avatar SPGPrints B.V. Manufacturing
  • Location: NOORD-BRABANT 
  • Founded: 1972-11-23
  • Website:

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    46th Annual REPORT 2019


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    Reading thRough... Corporate Overview 01-08 Statutory Reports 09 - 66 Stovec Industries Limited at a Glance 02 Notice 09 Financial Highlights 04 Board’s Report 21 Chairman’s Message 05 Corporate Governance 27 Relentless Focus on Innovation 06 Management Discussion and Analysis 41 Corporate Information 08 Financial Statements 67 - 115 Standalone Financials 67 Please find our online version at https://www.spgprints.com/spgprints-group/ Investor information companies-agents/stovec-industries-ltd CIN: or simply scan to download L45200GJ1973PLC050790 BSE Code: SToVACQ Dividend Recommended: ` 60 per equity share of ` 10/- each AGM Day, Date & Time: Wednesday, September 16, 2020 at 3.00 pm Disclaimer: This document contains statements AGM Venue: about expected future events and financials of Stovec Industries Limited, which are forward-looking. By Through Video Conferencing (VC)/ their nature, forward-looking statements require other Audio Visual Means (oAVM) the Company to make assumptions and are subject to inherent risks and uncertainties. There could be Contact detail: significant risk that the assumptions, predictions and other forward-looking statements may not prove to T +91 (0)79 6157 2300 be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of Fax +91 (0)79 2571 0406 factors could cause assumptions, actual future results Email at secretarial@stovec.com and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors referred to in the Management Discussion and Analysis of this Annual Report.


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    Delivering innovative solutions. Building reliable standards. Innovation is more than a strategy for us. It is a way of life at Stovec and continues to be the driving force behind our reliable quality standards. As one of the leading names in the textile printing landscape, we deliver the best-in-class solutions to a growing fraternity of customers across the world. During the year under review, we introduced new products and upgraded the existing ones. We employedthe latest technology in our operations that help us meet the dynamic needs of our customers. As we seek to cross new milestones of growth, we continue to focus on expanding our reach and creating value for all with a long-term perspective. `4,272.60 Mn `1,937.05 Mn Market capitalisation as on December 31, 2019 Revenue for FY 2019 `375.98 Mn EBIDTA for FY 2019 EBIDTA: Earnings before Interest, Depreciation, Taxes and Amortisation 46th ANNUAL REPORT 2019 1


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    Stovec induStRieS Limited at a gLance Who we are What we do Founded in 1973, Stovec Industries Limited Our business is broadly segregated into two (hereafter ‘Stovec’ or ‘The Company’) is a segments in the textile printing industry: subsidiary of the renowned SPGPrints Group. CAPITAL GOODS Established in 1947 and head-quartered in CONSUMABLE Boxmeer, Netherlands, SPGPrints entered Capital goods comprises rotary printing machines, laser textile market in 1953. The group is a leading engraving machines, digital printers, whereas, consumable provider of integrated solutions for rotary goods include rotary textile screens, Anilox rollers, Rota screen printing in the textile, label and plate, digital inks, lacquers and engraving chemicals. industrial markets across the globe. Over the We are mainly engaged into supply, installation and after years, Stovec has evolved into a global leader sales support of printing machines and development and in the rotary screen-printing technology. production of consumables for their use in textile and graphic printing industry. In the non-textile segment, the Company manufactures electroformed products for sugar industry, packaging and graphic printing industry. 1973 Year of inception 233 Employees as on December 31, 2019 2 STOVEC INDUSTRIES LIMITED


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    CORPORATE OVERVIEW STATuToRY REPoRTS FINANCIAL STATEMENTS Why we exist What differentiates us Higher purpose To set the future standards of printing. State-of-the-art Diversified Rich Expertise manufacturing Mission facility product basket To be the reliable printing partner that leads the market into the future. Our Brand promise Quality World-class Cutting-edge Assurance innovation technology Wide distribution Global presence network Where we operate With path-breaking technology, quality offerings and wide distribution network, the Company Netherlands is able to continuously meet the demands of its customers across the globe. Stovec is a part of SPGPrints Group having its headquarter in India uSA Boxmeer, Netherlands and SPGPrints operates through its subsidiaries Pakistan located in uSA, Austria, Brazil, China, China Brazil Mexico, Pakistan and Turkey. Mexico Turkey Austria 46th ANNuAL REPoRT 2019 3


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    FinanciaL highLightS Revenue from Operations EBIDTA (net of taxes) (Before Exceptional Items) (₹ in Mn) (₹ in Mn) 2,100.81 1,930.16 1,937.05 436.10 422.87 1,885.13 369.35 375.98 1,567.02 347.34 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 EBITDA Margin PAT (Before Exceptional Items) (%) (₹ in Mn) 22.17 279.37 21.91 256.94 20.76 246.17 19.59 19.41 223.95 205.39 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 PAT Margin Earning Per Share (%) (₹) 14.42 13.11 12.75 11.88 12.23 133.80 123.06 117.90 107.25 98.36 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Note: PAT – Profit after Tax 4 SToVEC INDuSTRIES LIMITED


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    CORPORATE OVERVIEW STATuToRY REPoRTS FINANCIAL STATEMENTS chaiRman»S meSSage I am glad to state that our unmatched expertise in value- engineering will bring distinguished experience for our customers across the globe. During the year 2019, Stovec’s revenue from operations increased from ₹ 1,930.16 Mn in FY 2018 to ₹ 1937.05 Mn in FY 2019. The profit before tax stood at ₹ 372.15 Mn during the year. It is noteworthy to mention that the Company launched unique products during the year, which will further set the benchmark in the textile consumable segment. We re- invented screen technology, while adding new screens in our product portfolio. The Company introduced new ortascreen™ and RandomScreen ECo®, which would serve the evolving needs of our customers by delivering high-quality prints. Looking ahead Stovec is well established in the domestic textile printing market for more than four decades now. We see developing over the past few years, we have built the trends in even in some low potential markets such as Panipat foundation needed for a modernised textile and Jetpur areas. Besides our primary focus of selling printing machinery company. Though the automatic rotary printing machine in the country, we are focused to increase the share of exports in the equipment year 2019 faced various headwinds, the business as well. With the latest printers and inks, the focused approach of the Company ensured Company also expects to have a substantial share in the satisfactory performance. With continuous digital printing segment. our established global performance with capability, trust and confidence of our customers innovation, superior product quality and leads us to believe that the future will be encouraging. our strong expertise, we are well positioned for a endurance and sustainability rest on our talented workforce, sustainable future. strong know-how and an ability to adapt to the changing environment. Year 2020 appears to be very different because of CoVID-19. Dear Shareholders, Global economy is expected to suffer heavily. The impact is We live in exciting times, where technological, economic and being felt by all businesses around the world. The impact geopolitical changes are keeping us on our toes. The global is not only limited to the demand side of the market, but economy witnessed its weakest pace during the year 2019. the supply chain also is hampered. Lockdown and social Intensified trade wars, Brexit delays and weak manufacturing distancing are impacting how businesses conduct their daily activities in a few emerging markets are largely responsible work. The pandemic is certainly affecting your company as for the slowdown. well. Your company is taking the desired actions including keeping their employees & customers safe and reorienting During the year under review, Indian economy witnessed operations to tide over the crisis. challenges owing to sluggish demand, low private consumption, tighter credit conditions and weakening Finally, I would like to thank our shareholders, customers, manufacturing and construction sectors. Irrespective of the employees and the management team for their incredible economy growing moderately, the textile sector continued support to the Company. I would like to extend gratitude to grow at its own pace. The Government has been taking to my fellow Board members for their continued guidance measures such as abolishment of anti-dumping duty on in ensuring that Stovec delivers on its action plans. I am Purified Terephthalic Acid (PTA) and launch of the National optimistic that with our size, heritage and versatility, we shall Technical Textiles mission among others, which will boost the continue to meet every kind of printing need with quality sector going forward. However, shifting fashion trends, higher products, better turn-around time and reliable solutions. operating costs and the requirement of meeting different environmental standards may impede the growth prospect. Best wishes, Despite adversities, Stovec continued to enhance the core K.M. Thanawalla strength of its business segments. Chairman 46th ANNuAL REPoRT 2019 5


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    ReLentLeSS FocuS on innovation Leading to the best-in-class printing solutions 6 STOVEC INDUSTRIES LIMITED


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    CORPORATE OVERVIEW STATuToRY REPoRTS FINANCIAL STATEMENTS Stovec is at the forefront of leveraging advanced technologies and creating excellent products for the textile, packaging and the graphic printing industry. Anticipating growing market requirements through our strong market intelligence, we have successfully developed high- quality and reliable rotary printing machines for our customers. During the year, the Company re-invented screen technology in the consumable segment by adding new screens in its product portfolio such as ortascreen™& RandomScreen ECo®. These come with evenness, definition and high-quality prints to fulfil our customers evolving needs. Through deep know-how, world-class technology and fully integrated manufacturing facility, Stovec remains one of the largest suppliers of the rotary screen-printing machines globally. As a part of our strategic goals, we are steadily discovering opportunities in tier-1 market and digital printing segment to further expand the market share. `3.23 Mn R&D spend 46th ANNuAL REPoRT 2019 7


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    coRPoRate inFoRmation Board of Directors Chairman & Independent Director Mr. Khurshed M. Thanawalla Non-Executive Non-Independent Directors Mr. Dirk W. Joustra Mr. Eiko Ris Ms. Sangeeta Sachdev (upto July 16, 2020) Independent Directors Mr. Marco Philippus A. Wadia Mrs. Kiran Dhingra (w.e.f. April 1, 2020) Managing Director Mr. Shailesh Wani Chief Financial Officer Registrar & Share Transfer Agents Mr. Paras Mehta Link Intime India Private Limited 5th Floor, 506 to 508, Amarnath Business Center –I (ABC-I), Company Secretary Besides Gala Business Center, Nr. St. Xavier’s College Mr. Sanjeev Singh Sengar Corner, off. C.G. Road, Navrangpura, *w.e.f. April 5, 2019 Ahmedabad – 380 009, Gujarat Phone: +91 79 26465179/86/87, Fax: +91 79 26465179 Statutory Auditor Email -ahmedabad@linkintime.co.in Deloitte Haskins & Sells LLP Chartered Accountants Bankers Axis Bank Limited Secretarial Auditor Citibank N.A Sandip Sheth & Associates Yes Bank Limited Company Secretaries, Ahmedabad Registered Office and Factory N.I.D.C., Near Lambha Village, Post: Narol, Ahmedabad - 382 405, Gujarat, India. 8 SToVEC INDuSTRIES LIMITED


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    Corporate Overview Statutory Reports Financial Statements Notice NOTICE is hereby given that the 46th Annual General Meeting SPECIAL BUSINESS: of the members of STOVEC INDUSTRIES LIMITED will be held 5. To approve re-appointment of Mr. K M. Thanawalla (DIN: on Wednesday, September 16, 2020 at 3.00 p.m. through 00201749), as an Independent Director of the Company video conferencing/other audio visual means (VC/OAVM) from for a second term of 5 (five) consecutive years the registered office of the Company at NIDC, Near Lambha To consider and, if thought fit, to pass the following resolution Village, Post Narol, Ahmedabad – 382 405 to transact the following as Special Resolution- businesses- “RESOLVED THAT pursuant to provisions of Sections 149, ORDINARY BUSINESS: 150 and 152 read with Schedule IV and other applicable 1. To receive, consider and adopt the Standalone Audited provisions, if any, of the Companies Act, 2013 (“the Act”) and Financial Statements of the Company for the financial year the Companies (Appointment and Qualification of Directors) ended December 31, 2019, together with the Report of the Rules, 2014, the applicable provisions of the Securities and Board of Directors and the Auditor’s thereon; Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, including any statutory 2. To declare dividend on Equity Shares of the Company; modifications or re-enactments thereof, for the time being 3. To appoint a Director in place of Mr. Eiko Ris (DIN: 07428696), in force and basis of recommendation of the Nomination & who retires by rotation and being eligible, offers himself for Remuneration Committee and the Board of Directors of the re-appointment; Company, Mr. K M Thanawalla (DIN: 00201749) aged about 76 years, an Independent Director of the Company, in respect 4. To approve appointment of M/s. S R B C & CO LLP, Chartered of whom the Company has received a notice in writing Accountants, (FRN 324982E/E300003) as Statutory Auditors under Section 160 of the Act, proposing his candidature for of the Company to hold office from the conclusion of the the office of Director, be and is hereby re-appointed as an 46th Annual General Meeting of the Company until the Independent Director of the Company for a second term of conclusion of the 51st Annual General Meeting of the 5 (five) consecutive years on the Board of the Company with Company. effect from May 7, 2020. To consider and if thought fit, to pass with or without RESOLVED FURTHER THAT any of the Directors or the Key modification(s), the following Resolution as an Ordinary Managerial Personnel of the Company be and are hereby Resolution: severally authorised to do necessary filings with the Ministry of Corporate Affairs and Stock Exchanges and to take all “RESOLVED THAT pursuant to the provisions of Sections steps, action as may be necessary to give effect to the 139, 142 and other applicable provisions, if any, of the above resolution.” Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 as amended from time to time or any 6. To approve re-appointment of Mr. Marco Wadia (DIN: other law for the time being in force (including any statutory 00244357), as an Independent Director of the Company modification or amendment thereto or re-enactment for a second term of 5 (five) consecutive years thereof for the time being in force) M/s. S R B C & CO LLP, To consider and, if thought fit, to pass the following resolution Chartered Accountants, (FRN 324982E/E300003) be and is as a Special Resolution- hereby appointed as statutory auditors of the Company to hold office for 5 (five) years from the conclusion of 46th “RESOLVED THAT pursuant to provisions of Sections 149, Annual General Meeting (AGM) until the conclusion of 51st 150 and 152 read with Schedule IV and other applicable Annual General Meeting (AGM) of the Company, at such provisions, if any, of the Companies Act, 2013 (“the Act”) and remuneration and applicable taxes plus reimbursement of the Companies (Appointment and Qualification of Directors) out-of-pocket expenses in connection with the Audit as may Rules, 2014, the applicable provisions of the Securities and be mutually agreed between the Board of Directors of the Exchange Board of India (Listing Obligations and Disclosure Company and the Auditors”. Requirements) Regulations, 2015, including any statutory modifications or re-enactments thereof, for the time being RESOLVED FURTHER THAT any of the Directors and Key in force and basis of recommendation of the Nomination & Managerial Personnel of the Company be and are hereby Remuneration Committee and the Board of Directors of the severally authorised to do all such acts, deeds and things as Company, Mr. Marco Wadia (DIN: 00244357), an Independent may be necessary to give effect to the foregoing resolution.” Director of the Company, in respect of whom the Company 46th Annual Report 2019 | 9


