Your Directors have pleasure in presenting the Fifty-eighth Annual Report togetherwith the Audited Accounts for the year ended 31st March 2019.
1. FINANCIAL RESULTS
| || ||(Rs in lac) |
|Particulars ||As at 31.3.2019 ||As at 31.3.2018 |
|Total Income ||228091 ||183418 |
|Profit before Depreciation & Tax ||18624 ||18916 |
|Depreciation ||2353 ||2588 |
|Exceptional Income ||Nil ||Nil |
|Profit/(Loss) before Tax ||16271 ||15608 |
|Provision for Taxation: || || |
|Current ||5035 ||4825 |
|Deferred ||(74) ||(338) |
|Provision for Taxation no longer required ||(118) ||(1498) |
|Profit/(Loss) for the year after Tax ||11427 ||12620 |
|Other Comprehensive Income ||(66) ||(11) |
|Balance brought forward from previous year ||59437 ||48098 |
|Profit available for appropriation ||70798 ||60707 |
|Appropriations: || || |
|Dividend ||358 ||- |
|Tax on Dividend ||74 ||- |
|General Reserve ||1150 ||1270 |
|Balance carried to Balance Sheet ||69216 ||59437 |
2. SHARE CAPITAL
Your Directors at the Board Meeting held on 29th May 2019 had announcedbuyback of upto 251000 (Two Lac Fifty-one Thousand) fully paid equity shares of yourCompany of face value of Rs 10/- only (Rupees Ten only) each representing upto 1.75% ofthe total number of equity shares from all the equity shareholders/beneficial owners ofyour Company on a proportionate basis through the tender offer using stock exchangemechanism at a price of Rs 1605/- (Rupees One Thousand Six Hundred and Five only)(including premium of Rs 1595/-) per equity share for an aggregate maximum amount of uptoRs 402855000/- (Rupees Forty Crore Twenty-eight Lac Fifty-five Thousand only). Theexercise of share buyback has been completed on 6th August 2019 post whichthe paid-up equity share capital of your Company stands at Rs 140710830/- as on date.
Your Directors at the Board Meeting held on 29th May 2019 have recommendeda dividend @25% (Rs 2.50 per equity share of Rs 10/- each) same as for the previous yearon the paid up Equity Share Capital of your Company.
The Reserves of your Company stood increased to Rs 837 crore at the end of the yearunder review as against Rs 728 crore for the previous year.
During the year under review your Company achieved record sales volume at 346256KLs/MTs as against 300303 KLs/MTs achieved during 2017-2018. The volume growth for yourCompany was 15.30% which is more than double the underlying growth of the user industry.Your Company's sales turnover during the year 2018-2019 also reached an all-time high ofRs 224583 lac against Rs 180861 lac in the year 2017 2018. However your Company's netprofit was slightly lower at Rs 11427 lac as against Rs 12620 lac during the previousyear.
During the year under review Crude Oil and Base Oil prices saw steady rise in theinternational markets. This was coupled with a steady depreciation in the Indian Rupeeduring the first half of the year 2018
2019. As a result of both these factors the cost of raw materials was adverselyaffected which in turn affected the bottom line of your Company. Going forward theuncertainty in the global macroeconomic and political scenarios together with the on-going'trade and tariff wars' between the world's superpowers are bound to have serious impacton the global economies including India.
During the Financial Year 2018-2019 your Company's Wind Power Plants situated in thestates of Maharashtra Karnataka and Tamil Nadu generated a total of 89.11 MU against90.37 MU generated in the previous year. During the year your company did not add any newprojects to its Wind Portfolio.
6. PUBLIC DEPOSITS
Your Company has not accepted any deposits from the public or its employees during theyear under review.
7. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
8. CORPORATE GOVERNANCE
Corporate Governance Report along with a Certificate from the Secretarial Auditors ofyour Company regarding compliance of the conditions of Corporate Governance pursuant torequirements as stipulated by Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 is annexed hereto and forms part of thisReport.
Mr. S. R. Pandit Mr. N. B. Karpe and Mr. H. A. Nagpal who were your Company'sIndependent Directors since more than a decade retired w.e.f. closing hours of 31stMarch 2019 due to completion of their tenure. Further Mr. C. V. Alexander Whole-timeDirector of your Company also retired w.e.f. closing hours of 30th April 2019after associating with your Company for more than 5 decades.
Your Directors appreciate their valuable contribution and guidance over the years tothe overall growth of your Company. Your Directors also compliment them for their focussedand determined efforts for the wellbeing of your Company and express profound gratitudetowards their contribution over the years. Your Directors wish each one of themindividually the very best in their future endeavours.
