| Dear Members,
The Directors take pleasure in presenting the Twentieth Annual Report
and the Audited Accounts for the financial year ended March 31, 2015
A. Financial highlights
(Indjan Rufiees in Lakhs
Particulars 2014 - 2015 2013 - 2014
Gross Income 5,593.40 4,291.66
Profit Before Interest and Depreciation (2,771.17) (15,626.16)
Finance Charges 3,713.03 402.42
Gross Profit (6,484.21) (16,028.57)
Provision for Depreciation 2,666.85 2,554.38
Net Profit Before Tax (9,151.05) (18,582.96)
Provision for Tax (279.80) 602.86
Net Profit After Tax (8,871.25) (17,980.10)
Balance of Profit brought forward (8,871.25) (17,980.10)
Balance available for appropriation (8,871.25) (17,980.10)
Proposed Dividend on Equity Shares - -
Tax on proposed Dividend - -
Transfer to General Reserve - -
Surplus carried to Balance Sheet (8,871.25) (17,980.10)
During the last few years, the telecom industry has been adversely
affected by the general economic slowdown and various other factors
such as slower growth of 3G technology; failure of spectrum auctions
and inflationary costs of power & fuel. This has resulted into
substantial erosion of the Company's net worth and the Company has
incurred cash losses. The Company continues to take various measures
such as cost optimization, improving operating efficiency,
renegotiation of contracts with customers to improve Company's
operating results and cash flows. Further the management believes that
new spectrum auction will result in exponential growth in 3G 4G & LTE
which are expected to generate incremental cash flows to the Company.
However, the management of the Company is confident on making better
results in the upcoming years.
B. Dividend & Reserves
Taking into account overall financial performances of the Company Your
Directors do not recommend any dividend for the financial year ended on
March 31, 2015. Consequently, general compliance has been made with
respect to the transfer to General Reserve Account.
C. Dividend
In view of losses, the Board of Directors of the Company have not
recommended any dividend for the fiscal year ended on March 31,2015.
D. Buy-back of shares
The shareholders of the Company had through Postal ballot, the results
of which were declared on October 29, 2011, approved Buyback of shares
not exceeding 25% of the Paid-up Capital and free reserves for a price
not exceeding Rs. 45 per share. The buyback period commenced on January
30, 2012 and was completed on October 28, 2012.
Under this buyback, the Company bought back 27,50,182 equity shares at
an average price of Rs. 11.39/- per share from the open market through
the stock exchanges. The total amount utilized for the buyback was Rs.
31,310,958.39/-.
The Paid-up Share Capital of the Company is Rs. 12,38,94,703/- and the
Company has not allotted any securities during the fiscal year under
review.
E. Deposits
During the year under review, Your Company has not accepted any
Deposits within the meaning of provisions of Chapter V of the Companies
Act 2013 (Acceptance of Deposits by Companies) read with the Companies
(Acceptance of Deposits) Rules, 2014.
F. Risk Management
Your Company has a robust Risk Management policy, The Company through a
steering committee oversees the Risk Management process including risk
identification, impact assessment, effective implementation of the
mitigation plans and risk reporting. A detailed Risk Management policy
of the Company to have good Corporate Governance is hosted in the
Company's official website.
G. Finance & Accounts
Your Company prepares its financial statements in compliance with
requirements of Section 134 of Companies Act 2013 and generally
accepted accounting principles (GAAP) in India.
H. Extract of Annual Return
The details forming part of the extract of the Annual Return in form
MGT-9 is annexed herewith as "Annexure A" as per section 92 of the
Companies Act 2013.
I. Board of Directors
The Board would like to place on record, their appreciation for the
contributions of the above Directors during their tenure as Directors
of the Company.
In accordance with the requirements of the Companies Act, 2013 and the
Articles of Association of the Company, Mr. Eswaran Annamalai, Director
retires by rotation at the forthcoming Annual General Meeting of the
Company and being eligible, has offered himself for re-appointment.
The information to shareholders as per Clause 49 of the Listing
agreement pertaining to Mr. Eswaran Annamalai, covering brief resume,
expertise in functional areas, names of Companies in which he is a
Director, is being provided in the Notice of the Annual General Meeting
which forms part of this Annual Report.
J. Board Evaluation of Board's Performance
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, a structured questionnaire was prepared after
taking into consideration of the various aspects of the Board's
functioning, composition of the Board and its Committees.
K. Number of the meetings of the Board
The Board had met four (4) times during the financial year ended March
31, 2015, on May 29, 2014, August 12, 2014, November 14, 2014 and
February 11, 2015. The details of the meetings are given under the
Report on Corporate Governance. The intervening gap between the
Meetings was within the period prescribed under the Companies Act,
2013.
L. Particulars of Loans, Guarantees or Investments by Company (u/s
186)
The complete details of loans, guarantees and Investments as per the
provisions of Section 186 of Companies Act 2013 are given in the notes
on accounts of the financial statements.
