Dear Shareholders,
Your directors are pleased to present the 78th Annual Report along with the
Audited Financial Statements of your Company for the Financial Year ended 31st
March, 2024. The Management's Discussion and Analysis Report as required under the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 forms part of this report.
Summarised Financial Highlights
The financial performance of business operations of the Company for the financial year
ended 31st March, 2024 is summarised as below:
(Rs. in Lakhs)
| Particulars |
Year ended 31st March, 2024 |
Year ended 31st March, 2023 |
| Revenue from Operations |
6056.37 |
2497.68 |
| Other income |
1945.99 |
965.19 |
| Total Income |
8002.36 |
3462.87 |
| Operating Profit/(Loss) / EBITDA (including other income) |
1384.71 |
418.98 |
| Add/Less: Finance Costs |
5.00 |
3.46 |
| Profit/(Loss) before Depreciation & Amortisation Expenses |
1379.71 |
415.52 |
| Add/Less: Depreciation & Amortisation Expenses |
32.44 |
41.34 |
| Profit/(Loss) before tax |
1347.27 |
374.18 |
Review of Operations
FY 2023-24 was the first full financial year of operations of your Company with new
business activities of trading in commodities and other commodity related activities,
which commenced from third quarter of FY 2022-23. Commodity trading involves buying and
selling goods such as metals, energy, and agricultural products. It can be done through
futures contracts on exchanges, allowing traders to speculate on price movements or hedge
against them. Earlier in April 2022, the Company disposed of all the assets together with
land, buildings and plant and machineries in relation to its manufacturing unit located at
Village Jolwa, Taluka Palsana, District Surat. The funds realized on sale of these assets
were also deployed prudently in a phased manner in diversified financial instruments for
the remaining period ended on 31st March, 2023.
During FY 24, your Company achieved Income from Operations of Rs. 60.56 Crore from the
Commodity trading business as compared to Rs. 24.98 Crore in FY 23. Your Company earned
higher Other Income of Rs. 19.46 Crore during FY 24 as compared to Rs. 9.65 crore in FY 23
which represents earnings from investments in Mutual Funds and other financial
instruments.
Increase in Other Income was primarily on account of additional funds deployed as well
as increased returns in the financial market during FY 24. Every category of debt and
equity have done well.
Commodities demonstrated robust performance for the third consecutive year, The CRB
Index delivered positive returns, overcoming a turbulent period.
War-like situations in many countries put the world on edge. Despite that, with
improved consumer spending and the announcement of interest rate cuts in 2024, the
financial world delivered some exceptional returns, including commodities.
We propose to deploy additional funds in the commodities business in a calibrated
manner in FY25, after proper evaluation of related external risk factors, if any, and the
overall business scenario.
Dividend
With a view to conserve the resources for future growth, the directors of the Company
have decided not to recommend any dividend on equity shares of the Company for the year
ended 31 March, 2024.
Transfer to Reserves
The Board of Directors has decided to retain the entire amount of profits for FY24 in
Profit and Loss Account.
Change of name of the Company
As the members are aware, consequent to sale/transfer of the assets its manufacturing
division at village Jolwa, Talika Palsana, Dist. Surat April, 2022, your Company commenced
the new activities of trading in commodities and other commodity related business from
third quarter of FY23. Accordingly, it was considered appropriate to align its name as per
the newly added business commenced by the Company.
The Board of Directors of the Company at its meeting held on 11th August,
2023 approved the proposal for change of name of the Company from "Surat Textile
Mills Limited" to "Surat Trade and Mercantile Limited" along with the
consequential amendments required to be made in the Memorandum of Association and Articles
of Association, subject to the approval of ROC, CRC, MCA and the Members of the Company.
Further in accordance with the provisions of Section 13 and 14 of the Companies Act,
2013 ("the Act") and pursuant to Regulation 45 of SEBI (Listing Obligations and
Disclosure) Requirements, 2015 ("Listing Regulation"), to the extent applicable,
the Company obtained shareholder's approval by way of a Special Resolution through Postal
Ballot Process vide Notice dated 14th August, 2023, to effect the change in the
Company's name and make necessary consequential alterations to the Memorandum and Articles
of Association.
A fresh Certificate of Incorporation pursuant to change of name was issued by the
Office of the Registrar of Companies, Ahmedabad, Gujarat on 18th September,
2023.
Industry Structure and Development
Indian Economy
The Indian economy has witnessed an average of more than 8% annual growth since the
covid-induced output contraction in FY21. The growth propelled the Indian economy to $3.5
trillion and set the stage for achieving the $5-trillion government target in the next few
years.
India's gross domestic product (GDP) growth for Fiscal 2024 has been upgraded to 8.2%,
driven by strong growth in investments, services and manufacturing. This was despite
agriculture growth of only 1.4%.
The Government's strengthened thrust on capex will augur well for the economy in the
mid to long term with the creation of employment opportunities, improved infrastructure
and elevated ease of doing business in the country. RBI has recently upgraded estimated
growth at 7.2% in FY 25 owing to expected recovery in agriculture and private consumption
in addition to the government's capex initiatives.
