Mar 31, 2018
Dear Members,
The Directors are pleased to present the 33rd Directorsâ Report on the business and operations of your Company along with the audited standalone financial statements for the year ended 31st March, 2018.
FINANCIAL PERFORMANCE
The salient features of the Companyâs financial results during the year are as under: (Rs. in Lacs)
Particulars |
For the year ended on 31st March, 2018 |
For the year ended on 31st March, 2017 |
Sales / Revenue from Operations |
3732.83 |
4697.19 |
Profit/(Loss) before Interest, Depreciation & Tax |
(332.26) |
(400.33) |
Less: Interest |
0.39 |
0.30 |
Profit/(Loss) before Depreciation & Tax |
(332.65) |
(400.63) |
Less: Depreciation |
400.84 |
397.38 |
Profit/(Loss) before Tax |
(733.49) |
(798.01) |
Less - Provision for Taxes (including Deferred) |
- |
- |
Profit/(Loss)After Tax |
(733.49) |
(798.01) |
Paid Up Share Capital |
2900.00 |
2900.00 |
Adjusted Net Worth ofthe Company |
(1533.67) |
(800.18) |
EPS (In Rs.) Basic & Diluted |
(2.53) |
(2.75) |
OPERATIONAL PERFORMANCE
During the financial year under review the turnover of your company stood at Rs. 3732.83 Lacs in financial year 2017-18 as against Rs. 4697.19 Lacs in financial year ended on 31st March, 2017 registering a decrease by 20.53%. PBIDT increased to Rs. (332.26) Lacs from Rs. (400.33) Lacs in the previous year. Interest cost increased to Rs. 0.39 Lacs from Rs. 0.30 Lacs in the previous year.
As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on 31st March, 2018 has been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Companyâs state of affairs, profits and cash flows for the year ended 31st March, 2018.
MATERIAL CHANGES FROM END OF FINANCIAL YEAR TO DATE OF REPORT
There are no material change and commitment, affecting the financial position of the Company which has occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report other than those disclosed in the financial statements.
DIVIDEND
Considering the accumulated losses, the Board of Directors does not recommend any dividend for the year 31st March, 2018.
FIXED DEPOSITS
The Company has not accepted or renewed any deposit from the public during the year under review and no amount of principle or interest was outstanding as on the balance sheet date.
SHARE CAPITAL
The paid up equity share capital of the Company as on 31st March, 2018 stood at Rs. 2900.00 Lacs. During the year under review, the Company has neither issued shares with differential voting rights nor granted any stock options / sweat equity. None of the Directors of the Company hold shares or any other securities of the Company as on the date of this report.
During the year under review, no Stock Options were granted, vested or exercised. No Stock Options are in force as on date. Hence, there are no disclosures required to be made pursuant to the applicable requirements of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.
CHANGE IN NATURE OF BUSINESS
Company continues to operate only in one segment i.e. Textile and there is no change in nature of Business of the Company. DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment / Re-appointment Mr. Aman Agrawal
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companyâs Article of Association, Mr. Aman Agrawal, Director of the Company is liable for retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. The Board recommends his reappointment.
Brief profile of Mr. Aman Agrawal is given in the notice of Annual General Meeting
Cessation Dr. R. B. Baheti - Chairman and Non-executive Director
During the year under review, Dr. R. B. Baheti, Director had resigned from the Directorship & Chairmanship of the Company w.e.f. 21st February, 2018 in view of his pre-occupations and commitments. The Board placed on records its deep appreciation and gratitude for the invaluable contributions made by Shri Dr. R. B. Baheti during his tenure as Director and Chairman of the Company.
During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.
Except above, there is no change in the Board of Directors of the Company.
KEY MANAGERIAL PERSONNEL
In terms of section 203 of the Companies Act, 2013, the following are the Key Managerial Personnel (KMP) of the Company:
01. Mr. Prashant Agrawal : Managing Director
02. Mr. Mukesh Maheshwari : Chief Financial Officer
03. Mr. Deepesh Kumar Nayak : Company Secretary
No KMP has been appointed or has retired or resigned during the year.
DECLARATION FROM INDEPENDENT DIRECTORS
The Independent Directors Mr. A. Arumugham, Mr. Suresh Shankar Vishwasrao and Mr. John Mathew have submitted their declaration to the Board that they fulfill the criteria as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1 )(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as âListing Regulationsâ), so as to qualify themselves to be appointed/continued as Independent Directors. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, 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 Committees.
A separate exercise was carried out to evaluate the performance of directors individually, including Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority members etc. The Performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and Non-executive Independent Directors was also carried out by the Independent Directors at their separate meeting. The Directors expressed their satisfaction with the evaluation.
INDEPENDENT DIRECTORâS FAMILIARIZATION PROGRAMME
The Company continued with its Independent directorsâ familiarization program, when needed, for familiarizing them with companyâs operations, regulatory and critical aspects which would enable them to effectively discharge responsibilities and functions conferred on them. Policy about familiarization Programme is placed on the Companyâs website and its web link is http://www.stitextile.net.
CRITERIA AND POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS
The Nomination and Remuneration Committee (NRC) is responsible for developing competency requirements for the Board based on Industry and Strategy of the Company. The Board composition analysis reflects in depth understanding of the Companyâs strategies, environment, operations, financial conditions, compliance requirements, etc. In terms of Section 178(3), (4) of the Companies Act, 2013 and LODR Regulations, NRC has formulated criteria for determining qualifications, positive attributes and Independence of Directors which are as follows:
a. Qualifications: The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise, personal, professional or business standing.
b. Expertise: The person to be chosen as a Director shall have relevant expertise in the fields of textile, information technology, sales /marketing, finance, taxation, law, governance and general management.
c. Positive Attributes: Apart from the duties of Directors as prescribed in the Companies Act, 2013, Directors are expected to demonstrate high standards of integrity, ethical behavior and independent judgment. The Directors are also expected to abide by the applicable code of conduct.
d. Independence: The Committee satisfies itself with regard to the criteria for independence of the Directors as required under applicable statutes in order to enable the Board to discharge its function and duties effectively.
e. Reappointment: In case of reappointment of Non-Executive and Independent Directors, the NRC and the Board takes into consideration the performance evaluation of the Director and his/her engagement level.
The Company has formulated and adopted the Nomination and Remuneration Policy in accordance with the provisions of the Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations.
The said Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Executive, Non-Executive and Independent Directors on the Board of Directors of the Company and persons in the Senior Management of the Company, their remuneration including determination of qualifications, positive attributes, independence of Directors and other matters as provided under sub-section (3) of Section 178 of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
DIRECTORâS RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, your Directors would like to state:
(a) that in the preparation of the annual financial statements for the year ended 31st March, 2018, the applicable accounting standards read with requirements set out under schedule III to the Act, have been followed along with proper explanation relating to material departures, if any;
(b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the (loss) of the Company for the year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) that the annual financial statements have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and
(f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
NOMINATION AND REMUNERATION POLICY
The Board of Directors has formulated a Policy which lays down a framework for selection and appointment of Directors and Senior Management and for determining qualifications, positive attributes and independence of Directors.
The Board has also formulated a Policy relating to remuneration of Directors, members of Senior Management and Key Managerial Personnel.
Both policies are available for inspection by members at the Registered Office of the Company during working hours up to the date of the Annual General Meeting and shall be made available to any members on request.
MEETING OF BOARD OF DIRECTORS
During the year under review, 04 (Four) Board Meetings were convened and held on 08*1 May, 2017, 04*1 August, 2017, 07th November, 2017 and 31st January, 2018. The details in respect of attendance of directors, sitting fees etc. are given in the Corporate Governance Report which forms part of the Annual Report.
The intervening gap between the above said meetings was within the timelines as stipulated under the Companies Act, 2013 and Regulation 17 of the Listing Regulations.
COMMITTEES OF THE BOARD
The Board of Directors has the following mandatory Committees:
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholdersâ Relationship Committee; and
4. Corporate Social Responsibility Committee.
COMPOSITION OFAUDIT COMMITTEE
The Audit Committee consists ofthe following members:
Mr. A. Arumugham : Chairman, Independent Director
Mr. John Mathew : Member, Independent Director
Mr. Suresh S. Vishwasrao : Member, Independent Director Mr. A. R. Mundra : Member, Non-executive Director
The composition of the Audit Committee is in alignment with provisions of Section 177 ofthe Companies Act, 2013 read with the Rules issued thereunder and Regulation 18 of the Listing Regulations. The members of the Audit are financially literate and have experience in financial management.
There are no qualifications and observations raised by Audit Committee which required any comments from the Board or Management ofthe Company.
Further detail on the Audit Committee is being provided in the Report on Corporate Governance forming part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
In compliance with the requirements of Section 135 of the Companies Act, 2013, the Company has constituted Corporate Social Responsibility (CSR) Committee, which is responsible for fulfilling the CSR objectives. The Composition of committee is as under:
Mr. A. Arumugham : Chairman, Independent Director
Mr. A. R. Mundra : Member, Non-executive Director
Ms. Prachi Deshpande : Member, Non-executive Director Dr. R. B. Baheti, Director has resigned from the membership of the Committee w.e.f. 21st F ebruary, 2018.
As the Company has no average net profit during the immediately preceding last three financial years, the provisions of section 135 of the Companies Act, 2013 with respect to contribution for CSR activities were not applicable to the Company during the financial year under review.
The details of other committees of the Board viz. Nomination and Remuneration Committee, Stakeholders Relation Committee are given in the Corporate Governance Report which forms part of this report.
AUDITORS Statutory Auditor
M/s V. K. Beswal & Associates, Chartered Accountants, Mumbai were appointed as Statutory Auditors of the Company at the 30th AGM. M/s V. K. Beswal & Associates have confirmed their eligibility and qualification required under section 139, 141 and other applicable provisions of the companies act, 2013 and rules issued thereunder (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
Pursuant to Notification issued by the Ministry of Corporate Affairs on 07th May, 2018 amending section 139 of the Companies Act, 2013 and the Rules framed thereunder, the mandatory requirement for ratification of appointment of Auditors by the Members at every Annual General Meeting (âAGMâ) has been omitted, and hence the Company is not proposing an item on ratification of appointment of Auditors at this AGM.
The Auditorâs Report does not contain any qualification, reservation or adverse remark on the financial statements for the year ended March 31, 2018. The statements made by the Auditors in their Report are self - explanatory and do not call for any further comments.
The statutory auditors have not reported any incident of fraud under section 143(12) of the Companies Act, 2013, to the Audit Committee of the Company during the year under review.
Secretarial Auditor
As per requirements of Section 204(1) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s Rao Saklecha & Co., Practicing Company Secretary, Indore (C.P. No. 6434) as the Secretarial Auditor ofthe Company to conduct Secretarial Audit of the compliance of applicable statutory provisions and adherence to good corporate governance practice by the Company.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The statements made by the Auditors in their Report are self - explanatory and do not call for any further comments.
The secretarial auditors have not reported any incident of fraud under section 143(12) of the Companies Act, 2013, to the Audit Committee of the Company during the year under review.
The report of the Secretarial Auditor for the financial year 2017-18 is annexed to this report as Annexure - I.
Internal Auditor
As per requirements of Section 138(1) of the Companies Act, 2013 read with rule 13 of the Companies (Accounts) Rules, 2014, the Board of Directors of the Company has appointed M/s Fadnis & Gupte, Chartered Accountants, Indore as Internal Auditor of the Company to conduct Internal Audit of business processes, financial reporting & controls, compliance with applicable laws, regulations etc.During the year under review, no material or serious observation has been received from the Internal Auditors ofthe Company.
Cost Auditor
The Ministry of Corporate Affairs (MCA) vides Notification dated 31st December, 2014 made amendment in the Companies (Cost Records and Audit) Rules, 2014, through Companies (Cost Records and Audit) Amendment Rules, 2014. As per the said amendment rules, our Company is exempted from the requirement to conduct Cost Audit. Therefore, the Company did not appointed Cost Auditor for financial year 2017-18.
CEO / CFO CERTIFICATION
In terms of Regulation 17 of the Listing Regulations, a Compliance Certificate duly signed by the Managing Director and Chief Financial Officer of the Company, on the financial statements and internal controls relating to financial reporting has been obtained and annexed with the corporate governance report.
INDUSTRIAL RELATIONS AND CORPORATE GOVERNANCE
The company provides a congenial and friendly atmosphere to its employees to maintain cordial relations and motivate them to develop their full potential. Industrial Relations throughout the year were very peaceful & cordial.
To upgrade human skills and improve their efficiencies, the Programs like Safety First, various sports tournaments, inbound & outbound training programs, recreational and team building activities, etc. are part of the total employee experience helping to promote individual wellness while balancing the needs of the work, family and society.
Your directors are also committed to good corporate governance as a policy. As per Regulation 34(3) read with schedule V of the Listing Regulations, a detailed report on Corporate Governance is given in the annexure which forms part of this report as Annexure II.
