Your Directors are pleased to present their Thirty Eighth Annual Report together withthe audited Stand-alone and Consolidated financial statements of the Company for the yearended 31st March 2019.
To avoid repetition in the Directors' Report and the Management Discussion and AnalysisReport the information under these reports is being furnished below as a compositesummary of the performance of the various aspects of the business of your company.
This discussion on the financial condition and results of operations of your Companyshould be read in conjunction with its audited stand-alone and the consolidated financialstatements containing financials of Sagar Cements Limited and its wholly-owned subsidiarySagar Cements (R) Limited and the notes thereto for the year ended 31st March2019 which are summarized below: र in Lakhs
| ||Stand-alone ||Consolidated |
|Particulars ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Total income ||91707 ||79461 ||122043 ||108502 |
|Total expenses ||88000 ||71852 ||119723 ||103935 |
|Profit before tax ||3707 ||7609 ||2320 ||4567 |
|Total Tax ||1045 ||2670 ||961 ||1941 |
|Profit after Tax ||2662 ||4939 ||1359 ||2626 |
|Other Comprehensive Income ||(165) ||(20) ||(186) ||(12) |
|Total Comprehensive Income ||2497 ||4919 ||1173 ||2614 |
|Basic & Diluted Earnings per share of र 10 each ||13.05 ||24.21 ||6.66 ||12.87 |
Higher capacity utilisation and growth in demand for cement in 2018-19 enabled yourcompany to register a marginal increase of 15.41% and 12.48% in its revenue from itsstand-alone and consolidated operations respectively.
Dividend is recommended by your Board taking into consideration the factors likeoverall profitability cash flow capital requirements and other business needs of yourcompany as well as the applicable regulatory requirements. With this background yourBoard of Directors is pleased to recommend a dividend at र 2.50 per equity share (25%) onthe 20400000 equity shares of र 10/- each of your company. This would result in a totaloutflow of र 61382400/- including the sum of र 10382400/- as dividend tax.
Transfer to reserves
As no transfer to any reserve is proposed the entire balance available in theStatement of Profit and Loss is retained in it.
The paid up share capital of the company is र 204000000/- consisting of 20400000equity shares of र 10/- each and there was no change in the share capital during the yearunder report.
Allotment of convertible warrants
Pursuant to the approval accorded by you at the Extraordinary General Meeting held on 8thJanuary 2019 your board has allotted 3100000 warrants at an issue price of र 730/- perwarrant. Each of these warrants is convertible at the option of the warrant holdersconcerned into 1 equity share of र 10/- each at a premium of र 720 per share within aperiod of 18 months from the date of allotment of the said warrants. The funds beingraised against the issue of the above said warrants are proposed to be utilizedinter-alia to part fund the setting up of a fully integrated green field cement plant of1 MTPA capacity in Madhya Pradesh and a grinding station of 1.5 MTPA capacity in Odishathrough separate entities since acquired for the purpose.
The details as required under Regulation 32(7A) of the SEBI (LODR) Regulations 2015regarding the funds so far collected against the above said warrants and the utilizationthereof have been given elsewhere in the report on corporate governance which forms partof the Annual Report.
Industry Structure and Development
Cement being a basic building material used widely in housing and industrial sectorsand in developing infrastructure its per capita consumption is an important index formeasuring the economic growth of a country. India is the world's second largest producerof cement and because of its strong connection with other sectors such as constructiontransportation coal and power this industry occupies an important place in the economyproviding employment directly and indirectly to more than a million people.
Cement is a high bulk and low value commodity. Competition in marketing it tends to belocalized since the cost of transportation of cement to distant markets often results inthe product being uncompetitive in those distant markets. The location of limestonereserves exclusively in some states in the country has resulted in the formation of cementclusters and Suryapet District in Telangana where your company's Mattampally unit islocated is one of such clusters. The proximity to coal deposits is also an importantfactor in the setting up of cement plants.