With continuity of the government post-elections, reforms momentum is expected to
continue which should spur growth and ensure macro-economic stability, presenting an
"optimistic economic outlook" for the coming year. Company results have been
strong supporting growth and tax revenues. S&P has upgraded India's outlook to
positive from stable.
As per International Monetary Fund (IMF) estimates India will be the third largest
economy before 2030 with its GDP projected to surpass both Japan and Germany. Both private
consumption and investment are projected to rise steadily, contributing to GDP expansion.
Inflation in India has remained within the Reserve Bank's target range of 2-6 per cent
since September 2023, contributing to a stable economic environment, the report added.
While weather remains a risk, there is a forecast of above normal rains in the current
year which may lead to better agriculture production.
Opportunities, Challenges, Threats, Risks and Concerns
In 2023, agricultural markets grappled with notable volatility, especially in spices,
rice, cotton etc. El Nino and other extreme weather events heightened concerns about the
supply of several agricultural commodities. However, food inflation came down with
improved availability. Several Indian commodities are fluctuating in price. Gold prices
rose 1.5% this month to a 6- month high, while crude oil prices fell 5% to a 4-month low
owing to sluggish global demand. Silver has been out primary commodity segment last
fiscal. Silver prices have been very volatile. These changes are caused by supply and
demand, production costs, economic development, geopolitical events, natural catastrophes,
speculative trading, and government policies. But its volatility has also presented
opportunities for higher returns.
The variables cited above impact commodity prices and the global economy, influencing
consumer products, stock markets, and other industries. These swings have major effects on
India's economy.
Trade disruptions may hurt commodity-dependent economies. Even as prices fall,
commodities market volatility is expected to provide economic concerns. Commodity pricing,
global trade dynamics, and changing rules and standards may impact actual economic
activity, inflation, and economic development in India.
With a 7% -plus growth rate for the third consecutive year in FY 24, India sits on the
cusp of advancement while facing several challenges. Geopolitical tensions, climate change
and economic growth are factors that will support longer term value for commodities.
Your company mitigates price risk by hedging its entire commodity exposure. However, a
threat is that opportunities with good returns might get limited.
Business Outlook
As FY 25 begins, the focus shifts to the outlook. Positive underlying fundamentals in
India, persistent geopolitical uncertainties, and anticipated easing by the Federal
Reserve and the RBI indicate that the bullion complex is poised to experience an upward
trend in the coming year. Expectation of increase in investment demand and ongoing Central
Bank purchases are expected to fuel bullish momentum for gold further, potentially pushing
it to new record highs alongside silver.
Commodity prices are projected to experience a slight downturn in 2024 and 2025 but are
expected to remain above pre-pandemic levels.
After three years of extreme volatility, commodities prices are set to broadly
stabilise in 2024. However, adverse weather conditions, escalating geopolitical tensions
and soaring shipping costs are among the risks to watch to commodity price forecasts.
In a statement by RBI Governor stated that during 2024- 25 so far, domestic economic
activity has maintained resilience while manufacturing activity continues to gain ground
on the back of strengthening domestic demand. Private consumption, the mainstay of
aggregate demand, is recovering with steady discretionary spending in urban areas.
The healthy balance sheets of banks and corporates, the government's continued thrust
on capex, high- capacity utilisation, and business optimism augur well for investment
activity.
Share Capital
As on March 31, 2024, the paid-up share capital of the Company stood at Rs. 2220.64
Lakhs consisting of 222064440 equity shares of Rs.l each fully paid up.
Out of the above, the Promoters held 152004917 equity shares comprising 68.45% of the
equity share capital of the Company. There was neither any change in the share capital of
the Company nor was there any change in the shareholding of the Promoter of the Company
during the year.
Subsidiary, Joint Venture and Associate Companies
The Company has no subsidiary / joint venture / associates for the financial year ended
31st March, 2024. Accordingly, the requirements pursuant to Section 129(3) of
the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 is not
applicable.
The policy for determining material subsidiaries formulated by the Board of Directors
is disclosed on the website of the Company and can be accessed at https://www.stml.in.
Resources and Liquidity
Our principal sources of liquidity are cash and cash equivalents, investments and the
cash flow that we generate from our operations. We understand that liquidity in the
Balance Sheet has to balance between earning adequate returns and the need to cover
financial and business requirements. We continue to be debt-free and maintain adequate
liquidity to meet our operational requirements.
There was no outstanding term loan at the beginning or at the end of financial year
2023-24. No fresh Term Loan was availed by the Company during the year. The Company has
not availed any working capital facility from Banks during the year.
Directors and Key Managerial Personnel
The composition of the Board of Directors of the Company is in accordance with the
provisions of Section 149 of the Companies Act 2013 and Regulation 17 of the SEBI Listing
Regulations, with an appropriate combination of Executive Director, Non-Executive
Directors and Independent Directors. The complete list of Directors of the Company has
been provided as part of the Corporate Governance Report.
Re-appointment /appointment of Directors
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the
rules made thereunder and the Articles of Association of your Company, Mr. Paresh V.
Chothani (DIN: 00218632) is liable to retire by rotation at the ensuing Annual General
Meeting and being eligible, offers himself for re-appointment. Based on performance
evaluation and the recommendations of the Nomination and Remuneration Committee, the Board
recommends the re-appointment of Mr. Paresh V. Chothani for your approval.