The requisite certificate from the Statutory Auditors of the Company confirming compliance with the conditions of corporate governance is annexed with the report on corporate governance.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The informationâs on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed and marked as Annexure - III.
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return (MGT - 9) pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure - IV to this Report.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on armâs length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.
As per provisions of sub-section (1) of Section 188 read with the Companies (Meeting of Board and its Powers) Rules, 2014 and further amendment thereof, the Company has obtained the prior omnibus approval of Audit Committee, Board of Directors and members for all material related parties transactions.
Further, the statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted has been placing before the Audit Committee and the Board of Directors for review on a quarterly basis.
The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note 32 to the Standalone Financial Statements ofthe Company.
Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules, 2014, particulars of contracts or arrangements with related party (ies) are given in the prescribed Form - AOC - 2 which is annexed and marked as
Annexure - V.
The policy on Related Party Transactions as approved by the Board is hosted on the Companyâs website www.stitextile.net.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companyâs shares and prohibits the purchase or sale of Companyâs shares by the Directors and the designated employees while in possession of unpublished price sensitive informations in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation ofthe Code.
All Directors and the designated employees have confirmed compliance with the Code.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year under review, the Company has provided corporate guarantee in connection with credit facilities availed by its holding company from banks. The terms and conditions of the guarantee so given are not prejudicial to the interest of the Company and in line with the provisions of the act. There is no transaction of loan and investment during the year under review.
HOLDING, SUBSIDIARY, JOINT VENTRES & ASSOCIATES COMPANIES.
Your Company continues to be the subsidiary of Bombay Rayon Fashions Limited (BRFL). The Company does not have any subsidiary, Joint Venture and Associates Company.
INTERNAL CONTROL SYSTEM AND AUDIT
The Company has appropriate Internal Control System for business processes, financial reporting & controls, compliance with applicable laws, regulations etc. The Internal Control System of the Company is designed to prevent operational risks through a framework of internal controls and processes. Our internal control system ensures that all business transactions are recorded in a timely manner, the financial records are complete, resources are utilized effectively and our assets are safeguarded. We have developed robust policies, procedures, checks and balances to bring in discipline in day-to-day functions, for accurately and timely compilation of data.
In addition, the Company has appointed M/s Fadnis & Gupte, Chartered Accountants, Indore as the Internal Auditors of the company. The Internal Audit conducts on monthly basis and the reports of auditor is placed before the Audit Committee in its next meeting. The internal audit ensures safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes and assessing the internal control strengths in all areas. Further, Internal Auditors observations and findings are discussed with the concerned departments head and suitable corrective actions are taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operation. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.
RISK MANAGEMENT
The Company has in place a mechanism to inform Board Members about the risk assessment and minimization procedures and periodical review to ensure that executive management controls risks by means of a properly defined frame work. As required under Regulation 17 of Listing Regulations, the Company has formulated a Policy on Risk Management.
CASH FLOW ANALYSIS
In conformity with the provisions of Regulation 34 of the Listing Regulations, the Cash Flow Statement forms part of annual report.
ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safe operations. The Companyâs policy requires conduct of operations in such a manner so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.
In order to prevent sexual harassment of women at work place, a new act the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. As per the said act, every company is required to set up an Internal Complaints Committee (ICC) to look into complaints relating to sexual harassment at work place of any women employee.
Accordingly, the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up an Internal Complaints Committee for implementation of said policy. There were no incidences of sexual harassment reported during the year under review.
WHISTLE BLOWER POLICY
In compliance of the requirements of Section 177 of the Companies Act, 2013 and as a measure of good corporate governance practice, the Board has formulated a Whistle Blower Policy. The policy comprehensively provides an opportunity for any employee / director of the Company to raise any issue concerning breaches of law, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy provides for adequate safeguard against victimization of employees and directors who avail of vigil mechanism and also provide for direct access to the Audit Committee.
POLICIES AS PER SEBI LISTING REGULATIONS
As per requirements of provisions of Listing Regulations the Company has adopted the following policies:
- Policy for Preservation of Documents.
- Policy for Determination and Disclosure of Material Events.
- Archival Policy.
- Policy on Material Related Party Transactions.
- Familiarization Programme for independent directors.
As, the Company does not have any subsidiary, hence not formulated policy on material subsidiary.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Reporting as required by Regulation 34(2)(f) of the Listing Regulations, is not applicable to your Company for the financial year ending March 31, 2018.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY
Debt Recovery Tribunal (DRT) in the matter of Oriental Bank of Commerce (OBC) (Erstwhile Global Trust Bank, GTB) & Gujarat State Co-operative Cotton Federation Limited (GUJCOT), passed an order dated 01st December, 2014 against the GUJCOT (Defendant No. 1) & STI India Limited (Defendant No. 2).
Then, STI preferred an appeal before the Debts Recovery Appellate Tribunal (DRAT), against said order of DRT. The Learned DRAT, by an order dated 14th December, 2015, adjourned the said Appeal proceedings on the ground that the matter was seized up by BIFR. Next date ofhearing in DRAT is 13th June, 2018.
Then, following the order of DRT and despite of pending the Companyâs appeal before the DRAT, Mumbai, the Recovery Officer (RO), Ahmedabad issued an impugned Order dated 31st January, 2018. By the said Impugned Order, the Recovery Officer has inter alia attached the all bank accounts of the Company and further passed an Order of Attachment dated 31st January, 2018, attaching the movable and immovable properties of the Company.
Against the said impugned orders of DRT and Recovery Officer, the Company preferred a writ petition to High Court, Ahmedabad on 12th April, 2018, requesting to quash and set aside the Recovery Proceeding (being R.P. No.265 of 2014), which are pending before the Recovery Officer and vacate the attachments levied, by the Recovery Officer vide the impugned orders dated 31st January, 2018.
The Honâble High Court on 17th April, 2018 granted an ad-interim relief to the Company staying the further proceeding of attachments order dated 31st January, 2018. The matter is now being reviewed by the High Court. The next date given is 13th June, 2018.
PARTICULARS OF EMPLOYEES
The detail as required pursuant to Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is given in Annexure - VI.
The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directorsâ Report for the year ended 31st March, 2018.
The said Annexure is not being sent along with this Report to the Members of the Company in line with the provisions of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary/Compliance Officer at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by the Members at the Registered Office of the Company, 21 days before the Annual General Meeting and up to the date of the said Annual General Meeting during the business hours on working days.
None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his/her spouse and dependent children) more than two percent of the equity shares of the Company. MANAGEMENT DISCUSSION AND ANALYSIS REPORT The management discussion and analysis report on the operations of the Company as required under regulation 34(2)(e) of the Listing Regulations has been given separately and forms part of this report as Annexure - VII.
DISCLOSURES
The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.
The Board of Directors state that except disclosures as given above, no further mandatory disclosure or reporting is required to give with this report.
GREEN INITIATIVE
The Ministry of Corporate Affairs had taken the Green Initiative in Report on Corporate Governance by allowing paperless compliances by Companies through electronic mode.
Your Company supports the Green Initiative and has accordingly decided to send necessary communications to its Shareholders to their respective registered E-mail addresses.
Your Company appeals to you, its Shareholders, who are yet to register the E-mail addresses that they take necessary steps for registering the same so that you can also become a part of the initiative and contribute towards a Greener environment.
CAUTIONARY STATEMENT
Statements in the Boardâs Report describing the Companyâs objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companyâs operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.
APPRECIATIONS AND ACKNOWLEDGEMENTS
The board would like to place on record its deep appreciation to the financial institutions, banks, business partners, central and state government authorities, stock exchanges and clients for their support and co-operation during the year.
We would also like to place on record our sincere appreciation for the commitment, dedication and hard work put in by every employee of the Company. We are also deeply grateful for the confidence and faith expressed by the stakeholders in the Company. Your Directors would also like to take this opportunity to acknowledge the excellent support given by Bombay Rayon Fashions Limited, the Holding Company of your company, in providing the financial assistance and excellent management support and guidance at all levels of business. This has enabled the Company to run its business smoothly and effectively for the accomplishment of its objectives.
For and on behalf of the Board
Of STI India Limited
Place:Mumbai Mr. Aman Agrawal
Date: 08th May, 2018 Chairman
DIN:00019534
Mar 31, 2016
Dear Members,
The Directors are pleased to present 31st Directors'' Report on the business and operations of your Company along with the audited financial statements for the year ended 31st March, 2016.
FINANCIAL RESULTS AND PERFORMANCE
The salient features of the Companyâs financial results during the year are as under:
_(Rs.in Lacs)
PARTICULARS |
Forthe yearended 31.03.2016 |
Forthe yearended 31.03.2015 |
Sales / Revenue from Operations |
4679.14 |
6047.09 |
Profit /(Loss) before Interest, |
||
Depreciation & Tax |
4114.05 |
(74.82) |
Less: Interest |
1.93 |
4.28 |
Profit /(Loss) before Depreciation & Tax |
4112.12 |
(79.10) |
Less: Depreciation |
392.73 |
417.83 |
Profit/(Loss) before Tax |
3719.39 |
(496.93) |
Less - Provision for Taxes (including Deferred) |
1319.54 |
(18.13) |
Profit/(Loss) After Tax |
2399.85 |
(478.80) |
Paid Up Share Capital |
2900.00 |
2900.00 |
AdjustedNet Worth of the Company |
(2.16) |
(2402.01) |
EPS (In Rs.) Basic & Diluted |
8.28 |
(1.65) |
During the financial year under review -
- The turnover of your company stood at Rs. 4679.14 Lacs in financial year ended on 31â March, 2016 as against fRs.6047.09 Lacs in financial year ended on 31st March, 2015, thereby registering a decrease by 22.62%.
- PBIDT increased to Rs. 4114.05 Lacs from Rs. (74.82) Lacs in the previous year.
- Interest cost decreased to Rs. 1.93 Lacs from Rs. 4.28 Lacs in the previous year.
DIVIDEND
Considering the accumulated losses, the Board of Directors does not recommend any dividend for the year 31 "March, 2016
FIXED DEPOSITS
The Company has not accepted or renewed any deposit from public during the year under review.
SHARE CAPITAL
The paid up equity share capital of the Company as on 31st March, 2016 stood at Rs. 2900.00 Lacs. During the year under review, the Company has neither issued shares with differential voting rights nor granted any stock options / sweat equity. Except Dr. R. B. Baheti, Chairman, who is holding 42 shares in the Company, none of the other Directors of the Company hold shares or any other securities of the Company as on the date of this report.
MATERIAL CHANGES FROM END OF FINANCIAL YEAR TO DATE OF REPORT
There are no material change and commitment, affecting the financial position of the Company which has occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report other than those disclosed in the financial statements.
CHANGE IN NATURE OF BUSINESS
During the year under review, the Company has not changed its nature of Business.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
MR. AMAN AGRAWAL AND MS. PRACHI DESHPANDE, RETIRING DIRECTORS.
In accordance with the provisions of section 152 of the Companies Act, 2013 and Article of Association of the Company, Mr. Aman Agrawal and Ms. Prachi Deshpande Directors of the Company are liable for retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment.
Brief profile of retiring directors is given in the notice of Annual General Meeting
CESSATION (MR. K. N. GARG - DIRECTOR)
Mr. K. N. Garg has resigned from the directorship of the Company w.e.f. 018t October, 2015. The Board placed on record its deep appreciation for the valuable services rendered by Mr. Garg during his tenure as Director of the Company.
APPOINTMENT (MR. YUDHVIR SINGH JAIN -NOMINEE DIRECTOR)
The Board of Directors approved and noted the appointment of Mr. Yudhvir Singh Jain as a Director (Nominee of -BIFR) of the Company. His appointment as a Director is being submitted to the shareholders seeking their approval in the ensuing Annual General Meeting. A brief profile of Mr. Yudhvir Singh Jain is also given in the explanatory statement as annexed with the notice of Annual General Meeting.
Except above, there is no change in the Board of Directors of the Company.
KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel (KMP) of the Company:
01. Mr. Prashant Agrawal : Managing Director
02.Mr.MukeshMaheshwari : Chief Financial Officer
03. Mr. Deepesh Kumar Nayak : Company Secretary DECLARATION FROM INDEPENDENT DIRECTORS
The Independent Directors Mr. A. Arumugham, Mr. T. N. Anand Reddy and Mr. John Mathew have submitted their declaration to the Board that they fulfill the criteria as stipulated in Section 149(6) of the Companies Act, 2013, so as to qualify themselves to be appointed/continued as Independent Directors.
DIRECTORâS RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, your Directors would like to state:
(a) that in the preparation of the annual financial statements for the year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for the year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) that the port annual financial statements have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and,
'' (f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, 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 Committees
A separate exercise was carried out to evaluate the performance of directors individually, including Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The Performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and Non-executive Independent Directors was also carried out by the Independent Directors at their separate meeting. The Directors expressed their satisfaction with the evaluation. The details of programme(s) for familiarization of Independent Directors with the Company, their roles, rights, responsibility in the Company, nature of industry in which the Company operates, business model of the Company and related matters are hosted on the website www.stitextile.net of the Company.
