STI India Ltd.
|BSE: 513151||Sector: Industrials|
|NSE: STINDIA||ISIN Code: INE090C01019|
|BSE 00:00 | 07 Jun||STI India Ltd|
|NSE 05:30 | 01 Jan||STI India Ltd|
|BSE: 513151||Sector: Industrials|
|NSE: STINDIA||ISIN Code: INE090C01019|
|BSE 00:00 | 07 Jun||STI India Ltd|
|NSE 05:30 | 01 Jan||STI India Ltd|
Your Directors are pleased to present the 34th Directors' Report and theManagement Discussion and Analysis Report on the business and operations of your Companyalong with the audited standalone financial statements for the year ended 31stMarch 2019.
The salient features of the Company's financial results during the year are as under:
(Rs in Lacs)
As mandated by the Ministry of Corporate Affairs the financial statements for the yearended on March 31 2019 has been prepared in accordance with the Indian AccountingStandards (Ind AS) notified under Section 133 of the Companies Act 2013 (hereinafterreferred to as "The Act") read with the Companies (Accounts) Rules 2014 asamended from time to time. The estimates and judgments relating to the FinancialStatements are made on a prudent basis so as to reflect in a true and fair manner theform and substance of transactions and reasonably present the Company's state of affairsprofits and cash flows for the year ended March 31 2019. The Notes to the FinancialStatements adequately cover the standalone and consolidated Audited Statements and form anintegral part of this Report.
During the financial year under review the turnover of your company stood at Rs.4090.78 Lacs as against Rs.3732.83 Lacs in financial year ended on 31st March 2018registering an increase by 9.59%. PBIDT increased to Rs. (197.37) Lacs from Rs. (332.26)Lacs in the previous year. Interest cost decreased to Rs. 0.07 Lacs from Rs. 0.39 Lacs inthe previous year. .
MATERIAL CHANGES FROM END OF FINANCIAL YEAR TO DATE OF REPORT
There are no material change and commitment affecting the financial position of theCompany which has occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of this report other than those disclosed inthe financial statements.
Considering the accumulated losses the Board of Directors does not recommend anydividend for the year 31st March 2019.
The Company has not accepted or renewed any deposit from the public during the yearunder review and no amount of principle or interest was outstanding as on the balancesheet date.
The paid up equity share capital of the Company as on 31st March 2019 stoodat Rs. 2900.00 Lacs. During the year under review the Company has neither issued shareswith differential voting rights nor granted any stock options / sweat equity. None of theDirectors of the Company hold shares or any other securities of the Company as on the dateof this report.
During the year under review no Stock Options were granted vested or exercised. NoStock Options are in force as on date. Hence there are no disclosures required to be madepursuant to the applicable requirements of the Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014.
CHANGE IN NATURE OF BUSINESS
Company continues to operate only in one segment i.e. Textile and there is no change innature of Business of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Appointment / Re-appointment Ms. Prachi Deshpande
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Article of Association Ms. Prachi Deshpande Director of the Company is liablefor retire by rotation at the ensuing Annual General Meeting and being eligible offerherself for re-appointment. The Board recommends her re-appointment.
Brief profile of Ms. Prachi Deshpande is given in the notice of Annual General Meeting
During the year under review the non-executive directors of the Company had nopecuniary relationship or transactions with the Company other than sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Company.
Except above there is no change in the Board of Directors of the Company till the dateof this report.
KEY MANAGERIAL PERSONNEL
In terms of section 203 of the Companies Act 2013 the following are the KeyManagerial Personnel (KMP) of the Company:
No KMP has been appointed retired or resigned during the year.
DECLARATION FROM INDEPENDENT DIRECTORS
The Independent Directors have submitted their declaration to the Board that theyfulfill the criteria as stipulated in Section 149(6) of the Companies Act 2013 andRegulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 read with amendment(s) therein (if any)(hereinafter referred to as "Listing Regulations") so as to qualify themselvesto be appointed/continued as Independent Directors.
In the opinion of the Board the Independent Directors fulfill the conditions ofindependence Specified in Section 149(6) of the Act and Regulation 16(1) (b) of theListing Regulations. The Independent Directors have also confirmed that they have compliedwith the Company's Code of Business Conduct & Ethics. There has been no change in thecircumstances affecting their status as independent directors of the Company.
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations theBoard has carried out an annual performance evaluation of its own performance thedirectors individually as well as the evaluation of the working of its Committees.