Based on the recommendation of the Nomination and Remuneration
Committee("NRC") and Board of Directors, members by way of Postal Ballotthrough
Special Resolution approved the Appointment of Mr. Suhail P. Shah as the Wholetime
Director designated as Executive Director of the Company for a period of 3 (Three) years
with effect from 1st September 2023 and remuneration thereof. Based on
recommendation of NRC and in accordance with provisions of the Act and Listing
Regulations, Mr. Manish Gandhi (DIN: 10671306) was appointed as an Additional Director
(Independent) of the Company by the Board of Directors on 27th June 2024, for a
term of 5 years commencing from 27th June, 2024 upto 26th June,
2029, subject to the approval of Members.
Based on recommendation of NRC and in accordance with provisions of the Act and Listing
Regulations, the Board of Directors on 27th June 2024, approved the
re-appointment of Ms. Kruti Kothari (DIN: 08502921) as an Independent Director of the
Company for a second term of 5 (Five) consecutive years commencing from 9th
July, 2024 upto 8th July, 2029, subject to the approval of Members.
Based on the recommendation of the Nomination & Remuneration Committee ('NRC'), the
Board of Directors on 27th June 2024, approved the re-appointment of Mr. Paresh
V. Chothani (DIN: 00218632) as the Wholetime Director of the Company, for a further period
of 5(five) years with effect from 26th November, 2024 and remuneration thereof.
Necessary Resolutions for the re-appointment/ appointment of the aforesaid Directors
have been included in the notice convening the ensuing AGM and requisite details have been
provided in the explanatory statement of the Notice. The Board recommends their
appointment/ re-appointment.
Brief details as required under Secretarial Standard-2 and under Regulation 36 (3) of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with respect
to directors being appointed / reappointed, are provided as an annexure to the Notice
convening the 78th AGM.
Cessation of Directors
During the year under review, Mr. Harishchandra B. Bharucha has retired from the office
of directorship of the Company on expiry of his second term of 5 (five) years on 31st
March, 2024 and therefore ceased to be a Director of the Company with effect from close of
business hours on 31st March, 2024.
The Company places on record its sincere appreciation of the contribution during his
tenure on the Board of the Company.
Key Managerial Personnel (KMP)
As on 31st March, 2024 the following persons were the Ke Managerial
Personnel ("KMP") of the Company pursuant to Section 2(51) and Section 203 of
the Companies Act, 2013 read with the Rules framed thereunder: 1. Mr. Alok P. Shah,
Managing Director 2. Mr. Paresh V. Chothani, Wholetime Director 3. Mr. Suhail P. Shah,
Wholetime Director 4. Mr. Chandresh S. Punjabi, Chief Financial Officer 5. Ms.
MahekGauravJaju, Company Secretary
Independent Directors
The Board is of the opinion that the Independent Directors appointed/re-appointed
during the year under review are person(s) of integrity and possess core skills/expertise/
competencies (including the proficiency) as identified by the Board of Directors as
required in the context of Company's business(es) and sector(s) for the Company to
function effectively.
In terms of the provisions of Section 149(7) of the Companies Act, 2013 read with
Regulation 25(8) of the Regulations, all the Independent Directors of the Company have
furnished a declaration to the Compliance Officer of the Company at the meeting of the
Board of Directors held on 24th May, 2024 stating that they fulfil the criteria
of Independent Director as prescribed under Section 149(6) of the Companies Act, 2013 read
with Regulation 16(l)(b) of the Regulations, and are not being disqualified to act as an
Independent Director. Further, they have declared that they are not aware of any
circumstance or situation, which exist or may be reasonably anticipated, that could impair
or impact their ability to discharge their duties with an objective independent judgment
and without any external influence.
In the opinion of the Board, all the Independent Directors fulfil the conditions
specified in the Companies Act, 2013 read with the Rules made thereunder and the
Regulations, and are independent of the management.
During the year under review, the Company did not have any pecuniary relationship or
transactions with any of its directors, other than payment of remuneration to the
Executive Directors and payment of sitting fees to Non-executive Directors and
reimbursement of expenses incurred by them for the purpose of attending meetings of the
Board / Committees of the Company.
The Independent Directors have also given declaration of compliance with Rules 6(1) and
6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with
respect to their name appearing in the data bank of Independent Directors maintained by
the Indian Institute of Corporate Affairs.
The Appointment and Tenure of the Independent Directors, including code for Independent
Directors are available on the website of the Company, www.stml.in.
Separate Meeting of Independent Directors
In terms of requirements under Schedule IV of the Companies Act, 2013 and Regulation 25
(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a
separate meeting of the Independent Directors was held on 13th February, 2024.
The Independent Directors at the meeting, inter alia, reviewed the following:
Performance of Non-Independent Directors and Board as a whole.
Performance of the Chairman of the Board, taking into account the views of Executive
Directors and Non-Executive Directors.
Assessed the quality, quantity and timeliness of flow of information between the
Company Management and the Board that is necessary for the Board to effectively and
reasonably perform their duties.
