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Directors Report of MRO - TEK Ltd. Company
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Directors Report of MRO - TEK Ltd.

Mar 31, 2015

THE MEMBERS OF MRO-TEK LIMITED

The Board of Directors have pleasure in presenting the 31st Annual Report and Audited financial results for the year ended 31st March, 2015 together with the Independent Auditors'' Report.

1.FINANCIAL RESULTS 2014-2015 2013-2014 (Rs. Lacs) (Rs. Lacs)

Net Revenue from operations 5,616.42 6,776.12

Other Income 67.67 29.07

Loss before Depreciation 972.21 909.69

Depreciation 136.90 240.44

Loss before Taxation 1,109.11 1,150.13

Provision for Taxation (Deferred Tax Adjustments) 8.27 (8.29)

Loss after Taxation 1,117.38 1,141.84

Exceptional Items -

Income from Capital Gains - -

Adjustments towards extra ordinary items - (6.19)

Loss for the period 1,117.38 1,135.65

The Company has incurred losses during the year and hence, there is no proposal of transfer of profits to reserves during the year.

PERFORMANCE:

During the year under review,

- the recessionary trend in overall business continued to prevail in the market created complex environment to capture the business.

- the turnover of the Company reduced to Rs 56.16 Crores from Rs 67.76 Crores due to reduction in turnover from Solar Projects.

- lack of clarity on the part of Central government in grant / subsidy sanction created the disturbance in Renewable Energy Industry resulted in lower revenue.

- lack of subsidy from Government coupled with competition affected the margin of Solar power projects during the year.

- the Solar Based Equipment and Project Business recorded turnover of Rs 15.21 Crores as compared to Rs 24.87 Crores in the previous year.

- the Networking Products Space, recorded turnover of Rs. 40.95 Crores as compared to Rs. 42.89 Crores in the previous year. Details on segmental revenue and performance are furnished in Para ''g'' of Note 26 II of ''Notes on Accounts and other explanatory information''.

- stiff competition and increased cost due to high inflation resulted in operating loss of Rs 11.02 Crores as against the loss of Rs 8.85 Crores in the previous year.

- Accumulated losses stood at Rs 49.80 Crores for the year ended 31st March 2015 as against Rs 38.50 Crores in the last year.

- provision has been made for an estimated amount of Rs 0.10 Crores (previous year- Rs 2.65 Crores) in respect of certain items of non/slow-moving inventory, based on Generally Accepted Accounting Practices and estimates by the company;

- Continuous efforts are being made to use slow / non moving stocks to manufacture other products or dispose off in a conducive manner.

- after considering the above, the Net Operating Results show a loss of Rs 11.12 Crores as against Rs.11.50 Crores of the previous year;

Your Company has taken steps to restructure the business by reduction of manpower and cost control methods.

Efforts are being taken to optimize available resources to reduce the overall costs of the company.

The Company proposed to the Board of its Joint Venture Company, RAD-MRO Manufacturing Private Limited to initiate the liquidation proceedings.

2. SHARE CAPITAL:

The Company has increased its Authorised Share Capital from Rs. 12,00,00,000/- (Rupees Twelve Crores only) divided into 2,40,00,000 (Two Crores Forty Lakhs) Equity Shares of Rs. 5/- (Rupees Five only) each to Rs. 15,00,00,000/- (Rupees Fifteen Crores only) divided into 30,000,000 (Three Crores) Equity Shares of Rs. 5/- (Rupees Five only) each by passing Special Resolution by the Members of the Company during the year under report.

During the year under review the Company has not issued shares with/without differential voting rights nor granted stock options nor sweaty equity shares.

3. CHANGE IN NATURE OF BUSINESS:

There were no changes in the nature of business during the year under review as prescribed in Rule 8(ii) of the Companies (Accounts) Rules, 2014.

4. MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:

There are no material changes and commitments between the end of the Financial Year and the Date of the Report, which affect the financial position of the Company.

5. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

As reported elsewhere, subsequent to 31st March 2015, steps were initiated to winding up of Joint Venture Company.

Perhaps the Shareholders will recall that the Company had notified the Stock Exchange on the proposal of disposal of its landed properties. Actions are being initiated towards this objective.

Mr. M. D. Rajan, Company Secretary, who was appointed during the year, expired in the month of July, 2015.

6. DIVIDEND:

Whilst your Directors understand the sentiments of the Investors, the financials of the year that has passed, constrained the Board to state that the dividend is not recommended.

However, the Directors will strive hard to bring the Company back to dividend track before long and the improving performance of the Company is hoped to continue to facilitate consideration of dividend in the days to come.

7. BOARD MEETINGS:

The Meetings of the Board are held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. Additional Meetings of the Board of Directors are held when necessary.

The Board of Directors duly met 6 (Six) times from

01.04.2014 to 31.03.2015 on the following dates: 29.05.2014, 06.08.2014, 16.10.2014, 12.11.2014,

28.01.2015 and 19.02.2015.

8. DIRECTORS AND KEY MANANGERIAL PERSONNEL:

Ms. Sunanda Nag, who was appointed as an Additional Director, holds office up to the date of this Meeting; is proposed to be appointed as an Independent Director of your Company.

Notice has been received from a member of the Company under Section 160 of the Companies Act, 2013 along with deposit of Rs. 1,00,000/-.

