To the Members
Your Directors have pleasure in presenting the 22nd Annual Report together with theAudited Statement of accounts of your Company for the year ended 31st March 2016:
1. FINANCIAL HIGLIGHTS:
| || ||(Rs. in Lacs) |
|Particulars ||2015-2016 ||2014-2015 |
|Sales & Other Income ||822.40 ||767.52 |
|Total Expenditure ||964.00 ||651.48 |
|Earning Before Finance Cost Tax Exceptional Items Depreciation and Amortization Expenses ||(141.6) ||116.04 |
|Less: Financial Costs ||0.90 ||0.51 |
|Depreciation and Amortization Expenses ||67.55 ||68.80 |
|Exceptional Items ||1.00 ||99.45 |
|Profit Before Extra-Ordinary Items & Tax ||(211.05) ||(52.72) |
|Less: Current Tax ||36.50 ||50.68 |
|Deferred Tax ||(10.40) ||(5.55) |
|Profit (Loss) for the year ||(237.15) ||(97.85) |
|Basic & Diluted Earnings Per Equity Share of Face Value of Rs.10 each ||(2.14) ||(0.88) |
The Company has incurred a loss of Rs.237.15 lacs and therefore the Board ofDirectors has decided not to declare Dividend for the year ended 31st March 2016.
Company's Overall Performance
During the year under review your Company has received income from operationsamounting to Rs.822.40 Lacs as compared to Rs.767.52 Lacs in the previous year. YourCompany has incurred losses after taxes of Rs.237.15 Lacs as compared to loss of Rs.97.85 Lacs in the previous year.
Segment wise Performance
The Company has discontinued soya business activity for Refined Oil & Soya Productsat its plant located at Village: Dakachiya A. B. Road Tehsil Sanwer District - Indoreas the company had closed down its soya division in the financial year 2012-13.
The revenue of your Company's Soya Division is Rs. 1.64 Lacs as against Rs. 6.61 Lacsin the previous year and it has incurred a loss of Rs. 34.06 Lacs as against Rs. 134.08Lacs during the previous year.
The revenue of the soya division comprises mainly of credit balances written off in thedivision and loss is attributable mainly to depreciation employee benefit expenses anddiminution in inventory.
During the year under review the revenue of your Company's Welding Division was Rs.575.90 Lacs as against Rs. 534.33 Lacs in the previous year and it has incurred a loss ofRs. 11.48 Lacs during this period as against Loss of Rs. 24.46 Lacs during the previousyear.
Real Estate Division
During the year under review the revenue of your Company's Real Estate Division wasRs. 166.04 Lacs as against Rs. 118.53 Lacs in the previous year and earned a profit ofRs. 113.35 Lacs during this period in comparison to a profit of Rs. 75.03 Lacs during theprevious year.
During the year under review the revenue of your Company's Investment Division was Rs.78.80 Lacs as against Rs. 108.03 Lacs in the previous year and has incurred a loss of Rs.192.98 Lacs in comparison to a profit of Rs. 94.55 Lacs in the previous year
4. MANAGEMENT DISCUSSIONS AND ANALYSIS
Your Company has three distinct businesses viz. Welding Electrodes Real Estate andInvestment division. The modus operandi of these three businesses is different in terms ofthe nature of the products customers profile challenges and growth avenues.
Welding Industry Scenario:
In view of the growing industrialization and expenditure on infrastructure we expect abuoyant demand for welding materials in India.
The Real Estate scenario is very encouraging in Indore and Dewas.
5. SUBSIDIARIES JOINT VENTURES AND ASSOCIATES COMPANIES
The Company has no Subsidiaries Joint Venture and any Associate Company.
The Policy for determining Material subsidiaries as approved may be accessed on theCompany's website at the link: http://www.sam-industries.com .
6. INTERNAL FINANCIAL CONTROL SYSTEM
According to Section 134(5)(e) of the Companies Act 2013 the term 'Internal FinancialControl' (IFC) means the policies and procedures adopted by the company for ensuring theorderly and efficient conduct of its business including adherence to company's policiessafeguarding of its assets prevention and detection of frauds and errors accuracy andcompleteness of the accounting records and timely preparation of reliable financialinformation.
The Company has a well placed proper and adequate internal control system whichensures that the efficiency and profitability of operations the reliability ofinformation adhering to rules and regulations that all assets are safeguarded andprotected and that the transactions are authorized recorded and reported regularly andcorrectly.
7. FIXED DEPOSIT
Your Company has not accepted any public deposit within the meaning of Sections 73 and74 of the Companies Act 2013 read together with the Companies (Acceptance of Deposits)Rules 2014 during the financial year 2015-16.
The Board of the Company at March 31st 2016 consisted of 6 Directors out of whom oneis Chairman who is also the Promoter Director and one woman Whole time director besidesthree independent Directors.