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    has received a notice in writing under Section 160 of the Act, incurred for attending the meetings of the Board and proposing his candidature for the office of Director, be and Committee(s) thereof, within the overall ceiling of 1% (one is hereby re-appointed as an Independent Director of the percent) or such other percentage as may be specified by Company for a second term of 5 (five) consecutive years on the Act from time to time in this regards, of the net profits the Board of the Company with effect from May 7, 2020. of the Company (computed in the manner provided in Section 198 of the Act), for a period of three financial years RESOLVED FURTHER THAT any of the Directors or the Key commencing from January 1, 2020, with powers to the Board Managerial Personnel of the Company be and are hereby of Director’s or its Committee(s), to decide such variable severally authorised to do necessary filings with the Ministry payment of commission from time to time to Independent of Corporate Affairs and Stock Exchanges and to take all Directors, as they may deem fit, within the above referred steps, action as may be necessary to give effect to the overall ceiling of 1% for the commission.” above resolution.” 7. To approve appointment of Mrs. Kiran Dhingra (DIN 9. To approve payment of commission to Mr. K. M. 00425602), as an Independent Director of the Company Thanawalla, Chairman (Independent Director) for the for a term of 5 (five) consecutive years financial year 2019, which may exceed fifty per cent of the total Commission payable to all the Independent To consider and, if thought fit, to pass the following resolution Directors of the Company as an Ordinary Resolution- To consider and, if thought fit, to pass the following resolution “RESOLVED THAT pursuant to provisions of Sections 149, as a Special Resolution- 150 and 152 read with Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) and “RESOLVED THAT pursuant to Regulation 17(6)(ca) of the the Companies (Appointment and Qualification of Directors) Securities and Exchange Board of India (Listing Obligations Rules, 2014, the applicable provisions of the Securities and and Disclosure Requirements) Regulations, 2015 including Exchange Board of India (Listing Obligations and Disclosure any amendment, modification, variation or re-enactment Requirements) Regulations, 2015, including any statutory thereof for the time being in force and other applicable modifications or re-enactments thereof, for the time being provisions, if any, of the Companies Act, 2013 and pursuant in force and basis of recommendation of the Nomination to the approval of Members of the Company at the 43rd & Remuneration Committee and the Board of Directors of Annual General Meeting, approval of the Members of the Company, Mrs. Kiran Dhingra (DIN 00425602), be and the Company be and is hereby accorded for payment of is hereby appointed as an Independent Director of the Commission to Mr. K. M. Thanawalla for the financial year Company for a term of 5 (five) consecutive years on the 2019 exceeding fifty per cent of the total Commission that Board of the Company with effect from April 01, 2020. may be payable to all Independent Directors for the financial year 2019. RESOLVED FURTHER THAT any of the Directors or the Key Managerial Personnel of the Company be and are hereby RESOLVED FURTHER THAT the Board of Directors of the severally authorised to do necessary filings with the Ministry Company be and is hereby authorised to do all such acts, of Corporate Affairs and Stock Exchanges and to take all deeds, matters as may be deemed necessary and expedient steps, action as may be necessary to give effect to the in this regard.” above resolution.” 10. To ratify remuneration of Cost Auditors of the Company 8. To approve payment of Commission to the Independent for the financial year 2020 Directors of the Company To consider and, if thought fit, to pass the following resolution To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution- as an Ordinary Resolution- “RESOLVED THAT pursuant to the provisions of Section “RESOLVED THAT pursuant to Sections 197, 198 and other 148 and other applicable provisions, if any, of the Companies applicable provisions, if any, of the Companies Act, 2013 Act, 2013 read with the Companies (Audit and Auditors) (“the Act”) read with the Companies (Appointment and Rules, 2014, (including any statutory modification(s) or Remuneration of Managerial Personnel) Rules, 2014 and amendment(s) or re-enactment(s) thereof for the time being Regulation 17(6)(a) of SEBI (Listing Obligations and Disclosure in force), the Company hereby ratifies the remuneration Requirements) Regulations, 2015 (including any statutory of ` 1,25,000/- (Rupees One Lakhs Twenty-Five Thousand modification(s) or amendment(s) or re-enactment(s) thereof Only) plus applicable taxes and re-imbursement of out-of- for the time being in force), the consent of the Members of pocket expenses payable to M/s Dalwadi & Associates, Cost the Company be and is hereby accorded to the payment Accountants (Firm Registration No. 000338), who have been of Commission to Independent Directors, on annual basis, appointed by the Board of Directors on the recommendation in addition to sitting fees and reimbursement of expenses of the Audit Committee, as Cost Auditors of the Company, 10 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements to conduct the audit of the cost records maintained by the addresses, in respect of electronic holdings with their Company as prescribed under the Companies (Cost Records concerned Depository Participants and in respect of and Audit) Rules, 2014, as amended, for the Financial Year physical holdings, with the Company’s Share Transfer ending December 31, 2020. Agent i.e. Link Intime India Private Limited, 5th Floor, 506 to 508, Amarnath Business Center –I (ABC-I), RESOLVED FURTHER THAT the Board of Directors of the Besides Gala Business Center, Nr. St. Xavier’s College Company (including Committee(s) of the Board), be and is Corner, Off. C.G. Road, Navrangpura, Ahmedabad hereby authorised to do all acts and take all such steps as – 380 009, Gujarat, Phone: +91 79 26465179/86/87, may be necessary, proper or expedient to give effect to this Email-ahmedabad@linkintime.co.in, by following due resolution.” procedure. NOTES: (iv) Members may also update their bank details by following instruction set out in (i) above. 1. In view of the massive outbreak of the COVID-19 pandemic, Ministry of Corporate Affairs vide its 3. The Explanatory Statement pursuant to Section 102 of Circular No. 14/2020 dated April 08, 2020, Circular the Companies Act, 2013, in respect of Special Business is No.17/2020 dated April 13, 2020 and Circular No. annexed hereto. 20/2020 dated May 05, 2020 (‘MCA Circulars’), inter alia, permitted companies to hold their AGM through video 4. Pursuant to Sections 124 of the Companies Act, 2013, the conferencing (VC) or other audio visual means (OAVM) amount of dividend remaining unpaid or unclaimed for a following the procedure prescribed therein, whereby period of seven years from the date of its transfer to the physical attendance of the Members to the AGM Unpaid Dividend Account of the Company is required to be venue shall not be required. Therefore, the Company transferred to Investor Education and Protection Fund (“IEPF”) is providing facility to attend and participate in the established by the Central Government. During the year, AGM through VC/OAVM. Thus, Members can attend and the Company has transferred unclaimed dividend amount participate in the meeting through VC/OAVM following pertaining to the financial year 2011 & 2012 to the Investor the instructions given in the notice. Education and Protection Fund of the Central Government. The shareholders who have not claimed their dividend for the 2. In accordance with the provisions of Section 101 of the financial year 2013 and all subsequent years are requested to Act read with Rule 18 of the Companies (Management claim their dividend as early as possible, failing which it would and Administration) Rules, 2014 read with the said MCA be transferred to IEPF as per the (tentative) dates mentioned Circulars, the Annual Report of the Company is being sent below and no claim shall lie against the Company for the said through email only to the members whose email address amount of unclaimed dividend so transferred. The details of are registered with the Company/Depositories, as the case unclaimed dividends are available on the Company’s website may be. Member(s) however, are entitled to receive Annual at www.stovec.com and Ministry of Corporate Affair’s website Report in physical form, free of cost, on receipt of written at http://www.iepf.gov.in/. request for the same. Members may also note that the Annual Report for the financial year 2019 together with the Financial Year Interim/Final Tentative Date of Dividend transfer to IEPF Notice of 46th Annual General Meeting is also available on 2013 Final Dividend June 15, 2021 the website of the Company viz. www.stovec.com. 2014 Final Dividend June 7, 2022 In case the shareholder has not registered his/her/their 2015 Final Dividend June 28, 2023 email address with the Company/its RTA/Depositories, the 2016 Final Dividend June 13, 2024 following instructions to be followed: 2017 Final Dividend June 2, 2025 (i) Kindly log in to the website of our RTA, Link Intime 2018 Final Dividend June 9, 2026 India Private Ltd., www.linkintime.co.in under Investor Services > Email/Bank detail Registration - fill in Further, pursuant to the provisions of Section 124 of the the details and upload the required documents for Act and Investor Education and Protection Fund Authority registering Email/Bank detail and submit. (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), all shares on which dividend has not been paid or (ii) Post successful registration of the email, the member claimed for seven consecutive years or more are required would get soft copy of the notice and Annual Report to be transferred to Demat Account of IEPF. During the of the Company. In case of any queries, member may year, Company had sent individual intimation to all such write to ahmedabad@linkintime.co.in. shareholders whose dividend has not been paid or claimed (iii) It is clarified that for permanent registration of email for any year during the seven consecutive years requesting address, members are required to register their email them to claim their Dividend before the due date of transfer 46th Annual Report 2019 | 11


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    failing which their shares were transferred to the IEPF and market, deletion of name of deceased shareholder or no claim shall lie against the Company on the shares so transmission/transposition of shares. Members holding transferred. The Shareholders need to claim their shares shares in dematerialised mode are requested to submit from IEPF Authority by filing E-Form-5 and by following the PAN details to their Depository Participant, whereas such procedures as prescribed in the IEPF Rules (as may be Members holding shares in physical form are requested amended from time to time). to submit the PAN details to the Company’s Registrar and Transfer Agents. As per the SEBI (Listing Obligations and 5. The Register of Members and Share Transfer Book shall Disclosure Requirements) Regulations, 2015 (effective from remain closed from September 10, 2020 to September 16, December 1, 2015), for registration of transfer of shares, the 2020 (both days inclusive). If the dividend on equity shares, transferee(s) as well as transferor(s) are required to furnish as recommended by the Board of Directors is declared at a copy of their PAN card to Company’s Registrar and Share the 46th Annual General Meeting, payment of such dividend Transfer Agent. will be made on or before its due date to the shareholders whose names appear in the Register of Members as on 10. In terms of the SEBI (Listing Obligations and Disclosure September 9, 2020 upon close of business hours. Requirements) Regulations, 2015 securities of listed entities 6. As mandated by the SEBI Listing Regulations, Company will can only be transferred in dematerialised form with effect remit dividend electronically by RTGS/National Electronic from April 1, 2019. In view of the above, members are advised Clearing System (NECS)/National Automated Clearing to dematerialise shares held by them in physical form in House (NACH) etc. to the bank account registered with the order to avoid inconvenience in future. Company. It is in Members interest to avail NECS/NACH 11. All documents referred to in the accompanying notice and facility as it is quick and much convenient way of getting explanatory statement are open for inspection electronically. dividend directly in your bank account. Members desirous of availing NECS/NACH facility are requested to submit bank 12. Members who are holding shares in more than one folio in particulars in ECS Mandate Form, the format of which is identical manner are requested to consolidate their holdings annexed at the end of this Annual Report. Alternatively, in one folio. members can follow the below instruction for updating bank details in the Company’s record through RTA - 13. Members desirous of obtaining any information concerning accounts and operations of the Company are requested to Kindly log in to the website of our RTA, Link Intime India address their questions in writing to the Company at least 7 Private Ltd., www.linkintime.co.in under Investor Services > days before the date of the meeting so that the information Email/Bank detail Registration - fill in the details and upload required may be made available at the meeting. the required documents and submit. 7. Members holding shares in dematerialised mode are 14. The Company has depository connectivity for holding share requested to intimate all changes pertaining to their bank in demat/electronic form and therefore equity shares of details, NECS, mandates, nominations, power of attorney, the Company can also be held in the electronic form with change of address/name, PAN details, etc. to their Depository any DP, with whom the members/ investors are having their Participant (“DP”) only. However, Members holding shares in depository account. The ISIN No. for the Equity Shares of physical mode are required to notify any change pertaining the Company is INE755D01015. Members holding shares in to their bank details, NECS, mandates, nominations, power physical form are requested to convert their holding into of attorney, change of address/name, PAN details, etc. to dematerialized form to eliminate risks associated with Registrar and Share Transfer Agent i.e. M/s. Link Intime physical shares. Members can contact Company’s Registrar India Private Limited, 5th Floor, 506 to 508, Amarnath and Share Transfer Agent for assistance in this regard. Business Center–I (ABC-I), Besides Gala Business Center, 15. As per the provisions of Section 72 of the Act and Rule Nr. St. Xavier’s College Corner, Off. C.G. Road, Navrangpura, 19(1) of the Companies (Share Capital and Debentures) Ahmedabad – 380 009, Gujarat. Rules, 2014, Members holding shares in physical form may file nomination in the prescribed form SH-13 with the 8. In terms of Regulation 36(3) of the SEBI (Listing Obligations Company’s Registrar and Share Transfer Agent. In respect and Disclosure Requirements) Regulations, 2015, brief profile of shares held in demat form; the nomination form may be of Director(s) seeking appointment/re-appointment at the filed with the respective Depository Participant. 46th Annual General Meeting, is annexed and forms integral part of the Notice. 16. INSTRUCTIONS FOR VOTING THROUGH ELECTRONIC MEANS AND ATTENDING MEETING THROUGH VC 9. As per Securities and Exchange Board of India (SEBI) norms, submission of Permanent Account Number (PAN) a) Pursuant to the provisions of Section 108 of the is compulsorily required for participating in the securities Companies Act, 2013 read with Rule 20 of the 12 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements Companies (Management and Administration) Rules, Exchange i.e. BSE Limited at www.bseindia.com. The 2014 (as amended) and Regulation 44 of SEBI (Listing AGM Notice is also disseminated on the website of Obligations & Disclosure Requirements) Regulations CDSL (agency for providing the Remote e-Voting 2015 (as amended), and MCA Circulars dated April 08, facility and e-voting system during the meeting) i.e. 2020, April 13, 2020 and May 05, 2020 the Company www.evotingindia.com. is providing facility of remote e-voting and e-voting during the meeting to its Members in respect of f) The AGM has been convened through VC/OAVM in the business to be transacted at the AGM. For this compliance with applicable provisions of the Companies purpose, the Company has entered into an agreement Act, 2013 read with MCA Circular No. 14/2020 dated with Central Depository Services (India) Limited (CDSL) April 8, 2020 and MCA Circular No. 17/2020 dated April for facilitating voting through electronic means, as the 13, 2020 and MCA Circular No. 20/2020 dated May 05, authorised e-Voting’s agency. The facility of casting 2020. votes by a member using remote e-voting as well as THE INSTRUCTIONS FOR SHAREHOLDERS FOR REMOTE the e-voting system on the date of the AGM will be E-VOTING ARE AS UNDER: provided by CDSL. (i) The voting period begins on September 13, 2020 @ 9.00 b) The Members can join the AGM in the VC/OAVM mode hours (IST) and ends on September 15, 2020 @ 17.00 15 minutes before and after the scheduled time of hours (IST). During this period shareholders of the Company, the commencement of the Meeting by following the holding shares either in physical form or in dematerialized procedure mentioned in the Notice. The facility of form, as on the cut-off date September 9, 2020 may cast participation at the AGM through VC/OAVM will be made their vote electronically. The e-voting module shall be disabled available to at least 1000 members on first come first by CDSL for voting thereafter. served basis. This will not include large Shareholders (Shareholders holding 2% or more shareholding), (ii) Shareholders who have already voted prior to the meeting Promoters, Institutional Investors, Directors, Key date would not be entitled to vote during the meeting. Managerial Personnel, the Chairpersons of the Audit (iii) The shareholders should log on to the e-voting website Committee, Nomination and Remuneration Committee www.evotingindia.com. and Stakeholders Relationship Committee, Auditors etc. who are allowed to attend the AGM without (iv) Click on “Shareholders” module. restriction on account of first come first served basis. (v) Now enter your User ID c) The attendance of the Members attending the AGM a. For CDSL: 16 digits beneficiary ID, through VC/OAVM will be counted for the purpose b. For NSDL: 8 Character DP ID followed by 8 Digits Client of ascertaining the quorum under Section 103 of the ID, Companies Act, 2013. c. Shareholders holding shares in Physical Form should d) Pursuant to MCA Circular No. 14/2020 dated April 08, enter Folio Number registered with the Company. 2020, the facility to appoint proxy to attend and cast OR vote for the members is not available for this AGM. However, in pursuance of Section 112 and Section Alternatively, if you are registered for CDSL’s 113 of the Companies Act, 2013, representatives of EASI/EASIEST e-services, you can log-in at the members such as the President of India or the https://www.cdslindia.com from Login - Myeasi using Governor of a State or body corporate can attend the your login credentials. Once you successfully log-in to AGM through VC/OAVM and cast their votes through CDSL’s EASI/EASIEST e-services, click on e-Voting option e-voting. and proceed directly to cast your vote electronically. e) In line with the Ministry of Corporate Affairs (MCA) (vi) Next enter the Image Verification as displayed and Click on Circular No. 17/2020 dated April 13, 2020, the Notice Login. calling the AGM has been uploaded on the website (vii) If you are holding shares in demat form and had logged on of the Company at www.stovec.com. The Notice can to www.evotingindia.com and voted on an earlier e-voting of also be accessed from the websites of the Stock any company, then your existing password is to be used. 46th Annual Report 2019 | 13


