The Directors have the pleasure of presenting the 39th Annual Report of your Companyfor the financial year 2019-20.
The financial performance of your Company for the year ended March 31 2020 issummarized below:-
(Rs in Lakh)
|Particulars ||Current Year ||Previous Year |
|revenue and other income ||82383.51 ||75285.12 |
|Profit Before interest depreciation and tax ||19011.55 ||17858.73 |
|interest and Financial charges ||2021.55 ||2077.50 |
|Depreciation ||5462.01 ||4773.16 |
|Profit from operations (before tax) prior year adjustments & exceptional item ||11527.99 ||11008.07 |
|tax expenses || || |
|current tax ||2350.02 ||1813.95 |
|Deferred tax ||-5.82 ||416.99 |
|Profit/(Loss) after Tax ||9183.79 ||8777.13 |
|Less : Appropriation || || |
|Dividend on Equity Shares ||300.00 ||250.00 |
Industry Review Corporate Overview
Satia Industries Limited operates in the following business segments: -
1 Writing and Printing Paper
5 Co-generation of Power for captive consumption and
6 Solar Power.
The Highlight of the Company's Performance for the year ended March 31 2020 are asbelow: -
1 Net revenue of your Company increased by 9.51% to Rs 80863.72 Lakh as compared to Rs73840.55 Lakh during the corresponding period of previous year 2018-19
2 Profit Before Depreciation and Tax increased by 7.63% to Rs 16990.00 Lakh as comparedto Rs 15781.23 Lakh during the corresponding period of previous year 2018-19
3 Profit before Tax increased by 4.72% to Rs 11527.99 Lakh as compared to Rs 11008.07Lakh during the corresponding period of previous year 2018-19
4 Net Profit Increased by 4.63% to Rs 9183.79 Lakh as Compared to Rs 8777.13 Lakh inthe previous Year.
Impact of Covid- 19
World Health Organization (WHO) declared outbreak of Coronavirus Disease (COVID-19) aglobal pandemic on March11 2020. Consequent to this Government of India declaredlockdown on March 23 2020 and the Company temporarily suspended the operations in all theunits of the Company incompliance with the lockdown instructions issued by the Central andState Governments. COVID-19 has impacted the normal business operations of the Company byway of interruption in production supply chain disruption unavailability of personnelclosure/ lock down of production facilities etc. during the lockdown period which wasextended till May 17 2020. However production and supply of goods has commenced duringthe month of April 2020 after obtaining permissions from the appropriate governmentauthorities. the impact of the same is reflected in the financial statements of thecompany
During the year under review the Board has declared Interim Dividends of Rs 0.15 (15%)per equity share of Rs 1/- each in its meeting held on 08.02.2020. The Board do notrecommend any final dividend for the year ended 31.03.2020 due to funds required for theongoing
projects and the interim declared on 08.02.2020 will be considered as final dividend.
Change in Share Capital
During the period under review the equity shares of the Company have been sub-dividedfrom face value of Rs 10/- per equity shares to face value of Re. 1/- per equity share andconsequent to the same Memorandum & Articles of Association of the Company was alsomodified and approved. Pursuant to aforesaid subdivision the paid-up share capital of theCompany is Rs 100000000/- divided into 100000000 equity shares of Rs 1/- each.
The closing balance of the retained earnings of the Company for the financial year2020 after all appropriation and adjustments was Rs. 38469.67 Lakhs
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
Particulars of Loans Guarantees or Investments:
The company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013. The details of the investments made by company aregiven in the notes to the financial statements.
Internal Control Systems and their adequacy
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the Internalauditor reports to the Joint Managing Director and the quarterly reports are placed beforethe Audit Committee.
Based on the report of internal audit the audit committee recommends correctiveactions the respective departments need to undertake in their respective areas and therebystrengthen the controls.