Pursuant to section149 of the Companies Act 2013 the Board at its meeting held on13th August 2016 recommended appointment of Mr. Santosh Muchhal Mr. Yogendra Vyas andMr. Ritesh Kumar Neema as independent directors of the company not liable to retire byrotation for a period of 5 years from the date of the 22nd Annual General Meeting subjectto the approval of the members of the company.
All the Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section149 of the Companies Act 2013 and Regulation ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which have beenrelied by the company and were placed before the Board.
Retirement by Rotation
In terms of Section 152 of the Companies Act 2013 Mrs. Gitanjali A. Maheshwari isliable to retire by Rotation at the forthcoming Annual General Meeting (AGM) and beingeligible has offered her-self for reappointment.
9. KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:
Mr. Ashutosh A. Maheshwari Chairman (DIN: 00094262)
Mrs. Gitanjali A. Maheshwari Whole time Director (DIN: 00094596)
Mr. Gopal Prasad Shrivastava Chief Financial Officer Mr. Navin S. Patwa CompanySecretary
10. AUDITORS Statutory Auditors
Messrs M. Mehta & Company Chartered Accountants (Firm Reg. No. 000957C) who arethe statutory auditors of the Company hold office till the conclusion of the ensuingAnnual General Meeting and being eligible have consented and offered them-selves forre-appointment. Pursuant to the provisions of section 139 of the Companies Act 2013 andthe Rules framed thereunder it is proposed to re-appoint Messrs M. Mehta & CompanyChartered Accountants as Statutory Auditors of the Company from the conclusion of theforthcoming AGM till the conclusion of 23rd AGM to be held in the year 2017 You arerequested to consider their re-appointment.
11. AUDITORS REPORT
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.
12. SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company with theapproval of its Board appointed M/s. M. Maheshwari & Associates a firm of CompanySecretaries in Practice to undertake the Secretarial Audit of the Company for thefinancial year ended March 31 2016. The Secretarial Audit Report is annexed herewith as Annexure-1.There are no qualifications reservation or adverse remark or disclaimer made by theauditor in the report save and except disclaimer made by them in discharge of theirprofessional obligation.
13. CORPORATE GOVERNANCE
Corporate Governance is an ethically driven business process that is committed tovalues aimed at enhancing organization's brand and reputation. The new Companies Act 2013and amended SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 havestrengthened the governance regime in the country. The Company is in compliance with thegovernance requirements provided under the new law and had proactively adopted manyprovisions of the new law ahead of time. The Company is committed to maintain the higheststandards of corporate governance and adhere to the corporate governance requirements setout by SEBI.
Your Company has complied with the requirements of corporate governance as per SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015. A detailed report onCorporate Governance is annexed as Annexure-2 in this Annual Report. A certificatefrom the Statutory Auditors of the Company regarding compliance of conditions of corporategovernance has been obtained and is enclosed with this Report.
A Certificate of the Whole time Director appointed in terms of Companies Act 2013 andCFO of the Company in terms of SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 inter alia confirming the correctness of the financial statements andcash flow statements adequacy of the internal control measures and reporting of mattersto the Audit Committee is also annexed as Annexure-3.
14. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of section 134(3)(c) of the Companies Act 2013 yourDirectors state that:
a) in the preparation of the annual accounts for the year ended March 31 2016 theapplicable accounting standards read with requirements set out under Schedule III to theAct had been followed and there are no material departures from the same;
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 as at March 31 2016 and of the profitand loss of the Company for the financial year;
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 are operatingeffectively; and
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively.
15. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGNEXCHANGE EARININGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134(3)(m) of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 is set out and enclosed herewith as Annexure-4to this Report.
16. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIESPROVIDED
Pursuant to Section 134(3)(g) of the Companies Act 2013 particulars of loansguarantees or investments provided by the Company under Section 186(4) of the Act as atthe end of the Financial Year 2015-16 are disclosed in the Note to the Financial Statementattached with the Board Report.
17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts whichwould impact the going concern status of the Company and its future operations.
18. NUMBER OF MEETINGS OF THE BOARD
The details of the number of Board and Audit Committee meetings of the Company are setout in the Corporate Governance Report in terms of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 which forms part of this Report.
19. DISCLOSURE BY INDEPENDENT DIRECTORS
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
20. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
In accordance with the provisions of The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and rules made thereunder the Companyhas not formulated an internal policy on aforesaid Act during the year since there was nowomen employee in the Company.
21. EXTRACT OF ANNUAL RETURN
In accordance with the provisions of Section 134 (3) (a) of the Companies Act 2013the extract of Annual Return as on March 31 2016 in the prescribed Form No. MGT-9pursuant to Section 92(3) of the Companies Act 2013 and Rule 12 (1) of the Companies(Management and Administration) Rules 2014 is attached herewith as Annexure-5 andforms part of this Report.
