Sturdy Industries Ltd

REVIEW OF OPERATIONS AND BUSINESS PERFORMANCE

During the financial year under review, the company has achieved turnover (including income from other sources) of Rs. 360.23 Lakhs. However, the expenditure side of the company has also proportionally decreased to Rs. 1,183.77 lakhs. Your management is striving hard to improve the financial position of the company by devising effective marketing plans and strategies.

CHANGE IN NATURE OF BUSINESS

During the year under review, there was no change in the nature of business.

DIVIDEND

The Board of Directors of your company, after considering holistically the relevant circumstances and keeping in view the company's dividend distribution policy, has decided that it would be prudent, not to recommend any dividend for the year under review.

LISTING OF SHARES

Presently, the equity shares of the company are listed on the BSE Limited (Bombay Stock Exchange Limited) and the company has paid the Annual Listing Fees to BSE for the financial year 2023-2024.

BORROWINGS

The total borrowings of the company (both long term and short term) as on 31^st March, 2023 were Rs. 20,617.50 Lakhs as compared to Rs. 20,987.98 Lakhs as on 31^st March, 2022. (For details Refer Note Number 15 and 18 of the Audited Financial Statement).

DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATES

The company has no subsidiaries, associates and joint venture companies.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for the financial year 2022-2023 is uploaded on the website of the company i.e. www.sturdyindustries.in under the head “Investors”.

BOARD AND COMMITTEE MEETINGS

The details of meetings of the Board and committee thereof held during the financial year 2022-2023 are provided in the Report on Corporate Governance which forms the part of this report.

DIRECTOR'S RESPONSIBILTY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility statement:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to 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 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 the Companies Act, 2013 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; and

(e) The directors, in the case of a listed company, 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.

DECLARATION OF INDEPENDENCE

The Board has received declarations from all the Independent Directors of the company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015. In the opinion of the Board they fulfill the conditions specified in the Act and the Rules made thereunder and are Independent of the management.

MACHANISM FOR EVALUATION OF BOARD

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of SEBI (LODR) Regulation 2015, a structured procedure was adopted after taking into consideration various aspects of the Board's functioning, composition of the Board and its committees, execution and performance of specific duties, obligations and governance.

The performance evaluation of the independent Directors was completed in time. The performance evaluation of the Chairman and the Non-independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

The performance of each committee has been evaluated by its members and found to be highly satisfactory.

On the basis of this exercise, the Board has decided that all Independent Directors should continue to be on the Board.

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and that of the Articles of Association of the company Mrs. Meenu (DIN: 08945317), Director of the Company, liable to retire by rotation at the ensuing Annual General Meeting offers herself for re-appointment. The Board also seeks the approval of members for the appointment of Mr. Rajinder Paul Bali as a Director (Non-Executive) of the company. The brief resume/details of the Director(s), who are to be appointed as mentioned herein, have been furnished in the Notice of the ensuing Annual General Meeting. The detailed section on ‘Board of Directors' is given in the separate section titled ‘Corporate Governance Report' forming part of this Annual Report.

PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS UNDER SECTION 186

During the financial year under review, the company has neither made any investment nor granted any loan and guarantee within the meaning of Section 186 of the Companies Act, 2013. However, the details of the earlier investments made under Section 186 of the Companies Act 2013 are provided in Note 3 of the audited financial statements of the company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the financial year under review, the company has entered into certain transactions with related parties pursuant to the provisions of Section 188 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 and which could be considered ‘material' as per Regulation 23 of the Securities Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015. Such transactions are reported in Form AOC-2 attached as Annexure-1 to this report.

The policy on Related Party Transactions as approved by the Board are uploaded on the Company's website at www.sturdyindustries.in and direct web link to the policy is at http://www.sturdyindustries.com/pdf/financial/Related%20Party%20policy.pdf

TRANSFER TO RESERVES

The debit balance of Profit and Loss account for the financial year ended 31^st March, 2023 amounting to Rs. 410.82 Lakhs.

TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

No unclaimed or unpaid amount is lying in the books of the company which is required to be transferred to Investor Education and Protection Fund.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT

There are no material changes and commitments in the business operations affecting the financial position of the company from the financial year ended 31^st March, 2023 to the date of signing of the Director's Report. However, Punjab National Bank has filed a CIRP petition vide Application Number CP(IB)Number 133/Chd/Pb/2023 against the company with Hon'ble National Company Law Tribunal, Chandigarh.

NOMINATION AND REMUNERATION COMMITTEE POLICY

Your Board has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management Personnel of the company. This policy also lays down criteria for selection and appointment of Board Members. The detail of this policy is explained in the Report on Corporate Governance. The Nomination and remuneration Policy is available on the website of the company atwww.sturdyindustries.in and direct web link to the policy is at http://www.sturdyindustries.in/pdf/financial/Nomination-Remuneration%20Policy.pdf

RISK MANAGEMENT POLICY

The risk management framework defines the risk management approach of the company and includes periodic review of such risks and also documentation, mitigating controls and reporting mechanism of such risks. The provisions of risk management committee pursuant to the Companies Act, 2013 are not applicable to the company. Hence, any standard policy has not been drafted.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(9) and 177(10) of the Companies Act 2013, the company has in place a well formulated Vigil Mechanism/Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The purpose of vigil mechanism is to provide for adequate safeguards against victimization of persons who use such mechanism and allows direct access to the Chairperson of the audit committee in exceptional cases. The policy enables the employees, Directors and other stakeholders to raise their concern about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics.

There was no incident when the access to the Audit Committee was denied to any employees with respect to vigil mechanism. The policy is posted on the website of the Company at www.sturdyindustries.in and direct web link to the policy is at http://www.sturdyindustries.in/pdf/financial/Vigil%20Mechanism.pdf

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 relating to Corporate Social Responsibility are not applicable to the company, since the company is incurring losses from past few years.

DEPOSITS

The following details of deposits, covered under Chapter V of the Act:

a) Deposits accepted during the year; NIL

b) Remained unpaid or unclaimed as at the end of the year; NIL

c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved; NIL

d) The details of deposits which are not in compliance with the requirements of Chapter V; NIL

CHANGES IN SHARE CAPITAL, IF ANY

During the financial year under review, there is no change in the authorized as well as paid up share capital of the company. The authorized share capital of the company is Rs. 150,10,00,000/- (Rupees One Hundred Fifty Crore Ten Lakh Only) consisting of 16,75,00,000 Equity Shares of Rs. 2/- (Rupees Two Only) each , 2,00,000 (Two Lacs only) Redeemable Preference share of Rs. 100/- (Rupees Hundred Only) and 1,14,60,000 (One Crore Fourteen Lakh Sixty Thousand) 0.01% Redeemable Preference share of Rs. 100/- (Rupees Hundred Only).

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your company has an effective internal control and risk-mitigation system, which is constantly assessed and strengthened with new/revised standard operating procedures. The company's internal control system is commensurate with its size, scale and complexities of its operations. The internal and operational audit is entrusted reputed firms of Chartered Accountants. The main trust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the Industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The report on Internal Financial Control under Clause (i) of Sub- Section 3 of Section 143 of the Companies Act 2013, is enclosed in the Annexure-B to the Independent Auditors' Report.

AUDITORS AND AUDITORS' REPORT STATUTORY AUDITOR

M/s. K Singh & Associates, Chartered Accountants were appointed as the Statutory Auditors of the company to hold office till the conclusion of the Annual General Meeting to be held for the Financial Year ended 31^st March, 2023. Further, they have also expressed their willingness to act as the Statutory Auditors of the company, if re-appointed and have further confirmed that the said appointment would be in conformity with the provisions of Section 139, 141 of the Companies Act, 2013. Based on the eligibility certificate given by the said auditors under Section 141 of the Companies Act, 2013, the Board of Directors recommend the re-appointment of M/s. K Singh & Associates, Chartered Accountants, as the Statutory Auditors of the company to hold office from the conclusion of this Annual General Meeting till the conclusion of Annual General Meeting to be held for the Financial year ended 31^st March, 2028.

