& management's discussion and analysis
TO THE MEMBERS OF SURAT TRADE AND MERCANTILE LIMITED
The Directors hereby present their 79th Annual Report on the performance of
Surat Trade and Mercantile Limited ('the Company') together with the Audited Financial
Statements for the Financial Year (FY) ended 31st March 2025. 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.
FINANCIAL HIGHLIGHTS
The summarised financial highlights are depicted below:
Particulars |
Year ended 31s* March, 2025 |
Year ended 31s* March, 2024 |
Revenue from Operations |
6863.70 |
6056.37 |
Other income |
1482.44 |
1945.99 |
Total Income |
8346.14 |
8002.36 |
Operating Profit/(Loss) / EBITDA (including other income) |
996.35 |
1384.71 |
Less: Finance Costs |
16.11 |
5.00 |
Profit before Depreciation & Amortisation Expenses |
980.24 |
1379.71 |
Less: Depreciation & Amortisation Expenses |
51.65 |
32.44 |
Profit before tax |
928.59 |
1347.27 |
review of operations
The Company is engaged in commodity trading activities as part of its core business
operations. During the year under review, the Company actively participated in the trading
of various metals, in particular silver and copper.
Your Company during FY 25, increased the volume of business activities of trading in
commodities and deployed additional funds in the related segment in a phased manner after
proper evaluation of potential external risk factors, and the overall business scenario.
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.
The global and domestic commodity markets were subject to significant fluctuations
during the year, influenced by factors such as geopolitical events, weather conditions,
central bank activities, market sentiments, supply chain disruptions, etc. Owing to its
hedging policy, the Company's performance in commodity trading was minimally impacted by
these volatile market conditions.
Despite the prevailing adverse scenario, your Company achieved Income from Operations
of Rs. 68.64 Crore during FY 25, from the Commodity trading business as compared to Rs.
60.56 Crore in FY 24, an increase of about 13.34%.
Other Income which represents earning from Investments in Mutual Funds, AIF etc.,
declined in FY 25 at Rs, 14.82 crore as compared to Rs. 19.46 crore earned during FY 24.
This was primarily on account of lower returns in financial markets (due to geo-political
and trade-related uncertainties, especially in Q4 FY 25), relative to the bull market of
FY 24. To reduce volatility and probably increase returns, greater investment allocation
will be made to high performance credit AIFs (alternative investment funds) whose
performance has remained strong in FY 25.
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 31st March 2025.
Transfer to Reserves
Your directors do not propose to transfer any amount to the reserves and decided to
retain the entire profit for FY25 in the retained earnings.
industry structure and developments
Indian Economic Overview
India's economy hit a four-year low of 6.5 per cent, lifted by an impressive fourth
quarter growth at 7.4%. The Reserve Bank of India had projected 6.5 per cent GDP growth
for the fiscal year 2024-25.
Manufacturing sector's share in India's economic growth remained steady in the last
decade, moving to 17.3% in FY 24 from 17.2% in FY 14. This steady growth highlights the
sector's increasing role in India's economic landscape.
The agriculture sector received a boost through several schemes and incentives, driving
a gradual recovery in financial year 2024-25. Increased grassroots-level structural
reforms and a focus on deregulation are expected to bolster medium-term growth and
competitiveness.
The Government's reforms aimed at boosting manufacturing, enhancing productivity and
improving ease of doing business will play a crucial role in ensuring long-term
sustainable growth. Within this, private consumption will play an important role.
India has displayed steady and robust economic growth while facing global challenges
and geopolitical concerns and it continues to maintain its position as the fastest-
growing major economy.
Industry Scenario
Global commodity prices are forecast on average to fall in 2025 and perhaps also in
2026, by many leading commodity forecasters. This applies to metals and minerals too. The
reasons include a slowdown in global economic growth, and expanded supply for certain
metals. If realized, these declines will end a period of elevated inflation-adjusted
commodity prices in the aftermath of the COVID-19 pandemic and Russia's invasion of
Ukraine.
Global growth prospects will strengthen if trade tensions ease in a lasting manner
implying a more robust outlook for commodity demand.
Opportunities, Challenges, Threats, Risks and Concerns
A 6.5% GDP growth for FY26 is feasible for India despite global headwinds like the twin
shocks of geopolitical tensions and trade policy uncertainties.