Mrs. Meghana Dalal who was appointed as an Independent Director of your Company on 31stOctober 2014 retired at the end of her first term on 31st March 2019.
The Board of Directors -
(A) Based on recommendation of the Nomination and Remuneration Committee-
(1) At its Meeting held on 28th January 2019 appointed Mrs. Meghana Dalalas an Additional Director to hold office as an Independent Director of your Company for aperiod upto the conclusion of the ensuing Annual General Meeting of your Company.
(2) At its Meetings held on 28th January 2019 and 29th May 2019and after reviewing the declarations submitted by Mr. Hariharan Sunder and Mr.Chandrashekhar R. Gupte formed opinions that they meet with the criteria of Independenceas per Section 149 (6) of the Companies Act 2013 ("the Act") and the rules madethereunder and also meet the requirements of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and accordingly appointed them as Additional Directors tohold office as Independent Directors of your Company w.e.f. 28th January 2019and 29th May 2019 respectively upto the conclusion of the ensuing AnnualGeneral Meeting of your Company.
(B) At its meeting held on 12th August 2019 has accepted the resignationof Mr. Chandrashekhar R. Gupte due to personal reasons.
(C) At its meeting held on 12th August 2019 has accepted the letterreceived from Ms. Simran G. Mehra who is to retire at the ensuing Annual General Meetingnot offering herself to be re-appointed as a Director at the ensuing Annual GeneralMeeting on account of her other commitments.
Mrs. Meghana Dalal (DIN: 00087178) is a Commerce Graduate and a Fellow Member of theInstitute of Chartered Accountants of India. She has experience in professional practicefor more than 3 decades specialising in Management of Corporate Emoluments across variousIndustries. She is also a Director of Chetan Dalai Investigation and Management ServicesPrivate Limited.
Mr. Hariharan Sunder (DIN: 00020583) is a Bachelor of Commerce and a CharteredAccountant. He has over 30 years of experience in finance taxation accounts legalsecretarial international business and general corporate management. He had started hisworking career with KEC International Limited and has worked in corporates like RaymondLimited Raymond Synthetics Limited Jost's Engineering Company Limited and ShogunOrganics Limited.
Chandrashekhar R. Gupte (DIN: 00009815) is a graduate in Science and a Fellow Member ofthe Institute of Chartered Accountants of India. He was the Managing Director of NocilLimited from 1st August 2005 and retired therefrom after serving for more than4 decades on 31st July 2017. He had joined the Rubber Chemicals Division ofNocil Limited from its inception in 1976 as Head of Internal Audit and held importantpositions as head of Finance Head of Sales and Marketing and eventually as ChiefExecutive of the said Division from 1995.
Your Company has received the requisite disclosures/ declarations from Mrs. MeghanaDalal and Mr. Hariharan Sunder as required under the relevant provisions of the CompaniesAct 2013. Your Company has also received Notices under Section 160 (1) of the CompaniesAct 2013 signifying intentions to propose their candidatures for the office of Directorsof your Company.
Your Company has also received declarations from all the Independent Directors of yourCompany confirming that they meet with the criteria of Independence as prescribed underthe Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Profiles and other details as required under the Act and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (as amended) of Mrs. Meghana Dalal and Mr.Hariharan Sunder have been provided in the Notice of the ensuing Annual General Meeting ofyour Company.
10. KEY MANAGERIAL PERSONNEL
During the year under review Mr. Gautam N. Mehra Managing Director Mr. Suhas M.Dixit Chief Financial Officer & Director Mr. C. V. Alexander Whole-time DirectorMr. Siddharth G. Mehra Whole-time Director and Mr. Uday C. Rege Company Secretary &Executive VP - Legal of the Company continued to be the Key Managerial Personnel of theCompany.
Remuneration and other details of the said Key Managerial Personnel for the financialyear ended 31st March 2019 are mentioned in the Extract of the Annual Returnwhich is attached to the Board's Report.
11. BOARD COMMITTEES
The Board of Directors of your Company at its Meeting held on 28th January2019 re-constituted various Committees considering the forthcoming retirement of certainDirectors of your Company in compliance with the provisions of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 namely AuditCommittee Nomination and Remuneration Committee Stakeholders' Relationship CommitteeRisk Management Committee and CSR Committee.
All decisions pertaining to the constitution of Committees appointment of Members andfixing of terms of reference/role of the Committees are taken by the Board of Directors.
Details of the role and composition of these Committees including the number ofmeetings held during the financial year and attendance at meetings are provided in theCorporate Governance Section of the Annual Report.
12. NUMBER OF MEETINGS
The Board of Directors of your Company met 4 times during 2018-2019. The Board Meetingswere held on 11th May 2018 3rd August 2018 3rdNovember 2018 and 28th January 2019. The maximum time gap between any twoconsecutive meetings did not exceed one hundred and twenty days.
