sterling tools ltd share price Directors report

Companys performance and Future outlook

The Companys strategic objective is to develop a well-diversified presence across all automotive segments and improve the overall product mix with a focus on green energy. Under the guidance of experienced management, your Company has demonstrated internal growth potential with a young and dynamic workforce which enables your Company to excel in new business areas. FY 2022-23 was the first full year post covid-19 disruption with the stable business environment. The key highlights of the Companys performance (Standalone) during the FY 2022-23 are as under:

? Revenue from Operations increased by 27% at Rs. 598 Crores;

? Profit before tax increased by 43% at Rs. 57 Crores;

? Profit after tax increased by 39% at Rs. 41 Crores;

? Cash profit increased by 27% at Rs. 72 Crores.

FY 2022-23 was also the first full year of the operations of Sterling Gtake E-Mobility Limited (SGEM), the wholly owned subsidiary of Sterling Tools Limited, which is one of

STERLING TOOLS LIMITED

the largest Motor Control Unit (MCU) supplier for electric high-speed scooters in India. With the positive Profit After Tax (PAT) of SGEM in its first full year of operation, the Companys consolidated income raised to Rs. 775 Crores (51% higher). Management looks at the future with optimism and hopes to touch new heights in times to come. The outlook of the Company as well as the Automobile Industry is provided in detail in Management Discussion and Analysis Report forming part of this Directors Report.

Transfer to General Reserve

During the year under review, the Company has not transferred any funds to General Reserves out of the amount available for appropriation.

Dividend

The Company has a robust track record of rewarding its shareholders with a generous dividend pay-out. In view of the strong operational and financial performance during the year under review, the Board of Directors are pleased to recommend a final dividend of Rs. 2 per equity share of face value of Rs. 2/- each (100%) for the year ended 31 March, 2023 subject to the approval of shareholders in the ensuing Annual General Meeting of the Company. The dividend pay-out will be in accordance with the Companys Dividend Distribution Policy. The Policy is available on the Companys website https://stlfasteners.com/wp-content/ uploads/2022/05/Dividend-Distribution-Policy-.pdf. As per the prevailing provisions of the Income Tax Act, 1961, the dividend, if declared, will be taxable in the hands of the shareholders at the applicable rates. The Company shall, accordingly, make the payment of Final Dividend after deduction of Tax at Source. Regarding the details of procedure for declaration & payment of dividend, shareholders are requested to refer to the Notice of 44^th Annual General Meeting of the company.

Deposits

During the year under review, the Company has not accepted any deposits which come under the purview of Section 73 of the Companies Act, 2013, and as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

Depository System

As the members are aware, the Company shares are compulsorily tradable in electronic form. As on 31 March, 2023, 99.77% of the Companys total paid-up Capital representing 3,59,40,675 equity shares are in dematerialised form. In view of numerous advantages offered by the Depository System, members holding shares in physical mode are advised to avail of the facility of dematerialisation from either of the Depositories.

Capital Structure and Listing

As on 31 March, 2023, the Company has Authorised Share Capital of Rs. 10,00,00,000/- and Paid Up Share Capital of

Rs. 7,20,48,422/-. The equity shares of the Company are listed with BSE Limited and National Stock Exchange of India Limited. The Company had paid the Listing fees to both the Stock Exchanges and there are no arrears on account of payment of listing fees to the said Stock Exchanges. The Promoters and Persons acting in concert with them hold 65.77% share capital of the Company as on 31 March, 2023.

There is no change in share capital structure during the year under review.

Subsidiaries, Joint Venture and Associate Companies

As on 31 March, 2023, the Company has 2 Wholly owned Subsidiaries. The highlights of the performance and other details of subsidiary Companies are given below:

1. Sterling Gtake E-Mobility Limited: Sterling Gtake E-Mobility Limited (SGEM) was incorporated on 10 January, 2020 for the purpose of manufacturing/ developing and trading Motor Control Units (MCUs) for Electric Vehicles on technical collaboration with a China based Company named Jiangsu Gtake Electric Company Limited. During the year under review, SGEM recorded a total revenue of Rs. 17,469.43 Lacs which is 4.5 times of previous year and the profit after tax for the year ended 31 March, 2023 is Rs. 748.04 Lacs i.e. Net profit in first year of its full operations.

