Your Directors have pleasure in presenting the 23rd Annual Report on the operations ofSaven Technologies Limited together with the audited financial statements for the yearended March 31 2016. The financial results of the Company are as follows:
1. Financial Results
| ||2015-16 ||2014-15 |
|Revenue from Operations ||864.94 ||784.78 |
|Operating expenditure ||705.82 ||602.74 |
|Earnings before interest tax depreciation and amortization (EBITDA) ||159.12 ||182.04 |
|Other income ||121.04 ||633.74 |
|Finance costs ||2.43 ||4.37 |
|Depreciation and amortization expense ||32.88 ||40.05 |
|Profit before tax (PBT) ||244.85 ||771.36 |
|Tax expense ||82.83 ||139.37 |
|Profit after tax (PAT) ||162.02 ||631.99 |
|Balance brought forward from previous year ||174.47 ||292.10 |
|Depreciation Reserve ||- ||(14.68) |
|Amount available for appropriation ||336.49 ||909.41 |
|Dividend || || |
| Interim ||217.57 ||76.15 |
| Final ||- ||108.79 |
|Total Dividend ||217.57 ||184.94 |
|Dividend Tax ||44.30 ||- |
|Amount transferred to General Reserve ||- ||550.00 |
|Balance carried to balance sheet ||860.95 ||960.80 |
2. State of Affairs of Company
The total revenue of the Company for the year ended March 31 2016 was Rs. 985.98 lakhsas compared to Rs.1418.52 lakhs. Revenue from operations was Rs. 864.94 lakhs as comparedto Rs.784.78 lakhs for the previous year. Other income of Rs. 121.04 lakhs (includesinterest on deposits of Rs.83.09 lakhs and profit on sale of investments of Rs.25.40lakhs) compared to Rs.633.74 lakhs (includes interest on deposits of Rs.137.96 lakhsDividend Income of Rs. 209.88 lakhs and Profit on Sale of Investments of Rs.285.99 lakhs)for the previous year. The profit before Tax for the year was Rs. 244.85 lakhs as comparedto Rs. 771.36 lakhs for the previous year. The profit after Tax for the year was Rs.162.02 lakhs as compared to Rs 631.99 lakhs recorded in the previous year.
3. 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
There are no material changes and commitments affecting the financial position of theCompany.
4. 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 2015-16 the company did not transfer any amountto Reserves.
The Board of directors (the Board) at their meeting held on 10th November 2015declared an interim dividend of Rs.2.00 (20%) per equity share of Rs.10/- each for theyear 2015-16 amounting to Rs.217.57 lakhs. No further dividend had been proposed for theyear ended March 31 2016.
6. 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.
7. 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.
8. Related Party Transactions
All the transactions with related parties are at arm's length and they fall outside thescope of Section 188(1) of the Act. Information on transactions with related partiespursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts)Rules 2014 is given in Annexure-1 in Form AOC-2 and the same forms part of this report.
9. 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.
10. 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 2016.
11. Joint Venture
Penrillian Limited a joint venture of your Company in UK is in the business ofsoftware development for wireless information devices to provide high end technicalsolutions to leading mobile Companies. Despite a recessionary trend in Europe Penrillianachieved revenue of 1.01 million for the year ended 30thJune 2015 as against 1.13million for the previous year.
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.
12. Subsidiary Company
The company does not have any subsidiary.
13. Directors and Key Managerial Personnel
The Board of Directors had on the recommendation of the Nomination and RemunerationCommittee appointed the Directors and Key Managerial Personnel of the Company during theFinancial Year 2015-16.
Mrs. R Renuka was appointed as Independent Director at the Annual General Meeting heldon 17th August 2015. Mr. Murty Gudipati was re-appointed as Executive Director and CEOof the Company for a period from 14th August 2015 to 31st March 2018 at the AnnualGeneral Meeting held on 17th August 2015.
Mr. Sridhar Chelikani retires as Director by rotation at the ensuing Annual GeneralMeeting and 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 are 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 the independent directors 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.
