The Members of
STARLITE COMPONENTS LIMITED
Your Directors have pleasure in presenting their Twenty-Sixth Annual Report togetherwith the Financial Statements - Audited Accounts together with Audit Report of the Companyfor the year ended 31st March 2017.
1. Financial Results -
(Amount in Rs.)
|PARTICULARS ||CURRENT YEAR 2016-17 ||PREVIOUS YEAR 2015-16 |
| || || |
|Gross Income ||581759900 ||429157035 |
|EBIDTA ||38390300 ||37828519 |
|Interest &finance expenses ||3014528 ||14816874 |
|Depreciation ||5314383 ||4798007 |
|Profit / (Loss) Before Tax ||30061388 ||18213638 |
|Less : Provision for Taxation ||- ||- |
|Less: Provision for Deferred Tax Liability ||9753417 ||6301146 |
|Profit / (Loss) after Tax ||20307971 ||11912492 |
|Proposed Dividend - Equity ||- ||- |
|Tax on Dividend ||- ||- |
Directors do not recommend any Equity dividend at the Annual General Meeting.
3. Amount Proposed To Be Transferred To Reserves :
The Directors do not propose any transfer to Reserves.
4. Brief description of the Company's working during the year / State of Company'saffair
Due to continuous efforts put forth by the management in previous annual report theCompany has shown remarkable growth of 34.19% in turnover and 70.47% in profit during theyear and achieved a turnover of Rs. 5747.95 lacs (against Rs. 4283.39 lacs in the previousyear). Profit after tax has also improved to Rs. 203.07 lacs during the year underconsideration (previous year closed at Profit of Rs. 119.12 lacs). These figures clearlyshow that the steps taken by the company have worked and are reaping results.
This result is due to some fundamentally correct strategic decision taken by themanagement revolving around improvement of bottom line by stopping loss making or lowmargin product categories & by hedging business and market risks over a larger basketof customers. While commodity prices and inflation continued to come down the secondconsecutive monsoon failure and resulting drought meant a distressed rural demand scenarioin several parts of the Country. Competition continued to be aggressive. In such achallenging external environment your Company remained focused on margin improvement andcost control to perform well and deliver profitable and responsible growth. This alongwith the effort put in by the entire team the Company has managed to improve its overallposition. The Company is now on the right path to achieve the challenging goals that ithas set for the coming years. The Company is also strongly focusing on furtherstrengthening its presence in E-Commerce OEM Customer base and Government projects whichare beginning to give the Company consistent revenue & a more stability to itsbusiness model.
The management also has plans of increasing the manufacturing capacity of LED productsin the coming year to provide quality products and to cater to the strong demand ofthemarket. Encouraged with the performance of previous year and seeing the growing potentialof the LED market the management feels even more confident & committed of achievingbetter top and bottom line during the next financial year.
Your Company aggressively pushed sales in the domestic market and successfullyincreased sales and achieved its sales revenues of Rs. 5747.95 lacs with a growth of34.19% and also improved profits to Rs. 203.07 lacs.
Domestic consumption remains a key growth engine for the Indian economy and withsignificant additions to the working age population rising disposable incomesparticularly in rural areas and the government revived spending on infrastructure and inthe social sector to foster inclusive growth will help India realize its long termdevelopment potential in a sustainable way. Your Company with a clear and dedicatedcustomer focus is investing in its R&D capabilities developing product lines withbetter profit margins and streamlining its production processes to eliminate waste fromoperations.
5. Change In Nature Of Business If Any -
No change has taken place during the year in the nature of Company's business.
6. Material Changes & Commitments Affecting The Financial Position Which HaveOccurred Between Date Of Year End To The Date Of Report -
There have been no material changes affecting the financial position which haveoccurred between date of year end to the date of Report.
7. Significant And Material Orders Passed By The Regulators Or Courts Or TribunalsImpacting The Going Concern Status And Company's Operations In Future :
No such Orders were passed by Regulators or Courts or Tribunals.
8. Details of Adeguacv of Internal Financial Controls With Reference To The FinancialStatements -
Company has well devised Internal control systems adopted by the Management to assistin achieving management's objective of ensuring the orderly and efficient conduct of itsbusiness including adherence to management policies the safeguarding of assets theprevention and detection of fraud and error the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information. Thesystem of internal control is under continuing supervision by Management to determine thatit is functioning as prescribed and is modified as appropriate for changes inconditions. Company endeavors to create the control environment with budgetary controlsand an effective internal audit function.
