Your Directors are pleased to present the 37th Annual Report on the business andoperations of your Company and Audited Financial Statements for the financial year endedMarch 31 2016.
The Companys performance for the Financial Year 2015-2016 vis--vis 2014-2015 issummarized as under:
(Amount in Lacs)
|Particulars ||Standalone ||Consolidated* |
| ||2015-2016 ||2014-2015 ||2015-2016 |
|Revenue from Operations (Net) ||36937.47 ||34005.72 ||37224.75 |
|Profit before interest depreciation and tax ||6248.50 ||4732.51 ||6208.42 |
|Interest ||561.76 ||655.44 ||561.76 |
|Depreciation ||1340.58 ||1203.13 ||1346.82 |
|Profit Before Tax (PBT) ||4346.16 ||2873.94 ||4299.84 |
|Provision for Tax ||1504.63 ||751.78 ||1495.37 |
|Profit After Tax (PAT) ||2841.53 ||2122.16 ||2804.47 |
|Appropriations: || || || |
|Interim Dividend ||1026.69 ||342.23 ||1026.69 |
|Proposed Dividend || || || |
|Tax on Interim Dividend ||209.01 ||58.16 ||209.01 |
|Tax on Proposed Dividend || || || |
|Transfer to General Reserve ||284.00 ||212.00 ||284.00 |
|Balance Carried to Balance Sheet ||9909.51 ||8587.68 ||9483.21 |
*Consolidated Financial Statements are applicable on Company effective from FinancialYear 2015-2016.
The Company performed very well and demonstrated good performance during the FinancialYear 2015-2016.
The highlights of the Companys performance during the Financial Year 2015-16 areas under:
Revenue from operations increased by 8.62% to Rs. 36937.47 Lacs.
Exports decreased by 8.16% to Rs. 3334.73 Lacs.
PBDIT increased by 32.03% at Rs. 6248.50 Lacs.
Profit before Tax increased by 51.23% at Rs. 4346.16 Lacs.
Net Profit increased by 33.90% to Rs. 2841.53 Lacs.
Considering the good financial performance of the Company the Directors had in theirmeetings held on 4th August 2015 8th February 2016 and 14th March 2016 recommended 50%dividend each time thus aggregating to 150% interim dividend for financial year 2015-2016against 50% dividend in previous financial year. This interim dividend has already beenpaid and taking note of this payout the Directors have not recommended any final dividendfor financial year 2015-2016 and the interim dividends already declared and paid beconsidered as final dividend for the financial year 2015-2016.
The total outflows on account of said Interim Dividends (including DividendDistribution Tax Surcharge and Education Cess) amount to Rs. 1235.70 Lacs.
Transfer to General Reserve
The Company proposes to transfer Rs. 284.00 Lacs to General Reserves out of the amountavailable for appropriation.
The Company has not accepted any deposits during the year which come under the purviewof Section 73 of the Companies Act 2013 and as such no amount on account of principal orinterest was outstanding as on the date of Balance Sheet.
As the members are aware the Company shares are compulsorily tradable inelectronic form. As on March 31 2016 99.06% of the Companys total paid-up Capitalrepresenting 6780371 shares are in dematerialized form. In view of numerous advantagesoffered by the Depository System members holding shares in physical mode are advised toavail of the facility of dematerialization from either of the Depositories.
Capital Structure and Listing
As on 31st March 2016 the Company has Authorised Share Capital ofRs.100000000/-and Paid Up Share Capital of Rs. 68446000/-. The equity shares of theCompany are listed with Bombay Stock Exchange Limited and National Stock Exchange of IndiaLimited. There are no arrears on account of payment of listing fees to the said StockExchanges.
The Promoters and Persons acting in concert with them hold 70.15% share Capital of theCompany as on 31st March 2016 as against 70.15% as on 31st March 2015.
Performance of Joint Venture Company
As on date the Company has one Joint Venture Company named Sterling Fabory India Pvt.Ltd.- a Joint Venture on 50:50 basis with a Netherland based Company named Fabory Mastersin Fasteners Group B.V.. There has been no change in the nature of business carried out bysaid Joint Venture Company during Financial Year 2015-2016. Pursuant to the provisions ofSection 129(3) of the Companies Act 2013 a Statement containing the salient features offinancial statements of Joint Venture Company named Sterling Fabory India Pvt. Ltd. by wayof Form AOC1 is attached to the Accounts.
