To the members of Savera Industries Ltd.
The Directors have pleasure in presenting the 48th Annual Report of Savera IndustriesLtd (the company) along with the audited financial statements for the financial year ended31st March 2017.
|FINANCIAL RESULTS || ||(Rs in lakhs) |
| ||2016-17 ||2015-16 |
|Profit / ( Loss) before tax for the year after the ||460.30 ||573.24 |
|exceptional item of Rs 196.44 lakhs || || |
|Less : Provision for income tax for the year || || |
|(Including deferred tax liability) ||222.61 ||330.15 |
|Profit after tax ||237.69 ||243.09 |
|Profit brought forward ||1934.04 ||1906.47 |
|Profit available for appropriation ||2171.73 ||2149.56 |
|Transferred to General Reserve || || |
|Dividend and Dividend Distribution Tax ||215.52 ||215.52 |
|Profit carried forward to next year ||1956.21 ||1934.04 |
The income of the company rose to Rs 6867.00 lakhs from Rs 6690.98 lakhs representing2.63% increase over last year. The occupancy of the main unit i.e. Savera Hotel Chennaiis 78.2% during the year as against 81% over the corresponding period last year.
During the year under review the profit before tax and before exceptional itemamounted to at Rs 656.74 lakhs and after an exceptional item ie. impairment loss of Rs196.44 lakhs but before Tax the Profit stood at Rs.460.30 lakhs as compared to Rs 573.24lakhs of last year registering a decrease of 19.70%.
After the Balance Sheet date Savera Purple situated at Bengaluru on leased lands wasclosed in view of losses. Accordingly impairment loss was booked as required under theAccounting Standard.
STATE OF COMPANYS AFFAIRS
Total expenditure for the period ended as at 31st March 2017 worked out to Rs 6210.26lakhs showing an increase of Rs 92.52 lakhs (1.51%) as compared to the previous year. TheProfit (EBITDA) before depreciation finance cost and tax for the year ended 31st March2017 amounted to Rs 1271.61 lakhs decreased by Rs 0.58 lakhs as compared to thecorresponding period last year. The tax expense including deferred tax for the year ended31st March 2017 amounted to Rs 222.61 lakhs. The Profit after Tax for the year ended 31stMarch 2017 stood at Rs 237.69 lakhs as against a profit of Rs 243.09 lakhs. No transferwas made to General Reserve during the year under review.
The Board of Directors of the Company has recommended a dividend of Rs 1.50 per equityshare for the financial year ended 31.03.2017. The outflow towards dividend will be Rs178.92 lakhs and the tax on dividend works out to Rs 36.60 lakhs totalling Rs 215.52lakhs.
DEPOSIT FROM PUBLIC
The Company has not accepted any deposit from public under the provisions of theCompanies Act 2013.
FINANCIAL HIGHLIGHTS OF THE COMPANY
The financial highlights of the company for last 10 years are furnished in the AnnualReport.
FINANCIAL INFORMATION AND DETAILS OF ASSOCIATE COMPANY
The Financial Statement of the company is prepared in accordance with the AccountingStandard issued by the Institute of Chartered Accountants of India and forms part of theAnnual Report. The companys financials disclose the assets liabilities incomeexpenses and other details.
There is no subsidiary company associate company and joint ventures within the meaningof section 2(6) of the Companies Act 2013 ("Act").
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. During the year under review Mr.G.Sitharaman Independent Director and Chairmanof the Audit Committee had resigned from the Directorship of the company with effect from25.3.2017 due to his personal reasons and his other professional pre-occupations. TheBoard placed on record its appreciation for the professional guidance given by Sri G.Sitharaman to the Board from time to time.
Pursuant to the provisions of the Companies Act 2013 Ms. A. Nivruti Director retiresby rotation and is eligible for reappointment. The Board recommends her appointment andaccordingly resolution seeking approval of the members for her appointment has beenincluded in the notice of the forthcoming Annual General Meeting of the company along withher brief profile. The Key Managerial Personnel of the company presently are Mr. A.Ravikumar Reddy Managing Director Mr. N. S. Mohan Company Secretary and Mr.I.SivakumarChief 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 companys internal financialcontrols were adequate and effective during the financial year 2016-17.
