To The Members of SAT INDUSTRIES LIMITED
The Directors of your Company have pleasure in presenting the Thirty-fifth (35th)Annual Report together with the Audited accounts of the Company for the year ended March31 2020.
1. FINANCIAL RESULTS
Your Company's performance during the year as compared with the previous year issummarised below:
| || ||(Rs. in lakhs) |
|Particulars ||2019-2020 ||2018-2019 |
|Total Revenue ||2174.01 ||3435.89 |
|Profit before Tax Interest Depreciation and Exceptional Items ||66.14 ||502.82 |
|Interest ||5.75 ||27.76 |
|Depreciation ||31.66 ||28.43 |
|Profit-before Tax and exceptional Items ||103.55 ||446.63 |
|Less: Tax Expense ||41.07 ||113.37 |
|Profit after Tax ||62.48 ||333.26 |
|Net Profit/(Loss) for the year ||62.48 ||333.26 |
| || ||(Rs. in lakhs) |
|Particulars ||2019-2020 ||2018-2019 |
|Total Revenue ||22895.02 ||23054.81 |
|Profit before Tax and after exceptional items ||228.37 ||1529.39 |
|Less: Tax Expense ||(41.64) ||(27.34) |
|Profit after Tax ||270.01 ||1556.73 |
2. STATE OF COMPANY'S 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. 2174.01 Lakhs against Rs. 3435.89 Lakhs in corresponding previousyear and earned a net Profit of Rs. 62.48 Lakh (pr.yr. 333.26 Lakh) after providing fordepreciation and tax. The last part of 4th quarter was impacted by the unforeseendevelopment of the COVID-19 pandemic.
On a consolidated basis the total revenues stood at Rs. 22895.02 Lakh against Rs.23054.81 Lakhs in corresponding previous year. The COVID-19 pandemic developed rapidlyinto a global crisis forcing governments to enforce lockdowns of all economic activityand in India is causing significant disturbance and slowdown of economic activity. In manycountries businesses are being forced to cease or limit their operations for long orindefinite periods of time. Measures taken to contain the spread of the virus includingtravel bans quarantines social distancing and closures of non-essential services havetriggered significant disruptions to businesses worldwide resulting in an economicslowdown. We in SAT focused on the safety of employees and other stakeholders.
Your Directors wish to place on record their appreciation to the Company's employeessuppliers customers & Government authorities for their selfless efforts which helpedyour Company reach normalcy in operations within few weeks of lock-down. The ownership andresponsiveness shown by all the stakeholders is unparalleled and is a testimony of thespirit of this great organization. Your Company shall review the long-term impact of thepandemic and take all steps necessary to adapt itself to emerging changes and the newnormal.
3. 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.
4. TRANSFER TO RESERVES
There is no amount proposed to be transferred to General Reserves during the year underreview.
The Directors of the Company are of the opinion to reinvest all of its earnings forfuture expansions and hence do not recommend any dividend for the financial year 2019-20.
6. CHANGE IN NATURE OF BUSINESS:
During the year there was no change in the nature of business of the Company.
7. 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 2020-2021 hasbeen paid.
8. SHARE CAPITAL:
During the year under report the issued subscribed and paid up capital of the Companyincreased from Rs.216000000/ divided into 108000000 Equity Shares of Rs. 2/- each toRs. 226170000/- divided into 113085000 of Rs. 2/- each with the allotment of5085000 equity of shares Rs. 2/- each upon conversion of the warrants.
Equity shares issued during the year have been listed and are traded on the BSELimited.
9. SUBSIDIARIES AND ASSOCIATES:
The Company has six subsidiaries (five Indian and one foreign subsidiary) and oneAssociate Company as on March 31 2020 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 pursuant to Section 129 of the Companies Act 2013 read withthe Rule 5 of the Companies (Accounts) Rules 2014 are given in Annexure I in Form No.AOC-1 and the same forms part of this report.
10. P ARTICULARS OF PERSONNEL AND 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"
11. 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.
12. DET AILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
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 35th Annual General Meeting and beingeligible offers himself for reappointment.
During the year Mr. Ramesh Chandra Soni (DIN: 00049497) was re-appointed asindependent director of the Company for a second term of 5 ( five) consecutive years fromOctober 1 2019 to 30th September 2024.
(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 by way ofmother-son relationship.
