BOARD'S REPORT
To the Members,
Your Company's Board of Directors ("Board") is pleased to present the fiftieth Annual Report of Stovec Industries Limited ("Stovec" or "Company") for the financial year ended 31st December, 2023 ("year under review" or "year" or "FY23").
1. FINANCIAL PERFORMANCE
( in Million except EPS)
During the year, your Company has achieved standalone revenue from operations of 2,072.56 Million as compared to 2,358.49 Million in previous year, and Operational Profit (PBT) stood at 114.20 Million as compared to 324.46 Million in previous year. A detailed overview of the global and Indian economy has been provided in the Management, Discussion and Analysis Report.
The Company has no subsidiary, associate and joint venture company during the year.
2. RESERVES AND SURPLUS
There is no amount transferred to the reserves.
3. DIVIDEND
On the occasion of 50th anniversary of the Company, the Board of Directors of the Company has declared and paid interim dividend as one-time special dividend of 157/- per equity share of 10/- each to the shareholders of the Company during the year.
Committed towards the stakeholders' return vis a vis Company's performance in the year, Board has recommended final dividend of 17/- per equity share of 10/- each (i.e. 170%) for the financial year ended on 31st December, 2023 subject to the approval of members in the ensuing annual general meeting of the Company. The aggregate dividend for the financial year ended on 31st December, 2023, on approval of the proposed final dividend at ensuing annual general meeting would be
174/- per shares amounting to 363.31 Million [including interim dividend of 157/- per share amounting to 327.82 Million] Unclaimed dividend of 1.64 Million pertaining to FY2015 has been transferred to the Investor Education and Protection Fund (‘IEPF') during the year upon completion of seven years in accordance with IEPF Rules.
4. SHARE CAPITAL
During the year under review, there was no change in the paid-up share capital of the Company. The Company's paid-up equity share capital stood at 20.88 Million as on 31st December, 2023. No shares or securities were issued by the Company during the year.
5. CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as required to be given under Section 134(3) (m) of the Companies Act, 2013 ("Act") read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure-I to this Report.
6. DEPOSITS
The Company has not accepted any deposits during the year which falls under Chapter V of the Act and rules made thereunder.
7. CORPORATE GOVERNANCE
ReportonCorporateGovernancepursuanttoSEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), is annexed to the Annual Report as Annexure-II along with the certificate of Practicing Company Secretary for compliance of the conditions of Corporate Governance.
8. AUDIT COMMITTEE
The Company has in place Audit Committee in terms of requirementsoftheActreadwithrulesframedthereunder and the Listing Regulations. The details relating to the Audit Committee are given in the Corporate Governance Report forming part of this report. During the year under review, Board has accepted all recommendations of the Audit Committee and there were no incidence of deviation from such recommendations during the financial year under review.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Garrett Forde (DIN: 09040078) Non-executive director of the Company is liable to retire by rotation at the ensuing AGM and being eligible offers himself for reappointment. The particulars of his re-appointment have been given in the notice of the AGM.
None of the directors has been disqualified as specified in section 164 of the Companies Act, 2013 nor debarred or disqualified from being appointed or act as director of the Company as specified in Regulation 34(f ) of the Listing Regulation and certificate to this effect has been obtained from the Sandip Sheth and Associates, a firm of practicing company secretaries.
Company meets the requirement of section 203 of the Companies Act, 2013 of having Key Managerial Personnel (KMP). Mr. Shailesh Wani, Managing Director (DIN: 06474766), Mr. Paras Mehta, Chief Financial Officer and Mr. Sanjeev Singh Sengar, Company Secretary are the KMP of the Company.
The Company's Independent Directors have given requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company's Code of Conduct. The Independent Directors of the Company are registered with the Indian Institute of Corporate Affairs (IICA) who maintained data bank of the independent directors and they meet the requirements of proficiency self-assessment test.
The independent directors are being updated on company's performance, industry's overview, business model, associated risks and opportunities through various presentations at the meeting of the board of directors of the company and regulatory updates are presented or circulated to the Board members from time to time towards their familiarization program.
10. BOARD MEETING
During the financial year, four meetings of the Board were held, details of which are given in the Corporate Governance Report annexed to this report.
Disclosure on the compliance of Secretarial Standards: The Board affirms to the best of their knowledge that the Company has complied with all the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India.
