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Stylam Industries Ltd.

BSE: 526951 Sector: Others
NSE: N.A. ISIN Code: INE239C01012
BSE 10:46 | 25 Mar 738.05 0.05
(0.01%)
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736.20

HIGH

738.05

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736.20

NSE 05:30 | 01 Jan Stylam Industries Ltd
OPEN 736.20
PREVIOUS CLOSE 738.00
VOLUME 169
52-Week high 890.00
52-Week low 525.00
P/E 18.38
Mkt Cap.(Rs cr) 603
Buy Price 738.00
Buy Qty 50.00
Sell Price 747.90
Sell Qty 11.00
OPEN 736.20
CLOSE 738.00
VOLUME 169
52-Week high 890.00
52-Week low 525.00
P/E 18.38
Mkt Cap.(Rs cr) 603
Buy Price 738.00
Buy Qty 50.00
Sell Price 747.90
Sell Qty 11.00

Stylam Industries Ltd. (STYLAMINDUS) - Director Report

Company director report

Your Directors are pleased to present the 27th Annual Report together with financialresults for the year ended March 31 2018.

FINANCIAL PERFORMANCE SUMMARY

Rs in crores

FINANCIAL RESULTS 2017-18 2016-17
Revenue from Operations* 337.96 29430
Earnings before Interest Taxes & Depreciation 49.25 45.76
Less: a) Finance Cost 7.70 10.02
b) Depreciation 10.83 5.70
Add: Other Income 2.34 1.12
Profit before tax 33.06 31.16
Less: Tax Expense 13.00 11.52
Profit for the Period 20.06 19.64
Add: Other Comprehensive Income (Net of Taxes) (2.04) 0.66
Total Comprehensive Income 18.02 20.30
Opening balance in Retained Earnings 69.21 48.98
Less: Re-measurement of net defined benefits plan - 0.07
Add: Share premium 50.24 -
Closing balance in Retained Earnings 137.47 69.21

* Figures for Revenue from Operations are comparable numbers .i.e Excise Duty has beenremoved as same does not form part of Revenue post GST implementation.

Highlights of Performance

During the financial year 2017-18 revenue from operations increased to Rs.337.96 croreas against Rs.29430 crore in the previous year- a growth of approx. 148%.

Operating margins has increased to Rs.49.25 crore from Rs.45.76 crore in previous year.

This performance has rationale when it is factored with increase in crude oil price andother challenging business environment both in domestic and international trades.

Domestic

During the year under review the company has registered growth of 22% in net revenuefrom domestic market. This needs to view where laminate industry witnessed challenges withthe weak real estate sector and sales effected because of challenges faced by distributorsand dealers and retailers level initially for implementation of GST.

Exports

Despite a gloomy Global outlook exports (including incentives) registered a growthof around 12% in value over the export of previous year.

Credit Rating

CARE has carried out a credit rating assessment of the Company for both short term andlong term exposures in compliance with BASEL II norms implemented by RBI. The rating ofthe Company has improved rating by one notch at 'A-' for long- term bank facilities andassigned 'A Two' rating on the short term bank facilities at 'CARE A2'.

Dividend

In view of expansion strategies which will facilitate in overall growth and performanceof the company your directors do not recommend any dividend for the year under review.

Material Changes and Commitments

There has been no material changes which have occurred subsequent to the close of thefinancial year of the Company to which the Balance Sheet relates and the date of thereport such as Settlement of tax liabilities;

• Operation of patent rights;

• Depression in market value of investments;

• Institution of cases by or against the Company;

• Destruction of any assets or disposal of a substantial part of undertaking;

• Changes in capital structure; and

• Material changes concerning purchase of raw material and sale of the product.

Changes in Share Capital

During the year under review the company has issued fresh Equity under PreferentialAllotment by issue of 850000 Nos of equity shares of Face value of Rs.10/- each at aconsideration of Rs.51.08crore.

The paid up Equity Share Capital as on 31st March 2018 was Rs.8.16 crore divided into8166200 Nos of equity shares of face value of Rs.10/- each. (Previous Year Rs.7.32 croredivided into 7316200 Nos of equity shares of face val ue of Rs.10- each)

A) Issue of equity shares with differential rights

The Company did not issue equity shares with differential rights during the financialyear 2017-18.

B} Issue of sweat equity shares

The Company did not issue sweat equity shares during the financial year 2017-18.

C) Issue of employee stock options

The Company did not issue stock options during the financial year 2017-18.

D) Provision of money by Company for purchase of its own shares by employees or bytrustees for the benefit of employees

The Company does not have a scheme for purchase of its own shares by employees or bytrustees for the benefit of employees.

