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Savera Industries Ltd.

BSE: 512634 Sector: Services
NSE: SAVERA ISIN Code: INE104E01014
BSE LIVE 15:22 | 18 Aug 69.95 -0.45
(-0.64%)
OPEN

70.00

HIGH

71.00

LOW

69.95

NSE 00:00 | 29 Jan Stock Is Not Traded.
OPEN 70.00
PREVIOUS CLOSE 70.40
VOLUME 29
52-Week high 84.00
52-Week low 55.00
P/E 19.76
Mkt Cap.(Rs cr) 83
Buy Price 66.60
Buy Qty 1.00
Sell Price 69.95
Sell Qty 26.00
OPEN 70.00
CLOSE 70.40
VOLUME 29
52-Week high 84.00
52-Week low 55.00
P/E 19.76
Mkt Cap.(Rs cr) 83
Buy Price 66.60
Buy Qty 1.00
Sell Price 69.95
Sell Qty 26.00

Savera Industries Ltd. (SAVERA) - Director Report

Company director report

To the members of Savera Industries Ltd

The Directors are pleased to present the 47th Annual Report of Savera Industries Ltd(the company) and the audited financial statements for the financial year ended 31stMarch 2016.

FINANCIAL RESULTS (Rs in lakhs)
2015-16 2014-15
Profit / ( Loss) before tax for the year 573.22 396.23
Less : Provision for income tax for the year (Including deferred tax liability) 330.15 107.00
Profit after tax 243.07 289.23
Profit brought forward 1906.49 1789.69
Profit available for appropriation 2149.56 2078.92
Transferred to General Reserve - -
Dividend and Dividend Distribution Tax 215.52 172.43
Profit carried forward to next year 1934.04 1906.49

OPERATING RESULTS

The revenues of the company increased by Rs 382.34 lakhs from Rs 6309.03 lakhs to Rs6691.37 lakhs registering a growth of 6.06% as compared to last year. The occupancy of themain unit i.e. Savera Hotel Chennai rose to 81% during the year under review as against76% over the corresponding period last year.

As can be seen above the profit before tax stood at Rs 573.22 lakhs as against Rs396.23 lakhs of last year registering an increase of 44.67%.

During the year under review the company’s wholly owned subsidiary M/s. ElkhillAgrotech Private Limited made an application to the Registrar of Companies on 17-02-2016for striking off the name of the company from the Register of Companies as the saidsubsidiary was unable to carry on any business on account of the leased lands on whichfloriculture was carried on which were surrendered. The balance sheet of the saidsubsidiary was drawn up as on 31-01-2016 with no liabilities & assets. The holdingcompany viz M/s. Savera Industries Limited written off the investments in shares of thesaid subsidiary company amounting to Rs 282.23 lakhs and an amount of Rs 7.05 lakhs duefrom the said subsidiary company. Therefore there is no consolidated financial statementsfor this year.

STATE OF COMPANY’S AFFAIRS

Total expenditure for the year ended 31st March 2016 amounted to Rs 6118.15 lakhs asagainst Rs 5912.80 lakhs thus there is an increase of Rs 205.35 lakhs representing 3.47%over last year. The Profit (EBITDA) before depreciation finance cost and tax for the yearended 31st March 2016 amounted to Rs 1272.19 lakhs increased by Rs 59.68 lakhsrepresenting 4.92% over the corresponding period last year. The tax expense includingdeferred tax for the year ended 31st March 2016 amounted to Rs 330.15 lakhs. The Profitafter Tax for the year ended 31st March 2016 stood at Rs 243.07 lakhs as against a profitof Rs 289.23 lakhs. No transfer was made to the General Reserve during the year underreview.

DIVIDEND

The Board of Directors of the Company has declared an Interim Dividend of Rs 1.20 perequity share for the financial year ended 31.03.2016 on 11th March 2016. Further theBoard of Directors of the Company has recommended a final dividend of Rs 0.30 per equityshare for the financial year ended 31.03.2016. Thus the total dividend for the year is Rs1.50 per share as against Rs 1.20 last year resulting to 25% increase over last year. Thetotal outflow towards dividend including interim dividend worked out to Rs 178.92 lakhsand the tax on dividend worked out to Rs 36.60 lakhs.

FIXED DEPOSIT

The Company has not accepted any fixed deposits under the provisions of the CompaniesAct 2013.

FINANCIAL HIGHLIGHTS OF THE COMPANY

The financial highlights of the company for last 10 years are furnished in the AnnualReport in Page No. 66.

FINANCIAL INFORMATION AND DETAILS OF SUBSIDIARY

There is no associate company within the meaning of section 2(6) of the Companies Act2013 ("Act").