14. 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.
15. Number of Meetings of the Board
Six 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.
16. Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations AndDisclosure Requirements) Regulations2015 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.
17. 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 companyto hold office till conclusion of the AGM to be held in the calendar year 2017. In termsof the first proviso to Section 139 of the Companies Act 2013 the appointment of theauditors shall be placed for ratification at every AGM. Accordingly the appointment ofM/s. Rambabu & Co. Chartered Accountants Hyderabad as Statutory Auditors of thecompany is placed for ratification by the shareholders.
There were no qualifications reservation or adverse remark in the Audit Report for theFinancial Year ended 31st March 2016.
Mr. S Chidambaram Company Secretary in Practice Hyderabad was appointed to undertakethe Secretarial Audit of the Company for the Financial Year 2015-16. The Secretarial AuditReport is given in Annexure-3.
With regard to the observation made in the Secretarial Audit Report for the financialyear 2015-16 about the delay in filing of the Annual Performance Report with RBI underFEMA we would like to state that the delay was due to non availability of the requisiteinformation within the prescribed time for filing the Report.
19. 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. The Directors have 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 endedMarch 31 2016 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.
20. 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 2016 was Rs.757 lakhs and as onMarch 31 2015 was Rs.1540 lakhs. The Foreign Exchange outgo for the Company as on March31 2016 was Rs.1.30 lakhs and as on March 31 2015 was Rs.0.60 lakhs.
21. 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 during the year under review none of the employees of the Companyemployed throughout the financial year was in receipt of remuneration for the year whichin the aggregate was not less than sixty lakh rupees; none of the employees of theCompany employed for a part of the financial year was in receipt of remuneration for anypart of the year at a rate which in the aggregate was not less than five lakh rupeesper month; none of the employees of the Company employed throughout the financial year orpart thereof was in receipt of remuneration in the year which in the aggregate or asthe case may be at a rate which in the aggregate is in excess of that drawn by themanaging director or whole-time director or manager and holds by himself or along with hisspouse and dependent children not less than two percent of the equity shares of thecompany.
22. Extract Of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 are given inAnnexure-5.
23. Risk Management
Pursuant to section 134 (3) (n) of the Companies Act 2013 and SEBI (ListingObligations And Disclosure Requirements) Regulations 2015 the company has formulated apolicy on risk management. At present the company has not identified any element of riskwhich may threaten the existence of the company.
24. 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 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.
25. Corporate Social Responsibility (CSR)
The provisions relating to Corporate Social Responsibility under the Companies Act2013 do not apply to the company.
26. 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.
27. 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.
28. 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 : July 08 2016 ||Chairman |
| ||DIN:00089922 |
Annexure - 1
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 arm's 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 2015-16.
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. Medha Services. Inc.USA 2. Pennar Industries Ltd 3. Pennar Engineered BuildingSystems Ltd
4. Pennar Enviro Ltd.
b. Nature of contracts / arrangements / transactions: IT/ITES Services
c. Duration of the contracts / arrangements / transactions: One year to be renewed onconsent of both the parties for further period.
d. Salient terms of the contracts or arrangements or transactions including the valueif any:
Saven Technologies Ltd shall (i) provide IT services to the existing and new clients ofMedha Services Inc. (ii) provide ITES services to Pennar Industries Ltd PennarEngineered Building Systems Ltd Pennar Enviro Ltd (iii) diligently perform the contractin timely manner and provide services in accordance with the agreement issued by the abovesaid companies.
(iv) submit invoices on monthly basis for the services provided for each project as perthe terms of contract and the above said companies shall promptly pay the same.
e. Date(s) of approval by the Board if any: Not applicable since the contract wasentered into in the ordinary course of business and on arm's length basis.
f. Amount paid as advances if any: Nil
| ||For and on behalf of the Board |
|Place : Hyderabad ||Nrupender Rao |
|Date : July 08 2016 ||Chairman |
| ||DIN:00089922 |