Savera Industries Ltd Directors Report.

To the members of Savera Industries Ltd,

The Directors have pleasure in presenting the 51st Annual Report of Savera Industries Ltd (the company), along with the audited financial statements under Ind AS for the financial year ended 31st March, 2020.

(Rs. in lakhs)

CURRENT PREVIOUS
PARTICULARS FINANCIAL YEAR 2019-20 FINANCIAL YEAR 2018-19
Revenue From Operations 6728.46 7187.15
Other income 61.60 71.27
Profit/loss before Depreciation, Finance Costs, Exceptional Items and Tax Expenses 1126.58 1324.97
Less : Depreciation / Amortisation / Impairment 458.17 347.44
Profit / loss before Finance Costs, Exceptional items and Tax Expenses 668.41 977.53
Less : Finance Costs 55.44 51.12
Profit / loss before Exceptional items and Tax Expenses 612.97 926.41
Add : (less) Exceptional Items -22.59 -
Profit / loss before Tax Expenses 590.38 926.41
Less : Tax Expenses (current & Deferred) 162.64 298.20
Profit / loss for the year (1) 427.74 628.21
Total Comprehensive Income / loss (2) -18.99 27.41
Total (1 + 2 ) 408.75 655.62
Balance of profit / loss for earlier years 3853.46 3596.85
Less :Transfer to Reserve -- 40.87
Less : Dividend paid on Equity Shares 167.00 274.34
Less : Dividend Distribution Tax 34.32 56.39
Balance Carried Forward 4079.88 3853.46

HOTEL INDUSTRY AND ECONOMIC FACTORS THAT IMPACTED THE GROWTH OF THE BUSINESS DURING THE YEAR UNDER REVIEW

The Indian tourism and hospitality industry have emerged as one of the key drivers of growth among the services sector in India. Tourism in India has significant potential considering the rich cultural and historical heritage. Tourism is also a potentially large employment generator besides being a significant source of foreign exchange for the country. Indian hospitality industry is the most digitally advanced traveller nation in terms of digital tools being used for planning, booking and experiencing a journey, Indias rising middle class and increasing disposable incomes has continued to support the growth of domestic and outbound tourism.

At the end of the financial year, the lockdown on account of Covid19 pandemic was announced by the Central / State Governments. The Companys hotel and restaurants have been closed from day one of the first lock down (in March 2020) announced by the Central/ State Governments, except for housing guests who are at the hotel on the date of announcement of the lock down. This position continues even today and is expected to continue till detailed guidelines are issued by the government for reopening. The lockdown has had a massive cascading effect with essentially zero revenues while having to bear with fixed costs with a ripple effect on the Companys other operations such as restaurants, gyms, spa etc. The Company has taken steps to meet its working capital demands and is also planning to take steps for cost optimisation at operational levels once the lockdown is lifted and the operations commence. From a financial perspective, the Company has considered the possible effects that may arise out of the still unfolding COVID-19 pandemic on the carrying amounts of its assets. For this purpose, the Company has considered internal and external sources of information up to the date of approval of the Financial Results on 29.6.2020. Based on the current estimates, the Company does not expect any significant impact on such carrying values. However, the actual impact of COVID-19 on the Companys financial position may differ from that estimated as at the date of approval of Financial Results on 29.6.2020.

STATE OF COMPANYS AFFAIRS

During the year under review the company achieved a turnover of Rs.6790.06 lakhs against the corresponding previous year turn over of Rs.7258.42 lakhs. Total expenditure for the period ended as at 31st March, 2020 amounted to Rs.6177.09 lakhs decreased by Rs.154.92.lakhs (2.45%) as compared to the previous year. The Profit (EBITDA) before depreciation, finance cost and tax for the year ended 31st March, 2020 amounted to Rs.1126.58 lakhs as against Rs.1324.97 lakhs over the corresponding period last year. The tax expense including deferred tax for the year ended 31st March, 2020 amounted to Rs.162.64 lakhs. The Profit after tax for the year ended 31st March, 2020 stood at Rs.427.74 lakhs as against profit of Rs.628.21 lakhs over the corresponding period last year. No amount was transferred to General Reserve during the year under review. The company has adopted Ind-AS from the financial year 2017-18.

DIVIDEND

The Board of Directors of the Company has declared an Interim Dividend of Rs.1.20 (12%) per equity share for the financial year ended 31.03.2020 on 14th November, 2019. The total outflow towards interim dividend stood at Rs.172.56 lakhs. No final dividend has been recommended by the Board for the financial year 2019 - 20.