Although the subsidiary company was closed (strike off) under the Exit Scheme from theRegister of Companies the information relating to the subsidiary company is furnished inthe Annexure 2.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors met five (5) times during the year under review and consideredthe financial results and the meeting dates are provided in the Corporate GovernanceReport.

Pursuant to the provisions of the Companies Act 2013 Mr. A. Tarun Reddy Directorretires by rotation and is eligible for reappointment. The Board recommends hisappointment and accordingly resolution seeking approval of the members for his appointmenthas been included in the notice of the forthcoming Annual General Meeting of the companyalong with his brief profile.

During the year under review Mr. I.Sivakumar was appointed as the Chief FinancialOfficer in the place of Mr.R.Dayakar Naidu who resigned.

The Key Managerial Personnel of the company are Mr. A. Ravikumar Reddy ManagingDirector Mr. N. S. Mohan Company Secretary and Mr.I.Sivakumar Chief Financial Officer.

DIRECTORS’ RESPONSIBILITY STATEMENT

On the basis of internal financial controls and systems relating to compliancemaintained by the company work done by the internal statutory and secretarial auditorsthe reviews performed by the management and the relevant Board Committees including theAudit Committee the Board is of the opinion that the company’s internal financialcontrols were adequate and effective during the financial year 2015-16.

Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013 and based onthe representations received from the management the directors hereby confirm that:

i. In the preparation of the Annual Accounts for the year 2015-16 the applicableaccounting standards have been followed and there are no material departures;

ii. They 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 31st March2016and of the profit of the company for that period;

iii. They have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Act. They confirm that there are adequate systems and controls forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities.

iv. They have prepared the annual accounts on a going concern basis;

v. They have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and operating properly;

vi. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

INTERNAL CONTROL & SYSTEM

The Company has internal control and systems commensurate with the size of thecomplexity of the business operations and it has well defined internal audit functions.For the purpose of independence the internal audit dept. reports to Chairman of the AuditCommittee of the Board of Directors.

SECRETARIAL AUDITOR

Mr. R. Balasubramaniam Practising Company Secretary has been appointed as theSecretarial Auditor during the year. The Secretarial Audit Report given by him shall formpart of this report.

STATUTORY AUDITORS

In accordance with statutory provisions of Section 139 the Companies Act 2013 and therules framed thereunder the Statutory Auditors M/s. D.A. Reddy & Co. CharteredAccountants were appointed as statutory auditors of the company from the conclusion ofthe 45th Annual General Meeting of the company held on 22.09.2014 till the conclusion ofthe 48th Annual General Meeting (AGM) to be held in the year 2017 subject to ratificationof their appointment at every AGM.

SIGNIFICANT AND MATERIAL ORDERS

There were no significant and material orders passed by the regulators or courts ortribunals affecting the going concern status and future operations of the company.

INDEPENDENT DIRECTORS DECLARATION

Mr. G. Sitharaman Mr. A. Sudhakar Reddy Mr. B. Ranga Reddy and Mr. S. Sridhara Raowho are independent directors have submitted a declaration that each of them meets thecriteria of independence as provided in sub-section (6) of section 149 of the Act.Further there is no change in their status as independent director during the year.

STATUTORY AND SECRETARIAL AUDITORS REPORT

There are no qualifications reservations or adverse remarks or disclaimers in theStatutory Auditors and Secretarial Auditors Report.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013.

LOANS & INVESTMENTS :

The company has made an investment of Rs 400000/- comprising 40000 equity shares ofthe face value of Rs 10 each in M/s. Clarion Wind Farm Pvt Ltd to comply with the terms ofEnergy Wheeling Agreement entered into with them for the supply of electricity throughWind Mills.

TRANSACTIONS WITH THE RELATED PARTIES

All related party transactions that were entered into during the financial year were incompliance with the applicable provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) (LODR) Regulations 2015.

Further all contracts or arrangements with related parties entered into during thefinancial year ended 31-3-2016 were on an arm’s length basis and in the ordinarycourse of business.

The particulars of contracts or arrangements with related parties referred to insub-section (1) of section 188 are furnished in Form AOC-2.

RISK MANAGEMENT

The Board takes responsibility in overseeing the risk management plan for the company.The Risk Management Policy facilitates in identifying the risks associated with theoperations of the company and in giving suitable measures/solutions to mitigate the same.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuous basis.

CORPORATE SOCIAL RESPONSIBILITY.

The CSR Policy of the company and the details about the initiatives taken by thecompany on CSR during the year under review as per the Companies (Corporate SocialResponsibility Policy) Rules 2014 have been disclosed in Annexure 1 to this Report .Further details of composition of the Corporate Social Responsibility Committee and otherdetails are provided in the Corporate Governance Report which forms part of this report.

