To The Members of SAT INDUSTRIES LIMITED
The Directors of your Company have pleasure in presenting their Thirty second (32nd)Annual Report and the Audited Accounts of the Company for the year ended March 31 2017.
01. FINANCIAL RESULTS
Your Company's performance during the year as compared with that during the Previousyear is summarized below :
| || ||(Rs. in lakhs) |
|Particulars ||2016-2017 ||2015-2016 |
|Turnover ||4795.75 ||4838.30 |
|Other Income ||0.07 ||0.00 |
|Profit/Loss(-) before Tax Interest Depreciation and Exceptional Items ||227.05 ||44.50 |
|Interest ||2.66 ||0.00 |
|Depreciation ||8.66 ||3.94 |
|Profit/(Loss) before Tax and exceptional Items ||215.73 ||40.56 |
|Less: Tax Expense ||16.73 ||70.35 |
|Profit/(Loss) after Tax ||199.00 ||(29.79) |
|Exceptional Items ||1167.13 ||0.00 |
|Profit/(Loss) after Tax and exceptional Items ||1366.13 ||(29.79) |
|Profit available for appropriation ||1366.13 ||(29.79) |
|Surplus carried from Previous year ||(1440.30) ||(1410.52) |
|Balance carried to Balance Sheet ||(74.18) ||(1440.30) |
| || ||(Rs. in lakhs) |
|Particulars ||2016-2017 ||2015-2016 |
|Turnover ||9137.68 ||9196.40 |
|Other Income ||197.34 ||82.78 |
|Profit before Tax ||2179.56 ||(154.90) |
|Less: Tax Expense ||72.11 ||(20.27) |
|Profit/(Loss) after Tax ||2107.45 ||(175.17) |
|Net Profit/(Loss) for the year after Shares of Profit/ (Loss) of Associates and Minority Interest ||2083.17 ||(197.78) |
|Balance carried from last year ||(2398.39) ||(2398.60) |
|Balance carried to Balance Sheet ||(336.49) ||(2398.39) |
02. STATE OF COMPANY'S AFFAIRS:
The company is engaged in the business of general trading mainly fabric and leasing ofmachinery & moulds. During the year the Company clocked a turnover of Rs. 4795.75lakhs as against Rs. 4838.30 lakhs in corresponding previous year. However during theyear the Company incurred a profit after tax of Rs. 1366.13 lakhs as against loss aftertax of Rs. 29.79 lakhs in the corresponding previous year.
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 whichthis financial statements relate and the date of report.
The Directors of the Company are of the opinion to reinvest all of its earnings backinto the company and hence do not recommend any dividend for the year 2016-2017.
05. CHANGE IN NATURE OF BUSINESS:
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and date of this Report. During the YearCompany has made foray into nonbanking financial activities.
06. LISTING OF SHARES:
The Equity Shares of your Company are listed on the BSE Limited Phiroze JeejeebhoyTowers Dalal Street Mumbai-400 001 and the listing fees for the year 2017-2018 has beenpaid.
07. SHARE CAPITAL:
During the year under report the authorized share capital of the Company increased fromRupees Fifteen Crores (Rs.150000000/-) divided into Seven Crore Fifty Lakhs(7500000) Equity Shares of Rs. 2/- each to Rupees Twenty Two Crores (Rs.220000000/-)divided into Eleven Crores (110000000) Equity Shares of Rs. 2/- each. Further theissued subscribed and paid up capital of the Company has also been increased from RupeesEleven Crores Eighteen Lakhs (Rs.111800000/-) divided into Five Crores Fifty Nine Lakhs(55900000) Equity Shares of Rs. 2/- each to Rupees Nineteen crores Sixty Lakhs(Rs.196000000/-) divided into Nine Crores Eighty Lakhs (98000000) Equity Shares ofRs. 2/- each with the allotment of equity shares upon conversion warrants.
The equity shares have since been listed on BSE Limited.
