DIRECTORS' REPORT. Annual Report CIN: L35201WB1931PLC006996

Transcription

1 DIRECTORS' REPORT Dear Shareholders, Your Directors have pleasure in presenting the 86th Annual Report along with the Audited Accounts of the Company for the year ended 31 March A summary of the Financial Results is given herein under : FINANCIAL HIGHLIGHTS Standalone Consolidated (Rs. in lacs) For the For the For the For the Financial Year Financial Year Financial Year Financial Year Gross Turnover 9,322 10, ,910 Profit before Interest, Depreciation & Taxation Interest Depreciation Profit before Taxation (591) 92 (605) (68) Provision for Taxation Deferred Tax (62) 116 (62) 116 Profit after Taxation (529) (24) (543) (47) Balance brought forward from previous year Profit available for appropriation APPROPRIATIONS: Balance Carried to the Balance Sheet Previous years figures have been rearranged and regrouped wherever felt necessary. DIVIDEND In view of incurring net loss in the relevant financial year, your Directors do not recommend a dividend for the year ended on 31st March, RESERVES In absence of profit, no amount was carried to Reserve. PERFORMANCE REVIEW During the year under review, the gross turnover of the Company rose to Rs crores from Rs crores and the net loss decreased to Rs. 24 lakhs from Rs crores as of last year due to increase in turnover of Rs crores and rigorous cost control. Company's Order booking decreased slightly to Rs crores in the year under review compared to earlier Order booking figure of Rs crores in the year In the new Product Category for Railway Sectors, Orders were booked for supply of 4.5 KW ERRUs, 25 KW ERRUS, Microprocessor Controlled Fault Diagnostic and Control Systems, Vigilance Control Devices, EP Brakes for EMU application and bulk orders for Air Spring Control Equipment. In the year, the company launched business initiatives for Escalators and continued the business of Platform Screen Doors in Metro Project segment. The company participated in bidding for escalators in Delhi Metro, Kochi Metro, Lucknow Metro in aforementioned product segment. The company was successful in acquiring prestigious contracts from Lucknow Metro for Heavy Duty Escalators worth INR Crore and from DMRC Greater Noida Project for Machine Room Less Elevators worth INR Crores. During the year the company successfully acquired orders from Indian Railways for supply of Heavy Duty Escalators worth INR Crores also. The company will participate in such biddings in future and shall try to maximize the order booking. In the Bio Toilet segment, Company has installed total 3264 toilets till all over India at Labour colonies, Village communities, village homes, urban slums, Construction Sites, Railway Platforms, Tea Gardens, Schools under CSR projects etc. Turnover for bio toilets division during the financial year stood at Rs Lacs. During the year, the company has been able to book bulk export Orders for supply of Slack Adjusters and Distributor Valves to Vietnam and Sudan. Annual Report

2 FUTURE OUTLOOK The Current year s Railway Budget has proposed a plan outlay of Rs 1,21,000 crore which is higher by 20.9% over last year s budget plan of Rs 1,00,011 crores. The Railways have decided to pursue high end technology to improve safety record, increase of punctuality, time table of freight trains as well as to run semi high speed trains. Life Insurance Corporation of India (LIC)has decided to invest Rs. 1.5 Lakh crores over the next 5 years with Indian Railways. Further, it is expected that Railways will make the first phase of DFCC (Dedicated Freight Corridor Corporation) operational by Further the work for three more freight corridors will start which are from Delhi to Chennai, Kharagpur to Mumbai as well as Kharagpur to Vijaywada. Work for two loco factories to manufacture High Horse Power Diesel and Electric Locos will also commence in the year at an investment of Rs.40,000 crores. In addition, Railways will introduce new generation 25 Tonne Axle Load Wagon in this financial year. In addition, Railways will also gradually replace the loco hauled passenger trains with EMU/DEMU in the near future. It is expected that with such a massive focused investment plan of Indian Railways and with introduction of new technologies, your company will be in a position to explore the potential of the market with products like Bogie Mounted Brake Systems for Wagons, End of Train Telemetry (EOTT) For Wagons, EP Brakes, Parking Brakes, Air Dryers for EMUs/DEMUs as well the High Reach Pantographs and Computer Operated Brake System for Electric Locomotives. The company expects a major demand for High Reach Pantographs as well as for End of Train Telemetry in the coming years. In order to reduce dependency on Indian Railways, company had already diversified activities to enter Metro Railway Market to introduce Escalators as well as Elevators. Escalator orders were also obtained from