Directors and Key Managerial Personnel
Pursuant to provisions of Companies Act 2013 (Act') and the Articles ofAssociation of the Company Sh Chirag Satia Executive Director (DIN: 03426414) retire
by rotation and being eligible offer himself for reappointment. During the periodunder review Mr Vinod Kumar Kathuria (DIN: 06662559) has been appointed as an AdditionalDirector (Independent) w.e.f 08.02.2020 and he holds the office of Additional Director(Independent) till the date of forthcoming Annual General Meeting. His candidature hasbeen received by the Company for regularization as a Director (Independent) of theCompany in the ensuing Annual General Meeting to be held on 30th September 2020 ShS.K.Arora Director (Independent) has vacated his office w.e.f 28.09.2019 due to his nonpresence from all the Board meetings held during the entire year . the term of Sh i. DSingh (independent) Director is expiring at the ensuing annual General Meeting inSeptember 2020. Based on the recommendation of the Nomination and remuneration committeehis re-appointment for a second term of five years is proposed at the ensuing AnnualGeneral Meeting for approval of the members by way of special resolution.
All the Independent Directors have affirmed their Independence under Section 149 of theCompanies Act 2013 and provisions of Regulation 25 of SEBI (LODR) Regulations 2015. TheCompany has obtained requisite declaration to that effect from the said Directors.
the Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the act and SEBIListing regulations. the performance of the board was evaluated by the board after seekinginputs from all the directors on the basis of criteria such as the board composition andstructure effectiveness of board processes information and functioning etc. Theperformance of the committees was evaluated by the board after seeking inputs from thecommittee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc. The above criteria are based on the GuidanceNote on Board Evaluation issued by the Securities and Exchange Board of India on January5 2017. In a separate meeting of independent directors performance of non-independentdirectors the board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of executive directors and nonexecutive directors.
the Board and the nomination and remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution
of the individual director to the board and committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc. In the board meeting that followed the meeting of the independent directors andmeeting of Nomination and Remuneration Committee the performance of the board itscommittees and individual directors was also discussed. Performance evaluation ofindependent directors was done by the entire board excluding the independent directorbeing evaluated.
Key Managerial Personnel
Pursuant to the provisions of Section 149 of the Act the independent directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed there under and Regulation 16(1)(b) ofthe Securities and Exchange Board of india (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations"). There has been nochange in the circumstances affecting their status as independent directors of thecompany.
During the year under review the non-executive directors of the company had nopecuniary relationship or transactions with the Company other than sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Board/Committee of the Company.
Pursuant to the provisions of Section 203 of the Act the Key Managerial personnel ofthe company as on March 31 2020 are: Dr Ajay Satia Chief Executive Officer Chairman cumManaging Director Sh Ashok Kumar Khurana Chief Financial Officer (CFO) retired on08.02.2020 and Sh Inder Jeet Monga AGM(Finance) appointed wef as (CFO) and Sh Rakesh KumarDhuria company Secretary.
The Audit Committee comprises four directors viz Sh A.C. Ahuja Chairman (independentDirector) Sh R.K. Bhandari Joint Managing Director Sh Arun Kumar Gupta IndependentDirector and Sh Inder Dev Singh Independent Director. The functions performed by theAudit Committee particulars of meetings held and attendance of Members at the saidmeetings are given in the Corporate Governance Report which forms part of this AnnualReport.
In compliance with Section 178(3) of the Act and Regulation 19(4) of the ListingRegulations on the recommendations of the Nomination and Remuneration Committee (NRC)the Board formulated Policy relating to the remuneration of Directors key managerialpersonnel and other employees. The policy includes criteria for determiningqualifications positive attributes and independence of directors and other matters. Itbroadly lays down the philosophy guiding principles and basis for recommending payment ofremuneration to the executive and non-executive Directors (by way of sitting fees andcommission). the role of the NRc is disclosed in the Corporate Governance Report whichforms part of the Annual Report. In compliance with proviso to Section 178(4) of the Act.The Remuneration Policy is stated in the Annexure-i.
During the year five board meetings and four Audit Committee Meetings were convened andheld. The detail of which are given in the Corporate Governance Report. The Interveninggap between the meetings was within the period prescribed under the Companies Act 2013.
Director Responsibility Statement
Pursuant to requirement of Section 134 (5) of the Companies Act 2013 your Directorsconfirm that :
(a) in the preparation of the annual accounts the applicable accounting standards havebeen 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 or loss of the company for the period.
