The Members of
STARLITE COMPONENTS LIMITED
Your Directors have pleasure in presenting their Twenty Fourth Annual Report togetherwith the Financial Statements - Audited Accounts together with Audit Report of the Companyfor the year ended 31st March 2015.
1. Financial Results -
(Amount in `)
|PARTICULARS ||CURRENT YEAR ||PREVIOUS YEAR |
| ||2014-15 ||2013-14 |
| || ||(9 months) |
|Gross Income ||272491081 ||137215950 |
|EBIDTA ||15387300 ||(6166135) |
|Interest & nance expenses ||10951645 ||2350640 |
|Depreciation ||3931724 ||1160674 |
|Pro t / (Loss) Before Tax ||8775438 ||(9677449) |
|Less : Provision for Taxation ||- ||- |
|Less: Provision for Deferred Tax Liability ||(1447401) ||(8539684) |
|Pro t / (Loss) after Tax ||10222839 ||(1137765) |
|Add : profit brought forward ||(160771045) ||(159633279) |
|Proposed Dividend - Equity ||- ||- |
|Proposed Dividend - Preference ||- ||- |
|Tax on Dividend ||- ||- |
|Pro t carried forward ||(150548206) ||(160771045) |
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 Companys working during the year / State ofCompanys affair
In line with the commitment put forth by the management in previous annual report theCompany has shown remarkable growth of 52.06% in turnover and profit during the year andachieved a turnover of Rs. Rs.2707.75 lacs (against Rs.1780.77 lacs in the previous year).profit after tax has also improved to Rs.102.16 lacs during the year under consideration(previous year closed at a Loss Rs. 192.41 lacs). These gures clearly show that the stepstaken by the company have worked and are reaping results. This comparison is made with thecorresponding period of 12 months of previous year though the previous Balance Sheet wasdrawn for a period of 9 months.
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. This along with the effort but in by the entire team the Company hasmanaged to improve its over all position. The Company is now on the right path to achievethe challenging goals that it has set for the coming 5 years. The Company is also stronglyfocusing on further strengthening its presence in E-Commerce OEM Customer base andGovernment projects whichare beginning to give the Company consistent revenue & amore stability to its businessmodel.
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 of themarket. Encouraged with the performance of previous year and seeing the growing potentialof the LED market the management feels even more con dent & committed of achievingbetter top and bottom line during the next financial year.
During the rst 6 months of the financial year there was moderate improvement in thecountrys economic climate with GDP growth improving to 5.5% Services sectorcontinuing its strong growth trend Agriculture also contributing with reasonabledevelopment and only IIP showing an erratic trend with a 1.5% growth. The change inGovernment in May2014 raised high expectations that a strong government notconstrained by coalition politics will usher in signi cant reforms that can accelerategrowth. Globally the sharp drop in crude oil prices helped contain in ation the IndianRupee after a year of volatility in 2013-14 stabilized against the USD and improvedagainst the Euro with only the RBI continuing its conservative approach - reducing reporates though not to the expected levels.
Despite the positive environment the revival of the investment cycle has not happenedand economic growth remains subdued with industrial production remaining lackluster. Theoverall volatility has had a negative in uence on consumer sentiment and demand.
Your Company aggressively pushed sales in the domestic market and successfullyincreased sales and achieved its sales revenues of Rs.2707.75 lacs with a growth of52.06% and also improved to Rs.102.16 lacs.
There is still optimism that the new government at the Centre will accelerate economicactivity and RBI will ease interest rates once in ation is contained thus favorablyimpacting the overall sentiment in the manufacturing sector. Domestic consumption remainsa key growth engine for the Indian economy and with signi cant additions to the workingage population; rising disposable incomes particularly in rural areas and the governmentrevived spending on infrastructure and in the social sector to foster inclusive growthwill help India realize its long term development potential in a sustainable way. TheCompany with a clear and dedicated focus is investing in and building its R&Dcapabilities developing product lines with better profit margins and streamlining itsproduction processes to eliminate waste from operations.
5. Change In Nature Of Business If Any -
No change has taken place during the year in the nature of Companys business.
6. Material Changes & Commitments Affecting The Financial Position WhichHave Occurred Between Date Of Year End To The Date Of Report
The authorized capital of the Company has been increased from Rs. 9 Crore to Rs. 18Crore on 1st July 2015. Subsequently the outstanding share warrants amountingto Rs. 7.20 Crore were converted into Equity shares on 6th July 2015.Simultaneously preferential allotment amounting to Rs. 90 lakhs was done to Promoters ofthe Company making total paid up equity capital of Rs. 17.10 Crore This allotment wasdone as per the BIFR sanctioned scheme of rehabilitation dated 10th October2013.
