Satia Industries Ltd Directors Report.

Dear Members,

The Directors have the pleasure of presenting the 38th Annual Report of your Company for the financial year 2018-19.

Financial Result:

the financial performance of your Company for the year ended March 31, 2019 is summarized below:-

(Rs in Lakhs)

Particulars Current Year Previous Year
revenue and other income 75285.12 67233.63
profit before interest, depreciation and tax 17858.73 15209.71
Interest and financial charges 2077.50 2372.59
Depreciation 4773.16 4504.07
profit from operations (before tax) Prior Year adjustment & exceptional item 11008.07 8333.05
tax Expenses
current tax 1813.95 639.26
Deferred tax 416.99 826.76
profit/^oss) after tax 8777.03 6867.03
less: proposed appropriation
Dividend on equity Shares 250.00 250.00

Industry Review Corporate Overview

Satia industries Limited operates in the following business segments:-

1 Writing and Printing Paper

2 Yarn.

3 cotton.

4 Agriculture,

5 Co-generation of power for captive consumption and

6 Solar Power.

Operational Review

The Highlight of the Companys performance for the year ended March 31, 2019 are as below:-

1 Production of paper as compared to 113517 MT of last year of the company increased by 8.35% to 123000

2 Net revenue of your company increased by 15 % to Rs 73840.55 lakh as compared to Rs 64207.32 lakh during the previous year 2017-18

3 profit Before Depreciation and tax increased by 22.93 % to Rs 15781.23 Lakh as compared to Rs 12837.12 lakh during the previous year 2017-18

4 profit before tax increased by 32.10% to Rs 11008.07 lakh as compared to Rs 8333.05 lakh during the corresponding period of previous year 2017-18

5 Net profit Increased by 29.54 % to Rs 8797.64 lakh as Compared to Rs 6791.40 lakh in the previous Year.

Dividend

During the year under review, the Board declared Interim Dividends-Rs 1.00 (10%) per equity share of Rs 10/- each in its meeting held on 13.02.2019. Your Directors are pleased to recommend a Final Dividend of Rs1.50 (15%) per equity share of Rs 10/- each for Financial Year 2018-19, for the approval of the equity shareholders at the ensuing Annual General Meeting. if approved, the total dividend payout (interim and final dividend) for the financial year 2018-19 will be Rs 2.50 (25%) per equity share of Rs 10/- each.

Financial Review

Share Capital

The paid up equity capital as on March 31, 2019 was Rs. 10,00,00,000/-. During the year under review, the company has not issued any shares.

Reserves

The closing balance of the retained earnings of the Company for the financial year 2019, after all appropriation and adjustments was Rs 29757.38 lakhs

Fixed Deposit

The company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Particulars of Loans, Guarantees or Investments:

The company has not given any loans or guarantees covered under the provisions of section 186 of the companies Act, 2013. the details of the investments made by company are given 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 and complexity of its operations. to maintain its objectivity and independence, the internal auditor reports to the Joint Managing Director and the quarterly reports are placed before the Audit committee.

Based on the report of internal audit, the audit committee recommends corrective actions the respective department needs to undertake in their respective areas and thereby strengthen the controls.

Directors:

As on 31st March, 2019, the company have 11 Directors consisting of 4 Executive Non- Independent Directors, 7 non- executive Independent Directors, Sh. Hardev Singh, Director (technical) is proposed to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible offers himself for reappointment. the term of two independent Directors viz. Shri A. c. Ahuja and Shri Dinesh chand Sharma is expiring at the ensuing AGM in Sept, 2019. Based on the recommendation of the Nomination and Remuneration Committee, their re-appointment for a second term of five years is proposed at the ensuing AGM for the approval of the Members by way of special resolution.

ah the Independent Directors have affirmed their Independence under Section 149 of the Companies Act, 2013 and provisions of regulation 25 of SEBi (lodr) regulations, 2015. the company has obtained requisite declaration to that effect from the said Directors.

Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and SEBi Listing Regulations. the performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. the performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. the above criteria are based on the Guidance Note on Board evaluation issued by the Securities and exchange Board of India on January 5, 2017 in a separate meeting of independent directors, performance of non-independent directors, the board as a whole and the chairman of the company was evaluated, taking into account the views of executive directors and nonexecutive directors.

the Board and the Nomination and Remuneration committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. in the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration committee, the performance of the board, its committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

Key Managerial Personnel

Pursuant to the provisions of Section 149 of the Act, the independent directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and exchange Board of India (Listing obligations and Disclosure Requirements) Regulations, 2015 ("SEBi Listing Regulations"). There has been no change in the circumstances affecting their status as independent directors of the company.

During the year under review, the non-executive directors ofthe company had no pecuniary relationship or transactions with the company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee ofthe Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the company as on March 31, 2019 are:

Dr Ajay Satia: Chief Executive Officer (CMD & CEO)

Sh ashok Kumar Khurana: CFo

Sh Rakesh Kumar Dhuria: Company Secretary

Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration committee framed a policy for selection & appointment of Directors. Senior Management and their remuneration. the remuneration policy is stated in the annexure-I.