Number of meetings of the Board
During the year under review, 5 (five) Board Meetings were held on the following dates
24th May, 2023, 06th July, 2023, 11th August, 2023, 07th
November, 2023 and 13th February,2024. The gap between any two meetings was not
more than one hundred twenty days as mandated under the provisions of Section 173 of the
Companies Act, 2013 and Regulation 17(2) of the Regulations.
Committees of the Board
The Committees of the Board focus on certain specific areas and make informed decisions
in line with the delegated authority.
The following statutory Committees constituted by the Board function according to their
respective roles and defined scope:
Audit Committee of Directors
Nomination and Remuneration Committee
Corporate Social Responsibility and Sustainability Committee
Stakeholders Relationship Committee
Details of composition, terms of reference and number of meetings held for respective
Committees are given in the Report on Corporate Governance, which forms a part of this
Annual Report. During the year, all recommendations made by the committees were approved
by the Board.
Familiarization / Orientation program for Independent Directors
In terms of Regulation 25(7) of the Regulations, the Company has adopted a
familiarization programme for the Independent Directors to familiarize them with working
of the Company, nature of the industry in which the Company operates, business model of
the Company, their roles, rights, responsibilities and other relevant details. These
programmes aim to provide insights into the Company to enable the Independent Directors to
understand its business in depth and contribute significantly to the Company.
Pursuant to Regulation 46, the details required are available on the website of your
Company at 'http://www. stml.in/policies.aspx.
Composition of the Audit Committee
The Audit Committee comprises Mr. Deepak N. Shah as its Chairperson, Mr. Ketan A.
Jariwala and Ms. Kruti Kothari, all of whom are Independent Directors as members. More
details on the Committee are given in the Report on Corporate Governance.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10), the Board
has devised a policy on evaluation of performance of Board of Directors, Committees and
Individual directors. The policy is also in compliance to Regulation 19 read with Schedule
II, Part D of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015.The Nomination and Remuneration Committee has defined the evaluation criteria for the
Performance Evaluation of the Board, its committees and individual Directors.
The performance of the Board was evaluated by the Board after seeking inputs from all
the directors on the basis of criteria such as the Board composition and structure,
effectiveness of board processes, information and functioning, etc.
The performance assessment of Non-Independent Directors, Board as a whole and the
Chairman were evaluated at separate meetings of Independent Directors. The same was also
discussed in the meetings of NRC and the Board. Performance evaluation of Independent
Directors was done by the entire Board, excluding the Independent Director being
evaluated.
The Nomination and Remuneration Committee has established a framework for the
evaluation process of performance of the Board, its Committees and Individual Directors
and the same was adopted by the Board.
During the period under review, the Board of Directors have carried out the evaluation
of the performance of Independent Directors and their independence criteria and the
Independent Directors in their meeting held on 13th February, 2024 have
evaluated the performance of the Chairman and Non-Independent Directors and the Board as a
whole and also assessed the quality, quantity and timeliness of flow of information
between the Board and Company management.
Code of Conduct for Directors and Senior Management
All Board members and Senior Management personnel have affirmed compliance with the
Code of Conduct for the year 2023-24. A declaration to this effect signed by the Managing
Director of the Company is contained in this Annual Report. The Managing Director and CFO
have certified to the Board with regard to the financial statements and other matters as
required under regulation 17(8) of the SEBI Listing Regulations, 2015.
Code for Prevention of Insider Trading
Your Company has adopted a Code of Conduct to regulate, monitor and report trading by
designated persons and their immediate relatives as per the requirements under the
Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.
This Code of Conduct also includes code for practices and procedures for fair disclosure
of unpublished price sensitive information which has been made available on the Company's
website at 'http://www.stml.in/policies.aspx.
Procedure for Nomination, Appointment & Remuneration of Directors
The Nomination and Remuneration Committee (NRC) has been mandated to oversee and
develop competency requirements for the Board based on the industry requirements and
business strategy of the Company.
The NRC reviews and evaluates the profiles of potential candidates for appointment of
Directors and meets them prior to making recommendations of their nomination to the Board.
Directors are appointed / re-appointed with the approval of the Members for a term in
accordance with the provisions of the law and the Articles of Association. The initial
appointment of Managing / Wholetime Director is generally for a period of 3-5 years. All
Directors other than Independent Directors are liable to retire by rotation unless
otherwise specifically provided under the Articles of Association or under any statute.
One-third of the Directors who are liable to retire by rotation, retire at every Annual
General Meeting and are eligible for reappointment.
Disclosures of the ratio of the remuneration of each director to the median employee's
remuneration and other details as required pursuant to Section 197(12) of the Companies
Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 as amended from time to time, are provided as "Annexure
B".
None of the directors or Managing Director of the Company received any remuneration or
commission from Subsidiary Companies of your Company.
The detail of remuneration paid to the Directors including the Managing Director of the
Company is provided in Corporate Governance Report.
Directors' Responsibility Statement
Pursuant to the requirements of Section 134(l)(c) read with Section 134(5) of the
Companies Act, 2013 and on the basis of explanation and compliance certificate given by
the executives of the Company, and subject to disclosures in the Annual Accounts and also
on the basis of discussions with the Statutory Auditors of the Company from time to time,
the Board is of the opinion that the Company's internal financial controls were adequate
and effective during Financial Year 2023-24.
