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    STOVEC INDUSTRIES LIMITED DETERMINED TO DELIVER All you need in printing, spgprints REPORT 2020


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    What’s lined up… Corporate Overview 01-08 About Stovec Industries Limited 02 Chairman’s Message 04 Strategic Review 06 Corporate Information 08 Statutory Reports 09-50 Notice 09 Board’s Report 17 Corporate Governance 23 Management Discussion and Analysis 35 Financial Statements 51-103 Standalone 51 Investor Information Please find our online version at: https:// www.spgprints.com/spgprints-group/ CIN companies-agents/stovec-industries-ltd L45200GJ1973PLC050790 Or simply scan to download BSE Code STOVACQ Disclaimer: This document contains statements about expected future events and Bloomberg Code financials of Stovec Industries Limited, which are forward-looking. By STOV:IN their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is Dividend recommended significant risk that the assumptions, predictions and other forward-looking ` 22.00 per share statements may not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could AGM Date cause assumptions, actual future results and events to differ materially Tuesday, May 11, 2021 from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the AGM Venue assumptions, qualifications and risk factors referred to in the Management Through Video Conferencing (VC) Discussion and Analysis section of this Annual Report.


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    Corporate Overview Statutory Reports Financial Statements They say, Determination is the wake-up call to the human will. Determination improves us, makes positive changes in our lives, and upsurges our chances of success. At Stovec, we believe challenges come with opportunities to think and deliver more. Despite an unprecedented year, the Company’s determination led to quality output, meet our customers’ anticipations without compromising highest safety standards for our employees. For our stakeholders, we realigned our strategies and proactively adopted measures to rationalise cost and maintain a healthy balance sheet. ` 4,171.33 Mn Market capitalisation as on December 31, 2020 With a legacy of over four decades, deep customer insights and world-class innovation, we remained at the forefront of the textile printing industry. Supported by our invaluable expertise, we continuously responded to our ` 1,501.17 Mn Revenue FY 2020 customers’ changing needs with our reliable printing solutions and services. Our goal is to continue expanding our offerings with focus on sustainable growth and enhanced trust of our stakeholders. ` 179.77 Mn EBIDTA* for FY 2020 * Earnings before Interest, Taxes, Depreciation, and Amortisation 1


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    Annual Report 2020 Stovec Industries Limited Our Identity Stovec Industries Limited (‘the Company’ or ‘Stovec’) was incorporated in 1973 and entered into technical collaboration with SPGPrints (then known as Stork Screens B.V.) in 1974 which also acquired the stake in Stovec subsequently. Since then Stovec is a part of SPGPrints Group. The Netherlands head-quartered SPGPrints, established in 1947, entered the textile market in 1953. Over the decades, the Group has advanced into being a pioneer in providing integrated solutions for rotary screen printing in the textile, label and industrial markets, globally. 48 Years of Experience 20 Years of Consistent Dividend Pay-Out 248 Dedicated Employees Vision and Values Higher Purpose To set the future standards of printing Mission To be the reliable printing partner that leads the market into the future Our Brand Promise All you need in printing 2


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    Corporate Overview Statutory Reports Financial Statements Our Product Offerings Stovec, as a holistic printing solutions provider, offers a product portfolio that includes a broad range of rotary screen and digital textile printing systems. Our business is mainly divided into Capital goods and Consumables. Stovec deals in supply, installation and after-sales support of printing machines and development and production of consumables for their use in textile. In the non-textile segment, the Company manufactures electroformed products for sugar industry, packaging and graphic printing industry. Capital Goods Rotary printing machines Laser engraving machines Digital printers Consumable Rotary textile screens Spares and services Digital inks Screens for label printing and industrial applications Lacquers and engraving chemicals Deepening Our Strong Suits Geographical Footprint Legacy Network China Netherlands Manufacturing Austria Turkey Pakistan Facilities USA India Products Mexico Quality Brazil Innovation Technology Apart from India, SPGPrints has a foothold in the USA, Austria, Brazil, China, Mexico, Netherlands, Pakistan and Turkey. The Presence worldwide presence has given SPGPrints a fair understanding of various local market needs, leveraging their strength through the Skilled international network of manufacturing facilities. Manpower 3


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    Annual Report 2020 From the Chairman’s Desk We safeguarded our Dear Shareholders, Hope this finds you in good health. market position through Now, that the impacts of COVID-19 are truly apparent, I am our prudent strategies extending my wishes to each and every one for fighting this healthcare battle with an undying spirit and coming out as such as rationalising winners. expenditures and The year 2020 will go down our memories for more good than bad. The reason solely being one: challenges were achieving cost defied and resolved. efficiencies. Our Economies across the world faced unprecedented lows owing to the COVID-19 outbreak. The disruptions due operations continued to the spread of the pandemic triggered one of the most to pave the way for pronounced contractions witnessed by global economies in modern times. Lockdowns and border closures across business continuity as key global markets crippled economic activities and halted production processes. we optimised cash flows Closer Home to conserve liquidity. With The nationwide lockdown, imposed to curb the spread of the pandemic, impacted employment, manufacturing, and our relentless efforts, we business activities across industries. These, in combination were able to maintain with derailed consumer demand and supply chain issues, significantly slowed down the economy in the first half satisfactory results of the year. The Government’s prompt and consistent interventions and stimulus, however, acted as breathers for and reached the pre- businesses and the vulnerable communities. Businesses COVID-19 levels by the were inching back to normalcy with gradual unlock mode from May 2020 onwards. end of the year. 4


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    Corporate Overview Statutory Reports Financial Statements As a result, the Indian economy started operations stood at ` 1,501.17 Mn, while showing green shoots of recovery at a the profit after tax was recorded at ` rate faster than earlier forecast. Moreover, 134.63 Mn. improved macroeconomic indicators and Today, Stovec is globally known for commencement of the vaccination drive its legacy of innovation, best-in-class have brought back positive sentiments in research and development capabilities the market. and high-quality products for the textile, The pandemic was equally hard-hearted packaging and the graphic printing to the Indian textile and apparel industry. industry. We are focused to strengthen However, various relief measures our footprint in the digital printer and announced by the Government such as digital ink products to meet changing Production Linked Incentive scheme, requirements of our customers. With Mega Investment Textiles Parks scheme, cutting-edge innovation and latest and reducing custom duties on raw technology, we further plan to introduce material in manmade textiles, among new products in our conventional rotary others, will support the textile sector. business. Delivering Value Way Forward Amid the pandemic upheavals, your The post-COVID world would be different. company remained determined to With a team of highly-proficient people, deliver on your expectations. With our advanced technology infrastructure and resilient strategies, sturdy foundation and reliable offerings, we are strongly placed customer-centric mindset, we ensured in the industry. We have already upgraded continued services to our customers. our functioning and are prepared to We placed highest priority on the sustain continuous growth. health and well-being of our people, On behalf of the Board, I would like to their families, and other stakeholders thank all our stakeholders, for their firm through awareness sessions, training faith in us and their continued support. and communication. We gradually I would also like to thank our resumed phased production, adhering to employees for their dedication the Government guidelines. We ensured and energy to stay by the Company regular sanitization, safe distance work even in such odd hours. I would like to practices and use of protective gears for express my sincere gratitude to all the our employees. members of our Board for their continued We safeguarded our market position insights and invaluable guidance as we through our prudent strategies such as serve our customers with future-ready rationalising expenditures and achieving products, superior experience and the cost efficiencies. Our operations undying spirit. continued to pave the way for business Best wishes, continuity as we optimised cash flows K.M. Thanawalla to conserve liquidity. With our relentless Chairman efforts, we were able to maintain satisfactory results and reached the pre-COVID-19 levels by the end of the year. During 2020, Stovec’s revenue from 5


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    Annual Report 2020 Determined to Deliver with prudent strategies and innovative offerings The COVID-19 outbreak changed the way we looked at the world a year back. The pandemic had a significant socio-economic impact on us, altering our ways of interaction, service and life. At Stovec, we remained resilient and focussed to deliver the best to our customers even when times were unfavourable for all. Our strong foundation, cautious strategies and deep understanding of customer requirements ensured that we smoothly sail through the crisis. Stringent lockdown, manpower underutilisation, supply chain and logistics issues and health concerns impacted our business operations. We, however, made concerted efforts to not just successfully mitigate risks and protect business but to also support our employees, customers and communities adapt the new normal in a sustainable manner. Strategies that determine we deliver the best Conserved cash by reducing operating cash and deferring large capex Reduced under-absorption by working to the extent possible with the Government’s approval during lockdowns Maintained stable prices and reduced cost such as personnel, repair maintenance, and operating costs, among others Achieved timely order execution and supplies to customers across the nation Managed all critical raw material procurement and processes to deliver highest quality output for our customers Utilised excess manpower in textile for neutral product line i.e. sugar segment, resulting in higher output 6


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    Corporate Overview Statutory Reports Financial Statements Ensuring well-being of our employees through… Regular sanitization of employees, visitors, entire work premises, canteen, pantry, vehicles, parking and green areas Everyday thermal scanning and temperature checking Physically-distanced seating arrangement and social distancing Virtual meetings (both internal and external) Frequent awareness sessions, affixing dos and don’ts With our determination, commitment, consistent efforts, and strict precautions, we bounced back to a stable business performance in a very short time. We continued to serve our customers in textile, packaging and the graphic printing segment with fresh ideas, high- quality products and services despite all the COVID-19 challenges. 7


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    Annual Report 2020 Corporate Information Board of Directors Secretarial Auditor Chairman & Independent Director Sandip Sheth & Associates Mr. Khurshed M. Thanawalla Company Secretaries, Ahmedabad Non-Executive Non-Independent Directors Registrar & Share Transfer Agents Mr. Garrett Forde (appointed w.e.f. February 26, 2021) Link Intime India Private Limited Mr. Dirk W. Joustra (ceased w.e.f. February 26, 2021) 5th Floor, 506 to 508, Amarnath Business Center –I (ABC-I), Mr. Eiko Ris Besides Gala Business Center, Near St. Xavier’s College Independent Directors Corner, Off. C.G. Road, Navrangpura, Mr. Marco Philippus A. Wadia Ahmedabad – 380 009, Gujarat Mrs. Kiran Dhingra Phone: +91 79 26465179/86/87, Fax: +91 79 26465179 Managing Director Email: ahmedabad@linkintime.co.in Mr. Shailesh Wani Bankers Chief Financial Officer Axis Bank Limited Mr. Paras Mehta Citibank N.A Company Secretary HDFC Bank Limited Mr. Sanjeev Singh Sengar Registered Office and Factory Statutory Auditor N.I.D.C., Near Lambha Village, SRBC & CO LLP Post: Narol, Ahmedabad - 382 405, Gujarat, India Chartered Accountants 8


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    Statutory Reports NOTICE Corporate Overview Financial Statements NOTICE is hereby given that the 47th Annual General Meeting Company accorded at its 46th Annual General Meeting, of the members of STOVEC INDUSTRIES LIMITED will be Commission to Mr. K. M. Thanawalla for the financial year held on Tuesday, May 11, 2021 at 02:00 pm through video 2020 exceeding fifty per cent of the total Commission conferencing/other audio visual means (VC/OAVM) from that may be payable to all Independent Directors for that the registered office of the Company at NIDC, Near Lambha year be and is hereby approved and paid. Village, Post Narol, Ahmedabad – 382 405 to transact the RESOLVED FURTHER THAT the Board of Directors of following businesses- the Company be and is hereby authorized to do all such acts, deeds, matters as may be deemed necessary and ORDINARY BUSINESS: expedient in this regard.” 1. To receive, consider and adopt the Standalone Audited Financial Statements of the Company for the financial 6. To ratify remuneration of Cost Auditors of the Company year ended December 31, 2020, together with the Report for the financial year 2021 of the Board of Directors and the Auditor’s thereon; To consider and, if thought fit, to pass the following 2. To declare dividend on Equity Shares of the Company; resolution as an Ordinary Resolution- 3. To appoint a Director in place of Mr. Eiko Ris “RESOLVED THAT pursuant to the provisions of Section (DIN: 07428696), who retires by rotation and being 148 and other applicable provisions, if any, of the eligible, offers himself for re-appointment; Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, (including any statutory SPECIAL BUSINESS: modification(s) or amendment(s) or re-enactment(s) 4. To approve appointment of Mr. Garrett Forde (DIN: thereof for the time being in force), the Company hereby 09040078) as a Director of the Company ratifies the remuneration of ` 1,25,000/- (Rupees One To consider and, if thought fit, to pass the following Lakhs Twenty-Five Thousand Only) plus applicable taxes resolution as an Ordinary Resolution- and re-imbursement of out-of-pocket expenses payable “RESOLVED THAT Mr. Garrett Forde (DIN: 09040078) who to M/s Dalwadi & Associates, Cost Accountants (Firm was appointed an Additional Director of the Company by Registration No. 000338), who have been appointed by Board w.e.f. February 26, 2021 to hold office upto the date the Board of Directors on the recommendation of the of 47th Annual General Meeting of the Company, in terms Audit Committee, as Cost Auditors of the Company, of Section 161 of the Companies Act, 2013, and in respect to conduct the audit of the cost records maintained by of whom the Company has received a notice in writing the Company as prescribed under the Companies (Cost from a Member under Section 160 of the Companies Act, Records and Audit) Rules, 2014, as amended, for the 2013, proposing his candidature for the office of Director, Financial Year ending December 31, 2021. be and is hereby appointed as a Director (Non-Executive RESOLVED FURTHER THAT the Board of Directors of the Non Independent) of the Company, liable to retire by Company (including Committee(s) of the Board), be and rotation”. is hereby authorized to do all acts and take all such steps as may be necessary, proper or expedient to give effect to 5. To approve payment of commission to Mr. K. M. this resolution.” Thanawalla, Chairman (Non-Executive & Independent) exceeding fifty per cent of the total Commission payable NOTES: to all the Independent Directors of the Company for the 1. Ministry of Corporate Affairs vide its General Circular No. financial year 2020 02/2021 dated January 13, 2021 permitted companies to To consider and, if thought fit, to pass the following hold their AGM through video conferencing (VC) or other resolution as a Special Resolution- audio visual means (OAVM) following the procedure “RESOLVED THAT pursuant to Regulation 17(6)(ca) prescribed in MCA Circular No. 20/2020 dated May of the Securities and Exchange Board of India (Listing 05, 2020 read along with the SEBI circular SEBI/HO/ Obligations and Disclosure Requirements) Regulations, CFD/CMD2/CIR/P/2021/11 dated January 15, 2021 2015 including any amendment, modification, variation (‘said Circulars’), inter alia, whereby physical attendance or re-enactment thereof for the time being in force and of the members to the AGM venue shall not be required. other applicable provisions, if any, of the Companies Act, Therefore, the Company is providing facility to attend and 2013 and pursuant to the approval of Members of the participate in the AGM through VC/OAVM. Thus, Members 9


