Your Directors have pleasure in presenting the 26th Annual Report of Saven TechnologiesLimited together with the audited financial statements for the year ended March 31 2019.
1. Financial Results
The Company's financial performance for the year ended March 31 2019 is summarisedbelow:
| || ||(Rs. In Lakhs) |
| ||2018-19 ||2017-18 |
|Revenue from Operations ||1060.95 ||839.51 |
|Operating expenditure ||776.24 ||746.92 |
|Earnings before interest tax depreciation and amortization (EBITDA) ||284.71 ||92.59 |
|Other income ||80.43 ||145.94 |
|Depreciation and amortization expense ||25.17 ||33.02 |
|Profit before tax (PBT) ||339.97 ||205.51 |
|Tax expense ||94.90 ||51.94 |
|Profit after Tax (PAT) ||245.07 ||153.57 |
|Other Comprehensive Income ||12.81 ||34.29 |
|Balance brought forward from previous year ||236.54 ||244.76 |
|Profit available for appropriation ||494.42 ||432.62 |
|Interim Dividend including Tax ||(131.15) ||- |
|Deemed dividend Tax on Reduction of Share Capital ||- ||(161.79) |
|Balance carried to balance sheet ||1183.89 ||1057.16 |
2. Financials of the Company
The total revenue of the Company for the year ended March 31 2019 was Rs.1141.38 lakhsas compared to Rs.985.45 lakhs for the previous year. Revenue from operations wasRs.1060.95 lakhs as compared to Rs.839.51 lakhs an increase of 26.40% over previous year.Other income was Rs.80.43 lakhs as against Rs.145.94 lakhs for the previous year. Theprofit before Tax for the year was Rs.339.97 lakhs as against Rs.205.51 lakhs for theprevious year. The profit after Tax for the year was Rs.245.07 lakhs as compared toRs.153.57 lakhs in the previous year. The total income including Comprehensive Income forthe year was Rs.257.88 lakhs as against Rs.187.86 lakhs in the previous year.
As per the provisions of Companies Act 2013 read with rules made thereunder thecompany has implemented the Indian Accounting Standards for preparing the FinancialStatements from the Financial Year 2017-18.
There are no material changes and commitments affecting the financial position of theCompany which have occured between the end of the financial year of the company to whichthe financial statements relate and the date of the report.
3. 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 2018-19 the company did not transfer any amountto Reserves.
The Board of directors (the Board) at their meeting held on 27th November 2018declared an interim dividend of Re.1.00 (100%) per equity share of Re.1/- each for theyear 2018-19 amounting to Rs.108.787 lakhs. No further dividend had been declared for theyear ended March 31 2019.
5. Deposits / Loans & Advances Guarantees or Investments
Your Company has not accepted any deposits and as such no amount of principal orinterest was outstanding as of the Balance Sheet date.
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.
6. 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.
7. Related Party Transactions
The transactions with related parties were in the ordinary course of business and on anarm's length pricing basis. Suitable disclosure as required by the Accounting Standards(Ind AS) has been made in the notes to the Financial Statements. There were no materiallysignificant related party transactions which had potential conflict with the interests ofthe company at large. The Board has approved a policy for related party transactions whichhas been uploaded on the Company's websitehttp://www.saven.in/documents/results/2014-15/Policy-on-related-party-transactions.pdf.Information on transactions with related parties pursuant to Section 134(3)(h) of the Actread with rule 8(2) of the Companies (Accounts) Rules 2014 is given in Annexure-1 in FormAOC-2 and the same forms part of this report.
8. 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 2019.
9. Subsidiary Company Joint Venture
The company does not have any Subsidiary or Joint Venture.
10. Directors and Key Managerial Personnel
Mr. Murty Gudipati was re-appointed as Executive Director and CEO of the Company for aperiod of three years commencing from 01st April 2018 to 31st March 2021 at 25th AnnualGeneral Meeting held on 28th September 2018.
Mr. Sridhar Chelikani retires as Director by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment.
Mr. R Ravi Independent Director was appointed by the board on 04th August 2014 and at21st Annual General Meeting held on 22nd September 2014 for a period of five years. Asper the recommendation made by the Nomination and Remuneration Committee and the Board ofDirectors of the Company the Board of Directors have proposed to extend the term ofappointment of Mr. R Ravi as Independent Director for second term of five years commencingfrom 21st September 2019 considering his experience knowledge skills and familiaritywith the company.
