Your Directors have pleasure in presenting their 10th Annual Report of the Companytogether with the audited financial statements for the year ended March 31 2017.
| || ||Rs in Lakhs |
|Particulars || |
| ||FY: 2016-'17. ||FY: 2015-'16. ||FY: 2016-'17. |
|Other Income ||660.09 ||1897.26 ||667.18 |
|Profit before Depreciation & Tax ||224.62 ||1523.99 ||226.47 |
|Less: Depreciation ||7.31 ||8.47 ||7.31 |
|Tax Expense ||71.16 ||87.04 ||71.76 |
|Profit after Tax ||146.15 ||1428.48 ||147.40 |
Consolidated Financial Statements
As per Regulation 33 of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (hereinafter referred to as SEBI (LODR)Regulations 2015) and applicable provisions of the Companies Act 2013 read with theRules issued thereunder the Consolidated Financial Statements of the Company for theFinancial Year 2016-'17 have been prepared in compliance with Accounting Standard 21(AS-21) dealing with Consolidated Financial Statement' and on the basis of auditedfinancial statements of the Company and its subsidiary as approved by the respective Boardof Directors. As stated in the transitional provisions in AS-21 since the consolidatedfinancial statements arepresented for the first time comparative figures for the previousperiod has notbeen presented. The Consolidated Financial Statements together with theAuditors' Report form an integral part of this Annual Report.
On 14th September 2016 the Company acquired 100% controlling stake in PSB Lending TreePrivate Limited Chennai a Non-Banking Financial Company (Non-deposit) undertaking for aconsideration of Rs 237.50 lakhs in cash and after completing all procedural formalitiesincluding change in the name of the Company the Reserve Bank of India Chennai accordedits Certificate of Registration on 30.01.2017 toSV Global Finance Private Limited awholly owned subsidiary of the Company.A separate statement containing the salientfeatures of the financial statements of the above named subsidiary in Form AOC -1 formspart of consolidated financial statements in compliance with Section 129(3) and otherapplicable provisions if any of the Companies Act 2013 read with Rule 5 of theCompanies (Accounts) Rules 2014.
In accordance with third proviso to Section 136(1) of the Companies Act 2013 theaudited standalone and consolidated financial statements and related information of theCompany and the audited financial statement of the subsidiary are available for inspectionby the members at the Registered Office of the Company during business hours on all daysexcept Sundays and public holidays up to the date of the ensuing Annual General Meetingand the aforesaid financial statements together with related information have beenuploaded on the website of the Company www.svgml.com.
In order to conserve the funds for future operations no dividend is being proposed forthe financial year 2016-17.
Transfer to Reserves
Appropriation to general reserves for the financial year ended March 31 2017 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 ||13317.84 ||13317.84 |
|Add: Net Profit for the year ||146.14 ||147.40 |
|Less: Capital Redemption Reserve ||1.96 ||1.96 |
|: Dividend on Cumulative Redeemable Preference Shares and Dividend Distribution Tax ||0.06 ||0.06 |
|Balance of General Reserve at the end of the year ||13461.96 ||13463.23 |
Company's Working /State of Affairs
The Company operates in one segment i.e. Real Estate business and as an NBFC(non-deposit) undertaking acquired through its wholly owned subsidiary. During theFinancial Year 2016-'17 the revenue of the Company on standalone basis was Rs. 660.09lakhs (P.Y. Rs. 1897.26 lakhs) earned towards interest on fixed deposits and other income.The revenueof the subsidiary during the Financial Year 2016-17 was Rs.14.79 lakhsearned towards interest on fixed deposits. The consolidated revenue stood at Rs. 667.18lakhs.
There are no material changes or commitments affecting the financial position of thecompany which have occurred between the end of the financial year and the date of thisreport except the redemption of 39200 9.75% Cumulative Preference Shares of Rs.5/-aggregating to Rs.196000/- along with arrear of dividend amounting to Rs. 191100/- on30.06.2016 in favor of M/s. The Thirumagal Mills Limited.
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 that wouldimpact the going concern status of the Company and its future operations.
Internal Financial Control and Risk Management
The Company has an adequate/effective system of internal financial controlscommensurate with its size and scale of its operations with documented procedures coveringall corporate functions which are constantly assessed and strengthened with new/revisedstandard operating procedures. The Company has adopted policies and procedures forensuring adherence to the Company's policies safe guarding 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 Companyhas framed a RiskManagement Policy. In the opinion of the Board there appears to be no element of riskwhich may threaten the existence of the Company.
The internal audit is entrusted toM/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 2017.
Pursuant to the provisions of Section 139 141142 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 three consecutive financial years commencingfrom FY 2016-'17 to 2018-'19 subject to ratification at every Annual General Meeting (AGM)by the shareholders of the Company and fix their remuneration. Accordingly the abovereferred Statutory Auditors hold office until the conclusion of the ensuing AGM and areeligible for re-appointment subject to ratification by the shareholders.