Accordingly, pursuant to Sections 134(5) of the Act, the Board of Directors, to the
best of its knowledge and ability, confirm that:
(a) in the preparation of the annual accounts for the financial year ended 31st March,
2024, the applicable accounting standards read with requirements set out under Schedule
III to the Act, have been followed and there are no material departures from the same;
(b) they have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company at the end of the Financial Year and of the loss of
the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the Annual Accounts for the Financial Year ended 31st March,
2024 on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and
such internal financial controls are adequate and operating effectively;
(f) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
Corporate Governance Report
Your Company is in compliance with all the applicable provisions of Corporate
Governance as stipulated under Chapter IV of the Listing Regulations. The Report on
Corporate Governance as stipulated under Schedule V(C) of the Regulations is provided in a
separate section as 'Annexure F' and forms part of this Report. The required
certificate from a Practicing Company Secretary confirming compliance with the conditions
of Corporate Governance as stipulated in the Regulation 34 of the Listing Regulations is
annexed to this Annual Report.
Corporate Social Responsibility (CSR)
In terms of the provisions of Section 135 of the Companies Act, 2013, the Corporate
Social Responsibility Committee ("CSR Committee") is in existence to monitor the
Corporate Social Responsibility Policy of the Company as approved by the Board and the
said policy is available on the official website of the Company i.e., http://www.stml.in/
under the link: https://www.stml.in/policies.aspx.
Consequent to the retirement of Mr. Harishchandra B. Bharucha as member of the the CSR
Committee, Mr. Deepak N. Shah was inducted as member of the Committee with the consent of
Board of Directors obtained through circular resolution.
The present members of the CSR Committee comprise of Mr. Ketan Jariwala as the
Chairman, Mr. Paresh V. Chothani and Deepak N. Shah as Members. The CSR Committee met on
13th February, 2024 to review the Corporate Social Responsibility Policy.
For the F.Y. 2023-24, the provisions of Section 135 (1) of the Companies Act, 2013 is
not applicable since the Company is not falling under the criteria as prescribed with
respect to net worth or turnover or net profit during the immediately preceding financial
year.
Further, pursuant to Rule 3(2) of the Companies (Corporate Social Responsibility
Policy) Amendment Rules, 2022 ("the Amendment Rules") issued by MCA notification
dated 20 September ,2022, the company is exempted from compliance from CSR compliance/
spending for the F.Y. 2023-24, however, the disclosure with respect to constitution of CSR
Committee and the report of the committee has been made forming part of the 'Annexure
A'.
Related Party Transactions
All Related Party Transactions that were entered into during the Financial Year under
review were on an arm's length basis and in the ordinary course of business and are in
compliance with the applicable provisions of the Act and the Listing Regulations.
The statement giving details of all Related Party Transactions are placed before the
audit committee / the Board for review and approval on a quarterly basis. Prior omnibus
approval of the Audit Committee is obtained for the transactions which are repetitive in
nature or when the need for these transactions cannot be foreseen in advance.
Details of transactions with Related Parties as required under Section 134(3)(h) of the
Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in 'Annexure
E' in Form AOC - 2 forms integral part of this Report.
Pursuant to Regulation 23(9) of the Listing Regulations your company has filed half
yearly report on Related Party Transactions with the stock exchanges.
The Company has formulated a policy on materiality of Related Party Transactions and
dealing with Related Party Transactions which has been uploaded on the Company's website
which can be accessed at following link http://www.stml.in/policies.aspx.
In terms of Regulation 23 of the SEBI Listing Regulations, the Company submits details
of related party transactions on a consolidated basis as per the format specified in the
relevant accounting standards to the stock exchanges on a half-yearly basis.
The details of the transactions with related parties are provided in the accompanying
Financial Statements.
Auditors
Statutory auditors
In line with the requirements of the Companies Act, 2013, Statutory Auditor M/s Sharp
and Tannan Associates, Chartered Accountants (ICAI Firm Registration Number 109983W) were
appointed as Statutory Auditor of the Company at the 76th AGM held on 13th
September, 2022 to hold office from the conclusion of the said meeting till the conclusion
of the 81st AGM to be held in the year 2027. As required under the SEBI Listing
Regulations, the Statutory Auditors have also confirmed that they hold a valid certificate
issued by the Peer Review Board of the Institute of Chartered Accountants of India.
Further, pursuant to Section 139 of the Companies Act, 2013, the Company has obtained
certificate from them to the effect that their continued appointment, would be in
accordance with the conditions prescribed under the Act and the Rules made thereunder, as
may be applicable.
Representatives of M/s Sharp and Tannan Associates, Statutory Auditors of your Company
attended the previous AGM of the Company held on 11th August, 2023.
Report on Financial Statements
The report of M/s Sharp & Tannan Associates, Chartered Accountants (ICAI
Registration No. 109983W), the Statutory Auditors of the Company on the financial
statements of the Company for the year ended 31 March, 2024 is annexed to the financial
statements in terms of the provisions of Section 134(2) of the Companies Act, 2013. The
observations of the Auditors in their report are self-explanatory and/or explained
suitably in the Notes forming part of the Financial Statements. The report of the
Statutory Auditors does not contain any qualification, reservation or adverse remark which
needs any explanation or comment of the Board.