A separate exercise was carried out to evaluate the performance of directorsindividually including Chairman of the Board who were evaluated on parameters such aslevel of engagement and contribution independence of judgment safeguarding the interestof the Company and its minority members etc. The Performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand Non-executive Independent Directors was also carried out by the Independent Directorsat their separate meeting. The Directors expressed their satisfaction with the evaluation.
INDEPENDENT DIRECTOR'S FAMILIARIZATION PROGRAMME
The Company continued with its Independent directors' familiarization program whenneeded for familiarizing them with company's operations regulatory and critical aspectswhich would enable them to effectively discharge responsibilities and functions conferredon them. Policy about familiarization Programme is placed on the Company's website and itsweb link is http://www.stitextile.net.
CRITERIA AND POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS
The Nomination and Remuneration Committee (NRC) is responsible for developingcompetency requirements for the Board based on Industry and Strategy of the Company. TheBoard composition analysis reflects in depth understanding of the Company's strategiesenvironment operations financial conditions compliance requirements etc. In terms ofSection 178(3) (4) of the Companies Act 2013 and LODR Regulations NRC has formulatedcriteria for determining qualifications positive attributes and Independence of Directorswhich are as follows:
a. Qualifications: The Board nomination process encourages diversity of thoughtexperience knowledge age and gender. It also ensures that the Board has an appropriateblend of functional and industry expertise personal professional or business standing.
b. Expertise: The person to be chosen as a Director shall have relevant expertise inthe fields of textile information technology sales /marketing finance taxation lawgovernance and general management.
c. Positive Attributes: Apart from the duties of Directors as prescribed in theCompanies Act 2013 and Listing Regulations Directors are expected to demonstrate highstandards of integrity ethical behavior and independent judgment. The Directors are alsoexpected to abide by the applicable code of conduct.
d. Independence: The Committee satisfies itself with regard to the criteria forindependence of the Directors as required under applicable statutes in order to enable theBoard to discharge its function and duties effectively.
e. Reappointment: In case of reappointment of Non-Executive and Independent Directorsthe NRC and the Board takes into consideration the performance evaluation of the Directorand his/her engagement level.
The Company has formulated and adopted the Nomination and Remuneration Policy inaccordance with the provisions of Companies Act 2013 read with the Rules issuedthereunder and the Listing Regulations.
The said Policy of the Company inter alia provides that the Nomination andRemuneration Committee shall formulate the criteria for appointment of ExecutiveNon-Executive and Independent Directors on the Board of Directors of the Company andpersons in the Senior Management of the Company their remuneration includingdetermination of qualifications positive attributes independence of Directors and othermatters as provided under sub-section (3) of Section 178 of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) thereof for the time being inforce).
DIRECTOR'S RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 your Directors would like tostate:
(a) that in the preparation of the annual financial statements for the year ended 31stMarch 2019 the applicable accounting standards read with requirements set out underschedule III to the Act have been followed along with proper explanation relating tomaterial departures if any;
(b) that such accounting policies as mentioned in the Notes to the Financial Statementshave been selected and applied consistently and judgments and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at 31st March 2019 and of the profit/(loss) of the Companyfor the year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of 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;
(d) that the annual financial statements have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively; and
(f) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
MEETING OF BOARD OF DIRECTORS
During the year under review 04 (Four) Board Meetings were convened and held on 08thMay 2018 14th August 2018 30th October 2018 and 01stFebruary 2019. The details in respect of attendance of directors sitting fees etc. aregiven in the Corporate Governance Report which forms part of the Annual Report.
The intervening gap between the above said meetings was within the timelines asstipulated under the Companies Act 2013 and Regulation 17 of the Listing Regulations.
COMMITTEES OF THE BOARD
The Board of Directors has the following mandatory Committees:
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders' Relationship Committee; and
4. Corporate Social Responsibility Committee.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee consists of the following members:
The composition of the Audit Committee is in alignment with provisions of Section 177of the Companies Act 2013 read with the Rules issued thereunder and Regulation 18 of theListing Regulations. The members of the Audit Committee are financially literate and haveexperience in financial management.
There are no qualifications and observations raised by Audit Committee which requiredany comments from the Board or Management of the Company.
