Your directors are pleased to present the 47^th Annual Report on the business and operations of Sterling Tools Limited ('the Company')
and Audited Financial Statements (Standalone and Consolidated) for the financial year ended 31^st March 2026.

Financial Summary & Highlights

The Company's financial performance for the year under review along with the previous year's figures are given hereunder:

Company's performance and outlook

STANDALONE

The standalone performance for FY 2025-26 demonstrates a
remarkable and encouraging upward trajectory. Revenue from
operations increased to H716.72 crore, while the company
achieved an outstanding profit after tax of H64.20 crore. This
strong financial outcome highlights the company's resilience,
operational efficiency, and sustained growth momentum,
reinforcing a solid and stable overall financial position.

CONSOLIDATED

On a consolidated basis, the Company continued to execute
its diversification strategy in FY 2025-26 and remains well-
positioned for future growth. Revenue from operations for the
year stood at H827.81 crore, as compared with H1,026.30 crore in
the previous year, while profit before tax and profit after tax were
H47.65 crore and H29.33 crore respectively.

The moderation in consolidated revenue and profitability
was primarily attributable to a shift in the customer mix of a
subsidiary company, following the insourcing of motor control
unit production by its largest customer. Your Board is of the view
that such variations are temporary in nature within the context
of an overall growing market, and the Company remains well-
positioned to recover and grow over the medium term.

Management views the future with confidence and anticipates
continued improvement in the coming years. The outlook of the

Company, together with that of the automobile industry, is set
out in greater detail in the Management Discussion and Analysis
Report, which forms an integral part of this Report.

Consolidated Financial Statements

The audited Consolidated Financial Statements in addition to the
audited Standalone Financial Statements pursuant to Section
129 of the Companies Act, 2013 (Act) read with the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015
('SEBI Listing Regulations') are prepared in accordance with
the Indian Accounting Standards prescribed by the Institute of
Chartered Accountants of India and the same is enclosed and
forms an integral part of this report.

The Consolidated Profit and Loss Account for the period ended
31^st March 2026, includes the Profit and Loss Account for the
subsidiaries i.e. Sterling E-Mobility Solutions Limited (formerly
known as Sterling Gtake E-Mobility Limited), Sterling Tech-Mobility
Limited, Sterling E-Mobility Private Limited, Sterling Advanced
Electric Machines Private Limited and Sterling Overseas Pte. Ltd.
for the Financial Year ended 31^st March 2026.

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 Shareholders Meetings section athttps://stlfasteners.com/
investors/shareholders-meetings.

Transfer to General Reserve

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

Dividend

The Company has a strong track record of rewarding its
shareholders with substantial dividend payouts. Given the robust
operational and financial performance of the Company during
the year under review, the Board of Directors are pleased to
recommend a final dividend of 137.5% i.e. H 2.75/- (Rupees Two
and Seventy-Five Paisa only) per equity share for the FY 2025¬
26, subject to approval of shareholders in the ensuing Annual
General Meeting. This dividend payout will be in accordance with
the Company's Dividend Distribution Policy, which is available on
the Company's website:https://stlfasteners.com/public/f/pdfs/
Dividend-Distribution-Policy.pdf

In accordance with the prevailing provisions of the Income Tax
Act, 2025, the dividend, if declared, will be taxable in the hands
of the shareholders at the applicable rates. Consequently, the
Company will make the final dividend payment after deducting
the tax at source. For detailed information on the procedure for
the declaration and payment of the dividend, shareholders are
requested to refer to the Notice of the 47^th Annual General Meeting.

Deposits

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

i. Number of cases of default in repayment of deposits or
payment of interest thereon at the beginning of the year- NIL

ii. Maximum number of cases of default in repayment of
deposits or payment of interest thereon during the year- NIL

iii. Number of cases of default in repayment of deposits or
payment of interest thereon at the end of the year- NIL

Depository System

As the members are aware, the Company's shares are
compulsorily tradeable in electronic form. As on 31^st March 2026,
99.83 % of the Company's total paid-up Capital representing
3,62,80,900 equity shares are in dematerialized form. In view
of numerous advantages offered by the Depository System,
members holding shares in physical mode are advised to avail
the facility of dematerialization from either of the Depositories.