- Audit Committee met four times on 11th May 2018 3rd August2018 3rd November 2018 and 28th January 2019 during the year2018-2019.
- Stakeholders' Relationship Committee met four times on 11th May 2018 3rdAugust 2018 3rd November 2018 and 28th January 2019 during theyear 2018-2019.
- Nomination and Remuneration Committee met three times on 2nd July 2018 3rdAugust 2018 and 28th January 2019 during the year 2018-2019.
- Risk Management Committee met two times on 11th May 2018 and 3rdNovember 2018 during the year 2018-2019.
- CSR Committee met four times on 11th May 2018 3rd August2018 3rd November 2018 and 28th January 2019 during the year2018-2019.
13. DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134 (5) of the
Companies Act 2013 your Directors confirm 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 selected accounting policies were applied consistently and the Directors madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of your Company as at March 31 2019 and of statement of profitand loss of your Company for the year ended on that date;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of your Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) the internal financial controls have been laid down to be followed by your Companyand such controls are adequate and are operating effectively;
f) proper systems to ensure compliance with the provisions of all applicable laws havebeen devised and such systems are adequate and are operating effectively.
14. PERFORMANCE EVALUATION
Pursuant to the provisions of Section 134 (3) (p) 149 (8) and Schedule IV of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 annual performance evaluation of the Directors as well as of the AuditCommittee Nomination and Remuneration Committee and Stakeholders' Relationship Committeefor the year 2018-2019 was carried out by your Company.
For the year 2018-2019 the performance evaluation of the Independent Directors wascarried out by the entire Board and the performance evaluation of the Chairman andNon-Independent Directors was carried out separately by the Independent Directors.
15. INDEPENDENT DIRECTORS' MEETING
During the year under review the Independent Directors of your Company met on 30thMarch 2019 interalia to discuss:
i) Evaluation of performance of Non-Independent Directors and the Board of Directors ofyour Company as a whole.
ii) Evaluation of performance of the Chairman of your Company taking into views ofExecutive and Non-Executive Directors.
iii) Evaluation of the quality content and timelines of flow of information betweenthe Management and the Board that is necessary for the Board to effectively and reasonablyperform its duties.
16. MANAGERIAL REMUNERATION
The information required under Rule 5 (1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided as
a separate annexure. The information as required under Rule 5 (2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 will be provided uponrequest by any Member of your Company. In terms of Section 136 (1) of the Companies Act2013 the Report and the Accounts are being sent to the Members excluding the aforesaidAnnexure. Any member interested in obtaining copy of the same may write to the CompanySecretary at the Registered Office of your Company.
17. NOMINATION AND REMUNERATION POLICY
The Nomination and Remuneration Policy
recommended by the Nomination and Remuneration Committee and approved by the Board ofDirectors of your Company in its Meeting held on 29th May 2014 continues to beadopted by your Company. The Remuneration Policy of your Company is attached to thisReport as a separate annexure.
18. CSR POLICY
The Corporate Social Responsibility Policy recommended by the CSR Committee andapproved by the Board of Directors of your Company in its Meeting held on 29thMay 2014 continues to be adopted by your Company. The same is available on the websitewww.savita.com of your Company.
The disclosure relating to the amount spent on Corporate Social Responsibilityactivities for the financial year ended 31st March 2019 is attached to thisReport as a separate annexure.
19. LISTING AND OTHER REGULATORY ORDERS AGAINST YOUR COMPANY IF ANY
Your Company's shares continue to be listed on BSE Limited and National Stock Exchangeof India Limited. The Listing Fees to these two Stock Exchanges for the year 2019-2020have been paid by your Company on time.
There were no significant or material orders passed by any of the regulators or courtsor tribunals impacting the going concern status and your Company's operations in future.
20. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the year your Company has transferred Rs 16.27 lac towards unclaimed Dividendas against Rs 10.44 lac towards unclaimed Dividend in the previous year to the InvestorEducation and Protection Fund which amount was due and payable for the year 2010-2011 andremained unclaimed and unpaid for a period of 7 years as provided in Section 125 of theCompanies Act 2013.
Your Company has intimated to the Shareholders who had not claimed dividends for thepast 7 years to claim the dividends forthwith failing which their shares would standtransferred to the IEPF Authority after 7th August 2019.
21. KEY FINANCIAL RATIOS
Key Financial Ratios for the financial year ended 31st March 2019 areprovided in the Management Discussion and Analysis Report which is annexed hereto andforms a part of the Board's Report.