Further detail on the Audit Committee is being provided in the Report on CorporateGovernance forming part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
In compliance with the requirements of Section 135 of the Companies Act 2013 theCompany has constituted Corporate Social Responsibility (CSR) Committee which isresponsible for fulfilling the CSR objectives. The Composition of committee is as under:
As the Company has no average net profit during the immediately preceding last threefinancial years the provisions of section 135 of the Companies Act 2013 with respect tocontribution for CSR activities were not applicable to the Company during the financialyear under review.
The details of the other Committees along with their composition number of meetingsheld attendance at the meetings etc. are provided in the Corporate Governance Report.
M/s V. K. Beswal & Associates Chartered Accountants Mumbai were appointed asStatutory Auditors of the Company at the 30th AGM. M/s V. K. Beswal & Associates haveconfirmed their eligibility and qualification required under section 139 141 and otherapplicable provisions of the companies act 2013 and rules issued thereunder (includingany statutory modification(s) or re-enactment(s) thereof for the time being in force).
The statutory auditors have confirmed that they satisfy the independence criteria asrequired under the Companies Act 2013 Code of Ethics issued by Institute of CharteredAccountants of India.
Pursuant to Notification issued by the Ministry of Corporate Affairs on 07thMay 2018 amending section 139 of the Companies Act 2013 and the Rules framed thereunderthe mandatory requirement for ratification of appointment of Auditors by the Members atevery Annual General Meeting ("AGM") has been omitted and hence the Company isnot proposing an item on ratification of appointment of Auditors at this AGM.
The Auditor's Report does not contain any qualification reservation or adverse remarkon the financial statements for the year ended March 31 2019. The statements made by theAuditors in their Report are self - explanatory and do not call for any further comments.
The statutory auditors have not reported any incident of fraud under section 143(12) ofthe Companies Act 2013 to the Audit Committee of the Company during the year underreview.
As per requirements of Section 204(1) of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company has appointed Raghav Panchal & Co. Practicing Company SecretaryIndore (C.P. No. 16463) as the Secretarial Auditor of the Company to conduct SecretarialAudit of the compliance of applicable statutory provisions and adherence to good corporategovernance practice by the Company.
The statements observations made by the Secretarial Auditors in their Report are self- explanatory and do not call for any further comments.
The secretarial auditors have not reported any incident of fraud under section 143(12)of the Companies Act 2013 to the Audit Committee of the Company during the year underreview.
The report of the Secretarial Auditor for the financial year 2018-19 is annexed to thisreport as Annexure - I.
In compliance of the SEBI Circular No. CIR/CFD/CMD1/27/2019 dated 08thFebruary 2019 Secretarial Auditor has done the Annual Secretarial Compliance for thefinancial year 2018-19 and the Company has submitted the report to the stock exchangeswithin the stipulated timeframe.
As per requirements of Section 138(1) of the Companies Act 2013 read with rule 13 ofthe Companies (Accounts) Rules 2014 the Board of Directors of the Company has appointedM/s Fadnis & Gupte Chartered Accountants Indore as Internal Auditor of the Companyto conduct Internal Audit of business processes financial reporting & controlscompliance with applicable laws regulations etc. During the year under review nomaterial or serious observation has been received from the Internal Auditors of theCompany.
The Ministry of Corporate Affairs (MCA) vides Notification dated 31stDecember 2014 made amendment in the Companies (Cost Records and Audit) Rules 2014through Companies (Cost Records and Audit) Amendment Rules 2014. As per the saidamendment rules our Company is exempted from the requirement to conduct Cost Audit.Therefore the Company did not appointed Cost Auditor for financial year 2018-19.
CEO / CFO CERTIFICATION
In terms of Regulation 17 of the Listing Regulations a Compliance Certificate dulysigned by the Managing Director and Chief Financial Officer of the Company on thefinancial statements and internal controls relating to financial reporting has beenobtained and annexed with the corporate governance report.
INDUSTRIAL RELATIONS AND CORPORATE GOVERNANCE
The company provides a congenial and friendly atmosphere to its employees to maintaincordial relations and motivate them to develop their full potential. Industrial Relationsthroughout the year were very peaceful & cordial.
To upgrade human skills and improve their efficiencies the Programs like Safety Firstvarious sports tournaments inbound & outbound training programs recreational andteam building activities etc. are part of the total employee experience helping topromote individual wellness while balancing the needs of the work family and society.
Your directors are also committed to good corporate governance as a policy. As perRegulation 34(3) read with schedule V of the Listing Regulations a detailed report onCorporate Governance is given in the annexure which forms part of this report as AnnexureII.