Though the structure of Indian cement industry in India is considered to be a highlyfragmented one still 70 % of the total cement production in the country is from the top20 players in the industry.
Apart from the ready availability of raw materials such as limestone and coal theother factor contributing to the growth of this industry is increasing demand for cementemanating from the development in the infrastructure and construction sectors. In thisconnection some of the recent major initiatives such as development of smartcities' provision for metro rails which are giving a push to the demand for cementproviding further boost to this sector augur well for the industry.
Whether it is affordable housing roads highways or smart cities' the entireindustry has high hopes from the Government as far as infrastructure spending is concernedand on such hopes materializing the industry will look up and achieve a reasonable growthrate in the current year.
Sagar Cements Limited (SCL) is a leading manufacturer of cement of different varietieswith focus so far on the marketing opportunities available in the southern parts of thecountry. Sagar group consisting of SCL and Sagar Cements (R) Limited (SCRL) have anintegrated cement plants as well as an independent grinding unit and power plants asdetailed below:
|Company ||Facility - Cement || ||Capacity MTPA |
|SCL ||Manufacturing Facility at Mattampally Suryapet Dist. Telangana || ||3.00 |
|SCL ||Grinding Facility at Bayyavaram Visakhapatnam Andhra Pradesh || ||1.50 |
|SCRL ||Manufacturing Facility at Gudipadu Anantapur Dist. Andhra Pradesh || ||1.25 |
| ||Total Capacity || ||5.75 |
|Company ||Facility Power ||Capacity MW ||Capacity MW |
|SCL ||Thermal Power at Mattampally Suryapet dist. Telangana || || |
| ||(under implementation and expected to be commissioned by June 2019) || ||18.00 |
|SCL ||Waste Heat Recovery Power Plant at Mattampally Suryapet Dist. || ||8.80 |
| ||Telangana || || |
|SCL ||Solar Power at Mattampally Suryapet Dist. Telangana || ||1.25 |
| ||Hydro Power at Guntur AP ||4.3 || |
| ||Hydro Power at Kurnool AP ||4.0 || |
| || || ||8.30 |
|SCRL ||Thermal Power at Gudipadu Anantapur Dist. Andhra Pradesh || ||25.00 |
| ||Total Capacity || ||61.35 |
Company's stand-alone performance with reference to its operational performance:
Demand for cement being a derived one it depends on the growth of Infrastructureconstruction and realty sectors which are on the path of recovery after a slow-downwitnessed a couple of years ago due to disruption caused by demonitisation and otherattendant factors. Further the anticipated revival in the demand for cement in Telanganaand Andhra Pradesh is gaining momentum easing the pressure on the pricing front to someextent. However even as the infrastructure sector is slowly looking up the housingsegment which is the biggest demand driver for cement is yet to reach its full potential.
Viewed in the above background the overall performance of your company on astand-alone basis during the year 2018-19 in terms of production sale revenue andaverage net sales realization per ton of cement is satisfactory.
Though your company achieved an increase of 25% and 24% in the cement production andsales respectively in terms of volume over the previous year the EBDITA dropped to 12%from 18% in the previous year due to increase in input costs and a marginal fall in theaverage sales realization per ton of cement.
|Particulars ||2018-19 ||2017-18 |
|Cement Production in MTs ||2420567 ||1941145 |
|Cement Sales in MTs ||2489033 ||2004808 |
|Average Net Sales Realization per MT ( र ) ||3125 ||3214 |
|Total Revenue ( र In lakhs) ||91707 ||79461 |
|EBDITA (%) ||12 ||18 |
|Key Ratios || || || |
|S.No. ||Ratio ||2018-19 ||2017-18 |
|1 ||Debtors Turnover Ratio ||13.21 ||14.81 |
|2 ||Inventory Turnover Ratio ||10.39 ||11.04 |
|3 ||Interest Coverage Ratio ||2.12 ||3.56 |
|4 ||Current Ratio ||0.90 ||1.08 |
|5 ||Debt Equity Ratio ||0.20 ||0.20 |
|6 ||Operating Profit Margin (%) ||13% ||17% |
|7 ||Net Profit Margin (%) ||4% ||10% |
|8 ||Return on Net Worth (%) ||4% ||9% |
There was a sharp fall in the operating profit margin net profit margin and return onnet worth due to lesser average sales realisation and higher input costs as compared tothe previous year coupled with the widening gap between supply and demand.
