The Board of Directors hereby submit the 24th Annual Report of your Companytogether with the Audited Accounts of the Company for the year ended 31st March' 2017.
| || ||Rs. In Lakhs |
|PARTICULARS ||2016-2017 ||2015-2016 |
|Sales and other Income ||4728.32 ||8538.15 |
|Profit before tax interest depreciation and write offs ||1796.98 ||530.85 |
|Interest & Financial Expenses ||171.14 ||312.14 |
|Depreciation ||98.16 ||102.64 |
|Profits ||(2066.28) ||116.07 |
|Exceptional Expenses ||4028.67 ||- |
|Exceptional Income ||1527.74 ||- |
|Profit Before Tax ||(4567.22) ||116.07 |
|Provision for Taxation : || || |
|Current ||(0.29) ||19.90 |
|Deferred ||(23.00) ||(15.41) |
|Earlier year ||- ||- |
|Profit after Tax ||(4543.93) ||108.38 |
|Balance of Profit from Previous Years ||2678.84 ||2715.43 |
|Adjustments ||- ||144.98 |
|Balance of Profit carried forward ||(1865.09) ||2678.84 |
*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 2017 stood at Rs. 47.28crore as compared to Rs. 85.38 crore in the previous year. During the year under reportCompany has incurred Net Loss after the exceptional items amounting to Rs. 45.43 crore ascompared to Profit Rs. 1.08 crore in the previous year..
During the year Company s manufacturing operations were run partially and companywas able to partially dispose off its assets and utilised the funds to pay off itsliabilities and as on date is a Debt Free company. The Company has shifted and started itsmanufacturing operations at a new premises which is also been the Registered office ofthe Company.
Your Company's Wholly Owned Subsidiary namely SSA International Limited has achieved aTurnover of Rs. 1235.59 crores. During the year there was Flood occurred at mandideepunit. With continuing recessionary trends in Rice Mill Industry and downfall in value ofinventory SSA incurred heavy losses amounting to Rs. 322.47 crores. The Company beendeclared as Non performing asset NPA by the lenders/banks.
As you are already aware that Company's other wholly owned Subsidiary namely ArlinFoods Limited (formerly known as Sam Buildcon Limited) is not operational. Your Board isexploring new avenues to revive the Company.
No material change and commitments have occurred between the end of the financial yearof the Company to which the financial statements relate and the date of the report whichmay affect the financial position of the Company.
In order to conserve and strengthen the financial resources of the Company theDirectors regret their inability to recommend any dividend for the year 2016-2017.
The Board of Directors at its meeting held on 24th September 2017 on therecommendation of Nomination and Remuneration committee has appointed Ms. Shubhra Bhambri(DIN 01167504) as an Additional Director (Independent). Her candidature has been proposedfor the approval of shareholders in the ensuing Annual General Meeting.
In accordance with the requirements of the Companies Act 2013 and the Company'sArticles of Association Mr. Atul Mittal Managing Director of the Company retires byrotation and being eligible offers himself for re-appointment. Mrs. Rita Mittal resignedfrom the Position of the Managing Director of the Company w.e.f- 16.08.2016. Your boardwould like to place on record its appreciation for the valuable services rendered by herduring her tenure as a Managing director.
Mr. Atul Mittal has been appointed as managing Director w.e.f. 01 September 2016 for atenure of 3 years approved by the Shareholders in the Annual General Meeting held on 30thSeptember 2016.
BOARD OF DIRECTORS MEETINGS
During the year 6 (Six) Board Meetings and 6 (Six) 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 comprise the following members:-
i) Mr. S.K. Gupta
ii) Mr. Atul Mittal
iii) Mrs. Shubhra Bhambri
AUDITORS STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Companies Act 2013 the tenure ofcurrent auditors - M/s Aggarwal & Rampal Chartered Accountants shall come to an end atthe conclusion of forthcoming AGM. Accordingly M/s Kapil Kumar & Co. CharteredAccountants (Firm Registration No. 006241N) have been recommended by the Audit Committeeand by the Board of Directors to be appointed as Statutory Auditors of the Company for aterm of -ve consecutive years to hold office from the conclusion of the 24thAnnual General Meeting until the conclusion of 29th Annual General Meeting ofthe Company to be held in the calendar year 2022 subject to annual rati-cation by Membersat every Annual General Meeting on such remuneration as may be decided by the Board. Theybeing eligible have consented and offered themselves for appointment as statutory auditorsfor conducting audit of accounts for -ve consecutive financial years starting from2017-18.
Pursuant to Section 139 and 141 of the Companies Act 2013 and relevant Rulesprescribed there under the Company has received certi-cate dated 9th August2017 from the Chartered Accountant Firm to the effect inter-alia that theirappointment if made would be within the limits laid down by the Act shall be as per theterm provided under the Act that they are not disquali-ed for such appointment under theprovisions of applicable laws and also that the list of proceedings against them or any oftheir partners pending with respect to professional matter of conduct as disclosed in thecerti-cate is true and correct.
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 2016-17.
The Secretarial Audit Report for the Financial Year 2016-17 submitted by them inprescribed form MR-3 has been annexed hereto marked as ANNEXURE -4 and forms anintegral part of this Report. The Secretarial Auditor has made certain observations. Theobservations and reply thereto are as under: Quali-cations/Observations.
1. It is observed that the company has not followed the procedure of reclassi-cation ofequity shares from promoter category to public category in terms of regulation 31A of theSEBI (Listing Obligation and Disclosure Requirement) 2015 (LODR).