Capital Structure and Listing

As of 31^st March 2026, the Company has an Authorized Share
Capital of H11,00,00,000/- and a Paid-Up Share Capital of
H7,26,88,852/-, with the Promoters and Promoter Group holding
64.86% of the Company's share capital. The Company's equity
shares are listed on the National Stock Exchange of India Limited
and BSE Limited, with listing fees paid to both exchanges
for FY 2026-27.

Subsidiaries, Joint Ventures, and Associate
Companies

As on 31^st March 2026, the Company has five wholly owned
subsidiaries. During the year, the Company had the following
subsidiary Companies, the status of which is mentioned thereto:

In accordance with Section 129 of the Companies Act, 2013, a
statement containing the salient features of financial statements
as on 31^st March, 2026 is presented by way of Form AOC-1 as an
Annexure -I. Further, pursuant to the provisions of Section 136 of
the Act, the financial statements of the Company, consolidated
financial statements along with relevant documents and
separate audited financial statements in respect of subsidiaries,
are available on the website of the Company athttps://
stlfasteners.com/investors.

Key business developments during the year under
review

During the financial year 2025-26, your Company continued to
advance its strategic transformation into a diversified automotive
components and technology enterprise, while reinforcing
its leadership in its core fastener business. The significant
developments during the year are set out below.

A. Strategic Partnerships and Technology Collaborations

In furtherance of its vision to build a comprehensive Electric
Vehicle (EV) powertrain and power-electronics platform,
your Company, through its subsidiaries, entered into several
strategic collaborations during the year:

1. Advanced Electric Machines (AEM), United

Kingdom: On 13^th May 2025, the Company, through
its subsidiary Sterling E-Mobility Solutions Limited
(formerly known as Sterling Gtake E-Mobility Limited),
executed a Technology Licensing Agreement with
Advanced Electric Machines Limited, UK, to develop,
manufacture and market rare-earth magnet-free
traction motors for electric vehicles at its Faridabad
facility. The arrangement provides the subsidiary an
exclusive license for India based on AEM's patented
technology, supporting import substitution in line with
the 'Atmanirbhar Bharat' and 'Make in India' initiatives.

2. Landworld Technology Co. Ltd., China: On

15^th September 2025, Sterling E-Mobility Solutions

Limited (formerly known as Sterling Gtake E-Mobility
Limited), the subsidiary of the Company, signed a
Technology License and Supply agreements with
Landworld Technology Co. Ltd., China, for the local
manufacture of On-Board Chargers, DC/DC Converters
and Multi-Function Units at its EV campus in Faridabad.

3. MINIEYE, China: On 19^th January 2026, your Company
partnered with MINIEYE, a China-based intelligent-driving
and in-cabin solutions provider, for the deployment of
Advanced Driver Assistance Systems (ADAS) and Driver
Monitoring Systems (DMS) for the Indian market across
commercial and passenger vehicle segments, aligned
with the mandatory ADAS and DDAWS regulations
becoming effective from 1^st January 2027.

B. Corporate Restructuring and Re-branding

During the year, the Company's subsidiary, Sterling Gtake
E-Mobility Limited, was re-branded as Sterling E-Mobility
Solutions Limited with effect from 14^th October 2025,
reflecting its evolution into a comprehensive provider
of EV powertrain and power-electronics solutions. The
Company's exclusive relationship with Jiangsu Gtake
Electric Co. Ltd. for the Indian market continues to remain
strong and unchanged.

C. Amalgamation

The scheme of amalgamation of Haryana Ispat Private
Limited (a wholly owned subsidiary) with the Company, was
approved by the Hon'ble National Company Law Tribunal
vide order dated 27^th March 2025 (effective from the
appointed date of 1^st April 2024), was given effect during the
year, with the order filed with the Registrar of Companies on
23^rd April 2025.

Employee stock option Plan

STL-Employee Stock Option Plan-2023 was introduced to offer
employees of the Company and its subsidiary companies; an
additional incentive tied to productivity and performance. This
initiative aims to motivate employees and contribute to the overall
corporate growth and profitability of the Company. In accordance
with SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021, a total of 9,00,605 (Nine Lakh Six Hundred and
Five) ESOP options were approved under the ESOP Plan.