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    (viii) If you are a first-time user follows the steps given below: (xvii) You can also take a print of the votes cast by clicking on “Click here to print” option on the Voting page. For Shareholders holding shares in Demat Form and Physical Form (xviii) If a demat account holder has forgotten the login password, PAN Enter your 10-digit alpha-numeric *PAN then Enter the User ID and the image verification code and issued by Income Tax Department click on Forgot Password & enter the details as prompted by (Applicable for both demat shareholders the system. as well as physical shareholders) • Shareholders who have not (xix) Shareholders can also cast their vote using CDSL’s mobile updated their PAN with the app “m-Voting”. The m-Voting app can be downloaded from Company/Depository Participant respective Store. Please follow the instructions as prompted are requested to use the sequence by the mobile app while Remote Voting on your mobile. number, which is communicated by e-mail, in the PAN field. PROCESS FOR THOSE SHAREHOLDERS WHOSE Dividend Bank Enter the Dividend Bank Details or Date EMAIL ADDRESSES ARE NOT REGISTERED WITH THE Details of Birth (in dd/mm/yyyy format) as DEPOSITORIES FOR OBTAINING LOGIN CREDENTIALS OR Date of recorded in your demat account or in FOR E-VOTING FOR THE RESOLUTIONS PROPOSED IN Birth (DOB) the Company records in order to login. THIS NOTICE: • If both the details are not recorded with the depository or company, 1. For Physical shareholders- please provide necessary please enter the member id / details like Folio No., Name of shareholder, scanned folio number in the Dividend copy of the share certificate (front and back), PAN (self Bank details field as mentioned in instruction (v). attested scanned copy of PAN card), AADHAR (self- attested scanned copy of Aadhar Card) by email to RTA (ix) After entering these details appropriately, click on “SUBMIT” at ahmedabad@linkintime.co.in. tab. 2. For Demat shareholders -, please provide Demat (x) Shareholders holding shares in physical form will then directly account details (CDSL-16 digit beneficiary ID or NSDL- reach the Company selection screen. However, shareholders 16 digit DPID + CLID), Name, client master or copy of holding shares in demat form will now reach ‘Password Consolidated Account statement, PAN (self-attested Creation’ menu wherein they are required to mandatorily enter scanned copy of PAN card), AADHAR (self-attested their login password in the new password field. Kindly note scanned copy of Aadhar Card) to RTA at ahmedabad@ that this password is to be also used by the demat holders linkintime.co.in . for voting for resolutions of any other company on which they INSTRUCTIONS FOR SHAREHOLDERS ATTENDING THE are eligible to vote, provided that company opts for e-voting AGM THROUGH VC/OAVM ARE AS UNDER: through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost 1. Shareholder will be provided with a facility to attend care to keep your password confidential. the AGM through VC/OAVM through the CDSL e-Voting system. Shareholders may access the same at (xi) For shareholders holding shares in physical form, the details https://www.evotingindia.com under shareholders/ can be used only for e-voting on the resolutions contained members login by using the remote e-voting credentials. in this Notice. The link for VC/OAVM will be available in shareholder/ (xii) Click on the EVSN for the relevant <STOVEC INDUSTRIES members login where the EVSN of Company will be LIMITED> on which you choose to vote. displayed. (xiii) On the voting page, you will see “RESOLUTION DESCRIPTION” 2. Shareholders are encouraged to join the Meeting and against the same the option “YES/NO” for voting. Select through Laptops / iPad for better experience. the option YES or NO as desired. The option YES implies 3. Further shareholders will be required to allow Camera that you assent to the Resolution and option NO implies that and use Internet with a good speed to avoid any you dissent to the Resolution. disturbance during the meeting. (xiv) Click on the “RESOLUTIONS FILE LINK” if you wish to view 4. Please note that Participants Connecting from Mobile the entire Resolution details. Devices or Tablets or through Laptop connecting via (xv) After selecting the resolution, you have decided to vote on, Mobile Hotspot may experience Audio/Video loss click on “SUBMIT”. A confirmation box will be displayed. If you due to Fluctuation in their respective network. It is wish to confirm your vote, click on “OK”, else to change your therefore recommended to use Stable Wi-Fi or LAN vote, click on “CANCEL” and accordingly modify your vote. Connection to mitigate any kind of aforesaid glitches. (xvi) Once you “CONFIRM” your vote on the resolution, you will 5. Shareholders who would like to express their not be allowed to modify your vote. views/ask questions during the meeting may 14 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements register themselves as a speaker by sending their • A scanned copy of the Registration Form bearing the request in advance at least (3) three days prior stamp and sign of the entity should be emailed to to meeting mentioning their name, demat account helpdesk.evoting@cdslindia.com. number/folio number, email id, mobile number at secretarial@stovec.com. The shareholders who do • After receiving the login details a Compliance User not wish to speak during the AGM but have queries should be created using the admin login and password. may send their queries in advance Seven days The Compliance User would be able to link the prior to meeting mentioning their name, demat account(s) for which they wish to vote on. account number/folio number, email id, mobile number at secretarial@stovec.com. The queries will • The list of accounts linked in the login should be mailed be replied suitably by the Company. to helpdesk.evoting@cdslindia.com and on approval of the accounts they would be able to cast their vote. 6. Those shareholders who have registered themselves as a speaker will only be allowed to express their views/ • A scanned copy of the Board Resolution and Power of ask questions during the meeting. Attorney (POA) which they have issued in favour of the INSTRUCTIONS FOR SHAREHOLDERS FOR E-VOTING Custodian, if any, should be uploaded in PDF format in DURING THE AGM ARE AS UNDER: - the system for the scrutiniser to verify the same. 1. The procedure for e-Voting on the day of the AGM is • Alternatively Non Individual shareholders are required same as the instructions mentioned above for Remote to send the relevant Board Resolution/ Authority letter e-voting. etc. together with attested specimen signature of the 2. Only those shareholders, who are present in the AGM duly authorised signatory who are authorised to vote, through VC/OAVM facility and have not casted their vote to the Scrutiniser and to the Company at the email on the Resolutions through remote e-Voting and are address viz; secretarial@stovec.com, if they have voted otherwise not barred from doing so, shall be eligible to from individual tab & not uploaded same in the CDSL vote through e-Voting system available during the AGM. e-voting system for the scrutiniser to verify the same. 3. If any Votes are cast by the shareholders through the If you have any queries or issues regarding attending e-voting available during the AGM and if the same AGM & e-Voting from the e-Voting System, you may shareholders have not participated in the meeting refer the Frequently Asked Questions (“FAQs”) and through VC/OAVM facility , then the votes cast by such e-voting manual available at www.evotingindia.com, shareholders shall be considered invalid as the facility under help section or write an email to helpdesk. of e-voting during the meeting is available only to the evoting@cdslindia.com or contact Mr. Nitin Kunder shareholders attending the meeting. (022- 23058738 ) or Mr. Mehboob Lakhani (022- 4. Shareholders who have voted through Remote e-Voting 23058543) or Mr. Rakesh Dalvi (022-23058542). will be eligible to attend the AGM. However, they will All grievances connected with the facility for voting not be eligible to vote at the AGM. by electronic means may be addressed to Mr. Rakesh (xx) Note for Non – Individual Shareholders and Custodians Dalvi, Manager, (CDSL, ) Central Depository Services • Non-Individual shareholders (i.e. other than Individuals, (India) Limited, A Wing, 25th Floor, Marathon Futurex, HUF, NRI etc.) and Custodians are required to log on to Mafatlal Mill Compounds, N M Joshi Marg, Lower Parel www.evotingindia.com and register themselves in the (East), Mumbai - 400013 or send an email to helpdesk. “Corporates” module. evoting@cdslindia.com or call on 022-23058542/43. Regd. Office: N.I.D.C. Nr. Lambha Village, Post: Narol, Ahmedabad – 382 405 By Order of the Board of Directors, Gujarat, INDIA. CIN: L45200GJ1973PLC050790 Tel: +91 (0) 79 6157 2300, Fax: +91 (0) 79 2571 0406, E-mail: secretarial@stovec.com, Website: www.stovec.com Sanjeev Singh Sengar Date: August 13, 2020 Company Secretary Place: Ahmedabad Membership No. FCS 7835 46th Annual Report 2019 | 15


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    Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 The Statement setting out the material facts pursuant to Section The Audit Firm has valid Peer Review certificate and is part of S.R. 102 of the Companies Act, 2013 (‘‘the Act’’), concerning the Special Batliboi & Affiliates network of audit firms. It is primarily engaged Business at Item No. 4 to 9 of the Notice is annexed hereto and in providing audit and assurance services to its clients. forms part of this Notice. The documents in relation to the transaction can be inspected ITEM NO. 4 electronically. M/s. S R B C & CO LLP, Chartered Accountants, (FRN 324982E/ None of the Directors, Key Managerial Personnel and their relatives E300003), was appointed as the Statutory Auditors of the Company is in any way, concerned or interested in the said resolution. by the members resolution passing through postal ballot on July 28, 2020 filling the casual vacancy caused by the resignation of ITEM NO. 5 & 6 former auditor viz. Deloitte Haskins & Sells LLP, to hold office Mr. K. M. Thanawalla and Mr. Marco Wadia had been appointed till the conclusion of this Annual General Meeting. Based on the by the Company as Independent Directors of the Company for a recommendation of the Audit Committee and conformation term of 5 consecutive year at the AGM held on May 7, 2015 and received from M/s. S R B C & CO LLP, on their eligibility, the whose current term expires on May 6, 2020, and pursuant to Board recommends to the members for their appointment as Section 149(10) of the Act, they are eligible for re-appointment for the Statutory Auditors of the Company for a period of five years, a second term of five years on passing of a special resolution by from the conclusion of the 46th Annual General Meeting till the the Company. conclusion of 51st Annual General Meeting of the Company to be held in the year 2025. On the recommendation of Nomination & Remuneration M/s. S R B C & CO LLP, Chartered Accountants, have conveyed Committee and based on report of their performance evaluation, their consent to be appointed as the Statutory Auditors of the the Board of Directors of the Company at their meeting held on Company along with a confirmation that, their appointment, if February 25, 2020 approved the re-appointment of the above made by the members, would be within the limits prescribed Independent Directors of the Company for a second term of five under the Companies Act, 2013. consecutive years with effect from May 7, 2020. The Company has also received consent letters and declaration of independence Terms and Conditions of Appointment are as under: from such Directors for their re-appointment. Term of Appointment: 5 year from the conclusion of this AGM In the opinion of the Board, the Independent Directors fulfill the until the conclusion of 51st AGM conditions specified in the Act and the Rules made thereunder Proposed Fees: The proposed audit fee for the first year shall be and listing regulations, for appointment as Independent Directors ` 24.00 Lakhs (Rs. Twenty-Four Lakhs only) plus applicable taxes, and they are independent of the management. and reimbursement of out-of-pocket expenses to be incurred by them in connection with the statutory audit of the Company. Pursuant to Regulation 36(3) of Listing Regulations the brief The proposed fee is based on knowledge, expertise, industry profile of Mr. K. M. Thanawalla and Mr. Marco Wadia are provided experience, time and efforts required to be put in by M/s. S R B C separately in this Notice. The Board of Directors is confident that & CO LLP during their association with the Company and also in their knowledge and experience will be of immense value to the line with the industry benchmarks. There is no material change in Company and hence recommends the respective Resolutions for the fee payable to M/s. S R B C & CO LLP from that paid to the the approval of Members. former auditor. The fees for other services such as certifications Further, in terms of Regulation 17 of the Listing Regulations, a non- and other professional work will be in addition to the audit fee executive director who attains the age of seventy-five years, shall as above and will be decided by the management in consultation not be appointed/continue his directorship as a non-executive with the Auditors.. director, unless such appointment is approved by the members Credentials by special resolution. Mr. K M Thanawalla who aged about 76 M/s S R B C & CO LLP, (FRN 324982E/E300003), (“the Audit Firm”), years, falls into the ambit of this provision and accordingly the is a firm of Chartered Accountants registered with the Institute of approval of the members is also sought for by way of passing Chartered Accountants of India. The Audit Firm was established special resolution to this regard. in the year 2002 and is a limited liability partnership firm (“LLP”) In compliance with the provisions of Section 149 read with incorporated in India. lt has registered office at 22, Camac Street, Schedule IV of the Act, the reappointment of above directors as Kolkata and has 11 branch offices in various cities in India. All the an Independent Directors of the Company for a second term is constituent firms of SRB are member firms in India of Ernst & placed before the Members in general meeting for their approval. Young Global (‘EYG’). 16 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements Mr. K M Thanawalla and Mr. Marco Wadia both are not related to ITEM NO. 8 any Directors or Key Managerial Personnel of the Company. In terms of Section 197 of the Companies Act, 2013 approval of the Members is not required for the payment of commission to None of the Directors, Key Managerial Personnel and their relatives the non-executive directors up to 1% of the net profits of the except Mr. K M Thanawalla and Mr. Marco Wadia, are in any way Company. However, as per Regulation 17(6)(a) of SEBI (Listing concerned or interested, financially or otherwise, in the respective Obligations and Disclosure Requirements) Regulations, 2015, resolution related to their appointment. compensation and disclosures, all fees / compensation, payable to ITEM NO. 7 non-executive directors (includes Independent Director) requires The Board of Directors based on the recommendation of approval of the Members by means of an ordinary resolution. Nomination and Remuneration Committee has appointed Ms. Considering the present dynamic business environment and Kiran Dhingra (DIN: 00425602), as an Additional Director in the good corporate governance, Independent Directors are playing Independent Category on the Board of the Company for a term a more pro-active role alongwith greater involvement in Board’s of 5 consecutive years with effect from April 01, 2020, who holds decision-making process. It is therefore Company to appropriately office up to the date of this Annual General Meeting. The Company compensate for their contributions. In view of this, the Board of has also received a consent letter and declaration of independence Director, subject to the approval of Members in General Meeting, from her to act as Independent Director of the Company. proposed to remunerate the Independent Directors by way of Commission and accordingly approval of Members is hereby sought In the opinion of the Board, she fulfills the conditions specified in by way of an Ordinary resolution for the payment of Commission the Act and the Rules made thereunder and listing regulations, for to Independent Directors for a period of three financial years appointment as Independent Director of the Company and she is commencing from January 1, 2020. The Commission shall be in independent of the management. addition to the payment of sitting fees and reimbursement of Mrs. Kiran Dhingra is MA in English Literature from the University expenses incurred for attending the meetings of the Board of of Meerut, UP. and a retired IAS Officer with almost 38 years Directors of the Company and Committee(s) thereof. of distinguished civil service with the distinction of being one The Board of Directors recommends the resolution for the of the longest serving officers at the rank of Secretary to the approval of Members. Government of India. Mr. K. M. Thanawalla and Mr. Marco Wadia, Independent Directors Before her retirement in the rank and scale of Secretary and and their relatives are deemed to be interested in the resolution, Additional Secretary to Government of India, she had been to the extent of the remuneration that may be received by them. Secretary to the Government of India in various Ministries None of the other Directors, Key Managerial Personnel and their including the Ministry of Textile, Govt. of India and also Chief relatives, are in anyway concerned or interested, financially or Secretary to the Government of Goa. She has held positions otherwise, in the resolution. in several fields - the development sector, the social, the infrastructural, industrial, environmental as well as the regulatory ITEM NO. 9 sectors – and therefore carries with her a vast store of well- grounded experience of administration, governance, planning and In terms of Regulation 17 of the SEBI (Listing Obligations and policy making, personnel matters and legislative writing. Disclosure Requirements) (Amendment) Regulations, 2018 listed entity is required to obtain the approval of Members She is on the Board of various other Companies including listed of the Company by way of Special Resolution for payment of companies and also holds Directorship on the Board of Governors remuneration to a single non-executive director exceeding 50% of the Goa Institute of Management, Goa, one of the top-ranking of the total remuneration payable to all non-executive director. management institutes of the country, since January 2018 and her brief profile is provided in this Notice. In the opinion of the Board of Directors of the Company, Mr. K. M. Thanawalla is a person of high repute and have a rich experience The Board of Directors is of opinion that she is a person of integrity of over 5 decades in textile industry. His in-depth knowledge and possesses all relevant expertise and experience. Board is of the textile industry and strategic guidance has helped the confident that her knowledge and experience will contribute be Company to grow year by year and his continued guidance would of immense value to the Company and hence recommends the be of immense benefit to the Company. Resolution for the approval of Members. The payment of commission to Independent Directors was She is not related to any Directors or Key Managerial Personnel approved by the Members of the Company in the 43rd Annual of the Company. General Meeting for a period of three financial years commencing None of the Directors, Key Managerial Personnel and their relatives from January 1, 2017 with powers to Board or Committee thereof except herself is in any way concerned or interested, financially or to decide from time to time the percentage of net profit of each otherwise, in the resolution. financial year to be paid as commission to the Independent 46th Annual Report 2019 | 17


