To The Members of
SAT INDUSTRIES LIMITED
The Directors of your Company have pleasure in presenting the Thirty-fourth (34th)Annual Report together with the Audited accounts of the Company for the year ended March31 2019.
Your Companys performance during the year as compared with the previous year issummarised below:
(Rs. in lakhs)
|Particulars ||2018-2019 ||2017-2018 |
|Total Revenue ||3435.89 ||5189.92 |
|Profit before Tax Interest Depreciation and Exceptional Items ||502.82 ||589.34 |
|Interest ||27.76 ||22.61 |
|Depreciation ||28.43 ||14.01 |
|Profit-before Tax and exceptional Items ||446.63 ||552.72 |
|Less: Tax Expense ||113.37 ||103.69 |
|Profit after Tax ||333.26 ||449.03 |
|Net Profit/(Loss) for the year ||333.26 ||449.03 |
(Rs. in lakhs)
|Particulars ||2018-2019 ||2017-2018 |
|Total Revenue ||23012.86 ||10183.53 |
|Profit before Tax and after exceptional items ||1529.39 ||809.85 |
|Less: Tax Expense ||(27.34) ||109.22 |
|Profit after Tax ||1556.73 ||700.63 |
|Net Profit for the year after Shares of Profit/(Loss) of Associates and Minority Interest ||1431.65 ||698.37 |
STATE OF COMPANYS AFFAIRS:
The Company is engaged in the business of general trading of merchandise leasing ofassets and financing. The total standalone revenue of your Company for the year underreview amounted to Rs. 3435.89 lakhs against Rs. 5189.92 lakhs in corresponding previousyear and earned a net profit of Rs. 333.26 lakh (pr.yr. 449.03 Lakh) after providing fordepreciation and tax.
On a consolidated basis the total revenues stood at Rs. 23012.86 Lakh an increase of126% over the previous year.
MATERIAL CHANGES AND COMMITMENTS:
There is no material changes and commitments affecting 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.
TRANSFER TO RESERVES
There is no amount proposed to be transferred to General Reserves during the year underreview.
The Directors are pleased to recommend a dividend of Re. 0.10 (5%) per equity share ofRs. 2/- each for the Financial Year 2018-19 subject to approval of the same by the membersat the ensuing Annual General Meeting Together with the Dividend Distribution Tax thetotal outflow on account of dividend will be appx. 129.22 Lakh.
CHANGE IN NATURE OF BUSINESS:
During the year there was no change in the nature of business of the Company.
LISTING OF SHARES:
The Equity Shares of the Company are listed on BSE Limited Phiroze Jeejeebhoy TowersDalal Street Mumbai-400 001 and the listing fee for the Financial Year 2019-2020 hasbeen paid.
During the year under report there was no change in the issued subscribed and paid upcapital of the Company.
SUBSIDIARIES AND ASSOCIATES:
The Company has six subsidiaries (five Indian and one foreign subsidiary) and oneAssociate Company as on March 31 2019 namely:
|Sr. No. Name of Company ||Subsidiary/ Associate |
|1 Sah Polymers Limited ||Subsidiary |
|2 Aeroflex Industries Limited ||Subsidiary |
|3 Aeroflex Finance Private Limited ||Subsidiary |
|4 Aeroflex International Limited ||Subsidiary |
|5 Italica Furniture Private Limited ||Subsidiary |
|6 Italica Global FZC UAE ||Subsidiary |
|7 Genext Students Private Limited ||Associate |
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.
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 remunerationand other details as required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are attachedto this report vide Annexure "A"
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.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Pursuant to the provisions of Section 152(5) of the Companies Act 2013 and in terms ofthe Articles of Association of the Company Mr. Goree Shankar Shrimali (DIN: 08198667) wasappointed as an Independent Director on the Board of Directors of the Company w.e.f.September 28 2018. Pursuant to the provisions of Section 168 of the Companies Act 2013and in terms of the Articles of Association of the Company Mr. Sunil Mithalal Jain (DIN:03398788) who served as an Independent Director on the Board of Directors of the Companyresigned w.e.f. 19th November 2018 due to his pre-occupation with other matters.
Pursuant to the provisions of Section 152 of the Companies Act 2013 and in terms ofthe Articles of Association of the Company Mr. Asad Daud Director (DIN: 02491539)retires by rotation at the 34th Annual General Meeting and being eligible offers himselffor re-appointment.
KEY MANAGERIAL PERSONNEL:
During the year there was no change in the Companys 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 by way ofmother-son relationship.
STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTOR U/S 149(6) OF THE COMPANIESACT 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.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO:
The Company continues to adopt and use the latest technologies to improve the qualityof its
Earning and outgo in foreign exchange:
|Particulars ||2018-19 ||2017-18 |
| ||(Rs. In lakhs) ||(Rs. In lakhs) |
|Earnings ||- ||- |
|Outgo ||153.18 ||34.04 |
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to clause (c) of sub-section 3 of section 134 of the Companies Act 2013 It isstated that:
in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;
the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
the directors had prepared the annual accounts on a going concern basis;
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
the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
M/S. Sampatilal Bohara & Co. Chartered Accountants (FRN: ICAI FRN: 003324C) wereappointed as Statutory Auditors of the Company for a period of five consecutive yearscommencing from the conclusion of Thirty-Second Annual General meeting of the Company upto the conclusion of Thirty-Seventh Annual General Meeting of the Company.
In view of the deletion of proviso to section 139 of the Companies Act 2013 effectedby the Companies (Amendments) 2017 their appointment does not require ratification atevery annual general meeting. In view of this the same has not be included in the Noticeto Annual General Meeting.
Further they have confirmed that they are not disqualified from continuing as Auditorsof the Company.
FRAUDS AGAINST THE COMPANY:
The auditors have not reported frauds under sub-section (12) of section 143 of theCompanies Act 2013.
QUALIFICATION IN THE AUDITORS REPORT - BOARDS COMMENTS OR EXPLANATIONON:
The Auditors Report does not contain any qualification reservation or adverseremark or disclaimer.
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").
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.
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"
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 Annexure- "D"
WEB-LINK OF ANNUAL RETURN:
Annual Return of the Company can be viewed at: http://satgroup.in/wp-content/uploads/2019/06/Extract-of-Annual-Return.pdf
NUMBER OF MEETINGS OF THE BOARD:
During the year seven (7) Board Meetings were held details of which are given in theCorporate Governance Report.
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.
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.The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the Companys Website: www.satgroup.in
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 Companys website www.satgroup. in . The policy on the above isattached as Annexure "E" & Annexure "F".
INDEPENDENT DIRECTORS TRAINING/ MEETING:
During the year under review a separate meeting of the Independent Directors of theCompany was held on March 23 2019 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.
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.
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".
NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURE ORASSOCIATE COMPANIES DURING THE YEAR:
Aeroflex Industries Limited (AIL) became a subsidiary of the Company with effect fromApril 2 2018. Besides no other Company became or ceased to be its subsidiary jointventure or associate Company during the year.
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.
Pursuant to Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audit) Amendment Rules 2014 appointment of cost auditor is not applicable to thecompany.
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 Companys competitive advantage. The businessrisk framework 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 Companysbusiness.
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.
CORPORATE SOCIAL RESPONSIBILITY:
The brief outline of the Corporate Social Responsibility (CSR) Policy of your companyalong with the initiative taken by it are set out in Annexure "H" of this reportin the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules2014. The policy is available on the website of the companyhttp://satgroup.in/corporate-social-responsibility-policy/
Your Company has established a robust Vigil Mechanism for reporting of concerns throughthe Whistle Blower Policy of the Company which is in compliance of the provisions ofSection 177 of the Act read with Rule 7 of the Companies (Meetings of Board and itsPowers) Rules 2014 and SEBI (LODR). The Policy provides for framework and processwhereby concerns can be raised by its employees against any kind of discriminationharassment victimisation or any other unfair practice being adopted against them.Adequate safeguards are provided against victimisation to those who avail of themechanism and access to the Chairman of the Audit Committee in exceptional cases isprovided to them. The details of the Whistle Blower Policy have been uploaded on thewebsite of the Company www.satgroup.in
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
The Company has in place an Anti-Sexual harassment Policy in line with the requirementsof the Sexual harassment of women at the workplace (Prevention Prohibition and Redressal)Act 2013 and rules made thereunder. An Internal Complaints Committee (ICC) is in place asper the requirements of the said Act to redress complaints received regarding sexualharassment. All employees (Permanent contractual temporary trainees) are covered underthis policy. No case has been reported during the year under review.
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.
ANNUAL PERFORMANCE EVALUATION
During the year under review pursuant to the provisions of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hascarried out an Annual Performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its various Committees. Aseparate meeting was carried out to evaluate the performance of individual Directors whowere evaluated on parameters such as level of engagement and contribution independence ofjudgement safeguarding the interest of the Company and its minority shareholders etc. Theperformance evaluation of the Independent Directors was carried out by the entire Board atits meeting following the meeting of Independent Directors.
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:
Issue of equity shares with differential rights as to dividend voting or otherwise.
Issue of shares (including sweat equity shares) to employees of the Company under anyscheme.
None of the Whole-time Directors of the Company receive any remuneration or commissionfrom any of its subsidiaries.
No significant and material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Companys operations in future.
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 recordtheir deep sense of appreciation for the devoted services of the executives staff andworkers of the Company for its success.
| ||For and on behalf of Board of Directors of |
| ||SAT INDUSTRIES LIMITED |
|Shehnaz D. Ali ||H.K. Turgalia |
|Whole-time Director ||Whole-time Director |
|DIN:00185452 ||DIN: 00049544 |
|Date: 29-05-2019 || |
|Place: Mumbai || |