stel holdings ltd share price Directors report


To,

The Members of STEL Holdings Limited,

The Board of Directors have pleasure in presenting the Thirty Third Annual Report of your company along with the audited financial statements and related annexures, for the financial year ended March 31, 2023. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. Financial Highlights

The revenue of the Company predominantly consists of dividend income. The net profit after tax of the company for the year ended March 31, 2023 was Rs. 1226.94 lakhs.

(Rs in lakhs)

Particulars

Standalone

Consolidated

FY 2022-23 FY 2021-22 FY 2022-23 FY 2021-22

Total Income

1716.17 2007.09 1716.17 2007.09

Profit / Loss before Tax

1642.34 1944.24 1641.30 1943.30

Provision for Taxation

415.40 482.48 415.40 482.48

Profit/Loss after Tax

1226.94 1461.75 1225.89 1460.81

Other Comprehensive Income for the period

6278.15 (5319.93) 6278.15 (5319.93)

2. Operations of the Company

Our Company is a Core Investment Company; hence investments are made in various group companies and dividend received from investee companies constitutes the major source of income for the Company. The standalone operating income of the Company is derived from a mix of dividend and interest income.

During the year, total income of the company was Rs 1716.17 lakhs as against 2007.09 lakhs in the previous year. The Company recorded a Net profit (after tax) of Rs 1226.94 lakhs as against Net Profit (after tax) of Rs 1461.75 lakhs in the previous year. The dividend payout ratio of few investee companies was comparatively lesser than the previous year payout ratio which resulted in lower income from operations of the company thereby reducing the profit for the year.

On a Consolidated basis, our Company achieved a revenue of Rs 1716.17 lakhs in FY 2022-23 as against 2007.09 in the previous year. Company earned a net profit of Rs 1225.89 lakhs as against Rs 1460.81 lakhs in the previous year.

3. Material Changes and Commitments 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

There are no material changes and commitments, affecting the financial position of the Company that have occurred between the close of the financial year ended 31st March, 2023 and the date of this Boards Report.

Change in the Nature of Business

During the year under review, there was no change in the nature of the business. The Company is a Core Investment Company which invests in the securities of group companies.

4. Dividend

Your directors have not declared any dividend on equity shares for the year ended March 31, 2023, in order to conserve the resources for the future years. There are no amounts to be transferred to Investor Education and Protection Fund.

Total amount lying in the Unpaid Dividend Account of the company in respect of the last seven years - Nil

When such unpaid Dividend is due for transfer to the IEPF - NA.

The amount of Dividend, if any, transferred by the company to the Investor Education and Protection Fund during the year - NA

5. Transfer to reserves

As permitted under the provisions of the Act, the Board does not propose to transfer any amount to general reserve. The closing balance of the retained earnings of the Company for FY 2022-23, after all appropriation and adjustments, was Rs 7615.79 lakhs (as on 31st March, 2022 Rs 6388.85 lakhs).

6. Share Capital

The paid-up Equity Share Capital of the Company as on March 31, 2023 was Rs 1845.54 lakhs. There was no change in the share capital during the year under review.

7. Annual Return

Pursuant to Section 92(3), Section 134(3)(a) of the Act read with Rule 12 of the Companies (Management and Administration) Rules,2014, the Company has placed a copy of the Annual Return as at 31st March, 2023 on its website at: https://www.stelholdings.com under Investor Corner tab.

8. Listing

The Equity Shares of the Company continue to remain listed on BSE Limited and National Stock Exchange of India Limited.

9. Deposits

The Company has not accepted any deposit within the meaning of subsection 31 of Section 2 and Section 73 of the Companies Act, 2013 and the Rules framed thereunder during the year under review. As on March 31, 2023, there were no deposits lying unpaid or unclaimed.

10. Particulars of Loans, Guarantees or Investments

Being an Investment Company, provisions relating to the investments as per Section 186 of the Act are not applicable to our Company and during the period under review. Our Company has not provided any loans or guarantees as prescribed under the provisions of Section 186 of the Act.

