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To The Members,
Standard Industries Limited.
Your Directors hereby present the 121st Annual Report together with the Audited Statements of Accounts for the Financial Year ended 31st March, 2018.
FINANCIAL RESULTS (AS ADJUSTED UNDER IND AS)
|01.04.2017 to 31.03.2018||
01.04.2016 to 31.03.2017
|( in lakhs)||
( in lakhs)
|A Gross Operating Profit before Depreciation and tax||1558.70||
|Profit before Taxes||1482.27||
|Less: Current Tax||338.21||
|Profit after Taxes||1144.06||
|B PREVIOUS YEAR (AS ADJUSTED UNDER IND AS)|
|Balance brought forward from previous year||1010.78||
|Add: Transferred from General Reserve||204.00||
|Less: Dividend on Equity Shares for 2016/17||482.47||
|Corporate Tax on Dividend for 2016/17||98.24||
The Company has drawn up its Accounts under IND AS. The figures for the previous year have been suitably adjusted, as appropriate to conform to IND AS requirements.
The Board of Directors have declared an Interim dividend of Re. 0.75 per equity share of 5/- each on 6,43,28,941 equity shares aggregating 4,82,46,705.75 for the year ended March 31st, 2018. Further, the Board of Directors proposed a final dividend of Re. 0.25 per equity share of 5/- each on 6,43,28,941 equity shares aggregating
1,60,82,235.25 for the year ended March 31st, 2018 which if approved by the Shareholders at the ensuing AGM to be held on August 20th, 2018 will be paid to those shareholders whose name appear on the Register of Members of the Company on the August 4th, 2018. Both aggregate Re. 1/- for the year ended March 31st, 2018 (Previous year Re. 0.75 per equity share of 5/- each).
|01.04.2017 to 31.03.2018||
01.04.2016 to 31.03.2017
|Interim Dividend @ Re. 0.75 per Equity Share of 5/- each on 6,43,28,941 Equity Shares||4,82,46,705.75||
|Final Dividend @ Re. 0.25 per Equity Share of 5/- each on 6,43,28,941|
|Equity Shares [Previous period Re. 0.75 per Equity Share of 5/- each on 6,43,28,941 Equity Shares]||1,60,82,235.25||
RESULTS OF OPERATIONS & THE STATE OF COMPANY AFFAIRS : TRADING DIVISION
For the Financial Year under review, i.e. April, 2017 to March, 2018, the Company has achieved a Textile Trading turnover of 999.42 lakhs in comparison with 717.19 lakhs for the previous Financial Year.
During the Financial Year, in spite of unfavourable circumstances, such as, after effect of demonitisation, implementation of Goods & Services Tax (GST) on Textile Goods, etc., the Company has achieved 39% higher turnover compared to the previous year.
In the past, Textile fabric was not subject to any tax such as VAT/Sales Tax, etc. The Industry was burdened by GST @ 5% for the majority of textile fabrics. Inspite of this adverse situation, the Company has achieved better turnover.
In addition to our regular product range such as PV Suiting, Uniform Suiting and Shirting, 100% Cotton Poplin, Lawn, Dhoti, we have added combo packing in case of ready to stitch segment. All these products have added to our sales growth.
In its effort to liquidate non-operating assets, which are more than the business needs, the Company is realizing such assets at the market value.
REAL ESTATE ACTIVITIES
Real Estate activities of the Company comprises of assets which are in excess of business needs, which the Company would liquidate based on market conditions. The Company has entered into an Agreement to assign TDR dated 18th May, 2017, to transfer and assign Development Rights Certificate ("DRC") to be issued by MCGM for TDR on surrender of Reserved Land bearing C.S. No. 211 of Parel Sewree Division admeasuring about 5,413.92 sq.mtrs. (less encroached area of approximately 1000 sq.mtrs.) or such area as may be ascertained by MCGM on actual measurement at site, at or for the consideration of 41.50 Crores subject to the terms and conditions therein mentioned. This transfer, assignment and consideration will depend on grant of quantum of DRC and on the other terms and conditions specified in the aforesaid Agreement.
The Consolidated Financial Statements of your Company for the financial year 2017-18, are prepared as per Indian Accounting Standards ("IND AS") and in compliance with applicable provisions of the Companies Act, 2013, read with the Rules issued thereunder and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The consolidated financial statements have been prepared on the basis of audited financial statements of your Company and its subsidiaries, as approved by the respective Board of Directors.
NATURE OF BUSINESS OF THE COMPANY
There has been no change in the nature of business of the Company.