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. Inthe preparation of the Annual Accounts for the year 2016-17 the applicable accountingstandards have been followed and there are no material departures; ii. They have selectedsuch accounting policies and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the company at the end of the financial year 31st March2017 and of the profit of thecompany for that period; iii. They have taken proper and sufficient care to the best oftheir knowledge and ability for the maintenance of adequate accounting records inaccordance with the provisions of the Act. They confirm that there are adequate systemsand controls for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities. iv. They have prepared the annual accounts on a goingconcern basis; v. They have laid down internal financial controls to be followed by thecompany and that 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 and the Board of Directors.
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.
Our existing Auditors M/s. D. A. Reddy & Co. who were appointed by the members attheir 45th Annual General Meeting held on 22.9.2014 shall hold office upto the conclusionof the forthcoming 48th Annual General Meeting and his term gets completed on the saiddate. The Board placed on record their professional advices and they are not eligible forreappointment under the provisions of the Companies Act 2013.
Further in pursuance of the provisions of section 139 of the Companies Act 2013 andthe rules framed thereunder the Board of Directors of the company has recommended M/s. S.Venkatram & Co. Chartered Accountants 218 T.T.K. Road Chennai - 600 018 forappointment as Statutory Auditors of the Company for a period of 5 years as a First Termto hold the office from the conclusion of the ensuing Annual General Meeting (48th AnnualGeneral Meeting) until the conclusion of the 53rd Annual General Meeting on theremuneration as may be fixed by the Board of Directors of the company subject to theapproval of the shareholders at the ensuing Annual General Meeting.
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. A. Sudhakar Reddy who is an independent director has submitted a declaration thathe meets the criteria of independence as provided in sub-section (6) of section 149 of theAct. Further the first term of Mr.B.Ranga Reddy and Mr.S.Sridhara Rao as independentdirectors shall get completed on 21.9.2017. Keeping in view their performance the Boardhas recommended them for the second term for a period of 5 years from 22.09.2017 to21.09.2022 to the members for their approval through Special Resolutions.
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 :
During the year under review the company has disinvested 44000 equity shares of theface value of Rs 10 each in M/s. Clarion Wind Farm Pvt Ltd for Rs 440000/- to complywith the terms of Energy Wheeling Agreement entered into with them for the supply ofelectricity through Wind 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 orarrangements with related parties entered into during the financial year ended 31-3-2017were on an arms length basis and in the ordinary course of business. The particularsof contracts or arrangements with related parties referred to in sub-section (1) ofsection 188 are furnished in Form AOC-2.
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 as per the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 have been disclosed in Annexure 1 to this Report . Further details ofcomposition of the Corporate Social Responsibility Committee and other details areprovided.
NOMINATION AND REMUNERATION POLICY
The companys 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.
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 Boards Chairman covering performance of the Board as a wholeperformance of the non-independent directors and the performance of the Board Chairman.White undertaking Board Evaluation the Company also followed the required principlescovered under the Guidance Note issued by SEBI.
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.
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.
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 methods as 3R. Reduce Reuse and Recycle inevery day operations. Through the green energy (wind energy) 90% of the power consumptionis met and 90% of the hot water is generated through the solar water heater panels. Thecompany has changed almost 95% of the lighting with LED light fittings resulting in thereductions of 85% of the electrical consumption on lighting.
The company is reusing the waste water from the sewage and sewerage water by its STPwater treatment plant. Solid organic wastes are converted into manure with the organicwaste convertor machine .
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 and is upgrading with the latesttechnology periodically.
Earnings in convertible foreign exchange for the year amounted to Rs 487.04 lakhs forthe services rendered to Foreign Tourists (Previous year Rs 370.26 lakhs). Expenditure inForeign Currency is Rs 42.12 lakhs (Previous Year Rs 44.77 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 2016-17.
|Number of complaints received during the year ||NIL |
|Number of Complaints disposed off ||NIL |
EXTRACT OF THE ANNUAL RETURN
As Provided under section 92(3) of the Act the extract of annual return is given inAnnexure 2 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 3 to this report. Your directors wish to place on record theirappreciation for the good services rendered by the employees at all levels of the company.
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 otherwiseIssue of shares (including sweat equity shares) to employees of the company under anyscheme.
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 and other stakeholders for their patronagesupport and guidance.
| || ||For and on behalf of the Board |
|Chennai ||A. Ravikumar Reddy ||A. Nina Reddy |
|30th May 2017 ||Managing Director ||Joint Managing Director |