Cost records and cost audit
Consequent to the sale / transfer of assets of Jolwa Manufacturing division in April
2022 and no other manufacturing activity in operation, maintenance of cost records and
requirement of cost audit as prescribed under the provisions of Section 148(1) of the
Companies Act, 2013 are not applicable for the business activities carried out by the
Company for the FY 2023-24. The Company had intimated to the Ministry of Corporate
Affairs, Cost Audit Department updating them on the decision of the management with
intimation to the outgoing cost auditors.
Secretarial Audit
The Board has appointed M/s Jigar Vyas & Associates, Practicing Company Secretaries
as Secretarial Auditor for the Financial Year 2023-24 in terms of the provisions of
Section 204 of the Companies Act, 2013. The Secretarial Audit Report of the Company for
the Financial Year ended 31 March, 2024 in the prescribed form MR-3 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as 'Annexure
D' to this report. The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark which needs any explanation or comment of the Board.
Annual Secretarial Compliance Report
The Company has undertaken an audit for the Financial Year 2023-24 for all applicable
compliances as per Securities and Exchange Board of India Regulations and
Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report duly
signed by Mr. Jigar Vyas Practicing Company Secretary (ICSI Membership No. FCS 8019) has
been submitted to the Stock Exchanges within the stipulated time, in compliance with the
provisions of the Regulation 24A of SEBI (LODR) Regulations, 2015.
Compliance with Secretarial Standards
The Company has generally complied with all the applicable provisions of Secretarial
Standard on Meetings of Board of Directors (SS-1) and Secretarial Standard on General
Meetings (SS-2), respectively issued by Institute of Company Secretaries of India.
Internal Auditor
Pursuant to the provisions of Section 138 of the Companies Act, 2013 and Rules made
thereunder the Board of Directors of the Company have appointed M/s Aadil Aibada &
Associates (ICAI Membership No.045310), Chartered Accountants as Internal Auditors of the
Company, for the financial year 2023-24.
Consequent to the resignation of M/s Aadil Aibada & Associates (ICAI Membership
No.045310), Chartered Accountants as Internal Auditors of the Company, the Board of
Directors of the Company at its meeting held on 24th May, 2024 approved the
appointment of M/s K. S. Jagirdar & Co., Chartered Accountants as Internal Auditor for
the year 2024-25 in accordance with the provisions of Section 138 of the Companies Act,
2013. The audit committee in consultation with the Internal Auditor formulates the scope,
functioning, periodicity and methodology for conducting the internal audit.
Internal Control Systems & their adequacy
The Board has adopted policies and procedures for ensuring the orderly and efficient
conduct of its business, including adherence to the Company's policies, the safeguarding
of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial
disclosures. The certification provided in the CEO and CFO certification section of the
Annual Report discusses the adequacy of our Internal Control System and procedures.
Internal Financial Control System and their Adequacy
The Company has internal financial controls which are adequate and were operating
effectively. The controls are adequate for ensuring the orderly and efficient conduct of
the business, including adherence to the Company's policies, the safeguarding of assets,
the prevention and detection of frauds and errors, the accuracy and completeness of
accounting records and timely preparation of reliable financial information.
Your Company has in placed adequate Internal Financial Controls with reference to the
Financial Statements commensurate with the size, scale and complexity of its operations.
The internal audit report is discussed with the Management and members of the Audit
Committee to keep a check on the existing systems and take corrective action to further
enhance the control measures.
The internal auditors of the Company have in compliance with provisions of Section 177
(4) of the Companies Act, 2013 confirmed to the Audit Committee that the Company has
adequate Internal Financial Controls and the systems of risk management are robust and
defensible.
Statutory Auditors of the Company have in their Report dated 24th May, 2024,
opined that the Company has, in all material respects adequate internal financial controls
over financial reporting and such internal financial controls over financial reporting
were operating effectively as at 31st March, 2024.
Material changes and commitments
Except as disclosed elsewhere in the Annual Report, there have been no material changes
and commitments which can affect the financial position of the Company that have occurred
between the end of the financial year to which the Financial Statements relate and the
date of this Report.
Significant and Material Orders passed by the Regulators/ Proceedings
There are no significant and material orders passed by the regulators or courts or
tribunals which would impact the going concern status of the Company and its future
operations.
Board policies
The details of the policies approved and adopted by the Board as required under the
Companies Act, 2013 and Securities and Exchange Board of India (SEBI) regulations are
provided in Corporate Governance Report.
Policy on Directors' Appointment and Remuneration
In terms of the provisions of Section 178 of the Companies Act, 2013 read with
Regulation 19 of the Regulations, Nomination and Remuneration Committee ('NRC') has
formulated a policy relating to appointment and determination of the remuneration for the
Directors, Key Managerial Personnel and Senior Management Personnel which has been adopted
by the Board of Directors of the Company. The NRC has also developed the criteria for
determining the qualifications, positive attributes and independence of Directors and for
making payments to the Executive and Non-Executive Directors of the Company. Your
directors affirm that the remuneration paid to the Directors, Key Managerial Personnel,
Senior Management Personnel and other employees is as per the Nomination and Remuneration
Policy of your Company. The said policy is annexed herewith as 'Annexure C' forming
part of this report and available on the website of the Company i.e.
http://www.stml.in/policies.aspx.