11. PERFORMANCE EVALUATION
The performance evaluation of the Directors, Chairman, Board as a whole and Committees of the Board were made during the year in accordance with the provisions of the Act and Listing Regulations.
Nomination and remuneration committee has evaluated the aforesaid performance taking into accounts inter alia feedback of the each of the directors on structured questionnaire made for evaluating the above performance. Independent Directors in their meeting has also evaluated the performance of Chairman and the directors individually. The results from this evaluation process have been communicated to the Chairman of the Board. The evaluation has been further elaborated in corporate governance report section.
12. CORPORATE SOCIAL RESPONSIBILITY
In accordance with Section 135 of the Act and Rules framed thereunder, the Corporate Social Responsibility ("CSR") Committee has been constituted consisting of three members, details of which is given in the Corporate Governance Report. The Company has implemented its CSR projects during the year through the implementing agencies approved by the Committee and Board. The details of CSR policy and Annual report on CSR activities of the Company as prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014, have been provided in Annexure-III to this report.
13. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT ("BRSR")
Last year, we had published our First BRSR report of the Company ahead of the mandate. We are proud to publish our 2nd BRSR of the Company for the year 2023. The BRSR would follow the format detailed in the amendment to Regulation 34(2) (f ) of Listing Regulations vide Gazette notification no. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated 10th May, 2021 and will form a part of this Annual Report. The BRSR for Financial Year 2023 is aligned with the nine principles of the National Guidelines on Responsible Business Conduct notified by the Ministry of Corporate Affairs, Government of India and annexed to this report as Annexure-IV.
14. NOMINATION AND REMUNERATION POLICY
Gist of the Nomination and Remuneration Policy of the Company is covered in Corporate Governance Report section of this report.
15. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company's internal control system commensurate with the size, scale and complexity of its operations and they are well defined. Management and the Internal Auditors monitors and evaluates the efficacy and adequacy of internal control systems of the Company with reference to the Financial Statement, its compliance with standard operating procedures, accounting procedures and policies. Reports of Internal Auditor are quarterly placed before the Audit Committee for its review. Based on the report of Internal Auditors, process owners undertake corrective actions in their respective areas and thereby strengthening the controls continuously. Significant audit observations, if any, and corrective actions suggested and taken are presented to the Audit Committee.
Our internal control system, supports orderly and efficient conduct of its business including adherence to Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information. During the year under review, no material weakness is reported and observed. Regular audit and review processes ensure that such systems are reinforced on an ongoing basis.
16. ANNUAL RETURN
Annual Return for FY2023 is available on the Company's website at www.stovec.com as required by section 92 of the Act.
17. CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
All the transactions with related parties that were entered during the year were at arms' length and in the ordinary course of business of the Company and none of them were material except one which was approved by the members in previous AGM held in 2022. Particulars of such material related party transactions in Form AOC-2 is reported as required by section 134 read with section 188 of the Companies Act, 2013 and Rule 8 (2) of the Companies (Accounts) Rules, 2014 by way of Annexure-VI to this report.
During the period under review, all the Related Party Transactions (RPTs) were placed before the audit committee for its prior approval and audit committee grants its approval or omnibus approval, as the case may be, considering, inter alia, their nature and repetitiveness. There was no material modification in any of the RPTs during the year. All RPTs including omnibus approvals are reviewed by the audit committee quarterly. The Company has framed a policy on RPTs for the purpose of identification, approval and monitoring of such transactions.
The policy on Related Party Transactions is hosted on the Company's website at www.stovec.com. Necessary related party disclosures are made in note no. 30 of notes to financial statements.
18. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS
As at 31st December, 2023, the Company has no inter-corporate loans, investments, guarantees or security as specified in Section 186 of the Act.
19. VIGIL MECHANISM
Your company believes in doing business with integrity and displays zero tolerance for any form of unethical behavior. In terms of Section 177(9) of the Act, vigil mechanism for the Directors and employees has been framed to report the unethical behavior, malpractices, wrongful conduct, frauds, violations of the Company's code of conduct, which also provides for adequate safeguards against victimization of director(s) / employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional circumstances. Audit Committee oversees and review the functioning of this policy from time to time.
