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Notes to Accounts of Switching Technologies Gunther Ltd.

Mar 31, 2015

1. SEGMENT REPORTING

(a) The company operates in only one segment – Reed Switches.

(b) Information about secondary segment (Geographical segment)

2. CONTINGENT LIABILITIES AND COMMITMENTS

The Income Tax Department has raised a demand for the Assessment Year 2012-13 amounting to Rs.20,61,790/- which is disputed by the Company. Hence an appeal has been preferred before CIT Appeal, Chennai & ACIT Company Range, Chennai .Therefore the Company has been advised that no provision for tax is required.


Mar 31, 2014

1. Break up of Shares issued in the last five years.

a. The Company has issued 98,178 Zero Coupon Redeemable Preference Shares of Rs. 100/- each totaling to Rs. 98,17,800/- on 14-02-2009 redeemable at par after the expiry of 5 years from the date of allotment.

b. RBI has given permission for extention of redemption of 98,178 Zero Coupon Preference Shares of Rs. 100 each alloted to M/s. Gunther America Inc, 454 Allwood road Clifton, N.J. 07012 USA for 7 years from 14-02-2014, vide their letter No. CHE:FED:F ID/7630/25.19.319/2013-14 dated May 19, 2014. The preference share holders have also consented for extension of Zero Coupon Preference Shares.

Contributions to provident fund are made monthly, at predetermined rates, and debited to the profit and loss account on accrual basis. Provision for Gratuity and Leave encashment has been made on the basis of Actuarial Valuation as per AS-15. The Company has subscribed to group gratuity scheme of LIC for all its employees. The date of commencement of the scheme is 26-03-2014.

2. CONTINGENT LIABILITIES AND COMMITMENTS

The Income Tax Department has rasied a demand for the Assessment Year 2012-13 amounting to Rs. 20,61,790/- which is disputed by the Company. Hence an appeal has been peferred before CIT Appeal Chennai & ACIT Company Range, Chennai .Therefore the Company has been advised that no provision for tax is required.


Mar 31, 2010

I. Deferred Tax

On principles of prudence no deferred tax asset has been recognized in the accounts as the company has substantial carry forward losses.

ii. Consequent to total erosion of the company’s net worth, as on 30.06.2005, the report as required under section 23 of the Sick Industrial companies (Special Provision) Act 1985 was submitted to the Board for Industrial and Financial Reconstruction (BIFR) on 06.02.2006. The said reference was not registered by BIFR for want of rectification of certain objection vide BIFR’s order No. F.3(S-4)/BC/2006 dated 24-03-2006. The management of your company was confident of changing the fortunes of company without getting attracted to the provisions of BIFR. Hence, your company had requested and obtained debt waiver from its parent companies and accordingly prepared the accounts on Going Concern.

The management had taken constructive steps to improve the profitability of the Company by increasing the production of switches with higher margins and introduction of additional product lines such as proximity switches, high vacuum switches, ball switches, etc which will give a higher contribution. For the successive financial years 2005-06, 2006-07, 2007- 08, 2008-09, the Company had again prepared the accounts on a Going Concern basis by obtaining debt waiver(s) successively from its parent companies. For the financial year 2009-10, the company posted operational profits due to its various initiatives including adopting cost cutting measures. Hence, the company did not take any debt waiver for the financial year 2009-10 from its parent companies. The management is confident that the operations of the company are expected to register more marked improvements in the near future and accordingly the accounts have been prepared on a "Going Concern" basis.

iii. The names of small scale Industrial undertakings to which the Company owes any sum including interest which is outstanding for more than 30 days at the Balance sheet date, are as given below. This information and that given in schedule 8 - “Current Liabilities” regarding small scale industrial undertakings has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors.

- Nikkam Agency

- Sri Venkateswara Plastic Industries

- Paramount Chemicals

- Bubble Package

iv. The Company is in the process of identifying suppliers who have registered under, "The Micro Small and Medium Enterprises Development Act 2006". As of date, the company has not received confirmations from any registered suppliers and hence no disclosures have taken made under the said Act.

v. The list of related parties as identifed by the management is as under

A) Holding Company Gunther America Inc.

B) Key Management Personnel [KMP] Mr. Robert P. Romano

Mr. John David Rollo

Mr. Michel Vandervelpen

Mr. P.Ramesh

C) Enterprise over which any person described in (B) is able to exercise significant influence.

This includes enterprises owned by Comus International Inc.

Directors or major share holders of the reporting Comus International Bvba

Management personnel in common with the Assemtech Europe Ltd. reporting enterprises

vi. Segment Reporting

(a) The company operates in only one segment – Reed Switches.

(b) Information about secondary segment (Geographical segment)

Segment assets include fixed assets and current assets. Sundry debtors being export receivables are shown in overseas segment. All Fixed assets are situated in India. Inventory includes various categories of items situated in India.