The Board of Directors hereby submit the 23rd Annual Report of your Companytogether with the Audited Accounts of the Company for the year ended 31st March2016.
Rs. In Lakhs
|PARTICULARS ||2015-2016 ||2014-2015 |
|Sales and other Income ||8538.15 ||10551.50 |
|Profit before tax interest depreciation and write offs ||530.85 ||720.03 |
|Interest & Financial Expenses ||312.14 ||416.66 |
|Depreciation ||102.64 ||104.79 |
|Profit Before Tax ||116.07 ||198.58 |
|Provision for Taxation : || || |
|Current ||19.90 ||11.95 |
|Deferred ||(15.41) ||(9.03) |
|Earlier year ||- ||- |
|Profit after Tax ||108.38 ||188.60 |
|Balance of Profit from Previous Years ||3162.70 ||2974.10 |
|Balance of Profit carried forward ||3271.08 ||3162.70 |
The company does not propose any transfer to General Reserve.
REVIEW OF OPERATIONS & FUTURE PROSPECTS:
The Gross Sales and other Income for the year ended 31st March 2016 stood at Rs.8538.16 lakhs and Net Profits at Rs. 108.38 Lakhs as compared to Rs. 10551.50 lakhs andRs. 188.60 lakhs respectively in the previous year.
The international economic conditions especially in US are becoming more tough forsurvival. Board of Directors are finding it difficult as there is no sign of improvementin the years to come.
The Board of Directors in their meeting held on 28th May 2016 discussed anddecided to stop the production activity at its unit at NSEZ Noida. A proposal for settingother business activity was placed. After some developments the manufacturing activitiesat NSEZ Noida unit were partially resumed.
Your Companys Wholly Owned Subsidiary namely SSA International Limited hasachieved a Turnover of Rs. 1629.00 crores and Net Profit of Rs.7.21 crores. As you arealready aware that Companys other wholly owned Subsidiary namely Arlin Foods Limited(formerly known as Sam Buildcon Limited) is not operational. Your Board is exploring newavenues for business. Your Directors further inform that on 9th July 2016 theFlood Water entered the Mandideep Plant of SSA International Limited and there werelosses of Inventory and some assets. The Insurance Surveyors are assessing the Losses.
During the year under review your company has sub-divided its share capital from 1(one) Equity share having a face value of Rs. 10/- each into 5 (five) Equity Shares of theface value of Rs.2/- each.
As a result of such sub division the Authorised Share Capital of the company has beenchanged from 16000000 (One Crores Sixty Lakhs) Equity shares of Rs. 10/- each into80000000 (Eight Crores) equity shares of Rs. 2/- (Rupees Two) each.
In order to conserve and strengthen the financial resources of the Company theDirectors regret their inability to recommend any dividend for the year 2015-2016.
Your Director Mr. Atul Mittal retires this year by rotation in accordance with theArticles of Association of the Company and being eligible offers himself forre-appointment.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149 (6) of the Companies Act 2013.
BOARD OF DIRECTORS MEETINGS
During the year 7 (Seven) Board Meetings and 4 (four) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.
Pursuant to the provisions of section 177 of the Companies Act 2013 and as perRegulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Audit Committee has comprise the following members:-
i) Mr. S.K. Gupta
ii) Mr. Raman Ohri
iii) Mr. Atul Mittal AUDITORS
Pursuant to Section 139 of the Companies Act 2013 Aggarwal & Rampal CharteredAccountants were appointed as Statutory Auditors in the 21st Annual GeneralMeeting until the conclusion of 24th Annual General Meeting to be held in thecalendar year 2017(subject to ratification of their appointment at every Annual GeneralMeeting) at such remuneration as shall be fixed by the Board. In terms of the firstproviso to section139 of the Companies Act 2013 the appointment of the auditors shall beplaced for ratification at every Annual General Meeting. Accordingly the appointment ofAggarwal & Rampal Chartered Accountants as statutory auditors of the Company isplaced for ratification by the shareholders. SECRETARIAL AUDIT
Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. DMK Associates Company Secretaries as Secretarial Auditor to undertakethe Secretarial Audit of the Company for the FY 2015-16.
The Secretarial Audit Report for the Financial Year 2015-16 submitted by them inprescribed form MR-3 has been annexed hereto marked as Annexure -4 and forms an integralpart of this Report. The Secretarial Auditor has made certain observations. Theobservations and reply thereto are as under:
1. According to Section 178 of the Act and Regulations 19 of LODR there must beminimum three Non-executive directors to constitute the Nomination and RemunerationCommittee(NRC) whereas NRC of the Company is comprises of only two Non-executiveDirectors.