11. Conservation of Energy, Technology Absorption and Foreign Exchange earnings and Outgo

The Additional information required under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 and forming part of the Report is reproduced herewith:

(a) Conservation of energy and technology absorption:

As the Company holds investments in the other Companies, there are no particulars regarding conservation of energy and technology absorption, as required under provisions of the Act and rules made thereunder.

(b) Foreign Exchange earnings and outgo:

Total foreign exchange inflow: Nil Total foreign exchange outflow: Nil

12. Consolidated Financial Statements

In accordance with the provisions of sub-section (3) of Section 129 of the Act and SEBI Listing Regulations, the Consolidated Financial Statements of the Company, including the financial details of its subsidiary companies, forms part of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with the Accounting Standards prescribed under Section 133 of the Act.

13. Subsidiary & Associate Company

As on March 31, 2023, the Company has a wholly owned subsidiary, Doon Dooars Plantations Limited ("DDPL"), which carries on the business of forming tea estate on any lands, cultivation of tea plants and other products, preparation of tea and any other products upon any lands, purchase and sale of tea, tea seeds etc.

During the year under review, DDPL has not commenced any business operations. Hence the company have not generated any income and does not have any revenue from operations. DDPL has incurred a loss of Rs. 1.04 lakhs during the year ended March 31,2023.

The annual accounts of the subsidiary is available on the website of our company under https://stelholdings.com/subsidiaries-financials/. The same may also be made available to shareholders of the company on request. The consolidated financial statements of the company along with its subsidiary prepared for the year 2022-23 in accordance with relevant Indian Accounting Standard issued by Institute of Chartered Accountants of India forms part of the Annual Report.

The consolidated financial results of the company reflect the operations of Doon Dooars Plantations Limited ("DDPL"). As DDPL have not generated any revenue during the year, there is no significant contribution of DDPL in the overall performance of our company.

None of the companies has become or ceased to be a subsidiary or associate of the Company.

The Company holds investments in CFL Capital Financial Services Limited (CFL CFSL). The Honble High Court of Calcutta had passed an order on October 06, 2015, for liquidation of CFL CFSL based on an application filed by a creditor of the company. The office of the official liquidator, Calcutta had took over possession of the Registered office of CFL CFSL on November 19, 2015 along with books, records and assets.The investment in CFL Capital Financial Services Ltd. (CFL) does not fall under the definition of associate company within the meaning of Sec. 2(6) of the Act as the Company does not have significant influence over CFL CFSL such as representation on the Board of Directors of CFL CFSL, participation in policy making processes, transactions between the Company and CFL CFSL, interchange of managerial personnel, provision of essential technical information, etc. As a result, the Company is not treating CFL CFSL as an associate for the purpose of consolidating its financial statements.

A Report on the performance and financial position of the Subsidiary and Associate Company pursuant to Rule 5 of Companies (Accounts) Rules, 2014 is marked as Annexure -A in Form AOC-1 and forms a part of this Report.

The Company has framed a policy for determining material subsidiaries in terms of Regulation 16 (1)( c ) of the SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015 and has uploaded the same on website and at : https://stelholdings.com/code-policies/.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the Company.

14. Corporate Governance Report and Management Discussion and Analysis Report

Your company has taken adequate steps to adhere to all the relevant stipulations laid down in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 on Corporate Governance. A separate report on the Corporate Governance (Annexure-D), The Management Discussion and Analysis (Annexure- C) and the Practicing Company Secretarys certificate (Annexure-B) regarding compliance of conditions of Corporate Governance are made part of the Annual Report.

15. Directors and Key Managerial Personnel

The Board of your Company consists of the following Eight Directors:

Category

Name of Directors

Executive Director

Mr. Abraham Ittyipe
Mr. Mahesh Narayanaswamy

Non-Executive Non - Independent Director

Mr. Kaushik Roy
Mr. Alok Kalani
Mr. H.C Dalal
Mr. Umang Kanoria

Non- Executive Independent Director

Mr. Prem Kapil
Mrs. Suhana Murshed

The composition of the Board is in line with the requirements of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations, 2015. All the Directors are having vast knowledge and experience in their relevant fields and the Company had benefitted immensely by their presence in the Board. The key Board qualifications, expertise, attributes are given in details in the Report on Corporate Governance forming part of this Report.