(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities.
(d) the Directors had prepared the annual accounts on a going concern basis.
The Directors had laid down internal financial control to be followed by the Companyand that such internal financial controls are adequate and were operating effectively. TheDirectors had devised proper systems to ensure compliance with the provision of allapplicable laws and that such system were adequate and operating effectively.
Audit reports and Auditors
The Auditors Report for the year 31.03.2020 does not contain any qualificationreservation or adverse remark. The Auditors' Report is enclosed with the financialstatement in this Annual Report.
under section 139 of the Companies Act 2013 and the rules made there under it ismandatory to rotate the statuary auditors on completion of the maximum term permittedunder the said section in line with the requirements of the Companies Act 2013 M/SDeepak Grover & Association Chartered Accountants (firm registration no 505923) wasappointed as the Statutory Auditors of the company to hold office for a period of fiveconsecutive years from the conclusion of the 36th Annual General Meeting of the companyheld on 29th September 2017 till the conclusion of the 41st Annual General Meeting to beheld in the year 2022 subject to ratification by shareholders at the Annual GeneralMeeting or as may necessitated by the Act from time to time. The first year of audit wasof the financial statements for the year ending March 31 2017 which included the audit ofthe quarterly financial statements for the year. Accordingly the appointment of M/sDeepak Grover & Associates is being placed before the shareholders for ratification.
the Auditors' Report on the Accounts is self-explanatory and requires no comments.
Pursuant to provision of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed M/s S. Parnami & Associates a firm of company Secretaries in practice toundertake the Secretarial audit of the company. the Secretarial Audit report is annexedherewith as 'Annexure V. The secretarial audit report for the year under reviewrequires no comments. The said report does not contain any qualification reservation oradverse remarks.
Annual Secretarial Compliance Report
In compliance with Circular No. CIR/CFD/CMD/1/27/2019 dated February 8 2019 issued bythe Securities and Exchange Board of India (SEBI) M/s S. Parnami & Associates wasappointed for issuing Annual Secretarial Compliance Report for the year ended March312020. The said Report confirms that the Company has maintained proper records asstipulated under various rules and Regulations and that no action has been taken againstthe Company or promoters/directors by the SEBI/Stock Exchange
During the year under review M/s S S P J & Co Chartered Accountants InternalAuditors carried out the internal audit and submitted their report.
Pursuant to the provisions of the Companies Act 2013 M/s R J Goel & Co. CostAccountants New Delhi has conducted the cost audit of the company.
As recommended by the Audit Committee the Board at its meeting held on 12.08.2019appointed M/s R J Goel & Co. Cost Accountants New Delhi as Cost Auditor to conductcost audit for the year ended March 31 2020 pursuant to the provisions of Section 148 ofthe Act read with the Companies (Cost Records and Audit) Amendment Rules 2014. M/s R JGoel & Co confirmed that they are free from disqualifications as specified underSection 141 read with Sections 139 and 148 of the Act held a valid certificate ofpractice and that their appointment met the requirements of Sections 141(3)(g) and 148 ofthe Act. M/s R J Goel & Co also confirmed that they are independent maintained anarm's length relationship with the Company and that no orders or proceedings are pendingagainst them relating to professional matters of conduct before the Institute of CostAccountants of India or any competent authority/court. The Company has maintained costrecords as specified by the Central Government under Section 148(1) of the Act.
Your Company has adopted Indian Accounting Standards (iND as). the Financial Statementfor the year ended March 31 2020 have been prepared in accordance with Ind As notifiedunder the Companies (Indian Accounting Standards) Rules as amended by the Companies(Indian Accounting Standard) Rules2018 read with Section 133 and other applicableprovisions of the Companies Act 2013.
Related Party Transaction:
AH related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the company with Promoters Key ManagerialPersonnel or other designated persons which may have potential conflict with interest ofthe company at large. Transactions with related parties entered by the Company in thenormal course of business are periodically placed before the Audit Committee for itsomnibus approval. The Board of Directors of the Company has on the recommendation of theAudit Committee adopted a policy to regulate transactions between the Company and itsRelated Parties in compliance with the applicable provisions of the Companies Act 2013the rules there under and Listing Regulations. This Policy as considered and approved bythe Board has been uploaded on the webs site of the Company at www.satiagroup.com
The Company does not have any subsidiary.