Mr. N K Rajasekharan, Director of the Company, is proposed to be appointed as Independent Director for consecutive 5 years and he fulfills the requirements as per the new Companies Act, 2013 His appointment is proposed under Special Business.

Due to personnel commitments, Mr. A. Mohan Rao offered to step down from the office of Director during the year.

Your Board places on record its deep appreciation for the significant contribution and support extended by the outgoing Director.

Mr. S Narayanan, Chairman and Managing Director and Mr. H Nandi, Managing Director, retire by rotation, as per the new Companies Act, 2013 and being eligible, offers themselves for re-appointment.

During the year, Mr. M. D. Rajan was appointed as Company Secretary and a Key Managerial Personnel.

9. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from

each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).( Annexure I)

10. COMPOSITION OF AUDIT COMMITTEE, NOMINATION AND REMUNERATION COMMITTEE & STAKEHOLDERS RELATIONSHIP COMMITTEE:

Following are the composition of various Committees:

i) Audit Committee:

1. Mr. K. Rajamani - Chairman

2. Mr. N. Sivaram - Member

3. Mr. N K. Rajasekharan - Member

ii) Nomination and Remuneration Committee:

a) Mr. K Rajamani - Chairman

b) Mr. N. Sivaram - Member

c) Mr. N K. Rajasekharan - Member

iii) Stakeholders Relationship Committee:

a) Mr. K Rajamani - Chairman

b) Mr. N. Sivaram - Member

c) Mr. N K. Rajasekharan - Member

11. VIGIL MECHANISM:

Report details of establishment of Vigil Mechanism (for Directors and Employees to report genuine concerns) pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and as per Clause 49 of the Listing Agreement and also posted on the website of the Company http://mro- tek.com/pdf/Whistle%20Blower%20Policy.pdf

12. DIRECTORS'' RESPONSIBILITY STATEMENT:

In pursuance of Section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and 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 of the profit and loss of the company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis; and

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

13. EXTRACT OF ANNUAL RETURN:

As required pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual return in MGT-9 attached as a part of this Annual Report. (Annexure II)

14. AUDITORS:

At the Annual General Meeting of the Company held on 17th September, 2014, Messrs NSVM & Associates, Chartered Accountants, Bangalore were appointed as Statutory Auditors of the Company who subsequently expressed their inability to undertake the Audit due to inadequacy of trained resources.

Further, Extra Ordinary general Meeting was convened on 10th November, 2014 and Messrs Singhvi, Dev & Unni, Chartered Accountants, were appointed as Statutory Auditors of the Company for the year 2014-15 in place of Messrs NSVM & Associates, Chartered Accountants, Bangalore.

Now, the Auditors, Messrs Singhvi, Dev & Unni, Chartered Accountants, retire at the ensuing Annual General Meeting. The Company has received a certificate under Section 141 of the Companies Act, 2013 from Messrs Singhvi, Dev & Unni, Chartered Accountants, that their appointment would be within the limits specified therein.

15. SECRETARIAL AUDIT:

Secretarial Audit report as provided by Mr. S Kedarnath, Practising Company Secretary in the form of MR-3 is annexed to this Report. (Annexure III)

16. DISCLOSURE ABOUT COST AUDIT:

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, 2014, dated December 31, 2014 issued by Ministry of Corporate Affairs (MCA), the cost audit records maintained by the such Companies, as may be prescribed, in respect of the products covered as per the above dated notification issued by MCA is required to be audited by an Cost Accountant.

However, the Company not being a prescribed company as per the rules, the Cost Audit is not applicable for the year under report.

17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

(a) Conservation of Energy:

Your Company is duly certified under ISO 14001:2004 (Environment Management System). Every possible effort is made / introduced to conserve and avoid wastage of energy.

Adequate facilities have been installed for rain

water harvesting, recycling of used water, solar- powered energy and maximum usage of natural lighting and ventilation, and thus implementing Go Green Policy in its total spirit.

(b) Research & Development:

The ever changing technology in the space of Networking Products casts a continuing responsibility on the role of R&D division in your Company. Efforts continue to introduce and promote Company''s own patentable products.

Efforts also continue to maximize utilization of the R&D unit''s expertise and technological skills, in finding state-of-the-art solutions, to provide more effective and revolutionary solutions, for all segments of Networking Products Industry.

During the year no amount was incurred towards Capital Expenditure in this division. On revenue account, an amount of Rs 1.70 Crores (Prev. year- Rs. 1.98 Crores) has been expended and absorbed in these accounts, in accordance with the applicable Accounting Standards.

(c) Technology Absorption:

The in-house technical and commercial teams consistently engage themselves in their endeavor to indigenize technology and components, as well as implementation of value-engineering and cost- saving methods.

(d) Foreign Exchange Earnings and Outgo:

Full details of foreign exchange earnings and expenditure are furnished under para 12 and 13 of Note 26 II on ''additional notes to accounts''. However, following are exhibited:

Earning - Rs. 6,95,658/- Outgo - Rs. 22,99,97,133/-

18. DEPOSITS:

Your Company has not invited/accepted/renewed any deposits from the public as defined under the provisions of Companies Act, 2013 and accordingly, there were no deposits which were due for repayment on or before 31st March 2015.

19. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company continued to maintain, high standards of internal control designed to provide adequate assurance on the efficiency of operations and security of its assets. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid-down systems and policies are comprehensively and frequently monitored by your Company''s management at all levels of the organization.

