sti india ltd Directors report

Dear Members,

Your Directors are pleased to present the 34^th Directors Report and the Management Discussion and Analysis Report, on the business and operations of your Company along with the audited standalone financial statements for the year ended 31^st March, 2019.

FINANCIAL PERFORMANCE

The salient features of the Companys financial results during the year are as under:

(Rs in Lacs)

Particulars	For the year ended on 31st March, 2019	For the year ended on 31st March, 2018
Sales / Revenue from Operations	4090.78	3732.83
Profit/(Loss) before Interest, Depreciation & Tax	(197.37)	(332.26)
Less: Interest	0.07	0.39
Profit/(Loss) before Depreciation & Tax	(197.44)	(332.65)
Less: Depreciation	396.95	400.84
Profit/(Loss) before Tax	(594.39)	(733.49)
Less - Provision for Taxes (including Deferred)	-	-
Profit/(Loss) After Tax	(594.39)	(733.49)
Paid Up Share Capital	2900.00	2900.00
Adjusted Net Worth of the Company	(2128.06)	(1533.67)
EPS (In Rs.) Basic & Diluted	(2.05)	(2.53)

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on March 31, 2019 has been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (hereinafter referred to as "The Act") read with the Companies (Accounts) Rules, 2014 as amended from time to time. The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Companys state of affairs, profits and cash flows for the year ended March 31, 2019. The Notes to the Financial Statements adequately cover the standalone and consolidated Audited Statements and form an integral part of this Report.

OPERATIONAL PERFORMANCE

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, 2018 registering 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 in the 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 the Company which has occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report other than those disclosed in the financial statements.

DIVIDEND

Considering the accumulated losses, the Board of Directors does not recommend any dividend for the year 31^st March, 2019.

FIXED DEPOSITS

The Company has not accepted or renewed any deposit from the public during the year under review and no amount of principle or interest was outstanding as on the balance sheet date.

SHARE CAPITAL

The paid up equity share capital of the Company as on 31^st March, 2019 stood at Rs. 2900.00 Lacs. During the year under review, the Company has neither issued shares with differential voting rights nor granted any stock options / sweat equity. None of the Directors of the Company hold shares or any other securities of the Company as on the date of this report.

During the year under review, no Stock Options were granted, vested or exercised. No Stock Options are in force as on date. Hence, there are no disclosures required to be made pursuant 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 in nature 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 the Companys Article of Association, Ms. Prachi Deshpande, Director of the Company is liable for retire by rotation at the ensuing Annual General Meeting and being eligible, offer herself 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 no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

Except above, there is no change in the Board of Directors of the Company till the date of this report.

KEY MANAGERIAL PERSONNEL

In terms of section 203 of the Companies Act, 2013, the following are the Key Managerial Personnel (KMP) of the Company:

01. Mr. Prashant Agrawal	: Managing Director
02. Mr. Mukesh Maheshwari	: Chief Financial Officer
03. Mr. Deepesh Kumar Nayak	: Company Secretary

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 they fulfill the criteria as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with amendment(s) therein (if any), (hereinafter referred to as "Listing Regulations"), so as to qualify themselves to be appointed/continued as Independent Directors.

In the opinion of the Board, the Independent Directors, fulfill the conditions of independence Specified in Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with the Companys Code of Business Conduct & Ethics. There has been no change in the circumstances affecting their status as independent directors of the Company.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees.

A separate exercise was carried out to evaluate the performance of directors individually, including Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority members etc. The Performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and Non-executive Independent Directors was also carried out by the Independent Directors at their separate meeting. The Directors expressed their satisfaction with the evaluation.

INDEPENDENT DIRECTORS FAMILIARIZATION PROGRAMME

The Company continued with its Independent directors familiarization program, when needed, for familiarizing them with companys operations, regulatory and critical aspects which would enable them to effectively discharge responsibilities and functions conferred on them. Policy about familiarization Programme is placed on the Companys website and its web link is http://www.stitextile.net.

CRITERIA AND POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS

The Nomination and Remuneration Committee (NRC) is responsible for developing competency requirements for the Board based on Industry and Strategy of the Company. The Board composition analysis reflects in depth understanding of the Companys strategies, environment, operations, financial conditions, compliance requirements, etc. In terms of Section 178(3), (4) of the Companies Act, 2013 and LODR Regulations, NRC has formulated criteria for determining qualifications, positive attributes and Independence of Directors which are as follows:

a. Qualifications: The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise, personal, professional or business standing.

b. Expertise: The person to be chosen as a Director shall have relevant expertise in the fields of textile, information technology, sales /marketing, finance, taxation, law, governance and general management.

c. Positive Attributes: Apart from the duties of Directors as prescribed in the Companies Act, 2013 and Listing Regulations, Directors are expected to demonstrate high standards of integrity, ethical behavior and independent judgment. The Directors are also expected to abide by the applicable code of conduct.

d. Independence: The Committee satisfies itself with regard to the criteria for independence of the Directors as required under applicable statutes in order to enable the Board to discharge its function and duties effectively.

e. Reappointment: In case of reappointment of Non-Executive and Independent Directors, the NRC and the Board takes into consideration the performance evaluation of the Director and his/her engagement level.