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, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

In terms of the provisions of Section 149 of the Companies Act, 2013 and Regulation 17 (1) (a) of the SEBI (LODR) Regulations, 2015, the Company shall have at least one Woman Director on the Board. Your Company has Mrs. Suhana Murshed as woman director on the Board.

The Company has Mr. Abraham Ittyipe as its Wholetime Director, Mr. Sivaram Neelakantan Krishnan as its Chief Financial Officer and Ms. Lakshmi P.S as its Company Secretary who are designated as Key Managerial Personnel within the meaning of Section 203 of the Companies Act, 2013.

15.1 Changes in Directors and Key Managerial Personnel (KMP) during the Financial Year 2022-23

During the year under review, Mr. Sunil Bhandari, a Non- Executive Non Independent Director of the Company resigned from directorship w.e.f August 01,2022 on account of other professional commitments. Board had placed on record its deep appreciation for the invaluable support and guidance received from Mr. Sunil Bhandari during his tenure as a Non-Executive Non Independent Director of the Company.

Based on the recommendation of the Nomination and Remuneration Committee (NRC), the Board of Directors had appointed Mr. Alok Kalani as an Additional Director in Non-Executive Non-Independent category, on the Board of the Company w.e.f. August 12,2022.

The appointment was approved by the Members of the Company at the last Annual General Meeting of the Company held on September 29,2022 by passing the requisite resolution in this regard.

Apart from the above, there were no changes in the Directors and the Key Managerial Personnel (KMP) of the Company, during the year under review.

As per the provisions of the Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Mahesh Narayana swamy, Non-Executive Non Independent Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

In compliance with sub-regulation (3) of Regulation 36 of SEBI Listing Regulations and Secretarial Standard - 2 on General Meetings, brief resume, expertise and other details of Director proposed to be appointed/re-appointed are given in the Notice convening the ensuing Annual General Meeting. The Board recommends the appointment/re-appointment of Director as stated above in the ensuing Annual General Meeting.

The Policy on Directors appointment and remuneration, including the criteria for qualifications, positive attributes and independence of directors forms a part of the Corporate Governance Section of the Annual Report.

During the year under review, 4 (Four) meetings of the Board of Directors were held, details of which are set out in the Corporate Governance Report which forms a part of this Report.

15.2 Declaration by Independent Directors

In terms of the provisions of sub-section (6) of Section 149 of the Act and Regulation 16 (1) (b) and 25 (8) of SEBI Listing Regulations including amendments thereof, the Company has received declarations from all the Independent Directors of the Company that they meet with the criteria of independence, as provided in the Act and SEBI Listing Regulations. There has been no change in the circumstances affecting their status as an Independent Director during the year.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and they hold highest standards of integrity. The Independent Directors have confirmed that they have registered their names in the data bank maintained with the Indian Institute of Corporate Affairs (IICA). As per the proviso to Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules,2014, all the Independent Directors of the Company are exempted from undertaking the online proficiency self-assessment test.

15.3 Board Evaluation

The Annual Evaluation as required under the Act and the Listing Regulations has been carried out by the Board of Directors of its own performance, the performance of each individual Director (including its chairperson) and its Committees. For this purpose, an Evaluation Questionnaire which was prepared considering the criteria for evaluation in accordance with the Companys "Nomination and Remuneration Policy", approved by the Board of Directors on recommendation of the Nomination and Remuneration Committee, taking into account the applicable provisions of the Act and the rules made thereunder, the Listing Regulations read with the Circulars issued by SEBI in this regard, which inter-alia covered various aspects such as participation in meetings, contributions to strategic decision making, core governance and compliance, etc. The aforesaid Evaluation Questionnaire was circulated to all the Directors and their responses were received in a sealed envelope addressed to the Chairman of the Board of Directors. Further, the Independent Directors of the Company met once during the year on Monday, March 06,2023 to review the performance of the Non-executive directors, Chairman of the Company and performance of the Board as a whole and to assess the quality, quantity and timeliness of flow of information between the management and the Board which is necessary for the Board to effectively and reasonably perform their duties.

