Your Directors have pleasure in presenting their 9th Annual Report and the auditedaccounts for the financial year ended March 31 2016.
1. Financial Highlights.
|Particulars ||Rs in Crores. |
| ||FY 2015 - '16. ||FY 2014 - '15. |
|Profit before Depreciation & Tax ||15.24 ||143.61 |
|Less: Depreciation ||0.08 ||0.24 |
|Profit before Tax ||15.16 ||143.37 |
|Less: Tax ||0.87 ||0.15 |
|Profit after Tax ||14.29 ||143.22 |
In order to conserve the funds for future operations no dividend is being proposed forthe FY. 2015-'16.
The Board had proposed to carry Rs14.29 Crores to reserves during the year.
4. Brief description of the Company's working during the year/State of affairs
The Company operates in one segment i.e. Real Estate business. No business operationswere carried out during the FY 2015-'16. However the Company is exploring various avenuesto commence operations in the real estate segment. The Company is also proposing toacquire a Non-Banking Finance Company (Non-Deposit) undertaking to do business through awholly owned subsidiary and the necessary RBI's prior approval has been granted to theacquiree company for the proposed acquisition by the Company.
5. Change in the nature of business if any
6. Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report.
The Company redeemed 39200 9.75% Cumulative Preference Shares of Rs.5/- aggregating toRs. 196000/- along with arrear of dividend amounting to Rs. 191100/- on 30.06.2016 infavour of M/s.The Thirumagal Mills Limited.
7. Details of significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and company's operations in future.
8. Details in respect of adequacy of Internal Financial Controls with reference to theFinancial Statements.
The Company has in place an adequate system of internal controls with documentedprocedures covering all corporate functions. The Company has engaged the services of M/s.Kalyanasundaram& Associates Chartered Accountants to carryout the Internal Audit. Atall levels of the Company necessary checks and balances are in place to ensure thattransactions are adequately authorized and reported correctly. The Audit Committee hadconsidered the systems as laid down and satisfied itself of the adequacy and effectivenessof the internal financial control system.
To maintain its objectivity and independence the Internal Audit function reports tothe Chairman of the Audit Committee and to the Managing Director of the Company. The scopeand authority of the Internal Audit function is defined in the Audit Committee Charter.The Internal Auditor of the Company conducts Audit to ensure that necessary controls arein place. The Audit Committee reviews these controls periodically. Based on the report ofinternal audit function corrective actions in the respective areas are taken to furtherstrengthen the controls. Significant audit observations and recommendations along withcorrective actions thereon are presented to the Audit Committee of the Board periodically.
9. Risk Management
Pursuant to section 134 (3) (n) of the Companies Act 2013 the Company has framed aRisk Management Policy. In the opinion of the Board there appears to be no element of riskwhich may threaten the existence of the Company.
10. Details of Subsidiary/Joint Ventures/Associate Companies including performance andfinancial positions of each of the subsidiaries.
The Company does not have any Subsidiary Joint Venture or Associate Company andtherefore performance and financial position of each of the subsidiaries does not arise.
11. Public Deposits
The Company has not accepted any deposit from the public within the meaning of ChapterV of the Companies Act 2013 for the year ended 31st March 2016.
12. Statutory Auditors.
At the 8th AGM held on 23.09.2015 the shareholders approved the appointment of M/s.P.B. Vijayaraghavan and Co. Chartered Accountants(Firm Regn. No:004721S) as theStatutory Auditors of the Company (to fill the casual vacancy caused by the resignation ofM/s.M. Kuppuswamy PSG & Co. LLP Chartered Accountants Vellore) to conduct theStatutory Audit for the period ended 31st March 2016 and who shall hold office from theconclusion of 8th AGM until the conclusion of 9th AGM.
It is proposed by the Board that pursuant to the provisions of Section 139 141 142and other applicable provisions if any of the Companies Act 2013 M/s. P.B.Vijayaraghavan and Co. Chartered Accountants (Firm Regn. No:004721S) be appointed as theStatutory Auditors of the Company to hold their office for a term of three successivefinancial years commencing from FY 2016-'17 to 2018-'19 subject to ratification at everyAGM by the shareholders of the Company and fix their remuneration.