The Companys Board comprises of four numbers of Directors with two ExecutivePromoter Directors and two Independent Non Executive Directors. The Company is in theprocess of appointing one more non executive director in the Board shortly.
2. It is observed that 100% promoters equity shares in the company are innot in dematerialized form as required under Regulation 31 of SEBI (Listing Obligation andDisclosure Requirement) 2015 (LODR).
As on 31st March 2016 the equity share capital in non dematerialized formbelonging to Promoter Category have been shifted to others category and share holdingpattern submitted to stock exchange for the period ended 31.03.2016 contains promotersequity as 100% De materialized form and is in compliance of Regulation 31 of SEBI (ListingObligation and Disclosure Requirement) 2015 (LODR).
3. The constitution of Internal Complaints Committee (ICC) is not in accordancewith Section 3 of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
The company is in the process of appointing one member from NGO to make theconstitution of Internal Complaints Committee in compliance of Section 3 of the SexualHarassment of Women at Workplace ( Prevention Prohibition and Redressal) Act 2013.
4. The company has not attached Form AOC-2 relating to transactions incurred onarm length basis in the ordinary course of business as an annexure to Board report for theFY 2014-2015.
During the Financial Year 2014-15 all the transactions with the related parties werein ordinary course of business and on arms length basis hence were out of thepurview of Section 188 of the Act. Further all transactions with related parties were alsoreviewed by the Audit Committee of the Board. The AOC-2 relating to transactions for theFinancial Year 2015-16 is attached with this Boards Report.
5. The Company has received a notice u/s 7A of Employees Provident Fund& Miscellaneous Provisions Act 1952 from Employees Provident Fund Organization(EPFO) dated 05.08.2015 for determination of PF amount and thereafter received demandnotice dated 11.07.2016 of Rs.61193017/-. Thereafter the Company has filed an
appeal with Employees Provident Fund Organization Tribunal (EPFOT) which washeard on 22.07.2016 EPFOT waived the pre deposit of said demand and stayed the impugnedorder of EPFO dated 11.07.2016 till further orders.
Your Company after receiving the notice from EPFO filed the appeal with EmployeesProvident Fund Organization Tribunal (EPFOT) which was heard on 22.072016 EPFOT waivedthe pre deposit of said demand and stayed the impugned order of EPFO dated 11.07.2016 tillfurther orders. Presently the matter is pending with EPFOT.
M/s. Ashok Aggarwal & Co. a firm of Chartered Accountants is conducting periodicInternal Audit of all operations of the Company and the Audit Committee of the Board ofDirectors has reviewed their findings regularly. Their reports have been well received bythe Audit Committee.
The Statutory Auditors of the Company has submitted their reports on the standalone andconsolidated Financial Statements of the Company for the Financial Year ended 31stMarch 2016. The Auditor has made certain observations. The observations and reply theretoare as under:
Going concern concept of the company may be affected if the decision of the Board ofDirectors meeting held on May 28 2016 to stop the production activities of the company isimplemented by the management.
In the Board of Directors meeting held on May 28 2016 Board decided to stop theproduction activities of the company at its unit at NSEZ Noida. After this decision theProduction activities were stopped for some time and later on after some developments werepartially resumed. The necessary ratification of decision was informed to Stock Exchangeand was taken on record by the Board of Directors.
Rest are self-explanatory and no further comments are required. The observation orcomment of the auditors on financial transactions or matters are not having any adverseeffect on the functioning of the company.
COMPLIANCE CERTIFICATE FROM COST AUDITOR FOR MAINTENANCE OF COST RECORDS
Pursuant to the provisions of section 148 of the Companies Act 2013 and rules madethere under and with Cost Accounting
Record Rules 2011 the company is maintaining the Cost records .
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an evaluation of itsown performance the directors individually as well as the evaluation of the working ofits Audit Nomination & Remuneration committees. The manner in which the evaluationhas been carried out has been explained in the Corporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS
As required by Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Managements discussion & analysis report isappended in the Annual report.
The Company is committed to maintain the standards of Corporate Governance and adhereto the Corporate Governance requirements set out by SEBI.