Mrs. R Renuka Independent Director was appointed by the board on 26th March 2015 andat 22nd Annual General Meeting held on 17th August 2015 for a period of five years till25th March 2020. As per the recommendation made by the Nomination and RemunerationCommittee and the Board of Directors of the Company the Board of Directors have proposedto extend the term of appointment of Mrs. R Renuka as Independent Director for second termof five years commencing from 26th March 2020 to 25th March 2025 considering herexperience knowledge skills and familiarity with the company.
Mr. Avula Bharat Bhushan Independent Director was re-appointed at 25th Annual GeneralMeeting held on 28th September 2018 for second term of five years commencing from01.10.2018. Since he has completed 76 years the board is proposing his re-appointment forshareholders' approval for him to continue as Independent Director during his second term.
For the perusal of the shareholders a brief resume of the Directors being re-appointedalong with necessary particulars is 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 each independent director 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.
11. Policy on Directors' Appointment and Remuneration and Other Details
The Nomination and Remuneration Committee ('the committee') comprises three independentdirectors as on March 31 2019. Wg Cdr A B Bhushan (Retd) Chairman Member Mr. R RaviMember Mrs. R Renuka Member. Mrs. R Renuka became member of the committee and Mr. R SSampath Member stepped down. The committee is constituted as per the provisions ofCompanies Act 2013 read with rules made thereunder and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 amended from time to time.
During the period under review the Committee met three times i.e. on 07.08.201824.10.2018 25.03.2019. The Chairman of the Nomination and Remuneration Committee waspresent at the last Annual General Meeting.
The policy of the company on remuneration including criteria for determiningqualifications positive attributes independence of a director and other matters is asrequired under sub-section (3) of Section 178 of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. There has been no change inthe policy since the last fiscal year. The remuneration paid to the directors keymanagerial personnel and other employees is as per the terms laid out in the nominationand remuneration policy of the Company. The detailed policy is posted on the website ofthe company www.saven.in. Following are the salient features of the policy:
Identifying and selection of candidates for appointment as Directors /Independent Directors based on certain laid down criteria
Identifying potential individuals for appointment as Key Managerial Personneland to other Senior Management positions
Formulate and review from time to time the policy for selection and appointmentof Directors Key Managerial Personnel and senior management employees and theirremuneration
Review the performance of the Board of Directors and Key Managerial Personnelbased on certain criteria as approved by the Board. In reviewing the overall remunerationof the Board of Directors and Key Managerial Personnel the Committee ensures that theremuneration is reasonable and sufficient to attract retain and motivate the bestmanagerial talent the relationship of remuneration to performance is clear and meetsappropriate performance benchmarks and that the remuneration involves a balance betweenfixed and incentive pay reflecting short term and long term objectives of the Company.
Details of remuneration to all the directors
The Non-Executive Directors receive remuneration only by way of sitting fees forattending the meetings of the Board and Committee thereof.
a) The details of remuneration paid to all the Directors' for 2018-19 is given below:(Amount in Rs.)
|Name of the Director ||Salary ||Provident fund and Superannuation fund other perquisites ||Sitting Fees ||Total |
|Sridhar Chelikani ||- ||- ||7500 ||7500 |
|R S Sampath ||- ||- ||62000 ||62000 |
|Wg Cdr A B Bhushan (Retd) ||- ||- ||61500 ||61500 |
|R Ravi ||- ||- ||69000 ||69000 |
|R Renuka ||- ||- ||47000 ||47000 |
|MurtyGudipati ||3000000 ||1730000 ||- ||4730000 |
b) Details of fixed component and performance linked incentives along with theperformance criteria;-
As per the terms of remuneration approved at the Annual General Meeting held on 28thSeptember 2018 Mr. Murty Gudipati was paid Rs.10 lakhs as performance incentive duringthe financial year 2018-19 on recommendation of the Nomination and Remuneration Committeeconsidering the performance of the company and approved by the Board.
c) Service contracts notice period severance fees:
Mr. Murty Gudipati's re-appointment as Executive Director and Chief Executive Officerfor the period commencing from 01st April 2018 to 31st March 2021 was approved by theBoard of Directors at the Board Meeting held on 01st February 2018 and by the members atthe Annual General Meeting held on 28th September 2018. As per the terms of hisappointment the services of Mr. Murty Gudipati can be terminated with Six months' noticeon either side and he shall not be eligible for any severance pay.