The Company made necessary requests to promoter Shareholders (PAC) whose shares are notin Dematerialised form and not having the PAN to regularise their holdings. After givingsufficient time and no any reply received from their side made a request to the StockExchange Mumbai for exemption and after eliminating the names of PAC submitted theShareholding Pattern with revised Promoter's List having 100% shareholding in d materialsform since 31st March 2016 and since then the same was accepted by the StockExchange in compliance of Regulation 31 of SEBI (Listing Obligation and DisclosureRequirement) 2015 (LODR).
2. The constitution of Internal Complaints Committee (ICC) is not in accordance withSection 3 of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
The company is under process to appoint any one person as nominated by the reputed NGO.
3. The AOC-1 attached with the Annual Report was not signed in the manner asstated in Section 129 of the Companies Act 2013.
The same has been complied for the current period.
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 -ndings 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 2017. The Auditor has made certain observations. The observations and reply theretoare as under:
a) The company has ceased its business operations at NSEZ plant and transferred itspremises at NSEZ to M/s Capgemini Technology Services India Limited. However as per theinformation and explanations provided to us the company has shifted its manufacturingactivities to a new factory outside NSEZ and commenced the production after the date ofFinancial Statements.
The financial transaction for transferring the premises has been accounted for in theaudited Financial statements for the year ended 31.03.2017. The manufacturing operationshave been started at the new premises which has also been setup as the company'sRegistered office.
b) The company had given a Corporate Guarantee for an amount of Rs. 807.46 croresagainst secured loans taken by its Wholly owned Subsidiary namely M/S SSA InternationalLtd which has been declared Non Performing Assets (NPAs) by the banks. The company hasalso received the notice u/s 13(2) of the SARFAESI Act 2002 from consortium of banks forrevocation of its Corporate Guarantee.
The Company has received a notice u/s 13(2) of the SARFAESI Act 2002 from consortiumof banks for revocation of its Corporate Guarantee. SSA is taking care for the same.
c) The company has made a provision for Diminution in Value of Investments of itswholly owned subsidiary namely SSA International Ltd as the net worth of the companyhas been fully eroded during the year refer Note- N Para-(vi).
M/s SSA International Limited the wholly owned subsidiary of the company has incurredheavy losses during the year and its net worth have been fully eroded. So the necessaryprovisions have been made in compliance of Indian Accounting Standards AS 13
d) Balances of Unsecured Loans are subject to confirmation and consequential effect (ifany) on the financial statement remains unascertained.
The Unsecured Loans were received in compliance of the conditions stipulated by thelending Banks for providing the funds to meet the company's financial requirements.
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 theCost records.
The Companies Act 2013 states that a formal annual evaluation needs to be made by theBoard of its own performance and that of its committees and individual directors. ScheduleIV of the Companies Act 2013 states that the performance evaluation of independentdirectors shall be done by the entire Board of Directors excluding the director beingevaluated. The evaluation of all the directors and the Board as a whole was conductedbased on the criteria and framework adopted by the Board and as collated by Nomination andRemuneration Committee and the Board expressed its satisfaction.
The manner in which the evaluation has been carried out has been explained in theCorporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS
As required by Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Management's 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 Certi-cate on itscompliance is annexed to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(3)(c) read with Section 134(5) Your 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 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 quali-cations 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.
During the year under review the long term credit rating of "BB+" and shortterm credit "A4+" assigned was get suspended .
The Company has two subsidiaries namely SSA International Limited and ArlinFoods Limited. During the year the Board of Directors (the Board') reviewed theaffairs of the subsidiaries. As per Section 129(3) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 a Consolidated Financial Statement of the Companyand its subsidiary has been prepared and attached to the Standalone Financial Statement ofthe Company. The Consolidated Financial Statements have been prepared in accordancewith the relevant accounting standards.
Pursuant to the provisions of the rule 8 of Companies (Accounts) Rules 2014 FormAOC-1 annexed 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.
DIMINUTION IN VALUE OF INVESTMENTS
The wholly owned subsidiary of the Company M/s SSA International Limited has incurredheavy losses during the year and its networth have been fully eroded. The fair value ofInvestment in M/s Yogendra Worsted Limited is not available. So the necessary provisionshave been made in compliance of Indian Accounting Standards AS 13 and the value ofinvestment have been diminutioned.
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.
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. It's compliances with operating systems accounting procedure and policies at alllocations 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 arm's 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 arementioned in the prescribed Form AOC-2 is appended as ANNEXURE- to the Board'sReport.
LOANS GUARANTEES AND INVESTMENT
During the year under report the company has not made any fresh investments nor haveprovided any new Guarantee .
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 andforms part of 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 3POLICIES
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 behavior actual or suspected fraud or violation of the Codes of Conduct or policy ||http://www.samtexfashions.com/finance-reports/ finance-report-download.php?id1439197042. pdf&nameVIGIL+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?id1439196915 pdf&namePOLICY+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?id1460372452 pdf&namePolicy+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?id1460372529 pdf&namePolicy-+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?id1460372662. pdf&namePolicy-+Determining+Material+Subsidi ary |
|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?id1460372810. pdf&namePolicy+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?id1439196980. pdf&nameRISK+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 -led. The notice issued to the company was settled and set aside by theconcerned authority.
The Company did not receive any other order passed by any Court or Tribunal orRegulator.
DEMATERIALIZATION OF SHARES
Your Company's shares are participating both with National Securities Depository Ltd.(NSDL) and Central Depository Services (India) Ltd. (CDSL). The ISIN number of the Companyis 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 2015 and 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 31 2017.
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 year under review there were no cases-led pursuant to the-Sexual-Harassment of Women at Workplace (Prevention Prohibition andRedressal) 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 |
| ||Atul Mittal |
|Place : New Delhi ||Managing Director |
|Dated : 28.08.2017 ||DIN 00223366 |