The Statutory Auditors' Report for the Financial Year 2016-'17 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 312017 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 "E" and formspart 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 and the annual reporton Corporate Social Responsibility (CSR) activities is annexed herewith as Annexure"A".
Directors and Key Managerial Personnel.
Appointment of Alternate Director
Pursuant to Section 161(2) of the Companies Act 2013 the Board of Directors at theirmeeting held on 3rd February 2017 appointed Ms.GirijaBalabhaskar (DIN-07693991) as anAlternate Women Director to Ms. S.Valli Women Director (DIN-00468218) to hold officeduring the absence of Smt. S.Valli Women Director for a period not less than three monthsfrom India.
Re-appointment of Managing Director
The Board of Directors at their meeting held on 03rd February 2017 & 08thNovember 2017 subject to the approval of the shareholders at the ensuing Annual GeneralMeeting considered and approved the reappointment of Mr.E.Shanmugam as the ManagingDirector of the Company for a further period of five years commencing from 03rd April2017.
Re-appointment of Independent Director for a second term
The Board of Directors at their meeting held on 01.09.2017re-appointedDr.ShivramSelvakkumar (DIN: 02384372) as an Independent Director on the Board for a secondconsecutive term of five years with effect from 27th September 2017 to 26th September2022.
Director Retiring by Rotation
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 Mr.M.Ethiraj Chairman of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment.
The resolutions seeking approval of the members for the re-appointment ofMr.E.Shanmugam as Managing Director Dr.ShivramSelvakkumar as an Independent Director fora second term and Mr.M.Ethiraj retiring by rotation have been incorporated in the Noticeof the ensuing Annual General Meeting along with brief details about them. The Boardrecommends the above appointments for the consideration of the Members of the Company atthe 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.
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:
|01. Mr. E. Shanmugam ||- Managing Director |
|02. Mr. K. Ramakrishnan ||- Chief Financial Officer |
|03. Mr. Govind M Joshi ||- Company Secretary |
Committees of the Board its constitution and details of Board Meetings and otherCommittees of the Board held during FY 2016-'17.
Brief details are provided in the Corporate Governance Report as per Annexure"C".
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 tothe Chairman of the Audit Committee to make protective disclosures to the management aboutthe grievances or violation of the Company's code of conduct.The policy is disclosed onthe Company'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 and Schedule V of the Listing Regulations. The details ofnon-current investments (unquoted) made during the F.Y. 2016-'17 is given in Note No.7 ofthe notes on the standalone financial statements of the Company.
Related Party Transactions
The Audit Committee and the Board of Directors have approved the related partytransactions and the same has been hosted on the Company's website www.svgml.com. Thepolicy intends to ensure that proper reporting approval and disclosure processes are inplace for 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 Year2016-'17 which 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 "B"(Form AOC-2) as annexed which forms an integral part ofthis 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. 48000/- per annum. Accordingly the ratio is 0.41 : 1 || |
|The percentage increase in remuneration of each Director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if anyin the financial year; Others not applicable ||: CFO : 90% || |
|The percentage increase in the median remuneration of employees in the financial year; ||: 15% || |
|The number of permanent employees on the rolls of company ||: 19 || |
|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 || |
|Variations in the market Capitalization of the Company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase (or) decrease in the market quotations of the shares of the Company in comparison to the rate at which the company came out with the last public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the company as at the close of the current financial year and previous financial year; ||: Market Cipitalization || |
| ||FY: 2016-'17 ||FY : 2015-'16 |
| ||312.47 Cr ||272.30 cr |
| ||Price Earling Ration || |
| ||FY: 2016-'17 192.92 ||FY : 2015-'16 19.06 |
|(viii) 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 anyexceptional circumstances for increase in the managerial remuneration; ||: Average percentile increase in salaries of non managerial Employees - 3.00% || |
|Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company. ||: Refer clause (v) || |
|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 remunerationis 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 2016-'17 in Form No. MR-3 issued by a Company Secretary inpractice is enclosed as Annexure "D" and forms an integral part of this report.The Secretarial Audit report does not contain any qualification reservation or adverseremarks.
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 "C" on Corporate Governance practices followedby the Company together with a certificate from a practicing Company Secretary confirmingcompliances 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 2017.
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 that :
a) that in the preparation of the annual accounts for the financial year ended 31stMarch 2017 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 2017 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 Departments BankersOrganizations 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 ||M.ETHIRAJ ||E.SHANMUGAM |
|Date: 8.11.2017 ||Chairman ||Managing Director |
| ||DIN 00041996 ||DIN 00041968 |