FOR FY 2019-20.
Your Directors have pleasure in presenting their 13th Annual Report of theCompany together with the audited financial statements for the year ended March 31 2020.
| || || || ||Rs. in Lakhs. |
| || |
|Particulars ||FY2019 - 20 ||FY 2018 - 19. ||FY 2019 -20 ||FY2018- 19 |
|Revenue from Operations ||87.89 ||101.20 ||662.12 ||1236.81 |
|Other Income ||421.49 ||1013.73 ||5.24 ||308.12 |
|Total Income ||509.38 ||1114.93 ||667.36 ||1544.93 |
|Profit before exceptional items Depreciation & Tax ||5.98 ||-1666.52 ||162.51 ||-1262.35 |
|Exceptional items ||0.16 ||44.20 ||0.16 ||44.20 |
|Less: Depreciation ||33.92 ||30.79 ||33.93 ||30.79 |
|:Tax Expense ||18.27 ||105.75 ||108.87 ||231.16 |
|Profit after Tax ||-46.37 ||-1847.26 ||19.55 ||-1568.49 |
Consolidated Financial Statements
The consolidated financial statements have been prepared pursuant to the provisions ofthe Companies Act 2013 as also the listing agreement entered into with the stockexchange. The statements have been prepared in accordance with the IND AS as prescribed bythe ICAI. The consolidated financial statements of the Company are prepared in accordancewith the provisions of Section 129 of the Act 2013 read with the Companies (Accounts)Rules 2014 and Regulation 33 of SEBI (LODR) Regulations along with a separate statementcontaining the salient features of the financial performance of subsidiaries/associate inthe prescribed form.
Overview of Operations
For the financial year under review the total income stood at Rs.667.36 Lakhs on aconsolidated basis. The PAT stood at Rs.19.55 Lakhs.
SV Global Finance Private Limited in their Board meeting held on 05.08.201909.09.201914.10.2019 07.11.2019 06.12.2019 06.01.2020 07.02.2020 &09.03.2020 declaredinterim dividend for the financial year 2019-20 as detailed below:
a. Rs. 0.15 per share (1.5%)Rs.1950000
b. Rs.0.15 per share (1.5%) Rs.1950000
c. Rs.0.04 per share (0.4%) Rs.520000
d. Rs.0.11 per share (0.11%) Rs.1430000
e. Rs.0.08 per share (0.08%) Rs.1040000
f. Rs.0.14 per share (0.14%) Rs.1820000
g. Rs.0.15 per share (1.5%) Rs.1950000
h. Rs.0.08 per share (0.08) Rs.1040000
The audited consolidated financial statements together with Auditors' Report form partof the Annual Report. The audited financial statements of the subsidiary company will bemade available to the shareholders on receipt of request from any shareholder and it hasalso been placed on the website of the Company www.svgml.com. This will also beavailable for inspection by the shareholders at the registered office during the businesshours.
The separate statement containing the salient features of the financial statements ofthe above named subsidiary in Form AOC -1 as Annexure "B" forms part ofconsolidated financial statements in compliance with Section 129(3) and other applicableprovisions if any of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014.
Due to COVID 19 the business trend in real estate sector has become gloomy andavailable resources are being conserved for survival and future operations hence nodividend is being proposed for the financial year 2019-20.
Transfer to Reserves
Appropriation to general reserves for the financial year ended March 31 2020 as perstandalone and consolidated financial statements are as under:
| || ||(Rs. in Lakhs) |
|Particulars ||Standalone ||Consolidated |
|Balance of General Reserve at the beginning of the year ||5034.49 ||5365.18 |
|Add: Net Profit for the year ||-46.37 ||19.55 |
|Balance of General Reserve at the end of the year ||4988.12 ||5384.73 |
Company's Working /State of Affairs
The Company operates in one segment i.e. Real Estate business and the subsidiarycompany S V Global Finance Private Limited operates as an NBFC (non-deposit). During theFinancial Year 2019-20 the revenue of the Company on standalone basis is Rs.509.38 lakhs(P.Y. Rs. 1114.93 lakhs) earned towards revenue from operations and other income. Therevenueof the subsidiary during the Financial Year 2019-20is Rs.574.23 Lakhs(P.Y. Rs.1137.47Lakhs) earned towards revenue from operations and other income.
Details of significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and company's operations in future.
There are no significant and material orders passed by the Regulators/Courts ortribunals that would impact the going concern status of the Company and its futureoperations.
Internal Financial Control and Risk Management
The Company has an established Internal Financial Control framework including internalcontrols over financial reporting operating controls and anti-fraud framework. The framework is reviewed regularly by the Management and tested by internal audit team andpresented to the Audit and Risk Management Committee. Based on periodical testing theframework is strengthened from time to time to ensure adequacy and effectiveness ofInternal Financial Control.
The established controls are constantly assessed and strengthened with new/revisedstandard operating procedures. The Company has adopted policies and procedures forensuring adherence to the Company's policies safeguarding of its assets the preventionand detection of frauds and errors the accuracy and reliability of accounting records andtimely preparation of reliable financial disclosures.
