Savita Oil Technologies Ltd Directors Report.

Your Directors have pleasure in presenting the Fifty-eighth Annual Report, together with 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 228,091 183,418
Profit before Depreciation & Tax 18,624 18,916
Depreciation 2,353 2,588
Exceptional Income Nil Nil
Profit/(Loss) before Tax 16,271 15,608
Provision for Taxation:
Current 5,035 4,825
Deferred (74) (338)
Provision for Taxation no longer required (118) (1,498)
Profit/(Loss) for the year after Tax 11,427 12,620
Other Comprehensive Income (66) (11)
Balance brought forward from previous year 59,437 48,098
Profit available for appropriation 70,798 60,707
Appropriations:
Dividend 358 -
Tax on Dividend 74 -
General Reserve 1,150 1,270
Balance carried to Balance Sheet 69,216 59,437

2. SHARE CAPITAL

Your Directors at the Board Meeting held on 29th May, 2019 had announced buyback of upto 2,51,000 (Two Lac Fifty-one Thousand) fully paid equity shares of your Company of face value of Rs 10/- only (Rupees Ten only) each representing upto 1.75% of the total number of equity shares, from all the equity shareholders/beneficial owners of your Company on a proportionate basis through the tender offer using stock exchange mechanism at a price of Rs 1,605/- (Rupees One Thousand Six Hundred and Five only) (including premium of Rs 1,595/-) per equity share for an aggregate maximum amount of upto Rs 40,28,55,000/- (Rupees Forty Crore Twenty-eight Lac Fifty-five Thousand only). The exercise of share buyback has been completed on 6th August, 2019 post which, the paid-up equity share capital of your Company stands at Rs 14,07,10,830/- as on date.

3. DIVIDEND

Your Directors at the Board Meeting held on 29th May, 2019 have recommended a dividend @25% (Rs 2.50 per equity share of Rs 10/- each), same as for the previous year, on the paid up Equity Share Capital of your Company.

4. RESERVES

The Reserves of your Company stood increased to Rs 837 crore at the end of the year under review as against Rs 728 crore for the previous year.

5. OPERATIONS

During the year under review, your Company achieved record sales volume at 3,46,256 KLs/MTs as against 3,00,303 KLs/MTs achieved during 2017-2018. The volume growth for your Company was 15.30% which is more than double the underlying growth of the user industry. Your Companys sales turnover during the year 2018-2019 also reached an all-time high of Rs 2,24,583 lac against Rs 1,80,861 lac in the year 2017 2018. However, your Companys net profit was slightly lower at Rs 11,427 lac as against Rs 12,620 lac during the previous year.

During the year under review, Crude Oil and Base Oil prices saw steady rise in the international markets. This was coupled with a steady depreciation in the Indian Rupee during the first half of the year 2018

2019. As a result of both these factors, the cost of raw materials was adversely affected which in turn affected the bottom line of your Company. Going forward, the uncertainty in the global macroeconomic and political scenarios together with the on-going trade and tariff wars between the worlds superpowers are bound to have serious impact on the global economies including India.

During the Financial Year 2018-2019, your Companys Wind Power Plants situated in the states of Maharashtra, Karnataka and Tamil Nadu generated a total of 89.11 MU against 90.37 MU generated in the previous year. During the year, your company did not add any new projects to its Wind Portfolio.

6. PUBLIC DEPOSITS

Your Company has not accepted any deposits from the public or its employees during the year under review.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 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 of your Company regarding compliance of the conditions of Corporate Governance pursuant to requirements as stipulated by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed hereto and forms part of this Report.

9. DIRECTORS

Mr. S. R. Pandit, Mr. N. B. Karpe and Mr. H. A. Nagpal, who were your Companys Independent Directors since more than a decade, retired w.e.f. closing hours of 31st March, 2019 due to completion of their tenure. Further, Mr. C. V. Alexander, Whole-time Director of your Company also retired w.e.f. closing hours of 30th April, 2019, after associating with your Company for more than 5 decades.

Your Directors appreciate their valuable contribution and guidance over the years to the overall growth of your Company. Your Directors also compliment them for their focussed and determined efforts for the wellbeing of your Company and express profound gratitude towards their contribution over the years. Your Directors wish each one of them individually the very best in their future endeavours.

Mrs. Meghana Dalal, who was appointed as an Independent Director of your Company on 31st October, 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 Dalal as an Additional Director to hold office as an Independent Director of your Company for a period upto the conclusion of the ensuing Annual General Meeting of your Company.

(2) At its Meetings held on 28th January, 2019 and 29th May, 2019 and after reviewing the declarations submitted by Mr. Hariharan Sunder and Mr. Chandrashekhar R. Gupte, formed opinions that they meet with the criteria of Independence as per Section 149 (6) of the Companies Act, 2013 ("the Act") and the rules made thereunder and also meet the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and accordingly appointed them as Additional Directors to hold office as Independent Directors of your Company w.e.f. 28th January, 2019 and 29th May, 2019 respectively upto the conclusion of the ensuing Annual General Meeting of your Company.

(B) At its meeting held on 12th August, 2019, has accepted the resignation of Mr. Chandrashekhar R. Gupte due to personal reasons.