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    Annual Report 2020 can attend and participate in the meeting through VC/ Government. The shareholders who have not claimed OAVM following the instructions given in the notice. their dividend pertaining to financial year 2013 and all 2. In accordance with the provisions of Section 101 of the subsequent years are requested to claim their dividend Act read with Rule 18 of the Companies (Management as early as possible, failing which it would be transferred and Administration) Rules, 2014 read with the said to IEPF as per the (tentative) date mentioned below Circulars, the Annual Report of the Company is being sent 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 are registered with the Company/Depositories, as the of unclaimed dividends are available on the Company’s case may be. Member(s) however, are entitled to receive website at www.stovec.com and Ministry of Corporate Annual Report in physical form, free of cost, on receipt Affair’s website at www.iepf.gov.in. of written request for the same. Members may also Financial Year Dividend type Tentative Date of note that the Annual Report for the financial year 2020 transfer to IEPF together with the Notice of 47th Annual General Meeting 2013 Dividend June 10, 2021 is also available on the website of the Company at 2014 Dividend June 7, 2022 2015 Dividend June 28, 2023 www.stovec.com. 2016 Dividend June 13, 2024 In case the shareholder/s has not registered his/her/their 2017 Dividend June 2, 2025 email address with the Company/its RTA/Depositories, 2018 Dividend June 9, 2026 they can do so by the following below instructions: 2019 Dividend October 16, 2027 (i) Kindly go to the website of our RTA, Link Intime India Further, pursuant to Section 124(6) of the Act read with Private Ltd., www.linkintime.co.in under Investor relevant rule of Investor Education and Protection Fund Services > Email/Bank detail Registration - fill in Authority (Accounting, Audit, Transfer and Refund) Rules, the details and upload the required documents for 2016 (“IEPF Rules”), all shares on which dividend has not registering Email/Bank detail and submit. been paid or claimed for seven consecutive years or more (ii) Post successful registration of the email, the member are required to be transferred to Demat Account of IEPF. would get soft copy of the notice and Annual Report During the year, Company has sent individual intimation of the Company. In case of any queries, member to all such shareholders whose dividend has not been may write to ahmedabad@linkintime.co.in. paid or claimed for any year during the seven consecutive years requesting them to claim their Dividend before the (iii) It is clarified that for permanent registration of email due date of transfer failing which their shares would be address, members are required to register their email transferred to the IEPF and no claim shall lie against the addresses, in respect of electronic holdings with their Company on the shares so transferred. The Shareholders concerned Depository Participants and in respect of whose shares are transferred to the IEPF Authority can physical holdings, with the Company’s Share Transfer claim their shares from such authority by filing E-Form-5 Agent i.e. Link Intime India Private Limited, 5th Floor, and following such procedures as may be prescribed in 506 to 508, Amarnath Business Center –I (ABC-I), the IEPF Rules from time to time. Besides Gala Business Center, Nr. St. Xavier’s College Corner, Off. C.G. Road, Navrangpura, Ahmedabad – 5. The Register of Members and Share Transfer Book 380 009, Gujarat, Phone: +91 79 26465179/86/87, shall remain closed from May 05, 2021 to May 11, 2021 Email-ahmedabad@linkintime.co.in, by following due (both days inclusive). If the dividend on equity shares, as procedure. recommended by the Board of Directors is declared at the 47th Annual General Meeting, payment of such dividend (iv) Members may also update their bank details by will be made on or before its due date to the shareholders following the instruction set out in (i) above. whose names appear in the Register of Members as on 3. The Explanatory Statement pursuant to Section 102 of cut-off date i.e. May 04, 2021 upon close of business the Companies Act, 2013, in respect of Special Business hours. The voting rights of Members shall be in proportion is annexed hereto. to their share in the paid-up equity share capital of the 4. Pursuant to Sections 124 of the Companies Act, 2013, Company as on the cut-off date. the amount of dividend remaining unpaid or unclaimed 6. As mandated by the SEBI (Listing obligations and for a period of seven years from the date of its transfer to Disclosure Requirements) Regulations, 2015 as amended the Unpaid Dividend Account of the Company is required hereinafter referred as SEBI Listing Regulations, to be transferred to Investor Education and Protection Company will remit dividend electronically by RTGS/ Fund (“IEPF”) established by the Central Government. National Electronic Clearing System (NECS)/National During the year, the Company has transferred unclaimed Automated Clearing House (NACH) etc. to the bank dividend amount pertaining to the financial year 2012 to account registered with the Company. It is in Members the Investor Education and Protection Fund of the Central interest to avail NECS/NACH facility as it is quick and 10


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    Statutory Reports much convenient way of getting dividend directly in your September 7, 2020 has fixed March 31, 2021 as the Corporate Overview Financial Statements bank account. Members desirous of availing NECS/NACH cut-off date for re-lodgment of physical share transfer facility are requested to submit bank particulars in ECS requests and has stipulated that such transferred shares Mandate Form, the format of which is annexed at the end shall be issued only in demat mode. It is therefore any re- of this Annual Report. Alternatively, members can update lodgment of physical share transfer requests will not be their bank details online through RTA by follow the below entertained by the Company thereafter. instructions - 12. All documents referred to in the accompanying notice Kindly go to the website of our RTA, Link Intime India and explanatory statement are open for inspection Private Ltd., www.linkintime.co.in under Investor Services electronically. > Email/Bank detail Registration - fill in the requisite 13. Members who are holding shares in more than one folio details, upload the required documents and submit. in identical manner are requested to consolidate their 7. Members holding shares in dematerialized mode are holdings in one folio. requested to intimate all changes pertaining to their bank 14. Members desirous of obtaining any information details, NECS, mandates, nominations, power of attorney, concerning accounts and operations of the Company change of address/name, PAN details, etc. to their are requested to address their questions in writing to Depository Participant (“DP”) only. However, Members the Company at least 7 days before the date of the holding shares in physical mode are required to notify any meeting so that the information required may be made change pertaining to their bank details, NECS, mandates, available at the meeting. nominations, power of attorney, change of address/ 15. The Company has depository connectivity for holding name, PAN details, etc. to Registrar and Share Transfer share in demat/electronic form and therefore equity Agent i.e. M/s. Link Intime India Private Limited, 5th Floor, shares of the Company may also be held in the electronic 506 to 508, Amarnath Business Center–I (ABC-I), Besides form with any DP, with whom the members/ investors Gala Business Center, Nr. St. Xavier’s College Corner, Off. are having their depository account. The ISIN No. for C.G. Road, Navrangpura, Ahmedabad – 380 009, Gujarat. the Equity Shares of the Company is INE755D01015. Members holding shares in physical form are requested 8. In terms of Regulation 36(3) of the SEBI (Listing to convert their holding into dematerialized form to Obligations and Disclosure Requirements) Regulations, eliminate risks associated with physical shares. Members 2015, brief profile of Director(s) seeking appointment/re- can contact Company’s Registrar and Share Transfer appointment in the Annual General Meeting is annexed Agent for assistance in this regard. and forms integral part of the Notice. 16. As per the provisions of Section 72 of the Act and Rule 9. As per Securities and Exchange Board of India (SEBI) 19(1) of the Companies (Share Capital and Debentures) norms, submission of Permanent Account Number (PAN) Rules, 2014, Members holding shares in physical form is compulsorily required for participating in the securities may file nomination in the prescribed form SH-13 with market, deletion of name of deceased shareholder or the Company’s Registrar and Share Transfer Agent. In transmission/transposition of shares. Members holding respect of shares held in demat form; the nomination form shares in dematerialized mode are requested to submit may be filed with the respective Depository Participant. the PAN details to their Depository Participant, whereas 17. A Resident individual shareholder with PAN and who is not Members holding shares in physical form are requested liable to pay income tax can submit a yearly declaration in to submit the PAN details to the Company’s Registrar Form No. 15G/15H, to avail the benefit of non-deduction and Transfer Agents. As per SEBI (Listing Obligations and of tax at source by e-mail to ahmedabad@linkintime.co.in Disclosure Requirements) Regulations, 2015, copy of PAN latest by May 07, 2021. Shareholders are requested to card of both transferor and transferee for registration of note that in case their PAN is not registered, the tax will transfer of shares are required to furnish to the Company/ be deducted at a higher rate of 20% excluding surcharge & Registrar and Share Transfer Agent of the Company. cess. 10. In terms of Regulation 40 of the SEBI (Listing Obligations Non-resident shareholders can avail beneficial rates and Disclosure Requirements) Regulations, 2015 under tax treaty between India and their country of securities of listed entities can only be transferred in residence, subject to providing necessary documents, i.e. dematerialized form with effect from April 1, 2019 except No Permanent Establishment and Beneficial Ownership in case of request for transmission or transposition of Declaration, Tax Residency Certificate, Form 10F, any securities. In view of the above, members are advised other document which may be required to avail the tax to dematerialize shares held by them in physical form in treaty benefits by sending an e-mail to ahmedabad@ order to avoid inconvenience in future. linkintime.co.in latest by that date. 11. Members may please note that SEBI vide its circular 18. Providing route map of the venue of the meeting is not no. SEBI/HO/MIRSD/RTAMB/CIR/P/2020/166 dated applicable in case of VC meeting. 11


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    Annual Report 2020 19. INSTRUCTIONS FOR VOTING THROUGH ELECTRONIC f) The AGM has been convened through VC/OAVM MEANS AND ATTENDING MEETING THROUGH VC in compliance with applicable provisions of the Companies Act, 2013 and the SEBI Listing a) Pursuant to the provisions of Section 108 of the Regulations read with said Circulars. Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) THE INSTRUCTIONS FOR SHAREHOLDERS FOR REMOTE E-VOTING ARE AS UNDER: Rules, 2014 (as amended) and Regulation 44 of SEBI (i) The voting period begins on May 8, 2021 @ 9.00 hours (Listing Obligations & Disclosure Requirements) (IST) and ends on May 10, 2021 @ 17.00 hours (IST). Regulations 2015 (as amended), and said Circulars, During this period shareholders of the Company, holding the Company is providing facility of remote e-voting shares either in physical form or in dematerialized form, and e-voting during the meeting to its Members as on the cut-off date i.e. May 4, 2021 may cast their in respect of the business to be transacted at the vote electronically. The e-voting module shall be disabled AGM. For this purpose, the Company has entered by CDSL for voting thereafter. into an agreement with Central Depository Services (ii) Shareholders who have already voted prior to the meeting (India) Limited (CDSL) for facilitating voting through date would not be entitled to vote at the meeting venue. electronic means, as the authorized e-Voting’s (iii) The shareholders should log on to the e-voting website agency. The facility of casting votes by a member www.evotingindia.com. using remote e-voting as well as the e-voting system (iv) Click on “Shareholders” module. on the date of the AGM will be provided by CDSL. (v) Now enter your User ID b) The Members can join the AGM in the VC/OAVM a. For CDSL: 16 digits beneficiary ID, mode 15 minutes before and after the scheduled b. For NSDL: 8 Character DP ID followed by 8 Digits time of the commencement of the Meeting by Client ID, following the procedure mentioned in the Notice. c. Shareholders holding shares in Physical Form should The facility of participation at the AGM through enter Folio Number registered with the Company. VC/OAVM will be made available to at least 1000 OR Alternatively, if you are registered for CDSL’s EASI/ members on first come first served basis. This will EASIEST e-services, you can log-in at https://www. not include large Shareholders (Shareholders holding cdslindia.com from Login - Myeasi using your login 2% or more shareholding), Promoters, Institutional credentials. Once you successfully log-in to CDSL’s Investors, Directors, Key Managerial Personnel, the EASI/EASIEST e-services, click on e-Voting option Chairpersons of the Audit Committee, Nomination and proceed directly to cast your vote electronically. and Remuneration Committee and Stakeholders (vi) Next enter the Image Verification as displayed and Click Relationship Committee, Auditors etc. who are on Login. allowed to attend the AGM without restriction on (vii) If you are holding shares in demat form and had logged account of first come first served basis. on to www.evotingindia.com and voted on an earlier c) The attendance of the Members attending the AGM e-voting of any company, then your existing password is through VC/OAVM will be counted for the purpose of to be used. ascertaining the quorum under Section 103 of the (viii) If you are a first-time user follows the steps given below: Companies Act, 2013. For Shareholders holding shares in Demat Form and Physical Form d) Pursuant to said Circulars facility to appoint proxy PAN Enter your 10-digit alpha-numeric *PAN to attend and cast vote for the members is not issued by Income Tax Department available for this AGM. However, in pursuance of (Applicable for both demat shareholders Section 112 and Section 113 of the Companies Act, as well as physical shareholders) 2013, representatives of the members such as the •Shareholders who have not President of India or the Governor of a State or body updated their PAN with the corporate can attend the AGM through VC/OAVM Company/Depository Participant are requested to use the sequence and cast their votes through e-voting. number, which is communicated by e) In line with the said Circulars, the Notice calling e-mail, in the PAN field. the AGM has been uploaded on the website of the Dividend Bank Enter the Dividend Bank Details or Date Company at www.stovec.com. The Notice can Details of Birth (in dd/mm/yyyy format) as OR Date of recorded in your demat account or in also be accessed from the websites of the Stock Birth (DOB) the company records in order to login. Exchange i.e. BSE Limited at www.bseindia.com. • If both the details are not recorded The AGM Notice is also disseminated on the website with the depository or company, of CDSL (agency for providing the Remote e-Voting please enter the member id / folio facility and e-voting system during the meeting) at number in the Dividend Bank details www.evotingindia.com. field as mentioned in instruction (v). 12


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    Statutory Reports (ix) After entering these details appropriately, click on (self-attested scanned copy of Aadhar Card) by Corporate Overview Financial Statements “SUBMIT” tab. email to RTA at ahmedabad@linkintime.co.in. (x) Shareholders holding shares in physical form will then 2. For Demat shareholders -, please provide Demat directly reach the Company selection screen. However, account details (CDSL-16 digit beneficiary ID or shareholders holding shares in demat form will now reach NSDL-16 digit DPID + CLID), Name, client master ‘Password Creation’ menu wherein they are required or copy of Consolidated Account statement, PAN to mandatorily enter their login password in the new (self-attested scanned copy of PAN card), AADHAR password field. Kindly note that this password is to be (self-attested scanned copy of Aadhar Card) to RTA also used by the demat holders for voting for resolutions at ahmedabad@linkintime.co.in. of any other company on which they are eligible to vote, INSTRUCTIONS FOR SHAREHOLDERS ATTENDING THE provided that company opts for e-voting through CDSL AGM THROUGH VC/OAVM ARE AS UNDER: platform. It is strongly recommended not to share your password with any other person and take utmost care to 1. Shareholder will be provided with a facility to attend the keep your password confidential. AGM through VC/OAVM through the CDSL e-Voting (xi) For shareholders holding shares in physical form, the system. Shareholders may access the same at details can be used only for e-voting on the resolutions https://www.evotingindia.com under shareholders/ contained in this Notice. members login by using the remote e-voting credentials. The link for VC/OAVM will be available (xii) Click on the EVSN for the relevant <STOVEC INDUSTRIES in shareholder/members login where the EVSN of LIMITED> on which you choose to vote. Company will be displayed. (xiii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/ 2. Shareholders are encouraged to join the Meeting NO” for voting. Select the option YES or NO as desired. through Laptops / iPad for better experience. The option YES implies that you assent to the Resolution 3. Further shareholders will be required to allow and option NO implies that you dissent to the Resolution. Camera and use Internet with a good speed to avoid (xiv) Click on the “RESOLUTIONS FILE LINK” if you wish to any disturbance during the meeting. view the entire Resolution details. 4. Please note that Participants Connecting from Mobile (xv) After selecting the resolution, you have decided to vote on, Devices or Tablets or through Laptop connecting click on “SUBMIT”. A confirmation box will be displayed. via Mobile Hotspot may experience Audio/Video If you wish to confirm your vote, click on “OK”, else to loss due to Fluctuation in their respective network. change your vote, click on “CANCEL” and accordingly It is therefore recommended to use Stable Wi-Fi or modify your vote. LAN Connection to mitigate any kind of aforesaid (xvi) Once you “CONFIRM” your vote on the resolution, you will glitches. not be allowed to modify your vote. 5. Shareholders who would like to express their (xvii) You can also take a print of the votes cast by clicking on views/ask questions during the meeting may “Click here to print” option on the Voting page. register themselves as a speaker by sending their (xviii) If a demat account holder has forgotten the login request in advance at least (3) three days prior to password, then Enter the User ID and the image meeting mentioning their name, demat account verification code and click on Forgot Password & enter number/folio number, email id, mobile number at the details as prompted by the system. secretarial@stovec.com. The shareholders who do (xix) Shareholders can also cast their vote using CDSL’s mobile not wish to speak during the AGM but have queries app “m-Voting”. The m-Voting app can be downloaded may send their queries in advance Seven days prior from respective Store. Please follow the instructions as to meeting mentioning their name, demat account prompted by the mobile app while Remote Voting on your number/folio number, email id, mobile number mobile. at secretarial@stovec.com. The queries will be replied suitably by the company. PROCESS FOR THOSE SHAREHOLDERS WHOSE 6. Those shareholders who have registered themselves EMAIL ADDRESSES ARE NOT REGISTERED WITH THE as a speaker will only be allowed to express their DEPOSITORIES FOR OBTAINING LOGIN CREDENTIALS views/ask questions during the meeting. FOR E-VOTING FOR THE RESOLUTIONS PROPOSED IN THIS NOTICE: INSTRUCTIONS FOR SHAREHOLDERS FOR E-VOTING 1. For Physical shareholders- please provide necessary DURING THE AGM ARE AS UNDER: - details like Folio No., Name of shareholder, scanned 1. The procedure for e-Voting on the day of the AGM copy of the share certificate (front and back), PAN is same as the instructions mentioned above for (self attested scanned copy of PAN card), AADHAR Remote e-voting. 13