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 ofrisk which may threaten the existence of the Company.
The internal audit is entrusted to M/s. Kalyanasundaram& Associates CharteredAccountants to ensure that necessary controls are in place at all levels andalltransactions are adequately authorized and reported correctly. To maintain its objectivityand independence the Internal Auditor reports to the Chairman of the Audit Committee andto the Managing Director of the Company. The Audit Committee of the Board actively reviewsthe adequacy and effectiveness of the internal control systems and suggests improvementsto strengthen the same. Significant internal audit observations and recommendations alongwith corrective actions thereon are presented to the Audit Committee of the Boardperiodically.
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 2020.
Pursuant to the provisions of Section 139 141 142 and other applicable provisions ifany of the Companies Act 2013 M/s. P.B. Vijayaraghavan and Co. Chartered AccountantsChennai (Firm Regn. No:004721S) had been appointed as the Statutory Auditors of theCompany to hold their office for a term of five consecutive financial years commencingfrom FY 2019-20 to 2023-'24.
The Statutory Auditors' Report for the Financial Year 2019-20 does not contain anyqualification reservation or adverse remarks and the same is enclosed with the auditedfinancial statements in this Annual Report.
During the year under review the Company has neither issued shares with differentialvoting rights sweat equity shares and employees stock options nor has it resorted to buyback of its securities.
Extract of Annual Return
The extract of Annual Return as on March 31 2020 in Form No. MGT-9 as required underSection 92 and in accordance with Section 134(3)(a) of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 is annexed herewith as Annexure "F" andforms part of the Board's Report.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars prescribed under Section 134 (3) (m) of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 are not applicable. There was no foreignexchange inflow or outflow during the year under review.
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 CSR Policy is annexed herewith asAnnexure "A".
Directors and Key Managerial Personnel Retirement of Directors by Rotation
By Postal Ballot Sri. M. Ethiraj Chairman who has attained the age of 75 and Sri. N.BalaBaskar the Independent Director were re-appointed/appointed as Director/ IndependentDirector respectively on 28.11.2019 as per the Regulation 17(1A) of SEBI (LODR)Regulations 2015 as amended vide SEBI (LODR) (Amendment) Regulations 2018 and under therelevant provisions of the Companies Act 2013.
In terms of the provisions of sub-section (6) read with explanation to Section 152 ofthe Act 2013 two-thirds of the total number of Directors i.e. excluding IndependentDirectors are liable to retire by rotation and out of which one-third is liable toretire by rotation at every Annual General Meeting.
Pursuant to Section 152 of the Companies Act 2013 read with the Companies (Appointmentand Qualification of Directors) Rules 2014 and the Articles of Association of theCompany Smt.S.Valli Woman Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible offers herself for re-appointment.
The resolution seeking approval of the members of the re-appointment of Smt. S.Valliwho is retiring by rotation is incorporated in the Notice of the ensuing Annual GeneralMeeting along with brief details about her. The Board recommends the above appointment forthe consideration of the Members of the Company at the ensuing Annual General Meeting.
All the Independent Directors of the Company have submitted a declaration under Section149(7) of the Companies Act 2013 that each of them meets the criteria of Independence asprovided in Section 149(6) of the Act and Regulation 16(b) of SEBI (LODR) Regulations2015 and there has been no change in the circumstances which may affect their status as anIndependent Director during the year.
Change in Chief Financial Officer/Company Secretary
During the year Sri.M.V.Gopinathan was appointed as the Chief Financial Officer of theCompany on 26th September 2019 based on the recommendation of the Nominationand Remuneration Committee and consequently Sri.R.Sugumaran was re-designated as CompanySecretary of the company.
Key Managerial Personnel
Pursuant to the provisions of Section 2(51) 203 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the followingare the Key Managerial Personnel of the Company:
|1. Sri.E.Shanmugam ||- Managing Director |
|2. Sri.R.Sugumaran ||- Company Secretary |
|3. Sri.M.V.Gopinathan ||- Chief Financial Officer |
Committees of the Board its constitution and details of Meetings of the Board andother Committees of the Board held during FY 2019-20:
Brief details are provided in the Corporate Governance Report as per Annexure"D".
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.
Policy on Vigil Mechanism
Pursuant to the provisions of Section 177(9) of the Companies Act 2013 read with Rule7 of the Companies (Meetings of its Board and its Powers) Rules 2014 and in accordancewith Regulation 22 of SEBI (LODR) Regulations 2015 the Company has an established Policyon Vigil Mechanism for Directors/Employees and other stakeholders of the Company to reportconcerns about unethical behaviors actual or suspected fraud or violation of theCompany's Code of conduct or ethics policy.The policy also provides a direct access to theChairman of the Audit Committee to make protective disclosures to the management about thegrievances or violation of the Company's code of conduct.The policy is disclosed on theCompany's website www.svgml.com.