The Audit Committee, which meets at-least four times a year, actively reviews internal control systems as well as financial disclosures with adequate participation, inputs from the Statutory, Internal and Corporate Secretarial Auditors.

21. RISK MANAGEMENT POLICY:

The Company has formulated a Risk Management Policy and has in place a mechanism to inform the Board Members about risk assessment and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework.

22. CORPORATE SOCIAL RESPONSIBILITY:

The Company has incurred losses during the last three financial years. Hence, the Company was not required to make any CSR Expenditure during the year.

23. RELATED PARTY TRANSACTIONS:

All related party transactions which were entered into, 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 at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website. Web link for the same is http://mro-tek.com/pdf/ 20_5_15_RPT_Policy.pdf and also Particulars of Contracts or Arrangements with Related parties referred to in Section 188(1) in Form AOC- 2 annexed to this report as (Annexure IV).

24. ANNUAL BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees.

25. RATIO OF REMUNERATION TO EACH DIRECTOR:

Details / Disclosures of Ratio of Remuneration to each Director to the median employee''s remuneration are annexed to this report as (Annexure-V).

26. LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to NSE and BSE where the Company''s Shares are listed.

27. CORPORATE GOVERNANCE AND

SHAREHOLDERS INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report as (Annexure -VI).

Certificate from the Auditors of the company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

28. CAPITAL EXPENDITURE:

As on 31st March 2015, the gross tangible and intangible assets stood at Rs. 54,12,98,605/- and the net tangible and intangible assets, at Rs 23,50,54,520/-. Additions during the year amounted to Rs. 2,20,68,444/-. The Company has not purchased any assets under lease.

29. JOINTVENTURE

As reported in prior year/s, the activities in the JV Company viz., RAD-MRO Manufacturing Private Limited, Bangalore, were suspended from November 2007. The Company still awaits procedural completion of requisite legal formalities, soon after which, further actions for (members voluntary) winding-up of this JV Company will be initiated. Efforts are being taken to expedite the same.

In the meanwhile, this JV Company continues to register revenue by way of Interest Income (on Fixed Deposit/s with the Bank) which earning is adequate to meet its outgo commitments (by way of professional charges and connected expenses) for completion of the presently-pending activities, and also leave behind a nominal surplus, thereby retaining positive Net Worth in the Company. Such financials are detailed in Para ''h'' of Note 26 II of ''Notes on Accounts and other explanatory information''.

Steps have been taken towards winding up of Joint Venture under the Companies Act, 2013.

30. MATERIAL ORDER PASSED BY ANY COURT OR REGULATOR OR TRIBNUALS IMPACTING GOING CONCERN STATUS OF COMPANY:

No order was passed by any court or regulator or tribunal during the period under review which impacts going concern status of the Company.

31. INDUSTRIAL RELATIONS:

Industrial relations have been cordial and constructive, which have helped your Company to achieve production targets.

32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2014-2015:

No of complaints received : NIL No of complaints disposed off : NIL

33. MANAGEMENT DISCUSSION AND ANALYSIS:

As requisite and appropriate Management Discussion & Analysis is covered under this Report itself, a separate note on the same is not being furnished.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

34. ACKNOWLEDGEMENTS

Your Directors place on record their sincere gratitude to the steadfast patronage of the valued Customers and Vendors. Your Directors also place on record, their sincere appreciation of the dedication and commitment of the employees at all levels.

Your Directors wish to register their acknowledgement and appreciation for the timely support and co-operation being extended by the Banks and all their officials.

for & on behalf of the Board of Directors

Place : Bangalore S. Narayanan Date :3rd August 2015 Chairman & Managing Director


Mar 31, 2014

NIL


Mar 31, 2013

The Directors have pleasure in presenting herewith their Twenty Ninth Annual Report on the activities of your company during the year ended 31 March 2013.

FINANCIAL RESULTS

2012-2013 2011-2012 (Rs. Lacs) (Rs. Lacs)

Net Revenue from operations 4,958.56 3,413.74

Other Income 41.69 145.88

Loss before Depreciation 1,231.96 1,174.36

Depreciation 245.36 254.35

Loss before Taxation 1,477.32 1,428.71

Provision for Taxation

(Deferred Tax adjustments) (6.24) 5.56

Loss after Taxation 1,471.08 1,434.27

Exceptional items

(Income from Capital Gain) 151.71

Adjustments towards extraordinary items 0.85 (2.05)

Loss for the period 1,320.22 1,432.22

PERFORMANCE

During the year under review,

- the demand fluctuation from Customers owing to the slow- down and weak market sentiments continued to exert additional pressure on the manufacturers;

- however, the Company continuously strived to capture every opportunity by continuing its aggressive marketing efforts for its Access & Networking Products, which is now showing signs of transforming into orders;

- the company commenced full-fledged commercial operations in manufacture and supply of Solar Based Equipment & Products which contributed in augmenting the revenue. Details on segmental revenue and performance are furnished in para 17 of Note 26 on ''Additional Notes'' to Accounts;

- in the above setting, the net revenue, at Rs.49.59 crores, registered a growth, over Rs.34.14 crores of the previous year;