Indian Railways for 20 stations.it is expected that with the Railway Ministry s intention to modernize 400 stations in near future there will be good demand of Escalators and Elevators in future in addition to the demand of similar equipment from metro projects. The company continued its activity to pursue the business for the Bio Toilets in various static applications and introduced several innovative models and turnover of this group increased substantially in the last financial year. CHANGE IN THE NATURE OF BUSINESS, IF ANY, AS PER RULE 8(5)(II) OF THE COMPANIES (ACCOUNTS) RULES 2014 Your Company has already ventured into the areas of Bio Toilets, Platform Screen Doors, Escalators & Elevators and Solar Inverters as a part of product diversification. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI (LODR) Regulations, 2015, is presented in a separate section forming part of the Annual Report. JOINT VENTURE During the year under review, your Company has entered into a Joint Venture agreement with SHENYANG BRILLIANT ELEVATOR GROUP CO., LTD. (a company incorporated in Shenyang, China) on 15th December, 2015 to form a joint venture company for doing the business of elevators. SUBSIDIARY Presently, the Company has two (2) subsidiaries, namely, Stone Intermodal Private Limited and Stone Biotech Private Limited which are not material unlisted subsidiary. A statement in AOC-1 containing financial position of the subsidiaries is attached as Annexure A. The Company monitors performance of its subsidiary companies, inter alia, by the following means:- i) The Audit Committee reviews financial statements of the subsidiary companies, along with investments made by them, on a quarterly basis. ii) The Board of directors reviews the Board meeting minutes and statements of all significant transactions and arrangements, if any, of the subsidiary companies. PUBLIC DEPOSITS During the year under review, the Company has not invited deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, EMPLOYEE STOCK OPTION SCHEME Your Company has not issued any share under the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, including any amendments, new enactment thereof or thereto during the year under review. SHARE CAPITAL The Company has issued 7,75,000 equity shares to M/s ISG Traders Ltd., a promoter group Company, in April, 2015 against conversion of equivalent number of warrants allotted to them on on preferential basis. Consequently, the paid up Equity Share Capital of your Company stands revised to Rs.960 Lacs as on Annual Report

3 INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment as on (Rupees in Lakhs) Secured Unsecured Deposits Total Loans Loans Indebted excluding ness Deposits Indebtedness at the beginning of the financial year i) Principal Amount 3011 Nil Nil 3011 ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii) 3011 Nil Nil 3011 Change in Indebtedness during the financial year Nil Nil Addition Reduction (116) (116) Net Change (116) Nil Nil (116) Indebtedness at the end of the financial year i) Principal Amount 2895 Nil Nil 2895 ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii) 2895 Nil Nil 2895 During the year, the Company has not issued any Unsecured Redeemable Non-Convertible Perpetual Debt Instruments in the nature of Debentures. CONSOLIDATED FINANCIAL STATEMENTS In accordance with the requirements under Regulation 33 of the SEBI (LODR) Regulations, 2015, your Company prepared Consolidated Financial Statements in accordance with Accounting Standard for Consolidated Financial Statements issued by The Institute of Chartered Accountants of India. The Consolidated Financial Statements form part of the Annual Report. CORPORATE GOVERNANCE Your Company has consistently been complying with the Corporate Governance Code prescribed by SEBI and a detailed report on Corporate Governance together with a certificate of compliance from the Statutory Auditors, as required under Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms a part of this Annual Report. DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a. that in the preparation of the annual financial statements for the year ended 31st March 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2016 and of the profit of the Company for the year ended on that date; c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. that the annual financial statements have been prepared on a going concern basis; e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; Annual Report