The economy has been reporting softer consumption in some of the past quarters, however
there are many domestic tailwinds such as strong and diversified FDI inflows, low
inflation, interest rate reduction and expected further policy rate cuts, and an
anticipated good monsoon. Measures in the last budget like rising capital expenditure, tax
reduction may raise both rural and urban demand and increase investment, consumption and
some push to exports as well. India is also poised to benefit from supply chain
realignments.
These factors should increase the market for commodities in India, resulting in better
opportunities for your company, irrespective whether prices increase or decrease.
Tensions between Indian and Pakistan escalated following the terrorist attack on 26
tourists in Pahalgam in Jammu and Kashmir in April. Conflict with our neighbour, in
addition to unresolved wars in Russia/ Ukraine and the Middle East, pose a risk to the GDP
forecast and business conditions.
On April 2, the US imposed a reciprocal tariff of 26% on imports from India. Key
sectors such as pharmaceuticals, electronics, semiconductors, and energy were exempted
from the duty. The US President later announced a 90 day pause on the tariff
implementation until July 9, although a baseline tariff of 10% remains in place.
Initial tariff imposition deadlines, set for April, were pushed back to July after US
President said negotiations had begun with various trading partners, including China. To
pre-empt a growth slack, the RBI has already lowered the benchmark repo rate - the rate at
which it lends to banks - by a cumulative 100 bps to 5.5% since February. Continued low
inflation is expected to bring down interest rates further. In the coming times, there
exists potential for the Company to expand its commodity activity and profitably trade in
gold.
Commodities are inherently volatile and risky assets, however, the Company employs a
robust risk management framework to mitigate potential losses arising from price
volatility and other market risks during its relatively short trading horizon. This
includes hedging, product diversification where possible, etc. The Company's risk
management policies and procedures are reviewed and updated periodically to adapt to
changing market dynamics. The strong economy is expected to enable good returns going
forward in both equity and debt related investment activities of the company.
It may be noted that acute policy uncertainty and deteriorating trade relations between
major economies, and in particular involving India, are downside risks to growth and
business prospects. If trade tensions escalate further, consumer and business confidence
will likely continue to decline, while the tightening of financial conditions may
intensify.
Business Outlook
Despite the recently lowered global growth projections, owing to tariff and policy
uncertainties presented by the US, and geopolitical concerns involving sanctions,
restriction of exports of sensitive goods by certain countries, and potential conflicts,
India is still expected to grow around 6.5% in FY 26 by most forecasters, and is expected
to remain the fastest growing major economy.
The ongoing uncertainties however are expected to lead to significant volatility in
commodity prices. Increasing geopolitical and policy uncertainties, and conflicts may
drive up prices of gold and silver, and vice-versa, all else equal. Central banks have
been buying gold, but if conditions improve this may not continue resulting in a potential
drop in gold prices. Silver still looks relatively cheap compared to gold and could do
comparatively better. Citi group and Economic Survey of India forecasts a dip in the gold
prices, whereas silver remains in short supply as it finds growing demand in the solar
power, electronics and electrification. A Chinese economic recovery could provide
additional support for industrial metals, including silver.
The price of Silver has gone up by 18-19% In the calendar year 2024, Even for this year
(2025) till June, it has appreciated by 21%. Silver has faced a supply deficit for four
consecutive years, driven by tight supply and robust demand. It may create attractive
buying opportunities.
The Company remains optimistic about the long-term prospects of commodity trading,
despite the inherent volatility, increased demand, potential price increases, or
regulatory changes etc. The Company will continue to explore new markets, optimize trading
strategies, etc. to enhance its performance in this sector.
India is expected to do well relative to the global economy owing to strong domestic
demand, substantial infrastructure development initiatives, a spike in rural demand and
effective government policy measures.
Rural consumption is picking up on the back of sustained agricultural growth of 4.6% in
the last six years. Private consumption is expected to benefit from tax cuts, and the
improving implementation of public investments plans should boost government investment,
but export demand
may be constrained by shifts in trade policy and slowing growth.
The higher disposable incomes to the middle class, the rate cuts, the accommodative
monetary policy and the enhanced liquidity in the banking system, is expected to boost
growth in times of external uncertainties.
