The Members of
SAT INDUSTRIES LIMITED
The Directors of your Company have pleasure in presenting the Thirty third (33rd)Annual Report together with the Audited accounts of the Company for the year ended March31 2018.
01. FINANCIAL RESULTS
Your Company's performance during the year as compared with the previous year issummarized below :
| || ||Rs. in lakhs) |
|Particulars ||2017-2018 ||2016-2017 |
|Total Revenue ||5191.95 ||4795.82 |
|Profit/Loss(-) before Tax Interest Depreciation and Exceptional Items ||589.15 ||226.54 |
|Interest ||22.42 ||2.15 |
|Depreciation ||14.01 ||8.66 |
|Profit/(Loss) before Tax and exceptional Items ||552.72 ||215.73 |
|Less: Tax Expense ||103.69 ||16.73 |
|Profit/(Loss) after Tax ||449.03 ||199.00 |
|Exceptional Items ||0 ||1167.13 |
|Net Profit/(Loss) for the year ||449.03 ||1366.13 |
| || ||Rs. in lakhs) |
|Particulars ||2017-2018 ||2016-2017 |
|Total Revenue ||10183.53 ||9711.25 |
|Profit before Tax and after exceptional items ||809.85 ||2155.75 |
|Less: Tax Expense ||109.22 ||72.10 |
|Profit/(Loss) after Tax ||700.63 ||2083.65 |
|Net Profit/(Loss) for the year after Shares of Profit/ (Loss) of Associates and Minority Interest ||698.37 ||2084.13 |
The financial statements have been prepared in accordance with Indian AccountingStandards (Ind AS) notified under Section 133 of the Companies Act 2013. The financialstatements have also been prepared in accordance with the relevant presentationrequirements of the Companies Act 2013. The Company adopted Ind AS from 1st April 2017.
Up to the year ended 31st March 2017 the Company prepared its financial statements inaccordance with the requirements of previous Generally Accepted Accounting Principles(GAAP) which includes Standards notified under the Companies (Accounting Standards)Rules 2006. These are the Company's first Ind AS financial statements. The date oftransition to Ind AS is 1st April 2016. Details of the exceptions and optional exemptionsavailed by the Company and principal adjustments along with related reconciliations aredetailed in Note 39 (First-time Adoption) to the Notes to Financial Statement.
02. STATE OF COMPANY'S AFFAIRS:
The Company is engaged in the business of general trading of merchandise leasing ofassets and financing. During the year the Company recorded a total revenue of Rs. 5191.95lakhs against Rs. 4795.82 lakhs in corresponding previous year and earned a net profit ofRs. 449.03 Lakh (pr.yr. 1366.13 Lakh) after providing for depreciation and tax.
03. MATERIAL CHANGES AND COMMITMENTS:
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report.
Based on the Company's better performance the Directors are pleased to recommend amaiden dividend of Re. 0.10 (5%) per equity share of Rs. 2/- each for the Financial Year2017-18 subject to declaration of the same by the Members at the ensuing Annual GeneralMeeting.
05. CHANGE IN NATURE OF BUSINESS:
During the year there was no change in the nature of business of the Company.
06. LISTING OF SHARES:
The Equity Shares of the Company are listed on the
BSE Limited Phiroze Jeejeebhoy Towers Dalai Street Mumbai-400 001 and the listingfee for the year 20182019 has been paid.
07. SHARE CAPITAL:
During the year under report the issued subscribed and paid up capital of the Companyincreased from Rs.196000000/- divided into 98000000 Equity Shares of Rs. 2/- each toRs. 216000000/- divided into 108000000 of Rs. 2/- each with the allotment of10000000 equity shares upon conversion of the warrants.
The above shares have been listed by the BSE Limited.
08. SUBSIDIARIES AND ASSOCIATES:
The Company has five subsidiaries (four Indian and one foreign subsidiary) as on March31 2018 namely:
1. Sah Polymers Limited (Material Subsidiary);
2. Italica Furniture Private Limited;
3. Italica Ventures Private Limited;
4. Aeroflex International Limited;
5. Italica Global FZC UAE; and an associate viz. Genext Students Private Limited
During the year the Company made further investment of Rs. 486 Lakhs in Sah PolymersLimited to increase its stake from 89.43 % to 91.79%.
A Statement containing the salient features of the financial statement of thesubsidiaries and associate in the prescribed Form AOC-1 pursuant to Section 129 of theCompanies Act 2013 read with the Rule 5 of the Companies (Accounts) Rules 2014 isforming part of this Report.