Policy on Prevention, Prohibition and Redressal of Sexual Harassment at
Workplace
The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual
Harassment at workplace in line with the provisions of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH) and the rules made
thereunder. The Company has zero tolerance for sexual harassment at workplace.
The Policy aims to provide protection to employees at workplace and prevent and redress
complaints of sexual harassment and for matters connected or incidental thereto, with the
objective of providing a safe working environment, where employees feel secure.
Pursuantto Section 21ofthe Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 read with Rule 14 of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has
constituted Internal Complaints Committee (ICC) where any grievance of sexual harassment
at workplace can be reported.
During the year under review, your Directors have not received any complaint of sexual
harassment from the 1C. Moreover, there were neither any complaint pending at the
beginning of the year nor were there any complaints that remained pending as at the end of
the year.
The Policy of the "Prevention of Sexual Harassment of Women at Workplace" of
the Company is available on the web link of the Company at http://www.stml.in/policies.
aspx.
Indian Accounting Standard (Ind AS)/Financial Statements
Your Company follows Indian Accounting Standards (Ind AS) issued by the Ministry of
Corporate Affairs in the preparation of its financial statements. Your Company has
consistently applied applicable accounting policies during the year under review.
Management evaluates all recently issued or revised accounting standards on an ongoing
basis. The Company discloses its financial results on a quarterly basis which are
subjected to limited review and publishes audited financial results on an annual basis.
The financial statements for the year ended 31 March, 2024 have been prepared in
accordance with the Indian Accounting Standards ("Ind AS") as required under the
provisions of Section 133 of the Companies Act, 2013 read with rules made there under, as
amended.
Particulars of Employees and Related Disclosures
Information regarding employees in accordance with the provisions of Rule 5(2) and Rule
5(3) of the companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
is given in 'Annexure B' to this Report.
Whistle Blower Policy / Vigil Mechanism
In terms of the provisions of Section 177 of the Companies Act, 2013 and the
Regulations, the Company has established an effective mechanism called Vigil Mechanism
(Whistle Blower Mechanism). The purpose of this policy is to provide a framework to
promote responsible whistle blowing by employees or by any other person who avails such
mechanism.
It protects employees or any other person who avails such mechanism wishing to raise a
concern about serious irregularities, unethical behaviour, actual or suspected fraud
within the Company by reporting the same to the Audit Committee.
The functioning of the Whistle Blower Mechanism/Vigil Mechanism existing in the Company
is reviewed by the Audit Committee on Annual basis. During the year under review, no
compliant has been received and no employee was denied access to the Audit Committee. The
Whistle Blower Policy has been posted on the Website of the Company at
'http://www.stml.in.
Reporting of frauds by auditors
During the year under review, neither the statutory auditors nor the secretarial
auditor has reported to the Audit Committee, under Section 143(12) of the Companies Act,
2013, any instances of fraud committed against the Company by its officers or employees,
the details of which would need to be mentioned in the Board's report.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and
outgo
Your Company during April 2022, disposed of all its assets of its manufacturing
division located at Village Jolwa, Taluka Palsana, Dist, Surat and discontinued its
business of manufacturing of Polyester Chips and Yarns. The management after considering
various options for possible alternate business commenced the new activities of Trading in
Commodities and other Commodity related business from 3"1 quarter of FY
23. Therefore, there are no reportable details relating to conservation of energy or
technology absorption. There were no foreign exchange earnings or outgo during the year
under review.
CEO and CFO certification.
Pursuant to Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, Managing Director and CFO Certification forms part of the Annual
Report. Managing Director and CFO also provide quarterly certification on financial
results, while placing the financial results before the Board in terms of the Listing
Regulations.
Health, safety and environment
Your Company believe that organisations' sustainability is directly proportional to the
safety, health and environment management. We endeavourto demonstrate environmental and
social responsibility at every step.
Our safety, health and environment objectives include complying with all applicable
laws relevant to the Company and its business activities. The Management believes in
sharing responsibility throughout the hierarchy in conforming to the existing laws.
The Company has obtained necessary approvals from concerned Government Department /
safety clearances as applicable to the Company.
Industrial Relations / Human Resources
During the year under review, industrial relations in the Company continued to be
cordial and peaceful.
Green Initiatives
In commitment to keep in line with the Green Initiatives and going beyond it, the
Notice of 78th Annual General Meeting of the Company including the Annual
Report for FY 2023-24 are being sent to all Members whose e-mail addresses are registered
with the Company / Depository Participant(s).
Risk Management
Your Company periodically assesses the risks in the internal and external environment
along with treating the risks and incorporates risk management plans in its strategy,
business and operational plans. Your Company recognizes that the risk is an integral part
of business and is committed to managing the risks in proactive and efficient manner.