The requisite certificate from the Statutory Auditors of the Company confirmingcompliance with the conditions of corporate governance is annexed with the report oncorporate governance.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The informations on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed and marked as Annexure- III.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Act is available on the Company's website viz. www.stitextile.net
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the company with Promoters Key ManagerialPersonnel or other designated persons which may have potential conflict with interest ofthe company at large.
As per provisions of sub-section (1) of Section 188 read with the Companies (Meeting ofBoard and its Powers) Rules 2014 and further amendment thereof the Company has obtainedthe prior omnibus approval of Audit Committee and Board of Directors for all related partytransactions to be held during the financial year 2019-20. The approval of members for allmaterial related parties' transactions is being sought in this Annual General Meeting.
Further the statement giving details of all related party transactions entered intopursuant to the omnibus approval so granted has been placing before the Audit Committeeand the Board of Directors for review on a quarterly basis.
The details of the related party transactions as per Indian Accounting Standards (INDAS) - 24 are set out in Note No. 36 to the Standalone Financial Statements of the Company.
Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014 particulars of contracts or arrangements withrelated party (ies) are given in the prescribed Form AOC 2 which is annexedand marked as Annexure - IV.
The policy on Related Party Transactions as approved by the Board is hosted on theCompany's website www.stitextile.net.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company's shares by the Directors and the designated employeeswhile in possession of unpublished price sensitive informations in relation to the Companyand during the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.
All Directors and the designated employees have confirmed compliance with the Code.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year under review the Company has provided corporate guarantee inconnection with credit facilities availed by its holding company from banks and financialinstitutions. The terms and conditions of the guarantee so given are not prejudicial tothe interest of the Company and in line with the provisions of the act. There is notransaction of loan and investment during the year under review.
HOLDING SUBSIDIARY JOINT VENTURES & ASSOCIATES COMPANIES.
Your Company continues to be the subsidiary of Bombay Rayon Fashions Limited (BRFL).The Company does not have any Subsidiary Joint Venture and Associates Company.
INTERNAL CONTROL SYSTEM AND AUDIT
The Company has appropriate Internal Control System for business processes financialreporting & controls compliance with applicable laws regulations etc. The InternalControl System of the Company is designed to prevent operational risks through a frameworkof internal controls and processes. Our internal control system ensures that all businesstransactions are recorded in a timely manner the financial records are completeresources are utilized effectively and our assets are safeguarded. We have developedrobust policies procedures checks and balances to bring in discipline in day-to-dayfunctions for accurately and timely compilation of data.
In addition the Company has appointed M/s Fadnis & Gupte Chartered AccountantsIndore as the Internal Auditors of the company. The Internal Audit conducts on monthlybasis and the reports of auditor is placed before the Audit Committee in its next meeting.The internal audit ensures safeguarding the assets of the Company review of operationalefficiency effectiveness of systems and processes and assessing the internal controlstrengths in all areas. Further Internal Auditors observations and findings are discussedwith the concerned departments head and suitable corrective actions are taken as per thedirections of Audit Committee on an ongoing basis to improve efficiency in operation.During the year under review no material or serious observation has been received fromthe Internal Auditors of the Company for inefficiency or inadequacy of such controls.
The Company has in place a mechanism to inform Board Members about the risk assessmentand minimization procedures and periodical review to ensure that executive managementcontrols risks by means of a properly defined frame work. As required under Regulation 17of Listing Regulations the Company has formulated a Policy on Risk Management.
CASH FLOW ANALYSIS
In conformity with the provisions of Regulation 34 of the Listing Regulations the CashFlow Statement forms part of annual report.
ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances of environmental regulations and preservationof natural resources.
In order to prevent sexual harassment of women at work place a new act the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013. As per the said act every company is required to setup an Internal Complaints Committee (ICC) to look into complaints relating to sexualharassment at work place of any women employee.
Accordingly the Company has adopted a policy for prevention of Sexual Harassment ofWomen at workplace and has set up an Internal Complaints Committee for implementation ofsaid policy.
There were no incidences of sexual harassment reported during the year under review.