REMUNERATION POLICY
The Board has framed a policy setting out the criteria for review of responsibilities of the directors positive attributes, independence of a director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees in accordance with the provisions of Section 178 of the Act.
AUDITORS Statutory Auditor
M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai having Firm Registration Number 101083W, were appointed as Statutory Auditors for a period of 5 years in the 30th Annual General Meeting held in the year 2015 and are eligible for reappointment. However, their appointment is subject to ratification by members at ensuing Annual General Meeting of the Company.
M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai have provided necessary certificate to the Company under section 139 (1) read with section 141 of the Companies Act, 2013.
The statutory auditors have not reported any incident of fraud under section 143(12) of the Companies Act, 2013, to the Audit Committee of the Company during the year under review.
Statutory Auditorsâ Report: The Auditors'' Report to the Shareholders for the year under review does not contain any qualification.
Secretarial Auditor
As per requirements of Section 204(1) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s Rao Saklecha & Co., Practicing Company Secretary, Indore (C.P. No. 6434) to conduct Secretarial Audit of the compliance of applicable statutory provisions and adherence to good corporate governance practice by the Company.
Secretarial Auditorsâ Report: The report of the Secretarial Auditor for the financial year 2015-16 is annexed to this report as Annexure -1. The management comments on the remarks and observations made by secretarial auditor in their report are as under:
Para V (II) of Secretarial Audit Report:
In compliance of the provisions of erstwhile Clause 41 of the Listing Agreement (now Regulation 31 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015), the Company had called the meeting of the Board of Directors on 10th November, 2015 at Mumbai for approving the un-audited financial results for the quarter ended on 3 0th September, 2015 along with other routing businesses. However, due to non-availability of quorum, the meeting was postponed and later it was held on 11th December, 2015 in which the said results were approved and thereafter submitted to the exchanges.
Internal Auditor
As per requirements of Section 138(1) of the Companies Act, 2013 read with rule 13 of the Companies (Accounts) Rules, 2014, the Board of Directors of the Company appointed M/s Fadnis & Gupte, Chartered Accountants, Indore as Internal Auditor of the Company to conduct Internal Audit of business processes, financial reporting & controls, compliance with applicable laws, regulations etc.
Cost Auditor
The Ministry of Corporate Affairs (MCA) vide Notification dated 31st December, 2014 made amendment in the Companies (Cost Records and Audit) Rules, 2014, through Companies (Cost Records and Audit) Amendment Rules, 2014. As per said amendment rules, our Company is exempted from the requirement to conduct Cost Audit. Therefore, the Company had not appointed Cost Auditor for financial year 2015-16.
CEO / CFO CERTIFICATION
In terms of Regulation 17 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, a Compliance Certificate duly signed by the Managing Director and Chief Financial Officer of the Company, on the financial statements and internal controls relating to financial reporting has been obtained and annexed with the corporate governance report.
POSTALBALLOT
During the year under review two resolutions were passed through postal ballot under Section 110 of the Companies Act, 2013, for obtaining approval of members for related party transactions and alteration in article of association of the Company.
The Company followed the procedure as prescribed under the Companies (Management and Administration) Rules, 2014 and Members were provided the facility to cast their votes through electronic voting as well as through postal ballot. The Board appointed M/s Rao Saklecha & Company, Practicing Company Secretary, Indore as the Scrutinizer for conducting the postal ballot voting process. The scrutinizer submitted his report to the Chairman after the completion of the scrutiny of the postal ballot as well as e-voting. The result of the postal ballot via postal ballot forms and e-voting facility was declared on 18th February, 2016 and communicated to the stock exchanges and displayed on the Companyâs website www.stitextile.net. The results were also published in the two newspapers as stipulated.
INDUSTRIAL RELATIONS AND CORPORATE GOVERNANCE
The company provides a congenial and friendly atmosphere to its employees to maintain cordial relations and motivate them to develop their full potential. Industrial Relations throughout the year were very peaceful & cordial.
To upgrade human skills and improve their efficiencies, the Company continuously organizes workshops on different management areas and also deputes employees to external workshop and seminars.
Your directors are also committed to good corporate governance as a policy. As per Regulation 34(3) read with schedule V of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, a detailed report on Corporate Governance is given in the annexure which forms part of this report as Annexure IL The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is annexed with the report on corporate governance.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The informationâs on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed and marked as Annexure - HI. EXTRACT OF ANNUAL RETURN
The extracts of Annual Return (MGT - 9) pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure - IV to this Report.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on armâs length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.
As per provisions of sub-section (1) of Section 188 read with the Companies (Meeting of Board and its Powers) Rules, 2014 and further amendment thereof, the Company has obtained the prior omnibus approval of Audit Committee, Board of Directors and Shareholders for all material related parties transactions.
Further, the statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted has been placed before the Audit Committee and the Board of Directors for review on quarterly basis. Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of contracts or arrangements with related party (ies) are given in the prescribed Form AOC - 2 is annexed and marked as Annexure - V.
The policy on Related Party Transactions as approved by the Board is hosted on the Companyâs website www.stitextile.net.
MEETING OF BOARD OF DIRECTORS
During the year under review, 05 (Five) Board Meetings were convened and held on 15th May, 2015, 14th August, 2015, SO01 September, 2015,11th December, 2015 and IS* February, 2016. The details in respect of attendance of directors, sitting fees etc. are given in the Corporate Governance Report.
The intervening gap between the above said meetings was within the timelines as stipulated under the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
COMMITTEES OF THE BOARD
The Board of Directors has the following mandatory Committees:
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders â Relationship Committee; and
4. Corporate Social Responsibility Committee.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee consists of the following members:
01. Mr. A. Arumugham : Chairman, Independent Director
02. Mr. T. N. Anand Reddy : Member, Independent Director
03. Mr. John Mathew : Member, Independent Director There are no qualifications and observations raised by Audit Committee which required any comments from the Board or Management of the Company.
The details of other committees of the Board are given in the Corporate Governance Report which forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
In compliance with the requirements of Section 13 5 of the Companies Act, 2013, the Company has constituted CSR Committee, which is responsible for fulfilling the CSR objectives. The Composition of committee is as under:
Mr. A. Arumugham Independent Director Chairman Dr. R. B. Baheti Non-executive Director Member
Ms. Prachi Deshpande Non-executive Director Member As the Company has no average net profit during the immediately preceding last three financial years, the provisions of section 135 of the Companies Act, 2013 with respect to contribution for CSR activities were not applicable to the Company during the financial year under review.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the directors and designated employees of the Company. The Code requires preclearance for dealing in the Companyâs shares and prohibits the purchase or sale of Companyâs shares by the Directors and the designated employees while in possession of unpublished price sensitive informationâs in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.
All directors and the designated employees have confirmed compliance with the Code.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year under review, the company has not given any such loan and made investment which are covered under the provisions of sections 185 and 186 of the Companies Act, 2013.
However, the Company has provided corporate guarantee in connection with credit facilities availed by holding company from banks. The terms and conditions of the guarantee so given are not prejudicial to the interest of the Company and in line with the provisions of the act. HOLDING, SUBSIDIARY, JOINT VENTRES ASSOCIATES COMPANIES.
During the year under review, the Board of Directors considered and approved the sale of Investment of 1,20,00,000 (One Crore Twenty Lacs) equity shares of STI Sanoh India Limited (the Joint Venture Company) to Sanoh Industrial Company Limited, Japan. Accordingly, the Joint Venture Agreement with Sanoh Industrial Company Limited, Japan stand cancelled.
Your Company continues to be the Subsidiary of Bombay Rayon Fashions Limited (BRFL).
The Company does not have any subsidiary. RISKMANAGEMENT
The Company has in place a mechanism to inform Board Members about the risk assessment and minimization procedures and periodical review to ensure that executive management controls risks by means of a properly defined frame work. As required under Regulation 17 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has formulated a Policy on Risk Management.
INTERNALCONTROLSYSTEMAND AUDIT
The Company has appropriate Internal Control System for business processes, financial reporting & controls, compliance with applicable laws, regulations etc. The Internal Control System of the Company is designed to prevent operational risks through a framework of internal controls and processes. Our internal control system ensures that all business transactions are recorded in a timely manner, the financial records are complete, resources are utilized effectively and our assets are safeguarded. We have developed robust policies, procedures, checks and balances to bring in discipline in day-to-day functions, for accurately and timely compilation of data.
In addition, the Audit Committee has appointed M/s Fadnis & Gupte, Chartered Accountants, Indore as the Internal Auditors of the company. The Internal Audit conducts on monthly basis and the reports of auditor is placed before the Audit Committee in its next meeting. The internal audit ensures safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes and assessing the internal control strengths in all areas. Further, Internal Auditors observations and findings are discussed with the concerned departments head and suitable corrective actions are taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operation. CASH FLOW ANALYSIS
In conformity with the provisions of Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Cash Flow Statement forms part of annual report.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
In order to prevent sexual harassment of women at work place a new act the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013.Asper said act, company is required to set up an Internal Complaints Committee (ICC) to look into complaints relating to sexual harassment at work place of any women employee. Accordingly, the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up an Internal Complaints Committee for implementation of said policy.
There were no incidences of sexual harassment reported during the year under review.
WHISTLE BLOWER POLICY In compliance of the requirements of Section 177 of the Companies Act, 2013 and as a measure of good corporate governance practice, the Board has formulated a Whistle Blower Policy. The policy comprehensively provides an opportunity for any employee / director of the Company to raise any issue concerning breaches of law, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy provides for adequate safeguard against victimization of employees and directors who avail of vigil mechanism and also provide for direct access to the Audit Committee.
POLICIES AS PER SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
As per requirements of provisions of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has adopted the following policies:
- Policy for Preservation of Documents. (Regulation 9)
- Policy for Determination and Disclosure of Material Events. (Regulation 30(4)(ii))
- Archival Policy, (Regulation 30(8))
- Policy on Material Related Party Transactions.
(Regulation 23)
STATUS OF THE CASE AT BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR).
The Company had declared as a Sick Industrial Undertaking under Section 3(l)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) vide summary of proceedings of the hearing held on 23rd January, 2006 against reference registration No. 743/2002 dated 30111 December, 2002. The Honâble BIFR Bench has appointed State Bank of India as Operating Agency to prepare Draft Rehabilitation Scheme.
The Honâble BIFR Bench, vide order dated 1st November, 2010 while accepting the report of operating agency, observed that the Company is liable to pay all the outstanding dues of GUJCOT, and directed the Company to prepare Draft Rehabilitation Scheme (DRS) taking into account the liability towards GUJCOT.
The Company filed an appeal against the said BIFR order. On 29fh April, 2013 the AAIFR passed its order and remanded the case to BIFR with a direction to hear matter on the points raised in appeal before AAIFR.
The last hearing at the BIFR was on 25th March, 2015, however the same was not heard as the bench did not function on the said date. No further date of hearing has been notified till date.
BUSINESS RESPON SIBILIT Y REPORT
The Business Responsibility Reporting as required by Regulation 34(2)(f) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is not applicable to your Company for the financial year ending 31" March, 2016.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
PARTICULARS OFEMPLOYEES
The details as required pursuant to Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is given in Annexure-VI.
There is no employee in the Company whose particulars are required to be given under Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The management discussion and analysis report on the operations of the Company as required under Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been given separately and forms part of this report as Annexure - VH.
CAUTIONARY STATEMENT
Statements in the Boardâs Report describing the Companyâs objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companyâs operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.
APPRECIATIONS AND ACKNOWLEDGEMENTS
The board would like to place on record its deep appreciation to the financial institutions, banks, business partners, central and state government authorities, stock exchanges and clients for their support and co-operation during the year.
We would also like to place on record our sincere appreciation for the commitment, dedication and hard work put in by every employee of the Company. We are also deeply grateful for the confidence and faith expressed by the shareholders in the Company.
Your Directors would also like to take this opportunity to acknowledge the excellent support given by Bombay Rayon Fashions Limited, the Holding Company of your company, in providing the financial assistance and excellent management support and guidance at all levels of business. This has enabled the Company to run its business smoothly and effectively for the accomplishment of its objectives.
For and on behalf of the Board of
STI India Limited
Place: Indore (M.P.) Dr. R.B. Baheti
Date: 10th May, 2016 Chairman
DIN: 00008202
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the 30 th Annual Report of
the Company along with the Audited Annual Accounts for the financial
year ended 31st March, 2015.