4 f. that proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. DIRECTORS AND KEY MANAGERIAL PERSONNEL During the financial year, Mr. Sukhendu Ray(DIN: ), an Independent Director, resigned from the Board on due to poor health condition which was accepted by the Board on and Ms. Savita Laxmipathy Acharya (DIN: ) was appointed as an Additional Director in the category of Non Executive, Woman Independent Director, with effect from 19th May, 2015 by the Board which was subsequently confirmed by the shareholders of the Company in the Annual General Meeting held on All other directors continued to remain as Director throughout the year. The Board recommends the re-appointment of Mr. Shrivardhan Goenka, who retires by rotation and being eligible, offers himself for re-election, as Director of the Company. Brief resume and other details of the Director seeking re-appointment at the ensuing Annual General Meeting are provided as Annexure to the Notice which forms part of this Annual Report. The following persons were designated as Key Managerial Personnel during the financial year : 1. Mr. Debashis Chakravarty, Managing Director and Chief Executive Officer, 2. Mr. Vikash Kamani, Chief Financial Officer, and 3. Mr. Abhijit Majumdar, Company Secretary and Legal Head. MEETINGS Minimum four pre-scheduled Board meetings are held annually. Additional Board meetings are convened by giving appropriate notice to address the Company s specific needs of business exigencies or urgency of matters. During the year, six Board Meetings and four Audit Committee Meetings were convened and held the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, AUDIT COMMITTEE The composition and terms of reference of the Audit Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee. NOMINATION AND REMUNERATION COMMITTEE The composition and terms of reference of the Nomination and Remuneration Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. STAKEHOLDERS RELATIONSHIP COMMITTEE The composition and terms of reference of the Share transfer cum Stakeholders Relationship Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. SHARE ALLOTMENT COMMITTEE The composition and terms of reference of the Share Allotment Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. AUDITORS M/s Lodha & Co., Chartered Accountants, Kolkata, bearing Registration No E Who has been appointed as the Statutory Auditors of the Company for a period of three (3) years from the conclusion of the 84th AGM (for FY ) till the conclusion of the 87th AGM (for FY ).The Board now recommends the ratification of the appointment of Lodha & Co. by the members at the Annual General Meeting for the Financial Year STATUTORY AUDITORS OBSERVATIONS The observations of the Statutory Auditors have been explained in the Notes forming part of the Financial Statements and these, interalia, include the following:- Para (a) regarding rental demands from Kolkata Port trust, the matter is sub-judice and pending decision of Hon ble Calcutta High Court, provision made in account has been considered adequate by the management as mentioned in note 6(b); Para (b) as regard managerial remuneration, necessary application is pending for approval before MCA as explained in Note 26(a); Para (c) regarding advance/investment made in a subsidiary in respect of Rail Runner project undertaken by it, necessary implementation including obtaining approval etc. are under progress, this being infrastructure project having long gestation period the exposure has been considered good as mentioned in Note 13(a), 15(b) & 15(c); Para (d) regarding advances amounting to Rs lacs pending investigation as stated in Note 19(b) of the Notes on Accounts, necessary administrative steps including suspension of an employee, so far identified, have been taken and further course of action for recovering the amount are in process. Para (e) regarding stocks lying at different locations under reconciliation with confirmation physical balances there against and pending this, provision of 6 Annual Report

5 Rs.397 lacs has been made which is considered adequate as mentioned in Note 16(c), certain debit/credit balances including capital advances as mentioned in note 15(a), certain overdue balance of trade receivable as mentioned in 17(b) and certain bank blances as explained in note 30; Para (f) regarding nonascertainment and accounting of depreciation as per Companies Act, 2013, as mentioned in Note 12(g), reassessment of life of fixed assets in process pending which depreciation has considered as per Schedule XIV of Companies Act, Para (g) regarding Micro, Small and Medium Enterprise related information, details has been sought from the parties but due to availability of inadequate information, the same could not be disclosed, Note 9(b); SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s. MKB & Associates, Practicing Company Secretaries, to conduct the Secretarial Audit. The Secretarial Audit Report for the financial year ended 31st March, 2016 dated 4th August, 2016 is provided in the Annual Report in Form MR 3. SECRETARIAL AUDITORS OBSERVATIONS There is no qualification made by the Secretarial Auditor in their report. REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee, adopted the Remuneration Policy which inter alia includes policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management Personnel and their remuneration. The Remuneration Policy is available on the Company's website : stoneindia.co.in BOARD EVALUATION Your Company has adopted the comprehensive procedure on performance evaluation. Chairman of the Nomination and Remuneration Committee, who is an independent Director of the Board, conducted a one-to-one session with each Director to understand their points of view on the parameters for performance evaluation. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board s functioning, such as, adequacy of the composition and quality of the Board and its Committees, execution and performance of specific duties, obligations, financial reporting process, monitoring activities, ethics and compliances etc. Performance parameters for the Board, as a collective body, included parameters like, qualification and diversity of Board members, effective participation, availability, insight & observations, appropriateness, clarity of understanding, scenarios faced by the Company, existence, sufficiency and appropriateness of policy on dealing with potential conflicts of interest, involvement of Board members in strategic planning process, etc. Independent Directors have conducted its meeting without the participation of other Non-Independent Directors and members of management and reviewed the performance of Board, its Committee, Chairman and individual Directors. On the basis of the review by the Independent Directors, they hold unanimous opinion that the Non-Independent Directors, including the Chairman to the Board, had abundant knowledge in their respective field and are experts in their areas. DECLARATION OF INDEPENDENT DIRECTORS UNDER SECTION 149(6) OF THE COMPANIES ACT,2013 The Company has received declarations pursuant to section 149(7) of the Companies Act,2013 from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under erstwhile clause 49 of the Listing Agreement executed with Stock Exchanges. CORPORATE SOCIAL RESPONSIBILITY The provisions of section 135 of the Companies Act, 2013 read with rules made thereunder, with regard to the Corporate Social Responsibility (CSR) Committee is not applicable to your Company at present. INTERNAL FINANCIAL CONTROLS Your Company has an adequate system of internal control procedures which is commensurate with the size and nature of business. Detailed procedural manuals are in place to ensure that all the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. The internal control systems of the Company are monitored and evaluated by internal auditors, M/s Singhi & Co., Chartered Accountants and their audit reports are periodically reviewed by the Audit Committee of the Board of Directors. The Audit Committee regularly reviews the audit findings and actions taken thereon, as well as the adequacy and effectiveness of the internal systems and controls. Your Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. In this regard, your Board confirms the following: i. Systems have been laid to ensure that all transactions are executed in accordance with management's general Annual Report

6 ii. and specific authorization. There are well-laid manuals for such general or specific authorization. Systems and procedures exist to ensure that all transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements and to maintain accountability for aspects. iii. Access to assets is permitted only in accordance with management's general and specific authorization. No assets of the Company are allowed to be used for personal purposes except in accordance with terms of employment or except as specifically permitted. The existing assets of the Company are verified/ checked at reasonable intervals and appropriate action is taken with respect to the differences, if any. VIGIL MECHANISM The Company has a vigil mechanism named Breach of Integrity and Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the said Policy is explained in the website of the Company at FRAUD REPORTING During the year under review, no incidence of fraud has occurred in the Company. Neither the Audit Committee of the Board nor the Board of the Company had received any report involving any fraud from the Statutory Auditors of the Company. As such, there is nothing to report by the Board, as required under Section 134 (3) (ca) of the Companies Act, RISK POLICY The Company has a Risk Management Committee and in the course of evolving a Risk Management Policy in due course as per the provisions of the Act and revised Corporate Governance norms issued by SEBI. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All contracts/arrangements /transactions entered into by the Company during the financial year ended with related parties were on an arm s length basis and were in the ordinary course of business. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material, and therefore, Shareholders approval was not required to be obtained, in accordance with the Policy of the Company on related party transactions. Thus, provisions of Sections 134(3)(h) and 188(1) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 are not applicable to the Company and therefore, Form No. AOC-2 has not been attached. In compliance with the requirements laid down in the erstwhile listing agreement, all related party transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee had been obtained for the transactions which were of foreseeable and repetitive nature. All transactions entered into with the related parties are presented to the Audit Committee by way of a statement giving details of all transactions. This procedure is continued to be followed under the relevant provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, The Policy on materiality of Related Party Transactions and dealing with Related Parties as approved by the Board has been uploaded on the Company s website at URL: stoneindia.co.in. EXTRACT OF ANNUAL RETURN An extract of the Annual Return in form MGT 9 as on the Financial Year ended on as required under Section 134(3) of the Companies Act, 2013, read with Section 92(3) of the said Act and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 are set out in Annexure-B forming part of this Report. PARTICULARS OF LOANS / GUARANTEE/ADVANCES/ INVESTMENTS OUTSTANDING DURING THE FINANCIAL YEAR Your Company has neither advanced any loan nor made any investments or had given any guarantees and/or provided any securities to anybody, whether directly or indirectly, within the meaning of Section 185 of the Companies Act, Hence, there are no details worth providing. MANAGERIAL REMUNERATION The information required pursuant to Section 197 read with Rule, 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of managerial remuneration, is provided in the Annexure- C forming part of this report PARTICULARS OF EMPLOYEES- AS PER CHAPTER XIII RULE 5(2) & RULE 5(3) The information required pursuant to Section 197 read with Rule, 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of top ten employees of the Company in terms of remuneration drawn will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members 8 Annual Report

7 and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. DETAILS OF PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES IMPOSED ON THE COMPANY: NIL. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, all amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from to time to time on due dates, to the Investor Education and Protection Fund (IEPF). ENVIRONMENT The Company is committed to the protection of environment and is not involved in any type of activity hazardous to environment. It strictly adheres to the provisions of environmental laws. There is no trade effluent generated by the Company, which may cause pollution. Our Company is both an ISO 9001(2008) and 14001(2004) certified company. CAPITAL EXPENDITURE During the year under review, the Company incurred Rs Lacs towards capital expenditure, most part of which was incurred on the new projects and on the addition to Company s fixed assets. DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place an Anti Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to prohibit, prevent or deter any acts of sexual harassment at workplace and to provide the procedure for the redressal of complaints pertaining to sexual harassment, thereby providing a safe and healthy work environment. The following is the summary of the complaints received and disposed off during the financial year: : a) No. of complaints received: NIL b) No. of complaints disposed off: NIL PARTICULARS AS PER SECTION 134 (m) OF THE COMPANIES ACT, ENERGY CONSERVATION Your Company has introduced certain Energy saving measures and re-engineering methods in terms of utilization of factory and office spaces. The practice to monitor and control the consumption of various sources of energy comprising power, oil and fuel in a bid to reduce energy cost despite increase in production and power tariffs is in place. The benefits derived out of research & development and technology absorption by the Company is attached as Annexure-D. FOREIGN EXCHANGE EARNING AND OUTGO Your Company earned Rs lacs foreign exchange during as against Rs lacs during Foreign exchange outgo during the year amounted to Rs lacs (including import of components and spare parts) against Rs lacs during the previous year. APPRECIATION Your Directors would like to record their appreciation of the hard work and commitment of the Company s employees and warmly acknowledge the unstinting support extended by its bankers, alliance partners and other stakeholders in contributing to the results. For and on behalf of the Board G. P. GOENKA Kolkata Chairman Date : 12th August, 2016 DIN: Note : There are no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of report. Annual Report