15.4. Policy on Appointment and Remuneration of Directors, KMP, Senior Management Personnel and Other employees

The Board based on the recommendation of the Nomination and Remuneration Committee has formulated a policy on remuneration of Directors, Key Managerial Personnel and Senior Management of the Company pursuant to the provisions of subsection (3) of Section 178 of the Act and SEBI Listing Regulations. The policy inter-alia covers the appointment, including criteria for determining qualification, positive attributes, independence and remuneration of its Directors, Key Managerial Personnel, Senior Management Personnel and other employees.

The Nomination and Remuneration Policy is enclosed as Annexure - E to this report and is also available on the website of the company at https://stelholdings.com/code-policies/

15.5 Policy on Board Diversity

The Policy on Companys diversity on the Board is provided on the website of the Company and can be assessed at https://stelholdings.com/code-policies/

16. Board Committees

Detailed composition of the mandatory Board committees namely Audit Committee, Nomination and Remuneration Committee, and Stakeholders Relationship Committee, number of meetings held during the year under review and other related details including attendance are set out in the Corporate Governance Report which forms a part of this Report.

There have been no situations where the Board has not accepted any recommendation of the Audit Committee.

17. Directors Responsibility Statement as required under Section 134 of the Companies Act, 2013.

Pursuant to the provisions of clause (c) of sub-section (3) and sub-section (5) of Section 134 of the Act, the Board of Directors of the Company hereby confirm that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards had been followed and there were no material departures;

b) the directors had 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 as at March 31, 2023 and of the profit of the company for the period ending March 31, 2023;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts for the financial year ended on March 31,2023 on a going concern basis;

e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

18. Auditors:

18.1 Statutory Auditor

The Statutory Auditors Report for the FY 2022-23 does not contain any qualification, reservation, adverse remark or disclaimer. The Report is enclosed with the financial statements in this Annual Report. M/s. G. Joseph & Associates, Chartered Accountants (Firm Registration Number: 006310S) was appointed as the statutory auditors of the Company, to hold office for a term of five consecutive years from the conclusion of the 32nd Annual General Meeting("AGM") of the Company held on September 29,2022, until the conclusion of the 37th AGM to be held held in the year 2027, as required under Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

Details in respect of frauds

No frauds were reported by auditors under sub-section (12) of section 143 of the Companies Act, 2013 read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.

18.2 Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of the Directors of the Company had appointed M/s. SEP & Associates, Practising Company Secretaries, to undertake the Secretarial Audit of the Company for the year ended March 31, 2023. The Secretarial Audit was carried out by them and the Secretarial Audit Report is marked as Annexure - F.

The said Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

There were no frauds reported by the Secretarial Auditors to the Company under sub-section (12) of Section 143 of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

18.3 Internal Auditor

The Board had appointed, M/s. CaesarPintoJohn & Associates LLP, Company Secretaries as Internal Auditor for the financial year 2022-23.

18.4 Cost Audit

The Company was not required to maintain Cost records as specified by the Central Government under Section 148 (1) of the Companies Act, 2013 and Rules made thereunder. Hence the Cost Audit is not applicable for the Company.

19. Corporate Social Responsibility

The Companys primary source of income is dividend received from its investee companies, which are already compliant with the CSR provisions under the Act. According to Rule 2(h) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the dividends received from such CSR-compliant investee companies are exempted from being included in the net profit calculation. Therefore, the provisions of Section 135 of the Companies Act, 2013 read with relevant rules pertaining to Corporate Social Responsibility is not applicable for the Company. As a result, the Company has not undertaken any CSR activity during the period under review.

20. Whistle Blower Policy

The Company promotes ethical behaviour in all its business activities and has a mechanism for reporting unethical behaviour, actual or suspected frauds or violation of the Companys Code of Conduct or ethics policy. Pursuant to Section 177 (9) & 177 (10) of the Companies Act, 2013 and as per Regulation 4 (2) (d) (iv) & 34 (3) read with Para 10 of Part C of Schedule V of the SEBI (LODR) Regulations, 2015, the Company has a Whistle Blower Policy or Vigil Mechanism in place. The mechanism provide for adequate safeguards against victimization of Director(s)/ Employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases.

No personnel have been denied access to the Chairman of the Audit Committee, for making complaint on any Integrity issue.

