The Board of your Company is immensely delighted in presenting its 30thAnnual Report. The Report is being presented along with the Audited Financial Statementsfor the Financial Year ended March 31 2019.
|PARTICULARS ||Year Ended March 31st 2019 ||Year Ended March 31st 2018 |
| ||(Rs. In lacs) ||(Rs. In lacs) |
|Revenue from Operations ||18524.81 ||21006.37 |
|Other Income ||1021.84 ||2212.41 |
|Total Income ||19546.65 ||23218.78 |
|Less:Expenses ||19946.11 ||25733.18 |
|Profit (Loss) before tax ||(399.47) ||(2514.39) |
|Tax Expenses: || || |
|Less: Current Tax ||0.00 ||0.00 |
|Less: Deferred Ta x ||(199.07) ||(363.54) |
|Less: Net of Tax after comprehensive Income/Loss ||(6.82) ||(17.93) |
|Total Profit/(Loss) After Tax ||(1832.97) ||(2132.93) |
REVIEW OF OPERATIONS AND BUSINESS PERFORMANCE
During the financial year under review the company has achieved turnover including(income from other sources) of Rs. 19546.65 Lakhs. However the expenditure side of theCompany has also been proportionally decreased to Rs. 19946.11 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 31stMarch 2019.
(ANNUAL REPORT 2018-19)
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 2019-20.
Total borrowings of the company both long term and short term as on31st March 2019 areamounting Rs. 24963.96 Lakhs as compared to previous year ended 31st March2018 ofamounting Rs. 25657.58 Lakhs(For details Refer Note No. 13 14 and Note No. 18 of theAudited 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 2018-19 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.
(ANNUAL REPORT 2018-19)
(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 itscommittees execution and performance 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. Ramesh Gupta (DIN 0161363) 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. Pushpa Devi (DIN 08238587) Additional Director appointed as Independent Directorof the Company subject to the approval of the shareholders in the ensuing Annual GeneralMeeting for the term of 5 years as prescribed under section 149 of The Companies Act 2013and rules made there-under.
Brief resume/details of the Directors who are to be re-appointed as mentioned hereinhave been furnished along with the Explanatory Statement (Note 9) to the Notice ofthe ensuing Annual General Meeting.
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
The company has not made any investment not any loan and gurantee. However the detailsof the Loans and investments made by the Company are in Note No.2 of the audited financialstatements of the company. The Company has not made any loans to any persons within themeaning of Section 186 and has also not given any guarantees within the meaning of thatsection.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the yearCompany has entered into certain transactions with related parties withrelated parties pursuant to the provisions of section 188 of the Companies Act 2013 readwith 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 atwww.sturdyindustries.comanddirectweblinktothepolicyisat http://www.sturdyindustries.com/pdf/financial/Related%20Party%20policy.pdf
TRANSFER TO RESERVES
During the year under review company incurred Losses of 1832.97 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 at www.sturdyindustries.comand direct web link to the policy is at http://www.sturdyindustries.com/pdf/financial/Nomination-Remuneration%20Policy.pdf
(ANNUAL REPORT 2018-19)
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 exceptionalcases.The policy enables the employees Directors and other stakeholders to raise theirconcern about unethical behavior actual or suspected fraud or violation of Code ofConduct and Ethics.
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.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 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 at the endof the year;NIL
c) Whether there has been any default in repayment of deposits or payment of interestthereon 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 ofChapter.