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    Annual Report 2020 2. Only those shareholders, who are present in the AGM • A scanned copy of the Board Resolution and Power through VC/OAVM facility and have not casted their of Attorney (POA) which they have issued in favour vote on the Resolutions through remote e-Voting of the Custodian, if any, should be uploaded in PDF and are otherwise not barred from doing so, shall format in the system for the scrutinizer to verify the be eligible to vote through e-Voting system available same. during the AGM. • Alternatively Non Individual shareholders are 3. If any Votes are cast by the shareholders through the required to send the relevant Board Resolution/ e-voting available during the AGM and if the same Authority letter etc. together with attested shareholders have not participated in the meeting specimen signature of the duly authorized signatory through VC/OAVM facility , then the votes cast by who are authorized to vote, to the Scrutinizer such shareholders shall be considered invalid as the and to the Company at the email address viz; facility of e-voting during the meeting is available secretarial@stovec.com, if they have voted from only to the shareholders attending the meeting. individual tab & not uploaded same in the CDSL 4. Shareholders who have voted through Remote e-voting system for the scrutinizer to verify the e-Voting will be eligible to attend the AGM. However, same. they will not be eligible to vote at the AGM. If you have any queries or issues regarding attending (xx) Note for Non – Individual Shareholders and Custodians AGM & e-Voting from the e-Voting System, you may • Non-Individual shareholders (i.e. other than refer the Frequently Asked Questions (“FAQs”) and Individuals, HUF, NRI etc.) and Custodians are e-voting manual available at www.evotingindia. required to log on to www.evotingindia.com and com, under help section or write an email to register themselves in the “Corporates” module. helpdesk.evoting@cdslindia.com or contact Mr. • A scanned copy of the Registration Form bearing the Nitin Kunder (022- 23058738 ) or Mr. Mehboob stamp and sign of the entity should be emailed to Lakhani (022-23058543) or Mr. Rakesh Dalvi (022- helpdesk.evoting@cdslindia.com. 23058542). • After receiving the login details a Compliance All grievances connected with the facility for voting User should be created using the admin login and by electronic means may be addressed to Mr. password. The Compliance User would be able to Rakesh Dalvi, Manager, (CDSL, ) Central Depository link the account(s) for which they wish to vote on. Services (India) Limited, A Wing, 25th Floor, Marathon • The list of accounts linked in the login should be Futurex, Mafatlal Mill Compounds, N M Joshi Marg, mailed to helpdesk.evoting@cdslindia.com and on Lower Parel (East), Mumbai - 400013 or send an approval of the accounts they would be able to cast email to helpdesk.evoting@cdslindia.com or call on their vote. 1800225533, 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: February 26, 2021 Company Secretary Place: Ahmedabad Membership No. FCS 7835 14


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    Statutory Reports EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 Corporate Overview Financial Statements The Statement setting out the material facts pursuant to The payment of commission to Independent Directors Section 102 of the Companies Act, 2013 (‘‘the Act’’), concerning was approved by the Members of the Company in the the Special Business at Item No. 4 to 6 of the Notice is annexed 46th Annual General Meeting for a period of three financial hereto and forms part of this Notice. years commencing from January 1, 2020 with powers to Board or Committee thereof to decide the percentage of net ITEM NO. 4 profit to be paid as commission to each of the Independent The Board of Directors based on the recommendation of Directors but the commission payable to Mr. K. M. Thanawalla Nomination and Remuneration Committee has appointed Mr. for the financial year 2020 exceeding fifty percent of the Garrett Forde (DIN: 09040078), aged 58 years, as an Additional total commission payable to all Independent Directors of the Director on the Board of the Company with effect from Company requiring approval of members in terms of aforesaid February 26, 2021to hold office up to the date of this Annual provision. It is therefore resolution is proposed for the approval General Meeting and is eligible for appointment as a Director. of shareholders by way of special resolution. The Company has received a notice pursuant to Section 160 The Board recommends the resolution for the approval of of the Act, from a member signifying his intention to propose Members of the Company. the appointment of Mr. Forde as Director of the Company. He None of the Directors except Mr. K. M. Thanawalla, Key holds the degree of MBA from university of Twente. He is a Managerial Personnel and relatives thereof, are in any way Chief Executive Officer and a Member of Executive Board concerned or interested, financially or otherwise, in the of SPGPrints B.V., the Holding Company of the Company. resolution. He treasured rich experience of more than two decades in Management Level. Brief profile of Mr. Forde is provided in this ITEM NO. 6 Notice. The Board of Directors is confident that his knowledge The Board of Directors of the Company, on the recommendation and experience will be of immense value to the Company and of the Audit Committee, has approved the appointment of M/s hence recommends the Resolution at Item No. 4 of this Notice Dalwadi & Associates, Cost Accountants (Firm Registration for the approval of Members. No. 000338), as the Cost Auditors to conduct the audit of the Mr. Garrett Forde does not hold any share in the Company, cost records of the Company for the financial year ending either in his individual capacity or on a beneficial basis for any December 31, 2021. person nor related to any of the Directors or Key Managerial Personnel of the Company. In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and None of the Directors, Key Managerial Personnel and relatives Auditors) Rules, 2014 (as amended), the remuneration thereof except Mr. Forde, is in any way concerned or interested, payable to the Cost Auditors has to be ratified by the Members financially or otherwise, in the resolution. of the Company. Accordingly consent of the Members is sought by way of an ordinary resolution as set out in the ITEM NO. 5 Notice for ratification of the remuneration amounting to In terms of Regulation 17 of the SEBI (Listing Obligations and ` 1,25,000/- plus applicable Goods and Service Tax and out of Disclosure Requirements) (Amendment) Regulations, 2018 pocket expenses, if any, payable to the Cost Auditors for Cost listed entity is required to obtain the approval of members of Audit for the financial year ending on December 31, 2021, in the Company by way of Special Resolution for payment of respect of products/ activities of the Company covered under remuneration to a single non-executive director exceeding 50% the Companies (Cost Records and Audit) Rules, 2014 (as of the total remuneration payable to all non-executive director. amended). Board felt that Mr. K. M. Thanawalla is a person of high repute The Board accordingly recommends the resolution for the and have a rich experience of over 5 decades in textile industry. approval of Members. His in-depth knowledge of the textile industry and strategic guidance has helped the Company to grow year by year and None of the Directors, Key Managerial Personnel and relatives his continue guidance would be of immense benefit to the thereof, are in any way concerned or interested, financially or Company. otherwise, in the resolution. 15


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    Annual Report 2020 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. Garrett Forde Director Identification Number 07428696 09040078 Date of Birth October 17, 1958 January 24, 1963 Nationality Dutch Dutch Date of Appointment March 12, 2019 February 26, 2021 Expertise in specific functional areas Finance & General Management Business Strategy, Sales, Marketing and General Management Qualifications & experience He holds the degree of MsC (RA) from He holds the degree of MBA from the Netherlands Institute of Registrar the university of Twente He has rich Accounts He has rich experience of experience of about two decades in about four decades in finance. Management Level. Terms and conditions of appointment/ Non-Executive Director liable to retire Non-Executive Director liable to retire re-appointment by rotation. by rotation. Remuneration to be paid None None Details of relationship with other Directors, None None Manager and Key Managerial Personnel of the Company Details of shares held in the Company Nil Nil No. of Board Meetings attended during the 4 (Four) Not Applicable financial year 2020 List of companies in which directorship held None None as on December 31, 2020 Chairman/Member of the Committees of None None other public Companies as on December 31, 2020 (includes Audit Committee and Stakeholders’ Relationship Committee only) 16


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    Statutory Reports BOARD’S REPORT Corporate Overview Financial Statements TO THE MEMBERS, The Board of Directors of your Company are pleased to present the its 47th Report on the business and operations of the Company together with the audited financial statement of the Company for the year ended December 31, 2020. 1. FINANCIAL PERFORMANCE (` in Millions except EPS) Particulars 2020 2019 Revenue from Operations (net) 1501.17 1942.47 Other Income 51.68 54.85 Total Income: 1552.85 1997.32 Total Expenditure: 1335.89 1581.06 Gross Profit before Depreciation and Amortisation exp. 216.96 416.26 Less: Depreciation & Amortisation expenses 45.34 44.10 Profit Before Exceptional Items and Tax 171.62 372.16 Add: Exceptional items - - Profit before tax 171.62 372.16 Current Tax 40.44 96.21 Deferred Tax Credit (5.26) (3.45) (Excess)/Short provision of income tax of earlier years (Net) 1.81 0.03 Profit After Tax 134.63 279.37 Add: Profit brought forward from previous year 1259.70 1122.62 Effect on account of adoption of Ind AS 115 from January 1, 2019 0 (0.69) Dividend on equity shares (Refer Note below) (125.29) (114.84) Tax on Dividend 0 (23.61) Remeasurement gains/(losses) on defined benefit plans (net of tax) (1.89) (3.15) Profit available for appropriation & carried forward to Balance Sheet 1267.15 1259.70 EPS 64.48 133.80 During the year, your Company has achieved standalone The Company has no Subsidiary, Associate and Joint revenue from operations of ` 1501.17 million as compared Venture company during the year. to ` 1,942.47 million in previous year, and Operational Profit (PBT) stood at ` 171.62 million as compared to 2. RESERVES AND SURPLUS: ` 372.16 million in previous year. In the prevailing situation The Company has not transferred any amount to the of Covid-19 leading to the lockdowns and disrupting the Reserves for the financial year ended December 31, 2020. economies globally, the Company provided greater level of attention on serving the customers with all covid 3. DIVIDEND: precautions. In spite of difficult year, the Board of Directors considering The Company had entered into Contract Manufacturing the Company’s financial performance and the availability Agreement (CMA) with Atul Sugar Screens Private Limited of distributable profit, have pleased to recommend in 2018 for manufacturing the sugar sieves. During the dividend of ` 22 per equity share of ` 10/- each (i.e. year, Atul Sugar screens Private Limited has informed 220%) for the financial year ended on December 31, 2020 that they intend to develop their own manufacturing subject to the approval of members in the ensuing Annual facilities and in light of the same, existing CMA shall be General Meeting of the Company. terminated at suitable time. Company has received notice Unclaimed dividend pertaining to FY2012 amounting to for termination of CMA and the same is expected to take ` 5,63,772/- has been transferred to the Investor place during early 2022. The termination of CMA shall Education and Protection Fund (‘IEPF’) in accordance have marginal impact on the business of the Company with IEPF Rules. going forward. 4. SHARE CAPITAL No material changes or commitments have occurred between the end of the financial year and the date of The Company’s paid-up equity share capital continues to this Report, which affect the Financial Statements of the stand at ` 20.88 Mn as on December 31, 2020. During Company with respect to the reporting year. the year, the Company has not issued any shares or convertible securities. 17


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    Annual Report 2020 5. CONSERVATION OF ENERGY, TECHNOLOGY The Company’s Independent Directors have submitted ABSORPTION, FOREIGN EXCHANGE EARNINGS AND requisite declarations confirming that they continue to OUTGO meet the criteria of independence as prescribed under Information as required to be given under Section 134(3) Section 149(6) of the Act and Regulation 16(1)(b) of the (m) of the Act read with Rule 8(3) of the Companies Listing Regulations. The Independent Directors have (Accounts) Rules, 2014 is provided in Annexure I forms also confirmed that they have complied with Schedule IV of the Act and the Company’s Code of Conduct. The part of this Report. Independent Directors of the Company have registered 6. DEPOSITS themselves with the Indian Institute of Corporate Affairs During the year, the Company has neither accepted nor (‘IICA’) towards the inclusion of their names in the data renewed any deposits falling under Section 73 of the Act bank maintained with it and they meet the requirements and rules made there under. of proficiency self-assessment test. The Company familiarized the newly appointed Director/s 7. CORPORATE GOVERNANCE & MDA with respect to their roles and responsibilities, an A separate report on Corporate Governance Compliance overview of the industry, the Company’s business model, and Management Discussion and Analysis Report as the risks and opportunities through various presentations required by SEBI (Listing Obligations and Disclosure at meeting of the board of directors of the Company in alignment with the requirements under the Act, and other Requirements) Regulations, 2015 (“Listing Regulations”) related regulations. annexed to the Annual Report as Annexure-II and III respectively along with the required Certificate from the The Company has complied with the requirements of Practicing Company Secretary regarding compliance of having Key Managerial Personnel as per the provisions of the conditions of Corporate Governance. Section 203 of the Act. 8. AUDIT COMMITTEE 10. BOARD MEETING The Company has in place an Audit Committee in terms of During the financial year ended December 31, 2020, four requirements of the Act read with rules framed thereunder meetings of the Board of Directors were held. The details and Listing Regulations. The details relating to the Audit of the attendance of Directors at the Board Meetings are Committee are given in the Corporate Governance Report mentioned in the Corporate Governance Report annexed hereto. forming part of this report. During the year under review, all recommendations made by the Audit Committee were The Board of Directors affirms that the Company has accepted by the Board. complied with the applicable Secretarial Standards (SS) issued by the Institute of Companies Secretaries of India 9. DIRECTORS AND KEY MANAGERIAL PERSONNEL (SS1 and SS2), respectively relating to Meetings of the Board and its Committees, and the Shareholders, which On the recommendation of Nomination and Remuneration have mandatory application during the year under review. Committee (NRC), Mr. Garrett Forde (DIN: 09040078), has been appointed an additional director (Non-Executive 11. PERFORMANCE EVALUATION & Non-Independent) by the board of directors of the Company with effect from February 26, 2021 to hold office The Company has carried out performance evaluation of all the Directors, Chairman, Board as a whole and up to the date of ensuing Annual General Meeting (‘AGM’). Committees of the Board during the year in accordance Further, the NRC and Board of Directors of the Company with the statutory provisions as contained in the Act and have also recommended the appointment of Mr. Forde Listing Regulations. The details of Annual Performance as Director (Non-Executive Non-Independent), to the Evaluation of Individual Directors including Chairperson, Members at the ensuing AGM, liable to retire by rotation. Board of Directors and Committees of Board of Directors Mr. Eiko Ris (DIN: 07428696), who retires by rotation and are mentioned in the Corporate Governance Report. being eligible, offers himself for re-appointment. Board recommends above appointment/re-appointment 12. CORPORATE SOCIAL RESPONSIBILITY to the members of the Company in the Notice of In accordance with Section 135 of the Act and Rules convening 47th AGM. framed thereunder, the Corporate Social Responsibility Mr. Dick Joustra (DIN:00481154), Non-Executive & (“CSR”) Committee has been constituted consisting of Non-Independent Director, has resigned from the three members, details of which is given in the Corporate Directorship of the Company with effect from February Governance Report. CSR policy and Annual report on 26, 2021. The Board has placed on record its warm CSR activities of the Company as prescribed under the appreciation of the contribution made by him during his Companies (Corporate Social Responsibility Policy) Rules, tenure as Director on the Board of the Company. 2014, have been provided as Annexure-IV to this report. 18


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    Statutory Reports 13. BUSINESS RESPONSIBILITY REPORT (BRR) During the reporting period, all the Related Party Corporate Overview Financial Statements SEBI vide Notification No. SEBI/LAD-NRO/GN/2019/45 Transactions (RPTs) were placed before the Audit dated December 26, 2019 had mandated top 1000 listed Committee for its approval and the Committee has entities, based on their market capitalisation, to include granted its prior approval/omnibus approvals, as the BRR in the annual report of the Company and your case may be, for RPTs considering their nature and company is placed in one of the top 1000 listed entities as repetitiveness. The Audit Committee reviewed its per list of BSE top 1000 listed entities based on their market omnibus approval quarterly. The Company has framed a cap. In compliance with, the business responsibility report policy on RPTs for the purpose of identification, approval of your Company in the SEBI prescribed format enclosed and monitoring of such transactions. The policy on to this annual report separately as Annexure -V. Related Party Transactions is hosted on the Company’s website at www.stovec.com. 14. REMUNERATION POLICY The details of the Remuneration Policy are mentioned 18. PARTICULARS OF LOANS, GUARANTEE OR in the Corporate Governance Report. A Statement of INVESTMENTS Disclosure of Remuneration pursuant to Section 197 of The Company has not given any loans or provided any the Act read with Rule 5(1) of the Companies (Appointment security falling under Section 186 of the Act. However, and Remuneration of Managerial Personnel) Rules, 2014, Investments made under the ambit of this section is (as amended) is provided as Annexure VI forming part of provided in note no. 5 of Notes to the Financial Statements. this Report. 19. VIGIL MECHANISM 15. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company believes in doing business with integrity The Company has an Internal Control System, and displays zero tolerance for any form of unethical commensurate with the size, scale and complexity of its behavior. In terms of Section 177(9) of the Act, a Vigil operations. The scope of Internal Audit is well defined in Mechanism for Directors and Employees to report the organisation. The Internal Audit Report is regularly genuine concerns is in place and the details of such Policy placed before the Audit Committee of the Board. The are provided in the Corporate Governance report forming Management and the Internal Auditor monitors and part of this Report. The Audit Committee oversees and evaluates the efficacy and adequacy of internal control review the functioning of this policy from time to time. systems in the Company with reference to the Financial The Company has disclosed information about the statement, its compliance with standard operating establishment of the Whistleblower Policy on its website procedures, accounting procedures and policies. Based at www.stovec.com at https://www.spgprints.com/ on the report of Internal Auditors, process owners uploads/documents/Stovec/Stovec-policies/Whistle_ undertake corrective action in their respective areas Blower_Policy.pdf. and thereby strengthening the controls continuously. Significant audit observations, if any, and corrective 20. RISK MANAGEMENT actions suggested and taken are presented to the Audit The Company has formulated Risk Management Policy Committee of the Board. to monitor the risks and to address/mitigate those risks During the year under review, no reportable material associated with the Company. The Board of Directors do weakness in the operation was observed. Regular audit not foresee any elements of risk, which in its opinion, may and review processes ensure that such systems are threaten the existence of the Company. reinforced on an ongoing basis. 21. DIRECTORS RESPONSIBILITY STATEMENT 16. EXTRACTS OF ANNUAL RETURN Pursuant to the provisions of Section 134 (3)(c) and 134 The extracts of Annual Return in Form MGT-9 as required (5) of the Act, your directors confirm, to the best of their under Section 92(3) of the Act read with Rule 12 of the knowledge and belief: Companies (Management and Administration) Rules, 2014 (as amended), is uploaded on the website of the a) that in the preparation of the annual financial Company at www.stovec.com. statements for the year ended December 31, 2020, the applicable accounting standards have been 17. PARTICULARS OF CONTRACTS OR ARRANGEMENT followed and that no material departures have been WITH RELATED PARTIES made from the same; No such contract or arrangement with Related Parties b) that such accounting policies have been selected and referred to in Section 188 (1) of the Act entered by the applied consistently and judgment and estimates Company during the year which required to be disclosed have been made that are reasonable and prudent, so in Form AOC-2. as to give a true and fair view of the state of affairs 19


