Sarda Energy & Minerals Ltd.
|BSE: 504614||Sector: Metals & Mining|
|NSE: SARDAEN||ISIN Code: INE385C01013|
|BSE LIVE 15:43 | 24 Nov||485.25||
|NSE 15:53 | 24 Nov||486.60||
|Mkt Cap.(Rs cr)||1,749|
|Mkt Cap.(Rs cr)||1749.33|
Sarda Energy & Minerals Ltd. (SARDAEN) - Director Report
Company director report
Your Directors are pleased to present the 43rd Annual Report on business and operationsof your Company for the financial year ended 31st March 2016.
(Rs. in crore)
Review of performance
Your Company has achieved highest ever production of power steel billet wire rod andwire. Inspite of high GDP and increase in steel consumption recorded in the country theselling prices of all products recorded falling trend due to slowdown in the globaleconomy and increased imports. This has also affected fresh investment particularly inprivate sector affecting steel demand putting severe pressure on the margins in steelindustry. To protect the industry in February 2016 the Govt. imposed minimum importprice which helped in improving price realisations. After de-allocation of coal minesw.e.f. 1st April 2015 the year also witnessed suspension of operations in iron ore mineowing to naxal attack resulting into casualty of one employee of the company. The closureof mine is temporary and matter is being resolved through proper channels. Your companyfocused on cost control and process improvements to sustain the operations in challengingtimes. This has helped in reporting satisfactory performance.
Inspite of several constraints your Company has been regular in meeting its financialcommitments to banks and institutions. The company has serviced all its debt obligationson time. The Debt-Equity ratio of your company as on 31st March 2016 stood at 0.23:1 asagainst 0.34:1 in the previous year. A detailed analysis of the performance is given inthe Management Discussion and Analysis Report appended hereto.
The Company has settled an international arbitration matter out of court wherein theCompany received EURO 8.5 million in settlement during the current year. There was nochange in the nature of the business of the Company.
Your Directors declared and paid interim dividend of Rs. 2/- (i.e. 20%) per equityshare in the Month of March 2016 (last year final dividend of Rs. 3/- per equity share.The Directors recommend the interim dividend to be the final dividend for the year ended31st March 2016.
During the year your Company has transferred the unpaid dividend amount in respect ofthe F.Y. 2007-08 to the Investor Education and Protection Fund.
During the year a sum of Rs. 1041 lac has been transferred to General Reserves fromDebenture Redemption Reserve on account of partial redemption of the Non-convertibleDebentures issued by the Company.
Subsidiaries / Controlled Entities / Joint Ventures
During the year there was no change in the subsidiaries. Your Company made additionalinvestments in Madhya Bharat Power Corporation Limited. A brief on theperformance/business operations of subsidiaries/controlled entities/joint venturesconsolidated with SEML is given hereunder:
Sarda Energy & Minerals Hongkong Limited Hongkong (SEMHKL) is a whollyowned subsidiary functioning as global investment arm of your Company. During the yearunder review the subsidiary reported a net loss of Rs. 5.71 crore as against net profitof Rs. 10.83 crore in the previous year. The loss is mainly on account of mark to marketof investments held for trading. The company has paid a dividend of USD 2.8 Million duringthe year (Pr. Year USD 2 Mn).
Sarda Global Venture Pte. Limited Singapore (SGV) a wholly owned subsidiaryhas acquired economic interest in coal mines in Indonesia but the mining project has notseen any progress during the year. The Company is evaluating the various options for itsstake in the coal mine in the best interest of all stake holders. During the year underreview the subsidiary reported a net loss of ' 0.82 crore (PY ' 0.65 crore) mainly onaccount of administrative and financial costs
Sarda Metals & Alloys Limited (SMAL) a wholly owned subsidiary is operating2 x 33 MVA Ferro Alloys plant backed by 80 MW captive thermal power plant. During theyear power generation was 612.83 MU as against 601.50 MU in the previous year. The ferroalloys production (including MnO slag) stood at 49955 MTs as against 57143 MT in theprevious year. The company's exports stood at Rs. 87 crore as against Rs. 139 crore in theprevious year. The production and export of ferro alloys was curtailed due to adversemarket conditions. Power accounted for more than half the revenue of the Company whileferro alloys contributed around 48% of the revenue.