During the year under review, the Company has allotted 1,60,108
equity shares to Mr. Jaideep Wadhwa, Non-Executive Non¬
Independent Director of the Company, pursuant to the exercise
of second tranche of ESOPs granted to him in the capacity of
Managing Director of Sterling E-Mobility Solutions Limited
(formerly known as Sterling Gtake E-Mobility Limited), Wholly
owned Subsidiary, in terms of the STL Employee Stock Option
Plan, 2023 and vesting schedule thereof. Further, pursuant to
the listing application by the Company in respect of the shares
allotted to Mr. Jaideep Wadhwa, the said equity shares were
listed and admitted to dealings on the National Stock Exchange
of India Limited and BSE Limited effective from 12^th March 2026.

A certificate from M/s. Dhananjay Shukla & Associates,
Secretarial Auditors, regarding this plan and the resolution passed

by members will be available for inspection on the Company's
website under the "Investors” section on the date of the Annual
General Meeting. There is no change in the Plan and the same
follows with the applicable regulations. A statement providing
complete details as of 31^st March 2026, pursuant to Regulation
14 of the SEBI (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021, is also available on the Company's
website. The web link for this information ishttps://stlfasteners.
com/investors/shareholders-meetings.

Material changes and commitments

No material changes and commitments which could affect the
Company's financial position have occurred between the end of
the financial year of the Company and the date of this report.

Change in the nature of business, if any.

There was no change in the nature of business of the Company
during the FY 2025-26.

Directors and Key Managerial Personnel

The Board of Directors of the Company comprises of Executive
and Non-Executive Directors, including Woman Director,
possessing rich experience and expertise across diverse fields
such as corporate finance, strategic management, accounts,
legal, marketing, brand building, social initiatives, general
management and strategy. Except for the Independent Directors,
all other Directors are liable to retire by rotation in accordance
with the provisions of the Companies Act, 2013.

Further, based on the recommendations of the Nomination
and Remuneration Committee, the Board of Directors and
the Members of the Company subsequently approved the re¬
appointment of Mr. Anil Aggarwal (DIN: 00027214) as Chairman
& Whole-Time Director and Mr. Atul Aggarwal (DIN: 00125825)
as Managing Director of the Company, both liable to retire by
rotation, for a further term of five (5) consecutive years with
effect from April 1, 2026. The Board and Members also approved
the re-appointment of Mr. Rakesh Batra (DIN: 06511494) as
Independent Director of the Company, not liable to retire by
rotation, for a second term of five (5) consecutive years from
10^th November 2025.

In accordance with the provisions of the Companies Act, 2013,
Mr. Akhill Aggarwal (DIN:01681666), Executive Director is liable
to retire by rotation and being eligible, has offered himself for
re-appointment. The details pertaining to Mr. Akhill Aggarwal
(DIN:01681666) being recommended for re-appointment are
included in the notice of the ensuing Annual General Meeting
of the Company.

The Nomination and Remuneration Committee selects the
candidates to be appointed as the Director on the basis of the
requirement and enhancing the competencies of the Board. The
current policy is to have a balance of Executive, Non-Executive
and Independent Directors to maintain the independence of
the Board and to separate the functions of governance and
management. The composition of Board of Directors during the
year ended 31^st March, 2026 is in conformity with Regulation 17
of the SEBI Listing Regulations, 2015 read with Section 149 of

the Companies Act, 2013.As on 31^st March 2026, there were ten
(10) Directors on the Board of the Company, consisting of five (5)
Independent Directors, two (2) Non-Executive Directors, one (1)
Managing Director and two (2) Whole-Time Directors.

Key Managerial Personnel (KMP) other than directors as
mentioned above as of 31^st March 2026 were:

Ms. Pragya Saxena, Company Secretary and Compliance Officer.

