DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the 22nd Annual Report on the operations of Saven Technologies Limited together with the audited financial statements for the year ended March 31, 2015. The financial results of the Company are as follows: The total revenue of the Company for the year ended March 31, 2015 was Rs.1418.52 lakhs (including Dividend income of Rs.209.88 lakhs and Profit on sale of Investments of Rs. 285.89 lakhs as compared to Rs.1135.36 lakhs (including Dividend income of Rs.172.47 lakhs) for the previous year. The revenue from Software development and services of the Company was at Rs. 751.19 lakhs as compared to Rs.834.19 lakhs for the previous year. The profit before Tax recorded an increase of 61%, from Rs.477.92 lakhs to Rs. 771.36 lakhs. The profit after Tax recorded an increase of 76%, from Rs.359.85 lakhs to Rs.631.99 lakhs. 3. TRANSFER TO RESERVES An amount of Rs.550.00 lakhs was transferred to General Reserve from surplus in the profit and loss account for the year ended March 31, 2015. 4. DIVIDEND The Board of Directors (the Board) at their meeting held on 4th August, 2014, declared an interim dividend of Rs. 0.70 (7%) per equity share of Rs.10/- each for the year 2014-15 amounting to Rs.76.15 lakhs. The same was paid/dispatched to the shareholders on 28th August, 2014. The Board at its meeting held on 06th May, 2015, took into consideration the profit during the year including the profit on disinvestment of its holding in its subsidiary, Saven Technologies Inc., USA, and recommended a final dividend of Rs.1.00 (10%) per equity share of Rs.10/- each, as a special onetime dividend subject to the approval of the shareholders at the ensuing Annual General Meeting for the year 2014-15 amounting to Rs.108.79 lakhs. The total amount of dividend including the interim and final dividend amounting to Rs.184.94 lakhs, for the year ended 31st March 2015, would amount to Rs.1.70 (17%) per equity share of Rs.10/- each. 5. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The company has not given any loan or guarantee covered under the provisions of section 186 of the Companies Act, 2013 (Act). The details of the investments made by the company are given in the notes to the financial statements. 6. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report. 7. RELATED PARTY TRANSACTIONS None of the transactions with related parties falls under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure - 1 in Form AOC-2 and the same forms part of this report. 8. FIXED DEPOSITS Your Company has not accepted any deposits and as such, no amount of principal or interest was outstanding on the date of the Balance Sheet. 9. CHANGE IN THE NATURE OF BUSINESS, IF ANY There is no material change in the nature of business affecting the financial position of the Company for the year ended March 31, 2015. 10. JOINT VENTURE Penrillian Limited, a joint venture of your Company in UK, is in the business of software development for wireless information devices to provide high end technical solutions to leading mobile Companies. Amidst a recessionary trend in Europe, Penrillian achieved revenue of £ 1.13 million for the year ended June 30, 2014 as against £ 1.80 million for the previous year and in its current financial year ending 30th June, 2015 it is expected to be sustained at the same level. Information on Joint Venture pursuant to Section 129(3) of the Act read with rule 5 of the Companies (Accounts) Rules, 2014 is given in Annexure - 2 in Form AOC-1 and the same forms part of this report. 11. SUBSIDIARY COMPANY Saven Technologies Inc., ceased to be the subsidiary of the Company since during the Financial Year 2014-15 the Company had disinvested its entire holdings in the subsidiary. 12. DIRECTORS AND KEY MANAGERIAL PERSONNEL The Board of Directors had on the recommendation of the Nomination & Remuneration Committee appointed the Directors and Key Managerial Personnel of the Company during the Financial Year 2014-15. Mr. Clive Menhinick stepped down from the Board of the Company on April 23, 2014. Mr. Vijay Chandra Puljal stepped down from the Board of the Company on September 29, 2014. The Board places on record its appreciation of the contribution and guidance provided by them during their tenure as a Director. Pursuant to the provisions of Section 149 of the Act which came into effect from April 1, 2014, Mr. R S Sampath, Wg Cdr A.B. Bhushan, Mr. R Ravi were appointed as Independent Directors at the Annual General Meeting held on 22nd September, 2014. The terms and conditions of appointment of independent directors are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year. Mr. Nrupender Rao retires as Director by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. Mr. Murty Gudipati, was appointed as Executive Director and CEO of the Company for a period of one year with effect from 14th August, 2014 at the Annual General Meeting held on 22nd September, 2014. As the term of Mr. Murty Gudipati is expiring on 13th August, 2015, the Board has proposed for his re-appointment with effect from 14th August, 2015 subject to the approval of members in the ensuing Annual General Meeting of the company. Mrs. R Renuka was appointed as an Additional Director of the company with effect from 26th March, 2015 under section 161 of the Companies Act 2013 (the Act). The resolution seeking approval of the Members for the re-appointment of Mr. Murty Gudipati has been incorporated in the notice of the forthcoming Annual General Meeting of the Company. The Company has received a notice under Section 160 of the Act along with the requisite deposit proposing the appointment of Mrs. R Renuka. Pursuant to the provisions of Section 203 of the Act, which came into effect from April 1, 2014, Mr. Murty Gudipati, was appointed as CEO of the Company for a period of one year with effect from 14th August, 2014, Mr. S. Mohan Rao was appointed as Chief Financial Officer with effect from 4th August, 2014 and Ms. Jayanthi.P, was appointed as Company Secretary with effect from 29th May, 2014 as key managerial personnel of the Company. For the perusal of the shareholders, a brief resume of the Directors being appointed/ re-appointed along with necessary particulars is given in the explanatory statement to the notice. The Board of Directors recommend their appointment/ re-appointment. 13. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors' report. 14. NUMBER OF MEETINGS OF THE BOARD Nine meetings of the Board were held during the year. For details of the meetings of the Board, please refer to the corporate governance report, which forms part of this report. 15. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board carried out an annual performance evaluation of its own performance, the directors as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committees. Independent Directors carried out a separate evaluation on the performance of Chairman and non independent directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 16. AUDIT COMMITTEE The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report. 17. AUDITORS STATUTORY AUDITORS The Statutory Auditors, M/s. Rambabu & Co., Chartered Accountants, Hyderabad are eligible for reappointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder, for ratification of their reappointment as Auditors of the Company. There were no qualifications, reservation or adverse remark in the Audit Report for the Financial Year ended 31st March, 2015. SECRETARIAL AUDIT Mr. S Chidambaram, Company Secretary in Practice, Hyderabad, was appointed to undertake the Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit Report is given in Annexure - 3. With regard to the observation in the Secretarial Audit Report for the Financial Year 2014-15, in respect of non filing of Annual Performance Report and Annual Return for Joint Venture Company under FEMA, we would like to state that the Company would be filing the same shortly. 18. DIRECTORS' RESPONSIBILITY STATEMENT In terms of Section 134(5) of the Companies Act 2013, your Directors would like to state that: a. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended March 31, 2015 and the profit of the Company for that financial year; c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 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 the company and that such internal financial controls are adequate and operating effectively. f. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 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 development in its present range of activities. Technology Absorption: The Company continues to use the latest technologies for improving the productivity and quality of its services and products. The Company has not imported any technology during the year. Foreign Exchange Earnings and Outgo: During the year under review, your Company earned Foreign Exchange aggregating to Rs. 1540 lakhs. The Foreign Exchange outgo during the year was Rs. 0.60 lakhs. 20. PARTICULARS OF EMPLOYEES a) The information required under section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - 4. b) Pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the year under review, none of the employees of the Company employed throughout the financial year, was in receipt of remuneration for the year which, in the aggregate, was not less than sixty lakh rupees, none of the employees of the Company employed for a part of the financial year, was in receipt of remuneration for any part of the year, at a rate which, in the aggregate, was not less than five lakh rupees per month, none of the employees of the Company employed throughout the financial year or part thereof, was in receipt of remuneration in the year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company 21. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 are given in Annexure - 5. 22. RISK MANAGEMENT Pursuant to section 134 (3) (n) of the Companies Act, 2013 and Clause 49 of the listing agreement, the company has formulated a policy on risk management. At present the company has not identified any element of risk 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, the Company has established a Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company <http://www.saven.in/documents/results/2014-15/Whistle->blower-policy.pdf. 24. CORPORATE SOCIAL RESPONSIBILITY During the Financial year 2014-15 company was not required to spend on CSR Activities, as the Net Profit after tax of the Company as on 31st March, 2014 was Rs. 3.59 crores. Since the Company was not falling under any of the category as specified under Section 135(1) of the Companies Act, 2013 read with rules made thereunder, CSR Committee was not constituted. 25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place a Policy on Prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 26. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR 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 no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. 27. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE The "Management Discussion and Analysis Report" highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns etc. is furnished separately and forms part of this Directors' Report. As per the requirements of the Listing Agreement with Stock Exchange, a Report on Corporate Governance duly audited is annexed for information of the Members. 28. ACKNOWLEDGMENTS Your Directors thank the investors, bankers, clients and vendors for their continued support. Your Directors place on record their appreciation of the valuable contribution made by the employees at all levels. For and on behalf of the Board Nrupender Rao Chairman DIN:00089922 Place : Hyderabad Date : June 19, 2015 |