The Members of
Starlite Components Limited.
Starlite Components Limited is under Corporate Insolvency Resolution Process (CIRP) ofthe Insolvency and Bankruptcy Code 2016 (IBC) pursuant to terms of Order passed by theHon'ble National Company Law Tribunal (NCLT) Mumbai Bench with effect from 29th January2020. CA Naren Sheth was appointed as Interim Resolution Professional by NCLT vide itsOrder dated 29th January 2020. Its affairs business and assets are being managed by theInterim Resolution Professional CA Naren Sheth who was appointed vide order dated 29thJanuary 2020 by Hon'ble NCLT Mumbai Bench.
Under Section 17 of the Insolvency & Bankruptcy Code;
a. the management of the affairs of the company shall vest in the Interim ResolutionProfessional.
b. the powers of the Board of Directors shall stand suspended and be exercised by theInterim Resolution Professional.
c. the officers and managers of the company if any shall report to the Interimresolution professional and provide access to such documents and records of the company asmay be required by the Interim Resolution Professional.
d. the financial institutions maintaining accounts of the company shall act on theinstructions of the Interim Resolution Professional in relating to such accounts furnishall information relating to the company available with them to the Interim ResolutionProfessional.
The Committee of Creditors have yet to approve a resolution plan for the Company.
1. Financial Results -
| || ||(Amount in Rs. Lakhs) |
|PARTICULARS ||CURRENT YEAR (2020-21) ||PREVIOUS YEAR (201920) |
|Revenue from operations ||185.27 ||1475.75 |
|Other income ||16.54 ||933.70 |
|Total Income ||201.81 ||2409.45 |
|Finance expenses ||0.06 ||22.58 |
|Depreciation ||55.35 ||61.95 |
|Total Expenses ||325.33 ||3950.60 |
|Profit/(Loss) Before Tax ||(123.52) ||(1541.14) |
|Less : Current Tax ||- ||- |
|Less: Deferred Tax Liability ||(2.56) ||(1.35) |
|Profit/(Loss) after Tax ||(120.97) ||(1539.80) |
Directors do not recommend any dividend in the current financial year.
3. Brief description of the Company's working during the year/State of Company's affair
Due to tightened market conditions and slump in the sales of the products of thecompany over the period of time there has been a considerable decline in the turnover ofthe Company eventually the Company has sustained losses of Rs. 12352000/- duringthe year as compared to a loss of Rs. 154114000/- in the FY 2019-20. Furtherthe Company has achieved a turnover of Rs. 18527000/ - against Rs. 147575000/ - inthe previous year. These figures clearly demonstrate the current market condition of theCompany in the middle of overall market slowdown and fall in the demand for the productsof the Company due to the new entrants in the market and the increasing competition.
4. Share Capital:
At present the securities of the Company are listed on BSE Limited and the Company hasbeen regular in paying the listing fees and other statutory payments to the Stock Exchangeand other intermediaries.
Due to financial crunches the Company could not pay Annual Listing Fees for the year2020-21 the Stock Exchange. The Shares of the Company were placed in Z category by BSELimited.
During the year under review the Authorized Share Capital of the Company was18000000 Equity Shares of Rs. 10/ - each amounting to Rs. 180000000/-.
Subscribed Issued and Paid up Capital of the Company was 17100000 Equity Shares ofRs.10/- amounting to Rs. 171000000/-.
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 dates 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 :
The Company is under Corporate Insolvency Resolution Process (CIRP) of the Insolvencyand Bankruptcy Code2016 (IBC) in terms of Order passed by the Hon'ble National Company LawTribunal (NCLT) Mumbai Bench with effect from January 29th 2020.
M/s. Shree Enterprises one of the Operational Creditor had filed an application withHon'ble NCLT Mumbai for initiation of Corporate Insolvency resolution process against theCompany u/s.9 of the Insolvency and Bankruptcy Code 2016.
The Hon'ble NCLT Mumbai after hearing the application vide its order dated 29/01/2020admitted the application of the said operational creditor for initiation of CorporateInsolvency resolution process (CIRP) and has appointed CA Naren Sheth (Reg. No.Registration No. IP/P- 00133- IBBI/IPA- 0013113- 1300133/2017-2018/10275) as InterimResolution Professional (IRP).
8. Details of Adequacy 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 |
| || ||Nil || || |
10. Report on the Performance of the Subsidiaries Associate Companies and TointVenture
The Company does not has any Subsidiaries and Joint Venture Companies but Company hasonly one Associate Company.
The Company has not accepted any Deposits during the year within the meaning of Section73 of Companies Act 2013 and rules made thereunder
12. Auditors -
A. Statutory Auditors -
The Members of the Company at their 27th AGM held on September 29 2018 have approvedthe appointment of M/s. Jain Chhajed & Associates Chartered Accountants Nasik (FirmRegistration No. 127911W) as the Statutory Auditor of the Company for a period of 5 (Five)consecutive year from the conclusion of the 27th AGM till the conclusion of 32nd AGM to beheld in the calendar year 2023 on such remuneration as may be mutually agreed by the Boardand the Auditor.