The Company has formulated and adopted the Nomination and Remuneration Policy in accordance with the provisions of Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations.

The said Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Executive, Non-Executive and Independent Directors on the Board of Directors of the Company and persons in the Senior Management of the Company, their remuneration including determination of qualifications, positive attributes, independence of Directors and other matters 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 in force).

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, your Directors would like to state:

(a) that in the preparation of the annual financial statements for the year ended 31^st March, 2019, the applicable accounting standards read with requirements set out under schedule III to the Act, have been followed along with proper explanation relating to material departures, if any;

(b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2019 and of the profit/(loss) of the Company for the year ended on that date;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(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 financial controls were adequate and were operating effectively; and

(f) that systems to ensure compliance with the provisions of all applicable laws were in 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 08^th May, 2018, 14^th August, 2018, 30^th October, 2018 and 01^st February, 2019. The details in respect of attendance of directors, sitting fees etc. are given in the Corporate Governance Report which forms part of the Annual Report.

The intervening gap between the above said meetings was within the timelines as stipulated 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:

Mr. A. Arumugham	: Chairman Independent Director
Mr. John Mathew	: Member Independent Director
Mr. Suresh Shankar Vishwasrao	: Member Independent Director
Mr. A. R. Mundra	: Member Non-executive Director

The composition of the Audit Committee is in alignment with provisions of Section 177 of the Companies Act, 2013 read with the Rules issued thereunder and Regulation 18 of the Listing Regulations. The members of the Audit Committee are financially literate and have experience in financial management.

There are no qualifications and observations raised by Audit Committee which required any comments from the Board or Management of the Company.

Further detail on the Audit Committee is being provided in the Report on Corporate Governance forming part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

In compliance with the requirements of Section 135 of the Companies Act, 2013, the Company has constituted Corporate Social Responsibility (CSR) Committee, which is responsible for fulfilling the CSR objectives. The Composition of committee is as under:

Mr. Aman Agrawal	: Chairman Non-executive Director
(w.e.f. 08th May, 2018)
Mr. A. R. Mundra	: Member Non-executive Director
Ms. Prachi Deshpande	: Member Non-executive Director

As the Company has no average net profit during the immediately preceding last three financial years, the provisions of section 135 of the Companies Act, 2013 with respect to contribution for CSR activities were not applicable to the Company during the financial year under review.

The details of the other Committees along with their composition, number of meetings held, attendance at the meetings etc. are provided in the Corporate Governance Report.

AUDITORS

Statutory Auditor

M/s V. K. Beswal & Associates, Chartered Accountants, Mumbai were appointed as Statutory Auditors of the Company at the 30th AGM. M/s V. K. Beswal & Associates have confirmed their eligibility and qualification required under section 139, 141 and other applicable provisions of the companies act, 2013 and rules issued thereunder (including any 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 as required under the Companies Act, 2013, Code of Ethics issued by Institute of Chartered Accountants of India.

Pursuant to Notification issued by the Ministry of Corporate Affairs on 07^th May, 2018 amending section 139 of the Companies Act, 2013 and the Rules framed thereunder, the mandatory requirement for ratification of appointment of Auditors by the Members at every Annual General Meeting ("AGM") has been omitted, and hence the Company is not proposing an item on ratification of appointment of Auditors at this AGM.

The Auditors Report does not contain any qualification, reservation or adverse remark on the financial statements for the year ended March 31, 2019. The statements made by the Auditors 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) of the Companies Act, 2013, to the Audit Committee of the Company during the year under review.

Secretarial Auditor

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 Directors of the Company has appointed Raghav Panchal & Co., Practicing Company Secretary, Indore (C.P. No. 16463) as the Secretarial Auditor of the Company to conduct Secretarial Audit of the compliance of applicable statutory provisions and adherence to good corporate governance 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 under review.

The report of the Secretarial Auditor for the financial year 2018-19 is annexed to this report as Annexure - I.

