To the Members
Your Directors have pleasure in presenting the 23rd Annual Report togetherwith the Audited Statement of accounts of your Company for the year ended 31st March 2017:
1. FINANCIAL HIGLIGHTS:
(Rs. in Lacs)
|Particulars ||2016-2017 ||2015-2016 |
|Sales & Other Income ||1104.53 ||822.40 |
|Total Expenditure ||830.19 ||964.00 |
|Earning Before Finance Cost Tax Exceptional Items Depreciation and Amortization Expenses ||274.34 ||(141.6) |
|Less: Financial Costs ||1.22 ||0.90 |
|Depreciation and Amortization Expenses ||67.94 ||67.55 |
|Exceptional Items ||0.09 ||1.00 |
|Profit Before Extra-Ordinary Items & Tax ||205.09 ||(211.05) |
|Less: Current Tax ||113.60 ||36.50 |
|Deferred Tax ||(14.91) ||(10.40) |
|Profit (Loss) for the year ||106.40 ||(237.15) |
|Basic & Diluted Earnings Per Equity Share of Face Value of Rs.10 each ||0.96 ||(2.14) |
The Board of Directors have not recommended any dividend on equity shares for the yearended 31st March 2017. There are no amounts to be transferred to Investor Education andProtection Fund.
Company's Overall Performance
During the year under review your Company has received income from operationsamounting to Rs.1104.53 Lakhs as compared to Rs. 822.40 Lakhs in the previous year. YourCompany has earned profit after taxes of Rs.106.40 as compared to loss of Rs. 237.15Lakhs 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: Indore -453771 Madhya Pradesh as the company had closed down its soya division in the financialyear 2012-13 however the impact of certain administrative expenses and depreciation wasstill there.
The Board of Directors of the Company in their meeting held on 31st January 2017 haddecided that all the Assets and Liabilities and Income and Expenses of Soya Division havebeen transferred to Welding Division with effect from 1st January 2017.
The revenue of your Company's Soya Division is Rs. 1.64 Lakhs in the previous year andit has incurred a loss of Rs. 34.06 Lakhs during the previous year.
During the year under review the revenue of your Company's Welding Division was Rs.757.91 Lakhs as against Rs. 575.90 Lakhs in the previous year and it has earned a profitRs. 111.15 Lakhs during this period as against Loss of Rs. 11.48 Lakhs during the previousyear.
Real Estate Division
During the year under review the revenue of your Company's Real Estate Division wasRs. 271.53 Lakhs as against Rs. 166.04 Lakhs in the previous year and earned a profit ofRs. 187.94 Lakhs during this period in comparison to a profit of Rs. 113.35 Lakhs duringthe previous year.
During the year under review the revenue of your Company's Investment Division was Rs.75.23 Lakhs as against Rs. 78.80 Lakhs in the previous year and has incurred a loss ofRs. 0.60 Lakhs in comparison to a loss of Rs. 92.98 Lakhs in the previous year
4. MANAGEMENT DISCUSSIONS AND ANALYSIS
A detailed report on management discussions and analysis is annexed as Annexure - Iin this Annual Report.
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 InternalFinancial Control' (IFC) means the policies and procedures adopted by the company forensuring the orderly and efficient conduct of its business including adherence tocompany's policies safeguarding of its assets prevention and detection of frauds anderrors accuracy and completeness of the accounting records and timely preparation ofreliable financial information.
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 2016-17.
The Board of the Company at March 31st 2017 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 Boardat its meeting held on 2nd June 2017 recommended appointment of Mr. Devraj Singh Badgaraas independent director of the company not liable to retire by rotation for a period of 5years from the 2nd June 2017 till the 1st June 2022 subject to the approval of themembers of the company.
Resignation of Mr. Santosh Muchhal from Independent Directorship of the Company wasaccepted by the Board on their meeting held on 27th June 2017. The Board places on recordthe valuable services rendered by Mr. Santosh Muchhal during his tenure as an independentdirector on the board of the company and express their deep sense of appreciation andgratitude and wish him good luck for his future endeavors.
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 ofSection 152 of the Companies Act 2013 Mr. Kishore Kale is liable to retire by Rotationat the forthcoming Annual General Meeting (AGM) and being eligible has offered him-selffor re- appointment.
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 PrasadShrivastava Chief Financial Officer and Mr. Navin S. Patwa Company Secretary
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 pursuant to the provisions of section 139 of the CompaniesAct 2013 and the Rules framed thereunder it is proposed to appoint Messrs M/s ManojKhatri & Company Chartered Accountants as Statutory Auditors of the Company from theconclusion of the forthcoming AGM till the conclusion of 28th AGM to be held in the year2022 you are requested to consider their 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 2017. The Secretarial Audit Report is annexed herewith as Annexure- II. There are no qualifications reservation or adverse remark or disclaimer made bythe auditor 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 an organization's brand and reputation. The new Companies Act2013 and amended SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015have strengthened the governance regime in the country. The Company is in compliance withthe governance 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 - III in this Annual Report. Acertificate from the Statutory Auditors of the Company regarding compliance of conditionsof corporate governance has been obtained and is enclosed with this Report. A Certificateof the Whole time Director appointed in terms of Companies Act 2013 and CFO of theCompany in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulation2015 inter alia confirming the correctness of the financial statements and cash flowstatements adequacy of the internal control measures and reporting of matters to theAudit Committee is also annexed as Annexure - IV.
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 2017 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 2017 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-V to 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 2016-17 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 2017 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 VI andforms part of this Report.
22. AUDIT COMMITTEE
The Audit Committee as on March 31st 2017 comprises Mr. Santosh Muchhal IndependentDirector (till 27th June 2017) Mr. Ritesh Kumar Neema Independent Director Mr. YogendraVyas Independent Director and Mr. Devraj Singh Badgara Independent Director (w.e.f. 27thJune 2017). 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. Thepolicy inter 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 2016-17 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. DISCLOSURE 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 - VII in this Annual Report.
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 THE END OF FINANCIAL YEAR AND THE DATE OF THE BOARDREPORT.
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.
30. TRANSFER TO RESERVES:
The Board does not propose to transfer any amount to reserves.
31. ANNUAL EVALUATION OF BOARD'S PERFORMANCE
In accordance with the provisions of schedule IV of the companies Act 2013 a separatemeeting of the independent Directors was held on 31st January 2017. Without theattendance of Non independent Directors and Members of the Management the committee hasreviewed the performance and effectiveness of the Board in the meeting as a whole for theFinancial Year 2016-2017.
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 |
|Place: Indore ||Chairman |
|Date: 18th August 2017 ||DIN: 00094262 |