The Board of your Company is immensely delighted in presenting its 29thAnnual Report. The Report is being presented along with the Audited Financial Statementsfor the Financial Year ended March 31 2018.
|FINANCIAL HIGHLIGHTS || || |
|PARTICULARS ||Year Ended March 31st 2018 ||Year Ended March 31st 2017 |
| ||(Rs. In lacs) ||(Rs. In lacs) |
|Revenue from Operations ||21006.37 ||39858.42 |
|Other Income ||2212.41 ||1134.56 |
|Total Income ||23218.78 ||40992.97 |
|Less: Expenses ||25733.18 ||41265.04 |
|Profit (Loss) before tax ||(2514.39) ||(272.06) |
|Tax Expenses: || || |
|Less: Current Tax ||0.00 ||0.00 |
|Less: Deferred Ta x ||(363.54) ||(120.59) |
|Less: Net of Tax after comprehensive Income/Loss ||(17.93) ||0.00 |
|Total Profit/(Loss) After Tax ||(2132.93) ||(392.65) |
REVIEW OF OPERATIONS AND BUSINESS PERFORMANCE
During the financial year under review the company has achieved turnover including(income from other sources) of Rs. 23218.78 Lakhs. However the expenditure side of theCompany has also been proportionally decreased to Rs. 25733.18 lakhs. Your management isstriving hard to improve the financial position of the Company by devising effectivemarketing 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 donot 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 StockExchange Ltd.) and the Company has paid the Annual Listing Fees to BSE for the financialyear 2018-19.
Total borrowings of the company both long term and short term as on 31st March 2018are amounting Rs. 25657.58 Lakhs as compared to previous year ended 31st March 2017 ofamounting 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) Rules2014 is furnished in Form MGT-9 and is attached as Annexure-1 to thisReport.
BOARD AND COMMITTEE MEETINGS
The details of meetings of the Board and committee thereof held during the financialyear 2017-18 is provided in the Report on Corporate Governance which forms the part ofthis report.
DIRECTOR'S 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 theBoard hereby submits its responsibility Statement:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; (b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period; (c) the directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof the Companies Act2013 for safeguarding the assets of the company and for preventingand detecting fraud and other irregularities; (d) the directors had prepared the annualaccounts on a going concern basis; and (e) The directors in the case of a listed companyhad laid down internal financial controls to be followed by the company and that suchinternal financial controls are adequate and were operating effectively.
(f) The directors had devised proper systems to ensure compliance with the provisionsof 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 Companyconfirming that they meet with the criteria of independence as prescribed undersub-section (6) of Section 149 of the Companies Act 2013 and regulation 16(b) ofSecurities & Exchange Board of India (Listing Obligations and Disclosure Requirement)Regulations 2015. In the opinion of the Board they fulfil the conditions specified in theAct 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 considerationof the various aspects of the
Board's functioning composition of the Board and its committees execution andperformance of specific duties obligations and governance.
The performance evaluation of the independent Directors was completed in time. Theperformance evaluation of the Chairman and the Non-independent Directors was carried outby the Independent Directors. The Board of Directors expresses their satisfaction with theevaluation process.
The performance of each committee has been evaluated by its members and found to behighly satisfactory.
On the basis of this exercise the Board has decided that all Independent Directorsshould 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 ofAssociation of the Company Mr. Amit Gupta (DIN 00161417) Whole- Time Director of thecompany will retire by rotation at the AGM and being eligible offers himself forre-appointment. Your Board has recommended his reappointment.
Ms. Puja (DIN 08054543) Additional Director appointed as Independent Director of theCompany subject to the approval of the shareholders in the ensuing Annual General Meetingfor the term of 5 years as prescribed under section 149 of The Companies Act 2013 andrules made there-under.
Brief resume/details of the Directors who are to be re-appointed as mentioned hereinhave been furnished alongwith the Explanatory Statement (Note 9) to the Notice ofthe 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 sectiontitled 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 grantedany loan & guarantee within the meaning of Section 186. However the details of theLoans and investments under section 186 of the Companies Act 2013 are in Note No.2 of theaudited financial statements of the company.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year Company has entered into certain transactions with related partieswith related parties pursuant to the provisions of section 188 of the Companies Act 2013read with Rule 8(2) of the Companies (Accounts) Rules 2014 and which could be consideredmaterial' 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 theCompany's website at www.sturdyindustries.com and direct web link to the policy is athttp://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 hasbeen 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 betransferred 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 thefinancial position of the company.