2. Haryana Ispat Private Limited: The Company acquired 100% shareholding of Haryana Ispat Private Limited (HIPL). For the financial year ended 31 March, 2023, HIPL recorded the revenue of Rs. 9.77 Lacs and the Profit after Tax for the year ended 31 March, 2023 is Rs. 5.46 Lacs.

3. Sterling Fabory India Private Limited

S terling Fabory India Private Limited (JV Company) was incorporated on 9 March, 2010 as a Joint Venture (JV) Company between Sterling Tools Limited and Fabory Masters in Fasteners Group BV. During the year under review, the Company has paid off all the liabilities and the balance amount left after setting off assets and liabilities, was remitted to the Shareholders of the Company. JV Company vide its Annual General Meeting dated

03 June, 2022 appointed a Voluntary Liquidator to liquidate its operation. The petition for Voluntary Liquidation was filed by the Voluntary Liquidator, Mr.Chetan Gupta with the National Company Law Tribunal (NCLT) on 23 March, 2023 and the Honble NCLT vide its Order dated 16 June, 2023 has given approval for Voluntary Liquidation of JV Company. In accordance with Section 129(3) of the Companies Act, 2013, a statement containing the salient features of financial statements in Form AOC-1 annexed as

Annexure -1.

Consolidated Financial Statements

Your Directors have pleasure in enclosing the audited Consolidated Financial Statements in addition to the audited standalone financial statements pursuant to Section 129(3) of the Companies Act, 2013 (Act) read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations) and prepared in accordance with the Indian Accounting Standards prescribed by the Institute of Chartered Accountants of

India.

The Consolidated Profit and Loss Account for the period ended 31 March, 2023, includes the Profit and Loss Account for both the subsidiaries i.e. Haryana Ispat Private Limited and Sterling Gtake E-Mobility Limited for the complete Financial Year ended 31 March, 2023 and Profit and Loss Account for Joint Venture viz. Sterling Fabory India Private Limited for the period upto June 2, 2022. In accordance with the third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements have been placed on the website of the Company in the Annual report section at https://stlfasteners.com/home/investors/.

Change in the nature of business, if any.

There is no change in the nature of business of the Company during the financial year ended 31 March, 2023.

Directors and Key Managerial Personnel

The Company has a professional Board with an optimum combination of Executive and Non-executive Director who bring to the table the right mix of knowledge, skills and expertise. The Board provides strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of stakeholders. During the year under review, the Non-Executive Director of the Company had no pecuniary relationship or transactions with the Company other than sitting fees, Advisory fees, if any, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board /Committee of the Company.

During the FY 2022-23, no changes took place in the composition of the Board of Directors of the Company. In accordance with Section 152 of the Act, Mr. Anil Aggarwal (DIN:0027214), who has been in the office, is liable to retire by rotation at the ensuing 44^th Annual General Meeting and being eligible, seeks re-appointment. The Board recommends his appointment for the approval of the members of the Company in the ensuing 44^th AGM. A resolution seeking shareholders approval for his reappointment forms part of the Notice of AGM.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are Mr. Anil Aggarwal, Chairman & Managing Director, Mr. Atul Aggarwal, Whole Time Director and Mr. Pankaj Gupta, Chief Financial Officer of the Company as on 31 March, 2023. Ms. Vaishali Singh, Company Secretary cum Compliance Officer vide her letter dated 9 November, 2022 tendered her resignation from the position of Company Secretary cum Compliance Officer of the Company to the Board of Directors of the Company w.e.f closure of business hours of 9 November, 2022. In her place, Mr. Abhishek Chawla has been appointed as Company Secretary and Compliance Officer of the Company in the Board Meeting held on 08 May, 2023, based on recommendation of Nomination & Remuneration Committee Meeting held on that date.

Declaration of Independence by Independent Directors.

During the year under review, all Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations and have complied with the Code of Conduct for Independent Directors prescribed in Schedule IV of the Act. In the opinion of the Board of Directors, all the Independent Directors have relevant integrity, skills, expertise, experience and proficiency.

Number of meetings of the Board and attendance of the Directors

The Board met 4 (Four) times during the FY 2022-23, in respect of which notices were given and the proceedings were properly recorded. For details of the meetings of the Board and attendance of the Directors, please refer Page No. 51 of Corporate Governance Report attached to this Annual Report.

