Sturdy Industries Ltd Directors Report.

To

The Members,

The Board of your Company is immensely delighted in presenting its 31stAnnual Report. The Report is being presented along with the Audited Financial Statements for the Financial Year ended March 31, 2020.

FINANCIAL HIGHLIGHTS

PARTICULARS Year Ended March 31st 2020 Year Ended March 31st 2019
(Rs. In lacs) (Rs. In lacs)
Revenue from Operations 12,203.37 18,524.81
Other Income 2,553.96 1,021.84
Total Income 14,757.33 19,546.65
Less.Expenses 24,674.75 19,946.11
Profit (Loss) before tax (9,917.42) (399.47)
Extraordinary Items (8,428.73) (1,625.75)
Tax Expenses:
Less: Current Tax 0.00 0.00
Less: Deferred Ta x (2,503.74) (199.07)
Less: Net of Tax after comprehensive Income/Loss (0.00) (6.82)
Total Profit/(Loss) After Tax (15,842.41) (18,32.97)

REVIEW OF OPERATIONS AND BUSINESS PERFORMANCE

During the financial year under review, the company has achieved turnover including (income from other sources) of Rs. 14,757.33 Lakhs. However, the expenditure side of the Company has also been proportionally increased to Rs. 24,674.75 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

Taking into account loss incurred by the Company, Board of directors of the Company do not recommend any dividend for the year ended 31stMarch, 2020.

LISTING OF SHARES

Presently, The Equity Shares of the Company are listed on the BSE Limited (Bombay Stock Exchange Ltd.) and the Company has paid the Annual Listing Fees to BSE for the financial year 2020-21.

BORROWINGS

Total borrowings of the company both long term and short term as on 31st March, 2020 are amounting Rs. 17,428.73 Lakhs as compared to previous year ended 31st March 2019 of amounting Rs. 24,963.96 Lakhs (For details Refer Note No. 13, 14 and Note No. 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

The extracts of Annual Return pursuant to the provisions of Section 92(3) and 134(3)(a) of the Act read with Rule 12(1) of the Companies (Management and administration) Rules, 2014 is furnished in Form MGT-9 and is attached as Annexure-1 to this Report.

BOARD AND COMMITTEE MEETINGS

The details of meetings of the Board and committee thereof held during the financial year 2019-20 is provided in the Report on Corporate Governance which forms the part of this report.

DIRECTORS 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 & 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 of the various aspects of the Boards 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 expresses 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

In accordance with the provisions of Section 152 of the Act read with the Articles of Association of the Company, Mr. Ramesh Gupta (DIN 0161363), Whole- Time Director of the company, will retire by rotation at the AGM and being eligible, offers himself for re-appointment. Your Board has recommended his re-appointment.

In the view of the stipulation imposed by the bank as per Debt Resolution plan, to create majority of non-promoter directors. Mr. Mohan Lal Gupta and Mr. Amit Gupta as resigned from the directorship of the company on 07.10.2019.

Mr. Shamsher Kumar Sharma appointed as Managing Director of the Company and Mr. Amit Bhatti as Whole Time Director of the Company.

Brief resume/details of the Directors, who are to be re-appointed as mentioned herein, have been furnished alongwith the Explanatory Statement(Note 9) to 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 year under review, the company has neither made any investment nor granted any loan & guarantee within the meaning of Section 186. However, the details of the Loans and investments under section 186 of the Companies Act 2013 are in Note No.2 of the audited financial statements of the company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year,Company has entered into certain transactions with related parties 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 as Annexure - 2.

The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website at www.sturdyindustries.com and direct web link to the policy is at

http://www.sturdvindustries.com/pdf/financial/Related%20Partv%20policv.pdf

TRANSFER TO RESERVES

During the year under review, company incurred Losses of 158.42 Cr. and the same has been transferred to the reserve of the Company.

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 to be transferred to Investor Education & Protection Fund.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

During the year under review, no material change took place which may effect the financial position of the company.

NOMINATION & 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 at www.sturdyindustries.com and direct web link to the policy is at http://www.sturdvindustries.com/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 Sturdy Industries Limited. Hence, any standard policy has not been drafted.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(9) & 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.comand direct web link to the policy is at http://www.sturdyindustries.com/pdf/financial/Vigil%20Mechanism.pdf

CORPORATE SOCIAL RESPONSIBILITY

The Provisions relating to Section 135 of the Companies Act, 2013 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.