FINANCIAL RESULTS AND PERFORMANCE
The salient features of the Company's financial results during the
year are as under:
(Rs. in Lacs)
PARTICULARS For the For the
year ended year ended
31.03.2015 31.03.2014
Sales / Revenue from Operations 6047.09 5572.80
Profit before Interest, Depreciation & Tax (74.82) 189.86
Less: Interest 4.28 1.44
Profit before Depreciation & Tax (79.10) 188.42
Less: Depreciation 417.83 1238.46
Profit/(Loss) before Tax (496.93) (1050.04)
Less - Provision for Taxes
(including Deferred) (18.13) (383.27)
Profit/(Loss) After Tax (478.80) (666.77)
Paid Up Share Capital 2900.00 2900.00
Adjusted Net Worth ofthe Company (2402.01) (1825.69)
EPS (In Rs.) Basic & Diluted (1.65) (2.30)
During the financial year under review -
- The turnover of your company stood at Rs. 6047.09 Lacs as against Rs.
5572.80 Lacs in financial year ended on 31st March, 2014 registering an
increase by 8.51%.
- PBIDT decreased to Rs. (74.82) Lacs from Rs. 189.86 Lacs in the previous
year.
- Interest cost increased to Rs. 4.28 Lacs from Rs. 1.44 Lacs in the
previous year.
DIVIDEND
In view of the operating losses incurred by the Company during the
year, the Board of Directors does not recommend any dividend for the
year 31st March, 2015
FIXED DEPOSITS
The Company has not accepted or renewed any deposit from public during
the year under review.
SHARE CAPITAL
The paid up Equity Share Capital of the Company as on 31st March, 2015
was Rs. 2900.00 Lacs. During the year under review, the Company has
neither issued shares with differential voting rights nor granted stock
options/sweat equity. Except Dr. R. B. Baheti and Mr. K. N. Garg,
Directors of the Company who hold 42 and 40 equity shares respectively,
none of the other Directors of the Company hold shares or any other
securities of the Company.
MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL THE DATE OF REPORT
There are no material changes and commitments, affecting the financial
position of the Company which have occurred between the end of the
financial year of the Company to which the financial statements relate
and the date of the report other than those disclosed in the financial
statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL CESSATION
Mr. S. D. Naik, Chief Financial Officer had resigned from the services
of the Company w.e.f. 30th September, 2014. The Board placed on record
its deep appreciation for the valuable services rendered by Mr. Naik
during his tenure as Chief Financial Officer of the Company.
APPOINTMENT
(A) Mr. John Mathew as an Additional Independent Director
The Board of Directors at its meeting held on 15th May, 2015 appointed
Mr. John Mathew as an Additional Independent Director ofthe Company
w.e.f. 15 th May, 2015. The advantage of his vast experience of various
fields is available for the benefits of the Company. His appointment as
Independent Director is submitted to the shareholders for their
approval in the ensuing Annual General Meeting. A brief profile of Mr.
John Mathew is also given in the explanatory statement as annexed with
the notice of Annual General Meeting.
(B) Ms. Prachi Deshpande as a Director
The Board of Directors at its meeting held on 15th May, 2015 appointed
Ms. Prachi Deshpande as an Additional Director of the Company w.e.f.
15th May, 2015. Ms. Deshpande has vast experience in fund raising which
will be beneficial to the Company. Her appointment will also fulfill
the requirement of having Woman Director on the Board of Directors
under the Companies Act, 2013 and Clause 49 of the Listing Agreement.
Her appointment as an Additional Director is submitted to the
shareholders for their approval in the ensuing Annual General Meeting.
A brief profile of Ms. Prachi Deshpande is given in the explanatory
statement as annexed with notice of Annual General Meeting.
(C) Mr. K.N. Garg and Mr. A. R. Mundra, Retiring Directors.
Mr. K. N. Garg and Mr. A. R. Mundra Directors of the Company are liable
for retire by rotation at the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment. The Board recommends
their re-appointment.
(D) Mr. Mukesh Maheshwari as Chief Financial Officer.
In place of Mr. S. D. Naik, the Board of Directors at its meeting held
on 30th October, 2014 had appointed Mr. Mukesh Maheshwari, Vice
President as Chief Financial Officer of the Company.
Mr. Maheshwari born in 1962, having Masters' Degree in Commerce and
Bachelors' Degree in Law. Mr. Maheshwari is associated with the
Company since last 29 years and presently, he is holding the position
of Vice President of the Company.
Mr. Maheshwari has vide experience of more than 3 decades of Commercial
Activities i.e. Accounts & Finance, Purchase, Inventory Control, Excise
& Customs, Imports & Exports, Sales Tax, DGFT, Insurance,
Transportation & Logistics, Legal Matters, SEZ and Finished goods
Warehouse Management etc.
As a Chief Financial Officer, Mr. Maheshwari is expected to add immense
value for the long-term growth of the Company. Mr. Maheshwari does not
hold any securities in the Company.
(E) Mr. T. N. Anand Reddy and Mr. A. Arumugham as Independent
Directors.
In compliance of the requirements of the Companies Act, 2013 and
revised clause 49 of the Listing Agreement, the Board appointed all
existing Independent Directors viz. Mr. T. N. Anand Reddy and Mr. A.
Arumugham as Independent Directors of the Company for a term up to 31st
March, 2019. The members of the Company at 29th Annual General Meeting
held on 29th September, 2014, have approved the appointment of
Independent Directors.
(F) Key Managerial Personnel.
As per requirements of sub-section (1) of Section 203 of the Companies
Act, 2013 the Company has the following Key Managerial Personnel:
01. Mr. PrashantAgrawal : Managing Director
02. Mr. Mukesh Maheshwari : Chief Financial Officer
03. Mr. Deepesh Kumar Nayak : Company Secretary DIRECTOR'S
RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, the Directors
would like to state:
(a) that in the preparation of the annual financial statements for the
year ended 31st March, 2015, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
(b) that such accounting policies as mentioned in the Notes to the
Financial Statements have been selected and applied consistently and
judgement and estimates have been made that are reasonable and prudent
so as to give a true and fair view of the state of affairs of the
Company as at 31st March, 2015 and of the profit of the Company for the
year ended on that date;
(c) that proper and sufficient care has been taken for the maintainance
of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(d) that the annual financial statements have been prepared on a going
concern basis;
(e) that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively.
(f) that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
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 Committees.
A separate exercise was carried out to evaluate the performance of
individual Directors including Chairman of the Board, who were
evaluated on parameters such as level of engagement and contribution,
independence of judgment, safeguarding the interest of the Company and
its minority shareholders etc. The Performance evaluation of the
Independent Directors was carried out by the entire Board. The
performance evaluation of the Chairman and non-executive Independent
Directors was also carried out by the Independent Directors at their
separate meeting. The Directors expressed their satisfaction with the
evaluation.
The details of programme for familiarization of Independent Directors
with the Company, their roles, rights, responsibility in the Company,
nature in which he Company operates, business model of the Company and
related matters are put up on the website of the Company.
REMUNERATION POLICY
The Board, on recommendation of the Nomination and Remuneration
Committee, has approved a policy setting out the criteria for review of
responsibilities of the Directors positive attributes, independence of
a Director and policy relating to remuneration for Directors, Key
Managerial Personnel and other employees in accordance with the
provisions of Section 178 of theAct.
AUDITORS Statutory Auditor
M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai having
Firm Registration Number 101083W the Statutory Auditors of the Company
retire at the ensuing Annual General Meeting and being eligible, offer
themselves for reappointment. M/s. V.K. Beswal & Associates, Chartered
Accountants, Mumbai have provided necessary certificate under section
139 (1) read with section 141 of the Companies Act, 2013.
The statutory auditors have not reported any incident of fraud to the
Audit Committee of the Company during the year under review.
Auditors' Report: The Auditors' Report to the Shareholders for the
year under review does not contain any qualification.
Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the cost
audit records maintained by the Company in respect of its Textile
activity is not required to be audited, therefore, the Company has not
appointed Cost Auditor for the financial year 2014-15. However, the
Company is maintaining proper Cost Records as per requirements of the
said rules.
Pursuant to Cost Audit (Report) Rule, 2011, the Cost Audit Report for
the financial year 2013-14, was filed on 11th August, 2014 vide SRN
S30847545.
SecretarialAuditor
As per requirements of Section 204(1) of the Companies Act, 2013 and
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, the Board of Directors of the Company has appointed M/s
Rao Saklecha & Co., Practicing Company Secretary, Indore (C.P. No.
6434) to conduct Secretarial Audit of the compliance of applicable
statutory provisions and adherence to good corporate governance
practice by the Company.
Secretarial Auditors' Report: The report of the Secretarial Auditor
is annexed to this report as Annexure - I. The management comments on
the remarks and observations made by secretarial auditor in their
report are as under:
Para I (a) of Secretarial Audit Report:
In compliance of the provisions of Section 149 of the Companies Act,
2013 and Clause 49 of the Listing Agreement, the Board of Directors at
its meeting held on 15 th May, 2015 has appointed Mr. John Mathew as
Independent Director and Ms. Prachi Deshpande as Woman Director on the
Board of the Company. Now, the board has duly constituted as per
requirements of the Act and Clause 49 of the Listing Agreement.
Para I (b) ofSecretarialAuditRepwrt:
The Company is in the process of obtaining requisite approval in the
ensuing Annual General Meeting as required under Section 197 of the
Companies Act, 2013 read with rules made thereunder with regard to
remuneration paid to Dr. R. B. Baheti.
Internal Auditor
As per requirements of Section 138(1) of the Companies Act, 2013 read
with rule 13 of the Companies (Accounts) Rules, 2014, the Board of
Directors of the Company appointed M/s Fadnis & Gupte, Chartered
Accountants, Indore as Internal Auditor of the Company to conduct
Internal Audit of business processes, financial reporting & controls,
compliance with applicable laws, regulations etc.
CEO / CFO CERTIFICATION
In terms of Clause 49 of the Listing Agreement, the certificates by the
Managing Director and Chief Financial Officer on the financial
statements and internal controls relating to financial reporting has
been obtained and forms part of annual report.
POSTAL BALLOT
Special Resolutions were passed through postal ballot during the year
under review under Section 110 of the Companies Act, 2013 and Clause
35B of the Listing Agreement, for obtaining approval of members for
related party transactions and to provide corporate guarantee.
The Company followed the procedure as prescribed under the Companies
(Management and Administration) Rules, 2014 and Members were provided
the facility to cast their votes through electronic voting or through
postal ballot. The Board appointed M/s Rao Saklecha & Company,
Practicing Company Secretary, Indore as the Scrutinizer for conducting
the postal ballot voting process. The scrutinizer submitted his report
to the Chairman after the completion of the scrutiny of the postal
ballot as well as e-voting. The result of the postal ballot via postal
ballot forms and e-voting facility was declared on 03rd December, 2014
and communicated to the stock exchanges and displayed on the
Company's website www.stitextile.net The results were also published
in the two newspapers as stipulated.
INDUSTRIAL RELATIONS AND CORPORATE GOVERNANCE
The company provides a congenial and friendly atmosphere to its
employees to maintain cordial relations and motivate them to develop
their full potential. Industrial Relations throughout the year were
very peaceful & cordial.
To upgrade human skills and improve their efficiencies, the Company
continuously organizes workshops on different management areas and also
deputes employees to external workshop and seminars.
Your Directors are also committed to good corporate governance as a
policy. A detailed report on Corporate Governance is given in the
annexure which form part of this report as Annexure II. The requisite
certificate from the Auditors of the Company confirming compliance with
the conditions of corporate governance as stipulated under Clause 49 of
the Listing Agreement is annexed with the Report on corporate
governance.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The informations on conservation of energy, technology absorption and
foreign exchange earnings and outgo as stipulated under Section
134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies
(Accounts) Rules, 2014, is annexed herewith as "Annexure - III".
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return (MGT - 9) pursuant to the provisions of
Section 92 read with Rule 12 of the Companies (Management and
Administration) Rules, 2014 is furnished in Annexure - IV to this
Report.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on arm's length basis and were in the ordinary
course of the business. There are no materially significant related
party transactions made by the company with Promoters, Key Managerial
Personnel or other designated persons which may have potential conflict
with interest of the company at large.
As per provisions of sub-section (1) of Section 188 read with the
Companies (Meeting of Board and its Powers) Rules, 2014 and revised
clause 49 of the Listing Agreement, as amended, the Company has
obtained the prior omnibus approval of the Audit Committee, Board of
Directors and Shareholders for all material related parties
transactions.
Further, the statement giving details of all related party transactions
entered into pursuant to the omnibus approval so granted has been
placed before the Audit Committee and the Board of Directors for
review, consideration and approval on a quarterly basis.
Pursuant to clause (h) of sub-section (3) of section 134 of the Act and
Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of
contracts or arrangements with related party(ies) are given in the
prescribed Form - AOC - 2 is annexed to this report as Annexure - V.
The policy on Related Party Transactions as approved by the Board is
uploaded on the Company's website.
MEETING OF BOARD OF DIRECTORS
During the year 04 (Four) Board Meetings were convened and held on 05th
May, 2014, 30th July, 2014, 30th October, 2014 and 12th February, 2015.
The details in respect of attendance of Directors, sitting fees etc.
are given in the Corporate Governance Report.