Subsidiaries Joint Ventures and Associate Companies
In the year 2015 your company acquired the entire equity stake in BMM Cements Limitedwhich has since been renamed as Sagar Cements [R] Limited. This wholly-owned subsidiaryhas a cement plant of 1.25 Million MTs per annum capacity along with a coal based captivepower plant of 25 MW capacity in Gudipadu Village in Ananthapur District A.P. Though thissubsidiary had faced certain problems at the time of its acquisition by Sagar Cements likethe said subsidiary not being able to source its lime stone requirement from its captivemine it has since overcome these problems consolidated its operations and itsperformance is now on right track. It is currently operating at around 74% capacity. Itspower unit is also operating at 83% capacity. As you are aware the cement produced bythis subsidiary is sold under the brand name "SAGAR CEMENT". With thissubsidiary further consolidating itself and improving upon its operations the investmentsmade by your company in this subsidiary will prove to be beneficial to your company in thelong run.
Salient features of the financials of the above mentioned subsidiary have been given inForm AOC-1 in the Annexure 1 to this report.
Your Company does not have any Joint Ventures or Associate Companies.
Grinding Unit in Bayyavaram
This grinding unit which was acquired by your company in the year 2016 has sinceexpanded its capacity from 0.18 MTPA to 1.5 MTPA. This unit utilises the surplus clinkeravailable at your plant in Mattampally for grinding into slag cement to cater to themarkets in South Odisha and North Coastal districts of Andhra Pradesh where with theidentification of Vishakhapatnam and Kakinada in Andhra Pradesh and Bhubaneswar in Odishafor development as smart cities' under the Prime Minister's Smart CitiesMission' the focus is more on the investments in their infrastructure sector.
Opportunities and threats: Constraints on inputs:
Energy along with other raw materials mainly comprising coal and lime stone forms amost critical component in the manufacture of cement. Your company does not face any majorproblems with respect to the availability of limestone. As the energy cost forms asignificant portion of the input costs your Company attaches high priority to keep it tothe minimum. This is sought to be achieved among other means by ensuring an optimumcombination in the consumption of indigenous coal along with imported coal.
After successfully commissioning the Waste Heat Recovery Plant at your Mattampallyplant which is presently operating at 8.8 MW capacity your company is now setting up acoal based plant of 18 MW capacity at the said plant which is expected to be commissionedwithin a couple of months.
Your Mattampally Unit is also meeting a part of its power requirement from renewableenergy sources like solar power plant of 1.25 MW capacity at the said plant and the 2mini hydel power units of combined capacity of 8.3 MW located at the Guntur Branch Canaland in Lock-in-Sula in Kurnool District both in Andhra Pradesh.
The above measures contribute to your company's efforts in pruning its energy cost.
Cement being a freight-intensive industry transportation of cement over long distancescan be uneconomical and this has made it largely a regional play. The logistics and theoptimizing the freight cost continue to be the main area of concern with the distributioncost remaining a significant component in the cost structure notwithstanding theavailability of a railway siding at your Mattampalli plant. Therefore managing thesecosts continues to be the biggest challenge for your company. Your company is weighingvarious other options available to it like setting up of grinding stations/full fledgedcement plants in distant areas where opportunities exist to cater to the local market andthis is sought to be achieved through means like mergers acquisitions joint venturesstrategic marketing tie-ups and setting up of green field projects. As part of optimizingthe freight cost demand in the Eastern markets which until a few years ago was served byyour company from its plant at Mattampally in Huzurnagar District of Telangana is nowbeing serviced from its plant at Bayyavaram in Visakhapatnam in A.P.