The Board of Directors at their meeting held on 16th May 2019 considered Revision ofRemuneration to Mr. Murty Gudipati effective from 01st April 2019 to 31st March 2021subject to approval of shareholders at the ensuing Annual General Meeting.
d) Stock option details if any and whether the same has been issued at a discount aswell as the period over which accrued and over which exercisable- NIL
12. Number of Meetings of the Board
During the period under review the board met Six times. The dates on which the Meetingswere held are 25th May 2018 08th August 2018 24th October 2018 27th November 201825th January 2019 and 25th March 2019.
Meetings of Independent Directors
The Independent Directors had a meeting on 25th March 2019. All the IndependentDirectors were present at the Meeting.
13. Board Evaluation
Performance Evaluation of Board Committees Individual Directors and IndependentDirectors.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 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 isexplained below;
The evaluation took into consideration the inputs received from the Directors coveringvarious aspects of the Board's functioning such as adequacy of the composition of theBoard and its Committees Board culture delineation of responsibilities to variousCommittees effectiveness of Board processes information and functioning execution andperformance of specific duties obligations and governance the Company and itsstakeholders. It was observed that the Board played a vital role in formulation andmonitoring of policies.
The evaluation in respect of the committees took into consideration covering variousaspects of the Committees functioning such as whether the amount of responsibilitydelegated by the Board to each of the committees is appropriate the committees takeeffective and proactive measures to perform its functions the reporting by each of theCommittees to the Board is sufficient etc. It was observed that the Board had constitutedsufficient committees wherever required with well-defined terms of reference whosecomposition was in compliance with the legal requirements and their performances werereviewed periodically. It was found that the Committees gave effective suggestion andrecommendation to the Board.
The performance evaluation of the Chairman and the Non Independent Directors wascarried out by the Independent Directors at a separate meeting held on 25th March 2019.The evaluation also assessed the quality quantity and timeliness of the flow ofinformation between the management and the Board that were necessary for it to effectivelyand reasonably perform its duties. It was observed that the Chairman and theNon-Independent Directors discharged their responsibilities in an effective manner.
The Board evaluated the performance of Independent Directors and Individual Directorsconsidering various parameters such as their familiarity with the Company's visionpolicies values code of conduct their attendance at Board and Committee Meetingswhether they participate in the meetings constructively by providing inputs and providesuggestions to the Management/Board in areas of domain expertise whether they seekclarifications by raising appropriate issues on the presentations made by theManagement/reports placed before the Board practice confidentiality etc. It was observedthat the Directors discharged their responsibilities in an effective manner.
During the year under review the recommendations made in the previous year weresatisfactorily implemented.
14. Audit Committee
The Audit Committee ('the committee') comprises three independent directors as on March31 2019. Mr. R Ravi Chairman Mr. R S Sampath Member Wg Cdr A B Bhushan (Retd) Member . The committee is constituted as per the provisions of Companies Act 2013 readwith rules made thereunder and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 amended from time to time.
During the period under review the Committee met four times i.e. on 25.05.201807.08.2018 23.10.2018 and 25.01.2019. The Chairman of the Audit Committee was present atthe previous Annual General Meeting.
The Statutory Auditors and the Internal Auditors of the Company are invited to attendthe Audit Committee Meeting. Mr. Murty Gudipati Executive Director and the ChiefFinancial Officer are also invited to attend the Audit Committee Meeting. The CompanySecretary acts as the secretary to the committee.
15. Stakeholders' Relationship Committee
The Stakeholders' Relationship Committee ('the committee') comprises three independentdirectors as on March 31 2019. Wg Cdr A B Bhushan (Retd) Chairman Member Mr. R RaviMember Mr. R S Sampath Member. The committee is constituted as per the provisions ofCompanies Act 2013 read with rules made thereunder and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 amended from time to time.
During the period under review the Committee met four times i.e. on 25.05.201807.08.2018 23.10.2018 and 25.01.2019. The Chairman of the Stakeholders' RelationshipCommittee was present at the previous Annual General Meeting.
At the Annual General Meeting (AGM) held on September 25 2017 M/s. Suryanarayana andSuresh. Chartered Accountants Hyderabad were appointed as Statutory Auditors of thecompany to hold office till conclusion of the AGM to be held in the calendar year 2022.The Ministry of Corporate Affairs vide its notification dated 7th May 2018 has done awaywith the requirement of yearly ratification of appointment of Statutory Auditors at theAGM.