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    Annual Report 2020 of the Company as at December 31, 2020 and of the COST RECORDS AND COST AUDITORS profit of the Company for the year ended on that date; In terms of Section 148 of the Companies Act, 2013 read c) that proper and sufficient care has been taken for with Rule 8 of the Companies (Accounts) Rules, 2014, the the maintenance of adequate accounting records in cost accounts and records are duly made and maintained accordance with the provisions of the Companies by the Company. Act, 2013, for safeguarding the assets of the The Board of Directors on the recommendation of the Audit Company and for preventing and detecting fraud Committee, have appointed M/s Dalwadi and Associates, and other irregularities; Cost Accountants (Firm Registration No.000338) as its d) that the annual financial statements for the year Cost Auditors to audit the cost records of the Company for ended December 31, 2020, have been prepared on a the financial year 2021, at a remuneration as mentioned going concern basis; in the Notice convening the 47th Annual General Meeting. e) that proper internal financial controls are in place in A certificate has been received from the Cost Auditors to the Company and that such internal financial controls the effect that their appointment as Cost Auditors of the are adequate and are operating effectively; and Company, if made, would be in accordance with the limits f) that proper systems have been devised to ensure specified under Section 141 of the Act and Rules framed compliance with the provisions of all applicable laws thereunder. A resolution seeking Member’s approval for and that such systems are adequate and operating the remuneration payable to Cost Auditors forms part of effectively. the Notice convening 47th Annual General Meeting of the Company and the same is recommended for approval of 22. POLICY ON PREVENTION OF SEXUAL HARASSMENT Members. OF WOMEN AT WORKPLACE SECRETARIAL AUDIT The Company has in place a Policy on Prevention of Sexual Harassment of Women at Workplace in line with Pursuant to the provisions of Section 204 of the Act read the requirements of the Sexual Harassment of Women with the Companies (Appointment and Remuneration at Workplace (Prevention, Prohibition and Redressal) of Managerial Personnel) Rules, 2014 and SEBI (LODR) Act, 2013 and Rules framed thereunder and Internal Amendment Regulation, 2018, the Company has Complaint’s Committee has also been set up to redress appointed M/s Sandip Sheth & Associates, Practicing complaints regarding sexual harassment. During the year, Company Secretaries (COP No. 4354), for conducting no complaint with allegations of sexual harassment was Secretarial Audit of the Company for the financial year received by the Company. Disclosures in relation to the ended on December 31, 2020 and the same is annexed to Sexual Harassment of Women at Workplace (Prevention, this report as Annexure-VII. Prohibition and Redressal) Act, 2013 is as under: AUDITORS REPORT a. Number of complaints filed during the financial year - Nil The Reports of the Auditor and the Secretarial Auditor do not contain any qualification, reservation or adverse b. Number of complaints disposed of during the remark of the respective auditors and hence they need financial year - Nil not require any comments or explanation under section c. Number of complaints pending as on end of the 134(3)(f) of the Act. financial year – Nil There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and 23. AUDITORS AND AUDITORS REPORT Rules framed thereunder, either to the Company or to the STATUTORY AUDITORS Central Government. Pursuant to the provisions of Section 139 of the Act read with the Companies (Audit and Auditor’s) Rules, 2014, 24. MATERIAL CHANGES AND COMMITMENTS AFFECTING M/s. S R B C & CO LLP, Chartered Accountants (FRN FINANCIAL POSITION OF THE COMPANY 324982E/E300003) was appointed as Statutory Auditors There have been no material changes and commitments of the Company for a term of 5 consecutive years to hold have occurred between the end of the financial year to office from the conclusion of 46th Annual General Meeting which the Financial Statements relate and the date of until the conclusion of 51st Annual General Meeting to be this Report, which affect the financial position of the held in the year 2025. Company. 20


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    Statutory Reports 25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE Sunday and Public Holidays) up to the date of Annual Corporate Overview Financial Statements REGULATORS OR COURTS General Meeting. Any Member interested in obtaining a As on date of this report, there are no significant and copy of the same may write to the Company Secretary. material orders passed by the Regulators or Courts 27. ACKNOWLEDGEMENT or Tribunals impacting the going concern status and operations of the Company in future. The Board express its appreciation for the contribution, co-operation and confidence reposed by SPG Prints B.V. 26. PARTICULARS OF EMPLOYEES – the Parent Company. The Directors further express The information on employees’ particulars as required their deep sense of gratitude to the Central and State under Section 197 (12) of the Act read with Rule 5 (2) and Government Ministries and departments, shareholders, 5 (3) of the Companies (Appointment and Remuneration customers, suppliers, business associates, bankers, of Managerial Personnel) Rules, 2014 (as amended), is employees, and all other stakeholders for their support annexed to this Report. In terms of Section 136 of the and look forward to their continued co-operation and Act, the Report and Financial Statements are being sent support. to the Members and others entitled thereto, excluding For and on behalf of Board of Directors aforesaid Annexure. The said information is available for inspection by any members at the Registered Office of K. M. Thanawalla the Company on any working day (i.e. except Saturday, Date: February 26, 2021 Chairman Place: Mumbai DIN: 00201749 21


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    Annual Report 2020 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 • Installed energy efficient cooling tower operating with VFD energy control to achieve maximum energy saving. • Kept on replacing old parts in rotary screen electroplating baths to achieve energy saving goals. • 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 utilizing Company keeps on evaluating feasibility of utilizing various available alternate sources of energy. options in market for alternate energy. (iii) The capital investment on energy conservation • Installed new energy efficient cooling tower. equipment’s • Kept on replacing new energy efficient rectifiers. 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 (` in Millions) Particulars Amount Earnings in foreign exchange from Goods and Services exported, Commission etc. 279.58 Value of imports of raw materials, components, stores, spares, Commission, technical know-how 508.71 fees, royalty etc. 22


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    Statutory Reports Annexure – II Corporate Overview Financial Statements CORPORATE GOVERNANCE REPORT 1. COMPANY’S PHILOSOPHY ON CORPORATE Governance is a journey for constantly improving GOVERNANCE sustainable value creation and is an upward moving Stovec firmly believes that Corporate Governance is target. about upholding the highest standard of ethics, integrity, transparency and accountability in conducting affairs 2. BOARD OF DIRECTORS of the Company, so as to disseminate transparent The composition of the Board with reference to the number information to all stakeholders. Stovec always seek to of Executive, Non-Executive Directors and Woman ensure that it attains performance goals with integrity. Directors, meets the requirement of Regulation 17(1) of Corporate Governance has indeed been an integral part SEBI (Listing Obligations and Disclosure Requirements) of the way Stovec have done business. This emanates Regulations, 2015 as amended (“Listing Regulations”). from our strong belief that strong governance is essential The Company has an optimum combination of Non- in creating value on a sustainable basis. Corporate Executive Directors. The present Board comprises of Six Directors which includes Non-Executive & Independent Chairman, Executive Director, Non-Executive & Non-Independent Directors & Non-Executive & Independent Director (including one Independent Woman Director) as under- Name of Director Executive/Non- Outside *No. of Committee Name of Other Listed Entities Executive/ Directorship positions in which He/She is Director Independent held outside Member Chairman Mr. K M Thanawalla Non-Executive & 13 0 0 - (DIN: 00201749) Independent (Chairman) (Thirteen) Mr. Marco Wadia Non-Executive & 13 4 5 - Chambal Fertilisers and (DIN: 00244357) Independent (Thirteen) Chemicals Limited - Gobind Sugar Mills Limited - Jost’s Engineering Co. Limited - Zuari Agro Chemicals Limited - Zuari Global Limited Mr. Dirk Wim Joustra Non-Executive & - - - - (DIN: 00481154) Non-Independent Mr. Eiko Ris Non-Executive & - - - - (DIN: 07428696) Non-Independent Mrs. Kiran Dhingra Non-Executive & 5 5 0 - Goa Carbon Limited (DIN: 00425602) Independent - Astra Microwave Products Limited - Zuari Agro Chemicals Limited Mr. Shailesh Wani Executive - - - - (DIN: 06474766) (Managing Director) *Includes Audit Committee and Stakeholders’ Relationship Committee only in all public companies. In the opinion of the Board, the independent directors Companies or more than 10 Public Limited Companies fulfill the conditions as specified in the Listing Regulations or acts as an Independent Director in more than 7 Listed and are independent of the management and none of the Companies. None of the Executive Directors act as Directors are related to any other Director. Independent Director of more than 3 listed entities. None of the Directors is a member in more than 10 Committees The Board met 4 (four) times during the year i.e. or is Chairperson of more than 5 Committees amongst February 25, 2020, June 04, 2020, August 13, 2020, and the Companies in which he/she hold directorships. The November 10, 2020 and maximum time gap between attendance record of the Directors at the Board as well as any two consecutive meetings was not more than 120 Annual General Meeting are as follows- days. None of the Directors is a Director in more than 20 23


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    Annual Report 2020 DETAILS OF THE BOARD MEETINGS, ATTENDANCE AND SHAREHOLDING OF DIRECTORS Directors No of Board No of Board Attendance at No. of Shares % of total Meetings held Meetings the last AGM held shares of the attended Company Mr. K. M. Thanawalla (KMT) 04 04 Yes Nil Nil Mr. Dirk Wim Joustra (DJ) 04 01 Yes Nil Nil Mr. Eiko Ris (ER) 04 04 Yes Nil Nil Mr. Marco Wadia (MW) 04 04 Yes 3700 0.177 Mrs. Kiran Dhingra (KD) 04 03 Yes Nil Nil (Appointed w.e.f. 01.04.2020) Mr. Shailesh Wani (SW) 04 04 Yes Nil Nil Ms. Sangeeta Sachdev 04 Nil No Nil Nil (Ceased w.e.f. 16.07.2020) 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 KMT DJ ER MW KD SW 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 Board of Directors (excluding the Director being The disclosure regarding appointment/re-appointment evaluated) evaluated the performance of Mr. K. M. of Directors has been given under Sr. No. 9 of Director’s Thanawalla, Mr. Marco Wadia, and Mrs. Kiran Dhingra Report. Independent Directors of the Company and determined that all Independent Directors shall continue with their ANNUAL PERFORMANCE EVALUATION present term of appointment, The Annual Performance Evaluation of Board, Committees The Independent Directors in their meeting assessed the of Board and each Director including Chairman of the quality, sufficiency and timeliness of flow of information Board was carried out through a structured questionnaire. between the Company Management and the Board which Pursuant to the provisions of the Companies Act, 2013 and is necessary for the Board to effectively and reasonably Listing Regulations, the Board of Directors/Independent perform their duties and found them satisfactory. Directors (as applicable) has undertaken an evaluation of their own performance, the performance of Committees FAMILIARISATION PROGRAMME FOR INDEPENDENT of Board and of all the individual Directors including DIRECTORS Chairman of the Board based on various parameters The Independent Directors are familiarized by relating to roles, responsibilities, obligations, level and the management with respect to their roles and effectiveness of participation e.g. inputs provided by responsibilities, an overview of the industry, the the Director based on his/her knowledge, skills and Company’s business model, the risks and opportunities experience, independence in judgment, understanding through various presentations at meeting of the board of the Company’s business and strategy, guidance on of directors of the Company and that the regulatory corporate strategy, sharing knowledge and experience updates also being circulated to the Board from time in their respective areas, contribution of Directors at to time towards familiarization programme. The meetings and functioning of Committees. The result details of familiarisation Programme is available at of above performance evaluation was presented to the the website of the Company www.stovec.com at Nomination and Remuneration Committee and the Board https://www.spgprints.com/uploads/documents/ of Directors (as applicable). Stovec/News/Familiarization-Programme.pdf. 24


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    Statutory Reports 3. COMMITTEES OF THE BOARD (vii) Discussion with Statutory Auditors before the Corporate Overview Financial Statements The Committees of the Board are constituted as per the audit commences, about the nature and scope Companies Act, 2013 and Listing Regulations of audit as well as post-audit discussion to 3.1 AUDIT COMMITTEE ascertain any area of concern; The terms of reference of the Audit Committee are (viii) May call for the comments of the auditors in line with the requirement of Section 177 of the about internal control systems, the scope of Companies Act, 2013 and rules framed thereunder audit, including the observations of the auditors and as per Listing Regulations. and review of financial statement before their The terms of reference of Audit Committee are submission to the Board and may also discuss briefly described below: any related issues with the Internal and Statutory Auditors and the Management of the (i) Review Company’s financial reporting process Company; and the disclosure of its financial information to ensure that the financial statement is correct, (ix) Reviewing with the Management, performance sufficient and credible and also to examine the of Statutory and Internal Auditors, adequacy of financial statement and the auditors’ report the internal control systems; thereon; (x) Review of the adequacy of internal audit (ii) Review with the management, of the annual function, if any, including the structure of financial statements before submission to the the internal audit department, staffing and Board for approval, with particular reference to: seniority of the official heading the department, reporting structure coverage and frequency of a. Matters required to be included in the internal audit; Director’s Responsibility Statement forming part of the Board’s report in terms (xi) Discussion with Internal Auditors of any of clause (c) of sub-section 3 of Section significant findings and follow up there on; 134 of the Companies Act, 2013 or any (xii) Evaluation of internal financial controls and risk amendment or re-enactment thereof; management systems; b. Changes, if any, in accounting policies and (xiii) Reviewing the findings of any internal practices and reasons for the same; investigations by the Internal Auditors into c. Major accounting entries involving matters where there is suspected fraud or estimates based on the exercise of irregularity or a failure of internal control judgment by management; systems of a material nature and reporting the matter to the Board; d. Significant adjustments made in the financial statements arising out of audit (xiv) Review of information relating to: findings; a) Management discussion and analysis e. Compliance with listing and other of financial condition and results of legal requirements relating to financial operations; statements; b) Statement of significant related party f. Disclosure of any related party transactions submitted by management; transactions; c) Management letters / letters of internal g. Qualifications in the draft audit report. control weaknesses issued by the Statutory Auditors; (iii) Review with the management of the quarterly financial statements before submission to the d) Internal Audit reports relating to internal Board for approval control weaknesses; (iv) Recommending to the Board, the appointment, e) The appointment, removal and terms of re-appointment, terms of appointment/re- remuneration of the Chief internal auditor appointment, fixation of audit fees and, if (xv) Approval or any subsequent modification of required, the replacement or removal of the transactions of the Company with related Auditor; parties; (v) Approval of payment to Statutory Auditors for (xvi) Scrutiny of inter-corporate loans and any other services rendered by the Statutory investments; Auditors; (xvii) Reviewing with the management, the (vi) Review and monitor the auditor’s independence statement of uses / application of funds raised and performance and effectiveness of audit through an issue (public issue, rights issue, process; preferential issue, etc.), The statement of funds 25