Specific control procedures include -
Control over movement of physical Assets Goods & Services includingPurchase and Payable Sales and Receivables Inventories etc.
Control over timely Accounting Legal compliances & Compliance of Accountingstandards.
Asset acquisitions & disposal - both tangible & intangible.
Control over borrowings & liabilities.
Control over expenses including employee benefits taxes etc.
Control over financial transactions.
Comparing and analyzing the financial results with corresponding budgetedfigures.
The controls include Preventive Detective & Corrective controls. These controlsare reviewed periodically & upgraded whenever necessary.
9. The Names Of Companies Which Have Become Or Ceased To Be Its Subsidiaries JointVentures Or Associate Companies During The Year
|Sr. no ||Name of Company ||CIN ||Type of association ||Date of joining / Cessation |
10. Report on the Performance of the Subsidiaries. Associate Companies and JointVenture
The Company does not have any Subsidiaries Associates or Joint Ventures.
The Company has not accepted any Deposits during the year within the meaning of Section73 of Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
|Sr. no ||Particulars || || |
|1 ||Amount accepted durinq the year || ||Nil |
|2 ||Amount remaining unclaimed or unpaid at the end of year || ||Nil |
|3 ||Details of default in repayment of deposit or interest thereon during the year - || ||Nil |
| ||No. of such cases - At the beginning of year Maximum during the year At the end of year ||Deposit ||Interest |
| ||Total amount involved - At the beginning of year Maximum during the year At the end of year ||Deposit ||Interest |
12. Auditors -
A. Statutory Auditors -
M/s. HMA & Associates Chartered Accountants were appointed as Auditors of theCompany at the Annual General Meeting held on 30th September 2016 for a term offive consecutive years. As per the provisions of Section 139 of Companies Act 2013 theappointment ofthe Auditors is duly ratified by the Members.
B. Secretarial Auditors -
The Board has appointed Amit R. Dadheech & Associates Practicing CompanySecretaries to conduct Secretarial Audit for the financial year 2016-17. The SecretarialAudit Report for the financial year ended 31st March 2017 is annexed herewithas Annexure 1 to this Report.
C. Internal Auditors:
Pursuant to the provisions of Section 138 and other applicable provisions if any ofthe Companies Act 2013 read with the Companies (Accounts) Rules 2014 the Company hasappointed Jain Chhajed &Associates (FRN 127911W) Chartered Accountants Nasik asinternal auditors. During the year the Company continued to implement their suggestionsand recommendations to improve the control environment. Their scope of work includesreview of processes for safeguarding the assets ofthe Company review of operationalefficiency effectiveness of systems and processes and assessing the internal controlstrengths of all areas.
13. Audit Reports:
A. Statutory Auditors Report - The observations made by the Auditors of the Company intheir report are self-explanatory - except for observations regarding pending litigations.The explanations of the management on the comments of the auditors with respect to thepending litigations are as follows:
Income Tax Demand raised for AY 2004-05 for Rs. 7371366/- : The Company hastaken appropriate steps and filed an appeal with High Court Mumbai which is under process.Further the Hon'ble BIFR has given relief for demand raised for AY 2004-05 vide theirorder dated 10th October 2013. On these grounds the management is positivethat relief would be granted by the High Court.
Sales Tax Demand for Rs. 92813759/- : The Company has filed an appeal withthe Appellate Authority for waiver of interest and penalty charged. Further the Hon'bleBIFR has given relief for demand raised by Sales Tax Department vide their order dated 10thOctober 2013. On these grounds the management is positive that relief would be granted bythe Appellate Authority.
B. Secretarial Audit report- The observations made by the Secretarial Auditors of theCompany in their report for the year ended 31st March 2017 areself-explanatory - except for observations regarding filing of forms Chief FinancialOfficer and whole time Company Secretary. Below are the responses of the Management on theobservations made by the Secretarial Auditor:-
1. The Company has initiated filing ofthe required forms/documents;
2. The Company has finalised the candidate to be appointed as the Chief FinancialOfficer (CFO) and appointment shall be effected in the month of October 2017.
3. Even after several efforts the Company could not find any candidate who will workas whole time Company Secretary therefore the Company had appointed a Company Secretaryon part time basis to look after compliances related to the Companies Act. Howeverefforts are being made to find out a suitable candidate for the position of whole timeCompany Secretary.