In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its standalone and the consolidatedfinancial statements has been placed on the website of the Companywww.stlfasteners.com/new/news.asp.
Number of meetings of the Board and attendance of the Directors
5 (Five) board meetings were conducted during the year in respect of which propernotices were given and the proceedings were properly recorded. For details of the meetingsof the Board and attendance of the Directors please refer Page No. 37 of CorporateGovernance Report attached to this Annual Report.
Extract of Annual Return
As provided under section 134(3)(a) and Section 92(3) of the Companies Act 2013 theextract of Annual Return in the prescribed form MGT-9 has been given by an AnnexureIIattached to this Report.
Directors and Key Managerial Personnel
Pursuant to the provisions of Section 149 of the Act Sh. C.R. Sharma Dr. T.N. Kapoorand Ms. Malini Sud have been appointed as Independent Directors. They have submitted adeclaration that each of them meets the criteria of independence as provided in Section149(6) of the Act and there has been no change in the circumstances which may affect theirstatus as Independent Director during the year.
Mr. Atul Aggarwal retires by rotation and being eligible offers himself forre-appointment.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company are Mr. Anil Aggarwal Managing Director Mr. Atul Aggarwal Whole timeDirector and Chief Financial Officer of the company and Vaishali Singh the CompanySecretary. There has been no change in the key managerial personnel during the year.
Policy on Directors appointment and remuneration and other details
The Companys policy on Directors appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a Directorand other matters provided in Section 178(3) and Section 134(3) (e) of the Act has beendisclosed in an AnnexureIII attached to this Report.
Policy on Board Diversity
In accordance with the clause 49(IV) of the Listing Agreement readwith the SEBI(Listing Obligations & Disclosure Requirement) Regulation 2015 the Nomination andRemuneration Committee (NRC) has framed and adopted a formal policy on Board diversitywhich sets out a framework to promote diversity on Companys Board of Directors. TheCompany recognizes the importance and benefits of having the diverse Board to enhancequality of its performance. The policy inter-alia specifies optimum combination ofExecutive Directors Non Executive Directors and Independent Directors the recommendatoryrequirement for each of the Directors to possess functional diversity and role of NRC toensure that the same policy is considered while recommending the appointment of newDirectors on the Board of company.
Particulars of Loans Guarantees or Investments under section 186
The Company has not provided any loans or Guarantees under Section 186 during the year.It has invested Rs.58825000/-(Rupees Five Crores Eighty Eight Lacs Twenty Five Thousandonly) in Equity share Capital of Sterling Fabory India Private Limited a Joint ventureCompany till 31st March 2016.
Transactions with Related Parties
Information on transactions with Related Parties pursuant to Section 134(3)(h) of theAct read with rule 8(2) of the Companies (Accounts) Rules 2014 are given in AnnexureIVin Form AOC2 and the same forms part of this report.
Audit Committee Meetings of the Committee & Attendance of Members:
The Committees composition meets with requirements of Section 177 of theCompanies Act 2013 and Regulation 18 of the Listing Regulations 2015. Members of theAudit Committee possess financial / accounting expertise / exposure. The purpose of thisCommittee is to ensure the objectivity credibility and correctness of the Companysfinancial reporting and disclosures process internal controls risk management policiesand processes tax policies compliance and legal requirements and associated matters.
At present the Audit Committee comprises of following Directors as members having wideexperience and knowledge of Corporate Affairs Income Tax & Finance.
|Shri. C. R. Sharma ||Chairman(Non Executive Independent Director) |
|Dr. T. N. Kapoor ||Member(Non Executive Independent Director) |
|Ms. Malini Sud ||Member(Non Executive Independent Director) |
|Shri Anil Aggarwal ||Member(Managing Director) |
All the recommendations made by the Audit committee during the year had been acceptedby the Board.
Four meetings were conducted during the year in respect of which proper notices weregiven and the proceedings were properly recorded. For details of the meetings of the AuditCommittee and attendance of the Members please refer Page No. 40 of Corporate GovernanceReport attached to this Annual Report.
The Board of Directors and Nomination and Remuneration Committee reviewed theperformance of the Board after seeking inputs from all the directors on the basis of thecriterial such as the board composition and structure effectiveness of board processesinformation and functioning etc.