Inspite of adverse market conditions the company has reported profit before tax of Rs.4.86 crore against Rs. 7.20 crore reported in the previous year. The profit after tax forthe year is negative Rs. 2.56 crore because of derecognition of MAT credit of Rs. 4.45crore. The company has derecognise MAT credit looking into the substantial amount ofUnabsorbsed Depreciation as per the Income Tax Act.
Sarda Energy Limited (SEL) a wholly owned subsidiary was incorporated as an SPVto put-up 1320 MW super critical IPP thermal power project in Chhattisgarh. In view ofinordinate delay in acquisition of land delay in getting various approvals and changedeconomic scenario particularly for power sector the company has abandoned the project. Inview of this during the year under review the subsidiary has bought back 25% of theequity shares as permitted by the prevailing guidelines out of the funds got released onabandonment of the project. Balance amount has been invested in MBPCL and loans to otherentities. During the year under review the subsidiary reported a net profit of Rs. 4.16crore as against net loss of Rs. 6.07 crore in the previous year.
Parvatiya Power Limited (PPL) is operating 4.8 MW Loharkhet Hydro Power projectin Bageshwar district of Uttarakhand. The Company has supplied 182.60 lac KWh (PreviousYear 203.42 lac KWh). The generation/supply were adversely affected because of constraintsin transmission line. A new 132 KV line is under installation. The Company has repaid infull the term loan taken for the project. During the year the Company has earned profitafter tax of Rs. 2.52 crore (Previous Year Rs. 2.87 Crore). As of 31st March 2016 theCompany has invested Rs. 18.44 crore in Sarda Dairy & Food Products Limited for a42.78% stake in the company.
Your Company continues to hold 51% stake in PPL.
Madhya Bharat Power Corporation Limited (MBPCL) is implementing 96 MW (2X48)Rongnichu HEP near Gangtok in East Sikkim. It is a run of the river scheme a CDMregistered project. The civil works of the project is going on in full swing with morethan half of excavation works of critical underground tunnel completed. PFC the leadlender and IDBI Bank has approved revised project cost and scheduled COD. Approval of PFSanother lender is expected shortly. Your Company alongwith SEL has invested Rs. 156.72crore as of 31st March 2015 and holds 76.74% stake in the project (63.54% directly and13.20% through its wholly owned subsidiary Sarda Energy Limited) as compared to 67.59 % inprevious financial year. The project is expected to be operational in the F.Y. 2018-19.During the year under review the subsidiary reported a net loss of Rs. 2.35 crore asagainst net loss of ' 0.03 crore in the previous year. The loss increased due to taxexpenses related to earlier years.
Sarda Hydro Power Private Limited (SHPPL) Sarda Hydro Power Private Limited(SHPPL) has been allotted 24 MW Kotaiveera and 9 MW Ganeshpur small hydro projects in thestate of Chhattisgarh. The projects are in clearance stage. Your Company continues to hold60% stake in this company.
Raipur Fabritech Private Limited (RFPL) has been incorporated to undertake steelfabrication activities at the site of closed steel plant of your Company. The company isalso exploring possibility of developing a logistic park. The Company is yet to startoperations. Your Company holds 52.38% stake in RFPL.
Raipur Industrial Gases Private Limited (RIGPL) has been incorporated toundertake activities related to production of industrial gases. The company is yet tostart operations. Your Company holds 51% stake in RFPL.
Natural Resources Energy Private Limited (NREPL) is an SPV to carry on thebusiness of development of mines and minerals generation and trading of power andinfrastructure development. The company had participated in the auction of coal mines asan SPV. The entire share capital of the company is held by SEML and its wholly ownedsubsidiary SMAL.
