DIRECTORS' REPORT 1. Your Directors have pleasure in presenting the Twenty Fifth Annual Report of the Company together with the Audited Statement of Accounts for the financial year ended March 31, 2015. 2. Operations of the Company Investments are made in various companies and dividend constitutes the main source of income for the Company. During the financial year ended March 31, 2015, total income of the Company was Rs. 419.05 lakhs as against Rs. 320.98 lakhs in the Previous Year. Profit after tax was Rs. 376.54 lakhs as against Rs. 254.82 lakhs in the Previous Year. 3. Change in the Nature of Business During the year under review, there was no change in the nature of the business. 4. Dividend Your Directors have deemed it prudent not to recommend any dividend on equity shares for the year ended March 31, 2015, in order to conserve the resources for the future years. 5. Amount transferred to the Reserves: Your Board has not proposed the transfer of any amount to the reserve. 6. Extract of Annual Return Details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure A". 7. Listing The Equity Shares of the Company continue to remain listed on BSE Limited and National Stock Exchange of India Limited. 8. Fixed Deposit The Company has not accepted any deposit within the meaning of Chapter V of the Companies Act, 2013 and the Rules framed there under. 9. Particulars of Loans, Guarantees or Investments In terms of the provisions of Section 186(11) of the Companies Act, 2013 the provisions of Section 186(4) requiring disclosure in the financial statements of the full particulars of loans given, investments made or guarantees given or securities provided and purpose thereof, is not applicable to the Company. 10. Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo The Additional information required under provisions of Section 134(3)(m) of The Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 and forming part of the Report is reproduced herewith: (a) Conservation of energy and technology absorption: As the Company holds investments in the other Companies, there are no particulars regarding conservation of energy and technology absorption, as required under provisions of the Act and rules made thereunder. (b) Foreign Exchange earnings and outgo: Total foreign exchange used : Nil Total foreign exchange earned : Nil 11. Subsidiary & Associate Company As on March 31, 2015, the Company has a subsidiary, Doon Dooars Plantations Limited, accounts of which shall be made available to the shareholders of the Company seeking such information at any point of time. The Consolidated Financial Statements of the Company along with its subsidiary prepared for the year 2014-15 in accordance with relevant Accounting Standard issued by Institute of Chartered Accountants of India forms part of this Annual Report. The Company holds 48.81% in the share capital of CFL Capital Financial Services Limited. As the Company does not have any significant influence over the affairs of the CFL Capital Financial Services Limited, it is not considered as an Associate Company for the purpose of Consolidation under the Companies Act, 2013. A Report on the performance and financial position of the Subsidiary and Associate Company pursuant to Rule 5 of Companies (Accounts) Rules, 2014 is annexed as Annexure - B and forms a part of this Report. The Company has framed a policy for determining material subsidiaries as per requirement of Clause 49 of the Listing Agreement and has uploaded the same on website and link for the same is as below: <http://stelholdings.com/docs/POLICY_ON_MATERIAL_SUBSIDIARIES.pdf> 12. Corporate Governance A report on Management Discussion and Analysis is attached here with (Annexure - C). A separate Report on Corporate Governance (Annexure - D) as prescribed under the Listing Agreement executed with the Stock Exchanges is annexed as a part of this Report along with the practicing Company Secretary's Certificate. 13. Directors and Key Managerial Personnel Shri. Sunil Bhandari retires in the forthcoming Annual General Meeting and being eligible offers himself for reappointment. Brief particulars of Shri Bhandari, his expertise in various functional areas is given in the Notice convening the Annual General Meeting. Shri. Sanjiv Goenka, Director resigned from the Board of the Company with effect from February 24, 2015. Shri. Kaushik Roy was appointed as Additional Directors of the Company with effect from February 16, 2015 and holds office upto the date of forthcoming Annual General Meeting. During the year under review, Shri Abraham Ittyipe, Manager, Shri Sivarama Krishnan, Chief Financial Officer and Shri Mithun B. Shenoy, Company Secretary were designated as Key Managerial Personnel within the meaning of Section 203 of the Companies Act, 2013. In compliance with Clause 49 VIII (E) of the Listing Agreement, brief resume of all the Directors proposed to be appointed / re-appointed are attached along with the Notice to the ensuing Annual General Meeting. During the year under review, 4 (Four) meetings of the Board of Directors were held, details of which are set out in the Corporate Governance Report which forms a part of this Report. 