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Stovec Industries Ltd.

BSE: 504959 Sector: Industrials
NSE: N.A. ISIN Code: INE755D01015
BSE 11:15 | 18 Oct 2410.20 38.60
(1.63%)
OPEN

2380.00

HIGH

2469.95

LOW

2380.00

NSE 05:30 | 01 Jan Stovec Industries Ltd
OPEN 2380.00
PREVIOUS CLOSE 2371.60
VOLUME 381
52-Week high 2949.00
52-Week low 1680.00
P/E 18.56
Mkt Cap.(Rs cr) 504
Buy Price 2410.20
Buy Qty 11.00
Sell Price 2422.00
Sell Qty 1.00
OPEN 2380.00
CLOSE 2371.60
VOLUME 381
52-Week high 2949.00
52-Week low 1680.00
P/E 18.56
Mkt Cap.(Rs cr) 504
Buy Price 2410.20
Buy Qty 11.00
Sell Price 2422.00
Sell Qty 1.00

Stovec Industries Ltd. (STOVECINDS) - Director Report

Company director report

TO THE MEMBERS

The Board of Directors of your Company are pleased to present the its 47th Report onthe business and operations of the Company together with the audited financial statementof the Company for the year ended December 31 2020.

1. FINANCIAL PERFORMANCE

(Rs in Millions except EPS)

Particulars 2020 2019
Revenue from Operations (net) 1501.17 1942.47
Other Income 51.68 54.85
Total Income: 1552.85 1997.32
Total Expenditure: 1335.89 1581.06
Gross Profit before Depreciation and Amortisation exp. 216.96 416.26
Less: Depreciation & Amortisation expenses 45.34 44.10
Profit Before Exceptional Items and Tax 171.62 372.16
Add: Exceptional items - -
Profit before tax 171.62 372.16
Current Tax 40.44 96.21
Deferred Tax Credit (5.26) (3.45)
(Excess)/Short provision of income tax of earlier years (Net) 1.81 0.03
Profit After 134.63 279.37
Add: Profit brought forward from previous year 1259.70 1122.62
Effect on account of adoption of Ind AS 115 from January 1 2019 0 (0.69)
Dividend on equity shares (Refer Note below) (125.29) (114.84)
Tax on Dividend 0 (23.61)
Remeasurement gains/(losses) on defined benefit plans (net of tax) (1.89) (3.15)
Profit available for appropriation & carried forward to Balance Sheet 1267.15 1259.70
EPS 64.48 133.80

During the year your Company has achieved standalone revenue from operations of Rs1501.17 million as compared to Rs 1942.47 million in previous year and OperationalProfit (PBT) stood atRs 171.62 million as compared to Rs 372.16 million in previous year.In the prevailing situation of Covid-19 leading to the lockdowns and disrupting theeconomies globally the Company provided greater level of attention on serving thecustomers with all covid precautions.

The Company had entered into Contract Manufacturing Agreement (CMA) with Atul SugarScreens Private Limited in 2018 for manufacturing the sugar sieves. During the year AtulSugar screens Private Limited has informed that they intend to develop their ownmanufacturing facilities and in light of the same existing CMA shall be terminated atsuitable time. Company has received notice for termination of CMA and the same is expectedto take place during early 2022. The termination of CMA shall have marginal impact on thebusiness of the Company going forward.

No material changes or commitments have occurred between the end of the financial yearand the date of this Report which affect the Financial Statements of the Company withrespect to the reporting year.

The Company has no Subsidiary Associate and Joint Venture company during the year.

2. RESERVES AND SURPLUS:

The Company has not transferred any amount to the Reserves for the financial year endedDecember 31 2020.

3. DIVIDEND:

In spite of difficult year the Board of Directors considering the Company's financialperformance and the availability of distributable profit have pleased to recommenddividend of Rs 22 per equity share of Rs 10/- each (i.e. 220%) for the financial yearended on December 31 2020 subject to the approval of members in the ensuing AnnualGeneral Meeting of the Company.