As required under SEBI (Listing Obligation & Disclosure Requirements) Regulations2015 a separate report on Corporate Governance report along with Certificate on itscompliance is annexed to this report.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134(3)(c) read with Section 134(5) the Directors state 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.
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
All independent directors have given declarations to the effect that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andprovisions under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
In terms of Section 178(3) of the Companies Act 2013 upon recommendation of theNomination and Remuneration Committee the Board has adopted the Nomination andRemuneration Policy of the Company. Directors appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other prescribed matters are governed by such policy. As per terms of Section 178(4)of the Act such policy is attached hereto as Annexure - 1 which forms part of thisreport.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism Policy to deal with instance of fraud andmismanagement if any.
As per the policy objective the Company encourages its employees who have concernsabout suspected misconduct to come forward and express these concerns without fear ofpunishment or unfair treatment. A vigil mechanism provides a channel to the employees andDirectors to report to the management concerns about unethical behaviour actual orsuspected fraud or violation of the Codes of conduct or policy. The mechanism provides foradequate safeguards against victimization of employees and Directors to avail of themechanism and also provide for direct access to the Managing Director/Chairman of theAudit Committee in exceptional cases. Such policy is made available on the website of theCompany.
The Securities and Exchange Board of India (SEBI) issued SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 on September 2 2015 in order to streamline theprovisions of the Listing Agreement for different segments of capital market in order toensure better enforceability. The said regulations were effective from December 1 2015.Accordingly all the listed entities were required to enter in to fresh Listing Agreementwithin six months from the effective date. Therefore the Company entered into ListingAgreement with the BSE Limited in the month of February 2016.
During the year under review the Company sustained its long term credit rating of"BB+" and short term credit A4+" SUBSIDIARIES
The Company has two subsidiaries namely SSA International Limited and Arlin FoodsLimited (Formerly known as Sam Buildcon Limited). During the year the Board of Directors(the Board) reviewed the affairs of the subsidiaries. As per Section 129(3) ofthe Companies Act 2013 read with the Companies (Accounts) Rules 2014 a consolidatedfinancial statement of the Company and its subsidiary has been prepared and attached tothe stand alone financial statement of the Company. The Consolidated Financial Statementshave been prepared in accordance with the relevant accounting standards. Form AOC-1annexed to the Financial Statements.
The accounts of the Subsidiaries are also available for inspection for shareholders/members /investor during the business hours at the registered office of the company.
CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of Business of the Company during the year. TheCompany has two wholly owned subsidiaries namely M/s SSA International Limited and M/s.Arlin Foods Limited (formerly known as M/s. Sam Buildcon Limited).There was no change inthe nature of business in SSA International Limited as well as Arlin Foods Limited. PUBLICDEPOSIT
The Company has not invited or accepted fixed deposits from public during the yearunder review under Chapter V of the Companies Act 2013 and the Rules made there under.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The internal Audit functions reports to the Chairman of theAudit Committee and to Chairman and Managing Director of the Company. The Internal Auditmonitors and evaluates the efficiency and adequacy of Internal control systems in thecompany. Its compliances with operating systems accounting procedure and policiesat all locations of the Company.
RELATED PARTY TRANSACTIONS
During the year under review there was no new transaction with related parties fallingunder the purview of Section 188 of the Act. All the transactions with the related partieswere in ordinary course of business and on arms length basis hence were out of thepurview of Section 188 of the Act. All transactions with related parties were dulyreviewed by the Audit Committee of the Board. Particulars of such transactions ismentioned in the prescribed Form AOC-2 is appended as Annexure- to the BoardsReport.
LOANS GUARANTEES AND INVESTMENT
During the year under review Company has invested Rs. 1.5 crores (Rupees One CroresFifty Lakhs) in the equity capital and provided the Guarantee of Rs. 80746 croresenhanced from existing Rs.716.79 crores for working capital limits and other limits toits wholly owned subsidiary SSA International Limited.