Housing sector which accounts for a major portion of cement demand is yet to pick-up ina big way both in Telangana and Andhra Pradesh which are the significant markets for yourcompany. While the initiatives by the governments like Smart Cities Mission'affordable housing' will help the construction real estate infrastructure andcement sectors in due course the cement industry may have to wait for some more time tosee any significant revival in demand in these states.
In the above circumstances though your company which has its major markets inTelangana Andhra Pradesh and in the border areas of the other neighboring States wantsto expand it beyond these areas the freight cost involved in moving the material from itsplants at Mattampally and Bayyavaram to these areas discourages it to do so as the priceof the locally produced cement in such areas would tend to be much lower.
As the company cannot afford any more to ignore the growing demand for cement in itsneighboring states just because of the transportation cost involved in catering to thesemarkets apart from serving these markets from its own production it buys cement in bulkfrom other sources located in these states and sell the same in the retail markets inthose areas under the brand name Sagar Cement' wherever there is cost advantage indoing so. It is hoped that this apart from increasing the sales turnover of the companywithout incurring any additional capital expenditure and in turn improving its bottomline would help it in popularizing its brand in new areas as well as in firmlyestablishing it in the areas where it presently has only a token presence.
Impact of new entrants:
The Indian cement industry with its huge potential continues to attract the entry ofglobal cement majors and encourages the strengthening of production bases by existingcompanies. This may lead to a substantial part of the cement capacity being continued tobe controlled by a few players. Sagar Cements proposes to meet some of the challengesposed by this development by focusing more on cost reduction and by further improving itsbrand image through greater expenditure on advertising strengthening its distributionnetworks as well as by other customer-focused initiatives. Apart from these Sagar Cementsis also looking for opportunities to expand its market through strategic alliance andsetting up of integrated cement plants and grinding stations in newer locations whereverviable.
Segment-wise /product-wise performance:
As your company operates in only one segment namely manufacture and sale of cementthere is no other reportable segment or product.
The present low per capita cement consumption in India and the process of catching upwith international averages along with rapid economic growth and increased focus oninfrastructure development are expected to drive future growth in the industry.
The cement produced from your company's existing plants is presently catering to themarkets in Telangana Andhra Pradesh Karnataka Tamil Nadu and Maharashtra. With theexpansion of your grinding unit at Bayyavaram your company has since increased itspresence in South Odisha Markets too.
However with the cement supplies in the above markets being in excess of the demandthe Demand supply Dynamics does not offer much scope for your company to increase itssales volume in these markets to any significant extent atleast in the near future.Further as these markets are witnessing heavy competition resulting in wide fluctuationsin the price impacting the margins with a view to reducing your Company's dependenceexclusively on these markets your company is looking for opportunities to set upintegrated cement plants / grinding stations in central and eastern parts of the countrywhere demand for cement is expected to grow relatively at a faster rate.
As you are aware your company has recently acquired 65% equity stake in Satguru CementPrivate Limited by virtue of which it has now become a subsidiary of your company. A sumof र 150 crores is being invested by your company in this subsidiary in a phased mannerwhich will enable the said subsidiary to part fund the setting up of a Greenfieldintegrated cement plant of 1 MT capacity with a waste heat recovery plant of appropriatecapacity in Dhar District in Madhya Pradesh at a total cost of around र 425 crores.
Similarly your company has recently acquired 100% equity stake in Jajpur CementsPrivate Limited from its promoters for a consideration of र 4.50 crores and proposes toinvest a further sum of र 103.50 crores in the form of equity capital loan or similarmode. This wholly owned subsidiary of your company is in the process of setting up of aCement Grinding Plant of 1.5 MT capacity at Jajpur in Odisha at a total cost of र 308.10crores Barring unforeseen circumstances and subject to regulatory approvals as may berequired for the purposes both the above said plants are expected to become operationalby 31st March 2021. Cement to be produced from these plants will cater todemand in the Central and Eastern parts of India.