The requirement to place the matter relating to appointment of Auditors forratification by members at every Annual General Meeting is done away by CompaniesAmendment Act 2017 vide notification dated May 7 2018 issued by the Ministry ofCorporate Affairs New Delhi. Accordingly no resolution is proposed for ratification ofthe appointment of Auditors who were appointed in the Annual General Meeting held on.
B. Secretarial Auditors -
The Board has appointed M/s. Amit R. Dadheech & Associates Practicing CompanySecretaries to conduct Secretarial Audit for the financial year 2020-21. The SecretarialAudit Report for the financial year ended 31st March 2021 is annexed herewith as Annexure1 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 to M/S. SKVM And Co. Chartered Accountants Nasik as internal auditors. Duringthe year the Company continued to implement their suggestions and recommendations toimprove the control environment. Their scope of work includes review of processes forsafeguarding the assets of the Company review of operational efficiency effectiveness ofsystems and processes and assessing the internal control strengths of all areas.
13. Audit Reports:
A. Statutory Auditors Report - The observations made by the Auditors of the Company intheir report are self-explanatory and the management need not make a comment on the same.
B. Secretarial Audit report- The observations made by the Secretarial Auditors of theCompany in their report for the year ended 31st March 2021 are self-explanatory. Beloware the responses of the Management on the observations made by the Secretarial Auditor:-
1. Even after several efforts the Company could not find any candidate who will workas whole time Company Secretary therefore the Company was not able to appoint a CompanySecretary in compliance with the relevant provisions of Companies Act 2013. Howeverefforts are being made to find out a suitable candidate for the position of whole timeCompany Secretary.
2. The actions taken against the Company is due non compliance with the SEBI CircularSEBI/HO/MRD/DSA/CIR/p/2017/92 dated August 1 2017 by M/s. Comet Filament Limited aCompany promoted by the same Promoters.
3. Due to actions taken against the Promoters in relation to non-compliance with theaforesaid SEBI Circular by one of the Group Company i.e. Comet Filament Limited theprocess of issuance and allotment of shares to Promoter and Promoter Group on preferentialbasis for cash and pursuant to conversion of loans obtained from them is been stagnatedand no In-Principal Approval is obtained from BSE Ltd for allotment of shares.
4. The Company shall take necessary step for filing the relevant forms and returns withthe Registrar of Companies Mumbai within the stipulated period of time to avoid anyadditional fees or penalty.
5. Since the Board of the Company has passed a resolution for allotment of warrants tothe Promoter and Promoter Group without obtaining the InPrinciple Approval of the StockExchange the said allotment was reversed in the books of the Company in the spirit of lawand no effect has been given for the said transaction by way of filing of anyreturn/e-form/intimation for the same.
14. 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 for the year ended March 31 2021 is provided on the website of the Company i.e.www.starlitecomponents.com
15. 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 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 in Compressors.
> 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 NIL & Earning is NIL by exports during the FY2020-21
16. Directors & Key Managerial Personnel (KMP)-
Section 17(1) of the IBC provides that from the date of appointment of the interimresolution professional
(a) the management of the affairs of the corporate debtor shall vest in the interimresolution professional;
(b) the powers of the board of directors or the partners of the corporate debtor asthe case may be shall stand suspended and be exercised by the interim resolutionprofessional;
It should be noted that pursuant to initiation of CIRP process against the Company theBoard of Directors stands suspended and the management of the affairs of the Company arebeing vested in interim resolution professional Mr. Naren Sheth.
17. 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.
18. Board Committees -
Pursuant to the requirements of the Listing Regulations the Company has constitutedAudit committee Nomination & Remuneration Committee Stake holders' relationshipcommittee. The details of the committees & its terms of reference are set out in theCorporate Governance Report forming part of the Board's report.
19. 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.
20. Meetings of Board of Directors & Audit Committee Meetings -
During the year Five (5) Board Meetings and Four (4) Audit Committee Meetings wereconvened and 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.
21. 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.
22. 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.
23. Particulars of Loans Guarantees & Investments U/S 186
The Company has not granted any loans or given guarantees - directly or indirectly todirectors or any other person in whom directors are interested in contravention of Section185 of the Companies Act 2013. Accordingly compliance under Section 185 and 186 of theAct in respect of providing securities is not applicable to the Company.
24. Particulars Of Contracts & Arrangements 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 RelatedParty Transactions as approved by the board is available on the Company's website. Thedetails are as per Annexure 3.
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 -
| || || || || ||In lakhs |
|Sr. No. ||Name of Director & KMP ||Remuneration p.a. ||Median remuneration p.a. ||Ratio ||Remark |
|1 ||Arvind Bharati - M.D. ||NIL ||NA ||NA ||NA |
|5 ||Sajid Shaikh ||5.23 || || || |
b. Percentage increase in remuneration of each Director & KMP -
| || || || || ||In lakhs |
|Sr. no. ||Name ||Designati on ||Remuneratio n 2019-20 ||Remuneration 2020-21 ||% increase |
|1 ||Arvind Bharati ||M.D. ||16.80 ||NIL ||NIL |
|3. ||Sajid Salauddin Shaikh ||CFO ||14.31 ||5.23 ||NIL |
c. No. of permanent employees on the roll - The Company has 3 permanent employees.
d. Percentage increase/decrease in the median remuneration of employees -
There has been a NIL increase in the median remuneration of employees compared toprevious year.