Chhattisgarh Hydro Power LLP (CHP LLP) is pioneer in the state of Chhattisgarhfor implementation of Hydro Power projects under IIP route. The firm has been allottedfour run of river scheme small hydel power projects with total installed capacity of 77MW. The construction of 24 MW Gullu SHP in Jashpur District is under progress. The projectis likely to commission ahead of Scheduled COD of April 2017. The project is eligible forMNRE subsidy and other incentives for renewable projects. The other projects are indifferent stages of clearances.
Your Company has made an additional contribution of Rs. 2.67 crore during the yeartowards its 60.92% share in the LLP.
Shri Ram Electricity LLP (SRELLP) was incorporated as a special purpose vehicle(SPV) for setting up a captive thermal power plant of 40 MW in the State of Chhattisgarh.In view of the cancellation of coal linkage for the power project the LLP has dropped theproject. During the year under review the entity reported a net profit of ' 0.08 crore asagainst net loss of ' 0.50 crore in the previous year. Your Company continues to hold 51%stake in SRELLP.
Raipur Infrastructure Company Limited (RICL) operates a private Railway Sidingin Mandhar Raipur. During the year 2015-16 the Company has earned net profit of Rs. 2.62crore as against Rs. 1.02 crore in the previous year. The company is pursuing with theRailways for getting refund of Rs. 5 crore deposited as security for siding at Odishawhich project has been dropped by the company. Your Company continues to holds one thirdshare in the Joint Venture.
Madanpur South Coal Company Limited (MSCCL) was SPV for the Madanpur South coalblock allotted in consortium. The Supreme Court has cancelled all coal block allotmentsmade by the Government through Screening Committee and govt. dispensation. The Company hasalso received back the Bank guarantee from the Ministry of Coal Govt. of Indiafurnished by it as security for development of coal mine. The SPV holds certain assetsincluding land acquired for the project. The SPV would be wound-up after disposal ofthese assets. The SPV has bought back part of the equity shares during the year underreview out of the surplus funds. Your Company holds a 20.63% stake in the joint venture.
Godawari Natural Resources Limited (GNRL) is an SPV for acquisition anddevelopment of mines and minerals generation and trading of power and infrastructuredevelopment. The Company remains invested in the JV for participating in auction foracquisition of coal mine jointly with others to meet the prescribed eligibility criteria.Your Company continues to hold 29.98% stake in GNRL.
A report on the performance and financial position of each of the subsidiariesassociates and joint venture companies as per the Companies Act 2013 is provided as partof the Consolidated Financial Statements and hence not repeated here for the sake ofbrevity. The Policy for determining material subsidiaries as approved by the Board may beaccessed on the Company's website www.seml.co.inunder the head corporate governance/policies under the Investors' section.
Consolidated financial statements
The consolidated financial statements presented by the Company include financialinformation of its subsidiaries prepared in compliance with applicable AccountingStandards.
The annual accounts and related information of the subsidiary companies are open forinspection by any member/investor at the Registered Office of your Company and thesubsidiary concerned and your Company will make available these documents/details uponrequest by any member of the Company who may be interested in obtaining the same.
In accordance with Section 136 of the Companies Act 2013 the Audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on our website
Your Company treats its human capital as the most valued asset and as a gesture of itsfeeling your Company has implemented SEML ESOP Scheme 2012 for the employees andDirectors of your Company and its subsidiaries. As on 31st March 2016 333360 optionshave been vested at a price of Rs. 125/- per share. Out of this 128319 options have beenexercised by the employees out of which 25966 options were exercised during the F.Y.2015-16.
The disclosures required to be made in the Directors' Report in respect of theaforesaid ESOP Scheme are contained in Annexure A forming part of the Directors' Report.
In accordance with the provisions of the Act and the Articles of Association of theCompany Mrs. Uma Sarda Director of the Company retire by rotation at the ensuing AnnualGeneral Meeting and being eligible has offered herself for reappointment.
Mr. G.D. Mundra Wholetime Director resigned w.e.f. 1st April 2016. The Board takes onrecord its deep appreciation of the services rendered by Mr. G. D. Mundra in variouscapacities during his nearly 29 years long association with the Company/group.