The performance of the Committees was evaluated by the board after seeking inputs fromthe Committee members on the basis of the criteria such as composition of committeeseffectiveness of committee meetings etc.
The Board of Directors and Nomination and Remuneration Committee reviewed theperformance of the individual directors on the basis of the criteria such as contributionof the individual director to the board and committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc.
In addition to above said Chairman of the Company was also evaluated on the keyaspects of his role.
In a separate meeting of independent directors held on 29th December 2015 performanceof non-independent directors performance of the board as a whole and performance of theChairman was evaluated taking into account the views of Executive and Non-executivedirectors.
Material changes and commitments
In terms of Section 134(3)(l) of the Companies Act 2013 no material changes andcommitments which could affect the Companys financial position have occurred betweenthe end of the financial year of the Company and date of this report.
The Company continues to enjoy the domestic credit rating of (A) from ICRA whichreflects the Companys financial discipline and prudence.
Corporate Social Responsibility
Composition of the Corporate Social Responsibility Committee has been disclosed in theCorporate Governance Report attached to this report. The brief outline of the CorporateSocial Responsibility (CSR) Policy of the Company and the initiatives undertaken by theCompany on CSR activities during the year are set out in AnnexureV of thisreport in the format prescribed in the Companies (Corporate Social Responsibility Policy)Rules 2014. The policy on CSR is available on the website of the Company(www.stlfasteners.com/new/news.asp).
Particulars of Employees
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 has beengiven by way of AnnexureVI to this Report.
As on March 31 2016 the Gross Fixed Assets (including Capital WIP) stood at Rs.22631.43 Lacs and Net Fixed Assets stood at Rs. 13936.57 Lacs. Additions during the yearamounted to Rs. 3748.48 Lacs.
Conservation of energy technology absorption and foreign exchange earnings and outgo
Information pursuant to the provisions of Section 134(3) (m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 relating to conservation ofenergy technology absorption & foreign exchange earnings and outgo are given by wayof Annexure-VII to this Report.
Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provisions of Section 125 of the Companies Act 2013 relevant amountswhich remained unpaid or unclaimed for a period of seven years have been transferred bythe Company from time to time on due dates to the Investor Education and ProtectionFund. Pursuant to the provisions of Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed amounts lying with the Company ason 29th September 2015 (date of last Annual General Meeting) on the Ministry of CorporateAffairs website.
Corporate Governance and Management Discussion & Analysis Report
A separate section on corporate governance practices followed by the Company togetherwith a certificate from the auditors confirming its compliance forms a part of thisAnnual Report as per SEBI Regulations. Further as per Regulation 34 read with Schedule Vof the Listing Regulations a Management Discussion and Analysis report is annexed to thisreport.
Directors Responsibility Statement
Pursuant to the requirement under section 134(3) (c) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed that:
(i) in the preparation of the accounts for the Financial Year ended 31st March 2016the applicable accounting standards have been followed and there are no materialdepartures.
(ii) the Directors have selected accounting policies in consultation with StatutoryAuditors and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for thefinancial year under review.
(iii) the directors have taken proper and sufficient care to the best of theirknowledge and ability for the maintenance of adequate accounting records in accordancewith the provisions of the Companies Act 2013. The directors have confirmed that thereare adequate control & systems for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities.
(iv) the Directors have prepared the accounts for the Financial Year ended 31st March2016 on a going concern basis.
(v) the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively.
(vi) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
During the year under review harmonious industrial relations were maintained in yourCompany.
Your Directors have made necessary disclosures as required under various provisions ofthe Companies Act 2013 and under SEBI Listing Regulations.
M/s. S. R. Dinodia & Co. LLP. the Statutory Auditors of the Company retire at theensuing Annual General Meeting and being eligible offer themselves for reappointment. M/sS. R. Dinodia & Co. LLP have under Section 141(3) (g) of Companies Act 2013furnished the certificate of their eligibility for reappointment. As recommended by theAudit Committee your Directors propose that they may be reappointed as Auditors of theCompany for a period of 1 year from the conclusion of this Annual General Meeting untilthe conclusion of the 38th Annual General Meeting of the Company.
The Auditors Report and Notes on Accounts for the financial year 2015-2016 areself-explanatory and therefore do not call for any further comments.