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    Annual Report 2020 utilised for purposes other than those stated in of the candidate; the offer document / prospectus / notice and (xxii) To review the financial investments, in the report submitted by the monitoring agency particular, the investments made by the monitoring the utilisation of proceeds of a unlisted subsidiary company; public or rights issue, and making appropriate (xxiii) Other matters as may be prescribed from recommendations to the Board to take up time to time to be dealt with or handled by steps in this matter; the Audit Committee pursuant to provisions (xviii) Valuation of undertakings or assets of the of the Companies Act, 2013, the Rules framed Company, wherever it is necessary; thereunder, the Listing Regulation and the (xix) To look into the reasons for substantial guidelines, circulars and notifications issued defaults in the payment to the depositors, if by Securities and Exchange Board of India any, debenture holders, if any, shareholders (in (“SEBI”)/Ministry of Corporate Affairs (“MCA”) case of non-payment of declared dividends) from time to time. and creditors; (xxiv) Reviewing the utilisation of loans and/ or (xx) To review the functioning of the Whistle Blower/ advances from/investment by the holding Vigil Mechanism; Details of establishing the company in the subsidiary exceeding rupees Vigil Mechanism have been disclosed on the 100 crore or 10% of the asset size of the Company’s website and in the Director’s Report; subsidiary, whichever is lower including existing (xxi) Approval of appointment of CFO (i.e., the loans / advances / investments existing as on whole-time Finance Director or any other the date of coming into force of this provision. person heading the finance function or (xxv) Carrying out any other function as may be discharging that function) after assessing the assigned to the Committee by the Board from qualifications, experience and background, etc. 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 2020 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 04 04 Mr. Marco Wadia Member Independent & Non-Executive Director 04 04 Mr. Shailesh Wani Member Managing Director 04 04 The Committee met 4 (four) times during the year • Formulation of the criteria for determining i.e. February 25, 2020, June 04, 2020, August 13, qualifications, positive attributes and 2020 and November 10, 2020. independence of a director and recommend to the Board a policy, relating to the remuneration Company Secretary act as the Secretary to the of the directors, key managerial personnel and Committee. The Chairman of the Audit Committee other employees; was present in the last Annual General Meeting to answer the shareholders queries. • Formulation of criteria for evaluation of Independent Directors and the Board; 3.2 NOMINATION AND REMUNERATION COMMITTEE: • Devising a policy on Board diversity; The terms of reference of the Nomination and • Identifying persons who are qualified to Remuneration Committee have been formulated become directors and who may be appointed in line with the requirement of Section 178 of the in senior management in accordance with the Companies Act, 2013 and rules framed thereunder criteria laid down and recommend to the Board and as per Listing Regulations. their appointment and removal. TERMS OF REFERENCE • Whether to extend or continue the term of Brief terms of reference of Nomination and appointment of the independent director. Remuneration Committee are as under: • Recommend to the board, all remuneration, in whatever form, payable to senior management. 26


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    Statutory Reports COMPOSITION & ATTENDANCE AT THE MEETING Corporate Overview Financial Statements 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 2020 are given below: Directors Position held Independent/Executive/Non-Executive No. of Meeting No. of Meetings in Committee 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 02 02 The Nomination and Remuneration Committee met SERVICE CONTRACT AND NOTICE PERIOD OF THE 2 (two) times during the year on February 25, 2020 MANAGING DIRECTOR/EXECUTIVE DIRECTOR: and August 13, 2020. Company Secretary act as the Mr. Shailesh Wani’s contract as a Managing Director is Secretary to the Committee. for a period of 3 years commencing from October 1, 2019 to September 30, 2022, terminable by six months’ notice REMUNERATION POLICY: by either side or amount equivalent to six months’ salary The Remuneration policy of the Company is in lieu thereof. performance driven and structured to motivate (B) NON-EXECUTIVE DIRECTORS: employees, recognise their merits and achievements, in order to retain the talent in the Company and The Independent Directors’ are paid remuneration stimulate excellence in their performance. by way of Sitting fees for attending Board/ Committee Meetings and Commission. During the The Board of Directors/Nomination and year, Independent Directors were paid remuneration Remuneration Committee is authorised to decide as under: the remuneration of the Managing Director/ Executive Director’s, subject to the approval of (` in Millions) the Members. Remuneration comprises of fixed Name Sitting Commission Total Components viz. Salary, perquisites and allowances Fees* and a variable component comprising of Gross Mr. K. M. Thanawalla 0.28 1.49 1.77 Bonus of minimum 38% and maximum of 50% of Mr. Marco Wadia 0.27 0.51 0.78 annual fixed salary (as per the scheme applicable Mrs. Kiran Dhingra 0.11 - 0.11 *Exclusive of Goods and Service Tax (as applicable). to Managing Directors’ of SPGPrints Operating Companies) based on the targets achieved. The NOTE: Managing Director will be entitled to bonus provided • Directors other than Independent Directors opted the conditions for awarding bonus have been met. not to accept any sitting fees for attending Board/ The performance evaluations and the criteria thereof Committee Meetings, as applicable. is given hereinabove in the report. • During the year, there were no pecuniary The Nomination & Remuneration Policy of the relationships or transactions between the Non- Company is available on the website of the Company Executive Directors and the Company. at www.stovec.com. COMMISSION The Directors’ remuneration and sitting fees paid/ The Members of the Company at its 46th Annual General payable in respect of the FY 2020 are given below: Meeting held on September 16, 2020 have approved payment of Commission to Independent Directors within (A) MANAGING DIRECTOR REMUNERATION: the overall ceiling of not exceeding 1% (one percent) or The details of remuneration to Managing such other percentage as may be prescribed in the Act Director are as follows: from time to time, of the net profits of the Company (` in Millions) (computed in the manner provided in Section 198 of the Name Salary & Perquisites Contribution Total Act or as may be prescribed by the Act or Rules framed Allowances & to Provident thereunder from time to time) for each financial year, Benefits and other for a period of three financial years commencing from Funds January 1, 2020, with Powers to Board /Committee * Mr. Shailesh 12.65 1.02 0.89 14.56 thereof to decide the amount to be paid as Commission Wani to Independent Directors, within the above referred ceiling *Remuneration includes variable pay on provisional basis. of Commission. 27


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    Annual Report 2020 The amount of Commission payable to each at the meeting. The Chairman of the Committee was Independent Director is decided by the Board present in the last Annual General Meeting to answer of Directors based on the recommendation of the shareholders queries. Company Secretary act as Nomination and Remuneration Committee and the Secretary to the Committee. distributed among the Independent Directors based COMPLIANCE OFFICER: on their attendance, contribution in decision making, Mr. Sanjeev Singh Sengar, Company Secretary, is Role and Responsibility as a Chairman/ Member of the Compliance Officer of the Company and can be the Board/Committee etc. contacted at: - Besides above, the Company does not pay any other commission or remuneration to its Non-Executive Stovec Industries Limited Directors. N.I.D.C., Nr. Lambha Village, Post: Narol, Ahmedabad, Gujarat – 382 405, India. 3.3 STAKEHOLDERS RELATIONSHIP COMMITTEE Tel: +91 79 6157 2300 • Fax: +91 79 2571 0406 The terms of reference of the Stakeholders Email: secretarial@stovec.com Relationship Committee have been formulated Complaints or queries relating to the shares can be in line with the requirement of Section 178 of the forwarded to the Company’s Registrar and Transfer Companies Act, 2013 and rules framed thereunder Agents ‘M/s Link Intime India Private Limited’ at and as per Listing Regulations. ahmedabad@linkintime.co.in. The Compliance TERMS OF REFERENCE: officer has been regularly interacting with the Share Transfer Agents to ensure that shares The brief terms of reference of the Stakeholders related complaints of the investors are attended to Relationship Committee are as under: without undue delay and where deemed expedient • Resolving the grievances of the security holders the complaints are referred to the committee or of the listed entity including complaints related discussed at the meetings. to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared The status on the total number of complaints dividends, issue of new/duplicate certificates, received during the FY 2020 are as follows: - general meetings etc. Complaints Resolved Pending as on Received during the Year 31.12.2020 • Review of measures taken for effective exercise 1 2 0 of voting rights by shareholders. • Review of adherence to the service standards 3.4 CORPORATE SOCIAL RESPONSIBILITY COMMITTEE adopted by the listed entity in respect of various TERMS OF REFERENCE: services being rendered by the Registrar & The Committee is primarily responsible for Share Transfer Agent. formulating and recommending to the Board of • Review of the various measures and initiatives Directors a Corporate Social Responsibility (CSR) taken by the listed entity for reducing the Policy and monitoring the same from time to time, quantum of unclaimed dividends and ensuring amount of expenditure to be incurred on the activities timely receipt of dividend warrants/annual pertaining to CSR and monitoring CSR activities. reports/statutory notices by the shareholders COMPOSITION: of the Company. The composition of the Corporate Social COMPOSITION Responsibility Committee is as under: The composition of the Stakeholder’s Relationship Directors Position Independent / No. of No. of held in Executive / Non- Meetings Meetings Committee is as under: Committee Executive Director Held attended Directors Position Independent/ Mr. Shailesh Chairman Managing Director 1 1 held in Executive/Non- Wani Committee Executive Director Mr. K. M. Member Independent Director 1 1 Mr. K. M. Chairman Independent & Non- Thanawalla Mr. Eiko Ris Member Non-Executive Director 1 1 Thanawalla Executive Director During the year, the Corporate Social Responsibility Mr. Shailesh Member Managing Director Committee met 1 (one) times i.e. on February 25, Wani 2020. Mr. Eiko Ris Member Non-Executive Director CSR POLICY: During the year under report, the committee met on The Company has formulated CSR Policy and the February 25, 2020 and all the members were present same is available at the website of the Company at 28


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    Statutory Reports www.stovec.com at https://www.spgprints.com/ 3. Approval of payment of commission to Mr. K. M. Corporate Overview Financial Statements uploads/documents/Stovec/Stovec-policies/CSR_ Thanawalla, Chairman (Independent Director) Policy.pdf. for the financial year 2019, exceeding fifty per Company Secretary acted as the Secretary to the cent of the total Commission payable to all the Committee. Independent Directors of the Company May 09, 2019 3.5 OTHER COMMITTEES Re-appointment of Mr. Shailesh Wani as Managing COMMITTEE OF DIRECTORS Director of the Company May 02, 2018 Directors Position Independent/ held in Executive / Non- None Committee Executive Director Postal Ballot: Mr. K. M. Chairman Independent & Non- During the year under review, no special resolution was Thanawalla Executive Director passed nor proposed to be conducted through postal Mr. Marco Member Independent & Non- ballot in terms of Section 110 of the Companies Act, 2013 Wadia Executive Director read with Rule 22 of the Companies (Management and During the year 2020, no meeting of Committee of Administration) Rules, 2014. Directors was held. 6. DISCLOSURE 3.6 SEPARATE INDEPENDENT DIRECTOR’S MEETING 6.1 There were no materially significant related party Pursuant to the Act and Regulation 25 of Listing transactions entered during the year that may have Regulations, the Company’s Independent Directors potential conflict with the interests of the Company met on February 25, 2020 during the year under at large. review without the presence of Non-Independent 6.2 The Company has complied with all rules and Directors and members of the Management. regulations prescribed by Stock Exchanges, Securities and Exchange Board of India or any other statutory 4. CODE OF BUSINESS CONDUCT AND ETHICS: authority relating to the capital markets. No penalties The Company has in place, a Code of Business Conduct or strictures have been imposed by any of them on and Ethics for its Board Members, Senior Management the Company during the last 3 years. However, SEBI and Employees. The Board and the Senior Management has imposed settlement charges for ` 5,84,350/- affirm compliance with the code annually. (Rupees Five Lakhs Eighty-Four Thousand Three Hundred and Fifty only) vide its order passed on April 5. GENERAL BODY MEETINGS’ DISCLOSURES: 15, 2019 toward settlement of delayed disclosure Location and time of Annual General Meetings in the past under SEBI SAST Regulation to the Stock Exchange, 3 financial years: on Company’s suo moto application. Year Location Date Time 6.3 Pursuant to the provisions of Regulation 17 (8) of FY 2019 Through Video Sep 16, 2020 3.00 pm the Listing Regulations, the Managing Director and Conference the Chief Financial Officer have issued a certificate FY 2018 Registered Office at May 9, 2019 11:00 am to the Board for the financial year ended December FY 2017 N.I.D.C., Nr. Lambha May 2, 2018 11:00 am 31, 2020. Village, Post: Narol, 6.4 During the year under review, the Company Ahmedabad– 382405 has complied with the corporate governance The following Special Resolutions were passed at Annual requirements specified in Regulation 17 to 27 and General Meetings held in the past 3 financial years: clauses (b) to (i) of sub-regulation 2 of Regulation 46 Summary of Listing Regulations. Sep 16, 2020 6.5 Whistle Blower Policy: 1. Re-appointment of Mr. K M. Thanawalla The Company has in place a Whistle Blower Policy (DIN:00201749), as an Independent Director of the through which Directors, Employees and other Company for a second term of 5 (five) consecutive Stakeholders may report their genuine concerns years or grievances. The Whistle Blower Policy of the 2. Re-appointment of Mr. Marco Wadia (DIN: Company has been disclosed on the website of the 00244357), as an Independent Director of the Company. No personnel have been denied access to Company for a second term of 5 (five) consecutive the Audit Committee to report its genuine concerns years or grievances. 29


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    Annual Report 2020 6.6 Related Party Transactions in the Accounting Standards prescribed by the There were no materially significant related party Institute of Chartered Accountants of India. There transactions entered into by the Company during are no audit qualifications in the Company’s financial the FY 2020. Related Party Transaction Policy has statements for the year under review. been formulated in order to regulate the transact ions 6.13 Disclosure of Commodity Price Risks, Foreign between Company and Related Parties. The Related Exchange Risk and Commodity Hedging Activities Party Transaction Policy is available at the website High quality Nickel is being imported regularly as per of the Company at www.stovec.com at https://www. Purchase guidelines of the Company. The Company’s spgprints.com/uploads/documents/Stovec/Stovec- performance may get impacted in case of substantial policies/Related-party-10.11.2020.pdf. change in prices of Nickel or Foreign Exchange rate 6.7 Risk Management fluctuations. However, Company takes forward cover as per its forex risk coverage policy. The Company As required by Listing Regulations, the Risk does not undertake commodity hedging activities. Management Policy has been formulated and the same is available at the website of the Company at The risk management policy has been putting place www.stovec.com. to address the risks associated with the business of the Company including commodity price risk and 6.8 Policy for Prohibition of Insider Trading and Code mechanism to continuously monitor the movement of Conduct for Fair Disclosures in commodity prices and take appropriate action The Company has adopted a Code of Conduct for to ensure better cost control. During the year, the Regulating, Monitoring and Reporting of Trading by Company has no material price risk exposure. Insiders and Code of Conduct for fair disclosures 6.14 Credit Rating pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015 (as amended). The requirement of disclosure relating to list of all credit ratings obtained by the entity along with any 6.9 Policy for determining Material Subsidiaries revisions thereto during the relevant financial year, The Company has formulated Policy for determining for all debt instruments of such entity or any fixed Material Subsidiaries and the same is available at deposit programme or any scheme or proposal of the the website of the Company at www.stovec.com at listed entity involving mobilisation of funds, whether https://www.spgprints.com/uploads/documents/ in India or abroad is not applicable to the Company. Stovec/Stovec-policies/Policy_for_determining_ 6.15 Details of utilisation of funds raised through Material_Subsidiaries.pdf. preferential allotment or qualified institutions 6.10 Policy for determining Material Information placement As required by Regulation 30 of SEBI (Listing During the year, the Company has not raised funds Obligations and Disclosure Requirements) through the preferential allotment or qualified Regulations, 2015, the Board of Directors institutions placement as specified under Regulation have approved the Policy for determining 32 (7A). Material Information and is available at the 6.16 Certificate from a company secretary in practice website of the Company at www.stovec.com at regarding disqualification of Directors https://www.spgprints.com/uploads/documents/ The company has obtained the certificate from M/s Stovec/Stovecpolicies/Policy_for_determining_ Sandip Sheth & Associates, confirming that none Material_ Information.pdf. of the directors on the board of the company have 6.11 Policy for Preservation of Documents and Archival been debarred or disqualified from being appointed Policy or continuing as directors of companies by the SEBI/ As required by Regulation 9 of SEBI (Listing Ministry of Corporate Affairs or any such statutory Obligations and Disclosure Requirements) authority. The certificate of non-disqualification is Regulations, 2015, the Board of Directors have appended to this Report. approved the Policy for Preservation of Documents 6.17 Regarding non-acceptance of Recommendation of and Archival Policy and the same is available at the any committee website of the Company at www.stovec.com at The Board of Directors have accepted every https://www.spgprints.com/uploads/documents/ recommendation made by any committee of the Stovec/Stovec-policies/Policy_for_Preservation_of_ board. Documents___Archival_Policy.pdf. 6.18 Regarding fees paid to the Statutory Auditor on a 6.12 Disclosure of Accounting Treatment consolidated basis The Company in the preparation of financial Details relating to fees paid to the Statutory Auditors statements has followed the treatment laid down is given in the Notes 25 to the Financial Statements. 30