The focus of the Budget on longer term development drivers and reforms, anchored around
the ambition of 'Viksit Bharat', adds to the confidence in domestic economic resilience.
The government is putting a lot of hard work on free trade agreements (FTAs). The India
- UK FTAs concluded recently is historic and we are expecting two more, one with the EU
and other with the US. These are very significant as it will help us integrate with global
value chains which constitute 70% of global trade.
Share Capital
As on 31st March 2025, the paid-up share capital of the Company stood at Rs.
2220.64 Lakhs consisting of 22,20,64,440 equity shares of Rs.1 each fully paid up. Out of
the above, the Promoters held 15, 20, 04,917 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 2025. 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
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.
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
2024-25. 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 Directors
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. Suhail P. Shah
(DIN: 00719002) retires by rotation at the ensuing Annual General Meeting and being
eligible, offers himself for re-appointment. Based on the recommendations of the
Nomination and Remuneration Committee, the Board recommends the re-appointment of Mr.
Suhail P. Shah as Director for your approval.
The Shareholders of the Company at the 76th AGM held on 13th
September 2022 approved the appointment of Mr. Alok P. Shah (DIN: 00218180) as Managing
Director of the Company for a period of 3 years with effect from 1st July 2022.
Based on the recommendation of the Nomination and Remuneration Committee and subject to
approval of the shareholders at the ensuing AGM, the board of directors of the Company at
their meeting held on 27th May 2025 approved the re-appointment of Mr. Alok P.
Shah as Managing Director of the Company for a period of 5(five) years with effect from 1st
July 2025.
Cessation
During the year under review, Mr. Ketan Jariwala (DIN: 02095540) ceased to be an
Independent Director of the Company on completion of his tenure with effect from 10th
August 2024. The Board places on record its appreciation for her invaluable
contribution and guidance during his tenure as an Independent Director.
Necessary Resolutions for the appointment/re- appointment of the aforesaid Directors
have been included in the notice convening the ensuing AGM. 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 / re-appointed, are provided as an annexure to the Notice
convening the 79th AGM.
Key Managerial Personnel (KMP)
As on the date of this report, following are the Key Managerial Personnel
("KMPs") of your Company as per Sections 2(51) and 203 of the Act:
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. Mahek Gaurav Jaju, Company Secretary
During the year under review, there were no changes in the KMP of the Company.
Independent Directors
In terms of Section 149 of the Act, Ms. Kruti Kothari, Mr. Deepak N. Shah and Mr.
Manish J. Gandhi are the Independent Directors of the Company.
In terms of Regulation 25(8) of the Listing Regulations, all IDs have confirmed that
they are not aware of any circumstances or situation which exists or may be reasonably
anticipated that could impact their ability to discharge their duties. The Directors have
further confirmed that they are not debarred from holding the office of the director under
any SEBI Order or any other such authority. Based upon the declarations received from the
IDs, the Board of Directors has confirmed that they meet the criteria of independence as
mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing
Regulations and that they are independent of the management.
In the opinion of the Board, there has been no change in the circumstances which may
affect their status as IDs of the Company and the Board is satisfied of the integrity,
expertise and experience (including proficiency in terms of Section 150(1) of the Act and
applicable rules thereunder) of all IDs on the Board.
During the year under review, the Non-Executive Directors of the Company had no
pecuniary relationship or transactions with the Company, other than sitting fees and
reimbursement of expenses incurred by them for the purpose of attending meetings of the
Board/Committees of the Company.
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 11th February 2025.
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.
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.
Number of meetings of the Board
During the financial year 2024-25, 5 (five) Board Meetings were held on the following
dates 24th May 2024, 27th June 2024, 8th August 2024, 13th
November 2024 and 11th February 2025. 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 SEBI Regulations.
Committees of the Board
As required under the Companies Act, 2013 and the SEBI Listing Regulations, your
Company has constituted various Statutory Committees. As on 31st March 2025,
the Board had four committees: the audit committee, the corporate social responsibility
committee, the nomination and remuneration committee and stakeholder's relationship
committee. During the year, all recommendations made by the committees were approved by
the Board. A detailed note on the composition of the Board and its committees is provided
in the Corporate Governance Report.
Composition of the Audit Committee
The Audit Committee comprises of Mr. Deepak N. Shah as its Chairperson, Ms. Kruti
Kothari and Mr. Manish J. Gandhi 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 11th February, 2025 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 2024-25. 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 C".