7. Signi cant And Material Orders Passed By The Regulators Or Courts OrTribunals Impacting The Going Concern Status And Companys Operations In Future :
No such Orders were passed by Regulators or Courts or Tribunals.
8. Details Of Adequacy Of Internal Financial Controls With Reference To TheFinancial Statements -
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
Control over timely Legal compliances & Compliance of Accounting standards
Asset acquisitions & disposal
Control over borrowings & liabilities
Control over financial transactions.
Comparing and analyzing the financial results with corresponding budgetedfigures.
These controls are reviewed periodically & upgraded whenever necessary.
9. The Names Of Companies Which Have Become Or Ceased To Be Its SubsidiariesJoint Ventures Or Associate Companies During The Year
Name of Company CIN Type of Dt of joining / association 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 during the year ||Nil |
|2 ||Amount remaining unclaimed or unpaid at the ||Nil |
| ||end of year || |
|3 ||Details of default in repayment of deposit or ||Nil |
| ||interest thereon during the year - || |
| ||No. of such cases ||Deposit Interest |
| ||At the beginning of year || |
| ||Maximum during the year || |
| ||At the end of year || |
| ||Total amount involved ||Deposit Interest |
| ||At the beginning of year || |
| ||Maximum during the year || |
| ||At the end of year || |
A. Statutory Auditors -
M/s. HMA & Associates Chartered Accountants appointed as the Auditors of theCompany retire at the conclusion of the ensuing Annual General Meeting but beingeligible offer themselves for reappointment till the conclusion of AGM to be held for theF.Y. 2019-20. In this connection the Company has received the requisite certi cate U/S.139 (1) of the Companies Act 2013.
B. Secretarial Auditors -
The Board has appointed Upendra C. Shukla Practicing Company Secretaries to conductSecretarial Audit for the financial year 2014-15. The Secretarial Audit Report for thefinancial year ended March 31 2015 is annexed herewith as Annexure 1 tothis 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 127911 W) 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 of the Company review of operational efciency effectiveness of systems and processes and assessing the internal controlstrengths of all areas.
The remuneration proposed to be paid to them requires ratification of the shareholdersof the Company. In view of this your ratification for payment of remuneration to internalauditors is being sought at the ensuing AGM.
The steps taken or impact on conservation of energy:
Installation of Energy Efficient LED Batten fittings for task lighting and LED High bayfor General Lighting Use of 36W x 4 T5 lamps for shop lights Installation of LED streetlights Installation of LED low bays fittings etc. Installation of Variable FrequencyDrives (VFD) for energy saving in Compressors.
Use of Energy Efficient Pumps Energy Efficient Compressed Air Nozzles. Every unit hasset targets for paper power and water consumption per employee which is monitored on aregular 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 Of ce Staff.
The capital investment on energy conservation equipments:
Company has invested Rs. 15.71 Lakh for achieving these results.
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 Companys in-house Research and Development teams during the year havecontinued to focus on developing products that were indigenous intelligent and energyefficient. Continued R&D efforts of the past years put in developing Lamps andLighting Products along with the electronics with higher ef ciency & improved lumenoutput.
C. Foreign exchange earnings and Outgo
Total foreign exchange outgo is Rs. 12.14 Crore & earning is Nil.
