Your Directors are pleased to present the 38th Annual Report on the business andoperations of your Company and Audited Financial Statements for the financial year endedMarch 31 2017.
The Company's performance for the Financial Year 2016-2017 vis--vis 2015-2016 issummarized as under:
(Amount in Lacs)
|Particulars ||Standalone ||Consolidated* |
| ||2016-2017 ||2015-2016 ||2016-2017 ||2015-2016 |
|Revenue from Operations (Net) ||37392.23 ||36937.47 ||37777.08 ||37224.75 |
|Profit before interest depreciation and tax 8030.15 6248.50 ||8025.95 ||6208.42 |
|Interest ||507.54 ||561.76 ||507.54 ||561.76 |
|Depreciation ||1533.44 ||1340.58 ||1538.04 ||1346.82 |
|Profit Before Tax (PBT) ||5989.17 ||4346.16 ||5980.37 ||4299.84 |
|Provision for Tax ||2103.49 ||1504.63 ||2104.15 ||1495.37 |
|Profit After Tax (PAT) ||3885.68 ||2841.53 ||3876.22 ||2804.47 |
|Appropriations: || || || || |
|Interim Dividend ||684.46 ||1026.69 ||684.46 ||1026.69 |
|Tax on Interim Dividend ||139.34 ||209.01 ||139.34 ||209.01 |
|Transfer to General Reserve ||391.00 ||284.00 ||391.00 ||284.00 |
|Balance Carried to Balance Sheet ||12580.38 ||9909.51 ||12144.63 ||9483.21 |
Company's performance and Future outlook
During the year under review your Company has taken measures to enhance operationalefficiencies by changing Product Mix improvements at shop floor and reducing rejections.
The highlights of the Company's performance during the Financial Year 2016-17 are asunder:
Revenue from operations increased by 1.23% to Rs. 37392.23 Lacs.
Exports decreased by 20.41% to Rs. 2654.14 Lacs.
PBDIT increased by 28.51% at Rs. 8030.15 Lacs.
Profit before Tax increased by 37.80% at Rs. 5989.17 Lacs.
Net Profit increased by 36.75% to Rs. 3885.68 Lacs.
The Company has plans to expand its operations by setting up fourth manufacturingfacility either at Ahmedabad or in South vicinity which will boost up the growth rate ofthe Company. The Company has already signed a Business Collaboration Agreement with aJapan based Company named Meidoh Co. Ltd. to upgrade the existing systems and processesfor catering the Japanese Four Wheeler Passenger Vehicle Companies in India. TheManagement looks the future with optimism and hopes to do better in year to come.
Considering the good financial performance of the Company the Directors had in theirmeetings held on 8th August 2016 and 11th February 2017 recommended 50% dividend eachtime thus aggregating to 100% interim dividend for financial year 2016-2017 against 150%dividend in previousfinancial year. This interim dividend has already been paid and takingnote of this payout the Directors have not recommended any final dividend for financialyear 2016-2017 and the interim dividends already declared and paid be considered as finaldividend for the financial year
The total outflows on account of said Interim Dividends (including DividendDistribution Tax
Surcharge and Education Cess) amount to Rs. 823.80 Lacs.
Transfer to General Reserve
The Company proposes to transfer Rs. 391.00 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 in electronicform. As on March 31 2017 99.10% of the Company's total paid-up Capital representing33915360 shares are in dematerialized form. In view of numerous advantages offered by theDepository System members holding shares in physical mode are advised to avail of thefacility of dematerialization from either of the Depositories.
Capital Structure and Listing
As on 31st March 2017 the Company has Authorised Share Capital ofRs.100000000/-and Paid Up Share Capital of Rs. 68446000/-. During the year companySub-divided the face value of Rs. 10/- for 1 (one) Equity Share into face value Rs. 2/-each for 5 (Five) Equity Shares through the ordinary resolution passed through Postalballot w.e.f. 11th January 2017. The equity shares of the Company are listedwith Bombay Stock Exchange Limited and National Stock Exchange of India Limited. There areno arrears on account of payment of listing fees to the said Stock Exchanges.
The Promoters and Persons acting in concert with them hold 70.15% share Capital of theCompany as on 31st March 2017.
Subsidiaries Joint Venture and Associate Companies
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 2016-2017.
Further the Company has acquired 100% shareholding of Haryana Ispat Pvt. Ltd. on 25thNovember 2016. Hence the said Company is a wholly owned Subsidiary of our company w.e.f.25th November 2016.
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a Statementcontaining the salient features of financial statements of both the Companies JointVenture Company
Sterling Fabory India Pvt. Ltd. and Wholly Owned Subsidiary Company named Haryana IspatPvt. Ltd. by way of Form AOC1 is attached to the Accounts as an Annexure -I.In accordance with third proviso of Section 136(1) of the Companies Act 2013 the AnnualReport of the Company containing therein its standalone and the consolidated financialstatements 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
4 (four) 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. 40 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
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. Anil Aggarwal retires by rotation andbeing eligible offers himself for re-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 Company Secretary. There hasbeen no change in the key managerial personnel during the year.