The intervening gap between the above said Meetings was within the
timelines as stipulated under the Companies Act, 2013 and Clause 49 of
the Listing Agreement.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee consists of the following members:
01. Mr. A. Arumugham : Chairman, Independent Director
02. Mr. T. N. Anand Reddy : Member, Independent Director
03. Mr. K. N. Garg : Member, Non-executive Director
There are no qualifications and observations raised by Audit Committee
which required any comments from the Board or Management of the
Company.
The details of other committees of the Board has given in the Corporate
Governance Report forms part of this report.
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors Mr. A. Arumugham, Mr. T. N. Anand Reddy and
Mr. John Mathew have submitted their declaration to the Board that they
fulfill the criteria as stipulated in Section 149(6) of the Companies
Act, 2013 and Clause 49 of the Listing Agreement, so as to qualify
themselves to be appointed/continued as Independent Directors under the
provisions ofthe CompaniesAct, 2013 and Clause 49.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider
Trading with a view to regulate trading in securities by the Directors
and designated employees of the Company. The Code requires
pre-clearance for dealing in the Company's shares and prohibits the
purchase or sale of Company's shares by the Directors and the
designated employees while in possession of unpublished price sensitive
informations in relation to the Company and during the period when the
Trading Window is closed. The Board is responsible for implementation
ofthe Code.
All Directors and the designated employees have confirmed compliance
with the Code.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year under review, the company has not given any loan and
made investment which are covered under the provisions of sections 185
and 186 ofthe Companies Act, 2013.
However, the Company has provided corporate guarantee in connection
with credit facilities availed by holding company from banks. The terms
and conditions of the guarantee given are not prejudicial to the
interest ofthe Company.
In compliance of the act, the requisite approval of the Members under
Section 186 of the Act, for providing Corporate Guarantee has obtained
through Postal Ballot in the month of December, 2014.
HOLDING, SUBSIDIARY, JOINT VENTURES ASSOCIATES COMPANIES.
Your Company continues to be the Subsidiary of Bombay Rayon Fashions
Limited (BRFL). Further, the Company has an Associate and Joint Venture
Company STI Sanoh India Limited, Dewas in which the equity
participation of the Company is 43.48%. The balance 56.52% share
capital is held by Sanoh Industrial Company Limited, Japan. The Company
does not have any subsidiary.
CONSOLIDATION OF FINANCIAL STATEMENTS
The Ministry of Corporate Affairs vide notification dated 14th October,
2014 has granted exemption for preparation, placing and filing of
Consolidated Financial Statement in respect of Joint Venture or
Associate Companies for the financial year 2014-15, therefore, the
Audited Statement of Accounts, Auditors' Report thereon and the
Reports of the Board of Directors of STI Sanoh India Limited (the
Associate and Joint Venture Company) has not been prepared and annexed
with the Annual Report. However, proportion of Company's interest and
brief financial informations of STI Sanoh India Limited is given under
Note No. 36 of SignificantAccounting Policies and Notes.
PERFORMANCE OF JOINT VENTURE COMPANY: STI SANOH INDIA LIMITED.
STI Sanoh India Ltd manufactures double walled copper brazed steel
tubes, single wall steel tubes and tubular components. In the domestic
automobile market STI Sanoh India supplies to OEMs such as Maruti
Udyog, Honda, Tata Motors, Bajaj Auto, Force Motors, Ashok Leyland,
Hindustan Motors, Premier Auto, Toyota, Kirloskar Motors and Godrej-GE,
Voltas, Videocon, BPL-Sanyo, Carrier Aircon, Electrolux in the
air-conditioning and refrigeration industries. At the international
level it exports to South East Asian countries and the Gulf region.
STI Sanoh has registered a net profit of Rs. 20.75 crores for the year
2014-15.
A statement containing the salient features of the financial statements
of STI Sanoh India Limited, the Joint Venture Company, in the
prescribed format AOC-1 is annexed as Annexure- VI.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Due to absence of average net profit and eroded net worth capital, the
provisions of section 135 of the Companies Act, 2013 are not
applicable.
RISK MANAGEMENT
The Company has in place a mechanism to inform Board Members about the
risk assessment and minimization procedures and periodical review to
ensure that executive management controls risks by means of a properly
defined frame work. As required under Clause 49 of the Listing
Agreement, the Company has formulated a Policy on Risk Management.
INTERNAL CONTROL SYSTEM AND AUDIT
The Company has appropriate Internal Control System for business
processes, financial reporting & controls, compliance with applicable
laws, regulations etc. The Internal Control System of the Company is
designed to prevent operational risks through a framework of internal
controls and processes. Our internal control system ensures that all
business transactions are recorded in a timely manner, the financial
records are complete, resources are utilized effectively and our assets
are safeguarded. We have developed robust policies, procedures, checks
and balances to bring discipline in day-to-day functions, for accuraty
and timely compilation of data.
In addition, the Audit Committee has appointed M/s Fadnis & Gupte,
Chartered Accountants, Indore as the Internal Auditors of the company.
The Internal Audit is conducted on monthly basis and the reports of
auditor is placed before the Audit Committee in its next meeting. The
internal audit ensures safeguarding the assets of the Company, review
of operational efficiency, effectiveness of systems and processes and
assessing the internal control strengths in all areas. Further,
Internal Auditors observations and findings are discussed with the
concerned departments head and suitable corrective actions are taken as
per the directions of Audit Committee on an ongoing basis to improve
efficiency in operation.
CASH FLOW ANALYSIS
In conformity with the provisions of Clause 32 of the Listing
Agreement, the Cash Flow Statement forms part of annual report.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
In order to prevent sexual harassment of women at work, place a new
act, the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 has been notified on 9th December,
2013. Under the said Act every company is required to set up an
Internal Complaints Committee to look into complaints relating to
sexual harassment at work place of any women employee.
Company has adopted a policy for prevention of Sexual Harassment of
Women at workplace and has set up Committee for implementation of said
policy.
There were no incidences of sexual harassment reported during the year
under review.
PARTICULARS OF EMPLOYEES
The details as required pursuant to Section 197 read with Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 in respect of employees of the Company, is give in Annexure - VII.
WHISTLE BLOWER POLICY
In compliance of the requirements of Section 177 of the Companies Act,
2013, Clause 49 of the Listing Agreement and as a measure of good
Corporate Governance practice, the Board has formulated a Whistle
Blower Policy. The policy comprehensively provides an opportunity for
any employee / director of the Company to raise any issue concerning
breaches of law, accounting policies or any act resulting in financial
or reputation loss and misuse of office or suspected or actual fraud.
The policy shall provide for adequate safeguard against victimization
of employees and directors who avail of vigil mechanism and also
provide for direct access to the Audit Committee.
STATUS OF BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR).
The Company has been declared as a Sick Industrial Undertaking under
Section 3(1)(o) of the Sick Industrial Companies (Special Provisions)
Act, 1985 (SICA) vide Summary of proceedings of the hearing held on
23rd January, 2006 against reference registration No. 743/2002 dated
30th December, 2002. The Hon'ble BIFR Bench has appointed State Bank
of India as Operating Agency to prepare Draft Rehabilitation Scheme
(DRS).
The Hon'ble BIFR Bench, vide order dated 1st November, 2010 while
accepting the report of operating agency, observed that the Company is
liable to pay all the outstanding dues of GUJCOT, and directed the
Company to prepare DRS taking into account the liability towards
GUJCOT.
On appeal by the Company against the said BIFR order, the Appellate
Authority for Industrial & Financial Reconstruction (AAIFR) vide order
dated 6th April, 2011 directed that the impugned directions passed by
the BIFR shall be subject to the final order passed by this Authority
in the Appeal. Final hearing from company side since completed and on
29th April, 2013 the AAIFR has remanded the case to BIFR with a
direction to hear matter on the points raised in appeal before AAIFR.
The last hearing at the BIFR was on 25 th March, 2015, however the same
was not heard as the bench did not function on the said date. No
further date of hearing has been notified till date.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY:
There are no significant material orders passed by the Regulators /
Courts which would impact the going concern status of the Company and
its future operations.
MANAGEMENT DISCUSSIONAND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review
as stipulated under Clause 49 of the Listing Agreement with the stock
exchanges, forms part of this report as Annexure - VIII.
CAUTIONARY STATEMENT
Statements in the Board's Report describing the Company's
objectives, expectations or forecasts may be forward-looking within the
meaning of applicable securities laws and regulations. Actual results
may differ materially from those expressed in the statement. Important
factors that could influence the Company's operations include global
and domestic demand and supply conditions affecting selling prices of
finished goods, input availability and prices, changes in government
regulations, tax laws, economic developments within the country and
other factors such as litigation and industrial relations.
APPRECIATIONS AND ACKNOWLEDGEMENTS
The Board would like to place on record its deep appreciation to the
financial institutions, banks, business partners, central and state
government authorities, stock exchanges and clients for their support
and co-operation during the year.
We would also like to place on record our sincere appreciation for the
commitment, dedication and hard work put in by every employee of the
Company. We are also deeply grateful for the confidence and faith
expressed by the shareholders in the Company.
Your Directors would also like to take this opportunity to acknowledge
the excellent support given by Bombay Rayon Fashions Limited, the
Holding Company of your company, in providing the financial assistance
and excellent management support and guidance at all levels of
business. This has enabled the Company to run its business smoothly and
effectively for the accomplishment of its objectives.
For and on behalf of the Board of Directors
of STI India Limited
Place: Indore (M.P) Dr. R.B. Baheti
Date: 15th May, 2015 Chairman
DIN : 00008202
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting 29th Annual Report of the
Company along with the Audited Annual Accounts for the financial year
ended 31st March, 2014.
FINANCIAL RESULTS
The salient features of the Company''s financial results during the year
are as under:
(Rs. in Lacs)
PARTICULARS For the For the
Year Ended Year Ended
31.03.2014 31.03.2013
Sales / Revenue from Operations 5572.80 4865.95
Profit before Interest, Depreciation & Tax 189.32 45.10
Less: Interest 0.90 0.57
Profit before Depreciation & Tax 188.42 44.53
Less: Depreciation 1238.46 1238.24
Profit/(Loss) before Tax (1050.04) (1193.71)
Less - Provision for Taxes
(including Deferred) (383.27) (261.00)
Profit/(Loss) After Tax (666.77) (932.71)
Paid Up Share Capital 2900.00 2900.00
Reserve and Surplus (4725.69) (4058.92)
Adjusted Net Worth of the Company (1825.69) (1158.92)
EPS (In Rs.)
* Basic & Diluted (2.30) (3.22)
OPERATIONS
During the financial year under review -
* the turnover of your company stood at Rs. 5572.80 Lacs as against Rs.
4865.95 Lacs in financial year ended on 31st March, 2014 registering an
increase by 14.53%.
* PBIDT increased to Rs. 189.32 Lacs from Rs. 45.10 Lacs in the
previous year.
* Interest cost increased to Rs. 0.90 Lacs from Rs. 0.57 Lacs in the
previous year.
DIVIDEND
In view of the accumulated losses, the Board of Directors does not
recommend any dividend for the year under review.
THE COMPANIES ACT, 2013
The Ministry of Corporate Affairs (MCA) vide its General Circular No.
08/2014 dated 04th April, 2014 has clarified that the financial
statements and documents annexed thereto, auditor''s report and board''s
report in respect of financial year that have commenced earlier than
01st April, 2014 shall be governed by the provisions of the Companies
Act, 1956 and in line with the same, the Company''s financial
statements, auditors report, and Board''s Report and attachments thereto
have been prepared in accordance with the provisions of the Companies
Act, 1956. With respect to other provisions of the Act, appropriate
references have been made in this report to the extent these provisions
have become applicable effective 01st April, 2014.
BOARD OF DIRECTORS
Dr. R. B. Baheti, Director of the Company retires by rotation at the
ensuing Annual General Meeting and is eligible for re-appointment. His
re-appointment as Director liable to retire by rotation is submitted to
the shareholders for their approval in the ensuing Annual General
Meeting.
The tenure of office of Mr. Prashant Agrawal as Managing Director was
expiring on 24th November, 2013. Therefore, subject to the approval of
members in the ensuing Annual General Meeting, the Board of Directors,
at its meeting held on 30th October, 2013 re- appointed him as Managing
Director of the Company for further period of three years w.e.f. 25th
November, 2013 to 24th November, 2016, without remuneration. A draft
resolution along with explanatory statements as per Section 102(1) of
the Companies Act, 2013 is annexed with the notice.
The Board of Directors at its meeting held on 30th October, 2013
re-appointed Dr. R.B. Baheti as Non-executive Chairman of the Company,
for a period of 1 year w.e.f. 01st November, 2013 to 31st October, 2014
on the same terms and conditions of the earlier appointment.
In terms of Section 149 and 152 of the Companies Act, 2013 read with
Schedule IV and rules made thereunder and Clause 49 of the Listing
Agreement (effective from 01st October, 2014) your Directors are
seeking appointment of Mr. T. N. Anand Reddy and Mr. A. Arumugham as
Independent Directors of the Company for a term of five consecutive
years and not liable to retire by rotation. The Directors have given
declarations to the effect that they meet the criteria of independence
as provided in Sub-section (6) of Section 149 of the Companies Act,
2013 and amended Clause 49 of the Listing Agreement.