Further, pursuant to the provisions of Section 203 of the Companies
Act, 2013 read with the applicable provisions of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the
below changes occurred in the Key Managerial Personnel of the
Company during the financial year under review:

Ms. Komal Malik was appointed as the Company Secretary and
Compliance Officer of the Company with effect from August 7,
2025. Subsequently, Mr. Pankaj Gupta stepped down from the
position of Chief Financial Officer and resigned from the services
of the Company with effect from the close of business hours on
December 31, 2025. Thereafter, Ms. Komal Malik resigned from
the position of Company Secretary and Compliance Officer with
effect from the close of business hours on February 28, 2026.

The Board places on record its sincere appreciation for the
valuable contributions made by Mr. Pankaj Gupta and Ms. Komal
Malik during their association with the Company and wishes
them success in their future endeavors.

Further, the Board appointed Ms. Pragya Saxena as the Company
Secretary and Compliance Officer of the Company with effect
from March 23, 2026.

The Board extends a warm welcome to Ms. Pragya Saxena and
looks forward to her valuable contribution towards the Company's
continued growth and governance framework.

Subsequent to the close of the financial year, the Board of Directors,
at its meeting held on May 15, 2026, appointed Mr. Anish Agarwal
(DIN: 07056465), Director, as the Chief Financial Officer of the
Company and designated him as a Key Managerial Personnel
pursuant to the provisions of Section 203 of the Companies Act,
2013, with effect from May 15, 2026.

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 and there has been no change in the circumstances which
may affect their status as independent director during the year.

In the opinion of the Board of Directors, all the Independent
Directors are persons of high repute, integrity and possess
the relevant proficiency, expertise and experience in their
respective fields.

Number of meetings of the Board and attendance of
the Directors

The Board met five (5) times during the FY 2025-26, in respect
of which notices were given and the proceedings were properly
recorded. The intervening gap between two consecutive meetings
was not exceeding the period prescribed under the Companies
Act, 2013. For details of the meetings of the Board and attendance
of the Directors, please refer Clause 2 of Corporate Governance
Report attached to this Annual Report.

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

The Company has complied 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 Company's 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 is
uploaded on the Website of the Company athttps://stlfasteners.
com/assets/upload/investors/20240111111425-nomination-
and-remuneration-policy-board-795595043113.pdf

Policy on Board Diversity

The Company recognizes and embraces the importance of a
diverse Board in its success. The Company believes 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 Nomination &
Remuneration Policy explains Board Diversity 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. The committee also oversees the
conduct of the annual review of board effectiveness.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and
the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("SEBI Listing Regulations"), the Company has
established a formal mechanism for evaluating the performance
of the Board of Directors, its committees, individual Directors, Key
Managerial Personnel ("KMP") and Senior Management Personnel
("SMP"). The evaluation framework is based on the Guidance
Note on Board Evaluation issued by SEBI on January 5, 2017
and is carried out through a structured questionnaire covering

various aspects, including the composition and effectiveness of
the Board and its Committees, governance practices, strategic
oversight, quality of discussions, participation, and discharge of
duties and responsibilities.

At a separate meeting of the Independent Directors, the
Independent Directors reviewed and evaluated the performance
of the Non-Independent Directors, the Board as a whole, and the
Chairman of the Company, taking into account the views of the
Executive and Non-Executive Directors. The Independent Directors
also assessed the quality, quantity and timeliness of the flow of
information between the Management and the Board, which is
essential for the effective discharge of the Board's responsibilities.

Thereafter, the Nomination and Remuneration Committee evaluated
the performance of the Board, Independent Directors, KMP and
SMP based on various parameters, including preparedness
for meetings, meaningful and constructive participation in
deliberations, achievement of key objectives, leadership qualities,
and contribution towards the Company's growth and governance
framework. The Board of Directors subsequently reviewed the
evaluation carried out by the Nomination and Remuneration
Committee and the Independent Directors.

The performance evaluation of the Independent Directors
was carried out by the entire Board, excluding the Director
being evaluated.

Based on the outcome of the evaluation process, the Board was
of the view that the performance of the Board, its Committees,
Individual Directors, KMP and SMP was effective and satisfactory.