Vigil Mechanism/Whistle blower Policy
Over the years your Company has established a reputation for doing business withintegrity and has displayed zero tolerance for any form of unethical behavior. Incompliance with Section 177(9) of the Act Rule 7 of the Companies (Meetings of Board andits Powers) Rules 2014 and Regulation 22 of the Listing Regulations the Company has inplace a robust vigil mechanism for Directors and employees to report concerns details ofwhich are covered in the Corporate Governance Report which forms part of this AnnualReport. The said mechanism provides adequate safeguards against victimization of personswho use the vigil mechanism and provides direct access to the Chairperson of the AuditCommittee. Whistleblower Policy has been hosted on Company's website www. satiagroup.com.
Extract of Annual Return:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure -Vi
Business Risk Management
Pursuant to Section 134 (3) (n) of the Companies Act 2013 the Board of Directors ofthe Company has formed a risk management committee to frame implement and monitor therisk management plan for the Company.
Particulars of Employees
Information as required under Section 197 read with rule 5 of the Companies Appointmentand Remuneration of Managerial Personnel) Rules 2014 is appended as Annexure-ii and formsan integrated part of this report.
Conservation of Energy Technology Absorption and Foreign Exchange Earning and Outgo
The Particulars as prescribed under section 134(3)(m) of the Companies Act 2013 readwith rule 8 of the Company (Accounts) Rules 2014 relating to conservation of energytechnology absorption and foreign exchange earnings and outgo is appended as annnexure-iii
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.
Corporate Social Responsibility Initiatives
The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year underreview are set out in Annexure 1V of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. For other details regarding the CSRCommittee please refer to the Corporate Governance Report which is a part of thisreport. The CSR policy is available on www. satiagroup.com.
The Company has carried out Need Assessment Study' to fulfill the requirements ofits social responsibility under CSR Programs and based on that assessment of demand themanagement has approved CSR program in surrounding villages (Expenditure on CSR will bereviewed in each year depending on the profitability of the Company). The activitiesmentioned therein shall be carried out within a time frame of 5 years (from the year2017-18 to 2021-22 . The sectors identified under the scope of CSR activities are asfollows:
|Sr. No ||Planned activities under CSR as per specific needs ||Budgetary Plan (Rs.) |
|1st Year ||2nd Year ||3rd Year ||4th Year ||5th Year ||Total |
|1. ||Community Health Improvement || || || || || || |
|i. ||Disinfection facilities for dug wells and other potable water sources ||200000 ||200000 ||350000 ||350000 ||300000 ||1400000 |
|ii. ||Periodically medical checkup blood donation camps to be organized near project site ||250000 ||250000 ||250000 ||300000 ||350000 ||1400000 |
|iii. ||Eye checkup camps ||300000 ||400000 ||500000 ||500000 ||500000 ||2200000 |
|iv. ||Health awareness camps for child and mother care health and hygiene practices. ||150000 ||150000 ||200000 ||250000 ||250000 ||1000000 |
| ||Total ||900000 ||1000000 ||1300000 ||1400000 ||1400000 ||6000000 |
|2. ||Community Education Facilities || || || || || || |
|i. ||Augmentation of furniture blackboard etc. in village schools ||500000 ||500000 ||500000 ||500000 ||500000 ||2500000 |
|ii. ||Award scholarship to meritorious students ||100000 ||100000 ||100000 ||100000 ||100000 ||500000 |
|iii. ||Distribution of educational books stationary uniforms and aids etc. ||400000 ||400000 ||400000 ||400000 ||400000 ||2000000 |
| ||Total ||1000000 ||1000000 ||1000000 ||1000000 ||1000000 ||5000000 |
|3. ||Community Welfare activities || || || || || || |
|i. ||Worship places development & beautician ||300000 ||300000 ||300000 ||300000 ||300000 ||1500000 |
|ii ||Distribution of seeds & saplings ||100000 ||100000 ||100000 ||100000 ||100000 ||500000 |
