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The Board of your Company is immensely delighted in presenting its 29th Annual Report. The Report is being presented along with the Audited Financial Statements for the Financial Year ended March 31, 2018.
|PARTICULARS||Year Ended March 31st 2018||Year Ended March 31st 2017|
|(Rs. In lacs)||(Rs. In lacs)|
|Revenue from Operations||210,06.37||398,58.42|
|Profit (Loss) before tax||(2514.39)||(2,72.06)|
|Less: Current Tax||0.00||0.00|
|Less: Deferred Ta x||(3,63.54)||(1,20.59)|
|Less: Net of Tax after comprehensive Income/Loss||(17.93)||0.00|
|Total Profit/(Loss) After Tax||(21,32.93)||(3,92.65)|
REVIEW OF OPERATIONS AND BUSINESS PERFORMANCE
During the financial year under review, the company has achieved turnover including (income from other sources) of Rs. 232,18.78 Lakhs. However, the expenditure side of the Company has also been proportionally decreased to Rs. 257,33.18 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.
Taking into account loss incurred by the Company, Board of directors of the Company do not recommend any dividend for the year ended 31st March, 2018.
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 2018-19.
Total borrowings of the company both long term and short term as on 31st March, 2018 are amounting Rs. 25657.58 Lakhs as compared to previous year ended 31st March 2017 of amounting Rs. 23023.28 Lakhs
(For details Refer Note No. 12, 13 and Note No. 17 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 2017-18 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,
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 fulfil 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. Amit Gupta (DIN 00161417), 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 reappointment.
Ms. Puja (DIN 08054543), Additional Director appointed as Independent Director of the Company subject to the approval of the shareholders in the ensuing Annual General Meeting for the term of 5 years as prescribed under section 149 of The Companies Act 2013 and rules made there-under.
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.
Mr. Khem Chand resigned from the post of CFO (Chief Financial Officer) w.e.f. 25.07.2017 due to some unavoidable reasons.
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.sturdyindustries.com/pdf/financial/Related%20Party%20policy.pdf
TRANSFER TO RESERVES
During the year under review, company incurred Losses of 21.46 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.sturdyindustries.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.com and 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.
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 was no change in the Authorized as well as paid up share capital of the company.
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
M/s R K Deepak & Co, Chartered Accountants (FRN: 003145N) has shown their unwillingness to continue in providing services for the company as Statutory Auditors; therefore, pursuant to the provisions of Section 139 of the Companies Act 2013, the Board of Director recommended the appointment of M/s K. Singh & Associates, Chartered Accountant having Firm Registration No. 012458N for 5 (five) consecutive years from the conclusion of the 29th Annual General Meeting (AGM) until the conclusion of 34th AGM of the Company.
Also, The Board expressed sincere thanks to the retiring Auditors for being valuable part of the organization and wished them luck for growth in future.
As per MCA Notification vide no. S.O. 1833(E) dated 07.05.2018, the provision of ratification of appointment and remuneration of statutory Auditor has been omitted. Therefore, the appointment will not subject to ratification in the Annual General Meeting.
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.
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 3 and forms an integral part.
Following are the reply in respect of the Auditor observations:-
|Company has not filed Financial Results within stipulated time as prescribed under regulation 33 of SEBI (LODR) Regulations 2015 The company has not filed Form in respect of the appointment made in Board Meeting of Cost Auditor for the Financial Year 2017-18||The delay occurred due to non availability of Financial Statement by the auditors on time.|
|It was an inadvertent error. However, it was pointed out by the Secretarial Auditor during his audit. The company has made the default good by filing the form with additional fee.|
|The has not appointed Chief Financial Officer as required under the provisions of The Companies Act 2013 and rules made thereunder.||The company had appointed CFO but due to some unavoidable personal reasons he resigned from the position. However, the company is still in search of qualified person who can represent the company as CFO. Hence, the Company is situated in remote area; therefore, the availability of human resource is very less.|
|Company has not appointed Company Secretary as per the provisions of the Companies Act 2013 and rules made thereunder||The company is looking for a suitable candidate for posting at its registered office as Company Secretary.|
|During 2016-17 company advertised about the requirement of Company Secretary but due to the remote area nobody has shown their interest.|
|But, now on, the company has appointed Whole- time Company Secretary w.e.f. 21st July 2018.|
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 2017-18 to audit the cost accounts of the Company. They have been re-appointed as Cost Auditors for FY 2018-19.
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.
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 2017-18 and hence no complaint is outstanding as on 31.03.2018. 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.
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, 2018 forms an integral part of the Financial Statements.
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.
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.
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
|(MOHAN LAL GUPTA)||(RAMESH GUPTA)|
|(DIN NO. 00161184)||(DIN NO. 00161363)|
|MANAGING DIRECTOR||WHOLE TIME DIRECTOR|
DATE : 29.08.2017