DIRECTORS' REPORT TO THE MEMBERS, STERLING INTERNATIONAL ENTERPRISES LIMITED st Your Directors have pleasure in presenting the 31 Annual Report together with the Audited Statement of th Accounts of the Company for the year ended 30 June, 2015. DIVIDEND The Directors do not recommend any dividend for the current year with a view to conserve the resources. OPERATIONS & FUTURE OUTLOOK The total income of the company on stand alone basis has been Rs. 190.93 lacs as compare to Rs. 259.31 lacs in the current year whereas the total income of the company on the consolidated basis has increased from Rs. 44,929.57 lacs in the previous year to Rs. 56,802.96 lacs the current year. The Company's Substantial Investment is in the overseas subsidiaries, which are in the business of Oil related activities. The Major Income of the Company is due to the operations of the subsidiaries in Oil related activities, which are reflected in the Consolidated Financial Statements. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES th The Company has the following four direct and indirect overseas subsidiary companies as on 30 June, 2015: British Oil & Gas Exploration Private Limited, Mauritius (BOGEPL) BOGEPL is 100 per cent owned subsidiary of the Company which is a Holding Company of British Oil Resources Limited. British Oil Resources Limited, Mauritius (BORL) BORL is 100 per cent owned subsidiary of BOGEPL and holds the entire issued share capital of SORL & GGL and 99.96 per cent of the entire issued share capital of BOGEL. British Oil & Gas Explorations Limited, British Virgin Islands (BOGEL) BOGEL is 99.96 per cent owned subsidiary of BORL. The Company is engaged in business of oil rigs and associated services, which involves the purchase of oil rigs and letting it on hire by deployment of rigs on oil fields for drilling Sterling Oil Resources Limited, British Virgin Islands (SORL) Sterling Oil Resources Ltd is a 100 per cent subsidiary of BORL. The company is engaged in the business of oil trading and other related products. Geodynamics Geospectra Limited, British Virgin Islands (GGL) Geodynamics Geospectra Limited (GGL) is 100% owned subsidiary of BORL. The company provides services in the collection and interpretation of seismic data. It is capable of acquiring both two-dimensional and three-dimensional seismic data. Seismic data is collected by causing an explosion in the area beneath a shot-hole and then capturing the resulting resonance by a geophone and a telemetry system. Interpretation of the seismic data collected helps in identifying the precise points for well drilling. During the year, the Board of Directors (the Board) reviewed the affairs of material subsidiaries. We have, in accordance with Section 129(3) of the Companies Act, 2013 prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. Further, the report on the performance and financial position of each of the subsidiary, associate and joint venture and salient features of the financial statements in the prescribed Form AOC-1 is given. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited financial statements of each of the subsidiary will be available on our website www.sterlinginternational.com. These documents will also be available for inspection during business hours at the registered office of the Company. CHANGE IN ACCOUNTING YEAR Our Company has financial year ends on June 30 every year. Pursuant to Section 2(41) of the Companies Act, 2013, we are required to change the financial year from June to March. Therefore our next financial statement st st will be prepared for a period of Nine months starting from 1 July, 2015 and ended on 31 March, 2016. MANAGEMENT DISCUSSION AND ANALYSIS A separate report on Management Discussion and Analysis relating to business and economic environment surrounding your company is enclosed as a part of the Annual Report. CORPORATE GOVERNANCE We believe Corporate Governance is at the heart of Stakeholder value creation In pursuance of the system of Corporate Governance instituted by SEBI, forming part of the Listing Agreement with the Stock Exchange, a report thereon is separately attached to this report. DIRECTORS Shri Nitin Sandesara and Shri Rajbhushan Dixit, Directors of the Company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offers themselves for re-appointment. The Board recommends re-appointment of Shri Nitin Sandesara and Shri Rajbhushan Dixit. During the year, Shri Ramani Iyer and Shri Hitesh Patel, Directors of the Company resigned from the Board. Shri Ramani Iyer and Shri Hitesh Patel were on the Board of the company for many years. The Directors would like to place on record their sincere appreciation for their commitment and contribution made by them during their tenure on the Board. th Ms. Mayuri patel was appointed as independent director w.e.f 25 March, 2015. As per Companies Act, 2013, Independent Directors shall hold office for a term of upto five consecutive years. Ms. Mayuri Patel being eligible and offering herself for appointment is proposed to be appointed as an Independent Director for five consecutive years for a term five years from the date of this Annual General Meeting.. Ms. Mayuri patel submitted to the Board a declaration that she meets criteria of independence as provided in Section 149 (6) of the Companies Act, 2013. The Board recommends appointment of Ms. Mayuri Patel as independent director to the members. During the year, the Board met four times. INDEPENDENT DIRECTORS DECLARATION The Company has received the necessary declaration from each Independent Directors in accordance with Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. RELATED PARTY TRANSACTIONS There have been no materially significant related party transactions between the Company and the Directors, the management, the subsidiaries or the relatives except for those disclosed in the financial statements. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The Company does not have any loan, guarantee or investments except as stated in Note No. 24 forming part of financial statements. NOMINATION AND REMUNERATION COMMITTEE The Board at its meeting held on May 14, 2014, Constitute Nomination & Remuneration Committee, in accordance with section 178 of the Companies Act, 2013. The functions of the Committee include recommending appointments of Directors to the Board, identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and recommending to the Board their appointment and removal, framing an evaluation framework for the evaluation of the performance of the Directors and the Board, evaluation of performance of every Director, recommending to the Board a policy relating to the remuneration for the Directors, key managerial personnel and other employees, formulating the criteria for determining qualifications, positive attributes and independence of a Director, framing policy on Board diversity and other functions assigned by the Board. PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND DIRECTORS The Company with the approval of remuneration and Nomination Committee has put in place an evaluation framework for evaluation of the Board of Directors. The Board also carries out an evaluation of the working of its Audit Committee, Nomination & Remuneration Committee, Risk Management Committee etc. The evaluation of the Committees is based on the assessment of the compliance with the terms of reference of the Committees. The evaluations for the Directors and the Board were done through circulation of two questionnaires, one for the Directors and the other for the Board which assessed the performance of the Board on select parameters related to roles, responsibilities and obligations of the Board and functioning of the Committees including assessing 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. The evaluation criteria for the Directors was based on their participation, contribution and offering guidance to and understanding of the areas which are relevant to them in their capacity as members of the Board. SELECTION OF NEW DIRECTORS AND BOARD MEMBERSHIP CRITERIA The Nomination and Remuneration Committee works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education and public service. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner. RISK MANAGEMENT COMMITTEE The Company has also constituted Risk Management Committee to oversee the operational risk management in the Company. The purpose of the Committee is to assist the Board of Directors in fulfilling its oversight responsibilities with regard to enterprise risk management. The Committee reviews the risk management practices and actions deployed by the Management with respect to identification, impact assessment, monitoring, mitigation and reporting of key risks while trying to achieve its business objectives. CORPORATE SOCIAL RESPONSIBILITY The Company's vision is to be a global benchmark in value creation and corporate citizenship and the Company's long-term Corporate Social Responsibility (CSR) objective, is to improve the quality of life of the communities through long-term value creation for all stakeholders. The Company have CSR committee consisting of Shri R. B. Dixit, Shri Ronald D'souza and Smt. Mayuri Patel. The average annual net profit for the past three years amounting to Rs. 389,875. As the committee is of the opinion that the amount of net profit is so meager that the amount required to be spent on CSR would not have any effectiveness and therefore it was decided not to spend the amount. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY There are no significant and/or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company. DIRECTORS' RESPONSIBILITY STATEMENT Pursuance to Section 134 of the Companies Act, 2013, the directors hereby states that : th i) in the preparation of the Annual Accounts for the year ended 30 June, 2015, the applicable Accounting Standards had been followed along with proper explanation relating to material departures. ii) the Directors had 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 profit of the company for that period. iii) the Directors had taken proper and sufficient care 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; th iv) the Directors had prepared the Annual Accounts for the year ended 30 June, 2015 on a going concern basis. v) the 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. vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. FIXED DEPOSITS The Company did not accept any deposits from the Public during the year under review. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure A. AUDITORS Statutory Auditors As recommended by the Audit Committee, the Board has proposed the re-appointment of M/s. H. S. Hathi & Co., Chartered Accountants as statutory auditors for the financial year from 01-07-2015 to 31-03-2016. The appointment is accordingly proposed in the Notice of the current AGM vide item no. 4 for approval by Members. There are no qualifications, reservation or adverse remarks made by the statutory auditors in the audit report. Secretarial Auditors Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company with the approval of its Board, appointed M/s. S. Bhattbhatt & Co. a Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year ended June 30, 2015. The Secretarial Audit Report is annexed herewith as Annexure B. There are no qualifications, reservation or adverse remark or disclaimer made by the auditor in the report save and except disclaimer made by them in discharge of their professional obligation. PERSONNEL The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not given as there is no employee drawing salary in excess of prescribed limit. INTERNAL CONTROL AND ITS ADEQUACY The Company has adequate internal controls and processes in place with respect to its financial statements which provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. These controls and processes are driven through various policies, procedures and certifications. The processes and controls are reviewed periodically. The Company has a mechanism of testing the controls at regular intervals for their design and operating effectiveness to ascertain the reliability and authenticity of financial information. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO In accordance with the provisions of Section 134 (3) (m) of the Companies Act, 2013 the required information relating to conservation of energy, technology absorption is not required to be given as Company do not have any manufacturing activities. There is no foreign exchange earnings or outgo during the year. ACKNOWLEDGEMENT Your Directors appreciate the valuable co-operation extended by the Central and State Government authorities and are extremely grateful to the Financial Institutions and the Company's Bankers for their continued assistance, guidance and support. Your Directors are also grateful to the Employees, Shareholders, Customers and the General Public for their support and confidence reposed in the Management. For and on behalf of the Board of Directors Chetan J. Sandesara Director (DIN - 00255671) Nitin J. Sandesara Director (DIN - 00255496 Place: Mumbai Date: August 28, 2015 |