The Company has received Notice under Section 160 of the Companies Act,
2013 from member proposing the appointment of Mr. T. N. Anand Reddy and
Mr. A. Arumugham as an Independent Directors of the Company together
with requisite deposit.
Pursuant to the provisions of Section 203(1) of the Companies Act, 2013
read with Rule 8 of Companies (Appointment and Remuneration of
Managerial Personnel) Rule, 2014, the Board of Directors of the Company
has re-designated Mr. Prashant Agrawal, Managing Director, Mr. S. D.
Naik, Chief Financial Officer and Mr. Deepesh Kumar Nayak, Company
Secretary as Key Managerial Personnel of the Company.
PERFORMANCE OF JOINT VENTURE COMPANY:
STI SANOH INDIA LIMITED
STI Sanoh India Ltd manufactures double walled copper brazed steel
tubes, single wall steel tubes and tubular components. In the domestic
automobile market STI Sanoh India supplies to OEMs such as Maruti
Udyog, Honda, Tata Motors, Bajaj Auto, Force Motors, Ashok Leyland,
Hindustan Motors, Premier Auto, Toyota, Kirloskar Motors and Godrej-GE,
Voltas, Videocon, BPL-Sanyo, Carrier Aircon, Electrolux in the
air-conditioning and refrigeration industries. At the international
level it exports to South East Asian countries and the Gulf region.
The Company''s Gross Revenue for financial year 2013-14 stood at Rs.
106.51 Crore (Previous Year: Rs. 104.96 Crore). In spite of challenging
business environment in the Automobile and Refrigeration sector, the
Company has performed better compared to the previous year and we
expect that the performance of the Company to be better in the current
year.
AUDITORS Statutory Auditor
M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai having
Firm Registration Number 101083W the Statutory Auditors of the Company
retire at the ensuing Annual General Meeting and being eligible, offer
themselves for reappointment. M/s. V.K. Beswal & Associates, Chartered
Accountants, Mumbai have provided necessary certificate under section
139 (1) read with section 141 of the Companies Act, 2013.
Cost Auditor
As per requirement of the Central Government and pursuant to the
provisions of Section 233B of the Companies Act, 1956, the audit of the
cost accounts relating to the Product "Textiles" was required to be
carried out every year. The Company has appointed Cost Auditor M/s R.
J. Goel & Co., Cost Accountants, New Delhi, having Firm Registration
No. 000026 to audit the cost accounts for the financial year 2013-2014
i.e. from 01st April, 2013 to 31st March, 2014, pursuant to approval of
Central Government dated 26.07.2013.
The Cost Audit report for the year ended 31st March 2014 would be
submitted to the Central Government within the prescribed timeframe.
Pursuant to Cost Audit Report Rule, due date for filling of Cost Audit
Report for the year ended March 31, 2013 was September 27, 2013, which
was submitted to the Central Government on 18th September, 2013.
Secretarial Auditor
As per requirements of Section 204(1) of the Companies Act, 2013, the
Board of Directors of the Company appointed M/s Rao Saklecha & Co.,
Practicing Company Secretary, Indore to conduct Secretarial Audit of
the compliance of applicable statutory provisions and adherence to good
corporate governance practice by the Company.
AUDITORS'' REPORT
There are no specific observations in the Auditors'' Report requiring
specific comments under Section 217 (3) of the Companies Act, 1956.
FIXED DEPOSITS
The Company has not accepted or renewed any deposit from public during
the year under review.
DIRECTOR''S RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, your Directors hereby confirm that:
1. In the preparation of the Annual Accounts for 2013-14, the
applicable accounting standards have been followed with proper
explanations relating to material departures;
2. 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 profit/loss of
the Company for the financial year;
3. 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;
4. They have prepared the annual accounts on a going concern basis.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO AND EMPLOYEES
Information as per Companies (Disclosure of particulars in the Report
of Board of Directors) Rules, 1988 relating to conservation of energy,
technology absorption, foreign exchange earnings and outgo and
Information under Section 217(2A) of the Companies Act, 1956 read with
the Companies (Particulars of Employees) Rules, 1975 are given in
Annexure I & II forming parts of this report.
INDUSTRIAL RELATIONS AND CORPORATE GOVERNANCE
The company provides a congenial and friendly atmosphere towards its
employees to maintain cordial relations and motivate them to develop to
their full potential. Industrial Relations throughout the year were
very peaceful & cordial.
Your Directors are also committed to good corporate governance as a
policy. A detailed report on Corporate Governance is given in the
annexure which form part of this report. The requisite certificate from
the Auditors of the Company confirming compliance with the conditions
of corporate governance as stipulated under Clause 49 of the Listing
Agreement is annexed to the Report on corporate governance.
WHISTLE BLOWER POLICY
In compliance of the requirements of Section 177 of the Companies Act,
2013 and as a measure of good Corporate Governance practice, the Board
has formulated a Whistle Blower Policy. The policy comprehensively
provides an opportunity for any employee / director of the Company to
raise any issue concerning breaches of law, accounting policies or any
act resulting in financial or reputation loss and misuse of office or
suspected or actual fraud. The policy shall provide for adequate
safeguard against victimization of employees and directors who avail of
vigil mechanism and also provide for direct access to the Audit
Committee.
APPRECIATIONS AND ACKNOWLEDGMENTS
Your Directors would like to acknowledge the excellent support given by
Bombay Rayon Fashions Limited, the Holding Company of your company, in
providing the financial assistance and excellent management support and
guidance at all levels of business. This has enabled the Company to run
its business smoothly and effectively for the accomplishment of its
objectives.
The board also places on record its deep appreciation to the financial
institutions, banks, business partners, employees, central and state
government authorities, stock exchanges, clients and shareholders for
their support and co-operation during the year.
For and on behalf of the Board of Directors of
STI India Limited
Place: Mumbai Dr. R.B. Baheti
Date: 30th July, 2014 Chairman
Mar 31, 2013
Dear Members,
The Directors have immense pleasure in presenting their 28th Annual
Report and the Audited Annual Accounts of the Company for the financial
year ended 31st March, 2013.
FINANCIAL RESULTS
The salient features of the Company's financial results during the year
are as under:
(Rs in Lacs)
PARTICULARS For the For the
Year Ended Year Ended
31.03.2013 31.03.2012
Sales /Revenue from Operations 4865.95 10877.73
Profit before Interest, 45.10 1336.99
Depreciation & Tax
Less: Interest 0.57 64.60
Profit before Depreciation & Tax 44.53 1272.39
Less: Depreciation 1238.24 1202.21
Profif(Loss) before Tax (1193.71) 70.18
Less-Provision for Taxes (261.00) 55.00
(inciudingDeferred)
Profit/(Loss) After Tax (932.71) 15.18
Paid Up Share Capital 2900.00 2900.00
Reserve and Surplus (4058.92) (3126.21)
Adjusted Net Worth of the Company (1158.92) (226.21)
EPS (In Rs.)
- Basic & Diluted (3.22) 0.05
OPERATIONS:
During the financial year under review -
* the turnover of your company stood at 7 48.66 Crores as against Rs
108.78 Crores in financial year ended on 31.03.2013 registering a
decrease by 55.28%. The turnover of the Company as at 31.03.2013 is not
comparable with last year as this financial year the revenue from
operations was only from 100% Job Work for Bombay Rayon Fashions Ltd.
(BRFL).
* PBIDT decreased to 7 45.10 Lacs from 7 1336.99 Lacs in the previous
year.
* Interest cost reduced to 7 0.57 Lacs from 7 64.60 Lacs in the
previous year.
DIVIDEND
In view of the accumulated losses, the Board of Directors docs not
recommend any dividend for the year under review.
AQUISITION OF STAKE BY BOMBAY RAYON FASHIONS LIMITED (BRFL)
During the year under review Bombay Rayon Fashions Limited (BRFL) has
acquired majority stake in the Company by purchasing 58,00,000 equity
shares representing 20% of the issued, subscribed and paid-up equity
share capital of the Company. The said acquisition has triggered open
offer by BRFL. Consequently, holding of BRFL had been total 2,71,79,722
Nos. of Equity Shares representing 93.72% of the total paid equity share
capital of the Company. BRFL is a listed Company, engaged in the
manufacturing and export of Fabrics & Garments. BRFL is having
integrated manufacturing facilities for yam dyeing, weaving, processing
of fabrics and garmenting. However, with the requirement of Clause 40A
of the Listing Agreements with the Stock Exchanges, Bombay Rayon
Fashions Limited (BRFL) sold 54,29,722 equity shares aggregating to
18.72% of the total paid up equity share capital of the Company through
an offer for sale mechanism. Consequently, the promoter shareholding has
decreased up 75% of the total paid'equity share capital of the Company.
Now, present shareholding of the promoter is 75% & public shareholding
is 25% of the total paid up equity share capital of the Company.
BOARD OFDIRECTORS
The Board of Directors has approved the payment of remuneration to Dr.
R.B. Baheti as non executive director of Rs 1 Crore per annum payable
monthly with effect from November I, 2010 for a period of 3 years as
approved by the shareholders.
Mr. Prashant Agrawal and Mr. A. Arumugham, Directors, retire by
rotation at the ensuing Annual General Meeting and are eligible for
re-appointment. Their re-appointment as Directors liable to retire by
rotation is submitted to the shareholders for their approval in the
ensuing Annual General Meeting.
Mr. Upkar Singh Kohli, Special Director ofBIFR was appointed on the
Board by Hon'ble BIFR vide their letter dated 26th May, 2010. As per
the terms of appointment mentioned in the said letter the appointment
was for the period of 3 years or the date on which he attains the age
of 65 years, which ever is earlier. As Mr. Upkar Singh Kohli attained
the age of 65 years on 18th August, 2012, his appointment as Special
Director was up to 18th August, 2012 & consequently he ceased to be a
director of the Company w.e.f. 18th August, 2012.
The Board places on record its deep appreciation for valuable
contributions rendered by Mr. Upkar Singh Kohli, during his tenure
asDirectorofthe Company.
PERFORMANCE OFSTISANOH INDIA LIMITED - THE JOINT VENTURE COMPANY
Your Directors are pleased to inform that growth in the automobile
sector has resulted in a good performance by STI Sanoh India Limited,
your Joint Venture Company with Sanoh Industrial Co. Limited, Japan.
During the year it recorded income at Rs 101.42 Crores (provisional).
As a result of India's expected GDP Growth during the current year and
targeted demand growth in automobiles and
. refrigeration industries in 2013-14, we expect the performance of
the Joint Venture to be better in the current year.
AUDITORS
Statutory Auditor
M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai having
Firm Registration Number 10I083W the Statutory Auditors of the Company
retire at the ensuing Annual General Meeting and being eligible, offer
themselves for reappointment.
Cost Auditor
As per the requirement of the Central Government and pursuant to the
provisions of Section 233B of the Companies Act, 1956, the audit of the
cost accounts relating to the Product "Textiles" was required to be
carried out every year. The Company has appointed Cost Auditor M/s R.
J. Goel & Co., Cost Accountants, New Delhi, having Firm Regd. No.
000026 to audit the cost accounts for the financial year 2012-2013 i.e.
from 01.04.2012 to 31.03.2013, pursuant to approval of Central
Government dated 26.07.2012. Cost Audit report for the year ended 31st
March 2013 would be submitted to the Central Government within the
prescribed time frame.
Pursuant to Cost Audit Report Rule, due date for filling of Cost Audit
Report for the year ended March 31,2012 was September 27, 2012, which
was submitted to the Central Government on 04th January, 2013. The
delay in filing of aforesaid documents was due to transformation of
version of available E-forms in XBRL mode which came in public domain
only after 1st day of January,2013.
The Company has re-appointed to M/s R. J. Goel & Co., Cost Accountants,
New Delhi, to audit the cost accounts for the financial year 2013-2014
i.e. from 01.04.2013 to 31.03.2014.
AUDITORS' REPORT
There arc no specific observations in the Auditors' Report requiring
further comments under Section 217 (3) of the Companies Act, 1956.
FIXED DEPOSITS
The Company has not accepted or renewed any deposit from public during
the year under review.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, your Directors hereby confirm that:
1. In the preparation of the Annual Accounts for 2012-13, the
applicable accounting standards have been followed with proper
explanations relating to material departures;
2. 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 profit/loss of
the Company for the financial year;
3. 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 frauds and other irregularities;
4. They have prepared the annual accounts on a going concern basis.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS ANDOUTGO
As required under section 217(1 )(e) of the Companies Act, 1956 read
with the Companies (Disclosures of Particulars in Report of Board of
Directors) Rules, 1988, particulars of Conservation of Energy,
Technology Absorption and Foreign Exchange Earnings and Outgo are given
in the Annexure-I which forms part of this Report.