4. The Company will take the necessary steps for making the proper disclosure in termsofthe SEBI (Substantial Acquisition ofShares and Takeover) Regulation 2011
14. Share capital -
During the year the Company has not issued any shares with differential rights orsweat equity shares. Company has neither issued any employee stock options nor hasprovided money for purchase of its own shares by employees or by trustees for the benefitof employees.
15. Extract Of Annual Return -
As required pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 forms part ofthis Annual Report as Annexure 2.
16. Conservation Of Energy Research & Development Technology Absorption ForeignExchange Earnings and Outgo
A. Conservation of enerov-
The Company has always been conscious of the need for conservation of energy and energyconservation measures have been implemented at all the plants and offices of the Company.Efforts for conservation of energy in all areas are made on a continuous basishighlighting areas for the same - maximizing use of daylight using energy efficientlamps arresting leakages in compressed air piping and electrical systems. With furtherefforts towards substitution of traditional sources of energy with renewable energymeasures for efficient usage of power and investment in additional equipment for saving ofelectricity. The illustrative measures taken towards energy conservation at Units are:
The steps taken or impact on conservation of energy:
Installation of Energy Efficient LED Batten fittings for task lighting and LEDHigh bay for General Lighting Use of 36W x 4 T5 lamps for shop lights Installation ofLED street lights Installation of LED low bays fittings etc.
Installation of Variable Frequency Drives (VFD) for energy saving inCompressors.
Use of Energy Efficient Pumps Energy Efficient Compressed Air Nozzles.
Every unit has set targets for paper power and water consumption per employeewhich is monitored on a regular basis.
Use of motion sensors & timers for on-off control of lighting system.
The Air Conditioners are kept at a moderate temperature and all the electricalequipments are turned off whenever they are not required by the Office Staff.
B. Technology absorption-
There is a continuing programme to enhance its range of products & allied parts tomeet the future needs of the evolving market by providing a strong proposition for itscustomers by providing multiple solutions for customer requirements.
The Company's in-house Research and Development teams during the year have continued tofocus on developing products that were indigenous intelligent and energy efficient.Continued R&D efforts of the past years put in developing Lamps and Lighting Productsalong with the electronics with higher efficiency & improved lumen output.
C. Foreign exchange earnings and Outgo-
Total Foreign Exchange Outgo is Rs. 342.73 Lacs & Earning is NIL as there are noexports during the FY 2016-17
17. Directors & Kev Managerial Personnel (KMP)-
a. None of the Directors are disqualified from being appointed as Directors asspecified in terms of Section 164 of the Companies Act 2013.
b. Mrs. Smita Deepak Patodkar- Director - retires by rotation at the forthcoming A.G.M.and being eligible offers herselffor re-appointment.
C. Mr. Deepak Joshi Chief Financial Officer (CFO) has resigned from the position ofKey Managerial Personnel of the Company w.e.f. August 4th 2017. Apart fromthis there were no appointment / resignation of Directors or Key Managerial Personnel(KMP) during the period under review
18. Declaration Given By Independent Directors U/S 149(6)
All independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and theprovisions of the Listing Regulations.
19. Board Committees -
Pursuant to the requirements of the Listing Regulations the Company has constitutedAudit committee Nomination & Remuneration Committee Stake holders' relationshipcommittee & Risk management committee. The details of the committees & its termsof reference are set out in the Corporate Governance Report forming part of the Board'sreport.
20. Formal Annual Evaluation:
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit Nomination & Remuneration andStakeholder Relationship Committee. The policy for formal evaluation of Board'sperformance is made available on the website of the Company.
21. Meetings of Board of Directors & Audit Committee Meetings -
During the year Six Board Meetings and Four Audit Committee Meetings were convened andheld the details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.
22. Vigil Mechanism:
Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 aVigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Model Vigil Mechanism Whistleblower Policy is made available on thewebsite of the Company.
23. Company's Policy Regarding Appointment Remuneration Independence andQualification etc of Directors Where Nomination And Remuneration Committee Is Necessary -
Pursuant to the requirements of the Listing Regulations the Company has constitutedNomination & Remuneration Committee. The details of the committee & its terms ofreference & Policy are set out in the Corporate Governance Report forming part of theBoard's report.
