Stanley Lifestyles , a prominent player in the lifestyle furniture industry, has disclosed that its wholly-owned subsidiary, Stanley OEM Sofas Limited, has been penalized by the Regional Director South East Region, Ministry of Corporate Affairs, Hyderabad. The subsidiary has been slapped with two separate penalties totaling ₹11.2 lakh for regulatory violations.

Related Party Transaction Violation

The first penalty of ₹10.00 lakh was imposed under Section 188 of the Companies Act. Stanley OEM Sofas Limited was found to have entered into related party transactions without obtaining the requisite Board or Shareholder approval. As a result, two directors of the company faced individual fines:

• Mrs. Shubha Sunil: ₹5.00 lakh
• Mr. Sunil Suresh: ₹5.00 lakh

MSME Dues Disclosure Failure

The second penalty of ₹1.20 lakh was levied under Section 405 of the Companies Act. This penalty was imposed due to the subsidiary's failure to disclose MSME (Micro, Small, and Medium Enterprises) dues in its financial statements for the fiscal years 2019-20 and 2020-21. The penalty was distributed as follows:

Exemption for Former Director

It's worth noting that Mr. Ananthakrishnan Viswanath, a former director of the company, had penalties set aside in both cases. The Regional Director acknowledged that Mr. Viswanath, who served as a Non-Executive Director from December 30, 2015, to March 20, 2024, was not involved in the day-to-day management of the company and was unaware of the related party transactions and MSME dues.

Company's Statement

Stanley Lifestyles has stated that there is no material impact on its financial or operational activities beyond the imposed penalties. The company emphasized that the financial impact is limited to the penalties imposed on the officers in default.

Regulatory Compliance Importance

This incident underscores the importance of strict adherence to regulatory requirements, particularly in areas of related party transactions and financial disclosures. It serves as a reminder for companies to maintain robust internal controls and ensure proper approvals are obtained for all transactions as mandated by the Companies Act.

As the furniture industry continues to grow, companies like Stanley Lifestyles and its subsidiaries will need to prioritize regulatory compliance to maintain investor confidence and uphold corporate governance standards.

Stanley Lifestyles held a significant board meeting on August 28, 2025, making several important decisions and approvals. The company, known for its presence in the lifestyle sector, addressed crucial corporate governance matters during the meeting.

Board's Report and BRSR Approval

The Board of Directors approved the company's Board's Report for the financial year ended March 31, 2025. This report, along with its annexures, provides a comprehensive overview of the company's performance and activities during the fiscal year. Additionally, the Board gave its nod to the Business Responsibility and Sustainability Report (BRSR) for the same period, highlighting Stanley Lifestyles' commitment to sustainable business practices.

Appointment of New Secretarial Auditor

In a notable move, the Board appointed Mr. Vijaykrishna K T as the company's Secretarial Auditor for a five-year term, spanning from FY 2025-26 to FY 2029-30. This appointment is subject to shareholder approval at the upcoming Annual General Meeting (AGM).

Mr. Vijaykrishna brings a wealth of experience to the role, with over 38 years of post-qualification expertise in corporate laws and governance. His impressive background includes:

• Extensive experience in public limited companies and as a practicing Company Secretary
• Expertise in corporate affairs, Initial Public Offerings (IPOs), rights issues, and preferential issues
• Proficiency in mergers & acquisitions, corporate restructuring, and fund-raising tasks
• Consultancy experience with various corporate clients, including multinational corporations and public sector undertakings

18th Annual General Meeting

The Board also approved the notice for Stanley Lifestyles' 18th Annual General Meeting, scheduled for September 26, 2025. In line with ongoing digital trends, the AGM will be conducted through video conferencing, ensuring broader participation and adherence to modern corporate practices.

Regulatory Compliance

The company promptly disclosed these developments to the National Stock Exchange of India Limited and BSE Limited, in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Stanley Lifestyles continues to demonstrate its commitment to transparent corporate governance and strategic growth as it moves forward in the dynamic lifestyle sector. Shareholders and market observers will be keenly watching the upcoming AGM for further insights into the company's future direction and performance.