In compliance of the SEBI Circular No. CIR/CFD/CMD1/27/2019 dated 08^th February, 2019, Secretarial Auditor has done the Annual Secretarial Compliance for the financial year 2018-19 and the Company has submitted the report to the stock exchanges within the stipulated timeframe.

Internal Auditor

As per requirements of Section 138(1) of the Companies Act, 2013 read with rule 13 of the Companies (Accounts) Rules, 2014, the Board of Directors of the Company has appointed M/s Fadnis & Gupte, Chartered Accountants, Indore as Internal Auditor of the Company to conduct Internal Audit of business processes, financial reporting & controls, compliance with applicable laws, regulations etc. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company.

Cost Auditor

The Ministry of Corporate Affairs (MCA) vides Notification dated 31^st December, 2014 made amendment in the Companies (Cost Records and Audit) Rules, 2014, through Companies (Cost Records and Audit) Amendment Rules, 2014. As per the said amendment 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 duly signed by the Managing Director and Chief Financial Officer of the Company, on the financial statements and internal controls relating to financial reporting has been obtained and annexed with the corporate governance report.

INDUSTRIAL RELATIONS AND CORPORATE GOVERNANCE

The company provides a congenial and friendly atmosphere to its employees to maintain cordial relations and motivate them to develop their full potential. Industrial Relations throughout the year were very peaceful & cordial.

To upgrade human skills and improve their efficiencies, the Programs like Safety First, various sports tournaments, inbound & outbound training programs, recreational and team building activities, etc. are part of the total employee experience helping to promote 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 per Regulation 34(3) read with schedule V of the Listing Regulations, a detailed report on Corporate Governance is given in the annexure which forms part of this report as Annexure II.

The requisite certificate from the Statutory Auditors of the Company confirming compliance with the conditions of corporate governance is annexed with the report on corporate governance.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The informations on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with 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 required under Section 92 of the Act, is available on the Companys website viz. www.stitextile.net

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.

As per provisions of sub-section (1) of Section 188 read with the Companies (Meeting of Board and its Powers) Rules, 2014 and further amendment thereof, the Company has obtained the prior omnibus approval of Audit Committee and Board of Directors for all related party transactions to be held during the financial year 2019-20. The approval of members for all material related parties transactions is being sought in this Annual General Meeting.

Further, the statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted has been placing before the Audit Committee and the Board of Directors for review on a quarterly basis.

The details of the related party transactions as per Indian Accounting Standards (IND AS) - 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) of the Companies (Accounts) Rules, 2014, particulars of contracts or arrangements with related party (ies) are given in the prescribed Form – AOC – 2 which is annexed and marked as Annexure - IV.

The policy on Related Party Transactions as approved by the Board is hosted on the Companys website www.stitextile.net.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Companys shares by the Directors and the designated employees while in possession of unpublished price sensitive informations in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation 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 in connection with credit facilities availed by its holding company from banks and financial institutions. The terms and conditions of the guarantee so given are not prejudicial to the interest of the Company and in line with the provisions of the act. There is no transaction 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, financial reporting & controls, compliance with applicable laws, regulations etc. The Internal Control System of the Company is designed to prevent operational risks through a framework of internal controls and processes. Our internal control system ensures that all business transactions are recorded in a timely manner, the financial records are complete, resources are utilized effectively and our assets are safeguarded. We have developed robust policies, procedures, checks and balances to bring in discipline in day-to-day functions, for accurately and timely compilation of data.

In addition, the Company has appointed M/s Fadnis & Gupte, Chartered Accountants, Indore as the Internal Auditors of the company. The Internal Audit conducts on monthly basis 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 operational efficiency, effectiveness of systems and processes and assessing the internal control strengths in all areas. Further, Internal Auditors observations and findings are discussed with the concerned departments head and suitable corrective actions are taken as per the directions 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 from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

RISK MANAGEMENT

The Company has in place a mechanism to inform Board Members about the risk assessment and minimization procedures and periodical review to ensure that executive management controls risks by means of a properly defined frame work. As required under Regulation 17 of 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 Cash Flow Statement forms part of annual report.

ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

In order to prevent sexual harassment of women at work place, a new act the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. As per the said act, every company is required to set up an Internal Complaints Committee (ICC) to look into complaints relating to sexual harassment at work place of any women employee.

Accordingly, the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up an Internal Complaints Committee for implementation of said 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 a measure of good corporate governance practice, the Board has formulated a Whistle Blower Policy. The policy comprehensively provides an opportunity for any employee / director of the Company to raise any issue concerning breaches of law, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy provides for adequate safeguard against victimization of employees and directors who avail of vigil mechanism and also provide for direct access to the Audit Committee.