09. PARTICULARS OF PERSONNEL AND RELATED DISCLOSURES:
During the year under review no employee of the Company was in receipt of remunerationin excess of the limits prescribed under rule 5(2) of the Companies (Appointment AndRemuneration of Managerial Personnel) Rules 2014.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are attached to this report vide Annexure-"A"
10. PUBLIC DEPOSITS:
The Company has not accepted any deposit within the meaning of Section 73 of theCompanies Act 2013 and rules made there under as such no amount of principal or interestwas outstanding as of the Balance Sheet date nor is there any deposit in non-complianceof Chapter V of the Companies Act 2013.
11. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
a) DIRECTORS :
Pursuant to the provisions of Section 152 of the Companies Act 2013 and in terms ofthe Articles of Association of the Company Mr. Harikant Turgalia Whole-time Director(DIN: 00049544) retires by rotation at the 33rd Annual General Meeting and beingeligible offers himself for re-appointment.
During the year Mr. Sunil Mithalal Jain (DIN: 03398788) and Mr. Nikhil Khanderao Raut(DIN: 06653335) were re-appointed as independent directors of the Company for a secondterm of 5 (five) consecutive years from 1st October 2017 to 30th September 2022.
b) KEY MANAGERIAL PERSONNEL :
During the year there was no change in the Company's Key Managerial Personnel.
None of the Directors and Key Managerial Personnel is in any way related to each otherexcept Mrs. Shehnaz D. Ali and Mr. Asad Daud who are related to each other as a mother andson.
12. STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTOR U/S 149(6) OF THECOMPANIES ACT 2013:
The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
13. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO:
a) The information required under Rule 8 of the Companies (Accounts) Rules 2014 readwith Section 134(3) of the Companies Act 2013 relating to conservation of energy andtechnology absorption is not being given since your Company is not engaged inmanufacturing activity.
b) Earning and outgo in foreign exchange :
| ||2017-18 ||2016-17 |
|(i) Earnings ||Nil ||Nil |
|(ii) Outgo ||Rs. 3404000/- ||2352147/- |
14. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to clause (c) of sub-section 3 of section 134 of the Companies Act 2013 It isstated that :
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to 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 controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; 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.
Through ordinary resolution no. 3 passed at the 32nd Annual General meeting held on29th September 2017 the existing auditors M/S. Sampatilal Bohara & Co. CharteredAccountants (FRN: ICAI FRN: 003324C) were appointed as statutory Auditors of the Companyfor a term of five years commencing from the conclusion of Thirty Second Annual Generalmeeting up to the conclusion of Thirty Seventh Annual General Meeting subject toratification of the same at every annual general meeting.
In view of the omission of the first proviso to subsection (1) of the section 139 ofthe Companies Act 2013 vide notification no. S.O. 1833(E) dated May 7 2018 theappointment of the Auditors is not required to be ratified by the members of the Companyat every Annual General Meeting.
To bring the appointment of the Auditors in consonance with the amended provision forthe remaining period i.e. from the conclusion of the 33rd Annual General Meeting up to theconclusion of the 37th Annual General Meeting the said resolution requires partialmodification -by deletion of the words requiring ratification at every Annual GeneralMeeting to conduct audit for the financial year 2018-19 2019-2020 20202021 and2021-2022.
The Board recommend the same for consideration at the ensuing annual general meeting.
16. FRAUDS AGAINST THE COMPANY:
The auditors have not reported frauds under sub-section (12) of section 143 of theCompanies Act 2013.
17. QUALIFIACTION IN THE AUDITORS' REPORT - BOARD'S COMMENTS OR EXPLANATIONON:
The Auditors' Report does not contain any qualification reservation or adverse remarkor disclaimer.
18. EXTRACT OF ANNUAL RETURN:
Extract of Annual Return as provided under sub-section (3) of section 92 of theCompanies Act 2013 is attached herewith (Annexure-"B").
19. CORPROATE GOVERNANCE:
The report on Corporate Governance as stipulated under Regulation 34(3) read with ParaC of Schedule V of the Listing Regulations is presented in separate section forming partof this Report as Corporate Governance Report.
20. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report for the year under review as stipulated underRegulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) is presented in aseparate section forming part of this Report as Annexure- "C"
21. CEO/CFO CERTIFICATE:
Chief executive officer and Chief financial officer compliance certificate asstipulated under Regulation 17(8) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) ispresented in a separate section forming part of this Report as
22. NUMBER OF MEETINGS OF THE BOARD:
During the year Seven (7) Board Meetings were held details of which are given in theCorporate Governance Report.
23. PARTICULARS OF LOANS GIVEN INVESTMENT MADE AND GUARANTEES GIVEN AND SECURITIESPROVIDED COVERED UNDER SECTION 186(4) OF THE COMPANIES ACT 2013:
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the Notes to the financial statements provided in this Annual Report.