Further subject to approval of members in the ensuing Annual General Meeting Mr. P KJain CFO of the Company has been appointed as Additional and Whole-time Director for aterm of five year w.e.f. 1st June 2016 liable to retire by rotation. Necessaryresolution is proposed for approval of the members in the general meeting.
Brief profile of the Directors proposed to be appointed / re-appointed nature of theirexpertise in specific functional areas names of the companies in which they holddirectorships and shareholding are provided in the Corporate Governance Report formingpart of the Annual Report.
During the year under review the members approved the re-appointment of Mr. PankajSarda as Director liable to retire by rotation and re-appointment of Mr. K.K. Sarda asChairman & Managing Director not liable to retire by rotation.
Your Company has received declarations from all the Independent Directors of theCompany confirming that they meet the criteria of independence as prescribed under theCompanies Act and the Listing Regulations.
Pursuant to the provisions of the Companies Act and the corporate governancerequirements as prescribed under the Listing Regulations the Board of Directors("Board") has carried out an annual evaluation of its own performance and thatof its Committees and individual Directors. The performance of the Board and individualDirectors was evaluated by the Board seeking inputs from all the Directors. Theperformance of the Committees was evaluated by the Board seeking inputs from the CommitteeMembers. The Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual Directors. A separate meeting of Independent Directors wasalso held to review the performance of Non-Independent Directors; performance of the Boardas a whole and performance of the Chairperson of the Company taking into account theviews of Executive Directors and Non-Executive Directors. The evaluation of IndependentDirectors was carried out without the presence of concerned Director. This was followed bya Board meeting that discussed the performance of the Board its Committees and individualDirectors. Key criteria's for performance evaluation are given in Annexure B to Directors'Report.
Your Company follows a policy on remuneration of Directors Key Managerial Personnel(KMP) Senior Management Personnel (SMP) and other employees of the Company. The policy isapproved by the Nomination & Remuneration Committee of the Company. RemunerationPolicy for Directors Key Managerial Personnel and other employees is marked as Annexure Cto Directors' Report.
Your Company with the approval of Nomination & Remuneration Committee has adopted apolicy on Board diversity and the recommendation of candidature for Board appointment willbe based on merit that complements and expands the skills experience and expertise of theBoard as a whole taking into account gender age professional experience andqualifications cultural and educational background and any other factors that the Boardmight consider relevant and applicable from time to time towards achieving a diverseBoard. The criteria for determining Qualification positive attributes and Independence ofDirector is enclosed as Annexure D to Directors' Report.
Familiarization programmes for Board Members
Your Company provides information to familiarize the Independent Directors with thestrategy operations and functions of the Company. The Board members are provided withinformation/ presentations and are given the opportunity to interact with the SeniorManagement of your Company to help them to understand the Company's strategy businessmodel operations products markets organization structure finance human resourcestechnology quality facilities and risk management and such other matters as may arisefrom time to time.
The Directors get an opportunity to visit Company's plants where plant heads appraisethem of the operational and sustainability aspects of the plants to enable them to havefull understanding on the activities of your Company and initiatives taken on safetyquality CSR sustainability etc. At various Board meetings during the year presentationsare made to the Board on safety health and environment and sustainability issue riskmanagement company policies changes in the regulatory environment applicable to thecorporate sector and to the industry in which it operates. Quarterly presentations onoperations made to the Board include information on business performance operationssafety market scenario financial parameters working capital management fund flowssenior management change major litigation compliances subsidiary informationdonations regulatory scenario etc.
The policy on familiarization programmes for Independent Directors is posted on thewebsite of the Company www.seml. co.in and can be accessedunder the head corporate governance/policies under the Investors' section.
Directors' Responsibility Statement
Your Directors state that :
a) in the preparation of the annual accounts for the year ended 31st March 2016 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2016 and of the profitof the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Key managerial personnel
During the year there was no change in the Key Managerial Personnel. Mr. Padam KumarJain has been elevated to the position of Wholetime Director w.e.f. 1st June 2016. Heshall also be continuing as Chief Financial Officer of the Company.