22. AUDIT COMMITTEE
The Audit Committee as on March 31 2016 comprises Mr. Santosh Muchhal IndependentDirector Mr. Ritesh Kumar Neema Independent Director and Mr. Yogendra Vyas IndependentDirector. Further all recommendations of Audit Committee were accepted by the Board ofDirectors.
23. VIGIL MECHANISM
The Company is committed to the highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors has formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177 (10) of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.The Policy onWhistle Blower/Vigil Mechanism has been hosted on the website of the company. The policyinter alia provides a direct access to the Chairman of the Audit Committee.
The policy provides for a framework and process whereby concerns can be raised by itsemployees against any kind of discrimination harassment victimization or any otherunfair practice being adopted against them.
24. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
During the financial year 2015-16 the Company has entered into transactions withrelated parties as defined under Section 2 (76) of the Companies Act 2013 read withCompanies (Specification of Definitions Details) Rules 2014 which were in the ordinarycourse of business and on arms' length basis and in accordance with the provisions of theCompanies Act 2013 Rules issued there under and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
During the year there were no transactions with related parties which qualify asmaterial transactions. In line with the requirements of the Companies Act 2013 theCompany has formulated a Policy on Related Party Transactions which is also available onCompany's website at www.sam-industries.com . The Policy intends to ensure that properreporting; approval and disclosure processes are in place for all transactions between theCompany and Related Parties.
25. CORPORATE SOCIAL RESPONSIBILITY:
The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within purview of Section 135(1) of the Companies Act 2013 andhence it is not required to formulate policy on corporate social responsibility.
26. INDUSTRIAL RELATIONS
Relation between the Management and its employees has been cordial. Your Directorsplace on record their appreciation of the efficient and loyal services rendered by theemployees of the Company at all levels.
27. DISCLOSER RELATING TO REMUNERATION OF DIRECTORS:
In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014a statement in the said rules is Annexed as Annexure-6.
28. RISK MANAGEMENT
Company has properly analyzed and identified the key business risk area and a RiskMitigation process. Company had extensively exercised at regular intervals to identifyevaluate manage and monitor all business risk.
29. MATERIAL CHANGES BETWEEN END OF FINANCIAL YEAR AND THE DATE OF THE BOARD REPORT.
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
The Company has received confirmation from Regional Director Mumbai to shift theregistered office of the company from the State of Maharashtra to Madhya Pradesh and theBoard of Directors decided in the meeting held on 13th August 2016 to shift registeredoffice of the company at Works situated at Village: Dakachiya A. B. Road Tehsil: SanwerDistrict: Indore - 453771 Madhya Pradesh India (w.e.f. 16/08/2016.)
30. TRANSFER TO RESERVES:
The Board does not propose to transfer any amount to reserves.
31. ANNUAL EVALUATION OF BOARD'S PERFORMANACE
In accordance with the provisions of schedule IV of the company Act 2013 a separatemeeting of the independent Directors was held on 13th February 2016. Withoutthe attendance of Non independent Directors and Members of the Management the committeehas reviewed the performance and effectiveness of the Board of in the meeting as a wholefor the Financial Year 2015-2016.
The Directors wish to convey their appreciation for the co-operation received from YourCompany's bankers and various Government agencies. The Directors also wish to thank theShareholders Employees Customers and Suppliers for their support and co-operation.
| ||For and on behalf of the Board of Directors |
| ||Ashutosh A. Maheshwari |
|Indore 13th August 2016 ||Chairman |
| ||DIN: 00094262 |
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo[Section 134(3)(m) of The Companies Act 2013 read with Rule 8(3) of The CompaniesAccounts Rules 2014]
(A) Conservation of energy
|S.No. Particulars || |
|i) the steps taken or impact on con servation of energy; ||All efforts are made to conserve and optimize use of energy with continuous monitoring improvement in maintenance and distribution systems and through improved operational techniques. |
|ii) the steps taken by the company for utilising alternate sources of energy; ||NA |
|iii) the capital investment on energy ||NIL |
|(i) the efforts made towards technology absorption ||Updation of in house Technology is a Continuous process of absorption implemented in our Industry & Technology developed in house This is fully absorbed for development in the existing product and new models. |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution ||The Company has been able to successfully indigenize the toolings to a large extent. Increased efficiency better performance and wider product range. |
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year ||NIL |
|(a) the details of technology imported ||NA |
|(b) the year of import ||NA |
|(c) whether the technology been fully absorbed ||NA |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and ||NA |
|(iv) the expenditure incurred on Research and Development ||NIL |
(C) Foreign exchange earnings and Outgo
| ||2015-16 ||2014-15 |
|The Foreign Exchange earned in terms of actual inflows during the year; and ||Nil ||Nil |
|The Foreign Exchange outgo during the year in terms of actual outflows. ||Nil ||Nil |