in the Notes Forming Part of Accounts.

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	C.CHANDRACHUDAN	K.MANOHARAN
Date : 7th August, 2024	Managing Director	Executive Director