POLICIES AS PER SEBI LISTING REGULATIONS

As per requirements of provisions of Listing Regulations the Company has adopted the following policies:

• Policy for Preservation of Documents. (Regulation 9)

• Policy for Determination and Disclosure of Material Events. (Regulation 30(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 the Listing Regulations.

As, the Company does not have any subsidiary, hence not formulated policy on material subsidiary as stipulated under regulation 16(1)(c).

SECRETARIAL STANDARDS

The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Reporting as required by Regulation 34(2)(f) of the Listing Regulations, is not applicable to your Company for the financial year ending March 31, 2019.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There are no significant material orders passed by the Regulators / Courts which would impact 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 employees of the Company, is given in Annexure - V.

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 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 the Company in line with the provisions of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary/Compliance Officer at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by the Members at the Registered Office of the Company, 21 days before the Annual General Meeting and up to the date of the said Annual General Meeting during the business hours on working days.

None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his/her spouse and dependent children) 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 as required under regulation 34(2)(e) of the Listing Regulations forms part of this report.

LISTING ON STOCK EXCHANGES

The Companys shares are listed on BSE Limited and National Stock Exchange of India Limited.

PAYMENT TO STATUTORY AUTHORITIES

During the year under review, there were delays in payment of dues statutory authorities.

DISCLOSURES

The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

The Board of Directors state that except disclosures as given above, no further mandatory disclosure or reporting is required to give with this report.

GREEN INITIATIVE

The Ministry of Corporate Affairs had taken the Green Initiative in Report on Corporate Governance by allowing paperless compliances by Companies through electronic mode.

Your Company supports the Green Initiative and has accordingly decided to send necessary communications to its Shareholders to their respective registered E-mail addresses.

Your Company appeals to its Shareholders, who are yet to register the E-mail addresses that they take necessary steps for registering the same so that you can also become a part of 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 second largest 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 tons for 2018-19 season, which is 6% higher compared to the previous season. Global average yield for 2018/19 is being estimated at 792 kilograms per hectare. The world cotton consumption estimated at 26.8 million tons is likely to outpace production. Stock levels in China and elsewhere in the world are expected to decrease from 18.8 million tons to 18.2 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 cotton season 2018-19 as compared to 36.5 million bales in 2017-18 while the domestic consumption is estimated at 31.5 Million bales. Cotton sown on 122.23 Lac hectares across the country during the cotton season 2018-19 compared to 124.29 Lac hectares in period 2017-18. Indias average yield to decline to 501.47 kg per hectares for cotton season 2018–19 from 506.07 kg the previous year.

Among the states Gujarat stood first with 93 Lakh bales followed by Maharashtra with 76 Lakh bales and Telangana with 42.07 Lakh bales, above three states combined contributing nearly 67% to total cotton production during 2018. Though, Tamil Nadu stands first in productivity with 1214 kg per hectare cotton production.

Cotton arrival in all over India about 258 Lakh bales till end of March2019 during the cotton seasons 2018-19. The carry-over stock at the end of this season on September 30, 2019 is estimated to be 13 lakh bales, which is lower by 15 lakh bales than the previous closing stock of 28 lakh bales.

Indias cotton exports for the cotton season 2018-19 are estimated at 47 lakh bales which 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 have been signed for another 5-6 lakh bales scheduled for shipment in April-June.

Indias cotton imports are set to more than double to 31 lakh bales this year as compared to 15 lakh bales reported last year. The imports this year will set a new milestone 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 a low of 75.60 cents to a high of 100.21 cents, of which the midpoint price level will be 86 cents per pound, lower than its earlier projection of 89 cents, on a likely decline in consumption.

Financial and Operational Performance of the Company

STI India Limited (STI) is situated amidst the cotton growing belt of Madhya Pradesh having 71040 Spindles and 32 Knitting Machines and producing spun yarn and knitted grey fabric. The Company is doing Job Work for Bombay Rayon Fashions Limited, the Holding Company 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, 2018 registering 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 in the previous year

RISKS AND CONCERNS:

The Company has laid down a well-defined Risk Management Framework covering the risk, risk exposure, potential impact and risk mitigation process. Major risks identified by the business and functions are systematically addressed through mitigating actions on continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.

The Company has framed Risk Management Policy. The Audit Committee and Board review the risks and suggest steps to be taken to control and mitigate the same through a properly defined framework.

The Companys 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. The primary risk factor is raw material prices, mainly cotton which is the largest component of cost. Since cotton is an agricultural produce, it suffers from climatic volatility in the major cotton producing countries.

Other factors like shortage of skilled workers coupled with lack of uninterrupted power, 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 continuous efforts at cost reduction and modernization.