- suctiairfailedgrowm in revenie, further cost pressures, resulted in accomplishing margins, sufficient only tocoverapartofyourCompany''s overheads, thereby resulting in operating loss, which registered Rs.9.72 crores, as against operating loss of Rs. 10.32 crores during the previous year; G provision has been made for an estimated amount of Rs.5 crores (previous year- Rs.4 crores) in respect of certain items of non/slow-moving inventory, based on Generally Accepted Accounting Practices and estimates by the company;

- after considering the above, the Net Operating Results show a loss of Rs. 14.72 crores, as against Rs. 14.32 crores of the previous year;

- an amount Rs.1.52 crores, being amount attributable to Capital Gain, on account of acquisition of a portion of landed property by National Highway Authority of India, minimized the operating loss to that extent, with which the declared loss as in financial statements works-out to Rs.13.20 crores, as against Rs. 14.32 crores of the previous year;

- while operating results were negative during the first three financial quarters, with comparatively higher revenues, the operations during the final quarter ended 31 March 2013, resulted in a positive note;

- taking this as a turn-around sign, your Directors are hopeful of achieving increased revenue and profits in the coming months.

DIVIDEND

Under these trying circumstances, your Directors are unable to recommend any dividend this year too which, with your whole- hearted co-operation and support, will facilitate optimization of presently existing cash resources, for operational requirements.

CONSERVATION OF ENERGY

Your company is duly certified under ISO 14001:2004 (Environment Management System). Every possible effort is made / introduced to conserve and avoid wastage of energy.

Adequate facilities have been installed for rain water harvesting, recycling of used water, solar-powered energy and maximum usage of natural lighting and ventilation, thus implementing Go Green Policy in its total spirit.

RESEARCH & DEVELOPMENT

The ever changing technology in the space of Access and Networking casts a continuing responsibility on the role of R&D division in your Company. Efforts continue to introduce and promote for one more of the products developed by this Division.

Efforts also continue to maximize utilization of the R&D unit''s expertise and technological skills, in finding state-of-the-art solutions, to provide more effective and revolutionary solutions, for all segments of the Communication and Networking Industry.

During the year an amount of Rs.0.01 Crore (Previous year- Rs.0.50 Crore) was incurred towards Capital Expenditure in this division. On revenue account, an amount of Rs.2.63 Crores (Previousyear- Rs. 2.90 Crores) has been expended and absorbed in these accounts, in accordance with the applicable Accounting Standards.

TECHNOLOGY ABSORPTION

The in-house technical and commercial teams consistently engage themselves in their endeavor to indigenize technology and components, as well as implementation of value-engineering and cost-saving methods.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Development of overseas market for the products of your company, as also development of products required for the overseas market, is progressing satisfactorily. Efforts also continue to minimize foreign exchange outflow by the process of indigenization.

Full details of foreign exchange earnings and expenditure are furnished under para 13 and 14 of Note 26 n on ''additional notes to accounts''.

CORPORATE GOVERNANCE

A detailed compliance note on Corporate Governance, as required under the provisions in the listing agreement with the Stock Exchanges, together with the certificate of Statutory Auditors thereon, is attached to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

As requisite and appropriate Management Discussion & Analysis is covered under this Report itself, a separate note on the same is not being furnished.

DIRECTORS

R Rajagopalan and A Mohan Rao, Directors, retire by rotation at this meeting, and being eligible, offer themselves for re-appointment.

AUDIT COMMITTEE

The Audit Committee continued to discharge its functions under the applicable laws during the year under report.

AUDITORS

M/s. Narayanan, Patil & Ramesh, Chartered Accountants, Bangalore, retire as Statutory Auditors at the conclusion of this Annual General Meeting. Being eligible for re-appointment, your Directors recommend the same for your consideration.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere gratitude to the steadfast patronage of the valued Customers and Vendors. Your Directors also place on record, their sincere appreciation of the dedication and commitment of the employees at all levels.

Your Directors wish to register their acknowledgement and appreciation for the timely support and co-operation being extended by the Banks and all their officials.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of Companies Act, 1956,

your Directors hereby confirm that

- in the preparation of these annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same; 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 of the profits for that period;

n they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and, for preventing and detecting fraud and other irregularities; rj they have prepared annual accounts on a ''opir- concern.''bask. for & on behalf of the Board of Directors

Race : Bangalore S. Narayanan

Date : 29 May 2013 Chairman & Managing Director


Mar 31, 2012

The Directors have pleasure in presenting herewith their Twenty Eighth Annual Report on the activities of your company during the year ended 31 March 2012.

FINANCIAL RESULTS

2011-2012 2010-2011 (Rs. Lacs) (Rs. Lacs)

Net Revenue from operations 3,413.74 2,582.03

Other Income 145.88 257.78

Profit/(Loss) before Depreciation (1,174.36) (1,283.72)

Depredation 254.35 269.81

Profit/ (Loss) before Taxation (1,428.71) (1,553.53)

Provision for Taxation 5.56 (45.88) (on account of deferred tax)

Profit/(Loss) after Taxation (1,434.27) (1,507.65)

Extraordinary Items 2.05 219.15 Surplus in Profit & Loss account brought forward from previous years 38.08 1,326.58

Net Surplus/(deficit) in Profit-- and Loss Account (1,394.14) 38.08

PERFORMANCE

During the year under review,

- The challenges in introducing new products in the market continued to be faced and were met with unrelenting vigor and enthusiasm;

- all round austerity measures were implemented to peg losses at minimum possible levels;

- aggressive marketing activities were further stepped- up, and customers were continually apprised of cost- effectiveness and unique features embedded in our products;

- however, the unclear economic and political scenario prevailing in the Country, which inevitably filtered down to the market for your company's products, affected achieving a major leap in revenue;

- despite the same, the turnover registered a growth of over 30%, at Rs.34.14 crores, against Rs.25.82 crores of previous year.

