Sat Industries Ltd Directors Report.

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 March 31, 2020.

1. FINANCIAL RESULTS

Your Companys performance during the year as compared with the previous year is summarised below:

Standalone

(Rs. in lakhs)
Particulars 2019-2020 2018-2019
Total Revenue 2,174.01 3,435.89
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

Consolidated

(Rs. in lakhs)
Particulars 2019-2020 2018-2019
Total Revenue 22,895.02 23,054.81
Profit before Tax and after exceptional items 228.37 1529.39
Less: Tax Expense (41.64) (27.34)
Profit after Tax 270.01 1,556.73

2. STATE OF COMPANYS AFFAIRS:

The Company is engaged in the business of general trading of merchandise, leasing of assets and financing. The total standalone revenue of your Company for the year under review amounted to Rs. 2,174.01 Lakhs against Rs. 3,435.89 Lakhs in corresponding previous year and earned a net Profit of Rs. 62.48 Lakh (pr.yr. 333.26 Lakh) after providing for depreciation and tax. The last part of 4th quarter was impacted by the unforeseen development of the COVID-19 pandemic.

On a consolidated basis, the total revenues stood at Rs. 22,895.02 Lakh against Rs. 23,054.81 Lakhs in corresponding previous year. The COVID-19 pandemic developed rapidly into a global crisis, forcing governments to enforce lockdowns of all economic activity, and in India is causing significant disturbance and slowdown of economic activity. In many countries, businesses are being forced to cease or limit their operations for long or indefinite periods of time. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing and closures of non-essential services have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown. We, in SAT focused on the safety of employees and other stakeholders.

Your Directors wish to place on record their appreciation to the Companys employees, suppliers, customers & Government authorities for their selfless efforts which helped your Company reach normalcy in operations within few weeks of lock-down. The ownership and responsiveness shown by all the stakeholders is unparalleled and is a testimony of the spirit of this great organization. Your Company shall review the long-term impact of the pandemic and take all steps necessary to adapt itself to emerging changes and the new normal.

3. MATERIAL CHANGES AND COMMITMENTS:

There is no material changes and commitments affecting financial position of the Company which have occurred between the end of the financial year of the Company to which the 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 under review.

5. DIVIDEND:

The Directors of the Company are of the opinion to reinvest all of its earnings for future 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 Towers, Dalal Street, Mumbai-400 001 and the listing fee for the Financial Year 2020-2021, has been paid.

8. SHARE CAPITAL:

During the year under report, the issued, subscribed and paid up capital of the Company increased from Rs.21,60,00,000/ divided into 10,80,00,000 Equity Shares of Rs. 2/- each to Rs. 22,61,70,000/- divided into 11,30,85,000 of Rs. 2/- each with the allotment of 50,85,000 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 BSE Limited.

9. SUBSIDIARIES AND ASSOCIATES:

The Company has six subsidiaries (five Indian and one foreign subsidiary) and one Associate 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 the subsidiaries and associate pursuant to Section 129 of the Companies Act, 2013 read with the 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 remuneration in excess of the limits prescribed under rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial 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 the Companies Act, 2013 and rules made there under as such, no amount of principal or interest was outstanding as of the Balance Sheet date, nor is there any deposit in non-compliance of Chapter V of the Companies Act, 2013.

12. DET AILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

(a) DIRECTORS:

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr. Harikant Turgalia, Whole-time Director (DIN: 00049544), retires by rotation at the 35th Annual General Meeting, and being eligible, offers himself for reappointment.

During the year, Mr. Ramesh Chandra Soni (DIN: 00049497) was re-appointed as independent director of the Company for a second term of 5 ( five) consecutive years from October 1, 2019 to 30th September 2024.

(b) 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 other, except Mrs. Shehnaz D. Ali and Mr. Asad Daud who are related to each other by way of mother-son relationship.

13. ST ATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTOR U/S 149(6) OF THE COMPANIES ACT, 2013:

The Company has received declaration from all the Independent Directors of the Company, confirming that they meet the criteria of independence as prescribed both under the Companies 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 of its 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. It is stated that:

a) in the preparation of the annual accounts, the accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Profit and loss of the company for that period;

c) the directors had taken proper and sufficient for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 and that such internal financial controls are adequate and were operating effectively; and

f) the directors had devised proper systems to compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. AUDITORS:

M/S. Sampatilal Bohara & Co., Chartered Accountants, (FRN: ICAI FRN: 003324C) were appointed as Statutory Auditors of the Company for a period of five consecutive years commencing from the conclusion of Thirty-Second Annual General meeting of the Company up to 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, 2013, effected by the Companies (Amendments), 2017, their appointment does not require rati_cation at every annual general meeting. In view of this the same has not been included in the Notice to Annual General Meeting. Further, they have confirmed that they are 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 the Companies Act, 2013.