Particulars of contracts or arrangements with Related
Parties

All Related Party Transactions that were entered into during the
financial year ended on March 31, 2026 were on an arm's length
basis and in the ordinary course of business and not material in
nature under Section 188(1) of the Act and the Listing Regulations
and hence a disclosure in Form AOC-2 in terms of clause (h) of
sub-section (3) of section 134 of the Act and Rule 8(2) of the
Companies (Accounts) Rules, 2014 is not required. Details of
the transactions with Related Parties are provided in note no.
43 of the accompanying Standalone and Consolidated Financial
Statements of the Company in compliance with the provision of
Section 134(3)(h) of the Act.

The Company has also adopted the Policy on Related Party
Transactions and the same is available on the website
of the Company athttps://stlfasteners.com/investors/
corporate-policies.

Committees of the Board

The Company has the following Board committees, which have
been established as a part of the corporate governance practices
and are in compliance with the requirements of the relevant
provisions of applicable laws and statutes.

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management Committee

• Share Transfer Committee

• Management Committee

• Investment Committee*

The details with respect to the compositions, powers, roles,
terms of reference and number of meetings held during the
year of relevant committees are given in detail in the Corporate
Governance Report of the Company, which forms part of this
Board's Report.

*The Board of Directors, at its meeting held on February 03, 2026,
approved the dissolution of the Investment Committee with
effect from February 03, 2026.

Auditors

I) Statutory Auditors

As per the provisions of Section 139 (1) of the Companies
Act, 2013, the Members of the Company had appointed
M/s Walker Chandiok & Co LLP, Chartered Accountants
as Statutory Auditors of the Company for a term of 5 (five)
consecutive years to conduct the audit from FY 2021-22 to
FY 2026- 27. M/s Walker Chandiok & Co LLP have confirmed
that they are not disqualified from continuing as Auditors
of the Company.

Statutory Auditors' Report

There has 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 the year ended 31^st March, 2026 forming part
of this report.

II) Secretarial Auditors

The Shareholders of the Company had appointed M/s
Dhanajay Shukla & Associates as the Secretarial Auditors of
the Company for a first term of 5 (Five) consecutive years
beginning from Financial Year 2025-26.

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- II.
During the year under review, the Secretarial Auditor noted
the following observation(s):

NSE and BSE imposed a penalty of ?25,960/- each inclusive
of GST, on the Company for non-compliance with Regulation
13(3) of SEBI (LODR) Regulations, 2015, relating to incorrect
filing of the investor grievances statement.

Further, NSE and BSE levied a penalty of ?21,240/-each
inclusive of GST, for the period from 1^st April, 2025 to
30^th June 2025, and ?43,660/- each inclusive of GST, for

the period from 1^st July 2025 to 6^th August 2025, for non¬
compliance with Regulation 6(1) of SEBI (LODR) Regulations,
2015, due to delay in appointment of a qualified Company
Secretary as Compliance Officer. The vacancy arose upon
resignation of CS Abhishek Chawla on 13^th March 2025 and
was filled by appointment of CS Komal Malik with effect
from 7^th August 2025.

Moreover, Mr. Pankaj Gupta resigned as Chief Financial
Officer of the Company with effect from 31^st December 2025.
In terms of Regulation 26A(2) of SEBI (LODR) Regulations,
2015, the vacancy was required to be filled within three
months. However, the appointment was completed on 15^th
May 2026 with the appointment of Mr. Anish Agarwal as
Chief Financial Officer. The delay occurred as the initially
selected candidate as recommended by the NRC on 8^th
January 2026 was expected to join on 23^rd March 2026 but
had declined to join on the stipulated date.

Therefore, the Board had taken note of the aforesaid
observations and the Company has taken necessary steps
to regularise the compliances and strengthen its compliance
monitoring mechanism.

Further as per the requirement of Regulation 24A of
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Secretarial Audit report of the
material subsidiary namely, Sterling E-Mobility Solutions
Ltd. (formerly known as Sterling Gtake E-Mobility Limited) is
also attached as Annexure III.

Annual Secretarial Compliance Report

Annual Secretarial Compliance Report for the financial year
ended 31^st March, 2026 on compliance of all applicable
SEBI Regulations and circulars/ guidelines issued
thereunder, was obtained from Mr. Santosh Kumar Pradhan,
Practicing Company Secretaries and the same was filed
with Stock Exchange(s) within the prescribed timeline.
The Annual Secretarial Compliance Report is available at
https://stlfasteners.com/investors/corporate-governance.