The Paid-up Equity Share Capital as on 31st March, 2018, was 32,16,44,705/- comprising 6,43,28,941 Shares of 5/- each. During the financial year under review, the Company has not issued any class of securities including shares with differential voting rights nor sweat Equity Shares, nor has it granted any stock options. The Company has not bought back any of its securities during the financial year under review.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company is not engaged in manufacturing activities during the financial year under review. Therefore, there is no information to submit in respect of conservation of energy and absorption of technology. The Company has no foreign exchange earnings and outgoings during the financial year under review.
There are no outstanding deposits remaining unpaid as on 31st March, 2018. The Company has not accepted any deposits under Chapter V of the Companies Act, 2013 and rules made thereunder.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) and 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, the Directors of your Company hereby state and confirm that : (a) in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period; (c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets 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; and (e) the Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively. (f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DETAILS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Associate or Joint Venture Company. However, your Company has following Subsidiaries :
1. Standard Salt Works Ltd
2. Mafatlal Enterprises Limited
The Company has framed a "Policy for determining Material Subsidiaries" for identifying material subsidiaries. The web link where policy for determining Material subsidiaries is disclosed is http://standardindustries.co/ pdf/PolicyfordeterminingMaterialSubsidiaries.pdf
During the Financial Year, the Company has contributed a sum of 70,17,000 to various Charitable and Educational Institutions.
DIRECTORS AND KEY MANAGERIAL PERSONNEL: A. Directors
Pursuant to Article 158 of the Articles of Association of the Company read with Section 152 of the Companies Act, 2013, Smt. Divya P. Mafatlal is due to retire by rotation at the ensuing Annual General Meeting and is eligible to offer herself for reappointment.
By Notification dated 9th May, 2018, Securities and Exchange Board of India ("SEBI") amended the Listing Regulations, 2015, by introducing Regulation 17(1A) in the Listing Regulations, 2015 with effect from 1st April, 2019. According to the said Regulation, no listed Company shall appoint or continue the directorship of a person who has attained age of 75 years unless Special Resolution is passed to that effect.
Shri M. L. Apte and Shri K. J. Pardiwalla, both are above 75 years as on date and therefore, Special Resolutions are proposed in the ensuing Annual General Meeting for continuation of holding Office of Non-Executive Independent Directors of the Company, by Shri M. L. Apte and Shri K. J. Pardiwalla both of whom are above the age of 75 years as on 1st April, 2019, to comply with the above amendment.
Therefore, it is proposed to pass Special Resolutions at the ensuing Annual General Meeting of the Company for continuation of remaining term of Shri M. L. Apte (DIN 00003656) and Shri K. J. Pardiwalla (DIN 00015670) i.e. upto 13th August, 2019 and 9th February, 2020, respectively.
Necessary Resolutions for re-appointment/continuation of Directorship, past the age of 75 years, of the aforesaid Directors have been included in the Notice of the ensuing Annual General Meeting and requisite details have been provided in the Explanatory Statement of the Notice. The Board recommends their re-appointment/ continuation as Directors of the Company.
B. Declarations by Independent Directors and re-appointment:
Declarations have been received from all the Independent Directors, viz., Shri M. L. Apte, Shri Shobhan Diwanji & Shri K. J. Pardiwalla, affirming that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 164 of the Companies Act, 2013.
C. Key Managerial Personnel
Further, there is no change in the Key Managerial Personnel of the Company.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the Report.
SIGNIFICANT AND MATERIAL ORDERS
There have been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS.
The Companys internal control procedures are adequate to ensure compliance with various policies, practices and statutes in keeping with the Organizations pace of growth and increasing complexity of the operations. The Company maintains a system of internal controls designed to provide reasonable assurance regarding the following : Effectiveness and efficiency of operations Adequacy of safeguards for assets Prevention and detection of frauds and errors Accuracy and completeness of the accounting records Timely preparation of reliable financial information. Key controls have been tested during the year and corrective and preventive actions are taken for any weakness. Internal Audit System is engaged in evaluation of internal control systems. Internal Audit findings and recommendations are reviewed by the Management and Audit Committee of the Board of Directors.
INDIAN ACCOUNTING STANDARDS (IND AS)
Your Company has adopted Indian Accounting Standards ("IND AS") pursuant to Ministry of Corporate Affairs Notification dated 16th February, 2015 notifying the Companies (Indian Accounting Standard) Rules, 2015.
AUDIT OBSERVATIONS AND EXPLANATION OR COMMENTS BY THE BOARD
There were no qualifications, reservations or adverse remarks made either by the Auditors or by the Practicing Company Secretary in their respective Reports. The observations made by the Auditors read with the relevant notes on accounts is self-explanatory.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Companys subsidiaries (in Form AOC 1) is annexed to the Financial Statements of the Company.