Policy on Directors' appointment and remuneration and other details
The Company's policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a Director and othermatters provided in Section
178(3) and Section 134(3) (e) of the Act has been disclosed in an AnnexureIIIattached 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 Company's 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 and Rs. 119850000/- (Rupees Eleven Crores Ninety Eight Lacs Fifty ThousandOnly) in Equity Share Capital of Haryana Ispat Private Limited a Subsidiary Company till31st March 2017.
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 Committee's composition meets with requirements of Section 177 of the CompaniesAct 2013 and Regulation 18 of the Listing Regulations 2015. Members of the AuditCommittee possess financial / accounting expertise / exposure. The purpose of thisCommittee is to ensure the objectivity credibility and correctness of the Company'sfinancial 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. 43 of CorporateGovernance Report 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 theboard after seeking inputs from the Committee members on the basis of the criteria such ascomposition of committees effectiveness 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 26th December2016 performance of non-independent directors performance of the board as a whole andperformance of the Chairman was evaluated taking into account the views of Executive andNon-executive directors.
Material changes and commitments
In terms of Section 134(3)(l) of the Companies Act 2013 no material changes andcommitments which could affect the Company's financial position have occurred between theend 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 Company's 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 onthe 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 2017 the Gross Fixed Assets (including Capital WIP) stood at Rs.24425.85 Lacs and Net Fixed Assets stood at Rs. 14314.41 Lacs. Additions during the yearamounted to Rs. 3965.48 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
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 2016 (date of last Annual General Meeting) on the Ministryof Corporate Affairs' 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.
Director's Responsibility Statement
Pursuant to the requirement under section 134(3) (c) of the Companies Act 2013 withrespect to Director's Responsibility Statement it is hereby confirmed that:
(i) in the preparation of the accounts for the Financial Year ended 31stMarch 2017 the applicable accounting standards have been followed and there are nomaterial departures.
(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 tothe best of their knowledge and ability for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act 2013. The directors have confirmedthat there are adequate control & systems for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities.
(iv) the Directors have prepared the accounts for the Financial Year ended 31stMarch 2017 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 existing Statutory Auditors of the Company havebeen in office for more than 10 years and in compliance with the provisions of Section 139of Companies Act 2013 the Audit Committee and the Board of Directors vide their meetingsheld on 31st August 2017 recommended the appointment of M/s Walker Chandiok& Co. LLP as Statuary Auditors of the Company for a term of 5 years from theconclusion of forthcoming Annual General Meeting of the Company until the conclusion ofthe 43rd Annual General Meeting of the Company.
The Auditors' Report and Notes on Accounts for the financialyear 2016-2017 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 2016-2017 who has conducted the Secretarial Auditof the Company for the year 2016-2017. The Secretarial Auditors' Report doesn't containany qualification reservation or adverse remarks. The said Secretarial Audit Report isannexed 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 2016-2017.
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.
STL's existing internal financial control systems are adequate for the nature of itsbusiness and the size of its operations. These have been designed to provide reasonableassurance with and operational information complying with regard to recording andproviding reliable financial applicable statues safeguarding assets from unauthoriseduse executing transactions with proper authorisation and ensuring compliance of corporatepolicies.
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 out by a firm of external Chartered significantaudit observations and follow up actions thereon are reported to theAudit Committee.
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 theFastener manufacturing units are certified to the following standards:
STL laboratory at DLF plant is certified to ISO 17025 for Chemical Testing MechanicalTesting and
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 2017 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
The Company has not received any significant order demand or notice from anyRegulatory Authority Courts or tribunals impacting the going concern status andoperations of the Company in future.
Development of Risk Management Policy
The Company has a risk management policy the objective of which is to lay down astructured framework of identifying potential threats to the organisation on a regularbasis assessing their occurance and develop a plan to mitigate the impact of such risk onthe Company to the extent possible. The policy recognizes that all the risks can't beeliminated but these could be controlled or minimized through effective mitigationmeasures and by effective internal controls.
Vigil Mechanism/Whistle Blower Policy
Pursuant to the provisions of Section 177(9) of the Act read with Rule 7 of theCompanies (Meetings of Board and its Powers) Rules 2014 and Regulation 22 of the SEBIListing Regulations the Company has adopted a policy on Vigil Mechanism for directors andemployees to report their genuine concerns or grievance to the Vigilence Officer. Thepolicy is available on the Company' website www.stlfasteners.com.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in enclosing the Consolidated Financial Statements inaddition to the standalone financial statements pursuant to Section 129(3) of theCompanies Act 2013 (Act) and SEBI Listing Regulations and prepared in accordance with theAccounting Standards prescribed by the Institute of Chartered Accountants of India inthis regard.
The Company believes and considers its human resources as the most valuable asset.Hence continues its focus on their retention through employee engagement initiatives andprovides a holistic environment where employees get opportunities to realize theirpotential. The policy of the Company not only meets all applicable statutory requirementsbut also focuses on motivation learning and training of employees for the overalldevelopment of human resources. The directors are pleased to record their appreciation forthe services rendered by the employees and staff at all levels.
Weblink to Important documents/information
The Company has hosted certain policies/documents/information including inter aliaPolicy for determining Policy on Related Party Transactions Familiarisationprogrammes for Independent Directors etc. as per the requirement of law or otherwise onfollowing link: www.stlfasteners.com/
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: 31st August 2017 ||Chairman |
|Place: Faridabad ||DIN No. 00027380 |