08. SUBSIDIARIES AND ASSOCIATES:
The Company has as on 31st March 2017 Five subsidiaries namely Aeroflex InternationalLimited Italica Furniture Private Limited Italica Ventures Private Limited Sat MiddleEast Limited as its Wholly Owned Subsidiary Companies and Sah Polymers Limited as itsSubsidiary Company. Further the Company also has as on 31st March 2017 one AssociateCompany namely Genext Students Private Limited as mentioned in the notes of the StandaloneFinancial Statements of the Company.
The prescribed salient features of the financial statements of the aforesaid subsidiarycompanies as per Sub Section 3 of Section 129 of the Act have been disclosed in a separatestatement attached to the consolidated Financial Statements which form part of this AnnualReport. The statement reflects the performance and financial position of each of thesubsidiaries as required by Rule 8 (1) of the Companies (Accounts) Rules 2014.
During the year Sat Middle East Limited wholly owned subsidiary of Sat IndustriesLimited engaged in the business of general trading has restarted its business operationsand achieved turnover of Rs. 20120474 (AED 1103780).
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"
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. Asad Daud Director (DIN: 02491539)retires by rotation at the ensuing Annual General Meeting and being eligible offershimself for re-appointment.
Further Mr. Nikhil Khanderao Raut (DIN: 06653335) and Mr. Sunil Mithalal Jain (DIN:03398788) will cease to hold their respective offices from 1st October 2017. The Board ofDirectors of your Company has at its meeting held on 23rd May 2017 proposed tore-appoint them on their respective posts subject to your approval at the ensuing AnnualGeneral Meeting for which necessary resolutions have been incorporated in the notice ofthe aforesaid meeting.
b) KEY MANAGERIAL PERSONNEL :
During the year under review there was no change in Key Managerial Personnel of theCompany.
12. STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTOR U/S 149(6) OF THECOMPANIES ACT 2013:
It is stated pursuant to provisions 134(3)(d) of the Companies Act 2013 that thedeclarations given by Mr. Ramesh Chandra Soni Mr. Sunil Jain and Mr. Nikhil Raut who areindependent directors meet the criteria of independence as mentioned in Schedule IV of theCompanies Act 2013 and under Clause 16(1)(b) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015.
13. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO:
Pursuant to rule 8(3) of the Companies (Accounts) Rules 2014 it is stated that theCompany has no particulars to be furnished under the head Energy Conservation andTechnology Absorption because it has carried on no manufacturing activity during the yearunder review. The operations of the Company are not power intensive. The Company ishowever taking every possible steps to conserve the energy wherever possible. It hasimported no technology. During the year there is no expenditure/Income of foreignexchange.
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.
The existing Statutory Auditors M/s R. Kabra & Co. Chartered Accountants willretire at the conclusion of ensuing annual general meeting. The retiring auditors areineligible for re-appointment in view of the provision of the section 139(2) of theCompanies Act 2013 read with the Companies (Auditors) Rules 2014. Under thesecircumstances the Board of Directors of the Company have on the recommendation of theAudit Committee proposed that M/s. Sampati Lal Bohara & Co. Chartered AccountantsUdaipur (ICAI FRN: 003324C) be appointed as the Statutory Auditors of the Company for aperiod of five years term commencing from the conclusion of this 32nd Annual GeneralMeeting till the conclusion of the 37th Annual General meeting subject to ratification oftheir appointment at every annual general meeting. M/s. Sampati Lal Bohara & Co.Chartered Accountants Udaipur have forwarded their letter to the Company stating thattheir appointment if made would be within the prescribed limits under Section 141(3)(g)of the Companies Act 2013 and that they are not disqualified for re-appointment.
16. QUALIFIACTION IN THE AUDITORS' REPORT - BOARD'S COMMENTS OR EXPLANATION THERE ON:
There is no qualification reported by Auditor's in their audit report for the yearended on 31st March 2017.
17. 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").