22. STATUTORY AUDITORS
The Members of your Company had at the 56th Annual General Meeting held on29th September 2017 approved the appointment of G. D. Apte & Co.Chartered Accountants Mumbai (Registration No.100515W) as the Statutory Auditors of yourCompany to hold office from the conclusion of that AGM until the conclusion of the 61stAnnual General Meeting.
23. AUDITORS' REPORT
The Auditors' Report to the Members on the Accounts of your Company for the financialyear ended 31st March 2019 is attached to this Report and does not contain anyqualification reservation or adverse remark.
24. SECRETARIAL AUDIT REPORT
Secretarial Audit for the year 2018-2019 was conducted by MP & Associates CompanySecretaries in Practice in accordance with the provisions of Section 204 of the CompaniesAct 2013. The Secretarial Audit Report is attached as a separate annexure to this Report.
The Board wishes to state here that your Company spent lower amount on CSR activitiesthan the prescribed one during the year 2018-2019 as certain projects were in the processof being identified and evaluated. The Cost Auditors Sevekari Khare & Associatesappointed at the Annual General Meeting held on September 29 2017 informed theirinability to conduct cost audit for the year 2017-2018 to the Company and hence theCompany did not file Form CRA-2 for intimation of their appointment to Registrar ofCompanies and the appointment of Cost Auditors in casual vacancy was delayed. The Companycould not file Form IEPF-4 with IEPF Authority due to technical reasons pertaining to thewebsite of the IEPF Authority and the Company has already communicated about the same toIEPF Authority. The Company has filed Forms IEPF-6 and IEPF-7 with IEPF Authority for theyear 2018-2019 as on the date of this Report.
25. COST AUDIT
In compliance with the provisions of Section 148 of the Companies Act 2013 the Boardof Directors of your Company at its meeting held on 29th May 2019 hasappointed Kale & Associates Cost Accountants as Cost Auditors of your Company for theyear 2019
2020. In terms of the provisions of Section 148(3) of the Companies Act 2013 read withRule 14(a)(ii) of The Companies (Audit and Auditors) Rules 2014 the remuneration of theCost Auditors has to be ratified by the Members. Accordingly necessary resolution isproposed at the ensuing Annual General Meeting for ratification of the remunerationpayable to the Cost Auditors for the year 2019-2020.
26. RISK MANAGEMENT
In accordance with the provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 your Company has a Risk Management Committee in operationto oversee the Risk Management of your Company in line with your Company's Risk Frameworkand a detailed Policy to cover risk assessments identification of various significantrisks and mitigation plans to address the identified risks. Your Company's Risk ManagementPolicy continues to be displayed on the website www. savita.com of your Company.
27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has internal control system commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined and reviewed by the Audit Committee as a continuing exercise. Your Company alsohires services of external agency for periodically carrying out internal audit in areasidentified by the Audit Committee from time to time. Such external agency reports theresults of the internal audits to the Audit Committee which then takes stock ofsignificant audit observations and corrective actions are then suggested to be takenthereon by the concerned departments. The actions taken are reviewed by the AuditCommittee at their subsequent meetings.
28. VIGIL MECHANISM
Your Company has a vigil mechanism policy to deal with instances of fraud andmismanagement if any. The Whistle Blower Policy framed for the purpose is uploaded on thewebsite www.savita.com of your Company.
29. RELATED PARTY TRANSACTIONS
The Audit Committee scrutinises and approves all related party transactions attractingcompliance under Section 188 and/or Regulation 23 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 before placing them for Board's approval. Prioromnibus approval of the Audit Committee is also sought for transactions which are of aforeseen and repetitive nature.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board of Directors of your Company is uploaded on thewebsite www.savita.com of your Company.
The disclosures on related party transactions too are made in the Financial Statementsof your Company from time to time.
30. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of Annual Return in prescribed Form MGT 9 isannexed as a separate annexure forming part of this Report.
31. SEXUAL HARASSMENT GRIEVANCES
During the year under review there were no grievances reported under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
32. INDUSTRIAL RELATIONS
The industrial relations continued to be generally peaceful and cordial during theyear.
33. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information relating to the Conservation of Energy Technology Absorption andForeign Exchange Earnings and Outgo as required to be disclosed under the Companies(Accounts) Rules 2014 is given as an annexure forming part of this Report.
Your Directors record their heartfelt appreciation for the encouragement support andco-operation received from members government authorities banks customers and all otherstakeholders and also wish to thank them for the trust reposed in the Management. YourDirectors are also grateful to all the employees for their commitment and contribution tothe welfare of your Company.
For and on behalf of the Board
| ||Gautam N. Mehra |
|Mumbai ||Managing Director |
|12th August 2019 ||(DIN:00296615) |