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    Directors. The Board is of the view that the commission payable In accordance with the provisions of Section 148 of the Companies to Mr. K. M. Thanawalla for the financial year 2019 may exceed Act, 2013 read with the Companies (Audit and Auditors) Rules, fifty percent of the total commission payable to all Independent 2014 (as amended), the remuneration payable to the Cost Auditors Directors of the Company and thus it is necessary to take approval has to be ratified by the Members of the Company. Accordingly of shareholders by way of special resolution. consent of the Members is sought by way of an ordinary resolution as set out at Item No. 10 of this Notice, for ratification/approval The Board recommends the resolution for the approval of of the remuneration amounting to Rs. 1,25,000/- plus applicable Members of the Company. Goods and Service Tax and out of pocket expenses, if any, payable None of the other Directors except Mr. K. M. Thanawalla, Key to the Cost Auditors for Cost Audit for the financial year ending Managerial Personnel and their relatives, are in any way concerned on December 31, 2020, in respect of products/ activities of the or interested, financially or otherwise, in the resolution. Company covered under the Companies (Cost Records and Audit) Rules, 2014 (as amended). ITEM NO. 10 The Board of Directors of the Company, on the recommendation The Board accordingly recommends the resolution for the of the Audit Committee, has approved the appointment of approval of Members. M/s Dalwadi & Associates, Cost Accountants (Firm Registration No. 000338), as the Cost Auditors to conduct the audit of the cost None of the Directors, Key Managerial Personnel and their records of the Company for the financial year ending December relatives, are in any way concerned or interested, financially or 31, 2020. otherwise, in the resolution. 18 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements Brief profile of Director(s) seeking appointment/re-appointment at the forthcoming Annual General Meeting of the company pursuant to Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard on General Meetings issued by The Institute of Company Secretaries of India. Name of Director Mr. Eiko Ris Mr. K. M. Thanawalla Director Identification Number 07428696 00201749 Date of Birth October 17, 1958 December 24, 1942 Nationality Dutch Indian Date of Appointment March 12, 2019 January 28, 2005 Expertise in specific functional areas Finance & General Management Marketing and General Management Qualifications & experience He holds the degree of MsC (RA) He is a commerce graduate from the Bombay from the Netherlands Institute of University, fellow of The Institute of Chartered Registrar Accounts He has rich Secretaries & Administrators, London, UK and Fellow experience of about four decades of The British Institute of Management. He is also in finance. an Associate of The Textile Institute, U.K. He has over 4 decades of experience in establishing and managing green field projects across the spectrum of the textiles, shipping, trading and other industries in India, E. Africa and S.E. Asia. He has been closely associated with many Government and Business Bodies from as early as 1970. Between 1975 and 1982 he was an active member of The Kenya Government Textile Industry Standards Committee. In 1989 he represented India on the International Standards Organisation Committee on Textile Machinery where he was responsible for the preparation of ISO Standards for Textile Machinery. In 2011 Mr. Thanawalla has been nominated on the Panel of Experts for formulating and drafting the textile machinery and components section of the 11th Five Year Plan. He was the President- Swiss India Chamber of Commerce – India (West) from 2015 till 2017. Mr. Thanawalla is on the Board of various other Companies also. Terms and conditions of appointment/ Non-Executive Director liable to Independent Director, Re-appointment for a second re-appointment retire by rotation. term of five consecutive years and shall not be liable to retire by rotation Remuneration to be paid None Eligible for sitting fees and commission, if any, as approved. Details of relationship with other None None Directors, Manager and Key Managerial Personnel of the Company Details of shares held in the Company Nil Nil No. of Board Meetings attended during 2 (Two) 6 (Six) the FY 2019 List of companies in which None Listed directorship held as on December 31, 1) GMM Pfaulder Limited 2019 Unlisted 2) Ahura Holdings Private Limited 3) Behr Bircher Cellpack BBC India Private Limited 4) Capricorn Financial Services Private Limited 5) Galaxy Securities Private Ltd. 6) Hilti Manufacturing India Private Limited 7) Nysa LPG Logistics Private Limited 8) Nysa Marine Services Private Limited. 9) Oerlikon Textile India Private Limited 10) Pallas Gas Carriers Private Limited. 11) Pallas Gas Shipping Private Limited 12) PT Mitra Bahari Raya, Indonesia 13) Saffron Finvest and Trading Private Limited Chairman/Member of the Committees None None of other public Companies as on December 31, 2019 (includes Audit Committee and Stakeholders’ Relationship Committee only) 46th Annual Report 2019 | 19


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    Name of Director Mr. Marco Wadia Mrs. Kiran Dhingra Director Identification Number 00244357 00425602 Date of Birth January 30, 1956 January 12, 1953 Nationality Indian Indian Date of Appointment May 21, 1999 April 1, 2020 Expertise in specific functional Law & Legal Administration, governance, planning and areas policy making, personnel matters and legislative writing, Deep knowledge of Textile Industry Qualifications & experience He is B.A. (Hons), L.L.B. and practicing Mrs. Kiran Dhingra is MA in English Literature Advocate since 1986. Currently, he, is a from the University of Meerut, UP. and a partner in Crawford Bayley & Co., Advocates retired IAS Officer with almost 38 years of and Solicitors. He has about three decades distinguished civil service with the distinction of experience in the legal profession having of being one of the longest serving officers at specialised in corporate matters, Business the rank of Secretary to the Government of and Law, Corporate planning & strategy and India. mergers and acquisitions etc. He is also on the Board and Committees of various Before her retirement, she had been Secretary other companies including as Independent to the Government of India in various Ministries Director in listed entities. including the Ministry of Textile, Govt. of India and also Chief Secretary to the Government of Goa. She has held positions in several fields - the development sector, the social, the infrastructural, industrial, environmental as well as the regulatory sectors – and therefore carries with her a vast store of well-grounded experience of administration, governance, planning and policy making, personnel matters and legislative writing. Terms and conditions of Independent Director, Re-appointment for a Appointment as Independent Director of the appointment/ second term of five consecutive years and Company for a term of five consecutive years re-appointment shall not be liable to retire by rotation and shall not be liable to retire by rotation Remuneration to be paid Eligible for sitting fees and commission, if Eligible for sitting fees and commission, if any, any, as approved. as may be approved. Details of relationship with None None other Directors, Manager and Key Managerial Personnel of the Company Details of shares held in the 3700 Nil Company No. of Board Meetings attended 6 (Six) NA during the FY 2019 List of companies in which Listed Listed directorship held as on December 1) Chambal Fertilisers and Chemicals 1) Goa Carbon Limited 31, 2019 Limited 2) Astra Microwave Products Limited 2) Gobind Sugar Mills Limited 3) Zuari Agro Chemicals Limited 3) Jost’s Engineering Co. Limited Unlisted 4) Zuari Agro Chemicals Limited 4) Paradeep Phosphates Ltd 5) Zuari Global Limited 5) Indian Register of Shipping Unlisted 6) Amphenol Interconnect India Private Limited 7) Amphenol Omniconnect India Private Limited 8) Amphetronix Offset Interconnect Solutions Private Limited 9) Indian Register of Shipping 10) Johnson & Johnson Private Limited 11) Paradeep Phosphates Limited 12) Simon India Limited Chairman/Member of the 1) Chambal Fertilisers & Chemicals 1) Goa Carbon Limited Committees of other public Limited. 2) Zuari Agro Chemicals Limited Companies as on December 31, 2) Gobind Sugar Mills Limited 3) Paradeep Phosphates Ltd 2019 (includes Audit Committee 3) Paradeep Phosphates Limited and Stakeholders’ Relationship 4) Simon India Limited. Committee only) 5) Zuari Agro Chemicals Limited 6) Zuari Global Limited 20 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements Director’s Report TO THE MEMBERS Your Directors are pleased to present the 46th Annual Report and the Audited Financial Statement of the Company for the year ended December 31, 2019. 1. FINANCIAL RESULTS AND PERFORMANCE OVERVIEW (` In Millions) Particulars Current Year Previous Year 31.12.2019 31.12.2018 Revenue from Operations (net) 1937.05 1930.16 Other Income 54.85 59.74 (a) Total Income: 1991.90 1989.90 (b) Total Expenditure: 1575.64 1535.30 Gross Profit before Depreciation and Amortisation expenses 416.26 454.60 Less: Depreciation & Amortisation expenses 44.10 52.52 Profit Before Exceptional Items and Tax 372.16 402.08 Add: Exceptional items - 141.08 Profit before tax 372.16 543.16 Less: Current Tax 96.21 158.96 Deferred tax (3.45) (3.05) (Excess)/Short provision of income tax of earlier years (Net) 0.03 92.79 - 155.91 Profit After Tax 279.37 387.25 Add: Profit brought forward from previous year 1122.62 827.56 Effect on account of adoption of Ind AS 115 from January 1, 2019 (0.69) - Dividend on equity shares (Refer Note below) (114.84) (75.17) Tax on Dividend (23.61) (15.45) Remeasurement gains/(losses) on defined benefit plans (net of tax) (3.16) (1.57) Profit available for appropriation 1259.69 1122.62 Profit carried forward to Balance Sheet 1259.69 During the year, your Company has achieved standalone revenue from operations of ` 1,937.05 million as compared to ` 1,930.16 million in previous year, with a modest growth under challenging business circumstances and Operational Profit (PBT) stood at ` 372.16 million as compared to 402.08 million in previous year. The Company has no Subsidiary, Associate and Joint Venture company during the year. 2. RESERVES AND SURPLUS: 5. FIXED DEPOSITS The Company has not transferred any amount to General During the year, the Company has neither accepted nor Reserves for the FY 2019. renewed any deposits falling within the purview of Section 73 of the Act and rules made there under. 3. DIVIDEND: 6. CORPORATE GOVERNANCE & MDA Considering the Company’s financial performance, the Board of Directors have recommended payment of Final Dividend A separate report on Corporate Governance Compliance and of ` 60/- per equity share of ` 10/- each (i.e. 600%) for the a Management Discussion and Analysis Report as required financial year ended on December 31, 2019 subject to the by SEBI (Listing Obligations and Disclosure Requirements) approval of Members in the 46th Annual General Meeting of Regulations, 2015 (“Listing Regulations”) forms part of the the Company. Director’s Report as Annexure-II and III respectively along with the required Certificate from the Practicing Company 4. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, Secretary regarding compliance of the conditions of FOREIGN EXCHANGE EARNINGS AND OUTGO Corporate Governance. Information as required to be given under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) 7. AUDIT COMMITTEE Rules, 2014 is provided in Annexure I forming part of this The Company has in place an Audit Committee in terms of Report. requirements of the Act read with rules framed thereunder 46th Annual Report 2019 | 21


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    and Listing Regulations. The details relating to the Audit 9. BOARD MEETING Committee are given in the Corporate Governance Report During the financial year ended December 31, 2019, six forming part of this report. The recommendations of Audit meetings of the Board of Directors were held. The details of the Committee were duly accepted by the Board of Directors. attendance of Directors at the Board Meeting are mentioned in the Corporate Governance Report annexed hereto. 8. DIRECTORS AND KEY MANAGERIAL PERSONNEL Your Directors confirm that to the best of their knowledge Mr. Khurshed. M. Thanawalla (DIN: 00201749) and Mr. Marco and belief, applicable provisions related to Secretarial Wadia (DIN: 00244357) were appointed as Independent Standards on Meetings of the Board of Directors, issued by Director of the Company for a term of 5 consecutive years The Institute of Company Secretaries of India have been by the Members at the 41st Annual General Meeting held complied with. on May 7, 2015. On the recommendation of Nomination & Remuneration Committee and based on the performance 10. PERFORMANCE EVALUATION evaluation report, the Board of Directors of the Company Performance evaluation of non-Independent Directors, at their meeting held on February 25, 2020 has considered Independent Directors, the Board as a whole and Committees and approved the re-appointment of the above Independent of the Board has been carried out in accordance with the Directors of the Company for their second term of 5 statutory provisions as contained in the Act and Listing (five) consecutive years with effect from May 7, 2020 and Regulations. The details of Annual Performance Evaluation of accordingly recommended to the members of the Company Individual Directors including Chairperson, Board of Directors in the notice of Annual General Meeting. The Company and Committees of Board of Directors are mentioned in the has also received consent letters from such Directors for Corporate Governance Report. their said re-appointment as per the requirement of the Act. The abovenamed Independent Directors have furnished 11. CORPORATE SOCIAL RESPONSIBILITY declarations to the Company, confirming that they meet In accordance with Section 135 of the Act and Rules framed the criteria of Independence as prescribed for Independent thereunder, the Company has constituted a Corporate Social Directors under Section 149 (6) of the Act and Regulation Responsibility (“CSR”) Committee of Directors. The details of 16(1)(b) of the Listing Regulations. Resolutions for their composition of CSR Committee are given in the Corporate appointment have been proposed for approval of Members Governance Report. The details of CSR policy and CSR in the Notice of convening 46th AGM. spending by the Company as required under the Companies Mr. Eiko Ris (DIN: 07428696), who retires by rotation and (Corporate Social Responsibility Policy) Rules, 2014, have being eligible, offers himself for re-appointment. The Board been provided as Annexure-IV to this report. recommend his appointment in the notice of AGM. 12. BUSINESS RESPONSIBILITY REPORT (BRR) On the recommendation of Nomination and Remuneration SEBI vide Notification No. SEBI/LAD-NRO/GN/2019/45 dated Committee, the Board of Directors of the Company at December 26, 2019 had mandated top 1000 listed entities, their meeting held on February 25, 2020 has approved based on market capitalization, to include BRR in the annual the appointment of Mrs. Kiran Dhingra (DIN 00425602) report of the Company. Your Company is one of the top as an additional director of the Company in the women 1000 listed entities as per list of BSE Top 1000 listed entities Independent Director category with effect from April 01, based on their market cap, it is pleased to present its first 2020 for a term of five consecutive years, who shall hold BRR for the FY 2019 in the SEBI prescribed format which office up to the date this annual general meeting. The forms part of this annual report as Annexure -V. Company has received consent letter and other required disclosures/declarations from Mrs. Kiran Dhingra in respect 13. REMUNERATION POLICY of her appointment as Independent Director of the Compony The details of the Remuneration Policy is mentioned in the as per the requirement of the Act and Listing Regulations. Corporate Governance Report. A Statement of Disclosure Resolution for her appointment has been proposed for of Remuneration pursuant to Section 197 of the Act approval of Members in the Notice of convening 46th AGM. read with Rule 5(1) of the Companies (Appointment and Mrs. Sangeeta Sachdev (DIN: 08118379), Non-Executive Remuneration of Managerial Personnel) Rules, 2014, (as Director, ceased to be the Director of the Company in terms amended) is provided as Annexure VI forming part of of Section 167(1)(b) of the Companies Act, 2013 with effect this Report. from July 16, 2020. 14. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has complied with the requirements of having The Company has an Internal Control System, commensurate Key Managerial Personnel as per the provisions of Section with the size, scale and complexity of its operations. The 203 of the Act. 22 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements scope of Internal Audit is well defined in the organization. Company has a Whistle Blower Policy (also known as Vigil The Internal Audit Report is regularly placed before the Audit Mechanism) in place and the details of the Whistle Blower Committee of the Board. The Management and the Internal Policy are provided in the Report on Corporate Governance Auditor monitors and evaluates the efficacy and adequacy forming part of this Report. of internal control systems in the Company with reference The Company has disclosed information about the to the Financial statement, its compliance with standard establishment of the Whistleblower Policy on its website operating procedures, accounting procedures and policies. at www.stovec.com at https://www.spgprints.com/uploads/ Based on the report of Internal Auditors, process owners documents/Stovec/Stovec-policies/Whistle_Blower_Policy.pdf. undertake corrective action in their respective areas and thereby strengthening the controls continuously. Significant 19. RISK MANAGEMENT audit observations, if any, and corrective actions suggested The Company has formulated Risk Management Policy and taken are presented to the Audit Committee of the to monitor the risks and to address/mitigate those risks Board. associated with the Company. The Board of Directors do During the year under review, no reportable material not foresee any elements of risk, which in its opinion, may weakness in the operation was observed. Regular audit and threaten the existence of the Company. review processes ensure that such systems are reinforced 20. DIRECTORS RESPONSIBILITY STATEMENT on an ongoing basis. Pursuant to the provisions of Section 134 (3)(c) and 134 (5) of the Act, your directors confirm, to the best of their 15. EXTRACTS OF ANNUAL RETURN knowledge and belief: The extracts of Annual Return in Form MGT-9 as required under Section 92(3) of the Act (as amended) read with Rule a) that in the preparation of the annual financial 12 of the Companies (Management and Administration) statements for the year ended December 31, 2019, the Rules, 2014 (as amended), is appended as Annexure VII to applicable accounting standards have been followed this report. and that no material departures have been made from the same; 16. PARTICULARS OF CONTRACTS OR ARRANGEMENT b) that such accounting policies have been selected and WITH RELATED PARTIES applied consistently and judgment and estimates have The Particulars of contract or arrangement with Related been made that are reasonable and prudent, so as to Parties referred to in Section 188 (1) of the Act, in the give a true and fair view of the state of affairs of the prescribed Form AOC-2 forms part of this Report as Company as at December 31, 2019 and of the profit of Annexure VIII. the Company for the year ended on that date; All the RPTs were placed before the Audit Committee c) that proper and sufficient care has been taken for for its approval and the Committee had granted its prior the maintenance of adequate accounting records approval/omnibus approvals, as the case may be, for all RPTs in accordance with the provisions of the Companies considering their nature. The Audit Committee reviewed, Act, 2013, for safeguarding the assets of the Company on a quarterly basis, RPTs entered into by the Company to and for preventing and detecting fraud and other which omnibus approval was granted by the Committee. The irregularities; Company has framed a policy on RPTs for the purpose of d) that the annual financial statements for the year ended identification, approval and monitoring of such transactions. December 31, 2019, have been prepared on a going The policy on Related Party Transactions is hosted on the concern basis; Company’s website at www.stovec.com. e) that proper internal financial controls are in place in the Company and that such internal financial controls 17. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS are adequate and are operating effectively; and There were no loans given or security provided falling f) that proper systems have been devised to ensure under Section 186 of the Act. However, statement providing compliance with the provisions of all applicable laws particulars of Investments made under section 186 is and that such systems are adequate and operating provided in note no. 5 of Notes to the Standalone Financial effectively. Statements. 21. POLICY ON PREVENTION OF SEXUAL HARASSMENT OF 18. VIGIL MECHANISM WOMEN AT WORKPLACE As per the provisions of Section 177(9) of the Act, the The Company has in place a Policy on Prevention of Company is required to establish a Vigil Mechanism for Sexual Harassment of Women at Workplace in line with Directors and Employees to report genuine concerns. The the requirements of the Sexual Harassment of Women at 46th Annual Report 2019 | 23