Disclosure under Secretarial Standards (SS-1 & SS-2):

The Company complies with the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and approved by the Central Government under Section 118 (10) of Companies Act, 2013.

Policy on Directors appointment and remuneration and other details

The Companys policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided in Section 178(3) and Section 134(3) (e) of the Companies Act, 2013 has been disclosed in Annexure–II attached to this Report and the same have been place on the Website of the Company at https://stlfasteners.com/home/investors/.

Policy on Board Diversity

The Company recognises and embraces the importance of a diverse Board in its success. We believe that a truly diverse Board will leverage differences in thought, perspective, regional and industry experience, cultural and geographical background, age, ethnicity, race, gender, knowledge and skills including expertise in financial, global business, leadership, technology, mergers & acquisitions, Board service, strategy, sales and marketing, Environment, Social and Governance (ESG), risk and cybersecurity and other domains, which will ensure that the Company retains its competitive advantage. The Board Diversity Policy adopted by the Board sets out its approach to diversity.

The Nomination and Remuneration Committee reviews and assesses board composition on behalf of the board and recommends the appointment of new Directors and Senior Management Personnel including functional Heads of the Company. The committee also oversees the conduct of the annual review of board effectiveness. The Nomination & Remuneration Committee and the Board in their meetings held on 8 May, 2023 have also included the functional head under the category of Senior Management Personnel of the Company. The said Committee has adopted a formal policy on Board diversity which sets out a framework to promote diversity on Companys Board of Directors.

Particulars of contracts or arrangements with Related Parties

The particulars of every contract and arrangement entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto are disclosed in Form No. AOC-2 in ANNEXURE – III and forms part of this Report.

Audit Committee - Meetings of the Committee & Attendance of Members

The Audit Committees composition meets with requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations, 2015. Members of the Audit Committee possess financial / accounting expertise / exposure. The purpose of this Committee is to ensure the objectivity, credibility and correctness of the Companys financial reporting and disclosures process, internal controls, risk management policies and processes, tax policies, compliance and legal requirements and associated matters.

As at 31 March, 2023, the Audit Committee of the Board of Directors of the Company comprised of 4 (Four) Members, namely Mr. Chhotu Ram Sharma, Mr. Rakesh Batra, Mr. Shailendra Swarup, and Mr. Anil Aggarwal, majority of them being Independent Directors except Mr. Anil Aggarwal, who is the Chairman cum Managing Director of the Company. Mr. Chhotu Ram Sharma, Independent Director, is the Chairman of the Audit Committee. The Board accepted the recommendations of the Audit Committee whenever made by the Committee during the year under review.

Four meetings were conducted during the year in respect of which proper notices were given and the proceedings were properly recorded. For details of the meetings of the Audit Committee and attendance of the Members, please refer Page No. 55 of Corporate Governance Report attached to this Annual Report.

Nomination & Remuneration Committee - Meetings of the Committee & Attendance of Members

The Nomination & Remuneration Committees (NRC) composition meets with requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations, 2015. As at 31 March, 2023, the NRC Committee of the Board of Directors of the Company comprised of 3 (Three) Members, namely Mr. Chhotu Ram Sharma, Mr. Rakesh Batra and Mr. Shailendra Swarup, all of them being Independent Directors. Mr. Chhotu Ram Sharma, an Independent Director, is the Chairman of the Committee. One meeting of NRC Committee was conducted during the year in respect of which proper notice was given and the proceedings were properly recorded. For details of the meetings of the NRC Committee and attendance of the Members, please refer Page No. 55 of Corporate Governance Report attached to this Annual Report.

Stakeholders Relationship Committee - Meetings of the Committee & Attendance of Members

The Stakeholders Relationship Committees (SRC) composition meets with requirements of Section 178(5) of the Companies Act, 2013 and Regulation 20 of the Listing Regulations, 2015. As at 31 March, 2023, the SRC Committee of the Board of Directors of the Company comprised of 3 (Three) Members, namely Mr. Shailendra Swarup, Mr. Chhotu Ram Sharma and Mr. Atul Aggarwal and majority of them being Independent Director except Mr. Atul Aggarwal, who is Whole time Director of the Company. Mr. Shailendra Swarup, an Independent Director, is the Chairman of the Committee. One meeting of SRC Committee was conducted during the year in respect of which proper notice was given and the proceedings were properly recorded. For details of the meetings of the SRC Committee and attendance of the Members, please refer Page No. 56 of Corporate Governance Report attached to this Annual Report.