Auditors and Auditors' Report Statutory Auditors
M/s. O.P. Singhania & Co. Chartered Accountants Statutory Auditors of theCompany holds office till the conclusion of the ensuing Annual General Meeting and areeligible for re-appointment. They have confirmed their eligibility to the effect thattheir re-appointment if made would be within the prescribed limits under the Act andthat they are not disqualified for re-appointment.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Rules 2014 the cost audit records maintained by the Company inrespect of various manufacturing activities are required to be audited.
The cost audit report for the financial year 2014-15 was filed with the Ministry ofCorporate Affairs. M/s. S.N. & Co. Cost and Management Accountants were appointed asthe Company's Cost Auditor.
Your Directors have on the recommendation of the Audit Committee appointed M/s. S.N.& Co. Cost and Management Accountants to audit the cost accounts of the Company on aremuneration of Rs. 1.50 lac for the year 2016-17.
As required under the Companies Act 2013 the remuneration payable to the cost auditoris required to be placed before the members in a general meeting for their ratification.Accordingly a resolution seeking members' ratification for the remuneration payable toM/s. S.N. Co. Cost Auditors is included in the Notice convening the Annual GeneralMeeting of the Company.
The Board has appointed S.G. Kankani & Associates Practicing Company Secretariesto conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Reportfor the financial year ended 31st March 2016 is annexed herewith marked as Annexure E tothis Report. The Secretarial Audit Report is self explanatory and do not call for anyfurther comments.
Corporate Social Responsibility (CSR)
With the objective of sustainable development and continual improvement your Companyadopts a voluntary and proactive approach to CSR to connect with the society by creating asense of belonging. Your Company strives for sustainable development programs inpartnership with the community.
Members are requested to refer the Corporate Governance Report forming part of thisannual report for the composition of the CSR Committee. The CSR policy of the Company isavailable on the website of the Company - www.seml.co.in- under the head corporate governance/policies under the Investors' section. The annualreport on the CSR activities is annexed as Annexure F to this report.
The Company's CSR initiatives usually involve setting the foundation of variousprograms at a small scale to learn from onground realities getting feedback fromcommunity and then putting an enhanced sustainable model to ensure maximum benefit to thecommunity. For this reason during the year the Company's spend on the CSR activities hasbeen less than the limits prescribed under Companies Act 2013. However the amount shortspent shall be spent during the year 201617.
Pursuant to the Listing Regulations Corporate Governance Report along with theAuditors' Certificate regarding compliance of conditions of Corporate Governance is made apart of the Annual Report.
The Board of Directors met 6 (six) times during the financial year 2015-16. The detailsof the composition of Board of Directors Corporate Social Responsibility Committee AuditCommittee other committees of the Board meetings of the board and committees andattendance of Directors at the Board and committee meetings and implementation of VigilMechanism are given in the Corporate Governance Report forming part of this Annual Report.
Particulars of Loans given Investments made Guarantees given and Securities provided
Particulars of loans given investments made and guarantees given are given in note no.13 16 36 and 41 to the standalone financial statements. The Company in its capacity ofpromoter has pledged 51% of its holding in Sarda Metals & Alloys Limited 100% of itsholding in Parvatiya Power Limited and 51.57% of its holding in MBPCL with the lenders forloans granted to the respective companies by the lenders. The loans and the guaranteesgiven are utilized by the recipients for their business purposes. Members are requested torefer the notes for details which are not repeated here for the sake of brevity.
Contracts and Arrangements with Related Parties
All contracts/arrangements/transactions entered by the Company during the financialyear with the related parties were in the ordinary course of business and on an arm'slength basis in the best interest of the Company. During the year the Company had notentered into any contract/ arrangement /transaction with related party which could beconsidered material in accordance with the policy of the Company on materiality of relatedparty transactions.
