DIRECTORS REPORT To The Members, Standard Industries Limited. Your Directors hereby present the 119th Annual Report together with the Audited Statements of Accounts for the Financial Year ended 31st March, 2016. REAL ESTATE DIVISION The Company had leasehold land of an area of 92 acres and 10 gunthas (approx. 92.25 acres) at Thane-Belapur Road, Navi Mumbai, for a term of 100 years computed from 1.8.1965. The Company has transferred and assigned to LOMA IT Park Developers Private Limited (LOMA), Singapore, an area of 30 acres located within the larger property of approx. 92.25 acres, for the remaining tenure of the lease with MIDC. The Company is making serious & continued efforts to assign/develop the balance portion of 62.25 acres of the Company's leasehold land for, inter-alia, establishing a large-scale industry for Information Technology, Software Unit/ IT Park and in this connection proposals are on for negotiations with various parties/facilitators for the assignment/ development so as to monetize the balance 62.25 acres of the Company's leasehold land at Navi Mumbai. Delayed revival of the Indian Economy and lack of business confidence has made the year under review challenging for the Real Estate Business coupled with inadequate funding and strict and prolonged regulatory process which leads to delays in obtaining approvals. The Company owns a piece or parcel of land admeasuring 5413.92 sq. mtrs. or thereabouts being C.S. No. 211 under Parel-Sewree Division. Under the Development Plan, the said property is shown as reserved for recreation ground. Under the D.C. Regulation, in lieu of the reservation for recreation ground, the Company is entitled to either the market value of the land or Transferable Development Rights (TDR) benefits. TRADING DIVISION For the Financial Year under review, i.e. April, 2015 to March, 2016, the Company has achieved a Textile Trading turnover of Rs. 612 lakhs in comparison with Rs. 673 lakhs for the previous Financial Year. The year under review was very lacklustre because of the tight financial situation in the Market. There was lot of competition from decentralized sector. However, the Company is optimistic and plans to increase the sales volume by adding new products in the existing range as well as trying to explore new market segments. NATURE OF BUSINESS OF THE COMPANY There has been no change in the nature of business of the Company. HUMAN RESOURCES Relations remain cordial with the employees during the year and there was all round co-operation. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The Company is not engaged in manufacturing activities during the year. Therefore, there is no information to submit in respect of conservation of energy and absorption of technology. The Company has no foreign exchange earnings and outgoings during the year. FIXED DEPOSITS There are no outstanding deposits remaining unpaid as on 31st March, 2016. The Company has not accepted any deposits under Chapter V of the Companies Act, 2013 and rules made thereunder. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that : (a) in the preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the Directors 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 profit and loss of the Company for that period; (c) the Directors 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) the Directors have prepared the annual accounts on a going concern basis; and (e) the Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively. (f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DETAILS OF SUBSIDIARIES 1. Standard Salt Works Ltd. 2. Mafatlal Enterprises Limited The Company has framed a "Policy for determining Material Subsidiaries" for identifying material subsidiaries. The web link where policy for determining 'Material' subsidiaries is disclosed is <http://standardindustries.co/pdf/> PolicyfordeterminingMaterialSubsidiaries.pdf DONATIONS During the Financial Year, the Company has contributed a sum of Rs. 72.54 lakhs to various Charitable and Educational Institutions. DIRECTORS: A) Directors Pursuant to Article 158 of the Articles of Association of the Company read with Section 152 of the Companies Act, 2013, Shri K. J. Pardiwalla is due to retire at the ensuing Annual General Meeting and is eligible for reappointment. B) Declarations by Independent Directors and re-appointment. Shri R.J. Taraporevala, Shri M.L. Apte, Shri F.M. Pardiwalla and Shri Shobhan Diwanji were appointed as Independent Directors to hold office for a term of five consecutive years from 14th August, 2014. Declarations have been received from all the Independent Directors affirming that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 164 of the Companies Act, 2013. MATERIAL CHANGES AND COMMITMENTS There have been no material changes 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 the Report. CHANGE IN THE REGISTRAR & SHARE TRANSFER AGENTS M/s. Sharepro Services (India) Pvt. Ltd., Registrar and Transfer Agent of the Company was handling physical and electronic Share Registry Work. SEBI, vide its Order dated 22nd March, 2016, has advised all Companies who are clients of Sharepro Services (I) Private Limited to switchover their activities related to a Registrar to an issue and share transfer agent to another Registrar to an issue and share transfer agent registered with SEBI. Pursuant to the SEBI order and on recommendations of the Stakeholders Relationship Committee, the Board of Directors of the Company has appointed M/s. Karvy Computershare Pvt. Ltd. (Karvy), having its Corporate Office at Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telangana - 500 032, as the Company's new Registrar & Share Transfer Agent with effect from 16th May, 2016 which has been informed to BSE Limited and the National Stock Exchange of India Limited, stock exchanges where equity shares of the Company are listed. The Company has also issued a Press Release to that effect. SIGNIFICANT AND MATERIAL ORDERS There have been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS. M/s. S.U. Kapasi & Co., Chartered Accountants, are the Internal Auditors of the Company and their remuneration is approved by the Audit Committee. The Company has proper and adequate system of internal control to ensure that all assets are safeguarded and protected against loss from unauthorized use on disposition and transactions are authorized, recorded and reported correctly. Internal control systems are supplemented by Internal Audit Reviews, coupled with guidelines and procedures updated from time to time by the Management. Internal control systems are established to ensure that the financial and other records are reliable for preparing financial statements. Internal Audit System is engaged in evaluation of internal control systems. Internal audit findings and recommendations are reviewed by the Management and Audit Committee of the Board of Directors. M/s Deloitte Haskins & Sells LLP Statutory Auditors, have been appointed to certify the adequacy and effectiveness of Internal Financial Control over financial reporting for the Financial Year 2015-16. AUDITORS QUALIFICATIONS There were no qualifications, reservations or adverse remarks made either by the Auditors or by the Practicing Company Secretary in their respective reports. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT A separate statement containing the salient features of the financial statement of its subsidiaries in the prescribed form (AOC-1) is annexed to the financial statements of the Company. EXTRACT OF THE ANNUAL RETURN The extract of Annual Return pursuant to the provisions of Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is furnished in Form MGT-9 in Annexure A of this Report. FORMAL ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS Pursuant to the provisions of the Companies Act, 2013, the Board, based on recommendations of the Nomination and Remuneration Committee, has carried out an annual performance evaluation of its own performance and that of its statutory committees viz. Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee and that of the individual Directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the Industry in which the Company operates, business model of the Company and related matters and familiarization programmes attended by Independent Directors are put up on the website of the Company at the link <http://www.standardindustries.co/pdf/> FamiliarizationProgrammeforIndependentDirectors.pdf NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS During the year 5 Board Meetings were duly convened and held, the details of which are given in the Corporate Governance Report. The gap between the meetings was within the period prescribed under Section 173 of the Companies Act, 2013 and Regulation 17(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. AUDIT COMMITTEE The Audit Committee constituted by the Board of Directors of the Company comprises 3 Independent Non-Executive Directors : Shri F. M. Pardiwalla — Chairman Shri R. J. Taraporevala — Member Shri M. L. Apte — Member DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES Vigil Mechanism/Whistle Blower Policy has been formulated with a view to provide a mechanism for Directors and Employees of the Company to approach the Audit Committee of the Board of Directors of the Company or any member of such Audit Committee. It aims to provide a platform for the Whistle Blower to raise concerns on serious matters regarding ethical values, probity and integrity or any violation of the Company's Code, including the operations of the Company. The said Code has been displayed on the Company's website www.standardindustries.co There have been no cases of frauds reported to the Audit Committee/Board during the year under review. DISCLOSURE UNDER THE 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 requirements of The Sexual Harassment of Women in the Workplace (Prevention, Prohibition & Redressal) Act, 2013. There have been no complaints received during the year. NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee comprises Shri R.J. Taraporevala, Chairman, Shri M.L. Apte, Shri F.M. Pardiwalla, Shri K.J. Pardiwalla and Shri Shobhan Diwanji, Members. The Committee has laid down the Company's Policy on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other related matters. Pursuant to Section 134(3)(e) and Section 178 of the Companies Act, 2013, the Company's Policy on Directors appointment & remuneration is attached as Annexure B to this Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, are given in the Notes to the Financial Statements. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: The particulars of contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013, is disclosed in Form No. AOC-2 (Please refer Annexure C to the Directors' Report). The Company has framed a Policy on Related Party Transactions. The web link where Policy on dealing with Related Party transactions is disclosed is <http://standardindustries.co/> pdf/PolicyonRelatedPartyTransactions.pdf DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 The requisite details relating to ratio of remuneration, percentage increase in remuneration etc. as stipulated under the above Rules are annexed as Annexure D to this report. PARTICULARS OF EMPLOYEES The Company has no employees in respect of whom the information as per Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, is required to be given. SECRETARIAL AUDIT REPORT 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 has appointed M/s. Nishant Jawasa & Associates, to undertake the secretarial audit of the Company. Report of the Secretarial Auditor is annexed herewith as Annexure E. RISK MANAGEMENT POLICY The Company has dissolved the Risk Management Committee as it has been non-functional pursuant to Regulation 21(5) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as the provisions of Risk Management Committee apply only to top 100 listed entities determined on the basis of market capitalization as at the end of the immediate previous financial year. During the Financial Year under review, a detailed exercise on Business Risk Management was carried out covering the entire spectrum of business operations and the Board has been informed about the risk assessment and minimization procedures. Business risk evaluation and management is an ongoing process with the Company. CORPORATE GOVERNANCE Pursuant to Regulation 34(3) read with Schedule V E of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate Report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed. MANAGEMENT DISCUSSION AND ANALYSIS Pursuant to Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis Report is annexed to this Report. INSURANCE All the properties/assets including buildings, furnitures/ fixtures, etc. and insurable interests of the Company are adequately insured. AUDITORS It is proposed to appoint M/s Deloitte Haskins & Sells LLP, the existing statutory auditors of the Company for the current year. In terms of Section 139 of the Companies Act, 2013 the members are requested to appoint Auditors for the current year. The Auditors have confirmed their eligibility under Section 141 of the Act & the Rules framed thereunder for reappointment as Auditors of the Company. As required under Regulation 33(1)(d) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. For and on behalf of the Board PRADEEP R. MAFATLAL Chairman Mumbai Dated : 27th April, 2016 |