17. Directors & Key Managerial Personnel (KMP) a. None of the Directors aredisquali ed from being appointed as Directors as speci ed in terms of Section 164 of theCompanies Act 2013. b. Smt. Rochana Bharati Director - retires by rotation at theforthcoming A.G.M. and
being eligible offers herself for re-appointment. c. Following are the details ofappointments / cessation of the Directors during the year -
|Sr. no ||Name ||DIN ||Appointment / cessation Date ||Remarks |
|1 ||Mr. Vijay Tiwari ||02946693 ||14/02/2014 ||Additional Director |
| ||Independent Director || || ||Regularized on |
| || || || ||30/09/2014. |
|2 ||Mrs. Smita Patodkar - ||06850370 ||14/02/2014 ||Additional Director |
| ||Independent Director || || ||Regularized on |
| || || || ||30/09/2014. |
|3 ||Mrs. Smita Patodkar - ||06850370 ||13/11/2014 ||Resigned as |
| ||Independent Director || || ||Independent Director. |
|4 ||Mrs. Smita Patodkar - ||06850370 ||14/11/2014 ||Additional Director to |
| ||Director || || ||be regularized. |
|5 ||Mr. Shreekumar Menon - ||00168680 ||14/11/2014 ||Additional Director to |
| ||Independent Director || || ||be regularized. |
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 has taken appropriate steps and led an appeal with High CourtMumbai which is under process. Further the Honble BIFR has given relief for demandraised for AY 2004-05 vide their order dated 10th October 2013. On thesegrounds the management is positive that relief would be granted by the High Court. SalesTax Demand for Rs. 61918168/-: The Company has led an appeal with the AppellateAuthority for waiver of interest and penalty charged. Further the Honble BIFR hasgiven 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 31 March 2015 are self- except for observationregarding adequate systems & processes. The explanation of the management on thecomments of the secretarial auditors is as follows: The management is in the process ofstrengthening the existing system and also has established the procedures to ensure propercompliances of applicable laws rules regulations and guidelines.
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 of this Annual Report as Annexure 2
16. Conservation Of Energy Research & Development Technology Absorption ForeignExchange Earnings and Outgo
A. Conservation of energy-
The Company has always been conscious of the need for conservation of energy and energyconservation measures have been implemented at all the plants and of ces 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:
Following are the details of appointments of the KMP during the year
|Sr. no ||Name ||PAN / DIN ||Date of appointment |
|1 ||Mr. Deepak Joshi - CFO ||AGHPJ5917C ||14th November 2014 |
18. Declaration Given By Independent Directors U/S 149(6)
A declaration by the Independent Directors that they meet the criteria of independenceas provided in sub-section (6) of Section 149 of the Companies Act 2013 is enclosed as Annexure3.
19. Board Committees
Pursuant to the requirements of Clause 49 of the Listing Agreement the Company hasconstituted Audit committee Nomination & Remuneration Committee Stake holdersrelationship committee & Risk management committee. The details of the committees& its terms of reference are set out in the Corporate Governance Report forming partof the Boards report.
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 andCompliance Committees. The policy for formal evaluation of Boards performance is asper Annexure 4.
21. Meetings of Board of Directors & Audit Committee Meetings -
During the year seven Board Meetings and four Audit Committee Meetings were convenedand held the details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 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 details of Policy are as per Annexure 5.
23. Companys Policy Regarding Appointment Remuneration Independence and Qualication etc. of Directors Where Nomination And Remuneration Committee Is Necessary
Pursuant to the requirements of Clause 49 of the Listing Agreement the Company hasconstituted Nomination & Remuneration Committee. The details of the committee &its terms of reference & Policy are set out in the Corporate Governance Report formingpart of the Boards report.
24. Particulars Of Loans Guarantees & Investments U/S 186
Details of Loans:
|Date of making loan ||Details of Amount Borrower ||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 |
| || ||Nil || || || || || |
Details of Investments:-
|Date of investmen ||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) ||Expected rate of return |
|09/06/95 ||Paragon Plastics Ltd. ||532350 ||Capital for business. ||09/06/95 ||12/05/95 ||Nil |
|30/06/98 ||Starlite Lighting Ltd. ||9200000 ||Capital for business ||06/05/98 ||12/05/95 ||Nil |
Details of Guarantee / Security Provided:
|Date of providing security/guarantee ||Details of recipient ||Amount ||Purpose for which the security/guarantee is proposed to be utilized by the recipient ||Date of BR ||Date of SR (if any) ||Commission |
|14/01/13 ||Ashoka ||273734 ||Performance ||04/12/ ||N.A ||Nil |
| ||Buildcon || ||guarantee ||12 || || |
25. Particulars Of Contracts & Arrangements With Related Parties U/S 188 (1)
The details are as per Annexure 6.