The Policy on materiality of related party transaction and dealing with related partytransactions as approved by the Board may be accessed on the Company's website -
Internal Financial Controls
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation were observed.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided inAnnexure G to this Report.
Extract of Annual Return
Extract of Annual Return of the Company is annexed herewith as Annexure H to thisreport.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules is annexed herewith as Annexure I to thisReport.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in Annexure J to this report.
The Risk Management Committee has been entrusted with the responsibility to assist theBoard in (a) Overseeing and approving the Company's enterprise wide risk managementframework; and (b) Overseeing that all the risks that the organization faces such asstrategic financial credit market liquidity accident security property IT legalregulatory reputational and other risks have been identified and assessed and there is anadequate risk management infrastructure in place capable of addressing those risks.
A Risk Management Policy approved by the Board of Director is in place. The Companymonitors and manages the risks and uncertainties that can impact its ability to achieveits strategic objectives.
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:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except Employee Stock Options Scheme referred to in this Report.
4. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
The disclosures/information/details disclosed/given elsewhere in the annual report hasnot been repeated again in the Directors' Report for the sake of brevity. Members arerequested to refer relevant sections for the information. All policies/ disclosuresrequired to be disclosed on the website are available under the Investors section on thewebsite of the Company.
Your Directors wish to place on record their gratitude for the valuable guidance andsupport rendered by various Government departments Financial Institutions Banks andvarious stakeholders such as shareholders surrounding societies customers andsuppliers among others. The Directors also commend the continuing commitment anddedication of the employees at all levels which has been critical for the Company'ssuccess. The Directors look forward to their continued support in future.
to the Directors' Report
DISCLOSURE PURSUANT TO THE PROVISIONS OF SECURITIES AND EXCHANGE BOARD OF INDIA (SHAREBASED EMPLOYEE BENEFITS) REGULATIONS 2014 AND COMPANIES (SHARE CAPITAL AND DEBENTURES)RULES 2014
Key Evaluation criteria Evaluation of Board
Composition of the Board
Procedure for Nomination and appointment of Board members and their remuneration
Leadership by the Chairman of the Board
Receipt of proper and timely information by the Board members
Meaningful/active participation at board meetings
Consideration of quality and appropriateness of financial accounting andreporting including the transparency of disclosures
Existence and effective working of necessary committees Evaluation ofIndependent Directors
Understanding of the Company and the external environment in which it operatesand contribution to strategic direction
Knowledge about company's products/services/activities
Attendance and participation in the meetings and timely inputs on the minutes
Adherence to ethical standards and code of conduct of Company and disclosure ofnon-independence as and when it exists and disclosure of interest
Raising of valid concerns to the Board and constructive contribution toresolution of issues at meetings
Interpersonal relations with other directors and management
Objective evaluation of Board's performance rendering independent unbiasedopinion Evaluation of Non-Independent Directors
Attendance and participation in the meetings and timely inputs on the minutes
Contribution towards growth of the Company
Adherence to ethical standards and code of conduct of Company
Team work attributes and supervising & training of staff members
Compliance with policies reporting of frauds violations etc. and disclosureof interest
Safeguarding of interest of whistle blowers under vigil mechanism and safeguardof confidential information
As per the requirements of the Companies Act 2013 and the Listing Regulations theBoard of Directors of Sarda Energy & Minerals Limited ("Company") hasconstituted a Nomination and Remuneration Committee. The Committee's role is to besupported by a policy for remuneration of Directors Key Managerial Personnel (KMP)Senior Management Personnel and other Employees.
The Policy is designed to attract motivate improve productivity and retain manpowerby creating a congenial work environment encouraging initiatives personal growth andteam work and inculcating a sense of belonging and involvement besides offeringappropriate remuneration packages and superannuation benefits. The policy reflects theCompany's objectives for good corporate governance as well as sustained long-term valuecreation for stakeholders.
The objectives of the Policy shall be to:
1. retain motivate and promote talent and to ensure long term sustainability forretention of talented managerial persons and create competitive advantage for the Company.
2. guide and assist the Board in laying down and administer ESOP Compensation policy interms of SEBI Guidelines as and when decided.