INVESTOR EDUCATION & PROTECTION FUND

During the year under review, unclaimed dividend of Rs.3,50,571.60 and 17902 number of shares were transferred to Investor Education and Protection Fund.

Mr.N.S.Mohan, Company Secretary of the company is appointed as Nodal Officer and Mr.A.C.Murali, Finance Officer is appointed as Deputy Nodal Officer, as per the provisions of Companies Act, 2013 relating to IEPF and the above details are available in the official website of the company i.e. www.saverahotel.com.

DEPOSIT FROM PUBLIC

The Company has not accepted any fixed deposits under the provisions of the Companies Act, 2013.

FINANCIAL HIGHLIGHTS OF THE COMPANY

The financial highlights of the company for last 10 years are furnished in the Annual Report.

FINANCIAL INFORMATION AND DETAILS OF ASSOCIATE COMPANY

The Financial Statement of the company is prepared in accordance with the Ind AS under the provisions of the Companies Act, 2013 and forms part of the Annual Report. The companys 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 meeting dates are on 29.05.2019, 13.08.2019, 14.11.2019, 23.01.2020, and 14.02.2020.

The Audit Committee was constituted by the company with three members. The audit committee consists of two Independent Directors and one Non Executive and non Independent Director. Mr.S.Sridhara Rao, is the Chairman of the committee and Mr.A.Sudhakar Reddy and Mr.A.Tarun Reddy are the members of Audit Committee. The Committee met five times during the year under review on 29.05.2019, 13.08.2019, 14.11.2019, 23.01.2020, and 14.02.2020.

Pursuant to the provisions of the Companies Act, 2013, Mrs.A.Nivruti, Director retires by rotation and is eligible for reappointment. The Board has recommended her appointment and accordingly resolution seeking approval of the members for her appointment has been included in the notice of the forthcoming Annual General Meeting of the company along with her brief profile.

The Key Managerial Personnel of the company presently are Mr. A. Ravikumar Reddy, Managing Director, Mr. N. S. Mohan, Company Secretary and Mr. CH Mahesh Kumar, Chief Financial Officer. During the year under review, Mr.D.V.M.Sambasiva Rao retired as Chief Financial Officer on 31.7.2019. In his place, Mr.CH. Mahesh Kumar was appointed as Chief Financial Officer w.e.f. 1.8.2019 by promotion from the existing position of Accounts Officer.

DIRECTORS RESPONSIBILITY STATEMENT

On the basis of internal financial controls and systems relating to compliance maintained by the company, work done by the internal, statutory and secretarial auditors, the reviews performed by the management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the companys internal financial controls were adequate and effective during the financial year 2019-20.

Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, and based on the representations received from the management, the directors hereby confirm that:

i. In the preparation of the Annual Accounts for the year 2019-20, the applicable accounting standards have been followed and there are no material departures;

ii. They 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 31st March,2020 and of the profit of the company for that period;

iii. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

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 and that such internal financial controls are adequate and operating properly;

vi. They have devised proper systems to ensure compliance with the provisions of all applicable 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 the complexity 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 Audit Committee and the Board of Directors.

VIGIL MECHAMISM

The company had established Vigil Mechanism for its Directors & employees to report their genuine concerns or grievances.

SECRETARIAL STANDARDS

The company has complied with Secretarial Standards I & II issued by ICSI.

SECRETARIAL AUDITOR

Mr.R.Balasubramaniam, Practicing Company Secretary has been appointed as the Secretarial Auditor during the year. But due to his sudden demise, M/s. A.K.Jain Associates, Company Secretaries have been appointed as the Secretarial Auditor to carry out the Secretarial Audit for the year 2019-20. The Secretarial Audit Report given by them shall form part of this report.

STATUTORY AUDITORS

In accordance with the provisions of Section 139 and 142 of the Companies Act, 2013, and the rules framed there under, M/s. S.Venkatram & Co., LLP, Chartered Accountants,218 TTK Road, Chennai 600 018 were appointed as statutory auditors of the company for a period of 5 years to hold the office from the conclusion of the 48th Annual General Meeting of the company held on 11.08.2017 till the conclusion of the 53rd Annual General Meeting(AGM) on the remuneration as may be fixed by the Board of Directors of the company.

SIGNIFICANT AND MATERIAL ORDERS

There were no significant and material orders passed by the regulators or courts or tribunals affecting the going concern status and future operations of the company. However, an inspection under section 206(5) of the Companies Act, 2013 was carried out by the Ministry of Corporate Affairs and the Company has replied to the queries raised by the Inspecting Officer and regularized the non-compliances by making an application for compounding of offences to the Regional Director, Ministry of Corporate Affairs, who passed the necessary Orders.

