To the Members
Your Directors have pleasure in presenting the 26th Annual Report together with theAudited Statement of accounts of your Company for the year ended 31st March 2020:
1. FINANCIAL HIGHLIGHTS
(Rs. in Lakhs)
|Particulars ||2019-20 ||2018-19 |
|Sales & Other Income ||999.03 ||1007.94 |
|Total Expenditure ||886.63 ||922.86 |
|Earning Before Finance Cost Tax Exceptional Items Depreciation and Amortization Expenses ||112.40 ||85.08 |
|Less: Financial Costs ||30.72 ||17.03 |
|Depreciation and Amortization Expenses ||36.70 ||39.21 |
|Exceptional Items ||2.47 ||0.18 |
|Profit Before Extra-Ordinary Items & Tax ||42.51 ||28.66 |
|Less: Current Tax ||68.59 ||42.80 |
|Deferred Tax ||(2.50) ||(36.79) |
|Profit (Loss) for the year ||(28.57) ||22.65 |
|Basic & Diluted Earnings Per Equity Share of Face Value of Rs.10 each ||(0.26) ||0.20 |
The Board of Directors has not recommended any dividend on equity shares for the yearended 31st March 2020. There are no amounts to be transferred to Investor Education andProtection Fund (IEPF).
3. PERFORMANCE Company's Overall Performance
During the year under review your Company has received income amounting to Rs.999.03lakhs as compared to Rs. 1007.94 lakhs in the previous year.
Your Company has incurred loss of Rs.28.57 lakhs as compared to profit of Rs. 22.65lakhs in the previous year.
Segment wise Performance
During the year under review the revenue of your Company's Welding Division was Rs.721.35 lakhs as against Rs. 794.40 lakhs in the previous year and it has earned a profitof Rs. 168.72 lakhs during this period as against profit of Rs. 60.70 lakhs during theprevious year.
Real Estate Division
During the year under review the revenue of your Company's Real Estate Division wasRs. 231.57 lakhs as against Rs. 161.24 lakhs in the previous year and earned a profit ofRs. 194.41 lakhs during this period in comparison to a profit of Rs. 125.42 lakhs duringthe previous year.
During the year under review the revenue of your Company's Investment Division was Rs.46.11 lakhs as against
Rs. 52.30 lakhs in the previous year and has incurred a loss of Rs. 162.48 lakhs incomparison to a loss of Rs. 5.43 lakhs in the previous year.
4. MANAGEMENT DISCUSSIONS AND ANALYSIS
A detailed report on management discussions and analysis is annexed as Annexure - I inthis Boards' Report. Outlook
Your Company has three distinct business viz. Welding Electrodes Real Estate andInvestment divisions. The modus operandi of these three business are is different in termsof the 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 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 the efficiency and profitability of operations the reliability of informationadhering to rules and regulations that all assets are safeguarded and protected and thatthe transactions are authorized recorded and reported regularly and correctly.
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 201920.
The Board of the Company at 31st March 2020 consisted of six directors out of whom oneis Chairperson who is also the Promoter Director and two Whole time directors includingone woman Whole time director and three independent Directors.
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 herself for 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. Kishore Kale Whole time Director (DIN: 01743556)
Mr. Gopal Prasad Shrivastava Chief Financial Officer and Mr. Navin S. Patwa CompanySecretary
10. AUDITORS Statutory Auditors
Messrs Manoj Khatri & Company Chartered Accountants were appointed as StatutoryAuditors of the Company from the conclusion of the 23rd Annual General Meeting till theconclusion of 28th AGM to be held in the year 2022 and that they are eligible for suchcontinuation of 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 312020. The Secretarial Audit Report for financial year ended31st March 2020 is annexed herewith as Annexure - II in this Board Report. Therewere no qualifications reservation or adverse remark or disclaimer made by the auditor inthe report save and except disclaimer made by them in discharge of their professionalobligation.
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 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 Securities Exchange Board of India (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 Board Report. Acertificate from the Statutory Auditors of the Company regarding compliance of conditionsof corporate governance has been obtained and is Annexed as Annexure-IV with thisreport.
A Certificate of the Whole time Director appointed in terms of Companies Act 2013 andChief Finance Officer (CFO) of the Company in terms of SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015 inter alia confirming the correctness of thefinancial statements and cash flow statements adequacy of the internal control measuresand reporting of matters to the Audit Committee is also annexed as Annexure - V inthis Board
14. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of section 134(3) of the Companies Act 2013 yourDirectors state that:
a) in the preparation of the annual accounts for the year ended March 312020 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 312020 and of the profit andloss 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-VI to this Board 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 2019-20 are disclosed in the Notes to the FinancialStatement attached 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 declaration 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 which have beenrelied by the Company and were placed before the Board.
20. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The constitution of Internal Complaints Committee under the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 is not formulated by thecompany since there was no women 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 312020 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 -VII andforms part of this Board Report.
22. AUDIT COMMITTEE
The Audit Committee as on 31st March 2020 comprises of Mr. Ritesh Kumar NeemaIndependent Director Mr. Yogendra Vyas Independent Director and Mr. Devraj SinghBadgara Independent Director. Further all recommendations of Audit Committee wereaccepted by the Board of Directors.
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 2019-20 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 in accordance with the provisions of theCompanies Act 2013 Rules issued there under and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. There were no materially significant related partytransactions with Promoters Directors Key Managerial Personnel or other designatedpersons which may have a potential conflict with interest of the Company at large.
In line with the requirements of the Companies Act 2013 the Company has formulated aPolicy on Related Party Transactions which is also available on Company's website atwww.sam-industries.com. The Policy intends to ensure that proper reporting; approval anddisclosure processes are in place for all transactions between the Company and RelatedParties.
25. COMPLIANCE OF SECRETARIAL STANDARD
The Company has complied with the Secretarial Standards issued by The Institute ofCompany Secretaries of India and approved by the Central Government as required underSection 118(10) of the Companies Act 2013.
26. 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.
27. 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 the employees of theCompany at all levels.
28. 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 - VIII in this Board Report.
29. 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.
30. 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 Board Report.
31. TRANSFER TO RESERVES:
The Company has not transferred any amount to the Reserves for the year ended 31stMarch 2020.
32. ANNUAL EVALUATION OF BOARD'S PERFORMANCE
In accordance with the provisions of schedule IV of the companies Act 2013 separatemeeting of the independent Directors was held on 11th February 2020 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 2019-2020.
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.
By order of the Board For Sam Industries Limited
Ashutosh A. Maheshwari Chairman DIN: 00094262