NOMINATION & REMUNERATION COMMITTEE POLICY
Your Board has framed a policy which lays down a framework in relation to remunerationof Directors Key Managerial Personnel and Senior Management Personnel of the Company.This policy also lays down criteria for selection and appointment of Board Members. Thedetail of this policy is explained in the Report on Corporate Governance. The Nominationand remuneration Policy is available on the website of the company atwww.sturdyindustries.com and direct web link to the policy is athttp://www.sturdyindustries.com/pdf/financial/Nomination-Remuneration%20Policy.pdf
RISK MANAGEMENT POLICY
The risk management framework defines the risk management approach of the Company andincludes periodic review of such risks and also documentation mitigating controls andreporting mechanism of such risks. The provisions of risk management committee pursuant tothe Companies Act 2013 are not applicable to Sturdy Industries Limited. Hence anystandard policy has not been drafted.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Pursuant to the provisions of Section 177(9) & 177(10) of the Companies Act 2013the Company has in place a well formulated Vigil Mechanism/ Whistle Blower Policy to dealwith instance of fraud and mismanagement if any. The Purpose of vigil mechanism is toprovide for adequate safeguards against victimization of persons who use such mechanismand 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 concernabout unethical behavior actual or suspected fraud or violation of Code of Conduct andEthics.
There was no incident when the access to the Audit Committee was denied to anyemployees with respect to vigil mechanism. The policy is posted on the website of theCompany at www.sturdyindustries.com and direct web link to the policy is athttp://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 tothe 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 atthe end of the year; NIL c) Whether there has been any default in repayment ofdeposits or payment of interest thereon during the year and if so number of such casesand the total amount involved- NIL d) The details of deposits which are not incompliance 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 capitalof the company.
STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THEFINANCIAL STATEMENTS
Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The internal and operational audit is entrusted reputed firms of CharteredAccountants. The main trust of internal audit is to test and review controls appraisal ofrisks and business processes beside benchmarking controls with best practices in theIndustry.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The report on Internal Financial Control under Clause (i) of Sub- Section 3 ofSection 143 of The Companies Act 2013 is enclosed in the Annexure-B to the IndependentAuditors' Report.
AUDITORS AND AUDITORS' REPORT
M/s R K Deepak & Co Chartered Accountants (FRN: 003145N) has shown theirunwillingness 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 Boardof Director recommended the appointment of M/s K. Singh & Associates CharteredAccountant having Firm Registration No. 012458N for 5 (five) consecutive years from theconclusion of the 29th Annual General Meeting (AGM) until the conclusion of 34thAGM of the Company.
Also The Board expressed sincere thanks to the retiring Auditors for being valuablepart 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 ofratification 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 madethere under the Company has appointed M/S Himanshu Sharma & Associates CompanySecretary in Practice (C.P. No. 11553) as Secretarial Auditor to undertake the SecretarialAudit of the Company. The Secretarial Audit Report in prescribed format MR-3 givenby aforesaid Secretarial Auditors is annexed to this Board Report as Annexure 3 andforms an integral part.
Following are the reply in respect of the Auditor observations:-
|Auditor Observation ||Reply |
|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 Section148 of the Companies Act 2013 M/s Balwinder & Associates Cost Accountants (FirmRegistration No. 000201) Chandigarh were appointed as the Cost Auditors of the Companyfor FY 2017-18 to audit the cost accounts of the Company. They have been re-appointed asCost 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 withCompanies
(Accounts) Rules 2014 relating to "Conservation of Energy Technology Absorptionand Foreign Exchange Earnings and Outgo" is given in the Annexure - 4 formingan integral part of this Report.
Statistical Disclosures pursuant to Rule 5 of Companies (Appointment and Remunerationof 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 theSexual Harassment of Women at Workplace (Prevention Prohibition & Redressal) Act2013. There was no compliant received from any employee during the financial year 2017-18and hence no complaint is outstanding as on 31.03.2018. The policy has been posted on thewebsite 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 ofSecurities & 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 stipulatedin SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015.
A separate section on Corporate Governance along with a certificate from the Auditorsof the Company confirming the compliance is annexed and forms part of this Report. TheBoard has also evolved and adopted a Code of Conduct based on the principles of GoodCorporate 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 theCash Flow Statement for the year ended on 31st March 2018 forms an integralpart of the Financial Statements.
Your Directors place on record their appreciation for the significant contribution madeby all the employees who through their competence hard work solidarity andco-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-operationthat the Company received from its suppliers distributors retailers and otherassociates. The Company has always looked upon them as partners in its progress and hashappily shared with them rewards of growth. It will be
Company's endeavor to build and nurture strong links based on mutuality respect andco-operation with each other and consistent with customer interest.
Directors wish to convey their sincere appreciation for the co-operation and excellentassistance the Company has received from central/state government(s) and variousministries departments of the central/state government(s) dealers and valued businessassociates without which it would not have been possible to achieve all round progress andgrowth of the Company.
The Board also places on record its appreciation to all investors banks regulatoryand government authorities for their continued support continued trust and support. TheBoard also places on record its appreciation for the continuous patronage of the customersof the Company.
For and On Behalf of THE BOARD
OF STURDY INDUSTRIES LIMITED
|Sd/- ||Sd/- |
|(MOHAN LAL GUPTA) ||(RAMESH GUPTA) |
|(DIN NO. 00161184) ||(DIN NO. 00161363) |
|MANAGING DIRECTOR ||WHOLE TIME DIRECTOR |
DATE : 29.08.2017