PARTICULARS OF EMPLOYEES
There is no employee in the Company whose particulars are required to
be given under section 217(2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules, 1975, as amended.
CORPORATE GOVERNANCE
Your Directors arc committed to good corporate governance as a
policy. The Audit Committee, Investors Grievance cum Share Transfer
Committee and Remuneration Committee have been constituted. A detailed
report on Corporate Governance is given in the annexure which forms
part of this report.
INDUSTRIAL RELATIONS
The company provides a congenial and friendly atmosphere towards its
employees to maintain cordial relations and motivate them to develop to
their full potential. Industrial Relations throughout the year were
very peaceful & cordial.
APPRECIATION
Your Directors place on record their sincere appreciation to the
Financial Institutions, Banks, Central and Stale Government
authorities, clients and shareholders for their support and co-
operation during the year.
For and on behalf of the Board of Directors
For STI India Limited
Place: Indore Dr. R.B. Baheti
Date: 10th May, 2013 Chairman
Mar 31, 2012
The Directors have immense pleasure in presenting their 27th Annual
Report and the Audited Annual Accounts of the Company for the financial
year ended 31st March, 2012.
FINANCIAL RESULTS
The salient features of the Company's financial results during the year
are as under:
(Rs in Lacs)
PARTICULARS For the For the
Year Ended Year Ended
31.03.2012 31.03.2011
Sales / Revenue from Operations 10877.73 24997.82
Profit before Interest,
Depreciation & Tax 1337.44 2341.45
Less: Interest 65.05 205.61
Profit before Depreciation & Tax 1272.39 2135.84
Less: Depreciation 1202.21 1156.69
Profit/(Loss) before Tax 70.18 979.15
Less - Provision for Taxes
(including Deferred) 55.00 (711.51)
Profit/(Loss) After Tax 15.18 1690.66
Waiver of OCDs amount - 2828.00
Paid Up Share Capital 2900.00 2900.00
Reserve and Surplus (3126.21) (3141.39)
Adjusted Net Worth of the Company (226.21) (241.39)
EPS (In Rs )
- Basic & Diluted 0.05 5.83
OPERATIONS:
During the financial year under review -
- the turnover of your company stood at Rs 108.78 Crores as against Rs
249.98 Crores in financial year ended on 31.03.2011 registering a
decrease by 56.48%. The turnover of the Company as at 31.03.2012 is not
comparable with last year as this financial year company has changed
the style of operation from direct sales to 100% Job Work for Bombay
Rayon Fashions Ltd. (BRFL).
- PBIDT decreased to Rs 1337.44 Lacs from Rs 2341.45 Lacs in the
previous year.
- Interest cost reduced to Rs 65.05 Lacs from Rs 205.61 Lacs in the
previous year.
DIVIDEND
In view of the accumulated losses, the Board of Directors does not
recommend any dividend for the year under review.
BOARD OF DIRECTORS
The Board of Directors has approved the payment of remuneration to Dr.
R.B. Baheti as non executive director
of Rs 1 Crore per annum payable monthly with effect from November 1,
2010 for a period of 3 years as approved by the shareholders.
Mr. Aman Agrawal, Mr. A. R. Mundra and Mr. T. N. Anand Reddy,
Directors, retire by rotation at the ensuing Annual General Meeting and
are eligible for re-appointment. Their re-appointment as Directors
liable to retire by rotation is submitted to the shareholders for their
approval in the ensuing Annual General Meeting.
Mr. A. V. Narasimha Reddy and Mr. S. Sreedhar Reddy, Directors resigned
from the Board w. e. f. 22nd September, 2011 and 19th October, 2011
respectively. The Board places on record its deep appreciation for
valuable contributions rendered by Mr. A. V. Narasimha Reddy and Mr.
S. Sreedhar Reddy during their tenure as Directors of the Company.
PERFORMANCE OF STI SANOH INDIA LIMITED - THE JOINT VENTURE COMPANY
Your Directors are pleased to inform that growth in the automobile
sector has resulted in an improved performance by STI Sanoh India
Limited, your Joint Venture Company with Sanoh Industrial Co. Limited.
During the year it recorded 9.54% growth in income at Rs114.44 Crores
(provisional) in comparison to Rs 104.47 Crores last year (Audited).
As a result of India's expected GDP Growth during the current year and
targeted demand growth in automobiles and refrigeration industries in
2012-13, we expect the performance of the Joint Venture to be further
better in the current year.
AUDITORS Statutory Auditor
M/s. V.K. Beswal & Associates, Chartered Accountants having Firm
Registration Number 101083W the Statutory Auditors of the Company
retire at the ensuing Annual General Meeting and being eligible, offer
themselves for reappointment.
Cost Auditor
As per the requirement of the Central Government and pursuant to the
provisions of Section 233B of the Companies Act, 1956, the audit of the
cost accounts relating to the Product "Textiles" was required to be
carried out every year. The Company has appointed Cost Auditor Mr. R.G.
Goel, Cost Auditor, New Delhi, having Membership No. 9876 to audit the
cost accounts for the Financial year 2011-2012 i.e. from 01.04.2011 to
31.03.2012, pursuant to approval of Central Government vide their
letter dated 17.06.2011. Cost Audit report for the year ended 31st
March 2012 would be submitted to the Central Government within the
prescribed time.
Pursuant to Cost Audit Report Rule, due date for filling of Cost Audit
Report for the year ended March 31, 2011 was September 27, 2011, which
was submitted to the Central Government on September 30, 2011.
The Company has re-appointed to Mr. R.G. Goel, Cost Auditor, New Delhi,
to audit the cost accounts for the financial year 2012-2013 i.e. from
01.04.2012 to 31.03.2013.
AUDITORS' REPORT
There are no specific observation in the Auditors' Report requiring
further comments under Section 217 (3) of the Companies Act, 1956.
FIXED DEPOSITS
The Company has not accepted or renewed any deposit from public during
the year under review.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, your Directors hereby confirm that:
1. In the preparation of the Annual Accounts for 2011-12, the
applicable accounting standards have been followed with proper
explanations relating to material departures;
2. 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 loss of the
Company for the financial year;
3. 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;
4. They have prepared the annual accounts on a going concern basis.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required under section 217(1)(e) of the Companies Act, 1956 read
with the Companies (Disclosures of Particulars in Report of Board of
Directors) Rules, 1988, particulars of Conservation of Energy,
Technology Absorption and Foreign Exchange Earnings and Outgo are given
in the Annexure-I which forms part of this Report.
PARTICULARS OF EMPLOYEES
Pursuant to the provisions of Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the name of and other particulars of an employee is set out in
the Annexure-II to the Directors' Report.
However, as per provisions of Section 219(1)(b)(iv) of the said Act,
the Annual Report excluding the aforesaid information is being sent to
all members of the Company. Any member, who is interested in obtaining
such particulars about an employee, may write to the Company Secretary
at Registered Office of the company.
CORPORATE GOVERNANCE
Your Directors are committed to good corporate governance as a policy.
The Audit Committee, Investors Grievance cum Share Transfer Committee
and Remuneration Committee have been constituted, as required. A
detailed report on Corporate Governance is given in the annexure which
form part of this report.
INDUSTRIAL RELATIONS
The company provides a congenial and friendly atmosphere to its
employees to maintain cordial relations and motivate them to develop to
their full potential. Industrial Relations throughout the year were
very peaceful.
COMPANY SECRETARY
During the year Mr. Rajkumar Bhavsar, Company Secretary has resigned
from the Company on 09th January, 2012 in whose place Board of
Directors appointed Mr. Deepesh Kumar Nayak, as Company Secretary of
the Company who will also acts as Compliance Officer of the Company,
w.e.f. 27thApril, 2012.
APPRECIATION
Your Directors place on record their sincere appreciation to the
Financial Institutions, Banks, Central and State Government
authorities, clients and shareholders for their support and
co-operation during the year.
For and on behalf of the Board of Directors
For STI India Limited
Place: Indore Dr. R.B. Baheti
Date : 04th May, 2012 Chairman
Mar 31, 2011
The Members,
The Directors have great pleasure in presenting their 26th Annual
Report and the Audited Annual Accounts of the Company for the financial
year ended 31st March, 2011.
FINANCIAL RESULTS
The salient features of the Company's financial results during the year
are as under:
(Rs. in Lacs)
PARTICULARS 31.03.2011 31.03.2010
Sales 24997.82 17878.40
Profit before Interest, Depreciation
& Tax 2341.45 835.17
Less: Interest 205.61 364.11
Profit before Depreciation & Tax 2135.84 471.06
Less: Depreciation 1156.69 1150.51
Profit/(Loss) before Tax 979.15 (679.45)
Less - Provision for Taxes
(including Deferred) (711.51) -
Profit/(Loss) After Tax 1690.66 (679.45)
Balance brought forward from previous year (11473.05) (10793.60)
Waiver of OCDs amount 2828.00 -
Net Profit/(Loss) carried forward to the
Balance Sheet (6954.39) (11473.05)
Less : Share Premium 3773.00 3773.00
Profit & Loss Account (3181.39) (7700.05)
Paid Up Share Capital and Reserve &
Surplus 2940.01 2940.01
Adjusted Net Worth of the Company (241.38) (4760.04)
EPS (In Rs.)
- Basic & Diluted 5.83 (2.34)
OPERATIONS:
During the financial year under review -
- the turnover of your company increased by 39.82% to Rs. 249.98
Crores. This is mainly due to better realization on export sale of
higher value added products like Organic Cotton, Yarn and knitted
fabric mainly to European Markets and increase in production of knitted
fabrics to 16.60 lacs kg as against 13.53 lacs kg of previous year;
- PBIDTA is increased to Rs. 2341.45 Lacs against Rs. 835.17 Lacs in
the previous year.
- Interest cost reduced to Rs. 205.61 Lacs from Rs. 364.11 Lacs in the
previous year.
DIVIDEND
In view of the accumulated losses, the Board of Directors does not
recommend any dividend for the year under review.
AQUISITION OF STAKE BY BOMBAY RAYON FASHIONS LIMITED (BRFL)
During the year under review BRFL has acquired majority stake in the
Company by purchasing 86,47,336 equity shares and 3,21,80,000
Optionally Convertible Debentures (OCD's) alongwith the underlying
securities / properties including the invoked 1,18,14,114 equity shares
of the Company, held by IDBI Trusteeship Services Limited as debenture
trustees, from two existing Overseas Private Investors (OPI's) i.e.
Spinnaker Investment Group, United Kingdom and Eight Capital &
Associates, United States. The said acquisition has triggered open
offer by BRFL and presently BRFL is holding 2,13,79,722 equity shares
representing 73.72% of paid up equity share capital of the company.
After Completion of Open Offer, BRFL has become the new promoters of
the Company. BRFL is a listed Company, engaged in the manufacturing and
export of Fabrics & Garments. BRFL is having integrated manufacturing
facilities for yarn dyeing, weaving, processing of fabrics and
garmenting.
BOARD OF DIRECTORS
The Board of Directors has approved the payment of remuneration to Dr.
R.B. Baheti as non executive director of Rs.1 Crore per annum payable
monthly effective from November 1, 2010 for a period of 3 years subject
to the approval of shareholders. The necessary resolution in this
regard is proposed at the forthcoming Annual General Meeting.
Mr. K. N. Garg and Mr. S. Sreedhar Reddy, Directors, retire by rotation
at the ensuing Annual General Meeting and are eligible for
re-appointment. Their re-appointment as Directors liable to retire by
rotation is submitted to the Shareholders for their approval in the
ensuing Annual General Meeting.
Mr. A. Arumugham was appointed as Additional Directors with effect from
February 9, 2011. The new Director has vide range of experience and
exposure of the field of finance & management of trade, business and
industry. It is expected that appointment of this new director will add
immense value to the Board.
Being additional Director Mr. Arumugham will hold the office till the
date of ensuing Annual General Meeting (AGM) of the Company. The
Company has received notice from member of the Company proposing
candidature of new Director for appointment as Director liable to
retire by rotation.
PERFORMANCE OF STI SANOH INDIA LIMITED - THE JOINT VENTURE COMPANY
Your Directors are pleased to inform that growth in the automobile
sector has resulted in an improved performance by STI Sanoh India
Limited, your Joint Venture Company with Sanoh Industrial Co. Limited.
During the year it recorded 27.21% growth in income at Rs.236.98 Crores
in comparison to Rs. 186.29 Crores last year.
As a result of India's expected GDP Growth of 8-8.5% during the current
year and targeted demand growth in automobiles and refrigeration
industries in 2011-12, we expect the performance of the Joint Venture
to be further better in the current year.
AUDITORS
M/s. V.K. Beswal & Associates, Chartered Accountants having Firm
Registration Number 101083W the Statutory Auditors of the Company
retire at the ensuing Annual General Meeting and being eligible, offer
themselves for reappointment.
Necessary resolution in this regard is proposed at the forthcoming
Annual General Meeting.