III. Guiding Principles
The following principles shall act as guiding factors while designing compensation forDirectors Key Managerial Personnel senior management and other employees:
1. Aligning key executive and board remuneration with the long term interests of theCompany and its shareholders
2. Minimize complexity and ensure transparency
3. Link to long term strategy as well as annual business performance of the Company
4. Promote a culture of meritocracy and is linked to key performance and businessdrivers
5. Reflective of line expertise market competitiveness so as to attract the besttalent
6. Consideration for living condition industry practices pay and employmentconditions with peers / elsewhere in the competitive market to ensure that pay structuresare appropriately aligned and that levels of remuneration remain appropriate in thiscontext.
IV. Remuneration 1. General
a. The remuneration / compensation / commission etc. to the Whole-time Director KMPand Senior Management Personnel will be determined by the Committee and recommended to theBoard for approval. The remuneration / compensation / commission etc. shall be subject tothe provisions of the Act and further subject to prior/post approval of the shareholdersof the Company and Central Government wherever required.
b. The remuneration and commission to be paid to the Whole-time Directors shall be inaccordance with the approval of the shareholders of the Company and as per the provisionsof the Act.
c. Increments to the existing remuneration/ compensation structure may be recommendedby the Committee to the Board which should be in terms of the approval of the Shareholdersin the case of Whole-time Director.
d. Where any insurance is taken by the Company for its Whole-time Director KeyManagerial Personnel and any other employees for indemnifying them against any liabilitythe premium paid on such insurance shall not be treated as part of the remunerationpayable to any such personnel.
Provided that if such person is proved to be guilty the premium paid on such insuranceshall be treated as part of the remuneration.
The employees including directors where applicable shall be eligible for casualleave earned leave and maternity leave as per prevailing Rules of the Service.
f. Retirement benefits
The Company shall extent Provident Fund and Gratuity benefits as per provisions of theapplicable law. In addition the Company may extent benefit of Provident Fund to employeesdrawing higher salary and also contribution to superannuation and other pensionfund/schemes for selective employees with mutual consent. The gratuity superannuation andpensionary contribution shall be invested in approved funds.
g. Loans to employees
The Company may extend interest free/ concessional loans to the employees of theCompany for meeting fund requirement for higher education of children land purchasebuilding purchase/ construction/ furnishing & repair marriage of self and familymembers medical treatment of self and family members and other exigencies. For thepurpose Rules shall be framed with authority for exceptions at appropriate levels.
2. Remuneration to Whole-time / Managing Director
a. Fixed pay
The Whole-time Director shall be eligible for a monthly remuneration as may be approvedby the Board on the recommendation of the Committee subject to approval of theshareholders and Central Government wherever required. The breakup of the pay and quantumof perquisites including employer's contribution to P.F pension scheme medicalexpenses club fees allowances severance payments etc. shall be decided and approved bythe Board/the Person authorized by the Board on the recommendation of the Committee.
b. Variable pay
The Committee may recommend suitable performance related variable payments linked tothe performance of the Director concerned and of the Company.
c. Minimum Remuneration
If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Whole-time Director in accordance with theprovisions of Schedule V of the Act and if it is not able to comply with such provisionswith the previous approval of the Central Government.
d. Provisions for excess remuneration
If any Whole-time Director draws or receives directly or indirectly by way ofremuneration any such sums in excess of the limits prescribed under the Act or without theprior sanction of the Central Government where required he / she shall refund such sumsto the Company and until such sum is refunded hold it in trust for the Company. TheCompany shall not waive recovery of such sum refundable to it unless permitted by theCentral Government.
e. Stock Options
The Committee shall determine the stock options and other share based payments to bemade to Whole Time Directors subject to prevailing guidelines of SEBI if any.
3. Remuneration to Non- Executive / Independent Director
a. Remuneration / Commission
Commission may be paid within the monetary limit approved by shareholders subject tothe limits prescribed in the Act computed as per the applicable provisions of the Act.
b. Sitting Fees
The Non- Executive / Independent Director may receive remuneration by way of fees forattending meetings of Board or Committee thereof as may be approved by the Board on therecommendation of the Nomination & Remuneration Committee.