The Company has obtained necessary certificate under Section 141 of the Companies Act2013 conveying their eligibility for being the Statutory Auditors of the Company for theFinancial Year 2016-'17.
13. Auditors' Report
The Statutory Auditors' Report for the Financial Year 2015-'16 does not contain anyqualification reservation or adverse remarks and the same is attached with the annualfinancial statements.
14. Share Capital
a) Issue of Equity Shares with Differential Rights
The Company has not issued any equity shares with differential rights during the yearunder review.
b) Issue of Sweat Equity Shares.
The Company has not issued any Sweat Equity Shares during the year under review.
c) Issue of Employee Stock Options.
The Company has not provided any Stock Option Scheme to its employees.
d) Provision of money by Company for purchase of its own shares by employees or bytrustees for the benefit of employees
The Company has not bought back any of its securities during the year under review.
15. Extract of Annual Return
The extract of Annual Return in Form No. MGT - 9 in terms of Section 134(3)(a) of theCompanies Act 2013 read with the Companies (Accounts) Rules 2014 is annexed herewith asAnnexure "E" and forms part of the Board's Report.
16. Conservation of energy technology absorption and foreign exchange earnings andoutgo.
The provisions of Section 134(m) of the Companies Act 2013 are not applicable. Therewas no foreign exchange inflow or Outflow during the year under review.
17. Corporate Social Responsibility (CSR)
Your Company has a deep sense for caring the needy improve the quality of life of thecommunities it serves.Pursuant to Section 135 of the Companies Act 2013 the Company hasconstituted a CSR Committee. The Composition of the CSR Committee Web-link to the CSRPolicy and the annual report on Corporate Social Responsibility (CSR) activities isannexed herewith as Annexure "A".
Pursuant to Section 152 of the Companies Act 2013 Ms.S.Valli Director is liable toretire by rotation at the ensuing Annual General Meeting and she has offered herself forre-appointment.
Except Ms.S.Valli Mr.M.Ethiraj & Mr.E.Shanmugam none of the Directors and KeyManagerial Personal of the Company and their relatives are concerned or interestedfinancial or otherwise in the re-appointment of Ms.S.Valli. The Board commends there-appointment of Ms.S.Valli.
19. Committees of the Board its constitution and details of Board Meetings and otherCommittees of the Board held during FY 2015-'16.
Brief details are provided in the Corporate Governance Report as annexed.
20. Changes in Directors and Key Managerial Personnel
During the year there was no change in the constitution of the Board. Mr. Govind MJoshi was appointed as Company Secretary in the place of Mr.S.S.Arunachalam who resignedas the Company Secretary of the Company.
21. Declaration by Independent Director(s) and re-appointment if any.
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149 (6) of the Companies Act 2013so as to qualify themselves to be appointed as Independent Directors under the provisionsof the Companies Act 2013.
22. Annual Performance Evaluation
In line with the criteria evolved by the Nomination and Remuneration Committee theperformance of the Chairman Managing Director other Directors Committees KeyManagerial Personnel and Senior Executives have been evaluated considering variousevaluation aspects.
23. Policy on Vigil Mechanism
In accordance with regulation 22 of SEBI(LODR) Regulations 2015 the Company has anestablished Policy on Vigil Mechanism for Directors / Employees and other stakeholders ofthe Company to report concerns about unethical behaviors actual or suspected fraud orviolation of the Company's Code of conduct or ethics policy.
The policy also provides a direct access to the Chairman of the Audit Committee to makeprotective disclosures to the management about the grievances or violation of theCompany's code of conduct.
The policy is disclosed on the Company's web-site www.svgml.com .
In pursuance of the Companies Act 2013 and the Listing Agreement/ SEBI(LODR)Regulations 2015 the following policies have been framed and has been disclosed onthe Company's website www.svgml.com
1. Related Party Transaction Policy.
2. CSR Policy.
3. Whistle Blower Policy consisting of Vigil Mechanism.
4. Policy on determination of Materiality of Events or Information.
5. Code of Ethics and Business Principles applicable to Directors and Senior Management
6. Familiarization Programme for Independent Directors.
7. Code of Conduct for Prohibition of Insider Trading.
8. Performance Evaluation Policy.
25. Particulars of loans guarantees or investments under Section 186 of the CompaniesAct 2013
The Company has not given any loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013 read with Rule 11(1) of Companies (Meetings ofBoard and its Powers) Rules 2014.