Risk Management Committee - Meetings of the Committee & Attendance of Members

The Risk Management Committees (RMC) composition meets with requirements of Regulation 21 of the Listing Regulations, 2015. As at 31 March, 2023, the RMC Committee of the Board of Directors of the Company comprised of 5 (Five) Members, namely Mr. Anil Aggarwal, Mr. Rakesh Batra, Mr. Atul Aggarwal, Mr. Jaideep Wadhwa and Mr. Pankaj Gupta. Two meetings of RMC Committee were conducted during the year in respect of which proper notice were given and the proceedings were properly recorded. For details of the meetings of the RMC Committee and attendance of the Members, please refer Page No. 57 of Corporate Governance Report attached to this Annual Report.

Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations.

Based on the guidance note on Board Evaluation issued by the Securities and Exchange Board of India on 05 January, 2017, a structured questionnaire was prepared after taking into consideration the various aspects of the Boards functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations, and governance. In a separate meeting of independent directors, the performance of non-independent directors, the board as a whole and the Chairman of the Company was evaluated, considering the views of Executive Directors and Non-Executive Directors of the Company. The Board and the Nomination and Remuneration Committee reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In the Board meeting that followed the meeting of the independent directors and meeting of the Nomination and Remuneration Committee, the performance of the board, its committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

Corporate Social Responsibility Committee

Composition of the Corporate Social Responsibility Committee has been disclosed in the Corporate Governance Report, attached to this report. The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure–IV of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy on CSR is available on the website of the Company, (https://stlfasteners.com/home/investors/).

I) Statutory Auditors

As per provisions of Section 139(1) of the Companies Act, 2013, the Company has appointed M/s Walker Chandiok & Co., LLP Chartered Accountants as Statutory Auditors for a period of 5 (Five) years in the AGM of the Company held on 22 September, 2022.

Statutory Auditors Report

There have been no qualification, reservation or adverse remark reported by the Statutory Auditors in its reports on standalone and consolidated financial statements of the Company for year ended 31 March, 2023.

II) Secretarial Auditors report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with corresponding Rules framed thereunder, M/s Dhananjay Shukla & Associates, Company Secretaries, were appointed as the Secretarial Auditors of the Company to carry out the secretarial audit for the year ending 31 March, 2023.

Secretarial Audit Report

In terms of Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI Listing Regulations a Secretarial Audit Report given by the Secretarial Auditors in Form No. MR-3 is annexed with this Report as Annexure – V. There are no qualifications, reservations or adverse remarks made by Secretarial Auditors in their Report.

Annual Secretarial Compliance Report

Annual Secretarial Compliance Report for the financial year ended 31 March, 2023 on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder, was obtained from M/s Santosh Kumar

Pradhan, Practicing Company Secretaries. The Annual Secretarial Compliance Report doesnt contain any qualification, reservation, or adverse remarks.

III) Cost Auditors

As per Section 148 of the Companies Act, 2013, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice.

Pursuant to the provisions of Section 141 read with Section 148 of the Companies Act, 2013 and Rules made thereunder, M/s Jitender, Navneet & Co., Cost Accountants were appointed as the Cost Auditor of the Company for the year ending 31 March, 2023.

Disclosure on maintenance of Cost Records

The Company has maintained the cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, as required by the Company and such accounts and records are made and maintained as per rule 8(5)(ix) of the Companies Accounts Rules, 2014.

Details in respect of Fraud, if any, Reported by the Auditors

M/s Walker Chandiok & Co., LLP, Chartered Accountants, the Statutory Auditors of the Company have stated that during the course of their audit, there were no fraud by the Company or on the Company by its officers or employees, noticed or reported in the Independent Auditors Report which forms part of this Report. Hence, there was no requirement to report the same to the Audit Committee or Board of Directors of the Company.

Internal Financial Control Systems and their adequacy

The Company has a robust Management Information System, which is an integral part of the control mechanism. The Company has adopted the policies and procedures which intended to increase the transparency & accountability in designing and implementation of the system of internal control in the Company. The management assessed the effectiveness of the Companys internal control over financial reporting (as defined in Clause 18(3) of SEBI Listing Regulations) as of 31 March, 2023.

Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed. Nonetheless your Company recognises that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

M/s Walker Chandiok & Co., LL.P., the statutory auditors of the Company have audited the financial statements is included in this annual report and have issued an attestation report on our internal control over financial reporting (as defined in section 143 of Companies Act 2013). The Company has well established Internal audit function. Risk based audit are performed for all businesses, functions & locations (Plant, Branch, warehouse, corporate office). The internal audit is entrusted to M/s S.R. Dinodia & Co., LLP, a firm of Chartered Accountants for the North based manufacturing plants of the Company and M/s Protiviti India Member Private Limited for South based manufacturing plant of the Company. Internal Audit plan is approved by the Audit Committee, further on a quarterly basis summary of key findings along with their root cause analysis and action taken status are presented to the Audit Committee. The main thrust 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, Statutory Auditors and the Management Personnel are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

Based on its evaluation (as defined in section 177 of Companies Act 2013 and Clause 18 of SEBI Listing Regulations 2015), our audit committee has concluded that, as of 31 March, 2023, our internal financial controls were adequate and operating effectively.

Risk Management

The Company has constituted a Risk management committee and formulated a Risk Management policy to identify, assess and mitigate various risks related to our business, which is covered in detail in the Management Discussion and Analysis Report.

The Company manages, monitors and reports on the principal risks and uncertainties that can impact on its ability to achieve its strategic objectives. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis.

Vigil Mechanism/Whistle Blower Policy

Pursuant to the provisions of Section 177(9) of The Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI Listing Regulations, the Company has adopted a policy on Vigil Mechanism for directors and employees to report their genuine concerns or grievance to the Vigilance Officer. The policy is available on the Company website https://stlfasteners.com/home/ investors/.

Extract of Annual Return

As provided under section 134(3)(a) and Section 92(3) of the Companies Act, 2013, the draft Annual Return in the prescribed form MGT-7 as on 31 March, 2023 is available on the Companys website at www.stlfasteners.com/ investors/.

Particulars of Loans, Guarantees or Investments under section 186

Particulars of loans, guarantees given and investments made during the year, as required under section 186 of the Companies Act, 2013 and schedule V of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirement) Regulations, 2015, are provided in Notes 5 and 14 of the standalone financial statements.

Material changes and commitments

In terms of Section 134(3)(l) of the Companies Act, 2013, no material changes and commitments which could affect the Companys financial position has occurred between the end of the financial year of the Company and date of this report.

Credit Rating

The ICRA Limited ("ICRA"), the credit rating agency has reafirmed the Long-Term Credit rating AA- Outlook Stable as well as Short Term Credit Rating A1+ of the Company. This rating indicates the strong financial health and credibility of the Company.

Particulars of Employees

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided as Annexure VI. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with rule

5(1) of the Companies (Appointment and Remuneration of Managerial Personnel Rules, 2014) Having regard to the provisions of the first proviso to Section 136(1) of The Companies Act, 2013 and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection on all working days, during business hours, at the Registered Office of the Company. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

Capital Expenditure

As on 31 March, 2023, the Gross Fixed Assets including intangible assets stood at Rs. 49,533.34 Lacs and Net Fixed Assets stood at Rs. 25,692.30 Lacs. Additions during the year amounted to Rs. 2,202.49 Lacs.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

Information pursuant to the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption & foreign exchange earnings and outgo is given by way of Annexure-VII to this Report.

Transfer to Investor Education and Protection Fund

Pursuant to the provisions of Section 125 of the Companies Act, 2013, relevant amounts along with the shares, which remained unpaid or unclaimed for a period more than seven years have been transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund. Pursuant to the provisions of Investor Education and Protection Fund (Accounting, Audit, Transfer & Refund) Rules, 2016, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the Ministry of Corporate Affairs website and the shareholders may refer to the Notice of AGM regarding details of amounts and the corresponding shares proposed to be transferred to IEPF during the coming year.

Corporate Governance and Management Discussion & Analysis Report

A separate section on corporate governance practices followed by the Company, together with a certificate from a Practising Company Secretary confirming its compliance, forms a part of this Annual Report, as per SEBI Listing Regulations. Further, as per Regulation 34 read with Schedule V of the Listing Regulations, a Management Discussion and Analysis Report is annexed to this report.