(C) At its meeting held on 12th August, 2019, has accepted the letter received from Ms. Simran G. Mehra, who is to retire at the ensuing Annual General Meeting, not offering herself to be re-appointed as a Director at the ensuing Annual General Meeting, on account of her other commitments.

Mrs. Meghana Dalal (DIN: 00087178) is a Commerce Graduate and a Fellow Member of the Institute of Chartered Accountants of India. She has experience in professional practice for more than 3 decades specialising in Management of Corporate Emoluments across various Industries. She is also a Director of Chetan Dalai Investigation and Management Services Private Limited.

Mr. Hariharan Sunder (DIN: 00020583) is a Bachelor of Commerce and a Chartered Accountant. He has over 30 years of experience in finance, taxation, accounts, legal, secretarial, international business and general corporate management. He had started his working career with KEC International Limited and has worked in corporates like Raymond Limited, Raymond Synthetics Limited, Josts Engineering Company Limited and Shogun Organics Limited.

Chandrashekhar R. Gupte (DIN: 00009815) is a graduate in Science and a Fellow Member of the Institute of Chartered Accountants of India. He was the Managing Director of Nocil Limited from 1st August, 2005 and retired therefrom after serving for more than 4 decades on 31st July, 2017. He had joined the Rubber Chemicals Division of Nocil Limited from its inception in 1976 as Head of Internal Audit and held important positions as head of Finance, Head of Sales and Marketing and eventually as Chief Executive of the said Division from 1995.

Your Company has received the requisite disclosures/ declarations from Mrs. Meghana Dalal and Mr. Hariharan Sunder as required under the relevant provisions of the Companies Act, 2013. Your Company has also received Notices under Section 160 (1) of the Companies Act, 2013 signifying intentions to propose their candidatures for the office of Directors of your Company.

Your Company has also received declarations from all the Independent Directors of your Company confirming that they meet with the criteria of Independence as prescribed under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Profiles and other details, as required under the Act and SEBI (Listing Obligations and Disclosure 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 of your 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 Director, Mr. 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 the Company.

Remuneration and other details of the said Key Managerial Personnel for the financial year ended 31st March, 2019 are mentioned in the Extract of the Annual Return which is attached to the Boards Report.

11. BOARD COMMITTEES

The Board of Directors of your Company at its Meeting held on 28th January, 2019 re-constituted various Committees considering the forthcoming retirement of certain Directors of your Company, in compliance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 namely, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee and CSR Committee.

All decisions pertaining to the constitution of Committees, appointment of Members and fixing 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 of meetings held during the financial year and attendance at meetings, are provided in the Corporate 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 Meetings were held on 11th May, 2018, 3rd August, 2018, 3rd November, 2018 and 28th January, 2019. The maximum time gap between any two consecutive meetings did not exceed one hundred and twenty days.

- Audit Committee met four times on 11th May, 2018, 3rd August, 2018, 3rd November, 2018 and 28th January, 2019 during the year 2018-2019.

- Stakeholders Relationship Committee met four times on 11th May, 2018, 3rd August, 2018, 3rd November, 2018 and 28th January, 2019 during the year 2018-2019.

- Nomination and Remuneration Committee met three times on 2nd July, 2018, 3rd August, 2018 and 28th January, 2019 during the year 2018-2019.

- Risk Management Committee met two times on 11th May, 2018 and 3rd November, 2018 during the year 2018-2019.

- CSR Committee met four times on 11th May, 2018, 3rd August, 2018, 3rd November, 2018 and 28th January, 2019 during the year 2018-2019.

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 have been followed along with proper explanation relating to material departures, if any;

b) the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2019 and of statement of profit and loss of your Company for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets 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 Company and such controls are adequate and are operating effectively;

f) proper systems to ensure compliance with the provisions of all applicable laws have been 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 the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, annual performance evaluation of the Directors as well as of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee for the year 2018-2019 was carried out by your Company.

For the year 2018-2019, the performance evaluation of the Independent Directors was carried out by the entire Board and the performance evaluation of the Chairman and Non-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 30th March, 2019, interalia, to discuss:

i) Evaluation of performance of Non-Independent Directors and the Board of Directors of your Company as a whole.

ii) Evaluation of performance of the Chairman of your Company, taking into views of Executive and Non-Executive Directors.

iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

16. MANAGERIAL REMUNERATION

The information required under Rule 5 (1) of the Companies (Appointment and Remuneration 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 upon request by any Member of your Company. In terms of Section 136 (1) of the Companies Act, 2013, the Report and the Accounts are being sent to the Members excluding the aforesaid Annexure. Any member interested in obtaining copy of the same may write to the Company Secretary 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 of Directors of your Company in its Meeting held on 29th May, 2014 continues to be adopted by your Company. The Remuneration Policy of your Company is attached to this Report as a separate annexure.

18. CSR POLICY

The Corporate Social Responsibility Policy recommended by the CSR Committee and approved by the Board of Directors of your Company in its Meeting held on 29th May, 2014 continues to be adopted by your Company. The same is available on the website www.savita.com of your Company.