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 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 to audit the Cost Accounts of the Company
for the year ending 31^st March, 2026.

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

During the year under review, the Statutory Auditors, Secretarial
Auditor and Cost Auditors of your Company have not reported
any instances of fraud committed in the Company by its Officers
or Employees to the Audit Committee, as required under Section
143(12) of the Act.

Internal Financial Control Systems and their adequacy

The Company has established adequate Internal Financial
Controls over Financial Reporting (IFCoFR) commensurate with
the size, scale, and complexity of its operations. These controls
are designed to ensure the orderly and efficient conduct of
business, adherence to established policies and procedures,
safeguarding of assets, prevention and detection of frauds and
errors, accuracy and completeness of accounting records, and
the timely preparation of reliable financial information.

The Internal Audit function periodically assesses the adequacy
and effectiveness of the Company's internal control framework
and compliance with applicable policies and procedures. The
findings of internal audit, along with the status of corrective
actions, are regularly reviewed by the Audit Committee to ensure
the continued effectiveness of internal controls.

As of March 31, 2026, the Management evaluated the
effectiveness of the Company's internal financial controls over
financial reporting, in accordance with the requirements of the
Companies Act, 2013 and Regulation 17(8) read with Schedule
II of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. Based on this assessment, Management
concluded that the controls were operating effectively and that no
material weaknesses or significant deficiencies existed as of that
date. Recognizing the inherent limitations of any internal control
system, the Company continues to undertake periodic reviews
and audits to strengthen and enhance its control environment.

M/s Walker Chandiok & Co. LLP, Statutory Auditors of the
Company, have audited the financial statements and issued
their report on the adequacy and operating effectiveness of the
Company's internal financial controls over financial reporting, as
required under Section 143(3)(i) of the Companies Act, 2013.

The Company also maintains a well-established Internal Audit
function that conducts risk-based audits across key business
processes and operational areas. During the year, the internal
audit activities were carried out by M/s Profaids Consulting.
The Audit Committee reviews and approves the annual Internal
Audit Plan and scope of work and receives quarterly updates on
audit observations, recommendations, and management actions.
Significant findings and corrective measures are periodically
presented to the Audit Committee to facilitate continuous
improvement and regulatory compliance.

Based on its review of the internal audit reports, management
responses, and the overall internal control framework, the Audit
Committee concluded that the Company's internal financial
controls were adequate and operating effectively as of March 31,
2026. The Board of Directors reviewed the recommendations of
the Audit Committee and accepted the same wherever applicable
during the year.

Risk Management System

The Company has constituted a Risk Management Committee
and adopted a comprehensive Risk Management Policy to
identify, assess, monitor, and mitigate risks that may impact
its business objectives. The Company's risk management
framework and key risk factors are discussed in detail in the
Management Discussion and Analysis Report.

The Risk Management Committee is responsible for identifying
and evaluating significant risks, developing and overseeing
the implementation of mitigation strategies, and periodically
reviewing the effectiveness of such measures. The Committee
regularly monitors identified risks and their corresponding
mitigation plans and, where necessary, reprioritizes risks based
on their potential impact on the Company's operations, financial
performance, and reputation.

The Company has established a structured process for managing,
monitoring, and reporting principal risks and uncertainties that
could affect the achievement of its strategic objectives. Key risks
identified across business functions are continuously assessed
and addressed through appropriate control measures and
mitigation actions.

Based on the assessment carried out during the year, the Board
is of the opinion that there are no risks that may threaten the
existence or continuity of the Company's business.

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' websitehttps://stlfasteners.com/
investors/corporate-policies.

Human Resources Management

Employees are the Company's most valuable asset and key to
its long-term success. The Company is committed to attracting,
developing, and retaining talented individuals by fostering
a collaborative, transparent, and inclusive work culture that
recognizes merit and rewards sustained high performance.
The Company's human resource practices focus on enhancing
employee capabilities, supporting career growth, and preparing
future leaders.