CHANGES IN SHARE CAPITAL, IF ANY

During the year, there has change in the Authorized as well as paid up share capital of the company. Company has increased Authorized share capital from Rs. 35,50,00,000/- (Rupees Thirty Five Crore Fifty Lakh Only) consisting of 16,75,00,000 Equity Shares of Rs. 2/- (Rupees Two Only) each and 2,00,000 (Two Lacs only) Redeemable Preference share of Rs.100/- (Rupees Hundred Only) to 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), by creation of additional 1,14,60,000(One Crore Fourteen Lakh Sixty Thousand) 0.01% Redeemable Preference share of Rs. 100/- each.

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 are constantly assessed and strengthened with new/revised standard operating procedures. The Companys 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, beside 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

The members had at 29th AGM of the Company appointed M/s.K Singh & Associates (Firms Registration Number: 012458N) as Statutory Auditors of the company to hold the office from the close of the 29th AGM till the conclusion of the 34th AGM, subject to their appointment being ratified by the members in every AGM. The members of the Company approved deletion of the requirement of seeking ratification of appointment of Statutory Auditors at every AGM pursuant to amendment brought by the Companies Amendment Act, 2017.

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.

Following are the reply in respect of the Auditor observations:-

Auditor Observation Reply
Attention is invited to Note No 22 of the financial statements the company has written off unsecured corporate loans amounting to Rs. 2279.69 Lacs and the same has been considered as other income and loss to that extent has been understated. There is agreement between the companies to waive off the unsecured loan. As Company is not in a position to repay unsecured loan. Some of the unsecured loans are time bar and not claimable.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed M/S Himanshu Sharma & Associates, Company Secretary in Practice (C.P. No. 11553) as Secretarial Auditor to undertake the Secretarial Audit of the Company. The Secretarial Audit Report in prescribed format MR-3 given by aforesaid Secretarial Auditors is annexed to this Board Report as Annexure 3and forms an integral part.

Following are the reply in respect of the Auditor observations:-

Auditor Observation Reply
Company has not appointed Chief Financial Officer as required under the provisions of Section 203 of the Companies Act, 2013 read with companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 & Listing Agreement. CFO AmitBhatti resigned on 07/10/2019 after that Company as not appointed new CFO. The company was in search of qualified person who can represent the company as CFO. Further, Company office is situated in remote area, therefore, the availability of human resource were very less.
But now, the company has re-appointed Mr. AmitBhatti as WTD Cum CFO on 30.06.2020
Company Website is not updated after 30/06/2019 as per Companies Act, 2013 and Regulation 46 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Company website was down due to technical error at the time of Audit. Now the error has been rectified and all the required documents/information are available on the Website of the Company and necessary links has been provided in the Board Report wherever required.
Company has not uploaded voting result within 48 Hour of the Conclusion of AGM. AGM was held on 28/09/2019 and was disseminated on stock exchange dated 05/10/2019 This delay happens due technical error faced at the time of uploading. Company was not able to upload the same on time. However, the same was uploaded on 05/10/2019.

COST AUDITORS

As per the requirements of Central Government and pursuant to the provisions of Section 148 of the Companies Act, 2013, M/s Balwinder & Associates, Cost Accountants (Firm Registration No. 000201), Chandigarh were appointed as the Cost Auditors of the Company for FY 2019-20 to audit the cost accounts of the Company. They have been re-appointed as Cost Auditors for FY 2020-21.

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

Statistical Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed with this report as Annexure -5.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION- PROHIBITION & 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 & Redressal) Act, 2013. There was no compliant received from any employee during the financial year 2019-20 and hence no complaint is outstanding as on 31.03.2020.

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

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussions and Analysis Report as required, pursuant to Schedule V of Securities & 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 31st March, 2020 forms an integral part of the Financial Statements.

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 Companys endeavor to build and nurture strong links based on mutuality, respect and co-operation with each other and consistent with customer interest.

ACKNOWLEDGEMENT

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.

For and On Behalf of THE BOARD

OF STURDY INDUSTRIES LIMITED

PLACE: PARWANOO
DATE : 30.07.2020 Sd/- Sd/-
(SHAMSHER KUMAR SHARMA) (RAMESH GUPTA)
(DIN NO. 08063703) (DIN NO. 00161363)
MANAGING DIRECTOR WHOLE TIME DIRECTOR