Your Directors have pleasure in presenting the 24th Annual Report of Saven TechnologiesLimited together with the audited financial statements for the year ended March 31 2017.The financial results of the Company are as follows:
1. Financial Resultis (In Lakhs)
| ||2016-17 ||2015-16 |
|Revenue from Operations ||983.21 ||864.94 |
|Operating expenditure ||800.01 ||705.82 |
|Earnings before interest tax depreciation and amortization (EBITDA) ||183.20 ||159.12 |
|Other income ||102.32 ||121.04 |
|Finance costs ||-- ||2.43 |
|Depreciation and amortization expense ||32.72 ||32.88 |
|Profit before tax (PBT) ||252.80 ||244.85 |
|Tax expense ||82.65 ||82.83 |
|Profit for the year (PAT) ||170.15 ||162.02 |
|Balance brought forward from previous year ||74.61 ||174.47 |
|Depreciation Reserve ||-- ||- |
|Amount available for appropriation ||244.76 ||336.49 |
|Dividend ||-- ||217.57 |
|Dividend Tax ||-- ||44.30 |
|Balance carried to balance sheet ||1031.09 ||860.95 |
2. Financials of the Company
The total revenue of the Company for the year ended March 31 2017 was Rs.1085.53 lakhsas compared to Rs.985.98 lakhs for the previous year. Revenue from operations wasRs.983.21 lakhs as compared to Rs.864.94 lakhs for the previous year. Other income wasRs.102.32 lakhs compared to Rs.121.04 lakhs for the previous year. The profit before Taxfor the year was Rs.252.80 lakhs as compared to Rs.244.85 lakhs for the previous year. Theprofit after Tax for the year was Rs.170.15 lakhs as compared to Rs.162.02 lakhs in theprevious year.
3. Reduction of Share Capital
During the financial year under review the Board of Directors considered it prudent toreturn back the surplus funds held by the company to the shareholders by reducing the paidup share capital of the Company. In this regard the Company has filed application forReduction of Share Capital with National Company Law Tribunal (NCLT) Hyderabad afterobtaining your approval by way of Postal ballot. NCLT directed the Company to issueNotices to Central Government Registrar of Companies Securities and Exchange Board ofIndia and Creditors seeking their representations and objections if any and makenewspaper publication. Accordingly the notices have been issued and published innewspapers.
After obtaining the approval of the National Company Law Tribunal the IssuedSubscribed and Paid up Share Capital of the Company shall stand reduced fromRs.108787480/- to Rs.10878748/-. The aforesaid reduction of paid up share capitalshall be effected by returning to the shareholders an amount of Rs.9/- per equity share ofRs.10/- each held by them. There will be no change in the Shareholding pattern of theCompany after the Reduction of Share Capital.
4. Material Changes and Commitments if any affecting the financial position ofthe company which have occured between the end of the financial year of the company towhich the financial statements relate and the date of the report
There are no material changes and commitments affecting the financial position of theCompany.
5. Transfer To Reserves
The company had at the beginning of the financial year an amount of Rs.550 lakhs in theGeneral Reserve. During the financial year 2016-17 the company did not transfer any amountto Reserves.
Your Directors considered it prudent to conserve the resources of the Company and assuch have not recommended any dividend for the current financial year.
7. Particulars of Loans Guarantees or Investments
The company has not given any loan or guarantee covered under the provisions of section186 of the Companies Act 2013 (Act). The details of the investments made by the companyare given in the notes to the financial statements.
8. Internal Financial Control Systems and Their Adequacy
The Company has adequate system of internal controls to safeguard and protect fromloss unauthorised use or disposition of its assets. All the transactions are properlyauthorised recorded and reported to the Management. The Company is following all theapplicable Accounting Standards for proper maintenance of books of accounts and forfinancial reporting.
9. Related Party Transactions
The transactions with related parties are in ordinary course of business and at arm'slength. Information on transactions with related parties pursuant to Section 134(3)(h) ofthe Act read with rule 8(2) of the Companies (Accounts) Rules 2014 is given in Annexure-1in Form AOC-2 and the same forms part of this report.
10. Fixed Deposits
Your Company has not accepted any deposits and as such no amount of principal orinterest was outstanding as of the Balance Sheet date.
11. Change In The Nature Of Business If Any
There is no material change in the nature of business affecting the financial positionof the Company for the year ended March 31 2017.
12. Joint Venture
Penrillian Limited a joint venture (JV) of your Company in UK is engaged in thebusiness of software development for mobile applications. Penrillian achieved revenue of 0.84 million for the year ended June 30 2016 as against
1.01 million for the previous year. The JV which was initially in the area ofproviding software development services expanded its operations to development of softwareproducts. Due to change in technology the company's products could not succeed in themarket place. This resulted in JV incurring heavy losses in its operations. The JV'sfinancial performance had declined drastically and due to erosion of net worth anddeclining business prospects the company decided to wind up its operations and liquidateand took steps for the Company to be formally placed into Creditors Voluntary Liquidationand have commenced the process of Creditors Voluntary Liquidation in the month of May2017.