18. CORPROATE GOVERNANCE:
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015Report on Corporate Governance is annexed herewith (Annexure-"C")
19. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015Management Discussion and Analysis report is annexed herewith (Annexure- "D")
20. CEO/CFO CERTIFICATE:
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015CEO/CFO Certificate is annexed herewith (Annexure- "E")
21. NUMBER OF MEETINGS OF THE BOARD:
Number of meetings of the Board during the year were Twelve (12) held on 30th May2016 6th July 2016 3rd August 2016 12th August 2016 25th August 2016 9thSeptember 2016 17th September 2016 27th October 2016 14th November 2016 24thDecember 2016 16th January 2017 and 14th February 2017.
22. PARTICULARS OF LOANS GIVEN INVESTMENT MADE AND GUARANTEES GIVEN AND SECURITIESPROVIDED COVERED UNDER SECTION 186(4) OF THE COMPANIES ACT 2013:
Loans guarantee and Investments covered under Section 186 of the Companies Act 2013form part of the Notes to the financial statements provided in this Annual Report.
23. 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
24. NOMINATION AND REMUNERATION POLICY OF DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHEREMPLOYEES:
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 arefurnished in Annexure "F" & Annexure "G" forms part ofthis Report.
25. INDPENDENT DIRECTORS:
The Non-Executive Independent Directors fulfil the conditions of Independencespecified in section 149(6) of Companies Act 2013 and Rules made thereunder and meet withrequirements of Clause 16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. A formal letter of appointment to Independent Director has been issuedand disclosed on the website of the Company at the link: www.satgroup.in The Company hasput in place a system to familiarize the Independent Directors about the Company itsbusiness and the on-going events relating to the Company.
26. EVALUATION OF THE PERFORMANCE OF THE BOARD MEMBERS:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an AnnualPerformance evaluation of its own performance the Directors individually as well as theevaluation of the working of its various Committees.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgement safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board at their separate meeting.
27. SECRETARIAL AUDIT REPORT:
The Board has appointed Mrs. Averil. F. Pinto Practicing Company Secretaries to carryout secretarial audit under the provisions of section 204 (1) of the Companies Act 2013.The Secretarial Audit is attached to this report vide Annexure "H"
28. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:
During the year Company has incorporated Italica Ventures Private Limited as its whollyowned Subsidiary and we make an application in terms of sub-section (2) of section 45-IAof the Reserve Bank of India Act 1934 for issue of a Certificate of Registration tocommence the business of a Non-Banking Financial Company.
29. CONSOLIDATION OF ACCOUNTS:
Pursuant to section 129(3) of the Companies Act 2013 read with Rule 6 of theCompanies(Accounts) Rules 2014 and also required under Regulation 33 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 audited consolidated financialstatements form part of the Annual Report.
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.
31. RISK MANAGEMENT:
The Company has laid down the procedures to inform to the Board about the Riskassessment and minimization procedures. The common risks inter alia are: RegulationsCredit Risk Foreign Exchange and Interest Risk Competition Business Risk TechnologyObsolescence Investments Retention of Talent and Expansion of Facilities etc. Businessrisk inter-alia further includes financial risk political risk legal risk etc. TheBoard reviews the risk trend exposure and potential impact analysis and prepares riskmitigation plans if necessary.
32. INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation were observed.
33. CORPORATE SOCIAL RESPONSIBILITY:
The Company does not qualify under the provisions of Section 135 of the Companies Act2013. The operating profit is 199 Lakhs which is below the threshold limit and exceptionalitems comprises of diminution in value of investment written back which is capitalreceipt and is not profit under Section 198(3)(c) Companies Act 2013. Hence the Companyis not required to constitute Corporate Scoial Responsibility committee as it does notfall under the purview of Section 135 of the Companies Act 2013.
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: 23-05-2017 ||H.K. Turgalia ||Shehnaz D. Al |
|Place: Mumbai ||Whole-time Director ||Whole-time Director |
| ||DIN: 00049544 ||DIN: 00185452 |