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    Workplace (Prevention, Prohibition and Redressal) Act, 2013 Company, if made, would be in accordance with the limits and Rules framed thereunder and Internal Complaint’s specified under Section 141 of the Act and Rules framed Committee has also been set up to redress complaints thereunder. A resolution seeking Member’s approval for regarding sexual harassment. During the year, no complaint ratifying remuneration payable to Cost Auditors forms with allegations of sexual harassment was received by the part of the Notice convening 46th Annual General Meeting Company. Disclosures in relation to the Sexual Harassment of the Company and the same is recommended for the of Women at Workplace (Prevention, Prohibition and consideration and approval of Members. Redressal) Act, 2013 is as under: SECRETARIAL AUDIT & SECRETARIAL COMPLIANCE a. Number of complaints filed during the financial year - REPORT Nil Pursuant to the provisions of Section 204 of the Act read b. Number of complaints disposed of during the financial with the Companies (Appointment and Remuneration year - Nil of Managerial Personnel) Rules, 2014 and SEBI (LODR) c. Number of complaints pending as on end of the Amendment Regulation , 2018, the Company has appointed/ financial year – Nil engaged M/s Sandip Sheth & Associates, Practicing Company 22. AUDITORS AND AUDITORS REPORT Secretaries (COP No. 4354), for conducting Secretarial Audit & Secretarial Compliance Report of the Company for the STATUTORY AUDITORS financial year ended on December 31, 2019 and the same are M/s. S R B C & CO LLP, Chartered Accountants (FRN annexed to this report as Annexure-IX. 324982E/E300003), has been appointed as the Statutory Auditors of the Company by the members passing the AUDITORS REPORT resolution on July 28, 2020 through postal ballot filling the There are no qualifications, reservations or adverse remarks casual vacancy caused by the resignation of M/s. Deloitte made by M/s. Deloitte Haskins & Sells LLP, Chartered Haskins & Sell LLP to hold office upto the date of this AGM. Accountants, Statutory Auditors, in their audit report and The Audit Committee and Board further recommended the by M/s. Sandip Sheth & Associates, Practicing Company appointment of M/s. S R B C & CO LLP, as the auditor of Secretaries, Secretarial Auditors in their secretarial audit the Company for a term of 5 (five) years to hold office from report and therefore need not require any comments under the conclusion of ensuing 46th AGM till the conclusion of 51st section 134(3)(f) of the Act. AGM to be held in the year 2025. There have been no instances of fraud reported by the M/s. S R B C & CO LLP have conveyed their consent and Statutory Auditors under Section 143(12) of the Act and eligibility to be appointed as the Statutory Auditors of the Rules framed thereunder, either to the Company or to the Company along with a confirmation that, their appointment, if Central Government. made by the members, would be within the limits prescribed under the Companies Act, 2013. Therefore, resolution 23. MATERIAL CHANGES AND COMMITMENTS, IF ANY, to the appointment of M/s. S R B C & CO LLP, Chartered AFFECTING FINANCIAL POSITION OF THE COMPANY Accountants, as the Statutory Auditor of the company has FROM THE END OF FINANCIAL YEAR AND TILL THE been proposed to the members of the Company in the DATE OF THIS REPORT. notice of convening AGM of the Company. There have been no material changes and commitments, if any, affecting the financial position of the Company which COST RECORDS AND COST AUDITORS have occurred between the end of the Financial Year of the In terms of Section 148 of the Companies Act, 2013 read Company to which the Financial Statements relate and the with Rule 8 of the Companies (Accounts) Rules, 2014 (as date of this Report. amended), it is stated that the cost accounts and cost records are made and maintained by the Company as 24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE specified by Central Government under sub-section (1) of REGULATORS OR COURTS Section 148 of the Companies Act, 2013. As on date of this report, there are no significant and Further, the Board of Directors on the recommendation material orders passed by the Regulators or Courts or of the Audit Committee, have appointed M/s Dalwadi and Tribunals impacting the going concern status and operations Associates, Cost Accountants (Firm Registration No.000338) of the Company in future. as its Cost Auditors to audit the cost records of the Company for the FY 2020, at a remuneration as mentioned 25. PARTICULARS OF EMPLOYEES in the Notice convening the 46th Annual General Meeting. Your Directors place on record their deep appreciation for A certificate has been received from the Cost Auditors to the contribution made by the employees of the Company the effect that their appointment as Cost Auditors of the at all levels. 24 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements The information on employees particulars as required under 26. ACKNOWLEDGEMENT Section 197 (12) of the Act read with Rule 5 (2) and 5 (3) of the The Board of Directors express its deep sense of appreciation Companies (Appointment and Remuneration of Managerial for the contribution, co-operation and confidence reposed Personnel) Rules, 2014 (as amended), is provided in the in the Company by SPGPrints B.V. – the Parent Company. Annexure forming part of the Report. In terms of Section 136 The Board of Directors also extend its gratitude to its valued of the Act, the Report and Financial Statements are being shareholders, employees, customers, bankers, suppliers and sent to the Members and others entitled thereto, excluding other stakeholders for their continued co-operation and aforesaid Annexure. The said information is available for support. inspection by the Members at the Registered Office of the Company, on any working day of the Company (i.e. except For and on behalf of Board of Directors Saturday, Sunday and Public Holidays) up to the date of the 46th Annual General Meeting. Any Member interested in K.M. Thanawalla obtaining a copy of the same may write to the Company Date : August 13, 2020 Chairman Secretary of the Company. Place: Mumbai DIN: 00201749 46th Annual Report 2019 | 25


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    Annexure – I CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO (Pursuant to provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014). A. Conservation of Energy (I) The steps taken or impact on conservation of • Utility equipment (such as HWG, Compressors, cooling tower) energy operating set points are re-adjusted to achieve optimised level of energy consumption. • Planned & replaced old inefficient equipment with energy efficient ones to improve efficiency, • Kept operating voltage at optimum levels that enhanced Nickel bath efficiency. • Maintained & improved power factor by installing additional capacitor banks. • Followed regular practice of kept replacing old inefficient lighting fixtures with LED lighting fixture. • Ensured healthy level of energy efficiency of all the plant machinery by following effective preventive maintenance practices. (ii) The steps taken by the Company for utilising Company time to time keep evaluating feasibility of utilising various alternate sources of energy. available options in market for alternate energy. (iii) The capital investment on energy conservation • Some inefficient rectifiers are replaced with new efficient versions. equipment’s • New designed ecofriendly energy efficient process equipment & LED lights are installed while upgrading old production plant. B. Technology Absorption (i) The efforts made towards technology The Company continues to perform R&D activities to improve quality absorption of products and to reduce production cost to serve its customer better. (ii) The benefits derived like product improvement, • Development of New Products cost reduction, product development or import • Reduction of Product cost substitution • Product and Process improvement (iii) In case of imported technology (imported Not Applicable during the last three years reckoned from the beginning of the financial year) (a) the details of technology imported; (b) the year of import; (c) whether the technology been fully absorbed; (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and FOREIGN EXCHANGE EARNINGS AND OUTGO Particulars Amount (in `) Earnings in foreign exchange from Goods and Services exported, Commission etc. 32,87,79,898 Value of imports of raw materials, components, stores, spares, Commission, technical know-how fees, 78,13,60,829 royalty etc. 26 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements Annexure – II CORPORATE GOVERNANCE REPORT 1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE Stovec firmly believes that Corporate Governance is about upholding the highest standard of ethics, integrity, transparency and accountability in conducting affairs of the Company, so as to disseminate transparent information to all stakeholders. Stovec always seek to ensure that it attains performance goals with integrity. Corporate Governance has indeed been an integral part of the way Stovec have done business. This emanates from our strong belief that strong governance is essential in creating value on a sustainable basis. Corporate Governance is a journey for constantly improving sustainable value creation and is an upward moving target. 2. BOARD OF DIRECTORS The composition of the Board with reference to the number of Executive, Non-Executive Directors and Woman Directors, meets the requirement of Regulation 17(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended (“Listing Regulations”). The Company has an optimum combination of Non-Executive Directors. The present Board comprises of Six Directors which includes Non-Executive & Independent Chairman, Executive Director, Non-Executive & Non-Independent Directors (including one Woman Director) & Non-Executive & Independent Director as under- Name of Director Executive/Non-Executive/ *Outside **No. of Committee positions Independent Directorship held outside Member Chairman Mr. K M Thanawalla Non-Executive & 13 0 0 (DIN: 00201749) Independent (Chairman) (Thirteen) Mr. Marco Wadia Non-Executive & 12 4 5 (DIN: 00244357) Independent (Twelve) Mr. Dirk Wim Joustra Non-Executive & - - - (DIN: 00481154) Non-Independent Mrs. Sangeeta Sachdev Non-Executive & - - - (DIN: 08118379) Non-Independent Mr. Eiko Ris Non-Executive & - - - (DIN: 07428696) Non-Independent Mr. Shailesh Wani Executive - - - (DIN: 06474766) (Managing Director) *Please refer annexure to the Notice of the AGM for names of listed entities where the directors are holding directorship **Includes Audit Committee and Stakeholders’ Relationship Committee only in all public companies. In the opinion of the Board, the independent directors fulfill the conditions as specified in the Listing Regulations and are independent of the management and none of the Directors are related to any other Director. The Board met 6 (Six) times during the year i.e. February 14, 2019, April 05, 2019, May 09, 2019, July 17, 2019, August 13, 2019 and November 05, 2019 and maximum time gap between any two consecutive meetings was not more than 120 days. None of the Directors is a Director in more than 20 Companies or more than 10 Public Limited Companies or acts as an Independent Director in more than 7 Listed Companies. None of the Executive Directors act as Independent Director of more than 3 listed entities. None of the Directors is a member in more than 10 Committees or is Chairperson of more than 5 Committees amongst the Companies in which he/she hold directorships. The attendance record of the Directors at the Board as well as Annual General Meeting are as follows- 46th Annual Report 2019 | 27


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    DETAILS OF THE BOARD MEETINGS, ATTENDANCE AND SHAREHOLDING OF DIRECTORS Directors No of Board No of Board Attendance No. of Shares % of total Meetings held Meetings at the last held shares of the attended AGM Company Mr. K. M. Thanawalla 06 06 Yes Nil Nil Mr. Marco Wadia 06 06 Yes 3700 0.177 Mr. Dirk Wim Joustra 06 01 No Nil Nil Mr. Guillaume Cornelis Gerardus Roncken 06 01 No Nil Nil (Ceased to be Director w.e.f. 12.03.2019) Mr. Eiko Ris (Appointed as Director 06 02 Yes Nil Nil w.e.f 12.03.2019) Ms. Sangeeta Sachdev 06 01 Yes Nil Nil Mr. Shailesh Wani 06 06 Yes Nil Nil DISCLOSURE OF EXPERTISE OR SKILLS OF DIRECTORS The Board has identified the following skill set with reference to its Business and Industry which are available with the Board: Sr. List of core skills/expertise/ competence Availability as on December 31, 2019 a) Knowledge of the Manufacturing sector and Textile Industry √ b) General Business Understanding, Administration and management √ c) Sales and Marketing Functions √ d) Business Strategy Formation √ e) Corporate Strategy/Restructuring √ f) Finance, Accounting and Costing √ g) Legal, Regulatory Compliance √ h) Corporate Governance √ i) Human Resource Management √ j) Risk Management and Mitigation Planning √ APPOINTMENT / RE-APPOINTMENT OF DIRECTORS: The disclosure regarding appointment/re-appointment of Directors has been given under Sr. No. 8 of Director’s Report. ANNUAL PERFORMANCE EVALUATION The Annual Performance Evaluation of Board, Committees of Board and each Director including Chairman of the Board was carried out through a structured questionnaire. Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board of Directors/Independent Directors/Nomination and Remuneration Committee (as applicable) has undertaken an evaluation of their own performance, the performance of Committees of Board and of all the individual Directors including Chairman of the Board of Directors based on various parameters relating to roles, responsibilities, obligations, level and effectiveness of participation e.g. inputs provided by the Director based on his/her knowledge, skills and experience, independence in judgment, understanding of the Company’s business and strategy, guidance on corporate strategy, sharing knowledge and experience in their respective areas, contribution of Directors at meetings and functioning of Committees. The result of above performance evaluation was presented to the Nomination and Remuneration Committee and the Board of Directors (as applicable). The Board of Directors (excluding the Director being evaluated) evaluated the performance of Mr. K. M. Thanawalla and Mr. Marco Wadia, Independent Directors of the Company and has determined to continue with the term of appointment or re-appointment of such Independent Directors. The Independent Directors in their meeting assessed the quality, sufficiency and timeliness of flow of information between the Company Management and the Board which is necessary for the Board to effectively and reasonably perform their duties. The Independent Directors found the same satisfactory. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS The familiarisation programme was organised for Independent Directors on November 5, 2019. The details of familiarisation Programme is available at the website of the Company www.stovec.com at https://www.spgprints.com/uploads/documents/ Stovec/News/Familiarization-Programme.pdf. 28 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements 3. COMMITTEES OF THE BOARD The Committees of the Board are constituted as per the Companies Act, 2013 and Listing Regulations 3.1 AUDIT COMMITTEE The terms of reference of the Audit Committee are in line with the requirement of Section 177 of the Companies Act, 2013 and rules framed thereunder and as per Listing Regulations. The terms of reference of Audit Committee are briefly described below: (i) Review Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible and also to examine the financial statement and the auditors’ report thereon; (ii) Review with the management, of the annual financial statements before submission to the Board for approval, with particular reference to: a. Matters required to be included in the Director’s Responsibility Statement forming part of the Board’s report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013 or any amendment or re-enactment thereof; b. Changes, if any, in accounting policies and practices and reasons for the same; c. Major accounting entries involving estimates based on the exercise of judgment by management; d. Significant adjustments made in the financial statements arising out of audit findings; e. Compliance with listing and other legal requirements relating to financial statements; f. Disclosure of any related party transactions; g. Qualifications in the draft audit report. (iii) Review with the management of the quarterly financial statements before submission to the Board for approval (iv) Recommending to the Board, the appointment, re-appointment, terms of appointment/re- appointment, fixation of audit fees and, if required, the replacement or removal of the Auditor; (v) Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors; (vi) Review and monitor the auditor’s independence and performance and effectiveness of audit process; (vii) Discussion with Statutory Auditors before the audit commences, about the nature and scope of audit as well as post- audit discussion to ascertain any area of concern; (viii) May call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board and may also discuss any related issues with the Internal and Statutory Auditors and the Management of the Company; (ix) Reviewing with the Management, performance of Statutory and Internal Auditors, adequacy of the internal control systems; (x) Review of the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit; (xi) Discussion with Internal Auditors of any significant findings and follow up there on; (xii) Evaluation of internal financial controls and risk management systems; (xiii) Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board; (xiv) Review of information relating to: a) Management discussion and analysis of financial condition and results of operations; b) Statement of significant related party transactions submitted by management; c) Management letters / letters of internal control weaknesses issued by the Statutory Auditors; d) Internal Audit reports relating to internal control weaknesses; e) The appointment, removal and terms of remuneration of the Chief internal auditor (xv) Approval or any subsequent modification of transactions of the Company with related parties; (xvi) Scrutiny of inter-corporate loans and investments; 46th Annual Report 2019 | 29