The Industrial relations remained cordial during the year under review.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE OUTGO
In terms of Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of Companies(Accounts) Rules 2014 a statement containing details of conservation of energytechnology absorption foreign exchange earnings and outgo in the manner as prescribedunder the Companies (Accounts) Rules 2014 is given in Annexure - 2 hereto and forms partof this Report. EXTRACT OF THE ANNUAL RETURN
In terms of Section 92(3) read with Section 134(3)(a) of the Companies Act 2013 theextract of the annual return in form MGT-9 is annexed herewith as Annexure - 3
As per the regulations of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 all listed entities are required to formulate certain policies. All suchpolicies are available on our website i.e. www.samtexfashions.com. Key policies that havebeen adopted by the Board are as follows:
|Name of the Policy ||Brief description ||Web link |
|Vigil Mechanism Policy ||The Vigil (Whistle Blower) Mechanism aims to provide a channel to the Directors and employees to report genuine concerns about unethical behaviour actual or suspected fraud or violation of the Codes of Conduct or policy ||http://www.samtexfashions.com/finance_reports/ finance report download.php?id=1439197042. pdf&name=VIGIL+MECHANISM+POLICY |
|Board Diversity ||To ensure a transparent Board nomination process with the diversity of thoughts experience knowledge perspective and gender in the Board ||http://www.samtexfashions.com/finance_reports/ finance report download.php?id=1439196915.pdf &name=POLICY+ON+BOARD+DIVERSITY |
|Policy on Preservation of Documents ||This policy deals with the retention and archival of corporate records of the Company ||http://www.samtexfashions.com/finance_reports/ finance_report_download.php?id=1460372452.pd f&name=Policy+on+Preservation+of+Documents |
|Policy- Dealing with Related Parties ||This policy regulates all the transactions between the Company and its related parties ||http://www.samtexfashions.com/finance_reports/ finance_report_download.php?id=1460372529. pdf&name=Policy-+Dealing+with+Related+Parties |
|Policy on Material Subsidiary ||This policy deals with determination of Material Subsidiaries of Samtex Fashions Limited in terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 (SEBI LODR) ||http://www.samtexfashions.com/finance_reports/ finance_report_download.php?id=1460372662. pdf&name=Policy-+Determining+Material+Subsid iary |
|Materiality of Events ||The objective of the Policy is to determine materiality of events or information of the Company and to ensure that such information is adequately disseminated in pursuance with the Regulations and to provide an overall governance framework for such determination of materiality. ||http://www.samtexfashions.com/finance_reports/ finance_report_download.php?id=1460372810.pdf &name=Policy+on+Materiality+of++Events |
|Risk Management Policy ||The objective of Risk Management at Samtex Fashions Limited is to create and protect shareholder value by minimizing threats or losses and identifying and maximizing opportunities. ||http://www.samtexfashions.com/finance_reports/ finance report download.php?id=1439196980. pdf&name=RISK+MANAGEMENT+POLICY |
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/ TRIBUNALS
A demand Notice dated 11.07.2016 from Employees Provident Fund Organisation undersection 7-A of the Employees Provident Funds & Miscellaneous Provisions Act 1952 wasreceived . An Appeal before the Employees Provident Fund Appellate Tribunal New Delhihave been filed . As per Tribunal order dtd. 27.07.16 the notice issued to the company isliable to be st aside and been stayed.
DEMATERIALIZATION OF SHARES
Your Companys shares are participating both with National Securities DepositoryLtd. (NSDL) and Central Depository Services (India) Ltd. (CDSL). The ISIN number of theCompany is INE931D01020.
STOCK EXCHANGE LISTING
The Equity shares of your Company are listed at: The Bombay Stock Exchange (BSE)Mumbai.
CORPORATE SOCIAL RESPONSIBILITY
The Company was not required to constitute corporate social responsibility committeepursuant to section 135 of the Companies Act 2013.
CODE OF CONDUCT:
In compliance with Regulation 26(3) of the SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015and the Companies Act 2013 the Company has framed andadopted a code of conduct. The code is applicable to the members of the Board and allemployees of the Company.
The Board Members have affirmed compliance with the Code of Conduct for the periodended March 312016.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
Company has adopted a policy for prevention of Sexual Harassment of Women at workplaceand has set up Committee for implementation of said policy.
The Company is committed to provide a safe and conducive work environment to itsemployees. During the year under review. Your Directors further state that during the yearunder review there were no cases filed pursuant to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
Your Directors wish to place on record their gratitude to members business associatesvarious agencies of the Government Financial Institutions and Banks for all the help andCo-operation extended by them to the Company.
They also acknowledge with appreciation the devoted services rendered by the workersstaff and Executives at all levels of the Company.
| ||For and on behalf of the Board of Directors |
| ||For SAMTEX FASHIONS LIMITED |
| ||Rita Mittal |
|Place : New Delhi ||(Chairperson & Managing Director) |
|Dated : 12.08.2016 ||DIN 03398410 |