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
The members had at 29th AGM of the Company appointed M/s.K Singh &Associates (Firm's Registration Number: 012458N) as Statutory Auditors of the company tohold the office from the close of the 29th AGM till the conclusion of the 34thAGM subject to their appointment being ratified by the members in every AGM. The membersof the Company approved deletion of the requirement of seeking ratification of appointmentof Statutory Auditors at every AGM pursuant to amendment brought by the CompaniesAmendment 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 2 of the financial statements in respect of Property Plant and Machinery and Equipments and depreciation on assets thereon. The company has already booked depreciation amounting to Rs. 4.51 Crupto 31/12/2018. During the current quarter the company has re-accessed the life of plant and machinery through Chartered Engineer as per his certificate dated 09/03/2019 the management of the company has taken the accessed useful life of plant and machinery to 35 Years against 25 Years as specified in part C' of ScheduleII of the companies Act 2013 as result of which depreciation for the current Quarter ending 31st March 2019 is Negative to the extent of Rs 1.26 Crs and as a result of this readjustment in useful life of plant and machinery depreciation and Net Block has been adjusted accordingly which has resulted in increase in the net profit to the extent 1.26 Cr for the year. ||The company hasre-accessed the life of plant and machinery through Chartered Engineer as per his certificate dated 09/03/2019 the management of the company has taken the accessed useful life of plant and machinery to 35 Years against 25 Years as specified in part C' of Schedule II of the companies Act 2013. |
|Attention is invited to Note No.9 of the financial statements in respect of Short Term Loan and Advances amounting to Rs. 1243.77 Lacs shown as recoverable in respect of Claims to be received on account of subsidy/incentives/other Govt. claims out of which Rs. 1019.67 Lacs has been considered as income during the year (Refer note 22 of financial statements)although the same has not been acknowledged by the concerned departments and right to receive has not been established. Hence profit to that extent has been overstated in financial statements. ||As per polices of Government of Assam industrial department the company has recognized the claims for interest subsidy and the documents for claims are submitted with the concerned department for release of incentives from time to time and being claimed since the inception of the Assam unit i.e F.Y 2012-13. |
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 3andforms an integral part.
Following are the reply in respect of the Auditor observations:-
|Auditor Observation ||Reply |
|Attention is invited to Note No 2 of the financial statements in respect of Property Plant and Machinery and Equipments and depreciation on assets thereon. The company has already booked depreciation amounting to Rs. 4.51 Cr upto 31/12/2018. During the current quarter the company has re-accessed the life of plant and machinery through Chartered Engineer as per his certificate dated 09/03/2019 the management of the company has taken the accessed useful life of plant and machinery to 35 Years against 25 Years as specified in part C' of Schedule II of the companies Act 2013 as result of which depreciation for the current Quarter ending 31st March 2019 is Negative to the extent of Rs 1.26 Crs and as a result of this readjustment in useful life of plant and machinery depreciation and Net Block has been adjusted accordingly which has resulted in increase in the net profit to the extent 1.26 Cr for the year. ||The company hasre-accessed the life of plant and machinery through Chartered Engineer as per his certificate dated 09/03/2019 the management of the company has taken the accessed useful life of plant and machinery to 35 Years against 25 Years as specified in part C' of Schedule II of the companies Act 2013. |
|Attention is invited to Note No.9 of the financial statements in respect of Short Term Loan and Advances amounting to Rs. 1243.77 Lacs shown as recoverable in respect of Claims to be received on account of subsidy/incentives/other Govt. claims out of which Rs. 1019.67 Lacs has been considered as income during the year (Refer note 22 of financial statements) although the same has not been acknowledged by the concerned departments and right to receive has not been established. Hence profit to that extent has been overstated in financial statements. ||As per polices of Government of Assam industrial department the company has recognized the claims for interest subsidy and the documents for claims are submitted with the concerned department for release of incentives from time to time and being claimed since the inception of the Assam 2012-13. unit i.e F.Y |
As per the requirements of Central Government and pursuant to the provisions of Section148 of the Companies Act 2013 M/sBalwinder& Associates Cost Accountants (FirmRegistration No. 000201)
(ANNUAL REPORT 2018-19)
Chandigarh were appointed as the Cost Auditors of the Company for FY 2018-19 to auditthe cost accounts of the Company. They have been re-appointed as Cost Auditors for FY2019-20.
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 TechnologyAbsorption and Foreign Exchange Earnings and Outgo" is given in the Annexure - 4forming an 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 31.03.2019. 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 31stMarch 2019 forms an integralpart of the Financial Statements.
(ANNUAL REPORT 2018-19)
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
|PLACE: Parwanoo || |
|DATE : 03.09.2019 || |
|Sd/- ||Sd/- |
|(MOHAN LAL GUPTA) ||(RAMESH GUPTA) |
|(DIN NO. 00161184) ||(DIN NO. 00161363) |
|MANAGING DIRECTOR ||WHOLE TIME DIRECTOR |