Provided that the amount of such fees shall not exceed the amount as may be prescribedby the Central Government from time to time.
c. Stock Options
An Independent Director shall not be entitled to any stock option of the Company.
d. Any remuneration paid to Non- Executive / Independent Directors for servicesrendered which are of professional in nature shall not be considered as remuneration ifthe following conditions are satisfied:
i) The Services are rendered by such Director in his capacity as the professional; and
ii) In the opinion of the Committee the director possesses the requisite qualificationfor the practice of that profession.
4. Remuneration to Key Managerial Personnel and Senior Management
a. The remuneration to Key Managerial Personnel and Senior Management may consist offixed pay and incentive pay in compliance with the provisions of the Companies Act 2013and in accordance with the Company's Policy.
b. The Committee shall determine the stock options and other share based payments to bemade to Key Managerial Personnel and Senior Management.
c. The Fixed pay shall include monthly remuneration employer's contribution tosuperannuation fund Provident Fund contribution to pension fund pension schemesallowances bonus etc. as decided from time to time for which Rules shall be framed.
d. The Incentive pay if any shall be decided based on the performance of the Companyand the performance of the Key Managerial Personnel and Senior Management to be decidedannually or at such intervals as may be considered appropriate.
5. Other Employees
a. The remuneration of other employees shall be fixed from time to time as per theguiding principles outlined above and considering industry standards and cost of living.In addition to basic salary they shall also be provided perquisites and retirementbenefits as per schemes of the Company and statutory requirements wherever applicable.Policy of motivation/reward/severance payments are applicable to this category ofpersonnel as in the case of those in the management cadre.
b. The implementation of remuneration policy for other employees is to be ensured byCMD/DMD of the Company or any other personnel that the CMD/DMD may deem fit to delegate.
V Remuneration Duties
The duties of the Committee in relation to remuneration matters shall include:
1. considering and determining the remuneration based on such other factors as theCommittee shall deem appropriate bearing in mind that the remuneration is reasonable andsufficient to attract retain and motivate talent.
2. approving the remuneration of the Senior Management including key managerialpersonnel of the Company maintaining a balance between fixed and incentive pay reflectingshort and long term performance objectives appropriate to the working of the Company.
3. professional indemnity and liability insurance for Directors and senior management.
1. The Committee may issue guidelines procedures formats reporting mechanism andmanuals in supplement and for better implementation of this policy as consideredappropriate.
2. The Committee may delegate any of its powers to one or more of its members.
VII Policy Review
The Committee may assess the adequacy of this Policy and suggest any necessary ordesirable amendments from time to time in the policy to the Board for approval to ensureit remains consistent with the Company's objectives current laws and best practices.
This Remuneration Policy shall be disclosed in the Board's report and shall be placedon the website of the Company as required under the Companies Act 2013 and the ListingRegulations.
CRITERIA for determining Qualifications Positive Attributes and Independence of aDirector
i) diversity of thought experience knowledge perspective age and gender.
ii) appropriate blend of functional and industry expertise.
iii) Independent Directors ("ID") ideally should be thought/ practice leadersin their respective functions/ domains.
i) compliance with duties as provided in the Companies Act 2013.
ii) possessing highest standards of ethical and moral qualities strong interpersonaland communication skills and soundness of judgment as are considered eligible for theposition.
iii) act in good faith in order to promote the objects of the Company for the benefitof its members as a whole and in the best interests of the Company its employees theshareholders the community and for the protection of environment.
iv) exercise duties with due and reasonable care skill and diligence and exerciseindependent judgment.
v) IDs are also expected to abide by the Code for Independent Directors as outlined inSchedule IV to section 149(8) of the Companies Act 2013.
A director will be considered as an "independent director" if the personmeets with the criteria for 'independent director' as laid down in the Companies Act 2013and/or Listing Regulations.