Unclaimed dividend pertaining to FY2012 amounting to

Rs 563772/- has been transferred to the Investor Education and Protection Fund(‘IEPF') in accordance with IEPF Rules.

4. SHARE CAPITAL

The Company's paid-up equity share capital continues to stand at Rs 20.88 Mn as onDecember 31 2020. During the year the Company has not issued any shares or convertiblesecurities.

5. CONSERVATION OF ENERGY TECHNOLOGY

ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required to be given under Section 134(3) (m) of the Act read with Rule8(3) of the Companies (Accounts) Rules 2014 is provided in Annexure I forms partof this Report.

6. DEPOSITS

During the year the Company has neither accepted nor renewed any deposits fallingunder Section 73 of the Act and rules made there under.

7. CORPORATE GOVERNANCE & MDA

A separate report on Corporate Governance Compliance and Management Discussion andAnalysis Report as required by SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") annexed to the Annual Report as Annexure-IIand III respectively along with the required Certificate from the Practicing CompanySecretary regarding compliance of the conditions of Corporate Governance.

8. AUDIT COMMITTEE

The Company has in place an Audit Committee in terms of requirements of the Act readwith rules framed thereunder and Listing Regulations. The details relating to the AuditCommittee are given in the Corporate Governance Report forming part of this report. Duringthe year under review all recommendations made by the Audit Committee were accepted bythe Board.

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL

On the recommendation of Nomination and Remuneration Committee (NRC) Mr. Garrett Forde(DIN: 09040078) has been appointed an additional director (Non-Executive &Non-Independent) by the board of directors of the Company with effect from February 262021 to hold office up to the date of ensuing Annual General Meeting (‘AGM').Further the NRC and Board of Directors of the Company have also recommended theappointment of Mr. Forde as Director (Non-Executive Non-Independent) to the Members atthe ensuing AGM liable to retire by rotation. Mr. Eiko Ris (DIN: 07428696) who retiresby rotation and being eligible offers himself for re-appointment. Board recommends aboveappointment/re-appointment to the members of the Company in the Notice of convening 47thAGM.

Mr. Dick Joustra (DIN:00481154) Non-Executive & Non-Independent Director hasresigned from the Directorship of the Company with effect from February 26 2021. TheBoard has placed on record its warm appreciation of the contribution made by him duringhis tenure as Director on the Board of the Company.

The Company's Independent Directors have submitted requisite declarations confirmingthat they continue to meet the criteria of independence as prescribed under Section 149(6)of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directorshave also confirmed that they have complied with Schedule IV of the Act and the Company'sCode of Conduct. The Independent Directors of the Company have registered themselves withthe Indian Institute of Corporate Affairs (‘IICA') towards the inclusion of theirnames in the data bank maintained with it and they meet the requirements of proficiencyself-assessment test.

The Company familiarized the newly appointed Director/s with respect to their roles andresponsibilities an overview of the industry the Company's business model the risks andopportunities through various presentations at meeting of the board of directors of theCompany in alignment with the requirements under the Act and other related regulations.

The Company has complied with the requirements of having Key Managerial Personnel asper the provisions of Section 203 of the Act.

10. BOARD MEETING

During the financial year ended December 31 2020 four meetings of the Board ofDirectors were held. The details of the attendance of Directors at the Board Meetings arementioned in the Corporate Governance Report annexed hereto.

The Board of Directors affirms complied with the applicable Secretarial Standards (SS)issued by the Institute of Companies Secretaries of India (SS1 and SS2) respectivelyrelating to Meetings of the Board and its Committees and the Shareholders which havemandatory application during the year under review.

11. PERFORMANCE EVALUATION

The Company has carried out performance evaluation of all the Directors ChairmanBoard as a whole and

Committees of the Board during the year in accordance with the statutory provisions ascontained in the Act and Listing Regulations. The details of Annual Performance Evaluationof Individual Directors including Chairperson Board of Directors and Committees of Boardof Directors are mentioned in the Corporate Governance Report.