Information on Joint Venture pursuant to Section 129(3) of the Act read with rule 5 ofthe Companies (Accounts) Rules 2014 is given in Annexure-2 in Form AOC-1 and the sameforms part of this report.
13. Subsidiary Company
The company does not have any subsidiary.
14. Directors and Key Managerial Personnel
During the financial year 2016-17 there was no appointment or cessation of any Directoror Key Managerial Personnel (KMP).
Mr. Nrupender Rao retires as Director by rotation at the ensuing Annual General Meetingand being eligible offers himself for re-appointment.
For the perusal of the shareholders a brief resume of the Director being re-appointedalong with necessary particulars is given in the explanatory statement to the notice.
Statement on the declaration given by the Independent Directors as per Section 149(6)
The company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he /she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
15. Policy on Directors' Appointment and Remuneration and Other Details
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and fixingtheir remuneration pursuant to the provisions of Section 178 of the Act and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Salient features of thePolicy are set out in the Corporate Governance Report.
16. Number of Meetings of the Board
Nine meetings of the Board were held during the year. The details pertaining to boardmeetings are included in the Corporate Governance Report which forms part of this report.
17. Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board carried out an annual performanceevaluation of its own performance the Directors as well as the evaluation of the workingof its Audit Nomination and Remuneration and Stakeholders' Relationship Committees.Independent Directors carried out a separate evaluation on the performance of Chairman andnon Independent directors. The manner in which the evaluation has been carried out hasbeen explained in the Corporate Governance Report.
18. Audit Committee
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.
At the Annual General Meeting (AGM) held on September 22 2014 M/s. Rambabu& Co.Chartered Accountants Hyderabad were appointed as Statutory Auditors of the company tohold office till conclusion of the AGM to be held in the calendar year 2017.
Under Section 139 of the Companies Act 2013 and the Rules made thereunder it ismandatory to rotate the statutory auditors on completion of the maximum term permittedunder the said section. Pursuant to the recommendation of the audit committee of theCompany on 11th August 2017 the Board of Directors of the Company has proposed theappointment of M/s. Suryanarayana and Suresh Chartered Accountants Hyderabad (Firmregistration No.006631S) as the statutory auditors of the Company. M/s. Suryanarayana andSuresh Chartered Accountants Hyderabad who will hold office for a period of fiveconsecutive years from the conclusion of the 24th Annual General Meeting of the Companyscheduled to be held on 25th September 2017 till the conclusion of the 29th AnnualGeneral Meeting to be held in the year 2022 subject to the approval of the shareholdersof the Company.
There were no qualifications reservation or adverse remark in the Audit Report for theFinancial Year ended 31st March 2017.
Mr. S Chidambaram Company Secretary in Practice Hyderabad was appointed to undertakethe Secretarial Audit of the Company for the Financial Year 2016-17. There were noqualifications reservation or adverse remark(s) in the Audit Report for the FinancialYear ended 31st March 2017. The Secretarial Audit Report is given in Annexure-3.
20. Directors' Responsibility Statement
In terms of Section 134(5) of the Companies Act 2013 your Directors would like tostate that:
a. In the preparation of the Annual Accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures; b. TheDirectors have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year ended March 312017 and the profit of the Company for that financial year;
c. The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. The Directors have 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 operating effectively.
f. The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
21. Details in respect of frauds reported by auditors under sub-section (12) of section143 other than those which are reportable to the Central Government-NIL
22. Conservation Of Energy Technology Absorption Foreign Exchange Earnings And Outgo
Conservation of Energy:
The nature of the Company's operations requires a low level of energy consumption.
Research and Development (R&D):
The Company continues to look at opportunities in the areas of research and developmentin its present range of activities.
The Company continues to use the latest technologies for improving the productivity andquality of its services and products. The Company has not imported any technology duringthe year.
Foreign Exchange Earnings and Outgo:
Foreign Exchange earned by the Company as on March 31 2017 was Rs. 901.17 lakhs and ason March 31 2016 was Rs. 757 lakhs. The Foreign Exchange outgo for the company as onMarch 31 2017 was Rs. 4.73 lakhs and as on March 31 2016 was Rs. 1.30 lakhs.
23. Particulars of Employees
(a) The information required under section 197 of the Companies Act 2013 read withrule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are given in Annexure-4.
(b) Pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and amendments made thereunder during the year under review noneof the employees of the Company employed throughout the financial year was in receipt ofremuneration for the year which in the aggregate was not less than one crore and twolakh rupees; none of the employees of the Company employed for a part of the financialyear was in receipt of remuneration for any part of the year at a rate which in theaggregate was not less than eight lakh and fifty thousand rupees per month; none of theemployees of the Company employed throughout the financial year or part thereof was inreceipt of remuneration in the year which in the aggregate or as the case may be at arate which in the aggregate is in excess of that drawn by the managing director orwhole-time director or manager and holds by himself or along with his spouse and dependentchildren not less than two percent of the equity shares of the company.