The Company is dedicated to maintaining a safe, respectful,
and inclusive workplace where all employees feel valued and
empowered to contribute to their fullest potential, irrespective of
gender, sexual orientation, or other personal characteristics.

Industrial relations remained harmonious and cordial throughout
the year under review. As of 31^st March 2026, the Company had
a total of 656 permanent employees, comprising 642 Males
and 14 Females.

Particulars of Employees

The details regarding the ratio of the remuneration of each
director to the median employee's remuneration and other
details except the statement showing the names of the top ten
employees in terms of remuneration drawn, as per the provisions
of Section 197(12) of the Companies Act, 2013 read with Rule 5
of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, are provided as Annexure IV.

However, in terms of proviso to Section 136(1) of the Companies
Act, 2013, the Annual Report excluding the statement showing
the names of the top ten employees in terms of remuneration
drawn 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.

Details of CSR policy and initiatives undertaken by the
company on CSR activities during the year

The 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-V of this report in the format
prescribed in the Companies (Corporate Social Responsibility
Policy) Rules, 2014, as amended from time to time. The policy
on CSR is available on the website of the Company,https://
stlfasteners.com/investors/corporate-policies.Further the
implementation and monitoring of CSR Policy is in compliance
with the provisions of the Companies Act, 2013.

Sexual Harassment

The Company has adopted a Policy on Prevention of Sexual
Harassment (POSH) in accordance with the provisions of
the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. In compliance with Section
4 of the Act and the rules framed thereunder, the Company
has constituted an Internal Complaints Committee (ICC) to
address and redress complaints relating to sexual harassment
at the workplace.

The status of the complaints, during the year under
review is as below:

• Number of sexual harassment complaints received
during the year - Nil

• Number of complaints disposed of during the year- Nil

• Number of cases pending for more than 90 days- Nil

Disclosure under the Maternity Benefit Act, 1961

The Directors hereby confirm that the Company is in full
compliance with the provisions of the Maternity Benefit Act, 1961
and affirm that :

(a) the Company provides maternity leave in accordance with
the requirements of the Act;

(b) all necessary facilities and entitlements mandated by the
law are extended to women employees;

(c) no discriminatory practices are adopted against women
employees on account of maternity or childbirth.

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 the Notes to the financial statements.

Credit Rating

During the year, ICRA Limited, reaffirmed the Company's long¬
term rating at [ICRA] AA- (Stable) and revised the outlook to Stable
from Positive, while reaffirming the short-term rating at [ICRA]
A1 . The rating continues to reflect the Company's established
market position as the second-largest automotive fasteners
manufacturer in India and its healthy credit profile, supported by
steady accruals from the fasteners business.

Capital Expenditure

As on 31^st March 2026, the Gross Fixed Assets including
intangible assets stood at H55,970.58 Lacs and Net Fixed Assets
stood at H 24,453.47 Lacs. Additions during the year amounted to
H1,722.59 Lacs.

Cash Flow Analysis

In compliance with the provisions of Regulation 34 of the Listing
Regulations, 2015, the Cash Flow Statement for the year ended
31^st March 2026 forms an integral part of this Annual Report.

Transfer of amounts to Investor Education and
Protection Fund (IEPF )

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.

During FY 2025-26, the Company transferred:-

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.

Name of Nodal Officer: Ms. Pragya Saxena, Company Secretary
and Compliance Officer. Details of Nodal Officer are mentioned
on the website of the Company athttps://stlfasteners.com/
investors/investor-contact

Corporate Governance and Management Discussion &
Analysis Report

The Company is committed to maintain good corporate
governance standards by applying the best management
practices, compliance with the law in true letter and spirit and
adherence to ethical standards for effective management and
distribution of wealth and discharge of social responsibility for
the sustainable development of all stakeholders.

Parameters of statutory compliances evidencing the standards
expected from a listed entity have been duly observed and a
Report on Corporate Governance as well as the Certificate from
Company Secretary in Practice confirming compliance with
the requirements of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("SEBI Listing Regulations”)
forms part of the Annual 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
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.