Your Directors are confident, and are hopeful, that this growth will be sustained, and every possible action will be taken to further improve such increase.

DIVIDEND

Viewed from the curtailed revenue and consequent losses, in order to continue conserving the presently existing resources for operational requirements, your Directors do not recommend any dividend for the year under review, and are confident of receiving your whole-hearted support for this proposal.

PROSPECTS & OUTLOOK

Your company continues to operate in the space of Communication and Networking. This space is experiencing 'advancement in technology', thereby creating considerable potential for business opportunities, both within and outside the Country.

- Your company is making every effort to encash these business opportunities. Focussed efforts are being taken by your company in promoting its own state-of-the- art products.

- The in-house R&D unit of your company, recognized by GOI, is providing the requisite support in development of innovative products, to meet market requirements.

- As per a recently published report, modernization of existing Data Centers and setting-up of new Data Centers, is expected to considerably increase the demand for LAN & WAN products. With this, the business opportunities for your company look promising.

FINANCE

During the year under review,

- your company incurred an operational loss of Rs 7.74 Crores;

- after providing for an estimated amount of Rs 4 crores towards slow-moving inventory, based on Generally Accepted Accounting Practices, even though the items continue to be usable in the activities of the company, the Loss before Depreciation worked-out to Rs. 11.74 Crores;

- after providing for Depreciation amounting to Rs.2.54 Crores, the Net Loss worked-out to Rs.14.28 crores;

- the preserved cash reserves of the past, fully covered such operational losses, leaving behind the Debt-Free status and a positive Net Worth, of approx 7 times the paid-up Share Capital;

- Stringent austerity measures, already in place, will continue unabated, in order to minimize the impact of expenditure on the financial results;

? Your Directors place on record their sincere appreciation of the assistance, guidance, co-operation and whole- hearted support received from your company's Employees and Bankers.

JOINT VENTURE

As reported in prior year/s, the activities in the JV company viz., RAD-MRO Manufacturing Private Limited, Bangalore, were suspended from November 2007. The company still awaits procedural completion of requisite legal formalities, such as Income Tax Assessments for prior year/s, soon after which, further actions for (members voluntary) winding-up of this JV company will be initiated. Efforts are being taken to expedite the same.

In the meanwhile, this JV company continues to register revenue by way of Interest Income (on Fixed Deposit/s with the Bank) which earning is adequate to meet its outgo commitments (by way of professional charges and connected expenses) for completion of the presently-pending activities, and also leave behind a nominal surplus, thereby retaining positive Net Worth in the Company. Such financials are detailed in Para 15 of Note 26 II on 'additional notes to accounts'

HUMAN RESOURCES & INDUSTRIAL RELATIONS

Your company continues its endeavor to attract the best available talents in the industry, recognize, register and retain the most-valuable human power.

During the year under review, there were no employees in the company drawing a remuneration in excess of Rs 5 lacs per month or Rs 60 lacs per annum, as stipulated under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as recently amended.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Your company remains committed to maintain, high standards of internal control designed to provide adequate assurance on the efficiency of operations and security of its assets. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid-down systems and policies are comprehensively and frequently monitored by your company's management at all levels of the organization. The Audit Committee, which meets at-least four times a year, actively reviews internal control systems as well as financial disclosures.

CONSERVATION OF ENERGY

Your company is duly certified under ISO 14001:2004 (Environment Management System). Every possible effort is made/introduced to conserve and avoid wastage of energy.

Adequate facilities have been installed for rain water harvesting, recycling of used water, solar-powered energy and maximum usage of natural lighting and ventilation, thus implementing GO GREEN POLICY in its total spirit.

RESEARCH & DEVELOPMENT

With your company's consistent efforts to introduce and promote its own patentable products, the importance and responsibility of in-house R&D unit has increased manifold.

All efforts are being taken to maximize utilization of the R&D unit's expertise and technological skills, in finding state- of-the-art solutions, to provide more effective and revolutionary solutions, for all segments of the Communication and Networking Industry.

During the year an amount of Rs.0.50 Crores (Prev. year- Rs.0.03 Crores) was incurred towards Capital Expenditure in this division. On revenue account, an amount of Rs.2.90 Crores (Prev. year- Rs. 3.45 Crores) has been expended and absorbed in these accounts, in accordance with the applicable Accounting Standards.

TECHNOLOGY ABSORPTION

The in-house technical and commercial teams consistently engage themselves in their endeavor to indigenize technology and components, as well as implementation of value-engineering and cost-saving methods.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Development of overseas market for the products of your company, as also development of products required for the overseas market, is progressing satisfactorily. Efforts also continue to minimize foreign exchange outflow by the process of indigenization.

Full details of foreign exchange earnings and expenditure are furnished under para 10 and 11 of Note 26 II on 'additional notes to accounts'.

CORPORATE GOVERNANCE

A detailed compliance note on Corporate Governance, as required under the provisions in the listing agreement with the Stock Exchanges, together with the certificate of Statutory Auditors thereon, is attached to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

As requisite and appropriate Management Discussion & Analysis is covered under this Report itself, a separate note on the same is not being furnished.