INDEPENDENT DIRECTORS DECLARATION

Mr. A. Sudhakar Reddy and Mr. S. Sridhar Rao who are independent directors, have submitted a declaration that each of them meets the criteria of independence as provided in sub-section (6) of section 149 of the Act. Further , there is no 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 the Statutory Auditors and Secretarial Auditors Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013.

The company has not borrowed any loan, has not given any guarantee and has not made any investment during the year under review

TRANSACTIONS WITH THE RELATED PARTIES

All related party transactions that were entered into during the financial year were in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations 2015.

Further all contracts or arrangements with related parties entered into during the financial year ended 31-3-2020 were on an arms length basis and in the ordinary course of business. The particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 are furnished in Form AOC-2.

RISK MANAGEMENT

The Board takes responsibility in overseeing the risk management plan for the company. The Risk Management Policy facilitates in identifying the risks associated with the operations of the company and in giving suitable measures/solutions to mitigate the same. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis.

CORPORATE SOCIAL RESPONSIBILITY.

The CSR Policy of the company and the details about the initiatives taken by the company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed in Annexure 1 to this Report . Further details of composition of the Corporate Social Responsibility Committee and other details are provided therein. During the year under review. The CSR Committee meetings were held on 29.05.2019, 13.08.2019, 14.11.2019, and 14.02.2020.

NOMINATION AND REMUNERATION POLICY

The companys policy on directors appointment and remuneration and other matters provided in section 178(3) of the Companies Act, 2013 has been disclosed in the corporate governance report, which forms part of the directors report.

BOARD EVALUATION

The performance evaluation of the Board as a whole, performance of non independent directors, and the performance of the Board Chairman were conducted and the same was based on the questionnaire and feed back from all directors on the Board.

While undertaking the Board evaluation, the company also followed the required principles 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.

LISTING

The equity shares of the Company are listed on Bombay Stock Exchange Limited (BSE). and the listing fees have been paid.

CORPORATE GOVERNANCE

In terms of Regulation 34 (2) & (3) of SEBI (LODR) Regulations 2015, a report on Corporate Governance, the Practicing Company Secretary certificate on the compliance of conditions of Corporate Governance and the report on Management Discussion and Analysis form part of the Annual 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 exercising the eco practices and has changed almost 99% of its lighting with LED lights reducing power consumption by 85% and the heat emission energy becomes very low thereby through the STP, the sewerage and sewage water is treated and the treated water is recirculated for flushing system ,cooling towers and gardens. The company also installed rain water harvesting system for collecting the rain water. The company also installed organic waste convertor machine in which the organic wastes are converted into composite manure

Hotel being a service industry, technology absorption, transfer etc., are not applicable.The Resilience of the companys Backbone Systems consists of Servers, VPN and Many Tools in companys disposal made possible to successfully do the Day to Day Operations sailed smoothly despite severe restrictions placed on movement of Staff during Lockdown period.

The company solemns pledged to exceed the expectations in every front serving the companys Valuable Clients Experience the Premiumness as always.

Earnings in convertible foreign exchange for the year amounted to Rs. 405.46 lakhs for the services rendered to Foreign Tourists (Previous year Rs. 422.78 lakhs). Expenditure in Foreign Currency is Rs. 56.67 lakhs (Previous Year Rs. 44.68 lakhs ).

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti-Sexual harassment Policy in line with the requirement 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 and trainees ) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2019-20.

Number of complaint received during the year NIL
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 in Annexure 2. in the prescribed form MGT -9 which forms part of this report. A copy of the Annual Return 2018-19 is placed on the website of the company and can be accessed via weblink https://www.saverahotel.com/wp-content/uploads/2020/07/Form_MGT-7_9_Cssd(2)FINAL.pdf

PARTICULARS OF EMPLOYEES

The information required under section 197(12) of the Act, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the Annexure 3 to this report

Your directors wish to place on record their appreciation for the good services rendered by the employees at all levels of the company.

GENERAL :

Your Directors state that no disclosure or reporting is required in respect of the following 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 any scheme.

ACKNOWLEDGEMENTS

The directors would like to thank the Central Bank of India, and other financial institutions for extending their financial support. They further express their thanks to the Central Government, State Government and other stakeholders for their patronage, support and guidance.

FOR AND ON BEHALF OF THE BOARD

CHENNAI A.Ravikumar Reddy A.Nina Reddy
29 June, 2020 Managing Director Joint Managing Director