The Board of Directors of the Company have from time to time framed and approvedvarious Policies in pursuance of the Companies Act 2013 and the Listing Agreement/ SEBI(LODR)Regulations 2015. These Policies and Codes are reviewed by the Board and areupdated if required. The following policies have been framed and has been disclosed onthe Company's website www.svgml.com
1. Related Party Transaction Policy.
2. Policy on Material Subsidiary.
3. CSR Policy.
4. Whistle Blower Policy consisting of Vigil Mechanism.
5. Policy on determination of Materiality of Events or Information.
6. Code of Ethics and Business Principles applicable to Directors and Senior Management
7. Familiarization Program for Independent Directors.
8. Code of Conduct for Prohibition of Insider Trading.
9. Performance Evaluation Policy.
Particulars of Loans Guarantees or Investments
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 except to its wholly owned subsidiary company viz. SVGlobal Finance Private Limited a loan of Rs.24.75 crores and made investment in the EquityShares of Rs.13.00 crores. Please refer to Notes on accounts on the standalone financialstatements for the financial year 2019-20 for details of investment made by the company.
Related Party Transactions
The Audit Committee and the Board of Directors have approved the related party policyand the same has been hosted on the Company's website www.svgml.com. The policyintends to ensure that proper reporting approval and disclosure processes are in placefor all transactions between the Company and related parties.
The transactions entered into with related parties as defined under Section 2(76) ofthe Companies Act 2013 read with Companies (Specification of Definition Details) Rules2014 were in the ordinary course of business and at arm's length basis. There were nomaterially significant transactions with related parties during the Financial Year 2019-20which were in conflict with the interest of the Company.
Suitable disclosures as required in Accounting Standard (AS) 18 have been made in thenotes to the financial statements. Details of contracts/arrangements with related partiesas required under Section 188 (1) and 134 (3) (h) of the Companies Act 2013 read withRule 8(2) of the Companies (Accounts) Rules 2014 have been disclosed in Form AOC-2 and isattached as Annexure "C" (Form AOC-2) as annexed which forms an integralpart of this Report.
Comparative Analysis of Remuneration paid to the Directors and Employees
|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- Executive Directors to attend the Board Meetings. Managing Director is paid a remuneration of Rs.2400000/- per annum. Accordingly the ratio is 1:0.50 . |
|The percentage increase in remuneration of each Director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; Others not applicable ||NIL |
|The percentage increase in the median remuneration of employees in the financial year. ||NIL |
|The number of permanent employees on the rolls of company ||13 |
|The explanation on the relationship between average increase in remuneration and company performance ||Not applicable since the Company's performance is not measurable |
|Comparison of remuneration of the Key Managerial Personnel against the performance of the Company. ||As above |
|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 any exceptional circumstances for increase in the managerial remuneration. ||Average percentile increase in salaries of nonmanagerial Employees - NIL |
|Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company. ||As above |
|The key parameters for any variable component of remuneration availed by the Directors. ||N.A |
|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 during the year. ||N.A |
|Affirmation that the remuneration is as per the remuneration policy of the company. ||Yes |
Secretarial Audit Report
Pursuant to Section 204 (1) of the Companies Act 2013 read with Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theSecretarial Audit Report for FY 2019-20 in Form No. MR-3 issued by a Company Secretary inpractice is enclosed as Annexure "E" and forms an integral part of thisreport. The Secretarial Audit report does not contain any qualification reservation oradverse remarks.
Report on Corporate Governance
Your Company is in compliance with the Corporate Governance guidelines as laid out inthe SEBI (LODR) Regulations. All the Directors and the Senior Management personnel haveaffirmed in writing their compliance with and adherence to the Code of Conduct adopted bythe Company.
As per Regulation 34 (3) read with Schedule V of the SEBI (LODR) Regulations 2015 aseparate section as per Annexure "D" on Corporate Governance practicesfollowed by the Company together with a certificate from a practicing Company Secretaryconfirming compliances forms an integral part of this 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 31st March 2020.
Directors' Responsibility Statement
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm:
a) that in the preparation of the annual accounts for the financial year ended 31stMarch 2020 the applicable Accounting Standards had been followed along with properexplanation relating to material departures if any;
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 the year ended on that date;
c) that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) that the Directors had prepared the annual accounts for the financial year ended31st March 2020 on a going concern basis;
e) that the 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; and
f) that as required under Section 134(5)(f) of the Companies Act 2013 the Directorshad devised proper systems to ensure compliance with the provisions of all applicable lawsand that such systems were adequate and operating effectively.
Acknowledgements and Appreciation
The Board of Directors of the Company wishes to place on record their deep sense ofgratitude to all the Shareholders of the Company for their consistent support andcontinued faith reposed in the Company.The Board would also like to express their deepsense of appreciation to the various Central and State Government DepartmentsBankersOrganizations and Agenciesexternal Professionals associated with the Company for theircontinued help and co-operation extended by them and last but not the least to Employeesat all levels for their hard work and commitment.
| || ||By Order of the Board |
|Place: Chennai ||Dr. K. Shivaram Selvakkumar ||E. Shanmugam |
|Date : 11.06.2020 ||Independent Director ||Managing Director |
| ||DIN: 02384372 ||DIN:00041968 |