24. Extract Of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 are given inAnnexure-5.
25. Risk Management
Pursuant to section 134(3)(n) of the Companies Act 2013 and SEBI (Listing ObligationsAnd Disclosure Requirements) Regulations 2015 the company has formulated a policy onrisk management. At present the company has not identified any element of risk which maythreaten the existence of the company.
26. Vigil Mechanism / Whistle Blower Policy
Pursuant to Section 177 of the Companies Act 2013 read with Rule 7 of Companies(Meetings of Board and its Powers) Rules 2014 and SEBI (Listing Obligations AndDisclosure Requirements) Regulations 2015 the Company has established a Whistle BlowerPolicy to deal with instance(s) of fraud and mismanagement if any. The details of theWhistle Blower Policy are explained in the Corporate Governance Report and also posted onthe website of the Companyhttp://www.saven.in/documents/results/2014-15/Whistle-blower-policy.pdf.
27. Corporate Social Responsibility (CSR)
The provisions relating to Corporate Social Responsibility under the Companies Act2013 do not apply to the company.
28. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition And Redressal) Act 2013
The Company has in place a Policy on Prevention of Sexual Harassment in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
29. The details of significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and company's operations in future
In terms of sub rule 5(vii) of Rule 8 of Companies (Accounts) Rules 2014 there are nosignificant material orders passed by the Regulators / Courts which would impact the goingconcern status of the Company and its future operations.
30. Management Discussion & Analysis and Corporate Governance
The "Management Discussion and Analysis Report" highlighting the industrystructure and developments opportunities and threats future outlook risks and concernsetc. is furnished separately and forms part of this Board's Report.
As per the requirements of the Listing Agreement with Stock Exchange and SEBI (ListingObligations And Disclosure Requirements) Regulations 2015 a Report on CorporateGovernance duly audited is annexed for information of the Members.
Your Directors thank the investors bankers clients and vendors for their continuedsupport. Your Directors place on record their appreciation of the valuable contributionmade by the employees at all levels.
| ||For and on behalf of the Board |
|Place : Hyderabad ||Nrupender Rao |
|Date : August 11 2017 ||Chairman |
| ||DIN:00089922 |
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts / arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third provisothereto:
1. Details of contracts or arrangements or transactions not at arm's length basis:
Saven Technologies Ltd has not entered into any contract or arrangement or transactionwith its related parties which is not at arm's length during financial year 2016-17.
2. Details of material contracts or arrangement or transactions at arm's length basis: a.Name(s) of the related party and nature of relationship : Common Director 1. MedhaServices Inc. USA
2. Pennar Industries Ltd 3. Pennar Engineered Building Systems Ltd 4. Pennar EnviroLtd. With these compa nies during the financial year the contracts were not renewed. b.Nature of contracts / arrangements / transactions: IT/ITES Services c. Duration of thecontracts / arrangements / transactions: One year to be renewed on consent of both theparties for further period. d. Salient terms of the contracts or arrangements ortransactions including the value if any: Saven Technologies Ltd shall (i) provide ITservices to the existing and new clients of Medha Services Inc. (ii) diligently performthe contract in timely manner and provide services in accordance with the agreement issuedby Medha Services Inc. e. Date(s) of approval by the Board if any: Not applicable sincethe contract was entered into in the ordinary course of business and on arm's lengthbasis. f. Amount paid as advances if any: Nil
| ||For and on behalf of the Board |
|Place : Hyderabad ||Nrupender Rao |
|Date : August 11 2017 ||Chairman |
| ||DIN:00089922 |
Annexure - 2
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)
Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures
Part "A": Subsidiaries
The company does not have any Subsidiary.
Part "B": Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures
| ||Name of Associates or Joint Ventures ||: ||Penrillian Ltd |
|1. ||Last audited Balance Sheet ||: ||30.06.2016 |
|2. ||Date on which the Associate or Joint Venture was associated or acquired ||: ||03.02.2001 |
|3. ||Shares of Associate or Joint Ventures held by the company on the year end No. ||: ||161 |
| ||Amount of Investment in Associates or Joint Venture ||: ||GBP 161 (Rs.10942/-) |
| ||Extent of Holding (in percentage) ||: ||23.33% |
|4. ||Description of how there is significant influence ||: ||No Significant influence |
|5. ||Reason why the Associate or Joint venture Is not consolidated ||: ||Investment only |
|6. ||Networth attributable to shareholding as per latest audited Balance Sheet ||: ||GBP 201028/- |
|7. ||Profit/ (Loss) for the year ||: ||GBP 143/- |
| ||i. Considered in Consolidation ||: ||-- |
| ||ii. Not Considered in Consolidation ||: ||Not Considered |
|for and on behalf of the Board || |
|Murty Gudipati ||R S Sampath |
|Executive Director ||Director |
|S Mohan Rao ||P.Jayanthi |
|Chief Financial Officer ||Company Secretary |