M. Vigil Mechanism/Whistle Blower Policy
The Company has taken steps to establish the Vigil Mechanism/Whistle
Blower Policy as is stipulated in the clause 49 of the Listing
Agreement and Pursuant to Section 177(9) & 177(10) of the Companies Act
2013. This provides a mechanism to raise concerns about actual or
suspected frauds, unethical behaviour, safeguards against victimization
of employees and etc., and the same has been posted in the official
website of the Company.
N. Related Party Transactions
All transactions entered by the Company with Related Parties were in
the ordinary course of business and at arms' length basis and that
provisions of Section 188 of the Companies Act 2013 are not attracted.
Hence the disclosure in form AOC-2 is not required.
Further, there are no material related party transactions during the
year under review with the promoters, directors or key managerial
personnel. All related party transactions were placed before the audit
committee and board for approval and an omnibus approval was obtained
on quarterly basis.
The Company has formed a policy on related party transactions through
standard operating procedures for the purpose of identification and
monitoring of such transaction, which has hosted in the Company's
official website.
O. Directors Responsibility Statement
Pursuant to the requirement under Section 134 (3)(c) of the Companies
Act, 2013, in relation to the Annual Financial Statements for the
Financial Year 2014-2015, your Directors confirm that:
(a) The Financial Statements of the Company comprising of the Balance
Sheet as at March 31, 2015 and the Statement of Profit & Loss for the
year ended on that date, have been prepared on a going concern basis
following as per the applicable accounting standards along with proper
explanation relating to material departures;
(b) Accounting policies selected were applied consistently and the
judgments and estimates related to the financial statements have been
made on a prudent and reasonable basis, so as to give a true and fair
view of the state of affairs of the Company as at March 31, 2015, and,
of the profit of the Company for the year ended on that date; and
(c) Proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013, to safeguard the assets of the Company and to
prevent and detect fraud and other irregularities.
(d) That the annual accounts for the year ended March 31, 2015 have
been prepared on a 'going concern' basis;
(e) That 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) That 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.
P. Declaration from Independent Directors
The Company has received necessary declaration from each Independent
Director of the Company under Section 149(7) of the Companies Act 2013
(the "Act") stating that the Independent Directors of the Company meet
with the criteria of Independence laid down in Section 149(6) of the
Act.
Q. Statutory Auditors
Pursuant to Section 139 of the Act and Rules made thereunder, M/s. V
Viswanathan & Associates, Chartered Accountants, Chennai were appointed
as Statutory Auditors of the Company at the last Annual General Meeting
held on September 29, 2014. Accordingly, your directors recommend the
re-appointment of M/s. V Viswanathan & Associates, Chartered
Accountants, Chennai as Statutory Auditors of the Company from the
conclusion this Annual General Meeting till the conclusion of the 24th
Annual General Meeting.
R. Internal Audit & Controls
The Company continues to engage an in-house team to meet the
responsibilities of the Internal Auditor. During the fiscal year, the
Company continued to implement their suggestions and recommendations to
improve the control environment. Their scope of work includes review of
processes for safeguarding the assets of the Company, review of
operational efficiency, effectiveness of systems and processes, and
assessing the internal control strengths in all areas. Findings made
were discussed with the process owners and suitable corrective actions
taken as per the directions of Audit Committee on an ongoing basis to
improve efficiency in operations. However, the Company is still under
the process of appointing an Internal Auditor as required under the
norms of the Companies Act, 2013 and rules made thereof.
S. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and rules made thereunder, the Company has appointed Mr. Giftson
Abraham of M/s. GIfTSON ABRAHAM AND CO., Company Secretaries in
Practice (Certificate of Practise Number: 12846), Chennai to undertake
the Secretarial Audit of the Company. The report of the Secretarial
Auditors is enclosed to this report. The report is self-explanatory and
do not call for any further comments.
T. Subsidiary
The Company has 6 subsidiaries namely:
M/s. Gemini Traze RFID Private Limited, Chennai M/s. PointRed Telecom
Limited, Bangalore M/s. Gemini Geoss Energy Private Limited, Chennai
M/s. Gemini Infotech Limited, Hong Kong M/s. PR Wireless Tech Limited,
Hong Kong M/s. Gemini FTZ, Dubai
As required under the Listing Agreements entered into with the Stock
Exchanges, a consolidated financial statement of the Company and all
its subsidiaries is attached. The consolidated financial statements
have been prepared in accordance with the relevant accounting standards
as prescribed under norms of the Companies Act, 2013 and rules made
thereof.
U. Management Discussion and Analysis report
A "Management Discussion and Analysis Report" highlighting the industry
structure and developments, opportunities and threats, future outlook,
risks and concerns, etc., has been furnished separately and the same
forms part of this Report.