Annual Return

As provided under section 134(3)(a) and Section 92(3) of the
Companies Act, 2013, the Annual Return in the prescribed
form MGT-7 as on 31^st March, 2026 is available on the
Company's website athttps://stlfasteners.com/assets/upload/
investors/?0?60811154049-ac5096015-358588078947.pdf

Business Responsibility and Sustainability Report
(BRSR)

The Company takes pride in presenting its third BRSR for
the FY 2025-26. This report adheres to the format outlined
in the amendment to Regulation 34(2)(f) of the SEBI Listing
Regulations as specified in Gazette Notification No. SEBI/LAD-
NRO/GN/2021/22 dated May 05, 2021 and is included within the
Annual Report. Aligned with the nine principles of the National
Guidelines on Responsible Business Conduct issued by the
Ministry of Corporate Affairs, Government of India, the BRSR for
the FY 2025-26 has been developed and forms part of this report.
The Company has further enhanced its reporting framework and
internal control mechanisms to ensure the consistent, accurate,
and reliable collection of data required for Business Responsibility
and Sustainability Reporting (BRSR) disclosures.

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-VI to this Report.

Safety, Health and Environment (SHE) Measures

Environmental protection remains a key priority for the Company.
The Company ensures strict compliance with applicable
environmental laws and regulations while undertaking additional
measures, wherever necessary, to prevent pollution and promote
recycling, as well as to minimize waste, discharges, and emissions.
It is also committed to the responsible and efficient use of natural
resources across all operations and aims to progressively reduce
its carbon footprint in the coming years.

Quality Management System

STL has implemented robust Quality, Environment management,
Data Security and Health & Safety management system at its
manufacturing facilities. The facilities are certified by:

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

The Company has neither filed an application during the year
under review nor are any proceedings pending under the
Insolvency and Bankruptcy Code, 2016 as on 31^st March, 2026.

Significant and Material Orders passed by the
Regulators or Courts

During the year, pursuant to the order dated 02^nd July 2025
passed by The Land Acquisition Collector/DRO, the Company
received compensation of ?949.64 Lacs (included interest of
H 622.45 lacs) from DMRC towards acquisition of land. The
order had a significant positive impact on the financial position
of the Company.

Insurance

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

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 programmes
for Independent Directors etc. as per the requirement of
law or otherwise on following the link:https://stlfasteners.
com/investors/.

OTHER DISCLOSURES

During the financial year under review:-

a. The Company has not issued any equity shares with
differential rights as to dividend, voting, or otherwise.

b. Except as disclosed in this report and the financials of the
Company, there was no issue of shares (including sweat
equity shares) to employees of the Company under any
other scheme. The equity shares so issued ranked pari-
passu with the existing fully paid-up equity shares in all
respects as to dividend, etc.

c. The Company does not have any scheme for provision of
money for the purchase of its own shares by employees or
by trustees for the benefit of employees.

d. Neither the Managing Director nor the Whole-Time Directors
of the Company receive any remuneration or commission
from any of its subsidiaries.

e. There was no instance of one-time settlement with any
Bank or Financial Institution.

f. The Company does not have any shares in an unclaimed
suspense demat account.

Director's Responsibility Statement

Pursuant to the requirement under section 134(3) (c) of the
Companies Act, 2013 with respect to the Director's Responsibility
Statement, it is hereby confirmed that:

(i) in the preparation of the accounts for the financial year
ended 31^st March 2026, 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 financial
year ended 31^st March 2026 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.

Acknowledgements

The Directors express deep gratitude to our customers for their sustained support and feedback, which have helped the company
meet evolving needs and diversify its product portfolio for sustainable business growth. We thank our dedicated employees for
their commitment to our growth and success. We also appreciate our supply chain partners, whose partnership has been key to our
industry leadership.

Our sincere thanks goes to the regulatory authorities, bankers, financial institutions, rating agencies, stock exchanges, depositories,
auditors, legal advisors, consultants, Technology partners and other stakeholders. Your commitment to good governance, transparency,
ethics, and accountability has been crucial to our success.

For and on behalf Board of Directors
Sterling Tools Limited

Anil Aggarwal Atul Aggarwal

Date:- 5^th August, 2026 Chairman & Whole Time Director Managing Director

Place:- Faridabad DIN:00027214 DIN:00125825