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.
Auditors
Statutory auditors
At the 76th AGM held on 13th September 2022, the Members approved
the re-appointment of M/s Sharp and Tannan Associates, Chartered Accountants (ICAI Firm
Registration Number 109983W), as the Statutory Auditors of the Company for a second term
of 5 years commencing from the conclusion of the 76th AGM 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.
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 31st March 2025 is annexed to the
financial statements in terms of the provisions of Section 134(2) of the Companies Act,
2013.
The Statutory Auditor's Report does not contain any qualifications, reservations,
adverse remarks or disclaimers. The Statutory Auditors of the Company have not reported
any fraud to the Audit Committee of Directors as specified under Section 143(12) of the
Act, during the year under review.
The Statutory Auditors were present in the last AGM.
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 2024-25.
Annual Secretarial Compliance Report
The Company has undertaken an audit for the Financial Year 2024-25 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.
Secretarial Audit
In terms of Section 204 of the Act and Rules made thereunder, Jigar Vyas &
Associates, Practicing Company Secretaries (Firm Registration No. S2015GJ307200) were
appointed as Secretarial Auditors of the Company to carry out the Secretarial Audit for FY
2024-25. The Secretarial Audit Report of the Company for the Financial Year ended 31 March
2025 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. There has been no qualification, reservation, adverse remark or disclaimer given
by the Secretarial Auditors in their Report.
Further, in terms of Section 204 of the Act and Regulation 24A of the SEBI Listing
Regulations, the Board of Directors has, on the recommendation of the Audit Committee,
approved the appointment of Jigar Vyas & Associates, as the Secretarial Auditors of
the Company, to hold office for a term of five (5) consecutive years with effect from
financial year 2025-26 to financial year 2029-30, subject to approval of the Members of
the Company at the ensuing AGM. Accordingly, a resolution seeking Members' approval for
appointment of Secretarial Auditors of the Company forms part of the Notice of the 79th
AGM forming part of this Annual Report.
Secretarial Standards
During the year under review, your Company has complied with all the applicable
provisions of Secretarial Standard - 1 and Secretarial Standard - 2 issued by the
Institute of Company Secretaries of India (as amended).
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 M/s K. S. Jagirdar
& Co., (ICAI Membership No.036904), Chartered Accountants as Internal Auditors of the
Company, for the financial year 2024-25.
The Internal Audit department carries out risk-focused audits across all locations,
enabling identification of areas where risk management processes may need to be
strengthened. Significant audit observations and corrective action plans are presented to
the Audit Committee.
The audit committee in consultation with the Internal Auditor formulates the scope,
functioning, periodicity and methodology for conducting the internal audit.
Directors' Responsibility Statement
Pursuant to the requirements of Section 134(1)(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 2024-25.
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
2025, 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 2025
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 G' 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: http://www.stml.in/policies.aspx.
Consequent to the retirement of Mr. Ketan A. Jariwala as member of the the CSR
Committee, Mr. Manish J. Gandhi was inducted as member of the Committee with effect from 8th
August 2024. The present members of the CSR Committee comprise of Mr. Deepak N. Shah as
the Chairman, Mr. Paresh V. Chothani and Mr. Manish J. Gandhi as Members. The CSR
Committee met on 28th March 2025 to review the Corporate Social Responsibility
Policy.
The Company works primarily towards supporting projects in the areas of protection of
national heritage, restoration of historical sites, and promotion of art and culture;
environmental sustainability and ecological balance; promoting education etc.
During the year under review, your Company spent Rs. 10.60 Lakhs on CSR activities. The
average net profit for the past three financial years was Rs 529.75 Lakhs.
Annual Report on mandatory CSR activities as required under the Companies (Corporate
Social Responsibility Policy) Rules, 2014, as amended, is given in 'Annexure A'
forms integral part of this Report.
Related Party Transactions
The Company has formulated a policy on the 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.
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
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.
Your Directors draw attention of the members to Note No. 35 to the notes to accounts
forming part of the financial statements which sets out related party transaction
disclosures.
During the year, the Company had not entered into any contract/ arrangement/
transaction with related parties which could be considered material in accordance with the
Policy on Materiality of Related Party Transactions.
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.