DIRECTORS

N Sivaram and A Murali, Directors, retire by rotation at this meeting, and being eligible, offer themselves for re-appointment.

AUDITORS

M/s. Narayanan, Patil & Ramesh, Chartered Accountants, Bangalore, retire as Statutory Auditors at the conclusion of this Annual General Meeting. Being eligible for re-appointment, your Directors recommend the same for your consideration.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere gratitude to the steadfast patronage of the valued Customers and Vendors. Your Directors also place on record, their sincere appreciation of the dedication and commitment of the employees at all levels, who have together been responsible for the growth of the company.

Your Directors wish to register their acknowledgement and appreciation for the timely support and co-operation being extended by the Banks and all their officials.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of Companies Act, 1956, your Directors hereby confirm that

- in the preparation of these annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

- they have selected such accounting policies and 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 of the profits for that period;

- they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and, for preventing and detecting fraud and other irregularities;

- they have prepared annual accounts on a 'going concern' basis.

for & on behalf of the Board of Directors

Place : Bangalore S. Narayanan

Date : 18 May 2012 Chairman & Managing Director


Mar 31, 2011

The Directors have pleasure in presenting herewith their Twenty Seventh Annual Report on the activities of your Company during the year ended 31 March 2011.

FINANCIAL RESULTS

2010-2011 2009-2010 (Rs. Lacs) (Rs. Lacs)

Net Revenue 2,839.81 8,283.84

Profit/(Loss) before Depreciation (1,283.72) 97.98

Depreciation 269.81 277.30

Profit/ (Loss) before Taxation (1,553.53) (179.32)

Provision for Taxation (45.88) 3.02 (on account of deferred tax and Wealth Tax)

Profit/(Loss) after Taxation (1,507.65) (182.34)

Prior period income 219.15 19.71

Surplus in Profit & Loss account brought forward from previous years 1,326.58 1,737.09

Balance for appropriations 38.08 1,574.46

APPROPRIATIONS

To General Reserve Nil 30.00

To Dividend - Nil (previous year-20%) Nil 186.85

To Dividend Tax on Dividend Nil 31.03

Surplus in Profit and Loss Account 38.08 1,326.58

PERFORMANCE

During the year under review,

- in order to augment the inherent strength, also in terms of financial valuation, the Company launched its own cost-effective products, to substitute products of other suppliers;

- the unblemished reputation garnered in the past with the Customers, more particularly in terms of meeting quality standards, delivery efficiency and support systems, provided the requisite impetus and platform for implementing the above;

- the gestation period for obtaining requisite technical / statutory approvals and completion of field-trials for these new products took a longer period than expected;

- the shadow of global economic recession continued to haunt the market during the initial period of the year;

- all these led to considerable reduction in revenues and consequent losses.

DIVIDEND

In the scenario detailed above, in order to conserve the much- needed financial resources, no dividend has been recommended by your Directors for the year under review. Your Directo are confident of receiving your whole-hearted support for this proposal.

PROSPECTS & OUTLOOK

- Continuing its business activities in the space of Communication and Networking, which has immense potential within and outside the Country, your Company is hopeful that the reduction in revenue and consequent losses will only be a temporary phenomenon, and looks forward to achieving increased revenue and profits in the coming years.

- Your Company is confident that such an action of promoting its own products shall, in the long-run, add immense value to the shareholders at large, in terms of enhanced visibility, expanded market potential and enlarge inherent strength, also in terms of financial valuation.

- With the market presently showing clear and positive signs of picking-up, more with implementation of innovative technology, advent of 3G and National Broadband Policy, the business during the coming years is expected to increase.

FINANCE

During the year under review,

- Despite loss as reflected in these accounts, your company continued to retain its debt-free status;

- a portion of cash reserves in the form of Fixed Deposits had to be utilized to meet the operational needs;

- your Management continues to implement austerity measures, wherever possible, to reduce overhead expenditure;

- your Directors place on record their sincere appreciation of the assistance, guidance, co-operation and whole- hearted support received from your companys employees and bankers.

JOINT VENTURE

As reported in prior year/s, the activities in the JV Company viz., RAD-MRO Manufacturing Private Limited, Bangalore, were suspended from November 2007. The Company now awaits procedural completion of requisite legal formalities, such as Income Tax Assessments for prior year/s, soon after which, further actions for (members voluntary) winding-up of this JV company will be initiated. Every step is being taken to expedite the same.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

Your company continues its endeavor to attract the best available talents in the industry, recognize, register and retain the most-valuable human power.

During the year under review, There were no employees in the Company drawing a remuneration in excess of Rs 5 lacs per month or Rs 60 lacs per annum, as stipulated under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as recently amended.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Your company remains committed to maintain, high standards of internal control designed to provide adequate assurance on the efficiency of operations and security of

its assets. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid-down systems and policies are comprehensively and frequently monitored by your Companys management at all levels of the organization. The Audit Committee, which meets at-least four times a year, actively reviews internal control systems as well as financial disclosures.

CONSERVATION OF ENERGY

Your Company is duly certified under ISO 14001:2004 (Environment Management System) and is committed to go green revolution. Every possible effort is made/ introduced to conserve and avoid wastage of energy.

Adequate facilities have been installed, for rain water harvesting, recycling of used water, solar-powered energy and maximum usage of natural lighting and ventilation, thus implementing GO GREEN POLICY in its total spirit.