EXTRACT OF THE ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is furnished in Form MGT-9 in Annexure A of this Report.
FORMAL ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to the provisions of the Companies Act, 2013, the Board, based on recommendations of the Nomination and Remuneration Committee, has carried out an annual performance evaluation of its own performance and that of its statutory committees viz. Audit Committee, Stakeholder Relationship Committee, Nomination and Remuneration Committee and that of the individual Directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the Industry in which the Company operates, business model of the Company and related matters and familiarization programmes attended by Independent Directors are put up on the website of the Company at the link http://www.standardindustries.co/pdf/ FamiliarizationProgrammeforIndependentDirectors.pdf
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year 4 Board Meetings were duly convened and held, the details of which are given in the Corporate Governance Report. The gap between the meetings was within the period prescribed under Section 173 of the Companies Act, 2013 and Regulation 17(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Audit Committee constituted by the Board of Directors of the Company comprises 2 Independent Non-Executive Directors in addition to the Executive Director (Wholetime Director): Shri K. J. Pardiwalla Chairman Shri M. L. Apte Member Shri D. H. Parekh Member
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
Vigil Mechanism/Whistle Blower Policy has been formulated with a view to provide a mechanism for Directors and Employees of the Company to approach the Audit Committee of the Board of Directors of the Company or any member of such Audit Committee. It aims to provide a platform for the Whistle Blower to raise concerns on serious matters regarding ethical values, probity and integrity or any violation of the Companys Code, including the operations of the Company. The said Code has been displayed on the Companys website www.standardindustries.co There have been no cases of frauds reported to the Audit Committee/Board during the financial year under review.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.
There have been no complaints received during the financial year.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The provisions of Section 135 of the Companies Act, 2013, relating to CSR are not applicable to the Company.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprises Shri K. J. Pardiwalla, Chairman, Shri M. L. Apte, Shri Shobhan Diwanji and Smt. Divya P. Mafatlal Members. The Committee has laid down the Companys Policy on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other related matters.
Pursuant to Section 134(3)(e) and Section 178 of the Companies Act, 2013, the Companys Policy on Directors appointment & remuneration is attached as Annexure B to this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans, Guarantees and Investments pursuant to the provisions of Section 186 of the Companies Act, 2013, read with Companies (Meetings of Board and its Powers) Rules, 2014, are given in the Notes to the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The particulars of contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013, are disclosed in Form No. AOC -2 (Please refer Annexure C to the Directors Report). The Company has framed a Policy on Related Party Transactions. The web link where Policy on dealing with Related Party transactions is disclosed is http://standardindustries.co/ pdf/PolicyonRelatedPartyTransactions.pdf
PARTICULARS OF EMPLOYEES
The information as per Section 197 of the Companies Act, 2013 ("the Act") read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report as Annexure D. However, as per the provisions of Section 136 of the Act, the report and accounts are being sent to the Members and others entitled thereto, excluding the information on employees remuneration particulars as required under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company in this regard.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed M/s. Nishant Jawasa & Associates, to undertake the Secretarial Audit of the Company. Report of the Secretarial Auditor is annexed herewith as Annexure E. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
RISK MANAGEMENT POLICY
During the Financial Year under review, a detailed exercise on Business Risk Management was carried out covering the entire spectrum of business operations and the Board has been informed about the risk assessment and minimization procedures. Business risk evaluation and management is an ongoing process with the Company.
Pursuant to Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate Report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Managements Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2) (e) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed to this Report.
All the properties/assets including buildings, furniture/ fixtures, etc. and insurable interests of the Company are adequately insured.
M/s. SHR & Co., Chartered Accountants, Mumbai, the existing Statutory Auditors of the Company have expressed their unwillingness to continue as the Statutory Auditors of the Company from the conclusion of the 121st Annual General Meeting. Accordingly, on the recommendation of the Audit Committee, the Board at its Meeting held on 29th May, 2018 have proposed the appointment of M/s. Arunkumar K. Shah & Co., (Firm Registration No. 126935W) Chartered Accountants, Mumbai, as the Statutory Auditors of the Company for a term of 5 years, i.e. from the conclusion of the 121st Annual General Meeting until the conclusion of the 126th Annual General Meeting.
The Company has also received a confirmation from M/s. Arunkumar K. Shah & Co., Chartered Accountants, Mumbai, that they are eligible and not disqualified under Section 141 of the Companies Act, 2013 and the Rules framed thereunder, for being appointed as Auditors of the Company. As required under Regulation 33(1)(d) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
For and on behalf of the Board
Chairman Mumbai Dated : 29th May, 2018.