Business Responsibility and Sustainability Report (BRSR)

At a time and age when enterprises are increasingly seen as critical components of the social system, they are accountable not merely to their shareholders from a revenue and profitability perspective but also to the larger society which is also its stakeholder. The Business responsibility and sustainability report seeks disclosure on the performance of the Company against nine principles of the "National Guidelines on Responsible Business Conduct (‘NGRBCs). As per the SEBI Circulars, effective from the FY 2022-23, reporting & filing of BRSR is mandatory for the top One Thousand listed companies by market capitalization as on 31 March 2023 and your Company is covered under the said limit. BRSR describing the initiatives taken by the Company from an environmental, social and governance perspective, in the format as specified by SEBI is enclosed to this Report.

Directors Responsibility Statement

Pursuant to the requirement under section 134(3) (c) of the Companies Act, 2013 with respect to the Directors Responsibility Statement, it is hereby confirmed that: (i) in the preparation of the accounts for the FY ended 31 March, 2023, the applicable accounting standards have been followed and there are no material departures.

(ii) the Directors have selected accounting policies in consultation with Statutory Auditors and applied them consistently and made judgements 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 the financial year under review.

(iii) the directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013. The directors have confirmed that there are adequate control & systems for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) the Directors have prepared the accounts for the FY ended 31 March, 2023 on a ‘going concern basis. (v) 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.

(vi) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Safety, Health and Environment (SHE) Measures

Protection of the environment is the prime concern of your Company. Your Company complies with the relevant laws and regulations as well as take any additional measures considered necessary to prevent pollution, maximise recycle, reduce waste, discharges and emissions. Company Conserve natural resources by their responsible and efficient use in all its operations and plant trees.

Name of the companies which have become or ceased to be Companys subsidiaries, Joint venture or Associate Companies during the year

During the year under review Sterling Fabory india Private Limited, the Joint Venture Company vide its Annual General Meeting dated 03 June, 2022 appointed a Voluntary Liquidator to liquidate the Companys operation.

The petition for Voluntary Liquidation was filed by the Voluntary Liquidator, Mr. Chetan Gupta with the National Company Law Tribunal (NCLT) on 23 March, 2023 and the Honble NCLT vide its Order dated 16 June, 2023 has approved Voluntary Liquidation of the Company. Except as above, no Company have become or ceased to be the Companys subsidiaries, Joint Venture or Associate during the year ended 31 March, 2023.

Proceedings pending, if any, under the Insolvency and Bankruptcy code, 2016

The Company has neither filed any application during the year under review nor any proceedings pending under the Insolvency and Bankruptcy Code, 2016 as at 31 March, 2023.

The details of difference between amount of the time of one time Settlement and the Valuation done while taking loan from the Bank or Financial institutions along with the reasons thereof

No such event has occurred during the year under review.

Quality Management System

Cash Flow Analysis

In compliance with the provisions of Regulation 34 of the SEBI Listing Regulations Regulations, 2015, the Cash Flow Statement for the year ended 31 March, 2023 is part of this Annual Report.

Sexual Harassment

The Company has Constituted an Internal Complaint Committee as required under Section-4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder.

During the year under review, there were no complaints pertaining to sexual harassment.

Significant and Material Orders passed by the Regulators or Courts

The Company has not received any significant order, demand or notice from any Regulatory Authority, Courts or tribunals impacting the going concern status and operations of the Company in future.

Insurance

Your Company has taken appropriate insurance for all its assets against foreseeable perils.

Human Resources

Our employees are our most important assets. We are committed for hiring and retaining the best talent. For this, we focus on promoting a collaborative, transparent and participative organisation culture, and rewarding merit and sustained high performance. Our human resource management focuses on allowing our employees to develop their skills, grow in their career and navigate navigate to their next level of achievements next.

STL goal has always been to create an open and safe workplace for every employee to feel empowered, irrespective of gender, sexual preferences, and other factors, and contribute to the best of their abilities. Industrial relations remained cordial throughout the year under review.

The Company had a total of 585 permanent employees as on 31 March, 2023.

Weblink to Important documents/information

The Company has hosted certain policies/documents/ information including inter alia Policy for determining ‘Policy on Related Party Transactions, Familiarisation programs for Independent Directors etc. as per the requirement of law or otherwise on following the link: https://stlfasteners.com/investors/.

Acknowledgements

Your Directors would like to express their appreciation for the assistance and co-operation received from the Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by all Company personnel.