12. CORPORATE SOCIAL RESPONSIBILITY

In accordance with Section 135 of the Act and Rules framed thereunder the CorporateSocial Responsibility ("CSR") Committee has been constituted consisting of threemembers details of which is given in the Corporate Governance Report. CSR policy andAnnual report on CSR activities of the Company as prescribed under the Companies(Corporate Social Responsibility Policy) Rules 2014 have been provided as Annexure-IVto this report.

13. BUSINESS RESPONSIBILITY REPORT (BRR)

SEBI vide Notification No. SEBI/LAD-NRO/GN/2019/45 dated December 26 2019 had mandatedtop 1000 listed entities based on their market capitalisation to include BRR in theannual report of the Company and your company is placed in one of the top 1000 listedentities as per list of BSE top 1000 listed entities based on their market cap. Incompliance with the business responsibility report of your Company in the SEBI prescribedformat enclosed to this annual report separately as Annexure -V.

14. REMUNERATION POLICY

The details of the Remuneration Policy are mentioned in the Corporate GovernanceReport. A Statement of Disclosure of Remuneration pursuant to Section 197 of the Act readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 (as amended) is provided as Annexure VI forming part of this Report.

15. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope of Internal Audit is well defined in theorganisation. The Internal Audit Report is regularly placed before the Audit Committee ofthe Board. The

Management and the Internal Auditor monitors and evaluates the efficacy and adequacy ofinternal control systems in the Company with reference to the Financial statement itscompliance with standard operating procedures accounting procedures and policies. Basedon the report of Internal Auditors process owners undertake corrective action in theirrespective areas and thereby strengthening the controls continuously. Significant auditobservations if any and corrective actions suggested and taken are presented to theAudit Committee of the Board.

During the year under review no reportable material weakness in the operation wasobserved. Regular audit and review processes ensure that such systems are reinforced on anongoing basis.

16. EXTRACTS OF ANNUAL RETURN

The extracts of Annual Return in Form MGT-9 as required under Section 92(3) of the Actread with Rule 12 of the Companies (Management and Administration) Rules 2014 (asamended) is uploaded on the website of the Company at www.stovec.com.

17. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES

No such contract or arrangement with Related Parties referred to in Section 188 (1) ofthe Act entered by the Company during the year which required to be disclosed in FormAOC-2.

During the reporting period all the Related Party Transactions (RPTs) were placedbefore the Audit Committee for its approval and the Committee has granted its priorapproval/omnibus approvals as the case may be for RPTs considering their nature andrepetitiveness. The Audit Committee reviewed its omnibus approval quarterly. The Companyhas framed a policy on RPTs for the purpose of identification approval and monitoring ofsuch transactions. The policy on Related Party Transactions is hosted on the Company'swebsite at www.stovec.com.

18. PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS

The Company has not given any loans or provided any security falling under Section 186of the Act. However

Investments made under the ambit of this section is provided in note no. 5 of Notes tothe Financial Statements.

19. VIGIL MECHANISM

The Company believes in doing business with integrity and displays zero tolerance forany form of unethical behavior. In terms of Section 177(9) of the Act a Vigil Mechanismfor Directors and Employees to report genuine concerns is in place and the details of suchPolicy are provided in the Corporate Governance report forming part of this Report. TheAudit Committee oversees and review the functioning of this policy from time to time. TheCompany has disclosed information about the establishment of the Whistleblower Policy onits website at www.stovec.com at https://www.spgprints.com/uploads/documents/Stovec/Stovec-policies/Whistle_ Blower_Policy.pdf.

20. RISK MANAGEMENT

The Company has formulated Risk Management Policy to monitor the risks and toaddress/mitigate those risks associated with the Company. The Board of Directors do notforesee any elements of risk which in its opinion may threaten the existence of theCompany.

21. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 (3)(c) and 134 (5) of the Act your directorsconfirm to the best of their knowledge and belief: a) that in the preparation of theannual financial statements for the year ended December 31 2020 the applicableaccounting standards have been followed and that no material departures have been madefrom the same; b) that such accounting policies have been selected and appliedconsistently and judgment and estimates have been made that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company as at December 312020 and of the profit of the Company for the year ended on that c) that proper andsufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; d) that theannual financial statements for the year ended December 31 2020 have been prepared on agoing concern basis; e) that proper internal financial controls are in place in theCompany and that such internal financial controls are adequate and are operatingeffectively; and f) that proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

22. POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has in place a Policy on Prevention of Sexual Harassment of Women atWorkplace in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunder and InternalComplaint's Committee has also been set up to redress complaints regarding sexualharassment. During the year no complaint with allegations of sexual harassment wasreceived by the Company. Disclosures in relation to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 is as under: a. Number ofcomplaints filed during the financial year

- Nil b. Number of complaints disposed of during the financial year - Nil c. Number ofcomplaints pending as on end of the financial year Nil

23. AUDITORS AND AUDITORS REPORT STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Act read with the Companies (Audit andAuditor's) Rules 2014 M/s. S R B C & CO LLP Chartered Accountants (FRN

324982E/E300003) was appointed as Statutory Auditors of the Company for a term of 5consecutive years to hold office from the conclusion of 46 th Annual GeneralMeeting until the conclusion of 51st Annual General Meeting to be held in theyear 2025.

COST RECORDS AND COST AUDITORS

In terms of Section 148 of the Companies Act 2013 read with Rule 8 of the Companies(Accounts) Rules 2014 the cost accounts and records are duly made and maintained by theCompany.

The Board of Directors on the recommendation of the Audit Committee have appointed M/sDalwadi and Associates Cost Accountants (Firm Registration No.000338) as its CostAuditors to audit the cost records of the Company for the financial year 2021 at aremuneration as mentioned in the Notice convening the 47th Annual GeneralMeeting. A certificate has been received from the Cost Auditors to the effect that theirappointment as Cost Auditors of the Company if made would be in accordance with thelimits specified under Section 141 of the Act and Rules framed thereunder. A resolutionseeking Member's approval for the remuneration payable to Cost Auditors forms part of theNotice convening 47th Annual General Meeting of the

Company and the same is recommended for approval of Members.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and SEBI (LODR)Amendment Regulation 2018 the Company has appointed M/s Sandip Sheth & AssociatesPracticing Company Secretaries (COP No. 4354) for conducting Secretarial Audit of theCompany for the financial year ended on December 31 2020 and the same is annexed to thisreport as Annexure-VII.

AUDITORS REPORT

The Reports of the Auditor and the Secretarial Auditor do not contain anyqualification reservation or adverse remark of the respective auditors and hence theyneed not require any comments or explanation under section 134(3)(f) of the Act.

There have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Act and Rules framed thereunder either to the Company or to the CentralGovernment.

24. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments have occurred between the end ofthe financial year to which the Financial Statements relate and the date of this Reportwhich affect the financial position of the Company.

25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS and As ondate of this report there are no significant material orders passed by the Regulators orCourts or Tribunals impacting the going concern status and operations of the Company infuture.

26. PARTICULARS OF EMPLOYEES

The information on employees' particulars as required under Section 197 (12) of the Actread with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 (as amended) is annexed to this Report. In terms ofSection 136 of the Act the Report and Financial Statements are being sent to the Membersand others entitled thereto excluding aforesaid Annexure. The said information isavailable for inspection by any members at the Registered Office of the Company on anyworking day (i.e. except Saturday

Sunday and Public Holidays) up to the date of Annual General Meeting. Any Memberinterested in obtaining a copy of the same may write to the Company Secretary.

27. ACKNOWLEDGEMENT

The Board express its appreciation for the contribution co-operation and confidencereposed by SPG Prints B.V. the Parent Company. The Directors further express their deepsense of gratitude to the Central and State Government Ministries and departmentsshareholders customers suppliers business associates bankers employees and all otherstakeholders for their support and look forward to their continued co-operation andsupport.

For and on behalf of Board of Directors
K. M. Thanawalla
Date: February 26 2021 Chairman
Place: Mumbai DIN: 00201749

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