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SAB Industries Ltd.

BSE: 539112 Sector: Infrastructure
NSE: N.A. ISIN Code: INE137M01017
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VOLUME 163
52-Week high 92.50
52-Week low 39.10
P/E 174.63
Mkt Cap.(Rs cr) 72
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 47.15
CLOSE 47.15
VOLUME 163
52-Week high 92.50
52-Week low 39.10
P/E 174.63
Mkt Cap.(Rs cr) 72
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

SAB Industries Ltd. (SABINDUSTRIES) - Director Report

Company director report

Dear Members

The Directors of your Company have pleasure in presenting the Annual Report on Accountsfor the Financial Year ending 31st March 2017.

FINANCIAL HIGHLIGHTS

Particulars

Standalone

Consolidated

2016-17 2015-16 2016-17 2015-16
Turnover and Other Income - Turnover 1933.24 4329.50 1933.24 4329.50
- Other Income 567.53 137.76 567.53 137.76
Operating Profit 449.95 871.72 - -
Financial Expenses 158.01 137.62 158.01 137.62
Depreciation 23.55 22.64 23.55 22.64
Net Profit from ordinary operations 268.39 711.46 268.39 711.46
Prior period Adjustments (251.44) 88.67 (251.44) 88.67
Net profit before tax 519.82 622.79 519.82 622.79
Tax Expense 62.93 145.85 62.93 145.85
Profit after Tax 456.89 476.94 459.93 425.90

OPERATIONS AND FUTURE OUTLOOK

During the year under consideration the turnover of the Company was at Rs.1933.24lakhs which is lower as compared to a turnover of Rs.4329.50 lakhs during the previousyear due to delay in procuring new job contracts. The Company earned a net profit ofRs.456.89 lakhs during the year as against Rs.476.94 lakhs during the previous year.

The Central Government has taken new initiatives such as Invest India Start Up India"100 smart cities" initiative implementation of Goods and Service Tax (GST) andReal Estate Regulation and Development Act 2016 (RERA) during the last two years to givea boost to the Real Estate Construction and Infrastructure Sector. In addition Govt. isgiving major thrust on road and railways. Tax benefits are being introduced to bring inFDI and Local investments in the sector. These initiatives are giving a thrust to theConstruction Sector.

The Company has been awarded new jobs worth Rs.57.88 crore approx. by GovernmentDepartments. Out of the above jobs worth Rs.12.12 crore approx. were under progress till31.03.2017 and the balance work is to be executed during the current year. The Company hasalso submitted fresh tenders which will also substantiate the turnover.

SEGMENT REPORT

Your Company has a number of activities in its fold. Its business activities includeConstruction and Engineering Real Estate Information Technology and Trading. The Companyis registered with various Government Departments like Uttranchal PWD (B&R) HP PWD(B&R) Madhya Pradesh PWD (B&R) PUDA and other Central Bodies as Class-1contractors. This segment presently has the largest share of revenue and profits in theperformance of the Company. This segment also provides consultancy in the field of civilengineering and preparation and award of claims.

The Infotech Division of the Company undertakes activities of an Internet ServiceProvider in Punjab Telecom Circle including Punjab Chandigarh Panchkula and parts ofHaryana and Himachal Pradesh.

The other important segment of activities of your Company is Development and Sale ofReal Estate. As stated above the Central Government is taking new initiatives to give aboost to the Real Estate Sector. Though the market growth in housing sector in NorthernRegion of the Country is presently low however it is likely to pick up in due course oftime.

A breakup of the segment-wise performance is given in the 'Notes on Accounts' whichforms a part of the Balance Sheet.

FINANCIAL STATUS

There is no change in the 'Issued and Subscribed Capital' of Rs.151883720 dividedinto 15188372 equity shares of Rs.10/- each during the year. There are no equityshares with differential rights or sweat equity or ESOP or scheme of purchase of Companyshares by employees or their trustees.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY

There are no material changes which occurred subsequent to the close of the financialyear to which the Financial Statements relate and upto the date of report.

CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE COMMITTEE

The Company has constituted a Corporate Social Responsibility Committee and also frameda Corporate Social Responsibility Policy and the same is posted on the website of theCompany at http://www.sabindutries.in

Since the Company does not have net profits in accordance with Section 135 of theCompanies Act 2013 the Company is not required to undertake any activity under CSRRules.

DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES DURING THE YEAR

Your Company has no Subsidiary or Joint Venture Company during the year. However thereis an Associate by the name of SAB Udyog Limited reportable under Section 129(3) of theCompanies Act 2013.

