To the members of Savera Industries Ltd.
The Directors have pleasure in presenting the 49th Annual Report of Savera IndustriesLtd (the company) along with the audited financial statements under Ind AS for thefinancial year ended 31st March 2018.
| ||2017-18 ||2016-17 |
|Profit / (Loss) before tax for the year ||679.93 ||532.12 |
|Less : Provision for income tax for the year || || |
|(Including deferred tax liability) ||166.53 ||218.36 |
|Profit after tax ||513.40 ||313.76 |
|Profit brought forward* ||2136.22 ||1865.52 |
|Profit available for appropriation ||2649.62 ||2179.28 |
|Transferred to General Reserve || || |
|Dividend and Dividend Distribution Tax ||387.62 ||43.07 |
|Profit carried forward to next year ||2262.00 ||2136.22 |
(*Do not include Revaluation Reserve to the extent of Rs. 1334.85 lakhs &other comprehensive income of Rs. 94.32 lakhs)
The revenues of the company including other income increased by Rs. 394.62 lakhsrepresenting 5.70% over last year. The occupancy of the main unit i.e. Savera HotelChennai rose to 84.4.% during the year as against 78.2% over the corresponding period lastyear.
As can be seen above the profit before tax is at Rs. 679.93 lakhs as compared to Rs.532.12 lakhs of last year registering an increase of 27.78%.
STATE OF COMPANY'S AFFAIRS
Total expenditure for the period ended as at 31st March 2018 amounted to Rs. 6534.41lakhs increased by Rs. 345.71 lakhs (5.59%) as compared to the previous year. The Profit(EBITDA) before depreciation finance cost and tax for the year ended 31st March 2018amounted to Rs. 1150.48 lakhs as against Rs. 1151.57 lakhs over the corresponding periodlast year. The tax expense including deferred tax for the year ended 31st March 2018amounted to Rs. 166.53 lakhs. The Profit after Tax for the year ended 31st March 2018stood at Rs. 513.40 lakhs as against profit of Rs. 313.76 lakhs. No transfer was made toGeneral Reserve during the year under review. The company has adopted Ind-AS for the firsttime from the financial year 2017-18 and accordingly the financial statements for the yearended 31.03.2018 have been prepared and necessary changes have been given effect to thefinancial statements of the previous year 2016-17.
The Board of Directors of the Company has declared an Interim Dividend of Rs. 1.20 perequity share for the financial year ended 31.03.2018 on 14th February 2018. Further theBoard of Directors of the Company has recommended a final dividend of Rs. 1.30 per equityshare for the financial year ended 31.03.2018. The total outflow towards including interimdividend will be Rs. 298.20 lakhs and the tax on dividend works out to Rs. 60.71 lakhs.
DEPOSIT FROM PUBLIC
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.
FINANCIAL INFORMATION AND DETAILS OF ASSOCIATE COMPANY
The Financial Statement of the company is prepared in accordance with the Ind AS underthe provisions of the Companies Act 2013 and forms part of the Annual Report. Thecompany's financials disclose the assets liabilities income expenses and other details.
There is no subsidiary company and associate company within the meaning of 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 the meetingdates are provided in the Corporate Governance Report.
Pursuant to the provisions of the Companies Act 2013 Mrs. A. Nina Reddy Directorretires by rotation and is eligible for reappointment. The Board recommends herappointment and accordingly resolution seeking approval of the members for her appointmenthas been included in the notice of the forthcoming Annual General Meeting of the companyalong with her brief profile.
The Key Managerial Personnel of the company presently are Mr. A. Ravikumar ReddyManaging Director Mr. N. S. Mohan Company Secretary and Mr. D.V.M. Sambasiva Rao ChiefFinancial 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 2017-18.
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 2017-18 the applicableaccounting standards have been followed and there are no material departures; ii. Theyhave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the company at the end of the financial year 31st March 2018 and ofthe 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 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.
In accordance with the provisions of Section 139 and 142 of the Companies Act 2013and the rules framed thereunder M/s. S. Venkatram & Co. LLP Chartered Accountants218 T.T.K. Road Chennai 600 018 were appointed as statutory auditors of the company for aperiod of 5 years to hold the office from the conclusion of the 48th Annual GeneralMeeting of the company held on 11.08.2017 till the conclusion of the 53rd Annual GeneralMeeting (AGM) on the remuneration as may be fixed by the Board of Directors of thecompany.
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 Mr. B. Ranga Reddy and Mr. S. Sridhar Rao who are independentdirectors have submitted a declaration that each of them meets the criteria ofindependence as provided in sub-section (6) of section 149 of the Act. Further there isno 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. 76010/- comprising 7601 equity shares of theface 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. Further the company has invested Rs. 92700/- comprising of 1236 equity sharesof face value of Rs.1 each at the premium of Rs. 74 in the Indian Hotels Company Ltd.
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 31-3-2018 were on an arm's length basis and in the ordinary course ofbusiness.
The particulars of contracts or arrangements with related parties referred to insub-section (1) of section 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 therein. The company could not spend Rs. 1.27 lakhs during the year under reviewand the said amount is carried forward to the financial year 2018-19 and before 31stMarch 2019 the unspent amount of Rs. 1.27 lakhs shall be utilized for CSR Expenses.During the year under review the CSR Committee meeting was held on 30.5.2017 9.8.2017and 14.2.2018.
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.
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 every director wasevaluated
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.
While undertaking the Board evaluation the company also follows the requiredprinciples covered 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). Thecompany has listed its shares in Madras Stock Exchange Limited.(MSE) and the said MSE isnot in existence as of now. Hence 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 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 reducingthe power consumption by 85% and the heat emission energy becomes very low thereby throughthe STP the sewerage and sewage water is treated and the treated water is recirculatedfor W.C flushing system and cooling tower water.
The company also installed organic waste convertor machine in which the organic wastesare converted in to 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. 377.55 lakhs forthe services rendered to Foreign Tourists (Previous year Rs. 487.04 lakhs). Expenditure inForeign Currency is Rs. 39.44 lakhs (Previous Year Rs. 42.12 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 2017-18.
|a. Number of complaints received during the year ||NIL |
|b. Number of Complaint disposed of during 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 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
During the year in terms of the Union Agreement dated 1.8.2017 the company made aprovision towards Earned Leave payable to those employees of the company who havecompleted 5 years of service for Rs. 148.18 lakhs.
Your directors wish to place on record their appreciation for the good servicesrendered 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 otherwise
Issue 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 2018 ||Managing Director ||Joint Managing Director |