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    (xvii) Reviewing with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), The statement of funds utilised for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter; (xviii) Valuation of undertakings or assets of the Company, wherever it is necessary; (xix) To look into the reasons for substantial defaults in the payment to the depositors, if any, debenture holders, if any, shareholders (in case of non-payment of declared dividends) and creditors; (xx) To review the functioning of the Whistle Blower/Vigil Mechanism; Details of establishing the Vigil Mechanism have been disclosed on the Company’s website and in the Director’s Report; (xxi) Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate; (xxii) To review the financial investments, in particular, the investments made by the unlisted subsidiary company; (xxiii) Other matters as may be prescribed from time to time to be dealt with or handled by the Audit Committee pursuant to provisions of the Companies Act, 2013, the Rules framed thereunder, the Listing Regulation and the guidelines, circulars and notifications issued by Securities and Exchange Board of India (“SEBI”)/Ministry of Corporate Affairs (“MCA”) from time to time. (xxv) Reviewing the utilisation of loans and/ or advances from/investment by the holding company in the subsidiary exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans / advances / investments existing as on the date of coming into force of this provision. (xxiv) Carrying out any other function as may be assigned to the Committee by the Board from time to time; COMPOSITION & ATTENDANCE AT THE MEETING The composition of the Audit Committee and details of meetings attended by the Members of the Audit Committee during the FY 2019 are given below: Directors Position held in Independent/Executive/ No. of Meeting No. of Meetings Committee Non-Executive held attended Mr. K M Thanawalla Chairman Independent & Non-Executive Director 05 05 Mr. Marco Wadia Member Independent & Non-Executive Director 05 05 Mr. Shailesh Wani Member Managing Director 05 05 The Committee met 5 (five) times during the year i.e. February 14, 2019, April 05, 2019, May 09, 2019, August 13, 2019 and November 05, 2019. Company Secretary act as the Secretary to the Committee. The Chairman of the Audit Committee was present in the last Annual General Meeting to answer the shareholders queries. 3.2 NOMINATION AND REMUNERATION COMMITTEE: The terms of reference of the Nomination and Remuneration Committee have been formulated in line with the requirement of Section 178 of the Companies Act, 2013 and rules framed thereunder and as per Listing Regulations. TERMS OF REFERENCE Brief terms of reference of Nomination and Remuneration Committee are as under: • Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees; • Formulation of criteria for evaluation of Independent Directors and the Board; • Devising a policy on Board diversity; • Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board their appointment and removal. • Whether to extend or continue the term of appointment of the independent director. • Recommend to the board, all remuneration, in whatever form, payable to senior management. 30 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements COMPOSITION & ATTENDANCE AT THE MEETING The composition of the Nomination and Remuneration Committee and details of meetings attended by the Members of the Nomination and Remuneration Committee during the FY 2019 are given below: Directors Position held in Independent/Executive/ No. of Meeting No. of Meetings Committee Non-Executive held attended Mr. Marco Wadia Chairman Independent & Non-Executive Director 02 02 Mr. K M Thanawalla Member Independent & Non-Executive Director 02 02 *Mr. Eiko Ris Member Non-Executive Director - - *(Appointed as a member w.e.f. March 12, 2019) Mr. Guillaume Cornelis Gerardus Roncken ceased to be a member of the committee upon resignation w.e.f. March 12, 2019. The Nomination and Remuneration Committee met 2 (two) times during the year on February 14, 2019 and April 05, 2019. Company Secretary act as the Secretary to the Committee. REMUNERATION POLICY: The Remuneration policy of the Company is performance driven and is structured to motivate employees, recognise their merits and achievements, in order to retain the talent in the Company and stimulate excellence in their performance. The Board of Directors/Nomination and Remuneration Committee is authorised to decide the remuneration of the Managing Director/Executive Director’s, subject to the approval of the Members. Remuneration comprises of fixed Components viz. Salary, perquisites and allowances and a variable component comprising of Gross Bonus of minimum 38% and maximum of 50% of annual fixed salary (as per the scheme applicable to Managing Directors’ of SPGPrints Operating Companies) based on the targets achieved. The Managing Director will be entitled to bonus provided the conditions for awarding bonus have been met. The Nomination & Remuneration Policy of the Company is available on the website of the Company at www.stovec.com The Directors’ remuneration and sitting fees paid/payable in respect of the FY 2019 are given below: - (A) MANAGING DIRECTOR REMUNERATION: The details of remuneration to Managing Director are as follows: Managing Director Salary & Perquisites & Contribution to Provident Total Allowances Benefits and other Funds Mr. Shailesh Wani 1,25,65,261.00 9,80,004.00 8,52,267.00 1,43,97,532.00* * Remuneration includes variable pay on provisional basis. SERVICE CONTRACT AND NOTICE PERIOD OF THE MANAGING DIRECTOR/EXECUTIVE DIRECTOR: Mr. Shailesh Wani’s contract as a Managing Director is for a period of 3 years commencing from October 1, 2019 to September 30, 2022, terminable by six months’ notice by either side or amount equivalent to six months’ salary in lieu thereof. (B) NON-EXECUTIVE DIRECTORS: The Independent Directors’ are paid remuneration by way of Sitting fees for attending Board/Committee Meetings and Commission. During the year, Independent Directors were paid remuneration as under: Name *Sitting Fees (In INR) Commission (In INR) Total (In INR) Mr. K M Thanawalla 5,94,000 14,89,300 20,83,300 Mr. Marco Wadia 5,67,000 5,10,700 10,77,700 *Exclusive of Goods and Service Tax (as applicable). NOTE: • Directors other than Independent Directors opted not to accept any sitting fees for attending Board/Committee Meetings, as applicable. 46th Annual Report 2019 | 31


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    • As approved by Members of the Company in the 43rd Annual General Meeting, Commission is payable only to Independent Directors. Commission mentioned above will be paid to Independent Directors after the approval of Annual Financial Statements for the FY 2019 by the Members at the ensuing Annual General Meeting. • During the year, there were no pecuniary relationships or transactions between the Non-Executive Directors and the Company. COMMISSION The Members of the Company at the 43rd Annual General Meeting held on May 11, 2017 have approved payment of Commission to Independent Directors within the overall ceiling of not exceeding 1% (one percent) or such other percentage as may be prescribed in the Act from time to time, of the net profits of the Company (computed in the manner provided in Section 198 of the Act or as may be prescribed by the Act or Rules framed thereunder from time to time) for each financial year, for a period of three financial years commencing from January 1, 2017, with Powers to Board committee thereof to decide the amount to be paid as Commission to Independent Directors, within the above referred ceiling of Commission. The amount of Commission payable to each Independent Director is decided by the Board of Directors based on the recommendation of Nomination and Remuneration Committee and distributed among the Independent Directors based on their attendance, contribution in decision making, Role and Responsibility as a Chairman/ Member of the Board/Committee etc. Besides above, the Company does not pay any other commission or remuneration to its Non-Executive Directors. 3.3 STAKEHOLDERS RELATIONSHIP COMMITTEE The terms of reference of the Stakeholders Relationship Committee have been formulated in line with the requirement of Section 178 of the Companies Act, 2013 and rules framed thereunder and as per Listing Regulations. TERMS OF REFERENCE: The brief terms of reference of the Stakeholders Relationship Committee are as under: • Resolving the grievances of the security holders of the listed entity including complaints related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc. • Review of measures taken for effective exercise of voting rights by shareholders. • Review of adherence to the service standards adopted by the listed entity in respect of various services being rendered by the Registrar & Share Transfer Agent. • Review of the various measures and initiatives taken by the listed entity for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the Company. COMPOSITION The composition of the Stakeholder’s Relationship Committee is as under: Directors Position held in Committee Independent/Executive/Non-Executive Director Mr. K. M. Thanawalla Chairman Independent & Non-Executive Director Mr. Shailesh Wani Member Managing Director Mr. Eiko Ris* Member Non-Executive Director *Appointed as a Member w.e.f March 12, 2019. During the year under report, the committee met on February 14, 2019 and all the members were present at the meeting. Company Secretary act as the Secretary to the Committee. COMPLIANCE OFFICER: Mr. Sanjeev Singh Sengar, Company Secretary, who is the Compliance Officer, can be contacted at: - Stovec Industries Limited N.I.D.C., Nr. Lambha Village, Post: Narol, Ahmedabad, Gujarat – 382 405, India. Tel: +91 79 6157 2300 • Fax: +91 79 2571 0406 Email: secretarial@stovec.com 32 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements Complaints or queries relating to the shares can be forwarded to the Company’s Registrar and Transfer Agents ‘M/s Link Intime India Private Limited’ at ahmedabad@linkintime.co.in. The Compliance officer has been regularly interacting with the Share Transfer Agents to ensure that shares related complaints of the investors are attended to without undue delay and where deemed expedient the complaints are referred to the committee or discussed at the meetings. The status on the total number of complaints received during the FY 2019 are as follows: - Complaints Received Resolved during the Year *Pending as on 31.12.2019 3 2 1 *Resolved within timelines 3.4 CORPORATE SOCIAL RESPONSIBILITY COMMITTEE TERMS OF REFERENCE: The Committee is primarily responsible for formulating and recommending to the Board of Directors a Corporate Social Responsibility (CSR) Policy and monitoring the same from time to time, amount of expenditure to be incurred on the activities pertaining to CSR and monitoring CSR activities. COMPOSITION: The composition of the Corporate Social Responsibility Committee is as under: Directors Position held in Independent / Executive / No. of Meetings No. of Meetings Committee Non-Executive Director Held attended Mr. Shailesh Wani Chairman Managing Director 2 2 Mr. K. M. Thanawalla Member Independent & 2 2 Non-Executive Director Mr. Eiko Ris* Member Non-Executive Director 2 1 *Appointed as a Member w.e.f March 12, 2019 During the year, the Corporate Social Responsibility Committee met 2 (two) times i.e. on February 14, 2019 and November 5, 2019. CSR POLICY: The Company has formulated CSR Policy and the same is available at the website of the Company at www.stovec.com at https://www.spgprints.com/uploads/documents/Stovec/Stovec-policies/CSR_Policy.pdf. Company Secretary acted as the Secretary to the Committee. 3.5 OTHER COMMITTEES COMMITTEE OF DIRECTORS Directors Position held in Committee Independent/Executive / Non-Executive Director Mr. K. M. Thanawalla Chairman Independent & Non-Executive Director Mr. Marco Wadia Member Independent & Non-Executive Director During the year 2019, no meeting of Committee of Directors was held. 3.6 SEPARATE INDEPENDENT DIRECTOR’S MEETING Pursuant to requirements of the Act and Regulation 25 of Listing Regulations, the Company’s Independent Directors during the year under review met on February 14, 2019, without the presence of Non-Independent Directors and members of the Management. 4. CODE OF BUSINESS CONDUCT AND ETHICS: The Company has in place, a Code of Business Conduct and Ethics for its Board Members, Senior Management and Employees. The Board and the Senior Management affirm compliance with the code annually. 46th Annual Report 2019 | 33


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    5. GENERAL BODY MEETINGS’ DISCLOSURES: Location and time of General Meetings in the past 3 financial years: Year Type Location Date Time FY2018 Annual General Stovec Industries Limited May 9, 2019 11:00 am FY2017 Meetings N.I.D.C., Nr. Lambha Village, Post: May 2, 2018 11:00 am Narol, Ahmedabad– 382405 FY2016 May 11, 2017 11:00 am The following are the Special Resolutions passed at Annual General Meetings held in the past 3 financial years: Date of Meeting Summary May 09, 2019 Re-appointment of Mr. Shailesh Wani as Managing Director of the Company May 02, 2018 Nil May 11, 2017 Nil Postal Ballot: During the year under review, pursuant to Section 110 of the Companies Act, 2013 read with Rule 22 of the Companies (Management and Administration) Rules, 2014, the Board of Directors had got the approval of the members of the Company on January 04, 2019 through postal ballot for two items. The Postal Ballot Notices along with their Explanatory Statement and the postal ballot forms were sent to all the Shareholders of the Company along with postage prepaid envelops. Mr. Sandip Sheth (Membership No. FCS 5467) and failing him Mr. Prashant Prajapati (Membership No. ACS 32597) of M/s. Sandip Sheth & Associates, Practicing Company Secretaries. Was appointed as the Scrutinizer who conducted the postal ballot process in a fair and transparent manner. The procedures prescribed under said section were duly followed for conducting the postal ballot process for passing the following resolutions vide Postal Ballot Notice dated November 14, 2018:- 1) Continuation of directorship of Mr. K. M. Thanawalla, Chairman (Non- Executive and Independent) who has attained the age of seventy-five years on December 24, 2017. 2) Commission to Mr. K. M. Thanawalla, Chairman (Non-Executive and Independent), for the financial year 2018, which may exceed fifty per cent of the total Commission payable to all the Independent Directors of the Company Summary of Results of the Postal Ballot and e-Voting: 1. For Special Resolution No. 1 Sr. Particulars Postal Ballot Form No. of Shares voted upon % of Total % Net No. Physical Remote Total Physical Remote Total Paid Up Valid Votes Ballot Evoting Ballot Evoting Shares Cast 1. Total postal ballot 72 27 99 1488438 40759 1529197 - - forms received /Evoting 2. Less: Invalid/Abstained 7 0 7 132 0 132 - - Postal Ballot Forms 3. Net Valid Postal Ballot 65 27 92 1488306 40759 1529065 - - Votes (1-2) 4. Forms with Assent for 64 26 90 1488291 40757 1529048 74.13 99.999 the Resolution Forms with dissent for 1 1 2 15 2 17 0.00 0.001 the Resolution 2. For Special Resolution No. 2 Sr. Particulars Postal Ballot Form No. of Shares voted upon % of Total % Net No. Physical Remote Total Physical Remote Total Paid Up Valid Votes Ballot Evoting Ballot Evoting Shares Cast 1. Total postal ballot 72 27 99 1488438 40759 1529197 - - forms received /Evoting 2. Less: Invalid/Abstained 11 0 11 2437 0 2437 - - Postal Ballot Forms 3. Net Valid Postal Ballot 61 27 88 1486001 40759 1526760 - - Votes (1-2) 4. Forms with Assent for 59 22 81 1485894 40600 1526494 74.00 99.98 the Resolution Forms with dissent for 2 5 7 107 159 266 0.00 0.02 the Resolution 34 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements The above-mentioned resolutions were passed by the members with requisite majority on January 04. There is no special resolution is proposed to be conducted to pass through postal ballot. 6. DISCLOSURE 6.1 Besides the transactions mentioned elsewhere in the Annual Report, there were no other materially significant related party transactions that may have potential conflict with the interests of the Company at large. 6.2 The Company has complied with various rules and regulations prescribed by Stock Exchanges, Securities and Exchange Board of India or any other statutory authority relating to the capital markets. No penalties or strictures have been imposed by them on the Company during the last 3 years. However, SEBI has imposed settlement charges for ` 5,84,350/- (Rupees Five Lakhs Eighty-Four Thousand Three Hundred and Fifty only) toward settlement of delayed disclosure under SEBI SAST Regulation to the Stock Exchange, on Company’s suo moto application. 6.3 Pursuant to the provisions of Regulation 17 (8) of the Listing Regulations, the Managing Director and the Chief Financial Officer have issued a certificate to the Board for the financial year ended December 31, 2019. 6.4 During the year under review, the Company has complied with the corporate governance requirements specified in Regulation 17 to 27 and clauses (b) to (i) of sub-regulation 2 of Regulation 46 of Listing Regulations. 6.5 Whistle Blower Policy: The Company has in place a Whistle Blower Policy through which Directors, Employees and other Stakeholders may report their genuine concerns or grievances. The Whistle Blower Policy of the Company has been disclosed on the website of the Company at March 12, 2019. No personnel have been denied access to the Audit Committee to report its genuine concerns or grievances. 6.6 Related Party Transactions There were no materially significant related party transactions other than those approved the members of the Company during the FY 2019. Related Party Transaction Policy has been formulated in order to regulate the transact ions between Company and Related Parties. The Related Party Transaction Policy is available at the website of the Company at www.stovec.com at https://www.spgprints.com/uploads/documents/Stovec/Stovec-policies/Related_Party_Transaction_Policy.pdf. 6.7 Risk Management As required by Listing Regulations, the Risk Management Policy has been formulated and the same is available at the website of the Company at www.stovec.com 6.8 Policy for Prohibition of Insider Trading and Code of Conduct for Fair Disclosures The Company has adopted a Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders and Code of Conduct for fair disclosures pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015 (as amended). 6.9 Policy for determining Material Subsidiaries The Company has formulated Policy for determining Material Subsidiaries and the same is available at the website of the Company at www.stovec.com at https://www.spgprints.com/uploads/documents/Stovec/Stovec-policies/Policy_for_ determining_Material_Subsidiaries.pdf. 6.10 Policy for determining Material Information As required by Regulation 30 of SEBI (Listing Obligations and Disclosure Requirement s) Regulations, 2015, the Board of Directors have approved the Policy for determining Material Information and is available at the website of the Company at www.stovec.com at https://www.spgprints.com/uploads/documents/Stovec/Stovec-policies/Policy_for_determining_Material_ Information.pdf. 6.11 Policy for Preservation of Documents and Archival Policy As required by Regulation 9 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 , the Board of Directors have approved the Policy for Preservation of Documents and Archival Policy and the same is available at the website of the Company at www.stovec.com at https://www.spgprints.com/uploads/documents/Stovec/Stovec-policies/ Policy_for_Preservation_of_Documents___Archival_Policy.pdf. 6.12 Disclosure of Accounting Treatment The Company in the preparation of financial statements has followed the treatment laid down in the Accounting Standards prescribed by the Institute of Chartered Accountants of India. There are no audit qualifications in the Company’s financial statements for the year under review. 46th Annual Report 2019 | 35


