The Board of Directors of your Company take pleasure in presenting the 36th Annual Report together
with the Audited Financial Statements for the financial year ended 31 st March 2024.
FINANCIAL RESULTS
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Year ended
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Year ended
|
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31.03.2024
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31.03.2023
|
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(?)
|
(?)
|
|
Sales and other Income
|
91,903,864
|
115,303,913
|
|
Profit before Interest and Depreciation
|
(87,285,083)
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(101,199,594)
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|
Interest
|
-
|
-
|
|
Profit before depreciation
|
(87,285,083)
|
(101,199,594)
|
|
Depreciation
|
787,553
|
643,835
|
|
Profit before taxation and exceptional item
|
(88,072,636)
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(101,843,429)
|
|
Exceptional item
|
(56,153,932)
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(215,205,223)
|
|
Profit before taxation after exceptional item
Provision for taxation
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(31,918,704)
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113,361,794
|
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- Current tax
|
-
|
-
|
|
- Deferred tax
|
-
|
-
|
|
Profit / (Loss) after taxation and exceptional item
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(31,918,704)
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113,361,794
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PERFORMANCE OF THE COMPANY
The Sales and Other Income during the year had decreased to ?91.904 million in the FY ending 31st
March, 2024 compared to ?115.304 million during the FY ended 31st March, 2023. Your company
has earned a loss of ?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
?561.54 lakhs. The Company’s accumulated losses as at 31st March, 2024 aggregate to ?812.49
lakhs mainly to reduction in sales orders throughout the financial year over which your company’s
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 31 st March, 2024 is available in the Company's 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 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 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 Independendent Non Executive Director and Ms.Saimathy Soupramanien as
Independent Non Executve 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 2022¬
23 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 Company's accumulated losses
as at March 31, 2024 aggregate to ?812.49 Lakhs resulting in complete erosion of its net
worth. Further, as of that date, Company's 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 Company's ability to continue as a going concern in the foreseeable
future. However, the Company's 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 ? 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 ? 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 AUDITOR’S 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 arm’s 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 company’s shares are listed in BSE LTD (Bombay Stock Exchange).The listing continued
throughout the year. Listing fees have been paid up to date.
DIRECTORS’ RESPONSIBILITY STATEMENT
In accordance with the requirements of Section 134 of the Companies Act, 2013, the Directors
confirm that:
a) In the preparation of annual accounts, the applicable Accounting Standards have been
followed along with proper explanation relating to material departures, if any;
b) The Directors had selected such accounting policies and have applied them consistently and
made judgments and estimates that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the financial year and the 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 ?10 Crores and Net Worth is not exceeding ? 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 Board’s Report.
(b) Board meetings
The Board of Directors of your Company met 04 times during the year under review.
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S.No.
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Name
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Number of Board
Meetings held during
the year 2023-24
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Number of Board
Meetings attended
during the year 2023-24
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1
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Mr.C.Chandrachudan
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4
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4
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2
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Mr.K.Manoharan
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4
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4
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3
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Mr.Kanthimathinathan Chocalingam
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4
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4
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4
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Ms.Gayathri M N
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4
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4
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(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
arm’s length and were in the ordinary course of business. There are no materially significant
related party transactions made by the Company with Promoters, Directors, Key Managerial
Personnel or other designated persons which may have a potential conflict with the interest
of the Company. Accordingly, the disclosure of Related Party Transactions as required under
Section 134(3)(h) of the Companies Act, 2013 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 F to
this Report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S
OPERATIONS IN FUTURE
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.
AOC - 2
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED
TO IN SUB-SECTION (1) OF SECTION 188 INCLUDING JUSTIFICATION FOR ENTERING INTO
SUCH CONTRACTS.
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1.
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Details of contracts or arrangements or
transactions not at arm’s length basis
|
|
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(a)
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Name(s) of the related party and
nature of relationship
|
|
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(b)
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Nature of contracts/arrangements/
transactions
|
|
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(c)
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Duration of the contracts /
arrangements/transactions
|
|
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(d)
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Salient terms of the contracts or
arrangements or transactions
including the value, if any
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NIL
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(e)
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Justification for entering into such
contracts or arrangements or
transactions
|
|
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(0
|
date(s) of approval by the Board
|
|
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(g)
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Amount paid as advances, if any:
|
|
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(h)
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Date on which the special resolution
was passed in general meeting
as required under first proviso to
Section 188
|
|
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2.
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Details of material contracts or
arrangement or transactions at arm’s
length basis
|
|
|
(a) Name(s) of the related party and
nature of relationship
|
Comus International
454, All wood Rd., Clifton
New Jersey 07012
USA
Comus Belgium BVBA
Overhaamlaan 40
B-3700 Tongeren
Belgium
Comus Europe Limited
Unit 7, Rice Bridge Industrial Estate
Thorpe - le - Soken
Essex, England
C016 0HL
Comus Technology BV
Jan camperstraat 11
6416 SG Heerlen
The Netherlands
Gunther America Inc.
454, All wood Rd., Clifton
New Jersey 07012
USA
Comus International is the Parent Company.
Comus Belgium, Comus Europe are direct
subsidiary of Comus International. Gunther
America is holding 61.22 % shares in STG
Ltd. Gunther America is subsidiary of Comus
International. Hence, STG is also subsidiary
of Comus International.
|
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(b) Nature of contracts/arrangements/
transactions
|
Import / Export marketing agreement
executed between the group companies.
Raw materials are supplied dutyfree to STG
Ltd by overseas group companies. STG Ltd
converts the raw materials and supplies back
finished goods to group companies. Payment
to the overseas vendors of raw material is
paid by overseas group companies directly
and the raw material costs are adjusted
against the sales invoices for finished goods
of STG Ltd, barring a few exceptions when
at times STG makes the payment directly to
the vendor if the situation so warrants.
|
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(c) Duration of the contracts /
arrangements/transactions
|
Contract termination is at will.
|
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(d) Salient terms of the contracts or
arrangements or transactions
including the value, if any:
|
As mentioned in Para-(b) above.
|
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(e) Date(s) of approval by the Board, if
any:
|
The agreement is from the inception of STG
Ltd.
|
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(f) Amount paid as advances, if any:
|
STG has not paid any advance to its group
companies.
|
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
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