Meetings

During the year four board meeting and five audit committee Meetings were convened and held. the detail of which are given in the corporate Governance report. the intervening gap 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 Directors confirm that :

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

(b) the Directors had selected such accounting policies 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 or loss of the company for the period.

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the companies Act, 2013 for safeguarding the assets 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.

The Directors had laid down internal financial control to be followed by the company and that such internal financial controls are adequate and were operating effectively. the Directors had devised proper systems

To ensure compliance with the provision of all applicable laws and that such system were adequate and operating effectively.

Audit Reports and Auditors

The auditors report for the year 31.03.2019 does not contain any qualification, reservation or adverse remark. the auditors report is enclosed with the financial statement in this annual report.

Statutory Auditors:

Under section 139 of the Companies act, 2013 and the rules made there under, it is mandatory to rotate the statuary auditors on completion of the maximum term permitted under the said section, in line with the requirements of the companies Act, 2013, M/S Deepak Grover & association, Charted accountants (firm registration no 505923) was appointed as the Statutory auditors of the company to hold office for a period of five consecutive years from the conclusion of the 36th Annual General Meeting of the company held on 29th September, 2017, till the conclusion of the 41st Annual General Meeting to be held in the year 2022, subject to ratification by shareholders at the annual General Meeting or as may necessitated by the Act from time to time. the first year of audit was of the financial statements for the year ending March 31, 2017 which included the audit of the quarterly financial statements for the year. Accordingly, the appointment of M/s Deepak Grover & associates is being placed before the shareholders for ratification.

The auditors report on the accounts is self explanatory and requires no comments.

Secretarial Audit:

Pursuant to provision of section 204 of the companies Act 2013 and the companies (Appointment and remuneration of Managerial Personnel) rules, 2014 the company has appointed M/s S. parnami & associates, a firm of company Secretaries in practice to undertake the Secretarial Audit of the company. the Secretarial audit report is annexed herewith as ^nnexure V. the secretarial audit report for the year under review requires no comments. the said report does not contain any qualification, reservation or adverse remarks.

Internal Auditors

During the year under review M/s G. Baksh & associates, Internal Auditors carried out the internal audit and submitted their report.

Cost Audit

Pursuant to the provisions of the Companies Act, 2013 M/s R J Goel & Co., Cost Accountants, New Delhi has conducted the cost audit of the company.

Indian Accounting Standard

Your company has adopted indian Accounting Standards (iND AS). The Financial Statement for the year ended March 31, 2019 have been prepared in accordance with Ind As notified under the Companies (indian Accounting Standards) Rules, as amended by the companies (indian Accounting Standard) Rules,2018 read with Section 133 and other applicable provisions of the companies Act, 2013.

Related Party Transaction:

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. there are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. transactions with related parties entered by the company in the normal course of business are periodically placed before the Audit committee for its omnibus approval. the Board of Directors of the company has on the recommendation of the Audit committee, adopted a policy to regulate transactions between the company and its related Parties, in compliance with the applicable provisions of the companies Act, 2013, the rules there under and Listing regulations. this Policy as considered and approved by the Board has been uploaded on the webs site of the company at www.satiagroup.com

Subsidiary Companies

the company does not have any subsidiary. Whistleblower Policy

the company has in place a Whistleblower Policy to deal with unethical behavior, victimization, fraud and other grievances or concerns, if any. the aforementioned whistleblower policy is available on the Companys website at the following web-link: www.satiagroup.com

Extract of Annual Return:

the details forming part of the extract of the annual return in form MGT-9 is annexed herewith as "Annexure -VI

Business Risk Management

Pursuant to Section 134 (3) (n) of the companies Act, 2013, the Board of Directors of the company has formed a risk management committee to frame, implement and monitor the risk management plan for the company.

Particulars of Employees

Information as required under Section 197 read with rule 5 of the companies Appointment and remuneration of Managerial Personnel) rules 2014 is appended as Annexure-II and forms an 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 read with rule 8 of the company (Accounts) rules 2014 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is appended as an Annexure-III to the Directors Report.

Industrial Relations:

During the year under review, your company enjoyed cordial relationship with workers and employees at all levels.

Corporate Social Responsibility Initiatives

The brief outline of the corporate Social responsibility (csr) policy of the company and the initiatives undertaken by the company on cSR activities during the year under review 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 cSR committee, please refer to the corporate Governance Report, which is a part of this report. the cSR policy is available on www. satiagroup.com.

Satia industries limited realizes its responsibility towards the society at large. Satia industries Limited recognizes that corporate are economic organs of society and therefore believes in making a positive difference to the society by trying to build a better tomorrow. the company assists in running the local Schools and directly organizes various programs for social welfare.