26. Managerial Remuneration As Per Sec 197 (12)[Information under Rule 5 ofCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014.
a. Ratio of Directors remuneration to median remuneration of employees
|Sr.no ||Name of Director ||Remuneration p.a. ||Median remuneration p.a. (based on 12 months working) ||Ratio ||Remark |
|1 ||Rochana Bharati ||Nil || ||Nil ||Nil |
|2 ||Arvind Bharati M.D. ||720000 ||184417 ||3.90 times ||Nil |
|3 ||Vijay Tiwari ||Nil || || ||Nil |
|4 ||SmitaPatodkar Executive Director ||900000 ||184417 ||4.88 times ||Nil |
|5 ||S. K. Menon ||Nil || || ||Nil |
b. Percentage increase in remuneration of each Director & KMP
|Sr. no. ||Name ||Designation ||Remunerati on 13-14 ||Remunerati on 14-15 ||% increase |
|1 ||Arvind Bharati ||M.D. ||720000 ||720000 ||0 |
|2 ||Smita ||Executive ||0 ||900000 ||100% |
| ||Patodkar ||Director || || || |
|3 ||Deepak Joshi ||CFO ||0 ||574059 ||100% |
c. No. of permanent employees on the roll
Company has 86 permanent employees of which 58 were employed throughout the year &remaining were employed for the part of the year.
d. Percentage increase in the median remuneration of employees
Average Percentage increase in the median remuneration of employees compared toprevious year is 16.12%.
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 in ation mandatory increases external competitiveness and the need fortalent retention. Remuneration is predominantly fixed in nature and attributable toemployees 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 F.Y. 2013-14 was Rs. 1780.77 lakhs & in F.Y.
2014-15 was Rs. 2707.75 lakhs. i.e. rise of 52.06%. In view of the improved performanceof the Company the rise in average remuneration of the employees of 19.10% is justi able.The Remuneration of KMP increased from 0.40% in 2013-14 to 0.48 % in 2014-15.
g. Variation in market capitalisation price earnings ratio as at the closing date ofthe FY 2014-15 and FY 2013-14 and percentage increase or decrease in the market quotationsof the shares of the Company in comparison to the rate at which the Company came out withthe last public offer As the Company was in the process of listing its shares with BSEand since the same was under process till April 2015 the shares were not been traded.Hence no data is available for comparison.
h. Average percentile increase already made in the salaries of employees other thanmanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justi cation thereof for increase inmanagerial remuneration & Exceptional circumstances for increase in the managerialremuneration
Average percentile increase in the remuneration of employees other than managerialremuneration was 27.31%. As compared to this Average percentile increase in managerialremuneration was 54.59%. The reason being increase in no. of managerial persons in 2014-15as compared to 2013-14.
i. Comparison of remuneration of each KMP against the performance of theCompany-Turnover of the Company for F.Y.2014-15 is Rs. 270775416/-
|Sr.no ||Name ||Designation ||Remuneration ||Remuneration |
|1 ||Arvind Bharati ||M.D. ||720000 ||0.27% |
|2 ||Deepak Joshi ||CFO ||574059 ||0.21% |
j. The key parameters for any variable component of remuneration availed by thedirectors
No variable component is payable to Directors.
k. 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. Arvind Bharati M.D. 14.83% b.Rochana Bharati Director 4.86%
Particulars pursuant to the Companies (Appointment and Remuneration of ManagerialPersonnel) 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 drawn by theMD.
Name Mrs. Smita Patodkar
Designation Executive Director
Remuneration received Rs. 900000/-
Nature of employment Permanent
Quali cation B.A.
Experience 8 years in Administration & legal eld.
Date of commencement of employment 14th November 2014.
Age - 38 years
Last employment held before joining the Company none.
Percentage of equity shares held Nil
Relation with existing Directors None.
28. Development & Implementation of Risk Management Policy:
A statement on Risk Management Policy is given in Corporate Governance Report.
29. Corporate Governance and Certi cate
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 inClause 49 of the Listing Agreement are complied with. A separate report on CorporateGovernance is being published as a part of the Annual Report of the Company.
The Compliance certi cate from the Auditors regarding compliance of conditions ofcorporate governance as stipulated in Clause 49 of the Listing agreement is annexed withthe Corporate Governance Report.
30. Directors Responsibility Statement:
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors to the best oftheir 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 March
2015 and of the profit of the Company for the year ended on 31st March2015;
III. Proper and suf cient care has been taken for the maintenance of the adequateaccounting records in accordance with the provisions of the Companies Act
2013 for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities;
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 Bombay Stock Exchange Limited Mumbai and theAnnual Listing fees for 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: - 31st August 2015. ||sd/- ||sd/- |
| ||Arvind Bharati ||Smt. Rochana Bharati |
| ||(Managing Director) ||(Chairperson) |
| ||DIN- 00148830 ||DIN 00163408 |