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    6.13 Disclosure of Commodity Price Risks, Foreign Exchange Risk and Commodity Hedging Activities High quality Nickel, which is the principal raw material for the Company is imported regularly, as per Purchase guidelines of the Company. The Company’s performance may get impacted in case of substantial change in prices of Nickel or Foreign Exchange rate fluctuations. The Company takes forward cover as per its forex risk coverage policy. The Company does not undertake commodity hedging activities. The Company has put in place risk management policy to address the risks associated with the business of the Company including commodity price risk and mechanism to continuously monitor the movement in commodity prices and take appropriate action to ensure better cost control. During the year, the Company has no material price risk exposure. 6.14 Credit Rating The requirement of disclosure relating to list of all credit ratings obtained by the entity along with any revisions thereto during the relevant financial year, for all debt instruments of such entity or any fixed deposit programme or any scheme or proposal of the listed entity involving mobilisation of funds, whether in India or abroad is not applicable to the Company. 6.15 Details of utilisation of funds raised through preferential allotment or qualified institutions placement During the year, the Company has not raised funds through the preferential allotment or qualified institutions placement as specified under Regulation 32 (7A). 6.16 Certificate from a company secretary in practice regarding disqualification of Directors The company has obtained the certificate from M/s Sandip Sheth & Associates, confirming that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the SEBI/Ministry of Corporate Affairs or any such statutory authority. The certificate of non-disqualification is appended to this Report. 6.17 Regarding non-acceptance of Recommendation of any committee The Board of Directors have accepted every recommendation made by any committee of the board. 6.18 Regarding total fees paid to the Statutory Auditor on a consolidated basis Details relating to fees paid to the Statutory Auditors is given in the Notes 31 to the Financial Statements. 6.19 Disclosure in relation to Sexual Harassment of Women at Workplace The disclosure has been given at Sr. No. 21 to the Directors’ Report. 6.20 Adoption of Non-Mandatory Requirements of Listing Regulations The Company has separate persons for the position of Chairman and Managing Director. Mr. K. M. Thanawalla is a Chairman (Independent & Non - Executive) and Mr. Shailesh Wani is the Managing Director of the Company. 7. SUBSIDIARY COMPANY The Company does not have any subsidiary, Associate and joint venture company during the FY 2019. 8. MEANS OF COMMUNICATION The Quarterly Results were published in Business Standard (English) and Loksatta Jansatta/Jaihind (Gujrati) and simultaneously hosted on the Company’s website www.stovec.com and also submitted with the BSE Limited (BSE). All the required disclosures and information are hosted on the Company’s website for the benefit of the shareholders and is available. The Annual Report of the Company is also available on the website in a user friendly and downloadable form. 9. GENERAL INFORMATION FOR MEMBERS 9.1 Annual General Meeting: Day, Date and Time Wednesday, September 16, 2020 at 3.00 p.m. Venue Through VC/OAVM from the Registered Office of the Company 9.2 Financial Calendar: Financial Year Ending on December 31, 2019 Date of Book Closure September 10, 2020 to September 16, 2020 (both days inclusive) Dividend Payment Date On or before October 15, 2020 9.3 Listing: The Company’s shares are listed on the BSE Limited (BSE) and the Company has paid annual listing fees to BSE in respect of the year 2019-2020. The Ahmedabad Stock Exchange (ASE) vide its letter dated January 11, 2017 communicated to the Company that it is non-functional and under exit policy, thereby no need to make any compliance with ASE. 36 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements 9.4 The following are the listing details of the Company’s Shares: Type of Shares ISIN No. BSE Stock Code Ordinary Shares INE755D01015 504959 9.5 Market Information: Month BSE High (`) Low (`) BSE SENSEX Jan-19 2,549.80 2,300.00 35,256.69 Feb-19 2,495.00 2,307.10 35,867.44 Mar-19 2,499.95 2,302.00 38,672.91 Apr-19 2,680.00 2,350.05 39,031.55 May-19 2,610.00 2,000.00 39,714.20 Jun-19 2,300.00 2,098.95 39,394.64 Jul-19 2,248.55 1,790.00 37,481.12 Aug-19 1,874.85 1,500.00 37,332.79 Sep-19 1,990.00 1,535.05 38,667.33 Oct-19 1,992.00 1,575.00 40,129.05 Nov-19 2,344.95 1,706.00 40,793.81 Dec-19 2,254.95 1,975.00 41,253.74 Performance in comparison to broad-based indices such as BSE Sensex: *Source: www.bseindia.com 9.6 Registrar and Transfer Agents: - For transfer lodgment, delivery and correspondence related to Shares, Members are requested to do correspondence with the Company’s Registrar and Share Transfer Agents - M/s Link Intime India Private Limited quoting their folio no. at the following address: - M/s Link Intime India Private Limited, 5th Floor, 506 to 508, Amarnath Business Center –I (ABC-I), Besides Gala Business Center, Nr. St. Xavier’s College Corner, Off. C.G. Road, Navrangpura, Ahmedabad – 380 009, Gujarat. Tel: +91(0) 79 - 2646 5179/86/87, Fax: +91(0) 79 - 2646 5179. ahmedabad@linkintime.co.in 9.7 Share Transfer System: The Board has issued Power of Attorney to Registrar and Share Transfer Agent, M/s. Link Intime India Pvt. Ltd., to approve transfer of shares. 9.8 Reconciliation of Share Capital Audit & Certificate pursuant to Regulation 40 (9) of Listing Regulations: A qualified Practicing Company Secretary carried out a Reconciliation of Share Capital Audit to reconcile the total admitted capital with NSDL and CDSL and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the aggregate of the total number of shares in physical form and in dematerialised form (held with NSDL and CDSL). Pursuant to Regulation 40 (9) of Listing Regulations, certificate on half-yearly basis have been issued by a Practicing Company Secretary for due compliance of share transfer formalities by the Company. 9.9 Report on Corporate Governance: The Company regularly submits to the Stock Exchanges, within the prescribed period, quarterly reports on Corporate Governance. A Certificate from the Practicing Company Secretary on Compliance of conditions of Corporate Governance is attached as annexure to the Report. 46th Annual Report 2019 | 37


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    9.10 Shareholding Pattern of the Company: Category As on 31.12.2019 As on 31.12.2018 No of Shares % No. of Shares % Promoters & Promoter Group 1,483,777 71.06 1,483,777 71.06 Mutual Funds/UTI 0 0.00 0 0.00 Foreign Portfolio Investors 0 0.00 600 0.03 Investor Education and 29,948 1.43 25,263 1.21 Protection Fund Financial Institutions/Banks 1,102 0.05 1,451 0.07 Bodies Corporate 31,045 1.49 24,733 1.19 NRIs (Repatriable) 6,274 0.30 5,932 0.28 NRIs (Non-Repatriable) 9,871 0.47 9,894 0.47 Clearing Members 270 0.01 6,705 0.32 Directors & their Relatives 5,864 0.28 5,864 0.28 Individuals/HUF 5,19,865 23.92 5,23,697 25.08 Trusts 0 0.00 0 0.00 TOTAL 2,088,016 100.00 2,088,016 100.00 9.11 Distribution of Shareholding as on December 31, 2019: Range of Shares No. of % of total No. of Shares % of Total Shareholders Shareholders Shares 1 - 500 6699 97.9959 301442 14.4368 501 - 1000 75 1.0971 53363 2.5557 1001 - 2000 34 0.4974 48593 2.3272 2001 - 3000 9 0.1317 22565 1.0807 3001 - 4000 5 0.0731 17678 0.8466 4001 - 5000 4 0.0585 18146 0.8691 5001 - 10000 5 0.0731 29718 1.4233 10001 or more 5 0.0731 1596511 76.4607 TOTAL 6,836 100 2,088,016 100.00 9.12 Shareholders (holding in excess of 1% of capital) as on December 31, 2019: Name of Shareholders No. of Shares held % of Share Capital SPGPrints B.V. 14,83,777 71.0616 Nanda Kishore Sharma 41,520 1.9885 IEPF, MCA 29,948 1.4343 Amit Shantilal Motla 24,745 1.1851 9.13 Dematerialisation of Shares & Liquidity: As on December 31, 2019, shares comprising 96.64% of the Company’s Equity Share Capital have been dematerialised. ISIN No. :- INE755D01015 9.14 Plant Location & Address for Correspondence: STOVEC INDUSTRIES LIMITED Address : N.I.D.C., Nr. Lambha Village, Post: Narol, Ahmedabad, Gujarat – 382 405, India. CIN : L45200GJ1973PLC050790 Tel : +91 79- 6157 2300 Facsimile No : +91 79- 2571 0406 Website : www.stovec.com DECLARATION BY THE MANAGING DIRECTOR UNDER PART D OF SCHEDULE V OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 REGARDING ADHERENCE TO THE CODE OF CONDUCT In accordance with Part D of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, I hereby confirm that, all the Directors and the Senior Management personnel of the Company have affirmed compliance with the Code of Business Conduct and Ethics for Board of Directors, Senior Management & Employees, as applicable to them, for the financial year ended December 31, 2019. For, STOVEC INDUSTRIES LIMITED Shailesh Wani Date : February 25, 2020 Managing Director Place: Ahmedabad (DIN: 06474766) 38 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements CIN: - L45200GJ1973PLC050790 Nominal Capital :- 3,00,00,000/- Paid-up Capital :- 2,08,80,160/- CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS (Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015) To, The Members, Stovec Industries Ltd. N.I.D.C. Nr. Lambha Village, Post: Narol, Ahmedabad – 382 405, Gujarat, India. We have examined all relevant registers, records, forms and disclosures received from the directors of Stovec Industries Limited, produced before us by the Company for the purpose of certifying compliance of conditions of clause 10 (i) of para C of Schedule V read with Regulation 34(3) of Chapter IV of SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 for the year ended on 31st December 2019. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of certification. During the course of such certification, we have relied on various information and declaration furnished by each director of the Company as at 31st December 2019 and relied on the online information available with Ministry of Corporate Affairs Portal, its filling position and other web pages. In our opinion and to the best of our information and according to the verifications (including Directors Identification Number (DIN status at the portal www.mca.gov.in) as considered necessary and explanations furnished to us by the Company & its officers, We hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31st December, 2019 have been debarred or disqualified from being appointed or continuing as Directors of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such other Statutory Authority. Sr. Name of Director Director Identification Date of appointment No Number (DIN) in the Company 1 MR. KHURSHED MEHERWANJI THANAWALLA 00201749 28/01/2005 2 MR. SHAILESH CHANDRAKRISHNA WANI 06474766 01/10/2013 3 MR. DIRK WIM JOUSTRA 00481154 29/01/1999 4 MR. EIKO RIS 07428696 12/03/2019 5 MR. MARCO PHILIPPUS ARDESHIR WADIA 00244357 21/05/1999 6 MS. SANGEETA PUNEET SINGH SACHDEV 08118379 02/05/2018 Ensuring the eligibility of for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification.. Our examination was limited to the procedure and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the clause 10 (i) of para C of Schedule V read with Regulation 34(3) of Chapter IV of SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 for the year ended on 31st December 2019. Sandip Sheth & Associates Firm Unique Code: P2001GJ041000 Practicing Company Secretaries Place: Ahmedabad Date: February 19, 2020 Sandip Sheth Partner FCS: 5467 CP No.: 4354 UDIN: F005467A000561231 46th Annual Report 2019 | 39


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    CIN: - L45200GJ1973PLC050790 Nominal Capital :- 3,00,00,000/- Paid-up Capital :- 2,08,80,160/- CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE To, The Members, Stovec Industries Ltd. N.I.D.C. Nr. Lambha Village, Post: Narol, Ahmedabad – 382 405, Gujarat, India. We have examined all relevant records of Stovec Industries Limited for the purpose of certifying compliance of conditions of Corporate Governance under para C of Schedule V read with Regulation 34(3) of Chapter IV of SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015for the year ended on 31st December, 2019. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of certification. The compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination was limited to the procedure and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. This certificate is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. On the basis of our examination of the records produced, explanation and information furnished, we certify that the Company has complied with all the mandatory conditions of the para C of Schedule V read with Regulation 34(3) of Chapter IV of SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015. Sandip Sheth & Associates Firm Unique Code: P2001GJ041000 Practicing Company Secretaries Place: Ahmedabad Date: February 25, 2020 Sandip Sheth Partner FCS: 5467 CP No.: 4354 UDIN: F005467A000573298 40 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements Annexure – III MANAGEMENT DISCUSSION & ANALYSIS GLOBAL ECONOMIC OVERVIEW to temporary increase in food inflation. Several reforms were The global economic momentum witnessed its weakest pace over undertaken by the Government to boost the economy such as the past ten years largely owing to intensified trade wars, increasing easing of credit for the stressed real estate and NBFC sector, geopolitical tensions, Brexit delays and weak economic activity in change in corporate taxes and measures to ease Goods and a few emerging markets. There were common influences across Services Tax (GST) related roadblocks. Further to this, Government countries and country-specific factors leading to trade barriers also introduced Kusum scheme under which farmers will be and high level of business uncertainty globally. According to the assisted to setup solar pumps and irrigation facilities. World Economic Outlook by the International Monetary fund (IMF), With these reforms, the economy was sailing on a recovery path, global growth is recorded at 2.9% in 2019. but Covid -19 struck the Indian economy. The impact of Covid-19 led However, in late 2019, the world witnessed an unexpected manufacturing activities to a halt. Further a nationwide lockdown outbreak of Covid-19 pandemic, which continues to impact was announced to curb the pandemic, which also resulted in loss several economies. In the pre-Covid phase, signs of stabilisation of income and rise in unemployment. However, the Government were seen through improving economic activities and monetary intervened by announcing economic stimulus and rate cuts. It policies. Further, Covid-19 developed rapidly into a global health also announced an economic package (in mid-May 2020) which crisis, forcing Governments to impose lock-downs of all economic will spur economic growth and build a self-reliant India. The activities. As a consequence, IMF has predicted a 3% contraction economic package focussed on strengthening the five pillars i.e. of the world economy in 2020 and has further warned that it may growing a new economy creating a state-of-the-art infrastructure, further cut global growth outlook for 2020. The Covid-19 has setting up a technology-based delivery system, leveraging the resulted in disruption of supply-chain, plunge in commodity prices young demography and exploiting domestic demand. specially oil, significant dip in capital expenditures leading to decline in travel and automobile industry, and in durable purchase. Outlook Amid Covid-19 times, the IMF has revised India’s 2020 growth Outlook forecast to 1.9%. As the impact of Covid-19 gradually fades out, the Assuming that the pandemic fades in the second half of 2020 economy is expected to rebound coming years. This growth will and that policy actions taken around the world are effective in be supported by robust consumption, continued implementation preventing widespread firm bankruptcies, extended job losses, of structural and financial reforms and efforts to reduce public and system-wide financial strains, IMF project global growth debt. In addition, higher tax revenue, better mobilisation of non- in 2021 to rebound to 5.8%. However, the same assumption is tax revenue and corporate tax reductions will play a pivotal role in likely to change as economies across the globe face more Covid reviving the economy. Further, the financial stimulus announced difficulties. will also give a kick start to manufacturing and service sector. However, lingering effect of credit weakness, rising inflation, fiscal Besides Covid, the other downside risks also remain prominent, deficit and global headwinds will continue to pose challenges to including rising geopolitical tensions, intensifying social unrest, an otherwise smooth growth momentum. deepening economic frictions between countries. A materialisation of these risks could impact the global growth prospect. (Source: Economic Survey Report FY 2019-20, IMF April 2020) (Source: The World Economic Outlook by IMF April 2020) INDUSTRY STRUCTURE AND DEVELOPMENTS INDIAN ECONOMIC OVERVIEW Overview The journey of Indian economy has been promising over recent Stovec Industries Limited is the global market leader in rotary years with the advent of various structural reforms. However, screen-printing technology, offering complete printing solutions the GDP growth rate of the economy moderated over three to the textile industry. It is a subsidiary of the SPGPrints Group, consecutive years. The economic growth for 2019, is estimated headquartered at Boxmeer, Netherlands. Besides India, Stovec at 4.2% owing to sluggish demand, shrinking private consumption also caters to clients in other textile manufacturing countries for and weakening manufacturing and construction sectors. Further, rotary printing equipment including Korea, Taiwan, Colombia, USA, tighter credit conditions in the non-banking sector contributed to Bangladesh, Mexico, China and Brazil. The Company’s performance a muted domestic demand. is directly dependent on the demand from the textile industry. The industrial sector as per Index of Industrial Production (IIP) The Company offers wide range of products like Pegasus Evo registered a growth of 0.6% in FY 2019-20 (April-November) as rotary screen-printing machine, RD8 Rotary screen-printing compared to 5% during FY 2018-19 (April-November). Headline machine, Rotary screen consumable for textile printing, Anilox inflation increased to 7.35% in December FY 2019-20 owing and screen for graphics printing. Besides, the Company also 46th Annual Report 2019 | 41