24. Particulars of Loans. Guarantees & Investments U/S 186 Details of Loans:
|SL No ||Date of making loan ||Details of Borrower ||Amount ||Purpose for which the loan is to be utilized by the recipient ||Time period for which it is given ||Date of BR ||Date of SR (if reqd) ||Rate of Interest ||Security |
Details of Investments:-
|SL. No. ||Date of investment ||Details of Investee ||Amount ||Purpose for which the proceeds from investment is proposed to be utilized by the recipient ||Date of BR ||Date of SR (if reqd) ||Expecte d rate of return |
|1 ||30/06/98 ||Starlite Lighting Ltd. ||9200000 ||Capital for Business ||06/05/98 ||12/05/98 ||Nil |
Details of Guarantee / Security Provided:
|SL No ||Date of providing security/g uarantee ||Details of recipient ||Amount ||Purpose for which the security/guara ntee is proposed to be utilized by the recipient ||Date of BR ||Date of SR (if any) ||Commi ssion |
|1 ||14/01/13 ||Ashoka Buildcon Ltd. ||273734 ||Performance Guarantee ||04/12/12 ||N.A ||Nil |
|2. ||14/01/15 ||National Aluminium Co. Ltd ||30498 ||Performance Guarantee ||15/12/14 ||N.A ||Nil |
|3 ||05/12/16 ||Karnataka Renewable Energy Development Ltd ||1431938 ||Performance Guarantee ||14/11/16 ||N.A ||Nil |
25. Particulars Of Contracts &Arranoements With Related Parties U/S 188 (1)
All Related Party Transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. The policy on
Related Party Transactions as approved by the board is available on the Company'swebsite. The details are as per Annexure 3.
26. Managerial Remuneration As Per Sec 197 (12) Information under Rule 5 of Companies(Appointment & Remuneration of Managerial Personnel) Rules. 2014
a. Ratio of Directors' remuneration to median remuneration of employees -
|Sr. No. ||Name of Director ||Remuneratio n p.a. ||Median remuneration p.a.(based on 12 months working) ||Ratio ||Remar k |
|1 ||Rochana Bharati ||Nil ||- ||Nil ||Nil |
|2 ||Arvind Bharati - M.D. ||2016000 ||183862 ||10.96 ||Nil |
|3 ||Viiay Tiwari ||Nil ||- || ||Nil |
|4 ||Smita Patodkar - Executive Director ||1150000 ||183862 ||6.25 times ||Nil |
|5 ||S. K. Menon ||Nil ||- || ||Nil |
b. Percentage increase in remuneration of each Director & KMP -
|Sr. no. ||Name ||Designation ||Remunerati on 15-16 ||Remunerati on 16-17 ||% increase |
|1 ||Arvind Bharati ||M.D. ||2016000 ||2016000 ||NIL |
|2 ||Smita Patodkar ||Executive Director ||900000 ||1150000 ||27.78 |
|3 ||Deepak Joshi ||CFO ||658062 ||674089 ||2.44 |
C. No. of permanent employees on the roll -
Company has 83 permanent employees of which 57 were employed throughout the year &remaining was employed for the part of the year.
d. Percentage increase / decrease in the median remuneration of employees -
There has been a decrease in the median remuneration of employees compared to previousyear by 3.93%.
e. Explanation on the relationship between average increase in remuneration ofDirectors. KMP & Employees vis a vis Company performance -
Average increase in remuneration of employees & KMP is guided by factors likeeconomic growth inflation mandatory increases external competitiveness and the need fortalent retention. Remuneration is predominantly fixed in nature and attributable toemployee's skills & experience and hence a perfect correlation with companyperformance cannot be achieved.
f. Comparison of remuneration of the KMP against the performance of the Company - Theturnover of the Company in the FY 2015-16 was Rs. 4283.39 Lacs & in F.Y. 2016-17 wasRs. 5747.95 lacs i.e. rise of 34.19%. However there has been a reduction in theremuneration paid by the Company due to the conservative approach adopted by themanagement for ensuring the growth and sustainability of the organisation. Further incomparison with the Revenue of the Company the Remuneration of KMP also decreased from0.83% in 2015-16 to 0.67% in 2016-17.