The Company has carried out ‘Need Assessment Study to fulfill the requirements of its social responsibility under CSR Programs and based on that assessment of demand, the management has approved Rs. 2.50 crores for CSR program in surrounding villages. The activities mentioned therein shall be carried out within a time frame of 5 years (from the year 2017-18 to 2021-22. the sectors identified under the scope of CSR activities are as follows:

CSR Activities

Sr. No Planned activities under CSR as per specific needs

Budgetary P lan (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 2,00,000 2,00,000 3,50,000 3,50,000 3,00,000 14,00,000
ii Periodically medical checkup, blood donation camps to be organized near project site 2,50,000 2,50,000 2,50,000 3,00,000 3,50,000 14,00,000
iii Eye checkup camps 3,00,000 4,00,000 5,00,000 5,00,000 5,00,000 22,00,000
iv Health awareness camps for child and mother care, health and hygiene practices. 1,50,000 1,50,000 2,00,000 2,50,000 2,50,000 10,00,000
Total 9,00,000 10,00,000 13,00,000 14,00,000 14,00,000 60,00,000
2. Community Education Facilities
i Augmentation of furniture, blackboard, etc. in village schools 5,00,000 5,00,000 5,00,000 5,00,000 5,00,000 25,00,000
ii Award scholarship to meritorious students 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 5,00,000
iii Distribution of educational books, stationary, uniforms and aids etc. 4,00,000 4,00,000 4,00,000 4,00,000 4,00,000 20,00,000
Total 10,00,000 10,00,000 10,00,000 10,00,000 10,00,000 50,00,000
3. Community Welfare activities
i Worship places development & beautician 3,00,000 3,00,000 3,00,000 3,00,000 3,00,000 15,00,000
ii Distribution of seeds & saplings 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 5,00,000
iii Promotion & support to various Govt. Schemes 2,00,000 2,00,000 2,00,000 2,00,000 2,00,000 10,00,000
Total 6,00,000 6,00,000 6,00,000 6,00,000 6,00,000 30,00,000
4. Infrastructural Development
i Village pond retrieval 3,00,000 3,00,000 3,00,000 3,00,000 3,00,000 15,00,000
ii R.o installation 3,00,000 3,00,000 3,00,000 3,00,000 3,00,000 15,00,000
Total 6,00,000 6,00,000 6,00,000 6,00,000 6,00,000 30,00,000
5. Community Water Conservation
i rain water harvesting and ground water recharge pits 5,00,000 5,00,000 5,00,000 5,00,000 5,00,000 25,00,000
ii Water conservation awareness programs 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 5,00,000
Total 6,00,000 6,00,000 6,00,000 6,00,000 6,00,000 30,00,000
6. A forestation Programs
i Plantation of trees in village road side 5,00,000 5,00,000 5,00,000 5,00,000 5,00,000 25,00,000
ii Development of nursery 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 5,00,000
Total 6,00,000 6,00,000 6,00,000 6,00,000 6,00,000 30,00,000
7. Community Capacity Building
i impairing vocational training for technical skills, self-employment training for women as stitching, embroidery, tailoring, handicrafts 2,00,000 3,00,000 4,00,000 5,00,000 6,00,000 20,00,000
Total 2,00,000 3,00,000 4,00,000 5,00,000 6,00,000 20,00,000
Grand Total 45,00,000 47,00,000 51,00,000 53,00,000 54,000,000 2,50,00,000

As part of its initiatives under “corporate social responsibility” (CSR), the company 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

Effective corporate governance practices constitute the strong foundation on which successful commercial enterprises are built to last. The Companys philosophy on corporate governance oversees business strategies and ensures fiscal accountability, ethical corporate behavior and fairness to all stakeholders comprising regulators, employees, customers, vendors, investors and the society at large. Strong leadership and effective corporate governance practices have been the Companys hallmark. the Company has a strong legacy of fair, transparent and ethical governance practices. The company has adopted a code of conduct for its employees including the Managing Director and the executive Directors. in addition, the Company has adopted a Code of Conduct for its nonexecutive directors which includes code of conduct for independent Directors which suitably incorporates

the duties of independent directors as laid down in the Companies Act, 2013 ("the Act"). the Company is in compliance with the requirements stipulated under Regulation 17 to 27 read with Schedule V and clauses (b) to (i) of sub-regulation (2) of Regulation 46 of Securities and exchange Board of india (Listing obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), as applicable, with regard to corporate governance.

The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the Report on corporate governance.

Acknowledgement

The Directors thank the Companys employees, customers, vendors, investors and for their continuous support. The Directors also thank the Government of india, Governments of various states in india and concerned Government departments and agencies for their co-operation.

For and on behalf of the Board of Directors
Place : VPO: Rupana (Dr Ajay Satia ) (R.K.Bhandari)
Date : 12.08.2019 Chairman Cum Managing Joint Managing Director