The said policy is available on the website of the Company which can be accessed at the link : https://stelholdings.com/code-policies/

21. Related Party Transactions

The Company has in place a Policy on Related Party Transactions for purpose of identification and monitoring of Related Party Transactions. The Policy on Related Party Transactions as approved by the Board of Directors is published on the Companys website at https://stelholdings.com/code-policies/.

All transactions entered into by the Company with related parties were in the ordinary course of business and at arms length basis. The Audit Committee grants an omnibus approval for the transactions that are in the ordinary course of the business and repetitive in nature. For other transactions, the Company obtains specific approval of the Audit Committee before entering into any such transactions. Disclosure of related party transactions as required under Indian

Accounting Standards ("IND AS") -24 have been made in the Note No. 24 to the Standalone Financial Statements. There are no materially significant related party transactions entered into by the Company with its related parties during the period under review.

The Company has not entered into any transaction with related parties during the year under review which requires reporting in Form AOC-2 in terms of the Section 134(3) and 188(1) of the Act read with Rule 8(1) of the Companies (Accounts) Rules, 2014.

There are no relationships between the Directors inter-se nor any relationship between the Key Managerial Personnel (KMP) inter-se. None of the Directors nor KMP had any pecuniary relationships or transactions vis-a-vis the Company except the sitting fees paid to Directors and remuneration paid to KMPs.

22. Risk Management

The Company is exposed to inherent uncertainties owing to the sector in which it invests and operates. Companys risk management framework helps manage risks at various levels. A brief report on Risk Management is included in the Management Discussion and Analysis report which forms a part of Annual Report.

23. Particulars of Employees

During the year under review, none of the employees, throughout the year or part of the year were in receipt of remuneration in excess of the sums as prescribed pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of managerial personnel) Rules, 2014.

The information required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure - G and forms a part of this report.

24. Internal Financial Control

The Company has in place a stabilized and effective Internal Audit and Financial Control System calibrated to the size and scale of operations of the Company. Apart from statutory audit, in compliance with Section 138 of the Companies Act, 2013, company had engaged M/s. Caesar Pinto John & Associates LLP, Company Secretaries as the Internal Auditors of the Company for the FY 2022-23.

Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis which forms part of this Report. During the year under review, there were no reportable material weaknesses in the systems or operation.

25. Significant and Material Orders Passed by the Regulators or Courts

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and companys operations in future.

26. Disclosure as per 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 the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, Contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2022-23.

No. of complaints filed during the financial year : NIL

No. of complaints disposed of during the financial year: NA

No. of complaints pending as at the end of the financial year: NIL

The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

27. Compliance of Secretarial Standards

The Company is in compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India, during the financial year.

28. Key Financial Ratios

Key Financial Ratios for the financial year ended 31st March, 2023, are provided in the Management Discussion and Analysis Report given in "Annexure - C", which forms a part of the Boards Report.

29. Other Disclosures

The Directors state that no disclosures or reporting is required in respect of the following items, as the same is either not applicable to the Company or relevant transactions / events have not taken place during the year under review :

a. The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise.

b. The Company has not issued shares (including sweat equity shares) to employees under any scheme.

c. There was no revision in the financial statements.

1. There are no applications filed for corporate insolvency resolution process, or any proceedings, pending under the Insolvency and Bankruptcy Code, 2016 as at the end of financial year March 31,2023

2. There was no instance of one-time settlement with any Bank or Financial Institution.

3. There were no instances of corporate actions like buy back of securities, payment of dividend declared, mergers and de-mergers, delisting etc.

30. Acknowledgements

The Directors hereby wish to place on record their appreciation of the efficient and loyal services rendered by each and every employee, more particularly during this challenging time, without whose whole-hearted efforts, the overall satisfactory performance would not have been possible. Your Directors also record their grateful appreciation for the encouragement, assistance and cooperation received from members, government authorities, banks, and all other stakeholders. Your Directors look forward to the long term future with confidence.

For and on behalf of the Board of Directors

Mr. Mahesh Narayanaswamy

Mr. Alok Kalani

Place : Kochi

(DIN : 01449684)

(DIN: 03082801)

Date : August 04, 2023

Director

Director