g. Variation in market capitalisation price earnings ratio as at the closing dateofthe FY 2016-17 and FY 2015-16 and percentage increase or decrease in the marketQuotations of the shares of the Company in comparison to the rate at which the Companycame out with the last public offer -
|Sr. No. ||Particulars ||31st March 2017 ||31st March 2016 ||% Variation |
|1 ||Market Capitalisation (Rs. In Lacs) ||8524.35 ||6571.53 ||29.72% |
|2 ||Price Earnings Ratio (Mkt. Price/EPS) ||41.89 ||56.43 ||-25.77% |
|3 ||Percentage increase/ (decrease) in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer (Last public issue made in 1994 @ Rs. 10/- per share of FV Rs. 10/-) ||398.5% ||295% ||35.08% |
|4 ||Market Price ||49.85 ||39.5 ||26.20% |
h. Comparison of remuneration of each Director and KMP against the performance of theCompanv Turnover of the Company for F.Y. 2016-17 is Rs. 5747.95 lacs.
|Sr. No ||Name ||Designation ||Remuneration ||Remuneration % |
|1 ||Arvind Bharati ||M. D. ||2016000 ||0.35% |
|2 ||Deepak Joshi ||CFO ||674089 ||0.12% |
|3 ||Smita Patodkar ||Executive Director ||1150000 ||0.20% |
i. The kev parameters for any variable component of remuneration availed bv thedirectors -
No variable component is payable to Directors.
j. The ratio of remuneration of highest paid director to that of employees who are notdirectors but receive remuneration in excess of the highest paid director during the year-
There are no such employees getting remuneration in excess of highest paid Director.
The remuneration is as per the remuneration policy of the Company.
27. Particulars Of Employees -
Following Director-Employees hold more than 2% equity -
a. Mr. Arvind Bharati - M.D. - 9.61%
b. Dr. Smt. Rochana Bharati - Director - 3.46%
Particulars pursuant to the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014
None of the employees is in receipt of remuneration exceeding Rs. 60 lakhs p.a. or Rs.5 lakh p.m. if employed for part of the year.
Particulars of employees drawing remuneration more than the remuneration drawnby the MD.
None of the employees draw remuneration more than the remuneration drawn by the MD.
28. Development & Implementation of Risk Management Policy:
Risk management practices seek to sustain and enhance long term competitive advantageof the Company. The Board has approved and implemented Risk Management Policy with an aimto identify evaluate monitor and minimize risks that are identifiable. The RiskManagement Policy of the Company is available on the website of the Company.
29. Corporate Governance and Certificate
Your Company is committed to the tenets of good Corporate Governance and has takenadequate steps to ensure that the requirements of Corporate Governance as laid down in theListing Regulations are complied with. A separate report on Corporate Governance is beingpublished as a part of the Annual Report of the Company.
The Compliance certificate from the Auditors regarding compliance of conditions ofcorporate governance as stipulated in the Listing Regulations is annexed with theCorporate Governance Report.
30. Director's Responsibility Statement:
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors to the bestoftheir knowledge and belief confirm that: -
I. In the preparation of the annual accounts the applicable accounting standards havebeen followed;
II. Appropriate accounting policies have been selected and applied consistently andhave made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March2017 and ofthe Profit of the Company for the year ended on 31st March 2017;
III. Proper and sufficient care has been taken for the maintenance of the adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
IV. The annual accounts have been prepared on going concern basis;
V. Internal financial controls had been laid down and that such internal financialcontrols are adequate and were operating effectively.
VI. Proper systems were devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
31. Sexual Harassment Of Women At Workplace (Prevention Prohibition And Redressal)Act. 2013 -
The Company has constituted an Internal Complaints Committee (ICC) for organizingworkshops and awareness programs at regular intervals for sensitizing employees on theissues and penal implications w.r.t. workplace sexual harassment. The ICC shall beresponsible for prevention and redressal of complaints if any. The ICC ensures timelysubmission of reports to the Board.
32. Listing Fees-
Your Company's shares are listed in The BSE Limited Mumbai and the Annual Listing feesfor the year under review have been paid.
The Directors greatly value the support and co-operation received during the year fromthe Company's Bankers Statutory Authorities and all organizations connected with itsbusiness. The Directors also take pleasure in commending the valuable contributions madeby the Company's employees at all levels during the year under review.
|Place: - Nasik ||By order of the Board of Directors |
|Date: - 29th August 2017. ||sd/- ||sd/- |
| ||Mr. Arvind Bharati ||Dr. Smt. Rochana Bharati |
| ||(Managing Director) ||(Chairperson) |
| ||DIN-00148830 ||DIN - 00163408 |