AUDITORS' REPORT
There are no specific observation in the Auditors' Report requiring
further comments under Section 217 (3) of the Companies Act, 1956.
FIXED DEPOSITS
The Company has not accepted or renewed any deposit from public during
the year under review.
RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, your Directors hereby confirm that:
1. In the preparation of the Annual Accounts for 2010-11, the
applicable accounting standards have been followed with proper
explanations relating to material departures;
2. 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 loss of the
Company for the financial year;
3. 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;
4. They have prepared the annual accounts on a going concern basis.
CORPORATE GOVERNANCE
Your Directors are committed to good corporate governance as a policy.
The Audit Committee, Investors Grievance cum Share Transfer Committee
and Remuneration Committee have been constituted, as required. A
detailed report on Corporate Governance is given in the annexure, which
form part of this report.
PARTICULARS OF EMPLOYEES
Pursuant to the provisions of Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the name of and other particulars of an employee is set out in
the Annexure to the Directors' Report. However, as per provisions of
Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the
aforesaid information is being sent to all members of the Company. Any
member, who is interested in obtaining such particulars about an
employee, may write to the Company Secretary at Registered Office of
the company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required under section 217(1)(e) of the Companies Act, 1956 read
with the Companies (Disclosures of Particulars in Report of Board of
Directors) Rules, 1988, particulars of conservation of energy,
technology absorption and Foreign Exchange earnings and outgo are given
in the Annexure I which forms part of this Report.
INDUSTRIAL RELATIONS
The company provides a congenial and friendly atmosphere to its
employees to maintain cordial relations and motivate them to develop to
their full potential. Industrial Relations throughout the year were
very peaceful.
APPRECIATION
Your Directors place on record their sincere appreciation to the
Financial Institutions, Banks, Central and State Government
authorities, representatives of Overseas Private Investors, clients and
shareholders for their support and co-operation during the year. The
Directors convey their special thanks to the overseas financial
partners.
For and on behalf of the Board of Directors
For STI India Limited
Dr. R.B. Baheti
Chairman
Place: Mumbai
Date : June 4, 2011
Mar 31, 2010
The Directors have pleasure in presenting their 25th Annual Report and
the Audited Annual Accounts of the Company for the financial year ended
31 st March, 2010.
FINANCIAL RESULTS
The salient features of the Companys financial results during the year
are as under:
(Rs in Lacs)
PARTICULARS 9 10 8 9
Sales Other Income 17991.09 17864.48
Expenditures 17155.93 17887.93
Earnings before Interest Depreciation 835.16 (23.45)
Less Interest 364.10 326.90
Less Depreciation 1150.51 1148.10
NetProfit (Loss) for the year (679.45) (1498.45)
(Less) Provision for Tax (FBT) - 11.00
(Less)-Provision for Doubtful Advances - 2450.75
Adjusted Profit (Loss) for the year (679.45) (3960.20)
Balance brought forward from
previous year (10793.60) (6833.40)
Net Profit (Loss) carried forward (11473.05) (10793.60)
to the Balance Sheet
Less: Share Premium 3773.00 3773.00
Profit Loss Account (7700.05) (7020.60)
Paidup Share Capital & Reserve Surplus 2940.01 2940.01
Adjusted Net Worth of the Company (4760.04) (4080.59)
PERFORMANCE
During the financial year under review, the turnover and other income
of your company increased by 0.71% and in value term touched Rs.180
Crores (previous year Rs.179 Crores). However due to stable raw cotton
prices during mid of the year under review as well as the impact of
Indian Rupee depreciation against US Dollar, Companys EBIDTA margin
had improved. During the year the Company had a positive EBIDTA of Rs.
835.16 Lacs against negative EBIDTA of Rs. 23.45 Lacs in the previous
year.
Interest cost in the current year, at Rs. 364.10 Lacs, is 11.62% higher
than the previous year of Rs. 326.90 Lacs.
However due to export sales of higher value added products, such as
Organic Cotton Yarn and Knitted Fabric, mainly to high-end European
market helped in receiving comparatively better realization.
The turnover in quantitative term was also at 13031 MT in comparison to
14148 MT in the previous year. The average sales realization was higher
at Rs. 120.45 per Kg. (Rs. 109.07). During the year the utilization of
Companys knitted fabric capacity was lower producing 13.53 Lacs Kg
knitted fabrics in comparison to the production of 13.90 Lacs Kg
fabrics in the previous year.
Your Company has been De-bonded w.e.f. 24th April,
2009 from the status of 100% EOU. Now it has greater flexibility to
sale its products either in domestic or international market wherever
price realisation is better. In addition to working freedom company has
also started getting export incentives like DEPB / Duty draw back etc.
due to De-bonding.
DIVIDEND
In view of the losses, the Board of Directors does not recommend any
dividend for the year under review.
WORKING CAPITAL CONSTRAINTS
The company continued to face working capital constraints during the
year. The Company tried various options for securing working capital
sanction from Banks including financial institutions andNBFC Companies,
but due to lack of sufficient profit margin on its operation and sudden
change in the out look for Textile and yarn industry, raising working
capital became difficult, which had a direct impact on the
profitability of the Company.
OVERSEAS PRIVATE INVESTMENT
The Members are aware that the two Overseas Private Investors (OPIs)
i.e. Spinnaker Investment Group, United Kingdom and Eight Capital &
Associates, United States who in total had invested an amount of Rs.
141,12,87,500/- in the company towards the subscription of Optionally
Convertible Debentures and Convertible Warrants. Due to sharp increase
in the raw cotton prices and continuous depreciation in Indian currency
against US Dollar in the year under review and previous years, the
Company has been unable to generate sufficient revenue to serve the
cost of funds received from Overseas Private Investors. The Company had
also not been able to redeem above referred OCDs in absence of a
sanction of equivalent amount by any Bank to the Company against
working capital requirements for which the Company is continuing its
efforts.
The OPIs by their communication dated 26th October,
2010 have waived total interest as was due and payable to them from the
date of invocation of the pledge i.e. February 14, 2008 till date and
also waived the principal due to the extent of Rs. 28,18,00,000/-
against total dues of OCD Series 1 to 4. Thereafter the OPIs has on
27th October, 2010 transferred to M/s Bombay Rayon Fashions Limited
(BRFL) the 86,47,336 equity shares of the Company and 3,21,80,000
Optionally Convertible Debentures (OCDs) alongwith the underlying
securities / properties including the invoked 1,18,14,114 equity shares
of the Company held by IDBI Trusteeship Services Limited as debenture
trustees. The BRFL would therefore hold share aggregating to
2,04,61,450 equity shares representing 70.56% of paid up equity share
capital of the company. BRFL is a listed Company engaged in
manufacturing and export of Readymade Garments.
BOARD OF DIRECTORS
Honble BIFR SD Coordination Cell has appointed Mr. Upkar Singh Kohli,
as "Special Director" on the Board of the Company by their order dated
26th May, 2010. The Board of Directors welcomes appointment of Mr.
Upkar Singh Kohli, as his rich experience will be immensely useful in
Companys turnaround.
The term of Dr. R. B. Baheti as Chairman & Managing Director of the
Company was up to 31 st October, 2010 and he has expressed his
willingness to continue as Non Executive Chairman w.e.f. 1st November,
2010 and eligible for re-appointment. Their re-appointment as Director
liable to retire by rotation is submitted to the Shareholders for their
approval in the ensuing Annual General Meeting.
Dr. Shashank N. Desai and Mr. T. N. Anand Reddy, Directors, retire by
rotation at the ensuing Annual General Meeting and are eligible for
re-appointment. Their re- appointment as Directors liable to retire by
rotation is submitted to the Shareholders for their approval in the
ensuing Annual General Meeting.
The Board has appointed Mr. Prashant Agrawal as Managing Director of
the Company w.e.f. 25th November, 2010 for 3 years subject to the
approval of Shareholders after the nomination received from M/s Bombay
Rayon Fashions Limited. Your Company expects to reap rich benefits
under the management of Mr. Prashant Agrawal, Managing Director through
his global vision and is expected to contribute significantly in
identifying new business opportunities and converting them into
remunerative projects. The necessary resolution is being included in
the notice of Annual General Meeting for approval of the Shareholders
of the Company. Your Board of Directors welcomes appointment of Mr.
Prashant Agrawal as Managing Director.
Mr. Aman Agrawal and Mr. A.R. Mundra were appointed as Additional
Directors with effect from 25th November, 2010. All the new Directors
have vide range of experience and exposure of the field of finance &
management of trade, business and industry. It is expected that
appointment of these new directors will add immense value to the Board.
Being additional Directors these new three directors would hold their
office till the date of ensuing Annual General Meeting (AGM) of the
Company. The Company has received notices from member of the Company
proposing candidature of these two new Directors for appointment as
Directors liable to retire by rotation. Accordingly appointment of Mr.
Aman Agrawal and Mr. A.R. Mundra is being considered for approval of
shareholders in the next AGM as Directors liable to retire by rotation.
Your Board of Directors welcomes these appointments.
PERFORMANCE OF STI SANOH INDIA LIMITED - THE JOINT VENTURE COMPANY
Your Directors are pleased to inform that growth in the automobile
sector has resulted in an improved performance by STI Sanoh India
Limited, your Joint Venture Company with Sanoh Industrial Co. Limited.
During the year it recorded 47.57% growth in income at Rs. 186.29
Crores in comparison to Rs. 126.24 Crores last year. Consequently the
net profit increased to Rs. 8.89 Crores from Rs. 4.87 Lacs in the
previous year.
As a result of Indias expected GDP Growth of 8.4% during the current
year and targeted demand growth in automobiles and refrigeration
industries in 2010-11, we expect the performance of the Joint Venture
to be further batter in the current year.
AUDITORS
M/s Vikas Kochhar & Associates, Chartered Accountants, New Delhi,
Auditors due to preoccupation have conveyed their unwillingness to be
re-appointed as Auditors of the Company at the conclusion of the
ensuing Annual General Meeting of the Company.
M/s. VK. Beswal & Associates, Chartered Accountants, Mumbai being
eligible offers themselves to be appointed would be in conformity with
the provisions of Section 224(1) (b) of the Companies Act, 1956. Your
Directors recommend the appointment of M/s. VK. Beswal & Associates,
Chartered Accountants, Mumbai as Statutory Auditors of the Company from
conclusion of the ensuing Annual General Meeting till the conclusion of
next Annual General Meeting.
Accordingly necessary resolution for appointment of M/s. VK. Beswal &
Associates, Chartered Accountants, Mumbai, as Statutory Auditors is
being proposed in the notice for approval of the Shareholders.
DIRECTORS* COMMENTS ON AUDITORS
QUALIFICATION
Your Directors have taken note of the observations / suggestions of the
Companys Auditors in their report including its annexure and positive
measures have been taken to implement the same. All their points have
been adequately covered and explained in the report of the Board of
Directors as well as in notes to the accounts. The Company has further
strengthened the internal control systems and procedures by enlarging
and upgrading the scope of work of Internal Auditors.
FIXED DEPOSITS
The Company has neither accepted nor invited any deposits from public
under the provisions of Section 58A of the Companies Act, 1956 read
with the Companies (Acceptance of Deposits) Rules, 1975 during the year
under review.
RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, your Directors hereby confirm that:
In the preparation of the Annual Accounts for 2009-10, the applicable
accounting standards have been followed with proper explanations
relating to material departures;
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 loss of the
Company for the financial year;
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 the annual accounts on a going concern basis.
CORPORATE GOVERNANCE
Your Directors are committed to good corporate governance as a policy.
The Audit Committee, Investors Grievance cum Share Transfer Committee
and Remuneration Committee have been constituted, as required. A
detailed report on Corporate Governance is given in the annexure, which
form part of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required under section 217(1 )(e) of the Companies Act, 1956 read
with the Companies (Disclosures of Particulars in Report of Board of
Directors) Rules, 1988, particulars of conservation of energy,
technology absorption and Foreign Exchange earnings and outgo are given
in the Annexure I which forms part of this Report.
PARTICULARS OF EMPLOYEES
Pursuant to the provisions of Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the name of and other particulars of an employee is set out in
the Annexure to the Directors Report. However, as per provisions of
Section 219(l)(b)(iv) of the said Act, the Annual Report excluding the
aforesaid information is being sent to all members of the Company. Any
member, who is interested in obtaining such particulars about an
employee, may write to the Company Secretary at Registered Office of
the company.
INDUSTRIAL RELATIONS
The company provides a congenial and friendly atmosphere to its
employees to maintain cordial relations and motivate them to develop to
their full potential. Industrial Relations throughout the year were
very peaceful.
APPRECIATION
Your Directors place on record their sincere appreciation to the
Financial Institutions, Banks, Central and State Government
authorities, representatives of Overseas Private Investors, clients and
shareholders for their support and co-operation during the year. The
Directors convey their special thanks to the overseas financial
partners.
For and on behalf of the Board of Directors
For STI India Limited
Dr. R.B. Baheti
Place: Mumbai Chairman
Date : 25th November, 2010