24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The Company has not entered into any contract or arrangement with any person includingpersons covered under sub - section(1) of section 188 of the Companies Act 2013. Thepolicy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the Company's Website: www.satgroup.in
25. POLICY ON APPOINTMENT AND REMUNERATION FOR DIRECTORS KEY MANAGERIAL PERSONNEL ANDSENIOR MANAGEMENT EMPLOYEES:
The Nomination and Remuneration Committee of the Board has devised a policy forselection and appointment of Directors Key Managerial Personnel and Senior ManagementEmployees and their Remuneration. The Committee has formulated the criteria fordetermining qualifications positive attributes and independence of a Director which hasbeen placed on the Company's website. The policy on the above is attached as
Annexure -"E" & Annexure -"F".
26. INDEPENDENT DIRECTORS TRAINING/ MEETING:
During the year under review a separate meeting of the Independent Directors of theCompany was held on March 13 2018 without the presence of other Directors and members ofManagement. The Independent Directors reviewed the performance of Non-IndependentDirectors and the Board as a whole performance of Chairperson of the Company and assessedthe quality quantity and timelines of flow of information between the Company managementand the Board.
27. EVALUATION OF THE PERFORMANCE OF THE BOARD MEMBERS:
The Company has devised a policy for performance evaluation of the individualdirectors Board and its Committees which includes criteria for performance evaluation.Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations theBoard has carried out an annual performance evaluation of its own performance theindividual directors as well as the evaluation of working of the Committees of the Board.The Board performance was evaluated based on inputs received from all the Directors afterconsidering criteria such as Board composition and structure effectiveness of processesand information provided to the Board etc. A separate meeting of the Independent Directorswas also held during the year for evaluation of the performance of non-independentDirectors performance of the Board as a whole and that of the Chairman. The Nominationand Remuneration Committee has also reviewed the performance of the individual directorsbased on their knowledge level of preparation and effective participation in Meetingsunderstanding of their roles as directors etc.
28. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors had appointedMrs. Nancy Jain Proprietor of Nancy Jain & Associates Company Secretaries inPractice to undertake the Secretarial Audit of the Company. There is no qualificationreservation or adverse remark made in their Secretarial Audit Report submitted to theCompany. The Secretarial Audit Report is attached herewith as Annexure "G".
29. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:
Sat Middleeast Limited ceased to be a subsidiary of the Company with effect from30.03.2018 and Italica Global FZC UAE became subsidiary with effect from 01.06.2017.
30. CONSOLIDATION OF ACCOUNTS:
Your Directors have pleasure in attaching the Consolidated Financial Statementspursuant to Section 129(3) of the Companies Act 2013 and Regulation 34 of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 and prepared inaccordance with the applicable Accounting Standards in this regard.
The Auditors' report to the shareholders does not contain any qualificationobservation or adverse comment.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a) Issue of equity shares with differential rights as to dividend voting or otherwise.
b) Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
c) None of the Whole-time Directors of the Company receive any remuneration orcommission from any of its subsidiaries.
No significant and material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
32. RISK MANAGEMENT:
The Company has a robust Risk Management framework to identify evaluate business risksand opportunities. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company's competitive advantage. The business riskframework defines the risk identification and its management approach across theenterprise at various levels including documentation and reporting. The framework helps inidentifying risks trend exposure and potential impact analysis on a Company's business.
33. INTERNAL FINANCIAL CONTROLS:
The Company has an internal control system commensurate with the size scale andcomplexity of its operations. The Internal Audit Department monitors and evaluates theefficacy and adequacy of internal control system in the Company its compliance withoperating systems accounting procedures and policies of the Company. Based on the reportof internal audit function the Company undertakes corrective action in their respectiveareas and thereby strengthen the controls.
Significant audit observations and recommendations along with corrective actionsthereon are presented to the Audit Committee of the Board.
34. CORPORATE SOCIAL RESPONSIBILITY:
The provisions with respect to Corporate Social Responsibility are not applicable tothe Company as the Company does not fall within the purview of the Section 135 of the Act.
35. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS:
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings and Annual General Meetings.
Your Directors would like to express their grateful appreciation for the assistance andco-operation received from the shareholders banks Central and State GovernmentAuthorities etc. during the year under review.
Your Directors wish to place on record their deep sense of appreciation for the devotedservices of the executives Staff and Workers of the Company for its success.
For and on behalf of Board of Directors of
| || |
Sat Industries Limited
|Date: 25-05-2018 ||H.K. Turgalia ||Shehnaz D. Ali |
|Place: Mumbai ||Whole-time Director ||Whole-time Director |
| ||DIN: 00049544 ||DIN: 00185452 |