Secretarial Auditors report
M/s Santosh Kumar Pradhan Company Secretaries was appointed as the Secretarial Auditorof the Company for the Financial Year 2015-2016 who has conducted the Secretarial Auditof the Company for the year 2015-2016. The Secretarial Auditors Report doesntcontain any qualification reservation or adverse remarks. The said Secretarial AuditReport is annexed as AnnexureVIII to this Report.
The Company appointed M/s G.T. & Co. the Cost Auditors to conduct the cost auditof the Company cost records for financial year 2015-2016.
Internal Financial Control Systems and their adequacy
In order to ensure that the policies and procedures adopted by STL for conducting itsbusiness orderly and efficiently STL is in process of aligning its internal financialcontrol systems on lines of globally accepted risk based framework.
STLs existing internal financial control systems are adequate for the nature ofits business and the size of its operations. These have been designed to providereasonable assurance with regard to recording and providing reliable financial andoperational applicable statues safeguarding assets from unauthorised use executingtransactions with proper authorisation and ensuring compliance of corporate policies.
In the beginning of the year the scope of audit exercise and the key businessprocesses and selected risk areas to be audited are decided in consultation with the AuditCommittee. The Internal
Audit is carried outbyfirmof external Chartered accountants and covers all departments.All significant audit observations and follow up actions thereon are reported to theAuditCommittee.
Safety Health and Environment (SHE) Measures
Protection of environment is the prime concern of your Company. Your Company complieswith the relevant laws and regulations as well as take any additional measures considerednecessary to Prevent pollution maximize recycle reduce waste discharges and emissions.Company Conserve natural resources by their responsible and efficient use in all itsoperations and plant trees.
Quality Management System
Sterling Tools Limited has three manufacturing Units Wire Processing Unit and twofastener manufacturing plants. All the Units are certified to ISO 9001 standard.
Both the Fastener manufacturing units are certified to the following standards:
STL laboratory at DLF plant is certified to ISO 17025 for Chemical TestingMechanical Testing and Instrument Calibration.
Cash Flow Analysis
In compliance with the provisions of Regulation 34 of the Listing Regulations 2015the Cash Flow Statement for the year ended 31st March 2016 is annexed hereto.
The Company has Constituted an Internal Complaint Committee as required under Section-4of the Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal)Act 2013 and the rules made thereunder.
During the year under review no complaint was reported.
Significant and Material Orders passed by the Regulators or Courts
Order passed by Central Excise and Service Tax Appellate Tribunal
The Company had filed appeals in Central Excise and Service Tax Appellate Tribunalagainst Department of Central Excise demand regarding assessable value withreference to MRP amounting to Rs. 189015254 for the period June 2006 to Dec 2008 Rs.106987422 for the period January 2009 to October 2010 Rs. 3990394 for the periodFebruary 2010 to March 2010 and Rs. 5326546 for the period Nov 2010 to January 2011under Central Excise Act. Based on the appeals the department has granted the Stay orderNo. SO/677-678/2012-EX (DB) dated 23 April 2012 against the demand of Rs. 189015254 forthe period June 2006 to Dec 2008 & Rs. 106987422 for the period January 2009 toOctober 2010. Corresponding to these stay orders the tribunal (CESTAT) vide section35-C(1) of the Central Excise Act 1944 has adjudicated and passed final Order No.A/52747-52748/2015/Ex [DB] dated 05/08/2015 in favour of the Company and accordingly thedemand of Rs. 189015254 for the period June 2006 to December 2008 and Rs. 106987422for the period January 2009 to October 2010 stands withdrawn. However the demand ordersfor the period February 2010 to March 2010 and November 2010 and January2011 are stillin the dispute till final adjudication.
Any other orders
The Company has not received any other order damand or notice from any otherRegulatory Authority.
Your Directors would like to express their appreciation for the assistance andco-operation received from the Banks Government Authorities Customers Vendors andMembers during the year under review. Your Directors also wish to place on record theirdeep sense of appreciation for the committed services by all Company personnel.
Your Directors look forward to their continued support.
| ||For and on behalf of the Board |
| ||M. L. Aggarwal |
|Date: 8th August 2016 ||Chairman |
|Place: Faridabad ||DIN No. 00027380 |