RESEARCH & DEVELOPMENT

During the year, the efforts of in-house R&D division was successful in securing a Patent, to one of its in-house developed products Power over Ethernet Switch. Efforts continue to develop more cost effective, new technology niche products.

During the year an amount of Rs.2.87 lacs (Prev. year- Rs. 1.03 lacs) was incurred towards Capital Expenditure. On revenue account, an amount of Rs.344.50 lacs (Prev. year- Rs. 349.43 lacs) has been expended and absorbed in these accounts, in accordance with the attending accounting standards.

TECHNOLOGY ABSORPTION

The in-house technical and commercial teams consistently engage themselves in their endeavor to indigenize technology and components, as well as implementation of value-engineering and cost-saving methods.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Development of overseas market for the products of your Company, as also development of products required for the overseas market, is progressing satisfactorily. Efforts also continue to minimize foreign exchange outflow by the process of indigenization.

Full details of foreign exchange earnings and expenditure are furnished under note no. 19 and 20 of Notes on Accounts.

CORPORATE GOVERNANCE

A detailed compliance note on Corporate Governance, as required under the provisions in the listing agreement with the Stock Exchanges, together with the certificate of Statutory Auditors thereon, is attached to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

As requisite and appropriate Management Discussion & Analysis is covered under this Report itself, a separate note on the same is not being furnished.

DIRECTORS

R Rajagopalan and A Mohan Rao, Directors, retire by rotation at this meeting, and being eligible, offers themselves for re-appointment.

AUDITORS

M/s. Narayanan, Patil & Ramesh, Chartered Accountants, Bangalore, retire as Statutory Auditors at the conclusion of this Annual General Meeting. Being eligible for re- appointment, your Directors recommend the same for your consideration.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere gratitude to the steadfast patronage of the valued Customers and Vendors. Your Directors also place on record, their sincere appreciation of the dedication and commitment of the employees at all levels, who have together stood firmly with your Company during this challenging time.

Your Directors wish to register their acknowledgement and appreciation for the timely support and co-operation being extended by the Banks and all their officials.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of Companies Act, 1956, your Directors hereby confirm that

- in the preparation of these annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

- they have selected such accounting policies and applied them consistently and made judgements 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 of the loss for that period;

- they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and, for preventing and detecting fraud and other irregularities;

- they have prepared annual accounts on a going concern basis.

for & on behalf of the Board of Directors

S. Narayanan

Chairman & Managing Director

Place : Bangalore

Date : 18 May 2011


Mar 31, 2010

The Directors have pleasure in presenting herewith their Twenty Sixth Annual Report on the activities of your Company during the year ended 31 March 2010.

FINANCIAL RESULTS

2009-2010 2008-2009 (Rs. Lacs) (Rs. Lacs) Net Revenue 8,283.84 12,950.72 Profit/(Loss) before Depreciation 97.48 687.43 Depreciation 277.30 269.15 Profit/ (Loss) before Taxation (179.82) 418.28 Provision for Taxation 3.02* 87.34 Profit/(Loss) after Taxation (182.84) 330.94 Prior year income 19.71 6.75 Surplus in Profit & Loss A/c brought forward from previous years 1,737.09 1,659.91 Balance for appropriations 1,573.96 1,997.60

APPROPRIATIONS

To General Reserve 30.00 40.00 To Dividend - 20% (previous year-20%) 186.85 188.48 To Dividend Tax on Dividend 31.03 32.03 Surplus in Profit and Loss Account i 1,326.08 1,737.09

*on account of deferred tax and Wealth Tax.

DIVIDEND

In order to uphold their continued commitment to the shareholders, and to retain the reputation of consistent dividend paying company, despite reduction in revenue, and consequent losses incurred during the year under review, your Directors have recommend a dividend of 20% (Re 1.00 per share) for the year, out of carried-over surplus in Profit & Loss Account, since the retained cash position, as well as the projected financials, well support such a proposal. PERFORMANCE During the year under review,

- the adverse impact of the global economic recession continued, adversely impacting the revenue and earnings of your Company;

n strengthening of Rupee against the Dollar, cushioned and mitigated the impact, to an extent;

O despite implementation, by your Company, of all possible austerity measures, the year ended with a loss of Rs.182.84 lacs;

- however, the loss so reflected being attributable exclusively to notional, and non-cash expenditure such as Depreciation, your Company did accomplish, and achieve, a cash profit of Rs.97.48 lacs - nominal though;

O despite all such extraneous circumstances impacting finances, it must be mentioned that, your Company never compromised on maintaining high quality standards, business ethics & timely service, which ensured continuity in receiving Customers appreciation and patronage.

PROSPECTS & OUTLOOK

- consistent search for better quality, more particularly in service sectors such as mobile telephony, banking, finance and insurance, to retain their customers, and the continuing thrust by Government, Private and Public players in Communication sector, shall ensure adequate market demand for the products of your company;

- in this scenario, your Company has already taken certain initiatives to induct newer cost-effective technology, thereby setting-up a level field to fight inundated competition;

l1 this action, coupled with enlarged product-mix, in the backdrop of better economic environment, is expected to result in augmenting sale revenue and enhancing market share.