There are no qualifications reservation or adverse remark in the Audit Report for theFinancial Year ended 31st March 2019.
Mr. S Chidambaram Company Secretary in Practice Hyderabad was appointed to undertakethe Secretarial Audit of the Company for the Financial Year 2018-19. The Secretarial AuditReport is given in Annexure-2.
With regard to the observation made in the Secretarial Audit Report for the financialyear 2018-19 about the delay in reporting the firms application as required as perForeign investment in India - Reporting in Single Master Form to RBI wide RBI CircularRBI/2017-181/194 A.P (DIR Series) Circular No.30 dated June 07 2018 we would like tostate that the delay was due to non-availability of the requisite information within theprescribed time for filing the Report.
In terms of the provisions of Section 139 of the Act and based on the recommendation ofAudit Committee the Board of Directors at their meeting held on 25th May 2018re-appointed M/s. Nandyala and Associates Chartered Accountants as the Internal Auditorsof the Company. Nandyala and Associates Chartered Accountants confirmed their willingnessto be re-appointed as the Internal Auditors of the Company. Further the Audit Committeein consultation with Internal Auditors formulated the scope functioning periodicitymethodology for conducting the internal audit.
17. 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 if any;
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 2019 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.
18. Details in respect of frauds reported by auditors under sub-section (12) of section143 other than those which are reportable to the Central Government - NIL
19. 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. The Company has not imported any technology during the year.
Foreign Exchange Earnings and Outgo:
Foreign Exchange earned by the Company as on March 31 2019 was Rs. 1038.16 lakhs andas on March 31 2018 was Rs. 972.88 lakhs. The Foreign Exchange outgo for the company ason March 31 2019 was Rs.4.36 lakhs and as on March 31 2018 was NIL.
20. 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-3.
(b) The information required under Section 197(12) of the Companies Act 2013("the Act") read with Rule 5(2) & of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this Report. Howeverpursuant to first proviso to Section 136(1) of the Act this Report is being sent to theShareholders excluding the aforesaid information. Any shareholder interested in obtainingsaid information may write to the Company Secretary at the Registered Office of theCompany and the said information is available for inspection at the Registered Office ofthe Company.
21. Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 are given inAnnexure-4. The web address where annual return referred to in sub-section (3) of section92 has been placed is www.saven.in.
22. 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. The Board regularly discusses the significant business risksidentified by the Management and the mitigation process being taken. The Company has anadequate risk management framework to identify monitor and minimize risks as alsoidentify business opportunities. At present the company has not identified any element ofrisk which may threaten the existence of the company.
23. 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(s) of fraud and mismanagement if any. The Whistle BlowerPolicy ensures that strict confidentiality is maintained whilst dealing with concerns andalso that no discrimination will be meted out to any person for a genuinely raisedconcern. Employees may also report to the Chairman of the Audit Committee. During the yearunder review no employee was denied access to the Audit Committee. The details of theWhistle Blower Policy is posted on the website of the Company http://www.saven.in/documents/results/2018-19/Revised%20Whistle%20Blower%20Policy.pdf.
24. Corporate Social Responsibility (CSR)
The provisions relating to Corporate Social Responsibility under the Companies Act2013 do not apply to the company.
25. Prevention Of Sexual Harassment Policy
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 no complaints werereceived pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
26. 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.
27. 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.
The paid up equity share capital is below Rupees Ten Crore and Net Worth below rupeesTwenty Five crore as on the last day of the previous financial year i.e. as per AuditedFinancials of Previous Financial year i.e. 31st March 2018 of the company. As per theprovisions of Regulation 15(2) of the SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 the compliance with the Corporate Governance provisions asspecified in Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) ofRegulation 46 and para C D and E of Schedule V shall not apply; therefore the CorporateGovernance Report is not Annexed in the Annual Report.
The Company is complying with all the applicable provisions of Companies Act 2013 readwith rules made thereunder SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and other statutory regulations.
Pursuant to provisions of Schedule V (A) of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 the compliance with Related Party Disclosure is given innotes to financial statement and pursuant to provisions of Schedule V (F) Disclosureswith respect to demat suspense account/ unclaimed suspense account is NIL.
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 ||R S Sampath |
|Date : July 23 2019 ||Chairman |
| ||DIN:00063633 |