18. QUALIFICATION IN THE AUDITORS REPORT - applicable

BOARDS COMMENTS OR EXPLANATIONON:

The Auditors Report does not contain any qualification, reservation or adverse remark or disclaimer.

19. EXTRA CT OF ANNUAL RETURN:

Extract of Annual Return as provided under sub-section (3) of section 92 of the Companies Act, 2013 is attached herewith (Annexure-"B").

20.CORPROATE GOVERNANCE:

The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of 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 under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part ensure of this Report as Annexure- "C".

22. CEO/CFO CERTIFICATE:

Whole-time Director and Chief financial officer compliance certificate as stipulated under Regulation 17(8) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate 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 the Corporate Governance Report.

25. PARTICULARS OF LOANS GIVEN, INVESTMENT MADE AND GUARANTEES GIVEN AND SECURITIES PROVIDED COVERED UNDER SECTION 186(4) OF THE COMPANIES ACT, 2013:

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form 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 of Section 188(1) of the Act. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 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 been uploaded on the Companys website: www.satgroup.in

27. POLICY ON APPOINTMENT AND REMUNERATION FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT EMPLOYEES:

The Nomination and Remuneration Committee of the Board has devised a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Employees and their Remuneration. The Committee has formulated the criteria for determining qualifications, positive attributes and independence of a Director, which has been placed on the Companys website, www.satgroup. in . The policy on the above is attached as Annexure –"E" & Annexure –"F".

28. INDEPENDENT DIRECTORS TRAINING/ MEETING:

During the year under review a separate meeting of the Independent Directors of the Company was held on February 13, 2020, without the presence of other Directors and members of Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole and assessed the quality, quantity and timelines of flow 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 individual directors, Board and its Committees, which includes criteria for performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the individual 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 after considering criteria such as Board composition and structure, effectiveness of processes and information provided to the Board etc. A separate meeting of the Independent Directors was also held during the year for evaluation of the performance of non-independent Directors, performance of the Board as a whole. The Nomination and Remuneration Committee has also reviewed the performance of the individual directors based on their knowledge, level of preparation and effective participation in Meetings, understanding of their roles as directors etc.

30. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed Dr. 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 no qualification, reservation or adverse remark made in their Secretarial Audit Report submitted 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, JOINT VENTURE OR ASSOCIATE COMPANIES DURING THE YEAR:

During the year, no Company became or ceased to be its subsidiary, joint venture or associate Company.

32. CONSOLIDATION OF ACCOUNTS:

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and prepared in accordance with the applicable Accounting Standards in this regard. The Auditors report to 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 Records and Audit) Amendment Rules, 2014, appointment of cost auditor is not applicable to the company.

34. RISK MANAGEMENT:

The Company has a Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage. The business risk framework defines the risk identification and its management approach across the enterprise at various levels including documentation and reporting. The framework helps in identifying risks trend, exposure and potential impact analysis on a Companys business.

35. INTERNAL FINANCIAL CONTROLS:

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Based on the report of internal audit function, the Company undertakes corrective action in their respective areas and thereby strengthen the controls.

Significant audit observations and recommendations along with corrective actions thereon 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 company along with the initiative taken by it are set out in Annexure "H" of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the company, http://satgroup.in/corporate-social-responsibility-policy/

36. VIGIL MECHANISIM/WHISTLEBLOWER:

Your Company has established a Vigil Mechanism for reporting of concerns through the Whistle Blower Policy of the Company, which is in compliance of the provisions of Section 177 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 whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimisation or any other unfair practice being adopted against them. Adequate safeguards are provided against victimisation to those who avail of the mechanism, and access to the Chairman of the Audit Committee in exceptional cases is provided to them. The details of the Whistle Blower Policy have been uploaded on the website of the Company, www.satgroup.in

38. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti-Sexual harassment Policy in line with the requirements of 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 as per the requirements of the said Act to redress complaints received regarding sexual harassment. All employees (Permanent, contractual, temporary, trainees) are covered under this 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 Company Secretaries 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 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board has carried out an Annual Performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its various Committees. A separate meeting was carried out to evaluate the performance of individual Directors, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board at its meeting following the meeting of Independent Directors.

41. GENERAL:

Your Directors state that no disclosure or reporting is required in respect of the following 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 any scheme. c) None of the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

No Significant and material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

42. ACKNOWLEDGEMENT:

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the shareholders, banks, Central and State Government Authorities etc. during the year under review. Your Directors wish to place on record their deep sense of appreciation for the devoted services of the executives, Staff and Workers 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