Deposits

During the year under review the Company did not accept any deposits from the publicwithin the ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014.

Directors and Key Managerial Personnel

It is a matter of great regret that Shri Satish Rai Gupta (DIN 0015025) ExecutiveDirector left for his heavenly abode on 15th December 2017. Your Directors place onrecord the appreciation for his invaluable guidance and stewardship and note that such agreat soul who created a landmark by his contributions to the Company and the Group wouldalways remain irreplaceable.

Appointment of Nominee Director

In accordance with the provisions of Section 161(3) and other applicable provisions ifany of the Companies Act 2013 (including any statutory modification(s) orre-enactment(s) therefore the time being in force) and the Articles of Association of theCompany Mr.Sachin Kumar Bhartiya (DIN 02122147) has been appointed as Nominee Director ofthe Company with effect from 15.07.2017. His appointment is by virtue of an agreement withLighthouse Emerging India Investors Limited. In accordance with the provisions of theCompanies Act 2013 and the Articles of Association of the Company the Nominee Directoris not liable to retire by rotation.

Appointment of Additional Director

In accordance with the provisions of Section 161 (1) and other applicable provisionsif any of the Companies Act 2013 read with Companies (Appointment and Qualification ofDirectors) Rule 2014 (including any statutory modification(s) or re-enactment(s)therefore the time being in force) and the Articles of Association of the Company Mr.Sachin Bhatla (DIN 008182443) has promoted as Additional Director -Technical with effectfrom 23.07.2018. His appointment is subject to the approval of the Members at the ensuingAnnual General Meeting of the Company in accordance with the provisions of the Act and therules made thereunder and is liable to retire by rotation.

Retirement by Rotation and subsequent re-oppointment

In accordance with the provisions of Section 152 and other applicable provisions ifany of the Companies Act 2013 read with Companies (Appointment and Qualification ofDirectors) Rule 2014 (including any statutory modification(s) or re-enactment(s)therefore the time being in force) and the Articles of Association of the CompanyMr.Manit Gupta (DIN 00889528) is liable to retire by rotation at the ensuing AGM and beingeligible have offered himself for re-appointment.

Appointment of Company Secretary and Compliance Officer

In accordance with the provisions of Section 203 of the Companies Act 2013 thecompany has appointed Mr.Ashok Swami as Company Secretary and Compliance Officer of theCompany with effect from 26.02.2018 in place of Mr. Mohinder Singh who has resigned asCompany Secretary and Compliance Officer of the company for pursuing externalopportunities.

Appointment of Chief Financial Officer

In accordance with the provisions of Section 203 of the Companies Act 2013 thecompany has elevated Mr.Sajeev Vaid as Chief Financial Officer of the Company with effectfrom 08.08.2018. The position falls vacant after resignation of Mr.Manav Gupta who hasbeen given additional responsibilities related to other fields for the growth of theCompany.

Meetings

During the year under review Fourteen Board Meetings and four Audit Committee Meetingswere convened and held the details of which are given in the Corporate Governance Report.The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.

The details of constitution of the Board and its Committees are given in the CorporateGovernance Report which forms part of this Annual Report.

Remuneration of Directors and Key Managerial Personnel

The remuneration paid to Directors is in accordance with Nomination and RemunerationPolicy formulated in accordance with the provisions of Section 178 of the Companies Act2013 Regulation 19 of the Listing Regulation (including any statutory modification(s) orre-enactment(s) thereof for the time being in force)

The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modification(s) or reenactments) thereof for the time being in force) inrespect of Director and Key Managerial Personnel is set out in the Annexure IV

Nomination and Remuneration Policy

The company has formulated and adopted the Nomination and Remuneration Policy inaccordance with the provisions of Section 178 of the Companies Act 2013 read with Part Dof Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

The Remuneration Policy is approved by the Board of Directors and is uploaded on thewebsite of the Company.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out an Annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsAudit Nomination and Remuneration Committees. The manner in which the evaluation has beencarried out has been explained in the Corporate Governance Report.

Director's Responsibility Statement

In terms of the provisions of Section 134(3){c) read with Section 134(5} of theCompanies Act 2013 the Directors state that:

a. in preparation of annual financial statements for the financial year ended March 312018 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;

b. the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for that period;

c. the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors have prepared the annual accounts on a going concern basis;

e. the proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively; and

f. the systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.

Audit Committee

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 the financial management.

Corporate Governance

Transparency is the cornerstone of the Company's philosophy and all requirements ofCorporate Governance are adhered to both in letter and spirit.