26. Particulars of contracts or arrangements with related parties:
Refer Annexure "B" (Form AOC-2)as annexed which forms part of this Report.
27. Comparative Analysis of Remuneration paid to the Directors and Employees:
|(i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year; ||: No remuneration was paid to Directors except sitting fee to non-executiveDirectors to attend the Board Meetings. Managing Director is paid aremuneration of Rs. 48000/- per annum. Accordingly the ratio is 0.41: 1 |
|(ii) The percentage increase in remuneration of each DirectorChief Financial Officer Chief Executive Officer Company Secretary or Manager if anyin the financial year; Others not applicable ||: Company Secretary: 18% |
|(iii) The percentage increase in the median remuneration of employees in the financial year; ||: 15% |
|(iv) The number of permanent employees on the rolls of company ||: 19 |
|(v) The explanation on the relationship between average increase in remuneration and company performance ||: Not applicable since the Company's performance is not measurable |
|(vi) Comparison of remuneration of the Key Managerial Personnel against the performance of the Company. ||: As above |
|(vii) Variations in the market Capitalization of the Company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase (or) decrease in the market quotations of the shares of the Company in comparison to the rate at which the company came out with the last public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the company as at the close of the current financial year and previous financial year; || |
| ||Financial Year |
| ||2015-'16 2014-'15 |
| ||Market Capitalization 2723 M 3232 M |
| ||Price Earning Ratio 19.06 2.40 |
| ||As above |
|(viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstance for increase in the managerial remuneration and justification there of and point out if there are anyexceptional circumstances for increase in the managerial remuneration; ||Average percentile increase in salaries of non managerial Employees - 3.00% |
| ||Average percentile increase in salaries of Managerial Employees - Nil |
|(ix) Comparison of the each remuneration of the Key Managerial Personnel against the performance of thecompany ||Refer clause (v) |
|(x) The key parameters for any variable component of remuneration availed by the Directors ||N.A |
|(xi) The ratio of remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director duringthe year ||N.A |
|(xii) Affirmation that the remunerationis as per the remuneration policy of the company ||YES |
28. Secretarial Audit Report
Pursuant to Section 204(1) of the Companies Act 2013 read with Rule 9 of the Companies(Appointment And Remuneration of Managerial Personnel)Rules 2014 the Secretarial AuditReport for FY 2015-'16 issued by a Company Secretary in practice is annexed herewith asAnnexure "D". The Secretarial Audit report does not contain any qualificationreservation or other remarks.
29. Report on Corporate Governance
The Company has been practicing the principles of good governance and lays strongemphasis on transparency accountability and integrity.
A separate section 'Report on Corporate Governance' as per Annexure "C" and acertificate from a Practicing Company Secretary regarding compliance of conditions ofCorporate Governance as annexed shall form part of this Annual Report.
The Managing Director and the Chief Financial Officer of the Company have certified tothe Board on financial statements and other matters in accordance with Regulation 17(8) ofthe SEBI (LODR) Regulations 2015 pertaining to MD / CFO Certification for the financialyear ended 31s March 2016.
30. Directors' Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:-
(a) that in the preparation of the annual accounts for the financial year ended 31stMarch 2016 the applicable Accounting Standards had been followed along with properexplanation relating to material departures;
(b) that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for that period;
(c) that 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) that Directors had prepared the annual accounts on a going concern basis; and
(e) that Directors had laid down policies and procedures adopted by the Company forinternal financial controls for ensuring orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information and that suchinternal financial controls are adequate and were operating effectively.
(f) that Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
The Board of Directors of the Company wishes to express their deep sense ofappreciation and offer their sincere thanks to all the Shareholders of the Company fortheir unstinted support to the Company.
The Board would also like to place on record their deep sense of gratitude to thevarious Central and State Government Departments Organizations and Agencies for thecontinued help and co-operation extended by them.
In the end the Board would like to place on record their deep sense of appreciation toall the executives officers employees staff members and workers.
| || ||By Order of the Board |
|Place: Chennai ||M.ETHIRAJ ||E.SHANMUGAM |
|Date: 18.08.2016 ||Chairman ||Managing Director |
| ||DIN 00041996 ||DIN 00041968 |