V. Material Change
There is no material change or commitments after the closure of the
financial year.
W. 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
X. Composition of Audit Committee
Pursuant to Section 177 of the Companies Act, 2013, the Audit Committee
was reconstituted by the Board of Directors and consists of the
following members:
1. Mr. R. Vijaykumar, Managing Director : Member
2. Mr. Eswaran Annamalai, Independent Director : Member
3. Mr. V. J. Chandran, Independent Director : Member
The Board has accepted the recommendations of the Audit Committee and
there were no incidences of deviation from such recommendations during
the financial year under review.
Y. Corporate Social Responsibility (CSR) Policy
The Company through its Corporate Social Responsibility Committee had
formulated a CSR policy as required under Section 135 of the Companies
Act, 2013.
The following is the composition of the Corporate Social Responsibility
Committee.
1. Mr. R. Vijaykumar, Managing Director : Member
2. Mr. Eswaran Annamalai, Independent Director : Member
3. Mr. V. J. Chandran, Independent Director : Member
Z. Scope of CSR Policy
This policy will apply to all projects/programmes undertaken as part
the Company's Corporate Social Responsibility and will be developed,
reviewed and updated periodically with reference to relevant changes in
corporate governance, international standards and sustainable and
innovative practices. The policy will maintain compliance and alignment
with the activities listed in Schedule VII and Section 135 of the
Companies Act, 2013 and the rules framed there under.
AA. CSR Policy Implementation
The Company shall undertake CSR project/ programmes identified by the
CSR Committee and approved by the Board of Directors in line with the
CSR Policy.
The CSR Policy of the Company is uploaded in the website of the
Company. The spending on CSR activities is not applicable to our
Company.
BB. Vigil Mechanism
The Company has devised a vigil mechanism in pursuance of provisions of
Section 177(10) of the Companies Act, 2013 for Directors and employees
to report genuine concerns or grievances to the Audit Committee in this
regard and details whereof are available on the Company's website.
CC. Corporate Governance
In terms of Clause 49 of the Listing Agreement with the stock
exchanges, a Corporate Governance Report is made part of this Annual
report.
A certificate from the Statutory Auditor of the Company regarding
compliance of the conditions stipulated for Corporate Governance under
Clause 49 of the Listing Agreement is attached to this report.
The declaration by the Managing Director addressed to the members of
the Company pursuant to Clause 49 of the Listing Agreement regarding
adherence to the Code of Conduct by the Members of the Board and by the
Members of the Senior Management Personnel of the Company is also
attached to this Report.
DD. Human Resources
The Company takes pride in the commitment, competence and dedication
shown by its employees (including outsourced) in all areas of business.
The Company is committed to nurturing, enhancing and retaining top
talent through superior learning & organization development as a part
of Corporate HR function. It is a critical pillar to support the
organization growth and its sustainability over the long run.
EE. Particulars of Employees
There were no Employees in the Company drawing more than sixty lakh
rupees per financial year or five lakh rupees per month. Hence, the
disclosure under Rule 5 of the Companies (Appointment & Remuneration of
Managerial Personnel) Rules, 2014 and other applicable provisions shall
not be applicable.
FF. Conservation of Energy, Technology Absorption and Research &
Development
Your Company's power requirements are very minimal. Your Company
however takes every possible step to make optimum utilization of energy
and avoid unnecessary wastage of power.
Your Company keeps itself updated with the latest technology available
in the market. Your company aims at providing future-proof and future
adaptable technologies to all its clients.
GG. Explanation to Qualification / remark in the Auditors' Report
Replies to the emphasis of matters stated in the Auditors Report:
a) The on-going law suits are expected to end in favorable for the
Company.
b) The general economic slowdown has affected the telecom industry. The
late auction of spectrum by government and the slowdown of 3G and 4G
technologies have not brought cheer to the telecom industry. The
non-payment of government receivables has resulted into substantial
erosion of the Company's net worth and the Company has incurred cash
losses. The Company continues to take various measures such as cost
optimisation, improving operating efficiency, renegotiation of contracts
with customers to improve Company's operating results and cash flows.
Further the management believes that new spectrum auction will result in
exponential growth in 3G 4G & LTE which are expected to generate
incremental cash flows to the Company. Therefore, the financial
statements are prepared on going concern basis.
HH. Foreign Exchange Earnings and Outgo
During the year, there were no foreign exchange earnings and expenses
during financial year ended on March 31,2015.
II. Appreciation
Your Board of Directors are grateful to the shareholders, Bankers,
Financial Institutions, Government Authorities, Local Authorities and
all business associates and customers for their continuous support and
enthusiastic co-operation. Your Board of Directors also places its
appreciation and thanks to the employees at all levels for their
untiring efforts put in for the benefit of the Company.
For and on behalf of the Board
For Gemini Communication Limited
Place: Chennai V. J. Chandran
Date: May 30, 2015 Chairman
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