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    offers digital ink, lacquers and chemicals that enables highest private consumption have resulted in increased aspirational quality results in textile printing. Stovec also provides products buying. As people are becoming more fashion conscious, the for conventional and digital engraving in the printing domain. demand for textile is expected to rise in foreseeable future. 2. Demographic factors: India is on track to become the The Company’s state-of-art manufacturing and R&D facilities youngest country in the world with ~64% of the population are located in Ahmedabad. With a strong technology prowess, falling under the working age category by FY 2020. This Stovec continuously strives to drive innovation into the products, constitutes potential buyers of various branded products, ensuring highest quality standards. Strong distribution network thus providing a huge opportunity in the domestic textile further allows the Company to understand the growing customer market. needs and offer customised products and services. 3. Increasing urbanisation: Urbanisation in India is happening TEXTILE SECTOR at a fast pace. It is estimated that by FY 2025, the number India’s textile sector is one of the mainstays of the economy. of Indians living in urban areas will reach 543 Mn and will The country continues to be the only country other than China contribute to 70% of India’s GDP. This shift in the consumer to have a full textile value chain, i.e. from fibre to clothing. demand through evolving fashion trends is expected to This sector caters to wide range of segments from traditional support higher textile demand. handloom products to cotton, wool and silk products. The 4. Consumption behaviour: Increase in consumption has been industry contributes to 13% of the industrial output and over catalysed by awareness about international brands. This, 2% of India’s GDP. The Government has been taking continuous coupled with the rising disposable incomes and changing measures for ensuring a sustainable growth for the sector. These lifestyles, will drive the growth of the textile industry. include reshuffling of GST rates, allowing refund of accumulated (Source: IBEF, The Economic Times) taxes in case of textiles and promoting exports, among others. Favourable Government initiatives OPPORTUNITIES FOR ROTARY AND DIGITAL TEXTILE PRINTING Over the recent past, there have been favourable Government Development in fashion trends policies to boost up the industry growth. The Government has Rapid urbanisation, increasing disposable income and change in come up with a number of announcements for the textiles sector fashion trends have led to higher demand in the textile market. in the Union Budget FY 2020-21. These include: Besides, rising growth in fast-changing retail and online clothing market further presents opportunities for foreign and domestic 1. Allotted ` 3,514.79 crore for the development of textile textile players. sector. 2. Allotted ` 762 crore for Amended Technology Upgradation Rise in demand for technical textiles Fund Scheme (ATUFS). Technical textiles are used for non-aesthetic purpose and have wide applications in agriculture, clothing, packaging and furnishing 3. Abolished the anti-dumping duty on Purified Terephthalic sector. The Government’s ` 1,480 crore National Technical Textiles Acid (PTA), a critical input for textile fibres and yarns. Its Mission aims to position India as a global leader in technical easy availability at competitive prices is desirable to unlock textiles. This will lead to a surge in the demand for technical immense potential in the textile sector. It would also boost textiles, which will fuel the growth of the textile printing machine growth of manmade fibre (MMF) industry and the entire market. textiles value chain. Supportive Government policies 4. Launched National Technical Textiles mission with a four- The Government has proposed various measures to make textile year implementation period from FY 2020-21 to FY 2023-24 sector more competitive and sustainable. This includes setting at an estimated outlay of ` 1480 crore. It will provide the up technology upgradation schemes and skill development much-needed thrust to the technical textiles segment. programmes. As a result, the textile printing machine sector is 5. Scheme for Reversion of duties and taxes on exported well positioned to grow ahead. products will help in making textiles and apparel exports competitive. Growing digital textile printing Increasing awareness and faster adaptability of creative fashion (Source: Union Budget Analysis by FICCI) designs, inclination towards newer colour options and easy Growth drivers access to digital printing technologies are the key factors for 1. Rising income: India’s GDP per capita at current prices rising demand of digital textile printing. In addition, competitive increased by 7.6% in a decade (from FY 2009 to FY 2019). price, cost advantage, lower wastage and power consumption are This rise in disposable income of consumers which fuels propelling the growth of digital textile printing machine market. 42 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements THREATS precautionary measures in respect of the events that may pose Slowdown in the economy (Covid-19) risks for the business. Stovec has a robust risk management Slowdown in the global as well as Indian economy can hamper the framework in place and has adopted a systematic approach to demand in the textile industry, which might affect your Company. mitigate risks associated with accomplishment of objectives of the company such as price risk, forex risk, environment risk etc. Increase in raw material prices The Company believes that this would ensure controlling risks Increase in raw material prices, such as metals, could increase the proactively and help to achieve stated objectives. cost of manufacturing. Foreign exchange risk INTERNAL CONTROL SYSTEM As the Company imports and exports its products across multiple The Company’s resilience and focus is driven to a large extent countries, any adverse currency fluctuation can affect profitability by its strong internal control systems for financial reporting. of the Company. Keeping in mind the nature, size and complexity of business operations, our formulated control framework covers various GRAPHICS PRINTING aspects of governance, compliance, audit, control and reporting The rapid rise of digital print technology, versatility and flexibility areas. Stringent procedures ensure high accuracy in recording combined with the high-quality graphics has led the print labels and providing reliable financial and operational information while market to grow. Increasing organised retail store and e-commerce, meeting statutory compliances. along with changing lifestyle will lead to higher demand in the packaging and label industry. Further, increase in the demand for HUMAN RESOURCE AND INDUSTRIAL RELATIONS personal care products, food and beverage is expected to drive The Company takes pride in the commitment, competence and packaging and label industry. dedication shown by its employees in all areas of business. Our employment policies are designed to empower employees and FINANCIAL REVIEW create an environment in which each employee can perform and Company’s revenue has increased from ` 1,930.16 Mn in FY 2018 grow to his or her fullest potential. The Company continuously to ` 1937.05 Mn in FY 2019, a modest growth under challenging aims to offer career advancement to its people through business circumstances. The Profit before exceptional item and comprehensive training programs and friendly HR policies. tax decreased from ` 402.08 Mn in FY 2018 to ` 372.16 Mn in FY 2019. Industrial relations at the offices and plants continued to be harmonious. The Company provides complete transparency Details of significant changes in key financial ratios: to the workforce through open communication channels. The As required by SEBI (LODR)(Amendment) Regulations, FY 2018, the policies are further refined to align with the organisational interest Company is required to furnish the details of significant changes and benefit everyone at the same time. As on December FY (i.e. change of 25% or more as compared to the immediately 2019, we have a team of total 233 employees adding value to our previous financial year) in key financial ratios, along with detailed organisation. explanations for the changes. There are no significant changes (change of 25% or more) compared to immediately preceding CAUTIONARY STATEMENT financial year as mentioned in above regulation. Statements in the Management Discussion and Analysis describing Segment-wise performance: the projections, estimates, expectations may be “forward looking The segment wise sales performance of the Company is as under: statements” within the meaning of applicable securities laws (Amount in ` Mn) and regulations. Actual results could differ materially from Particulars FY 2019 FY 2018 those expressed or implied. Important factors that could make Textile Consumables & Textile 1549.46 1,540.04 a difference to the Company’s operations includes, among Machinery others, economic conditions affecting demand/ supply and price Graphic Products 95.24 92.87 conditions in the domestic and overseas markets in which the Galvanic 292.35 297.25 Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors. TRADE SHOWS & EXHIBITIONS Note: Some parts of the content of this annual report are taken The Company participated in various exhibitions like ITMACH, from sources like www.worldbank.org, www.imf.org, www.ibef.org, Gandhinagar, India and ITMA, held in Barcelona, Spain. This articles published in various newspapers. further enhanced its visibility in the global markets. RISKS AND CONCERNS Risk Management is a very important part of our business. The main aim of risk management is to identify, monitor and take 46th Annual Report 2019 | 43


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    Annexure-IV CORPORATE SOCIAL RESPONSIBILITY REPORT 1. A brief outline of the Company’s CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programs. In alignment with vision of the Company, the Company through its CSR initiatives, will continue to enhance value creation in the society and in the community in which it operates, through its services, conduct & initiatives, so as to promote sustained growth for the society and community, in fulfillment of its role as Socially Responsible Corporate, with environmental concern. CSR Policy is available on the Company’s website at https://www.spgprints.com/uploads/documents/Stovec/Stovec-policies/CSR_Policy.pdf OBJECTIVE OF CSR POLICY: • Ensure an increased commitment at all levels in the organisation, to operate its business in an economically, socially & environmentally sustainable manner, while recognising the interests of all its stakeholders. • Demonstrate commitment to the common good through responsible business practices and good governance. • To directly or indirectly take up the programs that benefits the Society at large and communities in and around its work center over a period of time, in enhancing the quality of life & economic well-being of the local populace. • Support Governments’ development agenda to ensure sustainable change. PROJECTS OR PROGRAMS PROPOSED TO BE UNDERTAKEN: In accordance with this CSR Policy and the specified activities under the Companies Act, 2013 read with Companies ( Corporate Social Responsibility Policy) Rules, 2014 and any amendment(s) thereof, the CSR activities of the Company will have the following thrust areas: i. Skill Development for sustainable income generation & Livelihood for marginalised population ii. Literacy / Education; iii. Basic Infrastructure facilities like Safe Drinking Water, Health care & Sanitation; iv. Protection and safeguard of environment and maintenance of ecological balance; v. To respond to emergency situations/ disasters/ Other national cause by providing Contribution to State Funds for such cause; vi. Socio- economic development, relief and welfare of Children, Women and those who are Physically and Mentally challenged; vii. Any other CSR activities as specified in Schedule VII of Companies Act, 2013 by MCA from time to time. 2. Composition of the CSR Committee: Sr. No. Name of Member Position held in CSR Committee 1 Mr. Shailesh Wani Chairman 2 Mr. Khurshed M. Thanawalla Member 3 Mr. Eiko Ris Member 3. Average net profit of the Company for last three financial years: ` 85.89 Lakhs 4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): ` 86.00 Lakhs 5. Details of CSR spent during the financial year a) Total amount to be spent for the financial year: ` 86.00 Lakhs b) Amount unspent, if any: Nil 44 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements c) Manner in which the amount spent during the financial year is detailed below. Sr. CSR Sector in Projects or Amount Amount Cumulative Amount No. Project or which programs outlay spent on expenditure spent: activity identified the 1) Local area or (budget) the projects upto the Direct or Project is other project or or programs reporting through covered 2) Specify programs Sub-heads: period implementing the state and wise 1) Direct agency. district where expenditure projects or on projects programs was or programs. undertaken 2) overheads. 1 Contribution to Not Contribution to ` 86.00 ` 86.00 ` 86.00 Direct Prime Minister’s Applicable Prime Minister’s Lakhs Lakhs Lakhs National Relief Fund National Relief Fund Total ` 86.00 ` 86.00 ` 86.00 Lakhs Lakhs Lakhs 6. In case of company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board report. – Not applicable 7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy is in compliance with CSR objectives and Policy of the Company. The CSR Committee ensures that the implementation and monitoring of CSR Policy is in compliance with the CSR objectives and Policy of the Company. For and on behalf of the Board of Directors For and on behalf of CSR Committee For, Stovec Industries Limited For, Stovec Industries Limited Shailesh Wani Shailesh Wani Managing Director Chairman – Corporate Social Responsibility Committee (DIN: 06474766) (DIN: 06474766) Date : August 13, 2020 Place: Ahmedabad 46th Annual Report 2019 | 45


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    ANNEXURE - V BUSINESS RESPONSIBILITY REPORT (Pursuant to Regulation 34 (2) (f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) SECTION - A GENERAL INFORMATION ABOUT THE COMPANY: Sr. Particulars Details No. 1. Corporate Identity Number (CIN) of the Company L45200GJ1973PLC050790 2. Name of the Company Stovec Industries Limited 3. Registered address NIDC, Near Lambha Village, Post Narol, Ahmedabad – 382 405 (Gujarat, India) 4. Website www.stovec.com 5. Email id secretarial@stovec.com 6. Financial year reported January 1, 2019 to December 31, 2019 7. Sector(s) that the Company is engaged in Textile -Manufacturer of Rotary Printing Machines, Perforated Nickle (industrial activity code-wise) Screens, and other textile consumables and spare parts 8. Three key products/services of the Company (as (i) Perforated Rotary Screens, Lacquer & Auxiliary Chemicals, Rotary in balance sheet) Printing Machines, Engraving Equipment, Components and Spares, Digital Ink (ii) Anilox Rollers, Rota mesh screens and Rota Plate (iii) Galvano consumables 9. Total number of locations where business activity is undertaken by the Company (a) Number of international locations Zero (0) (b) Number of National locations One (1) Plant/factory located at its registered office at Ahmedabad. 10. Markets served by the Company - Local / State / Company serves to domestic as well as international markets. National / International SECTION – B FINANCIAL DETAILS OF THE COMPANY: Sr. Particulars Details No. 1. Paid up capital as on December 31, 2019 ` 2,08,80,160 2. Total turnover for F.Y. 2019 ` 1,79,10,12,074 3. Total profit after taxes for F.Y. 2019 ` 2,793,68,336 4. Total spending on Corporate Social Responsibility (CSR) as a ` 86,00,000 (3.08%) percentage of Profit After Tax (%) for F.Y. 2019 5. List of activities in which expenditure in 4 above has been incurred Refer Annexure IV to Board’s Report for CSR Activities SECTION - C OTHER DETAILS: Sr. Particulars Details No. 1. Does the Company have any Subsidiary Company/ Companies? No 2. Do the Subsidiary Company/ Companies participate in the BR N. A. Initiatives of the parent Company? If yes, then indicate the number of such subsidiary Company(s) 3. Do any other entity/entities (e.g. suppliers, distributors etc.) that No other entity / entities participate in the BR the Company does business with, participate in the BR initiatives of initiatives of the Company. the Company? If yes, then indicate the percentage of such entity/ entities? [Less than 30%, 30-60%, More than 60%] 46 | Stovec Industries Limited


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    Corporate Overview Statutory Reports Financial Statements SECTION - D BUSINESS RESPONSIBILITY (“BR”) IN FORMATION: 1. Details of Director(s) responsible for BR (a) Details of the Director responsible for implementation of the BR policy (ies) Sr. No. Particulars Details 1. DIN 06474766 2. Name of Director Mr. Shailesh Wani 3. Designation Managing Director (b) Details of the BR head Sr. No. Particulars Details 1. DIN 06474766 2. Name of Director Mr. Shailesh Wani 3. Designation Managing Director 4. Telephone Number +91 79 6157 2300 5. Email ID shailesh_wani@stovec.com 2. Principle-wise (as per National Voluntary Guidelines) BR Policy (ies) The National Voluntary Guidelines on Social, Environment and Economic Responsibilities of Business (NVGs), released by the Ministry of Corporate Affairs, is composed of nine principles of Business Responsibility. They are - P1. Business should conduct and govern themselves with Ethics, Transparency and Accountability P2. Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle P3. Businesses should promote the well-being of all employees. P4. Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized. P5. Businesses should respect and promote human rights. P6. Businesses should respect, protect, and make efforts to restore the environment. P7. Businesses when engaged in influencing public and regulatory policy, should do so in a responsible manner. P8. Businesses should support inclusive growth and equitable development. P9. Businesses should engage with and provide value to their customers and consumers in a responsible manner. (a) Details of Compliance (Reply in Y/N) Sr. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 No. 1. Do you have a policy (ies) Y Y Y N Y Y N Y Y for …@ This The Code of The Company This This - The This forms policy Business does not have forms forms Company forms part is part Conduct a specific part part has a CSR part of the of the & Ethics & policy, however of the of the Policy. of the Code of Code of Internal HR certain Code of Code of Code of Business Business Policies for aspect of this Business Business Business Conduct Conduct Employees. principle forms Conduct Conduct Conduct & Ethics & Ethics part of the & Ethics. & Ethics & Ethics. of the and EHS CSR and EHS Company. Policy. Policy. Policy. 2. Has the policy N N N N N N - N N been formulated in consultation with the relevant stakeholders? 46th Annual Report 2019 | 47


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    (a) Details of Compliance (Reply in Y/N) (Contd...) Sr. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 No. 3. Does the policy conform Y Y Y Y Y Y - Y Y to any national/ international standards? If yes, specify? (50 words) The Company’s policies are in conformity with national/international standards, wherever applicable and in compliance with the applicable regulatory requirements. 4. Has the policy been Y Y Y Y Y Y - Y Y approved by the Board? If yes, has it been signed by MD/ owner/ As a process, all policies have been considered and noted by the Board/Committee/s of the Board. The CEO/ appropriate Board Board authorised the Senior Officials of the Company to authenticate the policies. Director? 5. Does the Company have Y Y Y Y Y Y - Y Y a specified committee of the Board/ Director/ Official to oversee the implementation of the policy? 6. Indicate the link for the All Policies which are statutorily required, are placed on the Company’s website at www.stovec.com policy to be viewed online 7. Has the policy been Y Y Y Y Y Y - Y Y formally communicated to all relevant internal and external stakeholders? The policies is/are communicated to the relevant stakeholders, wherever applicable and required. 8. Does the Company have Y Y Y Y Y Y - Y Y in-house structure to implement the Policy / Policies 9. Does the Company have Y Y Y Y Y Y - Y Y a grievance redressal mechanism related to the Policy / Policies to address stakeholders’ grievances related to the policy (ies) 10. Has the Company carried N N N N N N - N N out independent audit/ evaluation of the working The Heads of Departments are responsible for effective implementation of the Policies/process. No of these policies by independent audit of the policies has been carried out but the Internal Audit Function periodically looks at an internal or external the implementation thereof. agency? Notes: @ The Company has its Code of Business Conduct & Ethics broadly covering the above principles. Besides, Company has also Insider Trading Policy and Code of Fair Disclosure, Policy on Related Party Transactions & Material Subsidiary, Whistle blower and Vigil Mechanism, Familiarization Program, CSR Policy, Policy on Prevention of Documents and Archival Policy, Policy for determining material information, Policy on prevention of sexual harassment of women at workplace which support to above principals. 48 | Stovec Industries Limited

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