13. ST ATEMENT 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.
14. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO:
a) The Company continues to adopt and use the technologies to improve the quality ofits Services.
b) Earning and outgo in foreign exchange:
|Particulars ||2019-20 ||2018-19 |
| ||(Rs. In lakhs) ||(Rs. In lakhs) |
|Earnings ||- ||- |
|Outgo ||110.66 ||153.18 |
15. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to clause (c) of sub-section 3 of section 134 of the Companies Act 2013. Itis stated that:
a) in the preparation of the annual accounts the accounting standards had beenfollowed along with proper explanation relating to material departures;
b) the directors had selected such accounting and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the Profitand loss of the company for that period;
c) the directors had taken proper and sufficient 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 going concern basis;
e) the directors had laid down internal financial to be followed by the company andthat such internal financial controls are adequate and were operating effectively; and
f) the directors had devised proper systems to compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
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 latestthe Companies Act 2013effected by the Companies (Amendments) 2017 their appointment does not requirerati_cation at every annual general meeting. In view of this the same has not beenincluded in the Notice to Annual General Meeting. Further they have confirmed that theyare not disquali_ed from continuing as Auditors of the Company.
17. FRAUDS AGAINST THE COMPANY:
The auditors have not reported frauds under sub-section (12) of section 143 of theCompanies Act 2013.
18. QUALIFICATION IN THE AUDITORS' REPORT - applicable
BOARD'S COMMENTS OR EXPLANATIONON:
The Auditors' Report does not contain any qualification reservation or adverse remarkor disclaimer.
19. EXTRA CT 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. on a
21. 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 ensure of this Report as Annexure- "C".
22. CEO/CFO CERTIFICATE:
Whole-time Director and Chief financial officer compliance certificate as stipulatedunder Regulation 17(8) of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (Listing Regulations) is presented in aseparate section forming part of this Report as Annexure- "D"
23. WEB-LINK OF ANNUAL RETURN:
Annual Return of the Company can be viewed at: https://satgroup.in/extract-of-annual-return/
24. NUMBER OF MEETINGS OF THE BOARD:
During the year nine (9) Board Meetings were held details of which are given in theCorporate Governance Report.
25. 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.
26. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The Company has entered the transactions with related parties fall under the scope ofSection 188(1) of the Act. The information on transactions with related parties pursuantto Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules2014 are given in Annexure II in Form No. AOC-2 and the same forms part of this report.The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the Company's website: www.satgroup.in
27. 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 www.satgroup. in . The policy on the above isattached as Annexure "E" & Annexure "F".
28. INDEPENDENT DIRECTORS TRAINING/ MEETING:
During the year under review a separate meeting of the Independent Directors of theCompany was held on February 13 2020 without the presence of other Directors and membersof Management. The Independent Directors reviewed the performance of Non-IndependentDirectors and the Board as a whole and assessed the quality quantity and timelines offlow of information between the Company management and the Board.
29. 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. The Nomination and Remuneration Committeehas also reviewed the performance of the individual directors based on their knowledgelevel of preparation and effective participation in Meetings understanding of their rolesas directors etc.
30. 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 appointedDr. S. K. Jain Proprietor of M/s. S. K. Jain & Co. Company Secretaries (FCS: 1473& COP: 3076) to undertake the Secretarial Audit of the Company. There is noqualification reservation or adverse remark made in their Secretarial Audit Reportsubmitted to the Company. The Secretarial Audit Report is attached herewith as Annexure"G".
31. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURE OR ASSOCIATE COMPANIES DURING THE YEAR:
During the year no Company became or ceased to be its subsidiary joint venture orassociate Company.
32. 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' reportto the shareholders does not contain any qualification observation or adverse comment.
33. COST AUDITORS
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.
34. RISK MANAGEMENT:
The Company has a Risk Management framework to identify evaluate business risks andopportunities. This framework seeks to create transparency minimize adverse impact on thebusiness 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.
35. 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.
36. 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/
36. VIGIL MECHANISIM/WHISTLEBLOWER:
Your Company has established a Vigil Mechanism for reporting of concerns through theWhistle Blower Policy of the Company which is in compliance of the provisions of Section177 of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers)Rules 2014 and SEBI (LODR). The Policy provides for framework and process wherebyconcerns can be raised by its employees against any kind of discrimination harassmentvictimisation or any other unfair practice being adopted against them. Adequate safeguardsare provided against victimisation to those who avail of the mechanism and access to theChairman of the Audit Committee in exceptional cases is provided to them. The details ofthe Whistle Blower Policy have been uploaded on the website of the Companywww.satgroup.in
38. 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.
39. 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.
40. 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: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 under anyscheme. 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 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: 24-07-2020 || |
|Place: Mumbai || |