NOMINATION AND REMUNERATION POLICY

The company’s policy on directors appointment and remuneration and other mattersprovided in section 178(3) of the Companies Act 2013 like last year has been disclosed inthe corporate governance report which forms part of the directors’ report.

BOARD EVALUATION

Like last year the performance evaluation of the Board its Committees and individualdirectors was conducted and the same was based on questionnaire and feedback from all theDirectors on the Board as a whole committees and self-evaluation.

Directors who were designated held separate discussions with each of the Directors ofthe company and obtained their feedback on overall Board effectiveness as well as each ofthe other directors. Based on the questionnaire and feedback the performance of everydirector was evaluated in the meeting of the Nomination and Remuneration Committee (NRC).A separate meeting of the independent directors was convened which reviewed theperformance of the Board (as a whole) the non-independent directors and the Chairman.After the annual independent directors meeting the collective feedback of each of theindependent directors was discussed by the Chairman of Nomination and RemunerationCommittee with the Board’s Chairman covering performance of the Board as a wholeperformance of the non-independent directors and the performance of the Board Chairman.

Important key criteria for performance evaluation are as follows.

DIRECTORS PERFORMANCE EVALUATION

Attendance at Board or Committee Meetings

Contribution at Board or Committee Meetings

Guidance/support to management outside Board/Committee meetings.

Performance evaluation of Board and Committees

Structure of the Board and Board composition

Establishment and delineation of responsibilities to Committees.

Effectiveness of Board processes information and functioning.

Board culture and dynamics

Quality of relationship between Board and management.

Efficacy of communication with external stakeholders.

LISTING

The equity shares of the Company are listed on Bombay Stock Exchange Limited (BSE) andMadras Stock Exchange Limited.(MSE). The listing fees have been paid to Bombay StockExchange Ltd only. The listing fees has not been paid to Madras Stock Exchange Ltd. whichis not functioning.

CORPORATE GOVERNANCE

In terms of Regulation 34 (2) & (3) of SEBI (LODR) Regulations 2015 a report onCorporate Governance the Auditors’ Certificate on the compliance of conditions ofCorporate Governance and the report on Management Discussion and Analysis form part of theAnnual Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 134 (3) (m) of the Act read with the companies(Accounts) Rules 2014 is furnished hereunder.

The company is practicing green energy by getting 90% of the power required through thewind energy and 80% of the hot water generated through the solar thermal system. For theeco practices the company has changed almost 90% of its lighting with LED lights whichreduces the power consumption by 85% thereby the heat emission energy becomes very low.Through the STP the sewerage and sewage water is treated and the treated water isrecirculated.

The company also installed organic waste converter machine in which the organic wastesare converted into composite manure.

Hotel being a service industry technology absorption transfer etc. are notapplicable. The company has installed Wi-Fi internet group mobile system wirelesssystems for its security for faster communication.

Earnings in convertible foreign exchange for the year amounted to Rs 370.26 lakhs forthe services rendered to Foreign Tourists (Previous year Rs 393.90 lakhs). Expenditure inForeign Currency is Rs 44.77 lakhs (Previous Year Rs 133.42 lakhs ).

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013.

The Company has in place an Anti-Sexual harassment Policy in line with the requirementof 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 contractual andtrainees ) are covered under this policy. The following is a summary of sexual harassmentcomplaints received and disposed off during the year 2015-16.

a. Number of complaint on sexual harassment received during the year - NIL
b. Number of complaint disposed of during the year - NIL
c. Number of case pending for more than 1 year - NIL
d. Nature of action taken by the company at the end of the year - NIL

EXTRACT OF THE ANNUAL RETURN

As Provided under section 92(3) of the Act the extract of annual return is given inAnnexure 3 in the prescribed form MGT 9 which forms part of this report.

PARTICULARS OF EMPLOYEES

The information required under section 197(12) of the Act read with rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel ) Rules 2014 is furnishedin the Annexure 4 to this report

Your directors wish to place on record their appreciation for the good servicesrendered by the employees at all levels of the company.

GENERAL:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review.

Issue of equity shares with differential rights as to dividend voting or otherwise

Issue of shares (including sweat equity shares) to employees of the company under anyscheme.

Neither the Managing Director nor the Joint Managing Director receive any remunerationor commission from its subsidiary.

ACKNOWLEDGMENTS

The directors would like to thank the Central Bank of India and other financialinstitutions for extending their financial support. They further express their thanks tothe Central Government State Government other stakeholders and employees for theirpatronage support and guidance.

For and on behalf of the Board
Chennai A. Ravikumar Reddy A. Nina Reddy
2nd August 2016 Managing Director Joint Managing Director