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    Statutory Reports 6.19 Disclosure in relation to Sexual Harassment of The following are the listing details of the Company’s Corporate Overview Financial Statements Women at Workplace Shares: The disclosure has been given at Sr. No. 22 to the Type of Shares ISIN No. BSE Stock Code Directors’ Report. Ordinary Shares INE755D01015 504959 6.20 Adoption of Non-Mandatory Requirements of Listing Regulations 9.4 Market Information: - The Company has separate persons for the Month BSE position of Chairman and Managing Director. Mr. High (`) Low (`) BSE SENSEX K. M. Thanawalla is a Chairman (Independent Jan-20 2,419.45 1995.00 40,723.49 & Non - Executive) and Mr. Shailesh Wani is the Managing Director of the Company. Feb-20 2,450.00 2,045.00 38,297.29 - The audit report of the Company’s Financial Mar-20 2,260.00 1,107.95 29,468.49 Statements for the year ended December 31, Apr-20 1,938.00 1,435.00 33,717.62 2020 is unmodified. May-20 1,994.80 1,808.00 32,424.10 - The Internal Auditor reports directly to the Audit Jun-20 2,314.75 1,856.05 34,915.80 Committee. Jul-20 2,111.00 1,865.00 37,606.89 Aug-20 2,225.00 1,858.00 38,628.29 7. SUBSIDIARY COMPANY Sep-20 2,180.00 1,770.00 38,067.93 The Company does not have any subsidiary, Associate Oct-20 1,940.00 1,731.00 39,614.07 and joint venture company during the FY 2020. Nov-20 1,899.95 1,735.25 44,149.72 8. MEANS OF COMMUNICATION Dec-20 2,160.00 1,831.95 47,751.33 The Quarterly Results were published in Business Standard (English) and Jaihind (Gujrati) and Performance in comparison to broad-based simultaneously hosted on the Company’s website www. indices such as BSE Sensex: stovec.com and also submitted with the BSE Limited Stovec Industries Limited (BSE). All the required disclosures and information are 3000 60000 hosted on the Company’s website for the benefit of the 2500 50000 shareholders and is available. The Annual Report of 2000 40000 the Company is also available on the website in a user Sensex Closing SIL Share Price 1500 30000 friendly and downloadable form. 1000 20000 9. GENERAL INFORMATION FOR MEMBERS 500 10000 9.1 Annual General Meeting: 0 0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Day, Date and Tuesday, May 11, 2021 Months High Low Sensex Time at 02.00 PM *Source: www.bseindia.com Venue Through VC/OAVM from he Registered office of the Company 9.5 Registrar and Transfer Agents: - 9.2 Financial Calendar: For transfer lodgment, delivery and correspondence related to Shares, Members are requested to do Financial Year FY 2020 correspondence with the Company’s Registrar Date of Book Closure May 05, 2021 to May 11, and Share Transfer Agents - M/s Link Intime India 2021 (Both day inclusive) Private Limited quoting their folio no. at the following Dividend Payment Date On or before June 10, address: - 2021. M/s Link Intime India Private Limited 9.3 Listing: 5th Floor, 506 to 508, The Company’s equity shares are listed on the BSE Amarnath Business Center –I (ABC-I), Limited (BSE) and the Company has paid annual Besides Gala Business Center, listing fees to BSE for year 2020. The Ahmedabad Nr. St. Xavier’s College Corner, Off. C.G. Road, Stock Exchange (ASE) vide its letter dated January Navrangpura, Ahmedabad – 380 009, Gujarat. 11, 2017 communicated to the Company that it is Tel: +91(0) 79 - 2646 5179/86/87 non-functional and under exit policy, thereby no Fax: +91(0) 79 - 2646 5179. need to make any compliance with ASE. ahmedabad@linkintime.co.in 31


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    Annual Report 2020 9.6 Share Transfer System: physical form and in dematerialised form (held with The Board has issued Power of Attorney to Registrar NSDL and CDSL). and Share Transfer Agent, M/s. Link Intime India Pvt. Pursuant to Regulation 40 (9) of Listing Regulations, Ltd., to approve transfer of shares. certificate on half-yearly basis have been issued by a Practicing Company Secretary for due compliance 9.7 Reconciliation of Share Capital Audit & Certificate of share transfer formalities by the Company. pursuant to Regulation 40 (9) of Listing Regulations: 9.8 Report on Corporate Governance: A qualified Practicing Company Secretary carried out The Company regularly submits to the Stock a Reconciliation of Share Capital Audit to reconcile Exchanges, within the prescribed period, quarterly the total admitted capital with NSDL and CDSL and reports on Corporate Governance. A Certificate from the total issued and listed capital. The audit confirms the Practicing Company Secretary on Compliance of that the total issued/paid up capital is in agreement conditions of Corporate Governance is attached as with the aggregate of the total number of shares in annexure to the Report. 9.9 Shareholding Pattern of the Company: Category As on December 30, 2020 As on December 31, 2019 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 Investor Education and Protection Fund 31,690 1.52 29,948 1.43 Financial Institutions/Banks 965 0.05 1,102 0.05 Bodies Corporate 58,047 2.78 31,045 1.49 NRIs (Repatriable) 3,321 0.16 6,274 0.30 NRIs (Non-Repatriable) 10,211 0.49 9,871 0.47 Clearing Members 1,357 0.07 270 0.01 Directors & their Relatives 5,864 0.28 5,864 0.28 Individuals/HUF 4,92,784 23.60 5,19,865 23.92 TOTAL 2,088,016 100.00 2,088,016 100.00 9.10 Distribution of Shareholding as on December 31, 2020 Range of Shares No. of % of total No. of % of Total Shareholders Shareholders Shares Shares 1 - 500 6581 98.0483 290919 13.9328 501 - 1000 70 1.0429 51414 2.4623 1001 - 2000 31 0.4619 45331 2.1710 2001 - 3000 9 0.1341 22364 1.0711 3001 - 4000 8 0.1192 27444 1.3144 4001 - 5000 2 0.0298 9296 0.4452 5001 - 10000 5 0.0745 29302 1.4033 10001 or more 6 0.0894 1611946 77.1999 TOTAL 6712 100 2088016 100 9.11 Shareholders (holding in excess of 1% of capital) as on December 31, 2020: Name of Shareholders No. of Shares held % of Share Capital SPGPrints B.V. 14,83,777 71.0616 Plutus Wealth Management LLP 35,000 1.6762 IEPF, MCA 31,690 1.5177 Nanda Kishore Sharma 24,020 1.1504 Amit Shantilal Motla 20,938 1.0028 9.12 Dematerialisation of Shares & Liquidity: As on December 31, 2020, shares comprising 96.80% of the Company’s Equity Share Capital have been dematerialised. ISIN No. :- INE755D01015 32


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    Statutory Reports 9.13 Plant Location & Address for Correspondence: Regulations, 2015 for the year ended on December 31, 2020. Corporate Overview Financial Statements STOVEC INDUSTRIES LIMITED We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the Address : N.I.D.C., Nr. Lambha Village, Post: purpose of certification. During the course of such certification, Narol, Ahmedabad, we have relied on various information and declaration furnished Gujarat – 382 405, India. by each director of the Company as at and relied on the online CIN : L45200GJ1973PLC050790 information available with Ministry of Corporate Affairs Portal, Tel : +91 79- 6157 2300 its filling position and other web pages. Facsimile No. : +91 79- 2571 0406 In our opinion and to the best of our information and according Website : www.stovec.com to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in) as considered DECLARATION BY THE MANAGING DIRECTOR UNDER necessary and explanations furnished to us by the Company PART D OF SCHEDULE V OF SEBI (LISTING OBLIGATIONS & its officers, We hereby certify that none of the Directors on AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 the Board of the Company as stated below for the Financial REGARDING ADHERENCE TO THE CODE OF CONDUCT Year ending on December 31, 2020 have been debarred or In accordance with Part D of Schedule V of SEBI (Listing disqualified from being appointed or continuing as Directors Obligations and Disclosure Requirements) Regulations, of Companies by the Securities and Exchange Board of India, 2015, I hereby confirm that, all the Directors and the Senior Ministry of Corporate Affairs or any such other Statutory Management personnel of the Company have affirmed Authority. compliance with the Code of Business Conduct and Ethics Sr Name of Director Director Date of for Board of Directors, Senior Management & Employees, as No. Identification appointment applicable to them, for the financial year ended December 31, Number in the 2020. (DIN) Company For, STOVEC INDUSTRIES LIMITED 1 Mr. Khurshed 00201749 28/01/2005 Meherwanji Thanawalla Shailesh Wani 2 Mr. Shailesh 06474766 01/10/2013 Chandrakrishna Wani Date : February 26, 2021 Managing Director Place: Ahmedabad (DIN: 06474766) 3 Mr. Dirk Wim Joustra 00481154 29/01/1999 4 Mr. Eiko Ris 07428696 12/03/2019 5 Mr. Marco Philippus 00244357 21/05/1999 Ardeshir Wadia CIN: - L45200GJ1973PLC050790 6 Ms. Kiran Dhingra 00425602 01/04/2020 Nominal Capital : - 3,00,00,000/- Paid-up Capital : - 2,08,80,160/- Ensuring the eligibility of for the appointment / continuity of every Director on the Board is the responsibility of the CERTIFICATE OF NON- management of the Company. Our responsibility is to express DISQUALIFICATION OF DIRECTORS an opinion on these based on our verification. Our examination (pursuant to Regulation 34(3) and Schedule V Para C clause was limited to the procedure and implementation thereof, (10)(i) of the SEBI (Listing Obligations and Disclosure adopted by the Company for ensuring the compliance of the Requirements) Regulations, 2015) conditions of the clause 10 (i) of para C of Schedule V read with Regulation 34 (3) of Chapter IV of SEBI (Listing Obligations To, And Disclosure Requirements) Regulations, 2015 for the year The Members, ended on December 31, 2020. Stovec Industries Limited CIN: L45200GJ1973PLC050790 Sandip Sheth & Associates N.I.D.C, Near Lambha Village, Firm Unique Code: P2001GJ041000 Post: Narol, Ahmedabad – 382 405, Gujarat, India. Practicing Company Secretaries We have examined all relevant registers, records, forms and disclosures received from the directors of Stovec Industries Sandip Sheth Limited, produced before us by the Company for the purpose Partner of certifying compliance of conditions of clause 10 (i) of para FCS : 5467 C of Schedule V read with Regulation 34(3) of Chapter IV of Place: Ahmedabad CP No : 4354 SEBI (Listing Obligations And Disclosure Requirements) Date: February 26, 2021 UDIN :F005467B003579831 33


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    Annual Report 2020 CIN: - L45200GJ1973PLC050790 Nominal Capital : - 3,00,00,000/- Paid-up Capital : - 2,08,80,160/- CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE To, The Members, Stovec Industries Limited CIN: L45200GJ1973PLC050790 N.I.D.C. Nr. Lambha Village, Post: Narol, Ahmedabad. 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, 2015 for the year ended on December 31, 2020. 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 Sandip Sheth Partner FCS : 5467 Place: Ahmedabad CP No : 4354 Date: February 26, 2021 UDIN :F005467B003580271 34


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    Statutory Reports Annexure-III Corporate Overview Financial Statements MANAGEMENT DISCUSSION & ANALYSIS GLOBAL ECONOMIC OVERVIEW improving for emerging market and developing economies. The year 2020 saw a significant transformation in the global Together, these developments indicate a stronger starting economic order. The year was intense and volatile for the point for FY 2022’s global growth outlook. world economy, to say the least. From lockdowns disrupting Multiple vaccine approvals have raised hopes of an eventual supply chains to movement-limiting restrictions affecting end to the pandemic. According to the IMF, the global economy all businesses, it was a year that tested resilience and is projected to grow at 5.5% and 4.2% in 2021 and 2022, persistence. The coronavirus (COVID-19) pandemic spread at respectively. However, new variants of the virus, renewed an alarming speed, infecting millions and costing many lives lockdowns, logistical and storage problems with vaccine worldwide. Governments across the globe imposed series distribution, and uncertainty about take-up are important of strict lockdowns to curb the spread of the virus, resulting counterpoints to a favourable outlook. A lot remains to be done in one of the most severe economic contraction since the on the health and economic policy fronts to ensure a sustained Great Depression. Collectively, these measures led to reduced recovery. cross-border travel and accelerated job losses. As a result, (Source: IMF, Business standard, UNCTAD) gross domestic product (GDP) plunged to record lows across economies. INDIAN ECONOMIC OVERVIEW A stunning increase in spending by the Governments across The calendar year 2020 started on a rather weak note for the the world, cushioning the economic damage, was witnessed. Indian economy. With the slowest GDP growth rate recorded Additionally, central banks also slashed interest rates and right at the beginning to entering a technical recession injected liquidity into the financial system. The International towards the end, the year unfolded quite dramatically. And Monetary Fund (IMF) forecasted the global economy to shrink yet, 2020 brought along unprecedented crisis and uncharted to (-)3.5% in 2020 which is 0.9% higher from their earlier opportunities for the Indian economy. The phased out projection. lockdowns, imposed to contain the spread of COVID-19, The first half of 2020 witnessed a slump in the flow of cratered employment, business, trade, manufacturing, global foreign direct investment (FDI) across the developed and service activities across sectors. The Reserve Bank of economies. A sluggish demand for crude oil drastically India (RBI) promptly responded and implemented adequate declined the oil prices in the international markets. The US measures like slashing interest rates, announcing fiscal Federal Reserve slashed interest rates to near zero, leading to stimulus package and allowing loan moratorium facilities, a powerful policy response and consumer rebound. However, among others, for the economy’s revival. changes in the US administration is anticipated to bring in a The demand side of the GDP reflected continued weakness likely change in the global economy’s course in near future. during the year, in both consumption and investment demand. With eased lockdowns and rapid deployment of policy support On the supply side, the sharpest contraction was experienced by central banks and governments, the global economy in construction followed by trade, manufacturing, hotels, is gradually emerging from the depths of its collapse in the transport and communication services. CPI inflation remained first half of 2020. China is witnessing a growth rebound led high at 6.9% in November 2020. The unemployment rate, as by the industrial sector and strong exports. More recently, its calculated by the CMIE, rose to 23.5% during the period April- recovery base has slowly started broadening to service sector May 2020, before further reducing to 9.1% in December 2020. and consumers as well. Europe, on the other hand, has fallen According to the data released by the Ministry of Statistics and marginally behind with resurgence of new cases, slowing the Programme Implementation (MoSPI), real GDP contracted recovery momentum from its previous robust pace. However, at a slower pace of (-)7.5% in Q2 of FY 2021 as compared the recent progress in coronavirus vaccines has boosted to (-)23.9% in Q1 of FY 2021. This was due to phased confidence, lifting optimism on recovery. relaxation of lockdown, leading to a gradual resumption of economic activities. Towards the end of FY 2020, there was OUTLOOK an improvement in manufacturing and industrial production, signaling the beginning of a V-shaped recovery. The real Despite the pandemic, the economic activity appears to GDP growth is projected to contract by 7.7% in FY 2021 as be adapting to subdued contact-intensive activity with the compared to a growth of 4.2% in FY 2020. passage of time. Additional policy measures, announced in the United States and Japan at the end of 2020, are expected to Meanwhile, the Index of Industrial Production (IIP) contracted counter the downturn and support the global economy in FY sharply by 1.9% in November 2020 as against a growth of 2022. Financial conditions are also expected to persist broadly 3.6% in October 2020. With the reduction in daily COVID at current levels for advanced economies while gradually infection rate and commencement of vaccination, the 35