WHISTLE BLOWER POLICY
In compliance of the requirements of Section 177 of the Companies Act 2013 and as ameasure of good corporate governance practice the Board has formulated a Whistle BlowerPolicy. The policy comprehensively provides an opportunity for any employee / director ofthe Company to raise any issue concerning breaches of law accounting policies or any actresulting in financial or reputation loss and misuse of office or suspected or actualfraud. The policy provides for adequate safeguard against victimization of employees anddirectors who avail of vigil mechanism and also provide for direct access to the AuditCommittee.
POLICIES AS PER SEBI LISTING REGULATIONS
As per requirements of provisions of Listing Regulations the Company has adopted thefollowing policies:
Policy for Preservation of Documents. (Regulation 9)
Policy for Determination and Disclosure of Material Events. (Regulation30(4)(ii)) ?
Archival Policy (Regulation 30(8))
Policy on Material Related Party Transactions. (Regulation 23)
Familiarization Programme for independent directors as per Regulation 25 of theListing Regulations.
As the Company does not have any subsidiary hence not formulated policy on materialsubsidiary as stipulated under regulation 16(1)(c).
The Company complies with all applicable mandatory secretarial standards issued by theInstitute of Company Secretaries of India.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Reporting as required by Regulation 34(2)(f) of the ListingRegulations is not applicable to your Company for the financial year ending March 312019.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
PARTICULARS OF EMPLOYEES
The detail as required pursuant to Section 197(12) read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is given in Annexure - V.
The information required under Section 197(12) of the Companies Act 2013 read withRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and forming part of the Directors' Report for the year ended 31st March 2019.
The said Annexure is not being sent along with this Report to the Members of theCompany in line with the provisions of Section 136 of the Companies Act 2013. Members whoare interested in obtaining these particulars may write to the CompanySecretary/Compliance Officer at the Registered Office of the Company. The aforesaidAnnexure is also available for inspection by the Members at the Registered Office of theCompany 21 days before the Annual General Meeting and up to the date of the said AnnualGeneral Meeting during the business hours on working days.
None of the employees listed in the said Annexure is a relative of any Director of theCompany. None of the employees hold (by himself or along with his/her spouse and dependentchildren) more than two percent of the equity shares of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The management discussion and analysis report on the operations of the Company asrequired under regulation 34(2)(e) of the Listing Regulations forms part of this report.
LISTING ON STOCK EXCHANGES
The Company's shares are listed on BSE Limited and National Stock Exchange of IndiaLimited.
PAYMENT TO STATUTORY AUTHORITIES
During the year under review there were delays in payment of dues statutoryauthorities.
The Company does not have any scheme of provision of money for the purchase of its ownshares by employees or by trustees for the benefit of employees.
The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.
The Board of Directors state that except disclosures as given above no furthermandatory disclosure or reporting is required to give with this report.
The Ministry of Corporate Affairs had taken the Green Initiative in Report on CorporateGovernance by allowing paperless compliances by Companies through electronic mode.
Your Company supports the Green Initiative and has accordingly decided to sendnecessary communications to its Shareholders to their respective registered E-mailaddresses.
Your Company appeals to its Shareholders who are yet to register the E-mail addressesthat they take necessary steps for registering the same so that you can also become a partof the initiative and contribute towards a Greener environment.
Industry Structure and Development:
India is the largest cotton producer contributing 31.05% to world cotton the secondlargest exporter next only to USA and the second largest consumer next only to China.
In the world cotton is being cultivated in an area of 33.40 million hectares about 45%of world fiber requirement fulfilled by the cotton with a production of 27.60 million tonsfor 2018-19 season which is 6% higher compared to the previous season. Global averageyield for 2018/19 is being estimated at 792 kilograms per hectare. The world cottonconsumption estimated at 26.8 million tons is likely to outpace production. Stock levelsin China and elsewhere in the world are expected to decrease from 18.8 million tons to18.2 million tons due to the huge decrease in stocks held by China.
Cotton production in India is estimated to be lower at 32.1 million bales in cottonseason 2018-19 as compared to 36.5 million bales in 2017-18 while the domestic consumptionis estimated at 31.5 Million bales. Cotton sown on 122.23 Lac hectares across the countryduring the cotton season 2018-19 compared to 124.29 Lac hectares in period 2017-18.India's average yield to decline to 501.47 kg per hectares for cotton season 201819from 506.07 kg the previous year.
Among the states Gujarat stood first with 93 Lakh bales followed by Maharashtra with 76Lakh bales and Telangana with 42.07 Lakh bales above three states combined contributingnearly 67% to total cotton production during 2018. Though Tamil Nadu stands first inproductivity with 1214 kg per hectare cotton production.