The Notes to Accounts referred to in the Auditors' Report on “Note No. 28” are self-explanatory and therefore do not call for any further comments. There is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

SECRETARIAL AUDITOR AND SECRETARIAL AUDITOR REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made there under, the company has appointed Ms. Riya Garg, proprietor of M/s. Riya Garg and Associates, Company Secretaries (C.P. Number: 22677) as Secretarial Auditors to undertake the Secretarial Audit of the company. The Secretarial Audit Report in prescribed Form MR-3 given by aforesaid Secretarial Auditors is annexed to this Board Report as Annexure-2 and forms an integral part.

The reply of the management to the qualification/reservation/adverse remark of the Secretarial Auditor is as follows:

ANNUAL SECRETARIAL COMPLIANCE REPORT

As required under Regulation 24A of the SEBI (LODR) Regulations, 2015 the company has obtained the secretarial compliance report for the financial year ended 31^st March, 2023 from M/s. M.R. Chechi and Associates, Company Secretaries, Chandigarh and same is attached as Annexure-3 to this report.

COST AUDITORS

The provisions of Section 148 of the Companies Act, 2013 relating to appoint of Cost of Auditors and Cost Audit are not applicable to the company for the Financial Year 2022-2023 since the turnover the company is below the limit prescribed under the Act and Rules made thereunder.

CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 relating to “Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo” is given in the Annexure-4 forming an integral part of this report.

MANAGERIAL REMUNERATION

The statistical disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed with this report as Annexure-5.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The company has in place an anti-harassment policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There was no compliant received from any employee during the Financial Year 2022-2023 and hence, no complaint is outstanding as on 31^st March, 2023.

The policy has been posted on the website of the company at www.sturdyindustries.in under the head “Investor”.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussions and Analysis Report as required, pursuant to Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 is annexed and forms part of this report.

CORPORATE GOVERNANCE

The company has complied with all the conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

A separate section on Corporate Governance along with a certificate from the Auditors of the company confirming the compliance is annexed and forms part of this Report. The Board has also evolved and adopted a Code of Conduct based on the principles of Good Corporate Governance and best management practices being followed globally.

CASH FLOW ANALYSIS

In conformity with the provisions of Clause 34(2) of SEBI (LODR) Regulations, 2015, the Cash Flow Statement for the year ended on 31^st March, 2023 forms an integral part of the Financial Statements.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS

There were no frauds reported by the Auditors as prescribed under sub-section (12) of Section 143 of the Companies Act, 2013 during the Financial Year under review.

DISCLOSURE IN RESPECT OF VOTING RIGHTS NOT EXERCISED DIRECTLY BY THE EMPLOYEES IN RESPECT OF SHARES TO WHICH SCHEME UNDER SECTION 67 RELATES N.A. COMPLIANCE WITH SECRETARIAL STANDARDS

The company is in compliance with all the applicable Secretarial Standards.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

Punjab National Bank has filed a CIRP petition vide Application Number CP(IB)Number 133/Chd/Pb/2023 against the company with Hon'ble National Company Law Tribunal, Chandigarh. Further an application for the recovery of Rs. 384.29 crore has been filed by Punjab National Bank before Debt Recovery Tribunal, Delhi and the matter is sub-judice.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF N.A.

PERSONNEL

Your Directors place on record their appreciation for the significant contribution made by all the employees, who through their competence, hard work, solidarity and co-operation, have enabled the company to withstand the impact of slowdown.

TRADE RELATIONS

The Board wishes to place on record its appreciation for the support and co-operation that the Company received from its suppliers, distributors, retailers and other associates. The Company has always looked upon them as partners in its progress and has happily shared with them rewards of growth. It will be Company's endeavor to build and nurture strong links based on mutuality, respect and co-operation with each other and consistent with customer interest.

ACKNOWLEDGEMENT

The directors wish to convey their sincere appreciation for the co-operation and excellent assistance the company has received from Central/State Government(s) and various ministries, departments of the central/state government(s), dealers and valued business associates without which it would not have been possible to achieve all round progress and growth of the Company. The Board also places on record its appreciation to all investors, banks, regulatory and government authorities, for their continued support continued trust and support. The Board also places on record its appreciation for the continuous patronage of the customers of the company.