13.1. Declaration by Independent Directors Pursuant to sub section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Independent Directors of the Company viz. Shri. Umang Kanoria, Shri. H. C. Dalal, Shri. Prem Kapil and Smt. Sucharita Basu, have given declaration to the Company that they qualify the criteria of independence as required under the Act. 13.2. Board Evaluation The Board has carried out an annual evaluation of its own performance, the directors and also committees of the Board based on the guideline formulated by the Nomination & Remuneration Committee. Board composition, quality and timely flow of information, frequency of meetings, and level of participation in discussions were some of the parameters considered during the evaluation process. Further, the Independent Directors of the Company met once during the year to review the performance of the Nonexecutive directors, Chairman of the Company and performance of the Board as a whole. 13.3. Policy on Remuneration to Directors, KMP and Senior Management Personnel The Board based on the recommendation of the Nomination and Remuneration Committee has formulated a policy on remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy covers the appointment, including criteria for determining qualification, positive attributes, independence and remuneration of its Directors, Key Managerial Personnel and Senior Management Personnel. The Nomination and Remuneration Policy is annexed as Annexure - E to this report. 11. Subsidiary & Associate Company As on March 31, 2015, the Company has a subsidiary, Doon Dooars Plantations Limited, accounts of which shall be made available to the shareholders of the Company seeking such information at any point of time. The Consolidated Financial Statements of the Company along with its subsidiary prepared for the year 2014-15 in accordance with relevant Accounting Standard issued by Institute of Chartered Accountants of India forms part of this Annual Report. The Company holds 48.81% in the share capital of CFL Capital Financial Services Limited. As the Company does not have any significant influence over the affairs of the CFL Capital Financial Services Limited, it is not considered as an Associate Company for the purpose of Consolidation under the Companies Act, 2013. A Report on the performance and financial position of the Subsidiary and Associate Company pursuant to Rule 5 of Companies (Accounts) Rules, 2014 is annexed as Annexure - B and forms a part of this Report. The Company has framed a policy for determining material subsidiaries as per requirement of Clause 49 of the Listing Agreement and has uploaded the same on website and link for the same is as below: <http://stelholdings.com/docs/POLICY_ON_MATERIAL_SUBSIDIARIES.pdf> 12. Corporate Governance A report on Management Discussion and Analysis is attached here with (Annexure - C). A separate Report on Corporate Governance (Annexure - D) as prescribed under the Listing Agreement executed with the Stock Exchanges is annexed as a part of this Report along with the practicing Company Secretary's Certificate. 13. Directors and Key Managerial Personnel Shri. Sunil Bhandari retires in the forthcoming Annual General Meeting and being eligible offers himself for reappointment. Brief particulars of Shri Bhandari, his expertise in various functional areas is given in the Notice convening the Annual General Meeting. Shri. Sanjiv Goenka, Director resigned from the Board of the Company with effect from February 24, 2015. Shri. Kaushik Roy was appointed as Additional Directors of the Company with effect from February 16, 2015 and holds office upto the date of forthcoming Annual General Meeting. During the year under review, Shri Abraham Ittyipe, Manager, Shri Sivarama Krishnan, Chief Financial Officer and Shri Mithun B. Shenoy, Company Secretary were designated as Key Managerial Personnel within the meaning of Section 203 of the Companies Act, 2013. In compliance with Clause 49 VIII (E) of the Listing Agreement, brief resume of all the Directors proposed to be appointed / re-appointed are attached along with the Notice to the ensuing Annual General Meeting. During the year under review, 4 (Four) meetings of the Board of Directors were held, details of which are set out in the Corporate Governance Report which forms a part of this Report. 13.1. Declaration by Independent Directors Pursuant to sub section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Independent Directors of the Company viz. Shri. Umang Kanoria, Shri. H. C. Dalal, Shri. Prem Kapil and Smt. Sucharita Basu, have given declaration to the Company that they qualify the criteria of independence as required under the Act. 13.2. Board Evaluation The Board has carried out an annual evaluation of its own performance, the directors and also committees of the Board based on the guideline formulated by the Nomination & Remuneration Committee. Board composition, quality and timely flow of information, frequency of meetings, and level of participation in discussions were some of the parameters considered during the evaluation process. Further, the Independent Directors of the Company met once during the year to review the performance of the Nonexecutive directors, Chairman of the Company and performance of the Board as a whole. 