All the Committees of the Board of Directors meets at regular intervals as required interms of SEBI {Listing Obligations & Disclosure Requirements) Regulations 2015. YourBoard of Directors has taken all necessary steps to ensure compliance with all statutoryand listing requirements. The Directors and key managerial personnel of your Company havecomplied with the approved 'Code of Ethics for Board of Directors and Senior Executives'of the Company.

The Report on Corporate Governance as required under the Listing Agreement forms partof and is annexed herewith marked as "Annexure - II" The Auditors' Certificateon compliance with Corporate Governance requirements is also attached to this Report.

Business Excellence and Quality Initiatives

The Company continues to be guided by the philosophy of business excellence to achievesustainable growth. Customer-focused culture towards building long-term customersrelationships is the key agenda of the Management.

The Company follows the principles of total quality management. The Company continuesto be certified under ISO 9001: 2015 certifications for complete range of laminatesmanufactured.

Auditors and Auditors' Report Statutory Auditor:

M/s Mittal Goel & Associates Chartered Accountants (Firm Registration No. 017577N)are proposed to be appointed as auditors for a period of 5 years commencing from theconclusion of this AGM till the conclusion of the 31st AGM of the Company to be held in2022 subject to ratification of their appointment at every AGM if so required under theAct.

M/s Mittal Goel & Associates have confirmed their eligibility and qualificationrequired under Section 139 141 and other applicable provisions of the Companies Act 2013and Rules issued thereunder (including any statutory modification(s) or re-enactment(s)thereof for the time being in force)

The Auditors' Report for the financial year ended 31st March 2018 onfinancial statements of the Company is a part of this Annual Report. The Auditors' Reportfor the financial year ended 31st March 2018 does not contain anyqualification reservation or adverse remarks.

Cost Auditor:

Pursuant to Section 148 of the Companies Act 2013 read with the Companies {CostRecords and Audit) Rules 2014 (as amended) the Company has appointed M/s C L. Ransal& Associates Cost Accountants as the Cost Auditor of the Company for audit of thecost records maintained by the Company for the financial year 2018-19. A resolutionregarding ratification of remuneration of Cost Auditor is being sought from the Members ofthe Company at ensuing Annual General Meeting.

The Company has received consent from M/s. CL Bansal & Associates CostAccountants to act as the Cost Auditor for conducting audit of the cost records for thefinancial year 2018-19

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s Sanjiv Goel & Co. Practicing Company Secretary to undertakeSecretarial Audit of the Company for the financial year 2017-18.

The Secretarial Audit Report in Form MR-3 for the financial year ended March 31 2018is annexed herewith as "Annexure-.l". The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.

Extract of the Annual Report

The extract of the Annual Return of the Company as on 31s March 2018 inForm No. MGT - 9 in accordance with Section 92(3) of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 are set out in the "AnnexureIV" of this report.

Related Party Transactions

All related party transactions that were entered during the financial year were in theordinary course of business and on an arm's length basis. There were no materiallysignificant related party transactions entered into by the Company with PromotersDirectors Key Managerial Personnel or other persons which may have a potential conflictwith the interest of the Company.

All related party transactions are placed before the Audit Committee for approval.Prior omnibus approval is also obtained from the Audit Committee for the related partytransactions which are of repetitive nature which can be foreseen and accordingly therequired disclosures are made to the Audit Committee on quarterly basis in terms of theapproval of the Committee.

The policy on materiality of related party transactions and also on dealing withrelated party transactions as approved by the Audit Committee and the Board of Directorsis uploaded on the website of the Company.

Since all related party transactions entered into by the Company were in the ordinarycourse of business and were on an arm's length basis. Form AOC - 2 is not applicable tothe Company

Loans Guarantees or Investments

Pursuant to Section 186 of the Companies Act 2013 Company has not directly orindirectly

a) given any loan to any person or other body corporate other than usual advancesenvisaged in a contract of supply of materials if any

b) given any guarantee or provide security in connection with a loan to any other bodycorporate or person and

c) acquired by way of subscription purchase or otherwise the securities of any otherbody corporate exceeding sixty percent of its paid-up share capital free reserve andsecurities premium account or one hundred percent of its free reserves and securitiespremium account whichever is more.

Vigil Mechanism/ Whistle Blower Policy

The Whistleblower Policy has been approved and adopted by Board of Directors of theCompany in compliance with the provisions of Section 177 (10) of the Companies Act 2013and Regulation 22 of the Listing Regulations

The Policy also provides protection to the employees and business associates who reportunethical practices and irregularities.

The policy is available on Company's website.

Policy on Prevention of Sexual Harassment at Workplace

The Company's Policy on Prevention of Sexual Harassment at Workplace is in line withthe requirements of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 (Prevention of Sexual Harassment of Women at Workplace Act) andRules framed thereunder.