The disclosure relating to the amount spent on Corporate Social Responsibility activities for the financial year ended 31st March, 2019 is attached to this Report as a separate annexure.

19. LISTING AND OTHER REGULATORY ORDERS AGAINST YOUR COMPANY, IF ANY

Your Companys shares continue to be listed on BSE Limited and National Stock Exchange of India Limited. The Listing Fees to these two Stock Exchanges for the year 2019-2020 have been paid by your Company on time.

There were no significant or material orders passed by any of the regulators or courts or tribunals impacting the going concern status and your Companys operations in future.

20. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, your Company has transferred Rs 16.27 lac towards unclaimed Dividend as against Rs 10.44 lac towards unclaimed Dividend in the previous year to the Investor Education and Protection Fund, which amount was due and payable for the year 2010-2011 and remained unclaimed and unpaid for a period of 7 years, as provided in Section 125 of the Companies Act, 2013.

Your Company has intimated to the Shareholders who had not claimed dividends for the past 7 years to claim the dividends forthwith failing which their shares would stand transferred to the IEPF Authority after 7th August, 2019.

21. KEY FINANCIAL RATIOS

Key Financial Ratios for the financial year ended 31st March, 2019, are provided in the Management Discussion and Analysis Report which is annexed hereto and forms a part of the Boards Report.

22. STATUTORY AUDITORS

The Members of your Company had, at the 56th Annual General Meeting held on 29th September, 2017 approved the appointment of G. D. Apte & Co., Chartered Accountants, Mumbai, (Registration No.100515W) as the Statutory Auditors of your Company, to hold office from the conclusion of that AGM until the conclusion of the 61st Annual General Meeting.

23. AUDITORS REPORT

The Auditors Report to the Members on the Accounts of your Company for the financial year ended 31st March, 2019 is attached to this Report and does not contain any qualification, reservation or adverse remark.

24. SECRETARIAL AUDIT REPORT

Secretarial Audit for the year 2018-2019 was conducted by MP & Associates, Company Secretaries in Practice in accordance with the provisions of Section 204 of the Companies Act, 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 activities than the prescribed one during the year 2018-2019 as certain projects were in the process of being identified and evaluated. The Cost Auditors, Sevekari, Khare & Associates, appointed at the Annual General Meeting held on September 29, 2017 informed their inability to conduct cost audit for the year 2017-2018 to the Company and hence, the Company did not file Form CRA-2 for intimation of their appointment to Registrar of Companies and the appointment of Cost Auditors in casual vacancy was delayed. The Company could not file Form IEPF-4 with IEPF Authority due to technical reasons pertaining to the website of the IEPF Authority and the Company has already communicated about the same to IEPF Authority. The Company has filed Forms IEPF-6 and IEPF-7 with IEPF Authority for the year 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 Board of Directors of your Company at its meeting held on 29th May, 2019 has appointed Kale & Associates, Cost Accountants as Cost Auditors of your Company for the year 2019

2020. In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors has to be ratified by the Members. Accordingly, necessary resolution is proposed at the ensuing Annual General Meeting for ratification of the remuneration payable to the Cost Auditors for the year 2019-2020.

26. RISK MANAGEMENT

In accordance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has a Risk Management Committee in operation to oversee the Risk Management of your Company in line with your Companys Risk Framework and a detailed Policy to cover risk assessments, identification of various significant risks and mitigation plans to address the identified risks. Your Companys Risk Management Policy 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 and complexity of its operations. The scope and authority of the Internal Audit function is defined and reviewed by the Audit Committee as a continuing exercise. Your Company also hires services of external agency for periodically carrying out internal audit in areas identified by the Audit Committee from time to time. Such external agency reports the results of the internal audits to the Audit Committee which then takes stock of significant audit observations and corrective actions are then suggested to be taken thereon by the concerned departments. The actions taken are reviewed by the Audit Committee at their subsequent meetings.

28. VIGIL MECHANISM

Your Company has a vigil mechanism policy to deal with instances of fraud and mismanagement, if any. The Whistle Blower Policy framed for the purpose is uploaded on the website www.savita.com of your Company.

29. RELATED PARTY TRANSACTIONS

The Audit Committee scrutinises and approves all related party transactions attracting compliance under Section 188 and/or Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 before placing them for Boards approval. Prior omnibus approval of the Audit Committee is also sought for transactions which are of a foreseen and repetitive nature.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors of your Company is uploaded on the website www.savita.com of your Company.

The disclosures on related party transactions too are made in the Financial Statements of 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 is annexed 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 Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

32. INDUSTRIAL RELATIONS

The industrial relations continued to be generally peaceful and cordial during the year.

33. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to the Conservation of Energy, Technology Absorption and Foreign 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.

34. ACKNOWLEDGEMENTS

Your Directors record their heartfelt appreciation for the encouragement, support and co-operation received from members, government authorities, banks, customers and all other stakeholders and also wish to thank them for the trust reposed in the Management. Your Directors are also grateful to all the employees for their commitment and contribution to the welfare of your Company.

For and on behalf of the Board

Gautam N. Mehra
Mumbai Managing Director
12th August, 2019 (DIN:00296615)