A separate statement related to the Associate Company forms part of Annual report inthe prescribed Form AOC-1 as Annexure- 1 in compliance with Section 129 and otherapplicable provisions if any of the Companies Act 2013 Consolidated Financial Statementprepared by the Company includes financial information of its Associate Company. TheCompany will provide a copy of Annual Report and other document of its Associate Companyon the request made by any member investor of the Company. The annual accounts of theAssociate Company have been kept for inspection by any Shareholder at the RegisteredOffice of the Company. The statement is also available on the website of the Company athttp://www.sabindustries.in.

DIVIDEND

Keeping in view the business commitments your Company has decided not to declare anydividend for the year 2016-17.

FIXED DEPOSITS

The Company has not accepted any fixed deposits covered under Chapter V of theCompanies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014 (as amended)during the year under review.

CORPORATE GOVERNANCE REPORT- DISCLOSURE REQUIREMENTS

The Company continuously strives to attain high levels of corporate performanceaccountability transparency responsibility and fairness in all aspects of itsoperations. Transparency in all dealings and providing better services withoutcompromising in any way on integrity and regulatory compliances have been the basicobjectives of corporate governance in the Company. The Corporate Governance practicesfollowed by the Company are enclosed as Annexure to this report. (Annexure-6)

EXTRACT OF THE ANNUAL RETURN

The extract of the annual return as provided under Section 92(3) of the Act isattached in Form No. MGT-9 which forms part of the Boards' Report. (Annexure-4)

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Directors' confirm that:

a. in the preparation of the annual accounts for the year ending 31st March 2017 theapplicable accounting standards had been followed along with proper explanation relatingto material departures;

b. the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

c. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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;

e. the Directors had laid down internal financial control to be followed by the Companyand that such internal financial controls were adequate and were operating effectively;and

f. the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The internal control systems and processes of the Company cover operational efficiencyaccuracy and promptness in financial reporting compliance with laws and regulations anddevelopment of mature disciplined and effective processes. The processes are alsodesigned to meet the goals of cost schedule functionality and quality thus resulting inhigher levels of customer satisfaction.

DIRECTORS

A) Changes in Directors and Key Managerial Personnel

Since the last Annual General Meeting following changes have taken place in the Boardof Directors.

- Pursuant to the provisions of Section 149 of the Act Smt. Tejinder Kaur wasappointed as Independent Director at the Annual General Meeting of the Company held on30th September 2016. The terms and conditions of appointment of Independent Director areas per Schedule IV of the Act. She has submitted a declaration that she meets the criteriaof Independence as provided in Section 149(6) of the Act and there has been no change inthe circumstance which could affect her status as Independent Director during the year.

- Shri Kanwarjit Singh being an Independent Director vacated office on 13.02.2017pursuant to section 167(b) of Companies Act 2013. However keeping in view his vast andvaried experience he was re-appointed as Additional Independent Director of the Companyby the Board in its meeting held on 30.05.2017.

As per the provisions of Companies Act 2013 Shri R K Garg (DIN-00034827) Directorretires by rotation at the forthcoming Annual General Meeting and being eligible offershimself for re-appointment

B) Declaration by an Independent Director(s) and re-appointment if any

A declaration by Independent Directors stating that he/they meet the criteria ofindependence as provided in sub-section (6) of Section 149 of the Companies Act 2013 hadbeen taken at the time of their appointment.

C) Formal Annual Evaluation

The Board of Directors has carried out an annual evaluation of its own performance andthat of the Board committees and individual directors pursuant to the provisions of theAct and the corporate governance requirements as prescribed by Securities and ExchangeBoard of India

("SEBI") under SEBI (LODR) Regulations 2015.

The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of the criteria such as composition of committeeseffectiveness of committee meetings etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issue to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspects ofhis role.

In a separate meeting of Independent Directors performance of nonindependentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors The same was discussed in the Board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual directors was also discussed.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year under review 5 Board Meetings were held one each on 18thApril2016 14th May 2016 12th August 2016 12th November 2016and 13th February 2017.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of the Directors' Report.

AUDIT COMMITTEE

The Audit & Compliance Committee comprises of three non-executive IndependentDirectors viz. Shri S S Virdi Shri Kanwarjit Singh Smt. Manju Lakhanpal and Shri H KSinghal. During the year the committee held four meetings. Other details of the AuditCommittee are included in the Corporate Governance Report which forms part of this report.

The Board had accepted all recommendation of the Audit Committee if any.