Cotton arrival in all over India about 258 Lakh bales till end of March'2019 during thecotton seasons 2018-19. The carry-over stock at the end of this season on September 302019 is estimated to be 13 lakh bales which is lower by 15 lakh bales than the previousclosing stock of 28 lakh bales.
India's cotton exports for the cotton season 2018-19 are estimated at 47 lakh baleswhich are lower by 22 lakh bales compared to the export of 69 lakh bales during last year.India has already shipped nearly 38 lakh bales in the current season and contracts havebeen signed for another 5-6 lakh bales scheduled for shipment in April-June.
India's cotton imports are set to more than double to 31 lakh bales this year ascompared to 15 lakh bales reported last year. The imports this year will set a newmilestone after 2016 when the country imported a record 29 lakh bales of cotton.
The ICAC has predicted the average global cotton price for 2018-19 price range from alow of 75.60 cents to a high of 100.21 cents of which the midpoint price level will be 86cents per pound lower than its earlier projection of 89 cents on a likely decline inconsumption.
Financial and Operational Performance of the Company
STI India Limited (STI) is situated amidst the cotton growing belt of Madhya Pradeshhaving 71040 Spindles and 32 Knitting Machines and producing spun yarn and knitted greyfabric. The Company is doing Job Work for Bombay Rayon Fashions Limited the HoldingCompany of the Company.
During the financial year under review the turnover of your company stood at Rs.4090.78 Lacs as against Rs.3732.83 Lacs in financial year ended on 31st March 2018registering an increase by 9.59%. PBIDT increased to Rs. (197.37) Lacs from Rs. (332.26)Lacs in the previous year. Interest cost decreased to Rs. 0.07 Lacs from Rs. 0.39 Lacs inthe previous year
RISKS AND CONCERNS:
The Company has laid down a well-defined Risk Management Framework covering the riskrisk exposure potential impact and risk mitigation process. Major risks identified by thebusiness and functions are systematically addressed through mitigating actions oncontinuing basis. These are discussed at the meetings of the Audit Committee and the Boardof Directors of the Company.
The Company has framed Risk Management Policy. The Audit Committee and Board review therisks and suggest steps to be taken to control and mitigate the same through a properlydefined framework.
The Company's Board of Directors perceives the following risks as high risks areas:-
1. Currency / Foreign Exchange Risks
2. Procurement Risks
3. Business Risks
The textile business like other businesses is susceptible to various risks. Theprimary risk factor is raw material prices mainly cotton which is the largest componentof cost. Since cotton is an agricultural produce it suffers from climatic volatility inthe major cotton producing countries.
Other factors like shortage of skilled workers coupled with lack of uninterruptedpower high transaction cost and high cost of labour are hindering the progress.
However we are making all our efforts to cope with all these challenges by continuousefforts at cost reduction and modernization.
Large potential in International Market.
Product development and diversification to cater global needs.
Elimination of Quota Restrictions leads to greater Market Access.
Market is gradually shifting towards Branded Readymade Garments.
Emerging Retail Industry and Malls provide huge opportunities for the ApparelHandicraft and other segments of the industry.
Greater Investment and FDI opportunities are available.
Large scope for technical textile linked with growing industrialization largeinfrastructure projects in stream.
Competition from other developing countries especially China in domestic marketalso- will lead to consolidation.
Rising prices of inputs-raw material
Formation of trading blocks
Independent & Self-Reliant industry.
Availability of Low Cost and Skilled Manpower
Availability of large varieties of cotton fiber and has a fast Growing syntheticfiber industry.
India has great advantage in Spinning Sector and has a Presence in completetextile value chain
The fabric and garmenting sector need modernization which is under process.
Infrastructural Bottlenecks and Efficiency such as Transaction time at Portsand transportation Time.
Unfavorable labor Laws.
Lack of Trade Membership which restrict to tap other Potential market
Higher Indirect Taxes Power and Interest Rates.
Segment-wise or Product-wise Performance
The Company is engaged in the business of manufacturing of Spun Yarn and knitted greyfabrics and accordingly this is the only single reportable segment.
Internal Control System and their Adequacy
The Company has a proper and adequate system of internal controls to ensure that allassets are safe guarded and protected against loss from unauthorized use or dispositionand the transactions are authorized recorded and reported correctly. The internal controlsystems of the Company comprises of Statutory Audit Secretarial Audit and Internal Audit.The work of all the audits have been assigned to reputed external independent andqualified firms.