The whistleblower policy of the company is available on the Company's website at www.stovec.com at https://2131785.fs1.hubspotusercontent-na1.net/ hubfs/2131785/Media%20(website)/Stovec%20 investor%20relations/6.%20Policies/Whistle%20 Blower%20Policy.pdf
20. RISK MANAGEMENT
Your company has a risk management policy pursuant to Section 134(3)(n) of the Act, 2013 read with Companies (Accounts) Rules, 2014, which guides identification of risk, that may threaten to the existence of the Company, assess them and mitigation plan.
The risk management process is designed to safeguard the organization from various risks through adequate and timely action. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The risk management framework of the Company is appropriate compared to the size of the Company and the environment under which the Company operates. The Audit Committee oversees the risk management system and its adequacy.
21. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 (3)(c) and 134 (5) of the Act, your directors confirm, to the best of their knowledge and belief: a) that in the preparation of the annual financial statements for the year ended 31st December, 2023, the applicable accounting standards have been followed and that no material departures have been made from the same; b) that such accounting policies have been selected and applied consistently and judgment 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 31st December, 2023 and of the profit 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 for the year ended 31st December, 2023, have been prepared on a going concern basis; e) that proper internal financial controls are in place in the Company and that such internal financial controls are adequate and are operating effectively; and f ) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
22. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Company has framed a policy on Sexual Harassment at workplace which aims to provide protection to women employees at workplace and prevent and redress complaints of sexual harassment and for matters connected therewith or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. An internal complaint's committee has been set up to redress complaints regarding sexual harassment.
The Company has not received any complaint under the sexual harassment of women at workplace during the year under review.
23. AUDITORS AND AUDITORS REPORT STATUTORY AUDITORS
M/s. SRBC & CO LLP, Chartered Accountants (FRN 324982E/E300003) is appointed as Statutory Auditors of the Company for a term of 5 consecutive years to hold office from the conclusion of 46th Annual General Meeting until the conclusion of 51st Annual General Meeting to be held in the year 2025 pursuant to the provisions of Section 139 of the Act read with the Companies (Audit and Auditor's) Rules, 2014.
24. MATERIAL CHANGES AND COMMITMENTS
AFFECTING FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments have occurred between the end of the financial year to which the Financial Statements relate and the date of this Report, which affect the financial position of the Company.
25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
As on date of this report, there are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company in future.
26. PARTICULARS OF EMPLOYEES
The statement related to the remuneration pursuant to Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended) is provided as Annexure-V to this Report.
The information on employees' particulars as required by Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. In terms of Section 136 of the Act, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding such information. The said information is available for inspection by any members at the Registered Office of the Company on any working day (i.e. except Saturday, Sunday and Public Holidays) up to the date of Annual General Meeting. Any Member interested in obtaining a copy of the same may write to the Company Secretary.
27. ENVIRONMENT, HEALTH AND SAFETY
The Company is committed to health and safety of its employees, contractors and visitors. We are compliant with all EHS Regulations stipulated under the Water (Prevention and Control of Pollution) Act, The Air (Prevention and Control of Pollution) Act, The Environment Protection Act and the Factories Act and Rules made thereunder. Our mandate is to go beyond compliance standards, and we are progressive in this direction.
The health and safety of our people is paramount. We prepare our people as much as possible for the potential risks in our facilities. This preparation includes adherence to clear standards, education, training, auditing and follow-up to reinforce accountability.
28. HUMAN RESOURCE & INDUSTRIAL RELATIONS
Your Directors believe that the key to the success of any Company are its employees. Industrial Relations were harmonious throughout the year. The Board wishes to place on record their sincere appreciation to the cooperation extended by all employees in maintaining cordial relations and their commitment towards the growth of the Company.
29. GENERAL a. There was no application made or proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year.
b. The Company is debt free and has no loan. Hence, there has been no such instance of valuation done for settlement or for taking loan from the Banks or Financial Institutions.
30. ACKNOWLEDGEMENT
The Board express its appreciation for the contribution, cooperation and confidence reposed by SPG Prints B.V. – the Parent Company. The Directors further express their deep sense of gratitude to the Central and State Government Ministries and departments, shareholders, customers, suppliers, business associates, bankers, employees, and all other stakeholders for their support and look forward to their continued co-operation and support.
For and on behalf of Board of Directors