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 -
There has been no increase in the remuneration paid by the Company to Directors &KMP.
g. The key parameters for any variable component of remuneration availed by thedirectors -
No variable component is payable to Directors.
h. 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.
25. Particulars Of Employees -
> Following Director-Employees hold more than 2% equity -
a. Mr. Arvind Bharati - M.D. - 8.44%
> 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 bythe MD.
None of the employees draw remuneration more than the remuneration drawn by the MD.
26. 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.
27. Corporate Governance and Certificate
In accordance with SEBI (LODR) Regulations 2015 as entered with the Stock Exchange andsome of the best practices followed internationally on Corporate Governance the reportcontaining the details of corporate governance systems and processes is as follows:
At Starlite Components Limited Corporate Governance is all about maintaining avaluable relationship and trust with all stakeholders. We consider stakeholders areplaying very important role in our success and we remain committed to maximizingstakeholder value be it shareholders employees suppliers customers investorscommunities or policy makers. This approach to value creation emanates from our beliefthat sound governance system based on relationship and trust is integral to creatingenduring value for all. We have a defined policy framework for ethical conduct ofbusinesses. We believe that any business conduct can be ethical only when it rests on thenine core values of Honesty Integrity Respect Fairness Purposefulness TrustResponsibility Citizenship and Courage. The corporate governance is an important tool forthe protection of shareholder and maximization of their long term values. The objective ofCorporate Governance is to achieve excellence in business thereby increasing stakeholders'worth in the long term which can be achieved keeping the interest of stakeholders' andcomply with all rules regulations and laws. The principal characteristics of CorporateGovernance are Transparency Independence Accountability Responsibility Fairness andSocial Responsibility along with efficient performance and respecting interests of thestakeholders and the society as a whole.
28. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
The Company's philosophy on corporate governance is been founded on the fundamentalideologies of the group viz. Trust Value and Service. Obeying the law both in letterand in spirit is the foundation on which the Company's ethical standards are built. Onadopting corporate governance the Company shall make a constant endeavor to achieveexcellence in Corporate Governance on continuing basis by following the principles oftransparency accountability and integrity in functioning so as to constantly striving toenhance value for all stakeholders and the society in general. As a good corporatecitizen the Company will maintain sound corporate practices based on conscienceopenness fairness professionalism and accountability in building confidence of itsvarious stakeholders in it thereby paving the way for its long term success. We are makingcontinuous efforts to adopt the best practices in corporate governance and we believe thatthe practices we are putting into place for the company shall go beyond adherence toregulatory framework.
29. Director's 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 2021 and of the Profitof the Company for the year ended on 31st March 2021;
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.
30. Sexual Harassment Of Women At Workplace (Prevention ProhibitionAnd Redressal) Act2013
The Company is committed to provide a protective environment at workplace for all itswomen employees. To ensure that every woman employee is treated with dignity and respectand as mandated under "The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013". The Company has in place an Anti SexualHarassment Policy in line with the requirements of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. An Internal Committee has been set up toredress the complaints received regarding sexual harassment at workplace. All employeesincluding trainees are covered under this policy.
The following is the summary of sexual harassment complaints received and disposed offduring the current financial year.
Number of Complaints received : Nil Number of Complaints disposed off : Nil
31. Listing Fees-
Your Company's shares are listed in The BSE Limited Mumbai and the Annual Listing feesfor the year under review has not been paid.
32. GREEN INITIATIVE IN CORPORATE GOVERNANCE
The Ministry of Corporate Affairs (MCA) has taken a "Green Initiative in CorporateGovernance" by allowing service of documents by a Company to its Members throughelectronic mode. The move of the Ministry allows public at large to contribute to thegreen movement.
Keeping in view the underlying theme the Company will continue to send variouscommunications and documents like notice calling general meetings audited financialstatements directors' report auditor's report etc. in electronic form to the emailaddress provided by the members to the Depositories or to the Company.
To support this green initiative in full measure members who have not registered theirE-mail address and PAN Number so far are requested to register their E-mail address andPAN Number in respect of electronic holdings with the Depository through their concernedDepository Participant. Members who hold shares in physical form are requested to filltheir e-mail address and PAN Number for our records in the registration form which can bedownloaded from the Company's website for sending the documents in electronic form or elsesend a request letter directly to the Company mentioning their E-mail address and PAN No.along with self attested copy of their PAN Card.
33. DEMATERIALIZATION OF SHARES
Shareholders are requested to convert their physical holding to demat/electronic formthrough any of the Depository Participants to avoid any possibility of loss mutilationetc. of physical share certificates and also to ensure safe and speedy transaction insecurities.
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.
For and On Behalf of Board of Directors of
Starlite Components Limited
(Company under Corporate Insolvency Resolution Process)
Mr. Naren Sheth
Resolution Professional (IHP)