Opportunities:

• 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 Apparel, Handicraft and other segments of the industry.

• Greater Investment and FDI opportunities are available.

• Large scope for technical textile linked with growing industrialization, large infrastructure projects in stream.

Threats:

• Competition from other developing countries, especially China in domestic market also- will lead to consolidation.

• Rising prices of inputs-raw material

• Formation of trading blocks

Strengths:

• Independent & Self-Reliant industry.

• Availability of Low Cost and Skilled Manpower

• Availability of large varieties of cotton fiber and has a fast Growing synthetic fiber industry.

• India has great advantage in Spinning Sector and has a Presence in complete textile value chain

Weakness:

• The fabric and garmenting sector need modernization, which is under process.

• Infrastructural Bottlenecks and Efficiency such as, Transaction time at Ports and 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 grey fabrics 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 all assets are safe guarded and protected against loss from unauthorized use or disposition, and the transactions are authorized, recorded and reported correctly. The internal control systems 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 and qualified firms.

The Company appointed M/s. Fadnis & Gupte, Chartered Accountants, as internal auditors. The prime objective of this audit is to test the adequacy and effectiveness of all internal control systems and suggest improvements.

The Audit Committee periodically reviews the adequacy and effectiveness of the internal controls and suggests improvements so that the internal controls system be strengthened further with commensurate growth and size of the Company and concentrated its efforts to improve the system in such a way that the financial and other data should be reliable while preparing the financial statements in accordance with the applicable laws and that every transactions whether it is a financial nature or any other must describe its true nature

Human Resource Management / Environmental Safety Measures.

Employees are the key to achievement of the Companys objective and strategies. The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Various HR initiatives are taken to align the HR Policies to the growing requirement of the business by building trust, instilling loyalty and coaching for results where best employees want to work. In our business context, the employees undergo various training programmes including management development programmes to upgrade their professional, inter-personal and management skills, covering the entire spectrum of employees. Technical and safety training programmes are also conducted periodically. Our relationship with the employees continues to remain cordial and harmonious throughout the year.

Total employees strength of the company as on 31^st March, 2019 was 591 (695 as on 31^st March, 2018).

Your Company is fully committed to the safety, health and well-being of its employees and to minimizing the environmental impact on its business operations. The Company has a range of policies, including on quality, safety and health aspects to guide the employees for better work practices, actions and decisions. The Company strives to continuously improve the effectiveness of its policies and the employees are encouraged to contribute their mite in this direction. All employees are obliged to ensure that they fully understand and accept all policies and that they do fully comply with the requirements.

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires the conduct of all operations in such manner so as to ensure safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.

The Company is known for developing unique and healthy human development and management policies and their implementation in fair and transparent manner. Considering our responsibility towards employees as well as society and in view of the present scenario of the country wherein number of cases of sexual harassment against women are coming in to light, the Company realizes its social responsibility in ensuring safe environment at the work place free from sexual harassment to its female employees.

Internal Complaints Committee: Your Company has formulated an "Internal Complaints Committee (ICC)" as per the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013, that will ensure a work environment free of all forms of sexual harassment – verbal, written, physical, visual or otherwise.

The Committee is formed as per the statute and the majority of members of the Committee are woman employees. The sole objective of the Committee is to address cases of sexual harassment against women properly and judiciously. The Committee lays down the whole procedure of filing complaints, enquiry, redressal of grievance and taking action against those 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 Directors and employees to report to the management about the unethical behavior, fraud or violation of Companys Code of Conduct. The mechanism provides for adequate safeguards against victimization of employees and Directors who use such mechanism and makes provision for direct access to the chairperson of the Audit Committee in exceptional cases.

CAUTIONARY STATEMENT

Statements in the Boards Report describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

APPRECIATIONS AND ACKNOWLEDGEMENTS

The board would like to place on record its deep appreciation to the financial institutions, banks, business partners, central and state government authorities, stock exchanges and clients for their support and co-operation during the year.

We would also like to place on record our sincere appreciation for the commitment, dedication and hard work put in by every employee of the Company. We are also deeply grateful for the confidence and faith expressed by the stakeholders in the Company.

Your Directors would also like to take this opportunity to acknowledge the excellent support given by Bombay Rayon Fashions Limited, the Holding Company of your company, in providing the financial assistance and excellent management support and guidance at all levels of business. This has enabled the Company to run its business smoothly and effectively for the accomplishment of its objectives.

	For and on behalf of the Board
	Of STI India Limited
Place: Indore	Mr. Aman Agrawal
Date: 28th May, 2019	Chairman
	DIN: 00019534