The Company appointed M/s. Fadnis & Gupte Chartered Accountants as internalauditors. The prime objective of this audit is to test the adequacy and effectiveness ofall internal control systems and suggest improvements.
The Audit Committee periodically reviews the adequacy and effectiveness of the internalcontrols and suggests improvements so that the internal controls system be strengthenedfurther with commensurate growth and size of the Company and concentrated its efforts toimprove the system in such a way that the financial and other data should be reliablewhile preparing the financial statements in accordance with the applicable laws and thatevery transactions whether it is a financial nature or any other must describe its truenature
Human Resource Management / Environmental Safety Measures.
Employees are the key to achievement of the Company's objective and strategies. TheCompany takes pride in the commitment competence and dedication shown by its employees inall areas of business. Various HR initiatives are taken to align the HR Policies to thegrowing requirement of the business by building trust instilling loyalty and coaching forresults where best employees want to work. In our business context the employees undergovarious training programmes including management development programmes to upgrade theirprofessional inter-personal and management skills covering the entire spectrum ofemployees. Technical and safety training programmes are also conducted periodically. Ourrelationship with the employees continues to remain cordial and harmonious throughout theyear.
Total employees strength of the company as on 31st March 2019 was 591 (695as on 31st March 2018).
Your Company is fully committed to the safety health and well-being of its employeesand to minimizing the environmental impact on its business operations. The Company has arange of policies including on quality safety and health aspects to guide the employeesfor better work practices actions and decisions. The Company strives to continuouslyimprove the effectiveness of its policies and the employees are encouraged to contributetheir mite in this direction. All employees are obliged to ensure that they fullyunderstand and accept all policies and that they do fully comply with the requirements.
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires the conduct of all operations in such manner soas to ensure safety of all concerned compliance of statutory and industrial requirementsfor environment protection and conservation of natural resources to the extent possible.
The Company is known for developing unique and healthy human development and managementpolicies and their implementation in fair and transparent manner. Considering ourresponsibility towards employees as well as society and in view of the present scenario ofthe country wherein number of cases of sexual harassment against women are coming in tolight the Company realizes its social responsibility in ensuring safe environment at thework place free from sexual harassment to its female employees.
Internal Complaints Committee: Your Company has formulated an "InternalComplaints Committee (ICC)" as per the Sexual Harassment of Woman at Workplace(Prevention Prohibition and Redressal) Act 2013 that will ensure a work environmentfree of all forms of sexual harassment verbal written physical visual orotherwise.
The Committee is formed as per the statute and the majority of members of the Committeeare woman employees. The sole objective of the Committee is to address cases of sexualharassment against women properly and judiciously. The Committee lays down the wholeprocedure of filing complaints enquiry redressal of grievance and taking action againstthose who are found guilty by the Committee in a fair and transparent manner.
Whistle Blower Policy
The Company has also formulated Whistle Blower Policy for vigil mechanism of Directorsand employees to report to the management about the unethical behavior fraud or violationof Company's Code of Conduct. The mechanism provides for adequate safeguards againstvictimization of employees and Directors who use such mechanism and makes provision fordirect access to the chairperson of the Audit Committee in exceptional cases.
Statements in the Board's Report describing the Company's objectives expectations orforecasts may be forward-looking within the meaning of applicable securities laws andregulations. Actual results may differ materially from those expressed in the statement.Important factors that could influence the Company's operations include global anddomestic demand and supply conditions affecting selling prices of finished goods inputavailability and prices changes in government regulations tax laws economicdevelopments within the country and other factors such as litigation and industrialrelations.
APPRECIATIONS AND ACKNOWLEDGEMENTS
The board would like to place on record its deep appreciation to the financialinstitutions banks business partners central and state government authorities stockexchanges and clients for their support and co-operation during the year.
We would also like to place on record our sincere appreciation for the commitmentdedication and hard work put in by every employee of the Company. We are also deeplygrateful for the confidence and faith expressed by the stakeholders in the Company.
Your Directors would also like to take this opportunity to acknowledge the excellentsupport given by Bombay Rayon Fashions Limited the Holding Company of your company inproviding the financial assistance and excellent management support and guidance at alllevels of business. This has enabled the Company to run its business smoothly andeffectively for the accomplishment of its objectives.