The business plan for the future is devised and approved by the Board keeping in mind
the risk factors which can significantly impact the performance of the particular
business. All major financial commitments are subject to scrutiny by the Board and
investments are permitted only on being satisfied about its returns or utility to the
Company. There are no risks which in the opinion of the Board threaten the existence of
the Company.
Insurance
The Company has taken all the necessary steps to insure its properties and insurable
interests, as deemed appropriate and also as required under the various legislative
enactments.
Public Deposits
There were no outstanding deposits within the meaning of Section 73 and 74 of the
Companies Act, 2013 read with rules made thereunder at the end of FY24 or the previous
financial years.
Your Company did not accept any deposit during the year under review.
Particulars of Loans, Guarantees and Investments
During the period under review, the Company has not made any loan, guarantee or
investment in terms of the provisions of Section 186 of the Companies Act, 2013.
Extract of the Annual Return
Pursuant to Section 134(3)(a) of the Companies Act, 2013 the Annual Return in Form MGT
7 as at the financial year ended 31st March, 2023 prepared in accordance with
Section 92(3) of the Act is made available on the website of your Company and link for the
same is given in Annexure-1 of this report.
Further, he Annual Return in Form MGT 7 as at the financial year ended 31st
March, 2024 will be hosted on website of the Company at http://www.stml.in under web link:
http://www.stml.in/AnnualReturn.aspx after necessary certification and filing the same
with the authority.
Agreement(s) binding the Company
As required under Regulation 30A of Listing Regulations, the Company has to report that
it has not been informed by any shareholders, promoters, promoter group entities, related
parties, directors, KMPs or employees of the Company, who are purported to be parties to
any agreements specified in Clause 5A of Paragraph A of Part A of Schedule III of the SEBI
Listing Regulations, of having entered into any agreement or have signed any agreement to
enter into such agreement to which the Company is not a party as at the end of the
financial year. The Company further reports that there is no such agreement of the nature
mentioned above that subsists on the date of coming into effect of the SEBI (LODR) (Second
Amendment) Regulations, 2023.
Business Responsibility Report
The Business Responsibility Reporting as required by Regulation 34(2) of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, is not applicable to
your Company for the financial year ended 31st March, 2024.
Key financial ratios
In accordance with the SEBI (Listing Obligations and Disclosure Requirements)
(Amendment) Regulations, 2018, the Company is required to give details of significant
changes in key sector-specific financial ratios.
The Company has identified the following ratios as key financial ratios:
| Sr. No. |
Particulars |
FY 2023-24 |
FY 2022-23 |
| 1 |
Current Ratio (times) |
98.71 |
128.38 |
| 2 |
Debt Service Coverage Ratio (times) |
31.19 |
11.65 |
| 3 |
Return on Equity Ratio (%) |
4.52 |
2.20 |
| 4 |
Net Profit Ratio (%) |
14.98 |
12.16 |
| 5 |
Return on Capital employed (%) |
6.64 |
2.12 |
| 6 |
Return on Investment (%) |
15.47 |
6.64 |
| 7 |
Inventory Turnover (times) |
8.60 |
0.00 |
Note:
1. Debt-Equity Ratio, Inventory Turnover Ratio, Trade Receivable Turnover Ratio, Trade
Payable Turnover Ratio, Net Capital Turnover Ratio does not apply to the Company in
absence of any Debt, Trade Receivable and Trade Payable.
General Disclosures
Your directors state that no disclosure or reporting is required in respect to the
following items, as there were no transactions/events on these matters during the year
under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the Company under
any scheme or ESOPs.
3. Voting rights which are not directly exercised by the employees in respect of shares
for the subscription/ purchase of which loan was given by the Company (as there is no
scheme pursuant to which such persons can beneficially hold shares as envisaged under
Section 67(3) (c) of the Companies Act, 2013).
4. Application made or any proceeding pending under the Insolvency and Bankruptcy Code,
2016.
5. One time settlement of loan obtained from the Banks or Financial Institutions.
6. Revision of financial statements and Directors' Report of your Company
7. There has been no change in the nature of business of the Company during the year
under review.
Forward Looking Statement
Certain statements made in the Directors Report relating to the Company's objectives,
projections, outlook, expectations, estimates and others may constitute 'forward looking
statements' within the meaning of applicable laws and regulations.
Actual results may differ from such expectations, whether expressed or implied. Several
factors could make significant difference to the Company's Operations. These include
climatic and economic conditions affecting demand and supply, government regulations and
taxation, any epidemic or pandemic, natural calamities over which the Company may not have
any direct / indirect control.
Acknowledgement
Your directors place on records their appreciation of the valuable co-operation
extended to the Company by its Bankers and various authorities of the State and Central
Government agencies.
Your directors also acknowledge with gratitude the support of customers, agents,
suppliers and all other stakeholders for their continued faith and support, during these
challenging times.
Your Board also take this opportunity to place on record its appreciation of the
contribution made by the employees of the Company at all levels and last but not least, of
the continued confidence reposed by you in the Management.
For and on behalf of the Board of Directors
|
Alok P.Shah |
|
Managing Director |
| Surat, 27* June,2024 |
DIN: 00218180 |