However till such time that the above plants become operational your company may haveto continue to face the problems like rising input and distribution costs despite theefforts being made by your company as mentioned above to mitigate the same.
Therefore taking an overall view of the above your Board is cautiously optimisticabout the future outlook for your company.
Risk Management System:
While your Company is subject to normal external business risks associated with anyother similar companies operating within the cement industry your Company attaches utmostimportance to the assessment of internal risks and the management thereof in all itsdealings. Like any other dynamic business organizations your Company is constantly on thelookout for identifying new opportunities to enhance its enterprise value. Keeping in viewthe need to minimize the risks associated with such efforts every proposal of significantnature is screened and evaluated for the risks involved in it and then approved atdifferent levels in the organization before implementation.
With a view to overcoming the risk of dependence exclusively upon any particularmarketing segment or region your Company is trying to reach out to a wider section of itsultimate consumers and as mentioned earlier is looking for growth opportunities in otherStates where infrastructure spending is set to get a boost.
Your Company has adequate system to manage the financial risks of its operations. Thesystem is implemented through imposition of checks and balances on extending credit to thecustomers audits like internal audit statutory cost and secretarial audit all of whichare periodically carried out through external firms proper appraisal of major capitalexpenditure adherence to the budget norms covering all areas of its operations and byadequate insurance coverage for the company's facilities.
Internal Control System and its adequacy:
Your Board of Directors are satisfied with the adequacy of the internal control systemcurrently in force in all major areas of operations of the Company supported by an ERPand compliance management systems. The audit committee assists the board of directors inmonitoring the integrity of the financial statements reservations if any expressed bythe company's auditors including the financial cost internal and secretarial auditorsand based on their inputs your board is of the opinion that the company's internalcontrols are adequate and effective.
Human resource development and Industrial Relations
Your Company continues to enjoy cordial relationship with all its personnel at itsPlants Offices and on the field. Your company is organizing training programmes whereverrequired for the employees concerned to improve their skill. They are also encouraged toparticipate in the seminars organized by the external agencies related to the areas oftheir operations.
Your company continues to focus on attracting and retaining competent personnel andproviding a holistic environment where they get opportunities to grow and realize theirfull potential. Your company is committed to providing all its employees with a healthyand safe work environment.
Regarding the Sexual Harassment of Women at the work place (Prevention Prohibition& Redressal) Act 2013 your company has an Internal Complaints Committee. Nocomplaints were received or disposed off during the year under the above Act and nocomplaints were pending either at the beginning or at the end of the year.
Awards and Recognitions
Your company has already achieved ISO Certification ISO 9001:2008 for QualityManagement System Standard ISO 14001:2004 for Environmental Management System Standardand OHAS 18001:2007 for Occupational Health and Safety Management System Standard.
As the shareholders are aware your company's Laboratory at its Plant in Mattampally isthe recipient of the Accreditation by the National Accreditation Board for Testing andCalibration Laboratories (NABL) which is the sole accreditation body for testing andcalibration laboratories under the aegis of Department of Science and TechnologyGovernment of India.
Directors Responsibility Statement
Pursuant to Section 134 (5) of the Companies Act 2013 your board of directors to thebest of their knowledge and ability confirm that: i. in the preparation of the annualaccounts the applicable accounting standards have been followed and there are no materialdepartures; ii. the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the company for that period; iii. the directors havetaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; iv. the directors haveprepared the annual accounts on a going concern basis; v. the directors have laid downinternal financial controls to be followed by the company and such internal financialcontrols are adequate and operating effectively; vi. the directors have devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystems are adequate and operating effectively.