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    Annual Report 2020 economy is recovering at a much faster rate than anticipated. 2. Launched a Production Linked Incentive (PLI) scheme GST collection for January 2021 touched an all-time high of worth ` 10,683 crore textile products – man-made ` 1.19 lakh crore. While exports witnessed a growth of 5.37% Fibre (MMF) segment and technical textiles segments in January 2021 with trade deficit narrowing down to US$ – to boost the domestic manufacturing, create jobs and 15 Bn. The Government, through Union Budget 2021-22, has reduce dependence on imports. promoted ‘Atmanirbhar Bharat’ with duty hikes to support 3. Launched Mega Investment Textiles Parks (MITRA) ‘Make in India’ campaign while also encouraging overseas scheme in addition to the PLI scheme under which investments. Additionally, a slew of announcements across seven textile parks will be established over three years. sectors such as health and well-being and core infrastructure With an estimated budget of ` 10,683 crore, these parks is further expected to boost the growth prospects. will be set up over 1,000 acre of land with world-class infrastructure. Enabling the industry to become globally OUTLOOK more competitive, attract large investments and boost The Indian economy is showing decisive and strong signs of employment generation. recovery riding the confidence post the vaccine roll out, low interest rates, return of consumer confidence and measures 4. Rationalised duties on raw material inputs to manmade attracting investment. With the prospects of robust growth textiles by bringing nylon chain at par with polyester and gaining grounds in consumption and investment and a lower other MMFs. The basic custom duty on caprolactam, base effect, GDP is estimated to grow at 11% in FY 2022 (Source: nylon chips and nylon fiber & yarn will be reduced from Economic Survey 2020–21). However, there are key downside 7.5% to 5%, helping the textile industry, MSMEs, and risks as well emanating from inflation with upward pressure on exports. prices due to rising input cost, oil prices, unemployment and 5. The Union Cabinet approved and signed an MOU between increasing non-performing assets of banks. textile committee, India and M/s Nissenken Quality (Source: NCAER, Economic times, IMF, Business Today) Evaluation Centre, Japan, for improving quality and testing Indian textiles and clothing for the Japanese market. This INDUSTRY STRUCTURE AND DEVELOPMENTS India-Japan pact on cooperation in textiles will facilitate Textile Industry Indian exporters to meet the requirements of Japanese The Indian textile industry contributes 2.3% to the nation’s importers as per the latter’s technical regulations. GDP, accounting for 13% of the industrial production, and 12% 6. Initiatives announced in recent years such as National of the country’s export earnings. The industry employs around Technical Textiles Mission, Amended Technology 45 Mn people currently, making it the country’s second-largest Upgradation Fund Scheme (ATUFS) and Scheme for employer. Reversion of duties and taxes on exported products, The widespread impact of the COVID-19 decelerated the among others, will help in making textiles and apparel growth projection of the Indian textile and apparel industry. exports competitive. However, the Government initiated and implemented various (Source: IBEF, Nitiayog, Budget Speech 2021-22) relief measures to combat the pandemic-induced crisis caused to the sector. The mandate requiring people to use Growth Drivers safety wear stirred a big boost to the textile industry. Yarn Vaccine rollout: The Indian economy is expected to perform manufacturers modified their manufacturing units to produce better on the back of sustained improvement in high frequency personal protective equipment (PPE) kit, safety masks and indicators and approval of emergency use of two vaccines to gloves. Besides, growing disposable income of the society’s counter COVID-19. As a result, the resumption in economic middle and lower middle-class sections, along with population activities and increased mobility are expected to lead towards boom, also led to increased demand in the textile industry. a path of recovery for the textile sector as well in the aftermath of the pandemic. Favourable Government Initiatives Increase in e-commerce: The smartphone boom has In the past few years, the Government has announced various globalised the Indian consumers. Purchasing for brands which favourable policies, fostering the textile industry’s growth. were earlier limited to metros has now made its way to tier The Government, in the Union Budget 2021-22, declared II and tier III cities, both via retail and e-commerce channels. several special measures to boost the industry. Some of these Moreover, the pandemic has accelerated the shift towards measures are stated below: a more digital world and instrumented changes in online 1. The Central Government announced ` 3,000 Bn collateral- shopping behaviours. free automatic loan for businesses, including the MSMEs Demographic factors: India’s population is among the to combat the impact of the pandemic. It is expected to youngest in an ageing world and is considered to spend a benefit ~4.5 Mn small businesses, including many small significant amount on lifestyle and clothing. By 2022, the textile and apparel units as well. 36


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    Statutory Reports median age in India will be 28 years; in comparison to 37 in the pre-Covid-19 levels. The textile industry might see a period Corporate Overview Financial Statements China and the United States, 45 in Western Europe, and 49 in of recovery characterised by a lull in spending and slack in Japan. The country is expected to add 273 million people by demand across channels. This can impact the demand for the 2050. Company’s capital products and consumable segments. (Source: The Hindu, Economic Times) Higher raw material prices Rising urbanisation: It is estimated that India’s urban The levy of 10% customs duty on raw cotton imports, as population will increase from 377 million in 2011 to 594 million announced in the Union Budget 2021-22, is likely to increase in 2036 – a whopping growth of 57%. Moreover, awareness domestic cotton prices. This is anticipated to adversely impact about fashion brands, lifestyle choices and shift in the the entire value chain. consumer behaviour is further expected to support higher textile demand. Foreign exchange risk (Source: The Wire) As the Company is engaged in imports and exports of its OPPORTUNITIES FOR ROTARY AND DIGITAL TEXTILE products across the globe, any adverse currency fluctuation PRINTING can impact its profitability. Evolving fashion trends GRAPHICS PRINTING Rising young Indian population, fast urbanisation, higher The growth of the digital printing market is driven by the and increased purchasing power and changes in lifestyle advancement of the packaging and textile industries. It patterns have led to an increase in the demand for fashion influences every part of today’s packaging and print label textile printing. An increase in the penetration of online retail industry. and e-commerce in the fashion industry, additionally presents opportunities for homegrown textile printing players. Asia-Pacific region and contribution by countries like China, Booming digital textile printing Japan and India is expected to increase the global packaging The fast-changing fashion industry trends, preference for and labelling services market share substantially due to an creative patterns and colours present a huge opportunity for increase in the e-commerce business, disposable income, the digital textile printing possibilities. Besides, advanced digital and urbanisation. Amidst the decorative applications, there printing technologies, competitive price, cost effectiveness, also exists an inherent need of some industrial applications lower wastage and optimal power consumption are the key which are fulfilled by the screen-printing technology. This factors behind growth of digital textile printing machine market brings in opportunities for our special screens apart from the in India. existing Rotary screens, Digital printer & inks catering to the aesthetic printing solutions. Encouraging Government policies Rising Government focus and favourable policies are leading The industry is confronting a rising demand for aesthetic to growth in the textiles and clothing industry. The Ministry printing solutions. These solutions find wide usage in end-use of Textiles is encouraging investment through schemes such industries which include food & beverage and pharmaceutical as Technology Up-gradation Fund Scheme (TUFS), Amended and premium packaging materials from cosmetics, alcoholic Technology Upgradation Fund Scheme, Scheme for Capacity drinks and household products manufacturing industries. Building in Textile Sector (SCBTS). Through these incentives, Moreover, increasing flexibility, low cost per device, and the Government is supporting the ‘Make in India’ campaign, emerging technologies are also expected to help the industry aiming to make the domestic industry more competitive. expand further. Growth in technical textile segment COMPANY OVERVIEW India is expected to be a key growth market for the technical A subsidiary of the SPGPrints Group, headquartered at Boxmeer, textile sector due to the cost-effectiveness, durability and Netherlands, Stovec Industries Limited has established itself versatility of its technical textiles. Under the PLI scheme, the as the market leader in rotary screen-printing technology. The Government has approved ` 10,683 crore for man-made fibre Company offers comprehensive range of printing solutions to and technical textiles manufacturing. This will create more the textile industry. Besides India, Stovec also has a marquee demand for technical textiles, underpinning the textile printing clientele in other textile manufacturing countries including machine market as well. Europe, USA, Turkey, Brazil, Mexico, Korea, Taiwan, Colombia, Bangladesh, and China. THREATS Prolonged slowdown in the economy The Company’s product offerings include Pegasus Evo, RD8 Despite the vaccination drive and expected spur in the ID & RD6 GOLD Rotary screen-printing machine, bestLEN & economic activities, businesses will take time to get back to SmartLEX Laser engraving machines, Javelin (multi pass) & 37


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    Annual Report 2020 PIKE (high speed Single Pass) digital printing machines, Rotary customers’ growing needs through its customised products screen consumables for textile printing, Digital inks, Anilox and and services. The Company’s performance is directly dependent Rota screen for graphics printing. In addition, the Company and influenced by the textile industry’s developments. also offers lacquers and chemicals that lead to highest quality results in textile printing. Stovec also provides products for FINANCIAL REVIEW conventional and digital engraving in the printing domain. The Company’s revenue drop-off to ` 1501.17 Mn in With world-class manufacturing and R&D facilities, located FY 2020 as against ` 1,942.47 Mn in FY 2019, under challenging in Ahmedabad, Stovec continuously strives to bring cutting- business circumstances due to Covid-19. The Profit before tax edge innovation and quality into its products. The Company’s also decreased from ` 372.16 Mn in FY 2019 to ` 171.62Mn in wide and solid distribution network further helps it address its FY 2020. Details of significant changes in key financial ratios: There has been significant changes (25% +/-) in the key financial ratios as compared to preceding financial year as under - Ratios FY 2020 FY 2019 Variance (%) Remarks Debtors turnover (in days) 75 60 -25% Slower recovery due to covid-19 pandemic during 2020. Inventory turnover (in days) 86 59 -46% Year end inventory higher to serve next year business. EBIDTA margin 11.98% 19.28% -38% Due to covid-19 pandemic. Net Profit margin 8.97% 14.38% -38% Due to covid-19 pandemic. Return on net worth 9.97% 20.25% -51% Profitability affected due to covid-19. SEGMENT-WISE PERFORMANCE: adequacy and effectiveness of the internal control system. It The Company’s segment-wise sales performance was also reviews the functioning of the whistleblower mechanism recorded as under- and monitors the action taken on the cases reported. (` in Million) HUMAN RESOURCE AND INDUSTRIAL RELATIONS Particulars FY 2020 FY 2019 Textile Consumables & Textile 1159.84 1,554.88 The Company recognises that human capital is its cardinal Machinery asset. Prudent HR practices have helped nurture the skills and Graphic Products 70.76 95.24 growth of its employees. The Company extensively invests Galvanic 270.56 292.35 in training programmes and learning modules. It reinforces engagement with employees across levels by providing an RISKS AND CONCERNS enriched workplace and transparent communication. With The Company has a structured approach for handling risks. new ways of working during the pandemic, the Company is It has a risk management framework in place, defined roles now geared to create a digitally-enabled workplace to the and responsibilities at different levels. Risk management team extent possible, with seamless virtual collaboration. reviews the overall risks and identifies the critical risks such The Company consciously works and maintains harmonious as price risk, forex risk, and environment risk, among others. industrial relations at its offices and plants. It believes and All inherent risks are measured, monitored and regularly nurtures a culture of complete transparency through open reported to the management. The Company has adequate communication channels with easy access. The Company mitigation plans for the risks based on the probability of their further refines its policies in alignment with its organisational occurrence, potential impact and volatility. The emerging risks interest, benefitting everyone at the same time. As on are discussed periodically with the management to ensure December FY 2020, the Company had a total team of 248 implementation of proper control mechanism. employees adding value to the organisation. INTERNAL CONTROL SYSTEM CAUTIONARY STATEMENT Internal controls form an integral part of the Company’s The statement forming a part of this Report may contain general organisational structure. It includes a range of certain forward-looking remarks with the meaning of personnel who act in a coordinated manner while executing applicable Securities Law and Regulations. Many factors could their respective responsibilities. These internal controls ensure cause the actual results, performances, or achievements of strict adherence to the applicable laws and regulations, the Company to be materially different from any future results, safeguarding of assets, prevention of frauds/errors and proper performances, or achievements. Significant factors that recording and reporting of financial transactions. The efficacy could make a difference to the Company’s operations include of the internal control systems is verified by the internal and domestic and international economic conditions, changes in statutory auditors of the Company. The Audit Committee of government regulations, tax regime and other statutes. the Board reviews the internal audit plan and ensures the 38


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    Statutory Reports Annexure-IV Corporate Overview Financial Statements REPORT ON CSR ACTIVITIES The CSR activities has been initiated in the area of textile trainees are from the low-income level with an objective to and allied industries offering skill development program by provide them an opportunity to move up the cadre thereby arranging training programs for the workers for uplifting their increasing their income augmentation possibility besides his life and to enhance their livelihood. The training is intended career options open to move to other units which makes them to be preferably carried out in and around Ahmedabad region self-reliant and capable. which consists of both theory and practice classes. On completion of training, an independent evaluation of trainees Because of COVID-19 pandemic induced lockdowns, is carried out besides feedback of the participants. Practical restrictions & the necessity of maintaining social distancing training class has been arranged at the various units located in etc; the Company was unable to undertake such training same or nearby locality. program during the major part of reporting year. Trainees could be entry level operators without any experience Besides that, Company being responsible citizen has given or training or they even could be operators working in the its partial contribution to PM CARES fund to help the nation in industry having some practical experience. The selected fighting with Covid-19 pandemic. CORPORATE SOCIAL RESPONSIBILITY REPORT 1. A brief outline of the Company’s CSR Policy, including Projects or Programs proposed to be undertaken: overview of projects or programs proposed to be In accordance with this CSR Policy and the specified undertaken and a reference to the web-link to the CSR activities under the Companies Act, 2013 read with Policy and projects or programs. Companies (Corporate Social Responsibility Policy) Rules, In alignment with vision of the Company, the Company 2014 and any amendment(s) thereof, the CSR activities of through its CSR initiatives, will continue to enhance value the Company will have the following thrust areas: creation in the society and in the community in which i. Skill Development for sustainable income generation it operates, through its services, conduct & initiatives, & Livelihood for marginalised population so as to promote sustained growth for the society ii. Literacy / Education; and community, in fulfillment of its role as Socially iii. Basic Infrastructure facilities like Safe Drinking Responsible Corporate, with environmental concern. CSR Water, Health care & Sanitation; Policy is available on the Company’s website at https://www.spgprints.com/uploads/documents/ iv. Protection and safeguard of environment and Stovec/Stovec-policies/CSR_Policy.pdf maintenance of ecological balance; v. To respond to emergency situations/ disasters/ Objective of CSR Policy: Other national cause by providing Contribution to • Ensure an increased commitment at all levels in State Funds for such cause; the organisation, to operate its business in an vi. Socio- economic development, relief and welfare of economically, socially & environmentally sustainable Children, Women and those who are Physically and manner, while recognizing the interests of all its Mentally challenged; stakeholders. vii. Any other CSR activities as specified in Schedule VII • Demonstrate commitment to the common good of Companies Act, 2013 by MCA from time to time. through responsible business practices and good 2. Composition of the CSR Committee: governance. • To directly or indirectly take up the programs that Sr. Name of Member Position held in benefits the Society at large and communities in No. CSR Committee and around its work center over a period of time, in 1 Mr. Shailesh Wani Chairman 2 Mr. Khurshed M. Thanawalla Member enhancing the quality of life & economic well-being 3 Mr. Eiko Ris Member of the local populace. • Support Governments’ development agenda to 3. Average net profit of the Company for last three financial ensure sustainable change. years: ` 438.45 million 39


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    Annual Report 2020 4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): ` 8.77 million 5. Details of CSR spent during the financial year a) Total amount to be spent for the financial year: ` 8.77 million b) Amount unspent, if any: Nil c) Manner in which the amount spent during the financial year is detailed below. (` in Million) Sr. CSR Sector in Projects or Amount Amount Cumulative Amount No. Project or which programs outlay spent on expenditure spent: activity identified the Project 1) Local area (budget) the projects upto the Direct or is covered or other project or or programs reporting through 2) Specify programs Sub-heads: period implementing wise agency. the state and 1) Direct district where expenditure projects or on projects or programs was programs. undertaken 2) overheads. 1 Contribution - Contribution 7.06 7.06 7.06 Direct to Prime to Prime Minister’s Minister’s National Relief National Fund Relief Fund 2 PM Cares - PM Cares 1.10 1.10 1.10 Direct 3 Skill Development Education Ahmedabad 0.61 0.61 0.61 Ahmedabad Programs and Textile livelihood Industrial Research Association (ATIRA) Total 8.77 8.77 8.77 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: February 26, 2021 Place: Ahmedabad 40


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    Statutory Reports ANNEXURE - V Corporate Overview Financial Statements 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, 2020 to December 31, 2020 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 (i) Perforated Rotary Screens, Lacquer & Auxiliary Chemicals, Rotary (as 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: (` in Million) Sr. Particulars Details No. 1. Paid up capital as on December 31, 2020 ` 20.88 2. Total turnover for FY 2020 ` 1357.91 3. Total profit after taxes for FY 2020 ` 134.63 4. Total spending on Corporate Social Responsibility (CSR) as a ` 8.77 (6.51%) percentage of Profit after Tax (%) for FY 2020 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 NA initiatives of the parent Company? If yes, then indicate the number of such subsidiary company(ies) 3. Do any other entity/entities (e.g. suppliers, distributors among No other entity/entities participate in the BR initiatives others) that the Company does business with, participate in the of the Company BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, more than 60%] 41