13.3. Policy on Remuneration to Directors, KMP and Senior Management Personnel The Board based on the recommendation of the Nomination and Remuneration Committee has formulated a policy on remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy covers the appointment, including criteria for determining qualification, positive attributes, independence and remuneration of its Directors, Key Managerial Personnel and Senior Management Personnel. The Nomination and Remuneration Policy is annexed as Annexure - E to this report. 14. Board Committees Detailed composition of the mandatory Board committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms a part of this Report. There have been no situations where the Board has not accepted any recommendation of the Audit Committee. 15. Directors' Responsibility Statement as required under Section 134 of the Companies Act, 2013 The Directors confirm that - a) in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards had been followed and there were no material departures; b) 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 as at March 31, 2015 and of the profit and loss of the company for that period; c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d) the directors had prepared the annual accounts on a going concern basis; e) 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. f) 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. 16. Auditors: 16.1. Statutory Auditors Messrs G. Joseph & Associates, Chartered Accountants, Statutory Auditors of the Company were re-appointed auditors to hold office from the conclusion of the Twenty Forth Annual General Meeting held on September 30, 2014 till the conclusion of the Twenty Seventh Annual General Meeting to be held in 2017, subject to ratification by the Members at the Twenty Fifth and Twenty Sixth AGM of the Company. Accordingly, the Notice convening the Twenty Fifth AGM includes a resolution seeking such ratification by the members of the said re-appointment of the Auditors. The Company has received a letter from the Statutory Auditors to the effect that the ratification of their re-appointment, if made at the forthcoming Annual General Meeting, would be in accordance with the limits prescribed under 141(3) (g) of the Act. There is no qualification, disclaimer, reservation or adverse remark made by the Statutory Auditors in Auditors' Report. 16.2. Secretarial Auditors Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of the Directors of the Company had appointed M/s. SVJS & Associates, Company Secretaries to undertake the Secretarial Auditors of the Company for the year ended March 31, 2015. The Secretarial Audit Report is annexed as Annexure - F. Further, there is no qualification, disclaimer, reservation or adverse remark made by the Company Secretary in practice in Secretarial Audit Report. 16.3. Internal Auditor The Board had appointed Smt. Jyothi Mary Jacob, Cost Accountant as Internal Auditors for the financial year 2014-15. 17. Corporate Social Responsibility The Company does not come under the purview of Section 135 of the Act. Hence it is not required to constitute Corporate Social Responsibility Committee. 18. Whistle Blower Policy Pursuant to Section 177 of the Companies Act, 2013 the rules made thereunder and the Listing Agreement with the Stock Exchanges, the Company has established a Whistle Blower Policy (Vigil Mechanism) for directors and employees to report genuine concerns about any instance of any irregularity, unethical practice and/or misconduct. The policy has been uploaded in the Company's website <http://stelholdings.com/docs/Whistleblowerpolicy.pdf> 19. Related Party Transactions There was no materially significant transaction with the Company's Promoters, Directors, Management or their relatives that could have had a potential conflict with the interests of the Company. This policy as approved by the Board is uploaded on the Company's website on the below link: <http://stelholdings.com/docs/Relatedpartytrans.pdf> 20. Risk Management A detailed report on Risk Management is included in Management Discussion and Analysis which forms part of this Report. The report clearly states development and implementation of a risk management policy for the company including identification therein of elements of risks along with risk mitigation plan. 21. Particulars of Employees During the year under review, none of the employees, throughout the year or part of the year were in receipt of remuneration in excess of the sums as prescribed pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of managerial personnel) Rules, 2014. The information required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure - G and forms a part of this report. 22. Internal Financial Control Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis which forms part of this Report. 23. Significant and Material Order The Company has received an Order dated 11.02.2015 from Regional Director, Southern Region, Ministry of Corporate Affairs, Chennai rejecting the Company's petition filed seeking shifting of the Registered Office of the Company from the state of Kerala to the state of Maharashtra. There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and company's operations in future. 24. Acknowledgements Your Directors wish to place on record, their appreciation for the contribution made and support provided to the Company by the bankers, employees and shareholders. For and on behalf of the Board of Directors Sunil Bhandari Director Umang Kanoria Director Mumbai August 11, 2015 |