Directors and Key Managerial Personnel
During the year your company suffered an irreparable loss in the passing away of LateShri S.Veera Reddy Managing Director. Though it is very difficult to fill the voidcreated by his demise your company will continue to be guided by his philosophygovernance and ethics.
In accordance with the provisions of Section 152 of the Companies Act 2013 Shri ShriS.Sreekanth Reddy and Mrs.S.Rachana will be retiring by rotation at the ensuing AnnualGeneral Meeting and being eligible offer themselves for re-appointment. Accordingly theresolutions seeking the approval of the members for the said re-appointments have beenincorporated in the notice of the annual general meeting of the company.
Shri O. Swaminatha Reddy and Shri K. Thanu Pillai will be completing their five yearterm as independent director on 23rd September 2019. Similarly ShriV.H.Ramakrishnan will be completing his term of 5 years as independent director on 29thMarch 2020. Though all these three directors have crossed 75 years of age consideringtheir professional qualification vast experience in their related areas the contributionmade by them to the deliberations of the Board and the benefit that will accrue to thecompany through their continued association with it the shareholders have alreadyaccorded their approval under Regulation 17 (1A) of the SEBI (LODR) Regulations 2015 forthese directors to continue as independent directors until the expiry of their currentterm.
During the year Shri Jens Van Nieuwenborgh was appointed as an Alternate Director toShri John-Eric Fernand Pascal Cesar Bertrand with effect from 20th November2018.
Excepting Mrs. S.Rachana who is a director in Panchavati Polyfibres Limited andR.V.Consulting Services Private Limited whose transactions with the company have beenreported under the related parties disclosure under notes to the accounts none of theother non-executive directors has had any pecuniary relationship or transactions with thecompany other than the receipt of sitting fee for the meetings of the Board andCommittees thereof attended by them.
Independent Directors Declaration
The company has received the necessary declaration from all the Independent Directorsin accordance with Section 149 (7) of the Companies Act 2013 that they meet the criteriaof independence as laid out in sub-section (6) of Section 149 of the Companies Act 2013and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI Listing Regulations"). There has been no change in thecircumstances affecting their status as an Independent Director during the year.
Number of meetings of the board
7 meetings of the board were held during the year 2018-19. Details of these meetings aswell as the meetings of its committee have been given in the corporate governance reportwhich forms part of the Annual Report.
Policy on directors' appointment and remuneration and other details
The company's policy on directors' appointment and remuneration and other mattersprovided in Section 178 (3) of the Act have been disclosed in the corporate governancereport.
Under Section 178 (3) of the Companies Act 2013 the Nomination and RemunerationCommittee of the board has adopted a policy for nomination remuneration and other relatedmatters for directors and senior management personnel. A gist of the policy is availablein the Corporate Governance Report.
The Board of directors have carried out an evaluation of its own performance and of itscommittees as well as its individual directors on the basis of criteria such ascomposition of the board / committee structure effectiveness its process informationflow functioning etc.
M/s. Deloitte Haskins & Sells Chartered Accountants (FR No.008072S) were appointedas Statutory Auditors of the company by the Shareholders at their 34th AnnualGeneral Meeting held on 23rd September 2015 and they will be holding their saidoffice till the conclusion of the 39th Annual General Meeting.
Auditors' Report and Secretarial Auditors' Report Auditors' Report
The auditors' report does not contain any qualifications reservations or adverseremarks.
Secretarial Auditors' Report
In accordance with Section 204 (1) of the Companies Act 2013 the report furnished bythe Secretarial Auditors who carried out the secretarial audit of the company under thesaid Section is given in the Annexure 2 which forms part of this report. There areno adverse remarks in the said report. Your company has complied with the SecretarialStandards applicable for holding Board and General Meetings.
The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.
M/s.Narasimha Murthy & Co. Cost Accountants have been appointed as Cost Auditorsof the company for the year ending 31st March 2020. A resolution seekingshareholders' ratification of the remuneration payable to the said Cost Auditors has beenincluded in the notice of the AGM. The reports submitted by the Cost Auditors are filedwith the appropriate authorities under Section 148 of the Companies Act 2013.