FINANCE

During the year under review,

n despite reduction in revenue, your company was able to meet its working capital requirements, exclusively from operations, thereby retaining its debt-free status;

3 with more cautious monitoring of finances and other assets, the retained funds by way of deposits and investment in MF, increased to Rs.3,422 lacs as at 31 March 2010;

"1 and achievement of the above, with no corresponding increase in payables account was a fete accomplished;

n under the Buy-back scheme which concluded on 24 February 2010, the Company could buyback only 3,01,372 equity shares, at a cost of Rs.66.17 lacs. More details on buyback is furnished elsewhere in this report;

1 your Directors place on record their sincere appreciation for the assistance, guidance, co-operation and whole- hearted support received from your companys bankers.

JOINT VENTURE

As reported in prior year/s, the activities in the JV Company viz., RAD-MRO Manufacturing Pvt Limited, Bangalore, have been suspended from November 2007. The Company now awaits procedural completion of requisite legal formalities, such as Income Tax Assessments for prior year/s, soon after which, further actions for (members voluntary) winding-up of the company will be initiated. Every step to expedite the same is being taken.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

Your company continues its endeavor to attract the best available talents in the industry, recognize, register and retain the most-valuable human power.

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, forms part of this Report. However, as per the provisions of Section 219(l)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the members, excluding the statement containing the particulars of employees to be provided under Section 217(2A) of the Companies Act, 1956. Any member interested in obtaining such particulars may inspect the same at the Registered Office of the Company or write to the Company Secretary for a copy.

BUY BACK

During the year under review, your Company implemented, yet another Scheme for buying back of its equity shares.

This Scheme, approved by the Board of Directors at their meeting held on 25 February 2009, envisaged buy back, through the Stock Exchange mechanism, upto a maximum of 22,00,000 equity shares, at price not exceeding Rs.25 per share, ear-marking an amount of Rs 500 lacs for this purpose.

During a major part of the period, the market price of the shares were quoting higher than the maximum limit of Rs.25 per share (fixed by the Board of Directors of your Company for buyback under this scheme). Hence, your Company could buy back only 3,01,372 equity shares (at a total outlay of Rs.66.17 lacs), until 24 February 2010, when the Scheme concluded in accordance with the Statutory provisions which limit the validity of the Scheme only upto 12 months from the date of approval by the Board of Directors.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Your company remains committed to maintain, high standards of internal control designed to provide adequate assurance on the efficiency of operations and security of its assets. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid-down systems and policies are comprehensively and frequently monitored by your Companys management at all levels of the organization. The Audit Committee, which meets at-least four times a year, actively reviews internal control systems as well as financial disclosures.

CONSERVATION OF ENERGY

During the year under review, your Company is conferred with ISO 14001 : 2004 (Environment Management System) Certification. Your Company continues to put every possible efforts to conserve and avoid wastage of energy.

Adequate facilities have been installed, for rain water harvesting, recycling of used water, solar-powered energy and maximum usage of natural lighting and ventilation, thus implementing GO GREEN POLICY in total spirit.

RESEARCH & DEVELOPMENT

The in-house developed and commercialized products continue to contribute to sales revenue. Efforts are intensified to develop niche products for niche markets. Efforts for reduction in material and conversion cost also continue simultaneously.

As one of the austerity measures, further investment in R&D equipment was deferred, pegging such expenditure during the year, at Rs.1.03 lacs (Prev. year- Rs. 2.64 lacs). On revenue account, an amount of Rs.349.43 lacs (Prev. year- Rs. 404.88 lacs) which has been expended, have been absorbed in these accounts, in accordance with the attending accounting standards.

TECHNOLOGY ABSORPTION

The in-house technical and commercial teams consistently engage themselves in their endeavor to indigenize technology and components, as well as implementation of value-engineering and cost-saving methods.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Development of overseas market for the products of your Company, as also development of products required for the overseas market, is progressing satisfactorily. Efforts also continue to minimize foreign exchange outflow by the process of indigenization.

Full details of foreign exchange earnings and expenditure are furnished under note no. 19 and 20 of Notes on Accounts.

CORPORATE GOVERNANCE

A detailed compliance note on Corporate Governance, as required under the provisions in the listing agreement with the Stock Exchanges, together with the certificate of Statutory Auditors thereon, is attached to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

As requisite and appropriate Management Discussion & Analysis is covered under this Report itself, a separate note on the same is not being furnished.

DIRECTORS

N Sivaram and A Murali, Directors, retire by rotation at this meeting, and being eligible, offers themselves for re-appointment.

AUDITORS

M/s. Narayanan, Patil & Ramesh, Chartered Accountants, Bangalore, retire as Statutory Auditors at the conclusion of this Annual General Meeting. Being eligible for re-appointment, your Directors recommend the same for your consideration.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere gratitude to the steadfast patronage of the valued Customers and Vendors. Your Directors also place on record, their sincere appreciation of the dedication and commitment of the employees at all levels, who have together been responsible for the growth of the Company.

Your Directors wish to register their acknowledgement and appreciation for the timely support and co-operation being extended by the Banks and all their officials.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of Companies Act, 1956, your Directors hereby confirm that

In the preparation of these annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

They have selected such accounting policies and applied them consistently and made judgements 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 of the profits for that period;

They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and, for preventing and detecting fraud and other irregularities;

they have prepared annual accounts on a going concern basis.

for & on behalf of the Board of Directors Place : Bangalore S. Narayanan Date : 21 May 2010 Chairman & Managing Director

 
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