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
Internal Financial Control systems of the Company are commensurate with its size and
the nature of its operations. 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. 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 27th May 2025
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 2025.
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.
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 available on the official 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.
Pursuant to Section 21 of the 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 IC. 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 website of the Company at
http://www.stml.in/policies.aspx.
Disclosure for compliance with other statutory laws
(a) In compliance with Rule 8(5)(xiii) of the Companies (Accounts) Second Amendment
Rules, 2025, the Board hereby confirms that the Company has complied with the provisions
relating to the constitution of Internal Complaints Committee (ICC) under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Details of the Sexual Harassment complaints during the financial year ended 31st
March 2025 are as under:
Particulars |
Number of Complaints |
Number of Sexual Harassment |
NIL |
Complaints received |
|
Number of Sexual Harassment |
NIL |
Complaints disposed off |
|
Number of Sexual Harassment |
NIL |
Complaints pending beyond 90 days |
|
(b) The Board hereby confirms that the Company has complied with the applicable
provisions of Maternity Benefit Act.
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 2025 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 Fraud
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial
Auditors have not reported any instance of fraud committed in the Company by its officers
or employees to the Audit Committee under Section 143(12) of the Act, details of which
need to be mentioned in this 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 3rd 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 endeavour to demonstrate environmental and
social responsibility at every step.
We are devoted to benefit communities - workforce, public and environment. Our safety,
health and environment objectives include complying with all applicable laws relevant to
the industry. The Management believes in sharing responsibility throughout the hierarchy
in conforming to the existing laws.
The Company obtained necessary approvals from concerned Government Department /
Pollution Control Board and all required environment clearances / safety clearances /
stipulations are complied with at Plant facilities of the Company.
Industrial Relations / Human Resources
During the year under review, the Company continued to have cordial and peaceful. There
were total 26 employees (including Managing / Wholetime Directors) which comprises of 2
Female and 24 Male members as at 31st March 2025.
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 2024-25 are being sent to all Members whose e-mail addresses are registered
with the Company / Depository Participant(s).
Code on Social Security
The Indian Parliament has approved the Code on Social Security, 2020 which would impact
the contributions by the company towards Provident Fund and Gratuity. The Ministry of
Labour and Employment had released draft rules for the Code on Social Security, 2020 on
November 13, 2020, and invited suggestions from stakeholders which are under consideration
by the Ministry. The Company will assess the impact and its evaluation once the subject
rules are notified.
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 Act
read with rules made thereunder at the end of FY25 or the previous financial year. 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.
Annual Return
Pursuant to Section 92(3) and 134(3)(a) of the Act and the Companies (Management and
Administration) Rules, 2014, the Annual Return for FY 2024-25 will be made available on
the website of the Company at https://www. stml.in/pdf/investorrelations/Annual-Return-
MGT-24-25. pdf
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 are 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 2025.
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 2024-25 |
FY 2023-24 |
1 |
Current Ratio (times) |
92.75 |
103.62 |
2 |
Debt Service Coverage Ratio (times) |
23.31 |
59.87 |
3 |
Return on Equity Ratio (%) |
5.53 |
4.52 |
4 |
Net Profit Ratio (%) |
16.99 |
14.98 |
5 |
Return on Capital employed (%) |
4.33 |
6.64 |
6 |
Return on Investment (%) |
10.63 |
15.47 |
7 |
Inventory Turnover (times) |
4.26 |
2.03 |
Note:
1. Debt-Equity 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 during the year under review:
1. Your Company did not issue any equity shares with differential rights as to
dividend, voting or otherwise.
2. Your Company did not issue shares (Including sweat equity shares) to employees of
your Company under any scheme.
3. No significant or material orders were passed by the Regulators or Courts or
Tribunals which impact the going concern status and your Company's operation in future.
4. No application was made, and no proceeding was pending under the Insolvency and
Bankruptcy Code, 2016.
5. There has been no change in the nature of business of the Company as on the date of
this report.
6. No one time settlement of loan was obtained from the Banks or Financial
Institutions.
7. There were no revisions made in the financial statements and Directors' Report of
your Company
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 State & Central Government agencies.
Your directors also acknowledge with gratitude the support of customers, agents,
suppliers, shareholders 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 |
Surat, 25th July 2025 |
Managing Director DIN: 00218180 |