During the year under review no case was filed under the Sexual Harassment of Women atWorkplace {Prevention Prohibition & Redressal) Act 2013.

Corporate Social Responsibility

Corporate Social Responsibility (CSR) encompasses much more than social outreachprogrammes.

In accordance with the requirements of Section 135 of Companies Act 2013 Company hasconstituted a Corporate Social Responsibility Committee.

The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy)Rules 2014 is annexed hereto as "Annexure - III"

The Company has contributed Rs.0.58 crore towards various CSR activities during theyear the Company has increased/scaled up its CSR intervention in the areas prescribed inthe Company's CSR policy and there was an increase of more than 74% in the total CSRspending on year to year basis.

As a socially responsible Company your Company is committed to increase its C$R impactand spend over the coming years with its aim of playing a larger role in India'ssustainable development by embedding wider economic social and environmental objectives.

The initiatives taken by the Company will certainly help in deploying larger fundsacross social sectors and achieve rapid scale in utilizing its full CSR budget in thecoming financial years as well.

Internal Control

The Company has proper and adequate system of internal controls. The external auditfirm has been appointed as internal auditors to conduct regular audits that are performedas per the annual Audit Plan. The Internal Audit team conducts its audits which arecarried out at factory branches and corporate offices with the objective to evaluate andcontinuously improve the effectiveness of internal controls and governance processes.Additional areas if any identified during the year are taken up as special assignments.The audit findings are reviewed by the Audit Committee of Directors and corrective actionas deemed necessary is taken. Company also has laid down procedures and authority levelswith suitable checks and balances encompassing the entire operations of the Company.

Fraud Reporting

During the year under review no fraud was reported by the Auditors of the Company tothe Audit Committee or the Board of directors.

Occupational Health Safety and Environment

Company has effectively deployed policies on Safety Occupational Health &Environment at all locations. It continually focus on improving the effectiveness ofsystem processes

Brand Visibility

During the year under review the Company has conducted various connect initiativeslike Architects' meet Distributors meet Dealers meet to drive brand visibility anddemand generation. This year also the Company budgeted an amount on Branding activitiesto attract new customers to create bigger footprint to enable expansion into new markets.

Insurance

The Company's properties including building plant machineries etc and stocks areadequately insured against risks.

Listing

The equity shares continue to be listed on BSE Limited (BSE). The Company has paidannual listing fee for the financial year 2018-19

Compliance with Code of Ethics for Board of Conduct for Directors and Senior ManagementPersonnel

All Directors and Senior Management Personnel have affirmed Compliance with the Code ofEthics for Board of Directors and Senior Executives. A Declaration to that effect isattached with the Corporate Governance Report.

Detail of Significant and Material Orders Passed by Regulators or Courts of TribunalsImpacting the Going Concern Status and Company's Operation in Future

There are no significant material orders passed by the Regulators/Courts which wouldimpact the Going Concern status of the Company a nd its future Operations.

Conservation of Energy and Technology Absorption and Foreign Exchange Earnings andOutgo Information pursuant to Clause (m) of Sub-Section (3) of Section 134 of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexedherewith as "Annexure V".

Human Resources

The Company recognizes that the purpose of Human Resources is to be a catalyst andchange agent.

Over the years there has been a paradigm shift in the approach adopted by EmployeeRelations through different initiatives in various capacities. We drive sustainable growthand have been instrumental in bringing in thought leadership in building strong employeerelations. The Company is focused on building a high performance culture with a growthmindset Developing and strengthening capabilities for all employees remained Company's anongoing priority. The Company maintains momentum on building speed and simplification inways of working.

Particulars of Employees

The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is 'Not Applicable' as no employee is in receipt of remuneration in excess of the limitsprescribed under this Section

CEO and CFO Certification

Pursuant to Clause 49 of the Listing Agreement the CEO and CFO certification isattached with the annual report. The Managing Director and CEO and the Chief FinancialOfficer also provide quarterly certification on financial results while placing thefinancial results before the Board in terms of Clause 41 of the Listing Agreement.

Acknowledgement

The Board place on record their deep appreciation to employees at all levels for theirhard work dedication and commitment.

The Board also wishes to place on record its appreciation for the support andcooperation the Company has been receiving from its suppliers redistribution stockiestretailers and others associated with the Company as its trading partners.

The Directors also take this opportunity to thank all Investors Clients VendorsBanks Government and Regulatory Authorities and Stock Exchanges for their continuedsupport.

On behalf of the Board
Place: Chandigarh Jagdish Gupta
Date: 01" September 201S Managing Director