|iii ||Promotion & support to various Govt. Schemes ||200000 ||200000 ||200000 ||200000 ||200000 ||1000000 |
| ||Total ||600000 ||600000 ||600000 ||600000 ||600000 ||3000000 |
|4. ||Infrastructural Development || || || || || || |
|i ||Village pond retrieval ||300000 ||300000 ||300000 ||300000 ||300000 ||1500000 |
|ii ||R.O installation ||300000 ||300000 ||300000 ||300000 ||300000 ||1500000 |
| ||Total ||600000 ||600000 ||600000 ||600000 ||600000 ||3000000 |
|5. ||Community Water Conservation || || || || || || |
|i ||Rain water harvesting and ground water recharge pits ||500000 ||500000 ||500000 ||500000 ||500000 ||2500000 |
|ii ||Water conservation awareness programs ||100000 ||100000 ||100000 ||100000 ||100000 ||500000 |
| ||Total ||600000 ||600000 ||600000 ||600000 ||600000 ||3000000 |
|6. ||A forestation Programs || || || || || || |
|i ||Plantation of trees in village road side ||500000 ||500000 ||500000 ||500000 ||500000 ||2500000 |
|ii ||Development of nursery ||100000 ||100000 ||100000 ||100000 ||100000 ||500000 |
| ||Total ||600000 ||600000 ||600000 ||600000 ||600000 ||3000000 |
|7. ||Community Capacity Building || || || || || || |
|i ||impairing vocational training for technical skills self-employment training for women as stitching embroidery tailoring handicrafts ||200000 ||300000 ||400000 ||500000 ||600000 ||2000000 |
| ||Total ||200000 ||300000 ||400000 ||500000 ||600000 ||2000000 |
| ||Grand total ||4500000 ||4700000 ||5100000 ||5300000 ||54000000 ||25000000 |
As part of its initiatives under "corporate social responsibility" (CSR) thecompany has contributed funds for the schemes of promotion of education and medical aid.
The Annual Report on CSR activities are annexed herewith as Annexure- IV
Report on Corporate Governance
The principles of Corporate Governance are based on transparency accountability andfocus on the sustainable success of the Company over the long-term. To succeed webelieve requires highest standards of corporate behaviour towards everyone we work withthe communities we touch and the environment on which we have an impact. This is our roadto consistent competitive profitable and responsible growth and creating long-term valuefor our shareholders our people and our business partners. The above principles have beenthe guiding force for whatever we do and shall continue to be so in the years to come. TheBoard of Directors (the Board') are aware of their responsibility and commitment tosound principles of Corporate Governance in the Company. The Board plays a crucial role inoverseeing how the management serves the short and long-term interests of shareholders andother stakeholders. This belief is reflected in our governance practices under which westrive to maintain an effective informed and independent Board.
In addition the Company has adopted a Code of Conduct for its non-executive directorswhich includes Code
of Conduct for Independent Directors which suitably incorporates the duties ofindependent Directors as laid down in the Companies Act 2013 ("the Act"). TheCompany is in compliance with the requirements stipulated under Regulation 17 to 27 readwith Schedule V and clauses (b) to (i) of sub-regulation (2) of Regulation 46 ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI Listing Regulations") as applicable with regard tocorporate governance.
The requisite certificate from the Auditors of the Company confirming compliance withthe conditions of corporate governance is attached to the Report on corporate governance.
Management Discussion and Analysis Report
In compliance with Regulation 34(3) read with Schedule V(B) of the Listing RegulationsManagement Discussion and Analysis forms part of this Annual report.
The Directors thanks the Company's Bankers Employees Customers Vendors Investorsand for their continuous support. the Directors also thank the Government of IndiaGovernment of Various States in India and concerned Government Departments and agenciesfor their co-operation.
|Place : Rupana ||(Dr Ajay Satia ) ||(R.K.Bhandari) |
|Date : 10.08.2020 ||Chairman Cum Managing Director ||Joint managing Director |