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM/ WHISTLE BLOWER POLICY FOR DIRECTORS ANDEMPLOYEES

The Company has formulated and published a Whistle Blower Policy to provide vigilmechanism for employees including Directors of the Company to report genuine concerns. Theprovisions of this Policy are in line with the provisions of Section 177(9) of the Act andthe Regulation 22 of SEBI (LODR) Regulations 2015.

There are no cases reported during the year.

NOMINATION AND REMUNERATION COMMITTEE

The committee has been constituted to review and recommend compensation payable to thewhole-time directors including Chairman and senior management of the Company. Thecommittee reviews the overall compensation structure and policies of the Company with aview to attract retain and motivate employees reviewing compensation levels of theCompany vis-a-vis other Companies and industry in general.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

There were no Loans/ Guarantee given and Investments made by the Company during theyear exceeding the limits prescribed under Section 186 of the Companies Act 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All contracts/ arrangements/ transactions entered by the Company during the FinancialYear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions. A statement insummary form of transactions with related parties which were all in ordinary course ofbusiness and arm's length basis is periodically placed before the audit committee forreview and recommendation to the board for their approval.

The policy on materiality of related party transactions and dealing with related partytransactions as approved by the board is uploaded on the website of the Company.

Disclosures as required under accounting standards (AS-18) have been made in thefinancial statements of the Company enclosed with this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated underRegulation 34(2) (e) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms part of the Board's report as Annexure-5.

BUSINESS RISK MANAGEMENT

The risk management includes identifying types of risks and its assessment riskhandling monitoring and reporting which in the opinion of the Board may threaten theexistence of the Company. The Board has formulated the Risk Management Policy to managerisks with the objective of maximizing shareholders value. The Risk Management Policy maybe accessed on the website of the Company at http://www.sabindustries.in.

AUDITORS

M/s S.C. Dewan & Co. Chartered Accountants were appointed as Statutory Auditorsof the Company to hold office till the conclusion of Annual General Meeting to be held inthe calendar year 2017 (subject to ratification of their appointment at every AGM).

Pursuant to provisions of Section 139 of the Companies Act 2013 M/s S.C. Dewan &Co. Chartered Accountants Auditors of the Company retire at the conclusion of theforthcoming Annual General Meeting of the Company.

Board in it's meeting held on 30.05.2017 proposed the appointment of M/s AKR &Associates Chartered Accountants as Statutory Auditors of the Company to hold the officefrom the conclusion of forthcoming Annual General Meeting till the conclusion of AnnualGeneral Meeting to be held in the calendar year 2022 subject to the approval of members.

AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT

The Auditors' Report and Secretarial Auditors' Report do not contain anyqualifications reservations or adverse remarks. Report of Secretarial Auditors isattached as an annexure which forms part of this report. (Annexure-2)

LISTING OF SHARES

Equity shares of the Company are listed on BSE Limited and Listing fee has already beenpaid in pursuance to Regulation 14 of SEBI (LODR) Regulations 2015.

DEMATERIALISATION

The equity shares of your Company are to be compulsorily traded in dematerialized form.As on 31.03.2017 a total of 15101450 equity shares representing 99.43% of equity sharecapital have been dematerialized.

INSURANCE

All the assets of the Company have been adequately insured.

PERSONNEL AND RELATED DISCLOSURES

The information required under Section 197 of the Act read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is enclosed with thisreport. (Annexure-3)

INDUSTRIAL RELATIONS

Industrial relations continued to be cordial during the year under review.

HEALTH SAFETY AND ENVIRONMENT PROTECTION

Our Company has complied with all the applicable health & Safety standardsenvironment laws and labour laws and has been taking all necessary measures to protect theenvironment and provide workers a safe work environment. Our Company is committed forcontinual improvement in Health & Safety as well as Environmental performance byinvolving all the employees to provide a Safe & healthy work environment to all itsemployees

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy against sexual harassment in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder.

During the financial year 2016-17 the Company has not received any complaint on sexualharassment and hence no complaints remain pending as on 31st March 2017.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 134(3)(m) of the CompaniesAct 2013 regarding Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo is not applicable as the Company did not have any manufacturingfacility during the period under consideration. There were no foreign exchange earnings/outgo during the period.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude the assistance co-operation and supportreceived by the Company from the Banks Statutory/ Govt. Bodies Customers andShareholders of the Company.

For and on behalf of
BOARD OF DIRECTORS
H.K. SINGHAL AVINASH SHARMA
Place: Chandigarh Director Executive Director
Date: 30.05.2017 DIN-00044328 DIN-02371722