BOARD OF DIRECTORS To the Members, 1. Your Directors have pleasure in presenting the 21st Annual Report together with the Audited Statement of accounts of your Company for the year ended 31st March 2015: 2. DIVIDEND The Board of Directors has decided not to declare Dividend for the year ended 31st March 2015. 3. PERFORMANCE Company's Overall Performance During the year under review, your Company has received income from operations amounting to Rs.767.52 Lacs as compared to Rs. Rs.950.15 Lacs in the previous year. Your Company has incurred losses after taxes are of Rs. 97.85 Lacs as compared to profit of Rs. 165.65 Lacs in the previous year. Segment wise Performance Soya Division The Company has discontinued soya business activity for Refined Oil & Soya Products at its plants located at Village Dakachya, Tehsil Sanwer, District Indore and company had closed its soya division in financial year 2012-13. The revenue of your Company's Soya Division Rs. 6.61 Lacs as against Rs. 18.30 Lacs in the previous year and incurred losses Rs.134.08 Lacs as against Rs. 159.13 Lacs during the previous year. The revenue of the soya division comprises mainly of Profit on Sale of Fixed Assets of the division and loss is attributable mainly to Loss on Sale of fixed assets, diminution on fixed assets and other administrative expenses. Welding Division During the year under review, the revenue of your Company's Welding Division was Rs. 534.33 Lacs as against Rs. 611.16 Lacs in the previous year and incurred losses of Rs. 24.46 Lacs during this period as against proft of Rs. 111.16 Lacs during the previous year. Real Estate Division During the year under review, the revenue of your Company's Real Estate Division was Rs. 118.53 Lacs as against Rs. 219.33 Lacs in the previous year and earned profit of Rs.75.03 Lacs during this period in comparision to a profit of Rs. 145.21 Lacs during the previous year. Investment Division As per segment reporting requirements, your company has identified a segment i.e. Investment division and all the activities relating to investment in shares and loans etc. are carried in its investment division. During the year under review your company has earned income of Rs. 94.55 Lacs in comparision to a profit of Rs. 84.36 Lacs in the previous year. 4. MANAGEMENT DISCUSSIONS AND ANALYSIS Outlook Your Company has three distinct businesses viz. Welding Electrodes, Real Estate and Investment division. The modus operandi of these three businesses is different in terms of 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 a buoyant demand for welding materials in India. Real Estate: The Real Estate scenario is very encouraging in Indore and Dewas. 5. SUSBSIDIARIES, 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 the Company'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 Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Company has a well placed, proper and adequate internal control system, which ensures, that the efficiency and profitability of operations, the reliability of information, adhering to rules regulations, that all assets are safeguarded and protected, and that the 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 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year 2014-15. 8. DIRECTORS APPOINTMENT: Your Board had appointed Mrs. Gitanjali A. Maheshwari (DIN: 00094596) on 14th August 2014 as an additional director in the company and in the AGM held on 29th Septmeber 2014 member approved her appointment in category of promoter and whole time director of the Company. Your Board had appointed Mr. Kishore Kale (DIN: 01743556) on 13th November 2014 as an additional director of the Company and he shall hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Mr. Kishore Kale for appointment as a Director. In accordance with Section 152 of the Companies Act, 2013, Mr. Ashutosh A. Maheshwari will retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment. RESIGNATION: Mr. Bhanu Prakash Inani, Independent Director of the Company had resigned and his resignation was accepted on 14th August 2014. The Board appreciates his valuable support and guidance to the Company during the tenure of his Directorship. Mr. Anil Maloo, Executive Director of the Company had resigned and his resignation was accepted wef 1st December 2014. The Board appreciates his valuable support and guidance to the Company during the tenure of his Directorship. 9. AUDITORS Messrs M. Mehta & Company, Chartered Accountants, (Firm Reg. No. 000957C) who are the statutory auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and being eligible have consented and offered them-selves for re-appointment. Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint Messrs M. Mehta & Company, Chartered Accountants, as Statutory Auditors of the Company from the conculsion of the forthcoming AGM till the conclusion of 23rd AGM to be held in the year 2017, subject to the ratification of their appointment at every AGM. You are requested to consider their re-appointment. 10. AUDITORS REPORT The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. 11. CORPORATE GOVERNANCE Corporate Governance is an ethically driven business process that is committed to values aimed at enhancing an organizations brand and reputation. The new Companies Act, 2013 and amended Listing Agreement have strengthened the governance regime in the country. The Company is in compliance with the governance requirements provided under the new law and had proactively adopted many provisions of the new law, ahead of time. The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. Your Company has complied with the requirements of corporate governance as per clause 49 of the Listing Agreements with the Stock Exchanges. A detailed report on Corporate Governance is annexed to this Annual Report. A certificate from the Statutory Auditors of the Company regarding compliance of conditions of corporate governance has been obtained and is enclosed with this Report. A Certificate of the Whole time Director, appointed in terms of Companies Act, 2013 and CFO of the Company in terms of sub-clause IX of Clause 49 of Equity Listing Agreement, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed. 12. DIRECTORS RESPONSIBILITY STATEMENT In accordance with the provisions of secion 134(3)(c) of the Commpanies Act, 2013, your Directors state that - a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, had been followed and there are no material departures from the same; b ) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit and loss of the Company for the year ended on that period; c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the Company and that such internal financial controls are adequate and are operating effectively; and f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARININGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out herewith as Annexure to this Report. 14. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED Pursuant to Section 134(3)(g) of the Companies Act, 2013 particulars of loans, guarantees or investments provided by the Company under Section 186 of the Act as at the end of the Financial Year 2014-15 are disclosed in the Note to the Financial Statement attached with the Board Report. 15. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. 16. KEY MANAGERIAL PERSONNEL The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows: Mr. Ashutosh A. Maheshwari, Chairman (DIN:00094262) Mrs. Gitanjali A. Maheshwari, Whole time Director (DIN: 00094596) (w.e.f. 14.08.2014) Mr. Gopal Prasad Shrivastava, Chief Financial Officer (w.e.f. 14.08.2014) Mr. Navin S. Patwa, Company Secretary 17. NUMBER OF MEETINGS OF THE BOARD The details of the number of Board and Audit Committee meetings of the Company are set out in the Corporate Governance Report which forms part of this Report. 18. DISCLOSURE BY INDEPENDENT DIRECTORS All Independent Directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 19. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION 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 there under, the Company has not formulated an internal policy on aforesaid Act during the year, since there were no women employee. 20. EXTRACT OF ANNUAL RETURN In accordance with the provisions of Section 134 (3) (a) of the Companies Act, 2013, the extract of Annual Return as on March 31, 2015 in the prescribed Form No. MGT-9, pursuant 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 and forms part of this Report. 21. AUDIT COMMITTEE The Audit Committee as on March 31, 2015 comprises Mr. Santosh Muchhal, Independent Director, Mr. Ritesh Kumar Neema, Independent Director and Mr. Yogendra Vyas, Independent Director Further, all recommendations of Audit Committee were accepted by the Board of Directors. 22. VIGIL MECHANISM The Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. 23. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES During the financial year 2014-15, the Company has entered into transactions with related parties as defined under Section 2 (76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arms' length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued there under and Clause 49 of the Listing Agreement. During the financial year 2014-15, there were no transactions with related parties which qualify as material transactions under the Listing Agreement. In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, the Company has formulated a Policy on Related Party Transactions which is also available on Company's website at www.sam-industries.com . The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and Related Parties. 24. CORPORATE SOCIAL RESPONSIBILITY: The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within purview of Section 135(1) of the Companies Act, 2013 and hence it is not required to formulate policy on corporate social responsibility. 25. INDUSTRIAL RELATIONS Relation between the Management and its employees has been cordial. Your Directors place on record their appreciation of the efficient and loyal services rendered by the employees of the Company at all levels. 26. DISCLOUSER RELATING TO REMUNERATION OF DIRECTORS: In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement in the said rules is given below: Gitanjali A. Maheshwari, whole time Director: Remuneration in Rs. 37.50 Lacs. 27. RISK MANAGEMENT Company has properly analyzed and identified the key business risk area and a Risk Mitigation process. Company had extensively exercised at regular intervals to identify, evaluate, manage and monitor all business Risk. Company has also framed an elaborate Risk Management policy. 28. MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR. There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report 29. TRANSFER TO RESERVES: The Board do not proposes to transfer any amount to reserves. 30. SECRETARIAL AUDITOR Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Manish Maheshwari, Practicing Company Secretary to conduct the Secretarial Audit of the Company. The Secretarial Auditor reported that the Company has not filed Form MGT-14 dated 31st Janaury 2015 regarding appointment of Internal Auditor under section 138 of the Companies Act, 2013. The Board of Directors will take necessary action for submission the same. 31. ANNUAL EVALUATION OF BOARD'S PERFORMANACE In accordance with the provisions of schedule IV of the company Act, 2013, a separate meeting of the independent Directors was held on 14th February, 2015. Without the attendance of Non independent Directors and Members of the Management the committee has reviewed the performance and effectiveness of the Board of in the meeting as a whole for the Financial Year 2014-2015. 32. ACKNOWLEDGEMENT The Directors wish to convey their appreciation for the co-operation received from Your Company's bankers and various Government agencies. The Directors also wish to thank the Shareholders, Employees, Customers and Suppliers for their support and co-operation. For and on behalf of the Board of Directors Ashutosh A. Maheshwari Chairman DIN: 00094262 Indore, 28th September, 2015 |