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    Annual Report 2020 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. Businesses 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 lifecycle 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 marginalised 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 part of the of the & Ethics & policy, of the of the CSR of the Code of Code of Internal HR however, Code of Code of Policy Code of Business Business Policies for certain Business Business Business Conduct Conduct Employees aspect of Conduct Conduct Conduct & Ethics & Ethics this principle & Ethics & Ethics & Ethics of the and EHS forms part and EHS Company Policy of the CSR Policy Policy 2. Has the policy been N N N - N N - N N formulated in consultation with the relevant stakeholders? 3. Does the policy conform to Y Y Y - Y Y - Y Y any national/ international The Company’s policies are in conformity with national/international standards, wherever applicable and in standards? If yes, specify? compliance with the applicable regulatory requirements (50 words) 42


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    Statutory Reports (a) Details of Compliance (Reply in Y/N) (Contd...) Corporate Overview Financial Statements Sr. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 No. 4. Has the policy been Y Y Y - Y Y - Y Y approved by the Board? As a process, all policies have been considered and noted by the Board/Committee/s of the Board. The Board If yes, has it been authorised the senior officials of the Company to authenticate the policies signed by MD/owner/ CEO/appropriate Board Director? 5. Does the Company have 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 formally communicated The policy (ies) is/are communicated to the relevant stakeholders, wherever applicable and required to all relevant internal and external stakeholders? 8. Does the Company have 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 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 out independent audit/ The heads of departments are responsible for effective implementation of the policies/process. evaluation of the working No independent audit of the policies has been carried out but the Internal Audit Function periodically of these policies by looks at the implementation thereof an internal or external agency? Notes: @ The Company has its Code of Business Conduct & Ethics broadly covering the above principles. Besides, the Company also has insider trading policy and code of fair disclosure, policy on related party transactions and material subsidiary, whistleblower and vigil mechanism, familiarisation programme, 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. (b) If answer to the question in serial number 1 against any principle, is ‘No’, please explain why: (Tick up to two options) Sr. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 No. 1. The Company has not understood the principles 2. The Company is not at a stage where it finds itself in √ √ a position to formulate and implement the policies on specified principles 3. The Company does not have financial or manpower resources available for the task 4. It is planned to be done within next six months 5. It is planned to be done within next one year 6. Any other reason (please specify) Considering the business activities of the Company and the nature of its business, the management/ Board has not felt the need to formulate certain policies. However, the Board reviews the requirements from time to time and will formulate relevant policies as and when the need arises 43


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    Annual Report 2020 3. Governance related to BR Sr. Particulars Details No. a. Indicate the frequency with which the Board of Directors, The Board of Directors of the Company through its committee of the Board or CEO to assess the BR Managing Director or internal committee assesses the performance of the Company (within three months, three- BR performance of the Company periodically. six months, annually, more than one year) b. Does the Company publish a BR or a sustainability report? The Company publishes the information on BR on its What is the hyperlink for viewing this report? How frequently annual report. The annual report is uploaded on the is it published? website of the Company at www.stovec.com SECTION E Complaints from external stakeholders such as suppliers PRINCIPLE-WISE PERFORMANCE: and contractors are raised directly to business teams and Principle 1: Businesses should conduct and govern are addressed by them on a case-by-case basis. themselves with ethics, transparency and accountability Principle 2: Businesses should provide goods and services 1. Does the policy relating to ethics, bribery and that are safe and contribute to sustainability throughout their corruption cover only the Company? Does it extend to lifecycle the group/joint ventures/suppliers/contractors/NGOs/ others? 1. List up to three of your products or services whose design has incorporated social or environmental The Company has defined the Code of Business Conduct concerns, risks and/or opportunities: & Ethics for its Directors and employees that cover issues related to ethics, workplace responsibilities and As an environmentally conscious Company, it continues conflict of interest etc. It also covers suppliers, vendors to innovate and use efficient technologies to bring down and other entities/ firms with whom the Company does our strain on ecology. The Company has undertaken the business. Further, the Company has adopted a Whistle- following initiatives to this objective: Blower Policy to provide a mechanism for employees and • Use of state-of-the-art Effluent Treatment Plant Directors of the Company to approach the ombudsperson (ETP) to reduce treated water discharge or chairman of the audit committee of the Company, as • Ensure energy-efficient operations the case may be, for reporting unethical behaviour, actual • Use of alternate packaging material to minimise or suspected, fraud or violation of the Company’s code of wood consumption conduct. 2. For each such product and services, provide the In compliance with the SEBI (Prohibition of Insider Trading) following details in respect to resource use (energy, (Amendment) Regulations, 2018, the Company has water, raw material, among others) per unit of product amended its whistle-blower policy to enable employees (optional): to report instances of leak of unpublished price-sensitive information. The Company has also in place anti-sexual a) Reduction during sourcing/production/distribution harassment policy to maintain a work environment free achieved since the previous year throughout the from any form of conduct which can be considered as value chain? harassing, coercive or disruptive. b) Reduction during usage by consumers (energy, water) has been achieved since the previous year? 2. How many stakeholder complaints have been received in the past financial year and what percentage was Details of conservation of energy are given in Annexure-I satisfactorily resolved by the management? If so, of the Directors’ Report. provide details thereof, in about 50 words or so. 3. Does the Company have procedures in place for The Company has different mechanisms for receiving sustainable sourcing, including transportation? and dealing with complaints from different stakeholders’ a. If yes, what percentage of your inputs was sourced viz. investors, customers, employees, vendors, etc. There sustainably? Also, provide details thereof, in about are dedicated resources to address the complaints 50 words or so. within a time-bound manner. The investors’ complaints Yes, the Company has procedures in place for sustainable are reported on quarterly basis to the stock exchange sourcing, including transportation. concerned. Also, there was no complaint reported by any Director or employee of the Company under our vigil/ As a responsible corporate citizen, the Company whistle-blower mechanism and none was reported under endeavours to reduce the environmental impact on its anti-sexual harassment policy. operations. The Company has made conscious efforts 44


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    Statutory Reports to reduce the usage of paper through various digital Principle 3: Businesses should promote the wellbeing of all Corporate Overview Financial Statements initiatives, including paperless board meeting, generating employees: of digital PO, use of recyclable packing materials. Our 1) Total number of employees: 248 (staff:107 + Workmen: supplier analysis also takes into account the sourcing 141) strategy of the supplier and proximity of the supplier to 2) Total number of employees hired on temporary/ the location where the order request has been raised contractual/casual basis: 38 to improve logistics and save time, cost and emissions 3) Number of permanent women employees: 04 from unwanted transportation through longer routes. The 4) Number of permanent employees with disabilities: 01 manufacturing processes are selected and improved year 5) Do you have an employee association that is recognised on year to consume lesser energy and resources. by the management: Yes 4. Has the Company taken any steps to procure goods 6) What percentage of your permanent employees is and services from local and small producers, including members of this recognised employee association? communities surrounding their place of work? If yes, -100% of workmen strength what steps have been taken to improve their capacity 7) Number of complaints relating to child labour, forced and capability of local and small vendors? labour, involuntary labour, sexual harassment in the last Most of the raw materials are procured from areas near financial year and pending, as on the end of the financial the factories and the Company works with vendors year: extensively to improve capacities and capabilities. Sr. Category No. of No. of The Company encourages local vendors to supply its No. complaints complaints regular needs. It is therefore if all other factors are on a filed during pending as at par among the potential suppliers, then the Company the the financial end of gives preference to the local supplier or small producer year financial year and thus procure goods locally. For consumable and 1. Child labour/forced Nil Nil operational services, the Company prefers to connect labour/involuntary with local vendors/suppliers to supply the necessary labour manpower and other requirements. Thus, the preference 2. Sexual harassment Nil Nil is given to micro, small and medium enterprises (MSME) 3. Discriminatory Nil Nil employment for business opportunity and uplift of lower middle class. 8) What percentage of your under-mentioned employees The human resources and other services required for our were given safety and skill upgradation training in the last operations are generally sourced from within the local year? area to the extent feasible. The products and services a. Permanent employees: 78.22% offered by the Company are aimed at encouraging b. Permanent women employees: 100% entrepreneurship, innovation, and capacity building among the society as well as to enable them to scale up c. Casual/temporary/contractual employees: 75% their business operations. d. Employees with disabilities: 100% 5. Does the Company have a mechanism to recycle Principle 4: Businesses should respect the interests of, and products and waste? If yes, what is the percentage of be responsive towards all stakeholders, especially those who recycling of products and waste (separately as <5%, are disadvantaged, vulnerable and marginalised: 5-10%, >10%). Also, provide details thereof, in about 50 1. Has the Company mapped its internal and external words or so. stakeholders? Yes, the Company has a mechanism to recycle waste. Our Yes. The Company has mapped its internal and external operational practices are focused to continually reduce stakeholders. The Company constantly strives to keep consumption of papers and progressive measures the communication open and transparent with all its are being implemented across different processes stakeholders to maximise stakeholders’ satisfaction and to facilitate the same. All the waste generated in the value creation. operations is being disposed through authorised recycler. 2. Out of the above, has the Company identified The Company re-uses the wooden packaging material the disadvantaged, vulnerable and marginalised for certain product lines to minimise wood usages. stakeholders? Our initiatives also strive to meet sustainability goals of The Company is committed towards proactively engaging waste reduction and more efficient resource utilisation. with the employees, business associates, customers and 45


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    Annual Report 2020 communities who may be disadvantaged, vulnerable and is continuously implementing process improvements marginalised. to reduce emissions and wastes and explores various opportunities to address such issues from time to time 3. Are there any special initiatives taken by the Company such as use of solar rooftop. to engage with the disadvantaged, vulnerable and marginalised stakeholders? If so, provide details Our efficient operational and environment-management thereof, in about 50 words or so. practices and digital-business initiatives help us to reduce our environment footprint and help us achieve We being a responsible corporate, believe in inclusive environmentally sustainable business practices. growth and equitable development for socio-economic betterment of the community. The Company is 3. Does the Company identify and assess potential susceptible to extend support to the disadvantaged and environmental risks? marginalised stakeholders, through CSR programmes The Company is aware of the potential environment and active employee volunteering. The Company makes risks; thus, the Company follows sound environment efforts to promote extending support to weaker section/ management practices at its manufacturing unit to community, including engagement of differently abled assess and address potential environment risks. persons, in the employment. We understand that environment risks may affect Principle 5: Businesses should respect and promote human business operations and pose potential threat. The rights: Company has its own ways to identify and assess the 1. Does the policy of the Company on human rights cover potential environment risks at the design stage itself. only the Company or extend to the group/joint ventures/ We have also integrated environment and social suppliers/contractors/NGOs/others? safeguards into the business process. The Company The Company is committed to upholding the dignity of continuously seeks to improve its environment every individual engaged or associated with the Company. performance by promoting use of energy efficient As a socially responsible organisation, the Company is environment-friendly technologies and use of renewable committed to protect and safeguard human rights. energy. The fair practices code as well as code of conduct lay 4. Does the Company have any project related to clean down the acceptable employee behaviour on various development mechanism? If so, provide details thereof, aspects, including human rights. All employees, with in about 50 words or so. Also, if yes, whether any direct interface to customers, are trained to be polite environment compliance report is filed? and courteous to customers under all circumstances. Yes, the Company ensures project related to the clean This focus on human rights extends towards all its development mechanism and environment compliance interactions with stakeholders with utmost importance report is filed with the state environment authority i.e. placed on fairness and transparency. GPCB. 2. How many stakeholder complaints have been received 5. Has the Company undertaken any other initiatives on in the past financial year and what percent was clean technology, energy efficiency, renewable energy, satisfactorily resolved by the management? among others? Yes/No. If yes, please give hyperlink for No complaints on human rights were received during the webpage etc. year. Technology is used to reduce impact on environment in the entire chain of manufacturing, the emphasis is on Principle 6: Businesses should respect, protect, and make preserving natural resources such as Company uses in efforts to restore the environment: its operations’ battery-operated forklift and stackers for 1. Does the policy related to Principle 6 cover only the material handling. Company or extends to the group/joint ventures/ suppliers/contractors/NGO s/others? 6. Are the emissions/waste generated by the Company within the permissible limits given by CPCB/SPCB for The policy covers only to the Company. The Company the financial year being reported? adheres to all statutory compliances with respect to environment, health and safety requirements. Yes, the emissions and waste generated were within permissible limits stated by GPCB. 2. Does the Company have strategies/initiatives to address global environment issues such as climate 7. Number of show cause/legal notices received from change, global warming, among others? Yes/No. If yes, CPCB/SPCB which are pending (i.e. not resolved to please give hyperlink for webpage etc. satisfaction) as on end of financial year. The Company doesn’t have any specific programme or No notices were received by the Company during the year initiatives to address such issues. However, the Company ended on December 31, 2020. 46


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    Statutory Reports Principle 7: Businesses, when engaged in influencing public 4. What is your Company’s direct contribution to Corporate Overview Financial Statements and regulatory policy, should do so in a responsible manner community development projects: Amount in ` and the 1. Is your Company a member of any trade and chamber details of the projects undertaken? or association? If Yes, name only those major ones that The Company has made no direct contribution to the your business deals with: community except the CSR contribution as mentioned The Company is a member of Textile Machinery above. Manufacturers’ Association (TMMA). 5. Have you taken steps to ensure that this community- development initiative is successfully adopted by the 2. Have you advocated/lobbied through above community? Please explain in 50 words, or so. associations for the advancement or improvement of Not applicable. public good? Yes/No; if yes, specify the broad areas (governance and administration, economic reforms, Principle 9: Businesses should engage with and provide inclusive development policies, energy security, water, value to their customers and consumers in a responsible food security, sustainable business principles, others) manner: No. 1. What percentage of customer complaints/consumer cases are pending as on the end of financial year? Principle 8: Businesses should support inclusive growth and equitable development: There are no consumer cases outstanding as at the end of the financial year. However, the customer complaints 1. Does the Company have specified programmes/ with respect to the Company’s goods have been taken initiatives/projects in pursuit of the policy related to care of by a separate team and resolved within the Principle 8? If yes, details thereof. committed timelines. The Company has a well-defined CSR policy in line with 2. Does the Company display product and service the Companies Act, 2013, for undertaking various CSR information on the product label, over and above what initiatives for the support and development of society. is mandated as per local laws? The report on the CSR projects carried by the Company during the year is annexed with the Board’s report. No. 3. Is there any case filed by any stakeholder against the 2. Are the programmes/projects undertaken through in- Company regarding unfair trade practices, irresponsible house team/own foundation/external NGO/government advertising and/or anti-competitive behaviour during the structures/any other organisation? last five years and pending as on end of financial year? If The Company contributes its CSR contribution to the so, provide details thereof, in about 50 words or so government and NGO. Please refer annual CSR report No. of the Company annexed to the director’s report of this 4. Did your Company carry out any consumer survey/ annual report. consumer-satisfaction trends? 3. Have you done any impact assessment of your The customer feedback/comments are being taken initiative? during customer visit and appropriate actions are taken No. as applicable. 47


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    Annual Report 2020 Annexure-VI STATEMENT OF DISCLOSURE OF REMUNERATION (Pursuant to Section 197 of the Act and Rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014) (i) Ratio of the remuneration of each Executive Director to the median remuneration of the employees of the Company for the financial year 2020, the percentage increase in remuneration of Managing Director, Chief Financial Officer and Company Secretary during the financial year 2020. Sr. Name of Director / Key Designation *Ratio of Remuneration of Percentage increase in No. Managerial Personnel each Director to median Remuneration remuneration of employees 1 Mr. Shailesh Wani Managing Director 38.14:1 5% 2 Mr. Paras Mehta Chief Financial Officer Not Applicable 5% 3 Mr. Sanjeev Singh Sengar Company Secretary Not Applicable 5% *remuneration includes variable pay on provisional basis. (ii) The percentage increase in the median remuneration of employees for the financial year 2020 was 12.9%. (iii) The Company had 223 permanent employees on the rolls of the Company as on December 31, 2020. (iv) Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year was 11.81 % whereas the increase in the managerial remuneration was 5%. The average increases every year is an outcome of the Company’s market competitiveness and business performance. Keeping in mind our Nomination and Remuneration policy and benchmarking results, the increases this year reflect the market practice. (v) It is hereby affirmed that the remuneration paid during the year 2020 is as per the Nomination and Remuneration Policy of the Company. For and on behalf of Board of Directors K. M. Thanawalla Date: February 26, 2021 Chairman Place: Mumbai DIN: 00201749 48

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