Details in respect of frauds reported by Auditors under Section 143(12) other thanthose which are reportable to the Central Government.
There were no frauds reported by the Statutory Auditors under Sub-section 12 of Section143 of the Companies Act 2013 along with the Rules made there under.
Particulars of loans guarantees and investments
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
Transactions with related parties
Information on transactions with related parties pursuant to Section 134 (3) (h) of theAct read with rule 8 (2) of the Companies (Accounts) Rules 2014 are given in Annexure-3in Form AOC-2 and the same forms part of this report. All related party transactionsentered into during the financial year were on arms length basis and in the ordinarycourse of business. There were no materially significant related party transactionsentered into by the company with the promoters key management personnel or otherdesignated persons that may have potential conflict with the interests of the company atlarge. All related party transactions had prior approval of the Audit Committee and werelater ratified by the Board. During the year 2018-2019 your Company had not entered intotransactions with any person or entity belonging to its promoter / promoter group whichholds 10% or more shareholding in the Company.
Corporate Social Responsibility
A brief outline of the Corporate Social Responsibility (CSR) Policy of the companyalong with the initiative taken by your company are set out in Annexure-4 of thisreport in the format prescribed in the Companies (Corporate Social Responsibility Policy)Rules 2014. The policy is available on the website of the companyhttp://www.sagarcements.in/csr.html.
Extract of Annual Return
As required under Section 92(3) of the Act an extract of the Annual Return for theyear 2018-19 has been given in the Annexure - 5 in the prescribed format whichforms part of this report and a copy thereof is also available on the company's website:www.sagarcements.in.
Particulars of Employees
The information required under Section 197 of the Act read with Rule 5 (1) and 5 (2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules has been givenin the Annexure-6 which forms part of this report. a. The ratio of theremuneration of each director to the median remuneration of the employees of the Companyfor the financial year:
|Particulars ||Ratio to Median Remuneration |
|Non-Executive Directors * || |
|Executive Directors || |
|Late Shri S.Veera Reddy (upto 28.9.2018) ||26.71 |
|Dr.S.Anand Reddy ||51.93 |
|Shri S.Sreekanth Reddy ||47.34 |
*Non-Executive Directors are not paid any remuneration other than sitting fee. b. Thepercentage increase in remuneration of each director chief executive officer chieffinancial officer company secretary in the financial year:
|Director Chief Executive Officer Chief Financial Officer and Company Secretary ||% increase in remuneration in the financial year |
|Shri O.Swaminatha Reddy Non-Executive Chairman ||These directors are not paid any remuneration other than the sitting fee in which there was no increase during the financial year |
|Shri K.Thanu Pillai Non-Executive Director || |
|Shri T.Nagesh Reddy (APIDC Nominee Director) || |
|Shri John-Eric Fernand Pascal Cesar Bertrand || |
|Non-Executive Director || |
|Shri V.H.Ramakrishnan Non-Executive Director || |
|Mrs.S.Rachana Non-Executive Director || |
|Late Shri S.Veera Reddy Managing Director (upto 28.9.2018) ||-54.48 |
|Dr.S.Anand Reddy Managing Director (From 31.10.2018) ||4.97 |
|Shri S.Sreekanth Reddy Joint Managing Director ||5.48 |
|Shri R.Soundararajan Company Secretary ||11.34 |
|Shri K.Prasad Chief Financial Officer ||3.77 |
c. The percentage increase in the median remuneration of employees in the financialyear: 7.63 d. The number of permanent employees on the rolls of Company: 550 e. Percentageincrease over decrease in the market quotations of the shares of the company comparisonto the rate at which the company came out with the last public offer:
|Particulars ||March 31 2019 ||June 22 1992 ||% Change |
|Market Price in NSE ||647.00 ||Not listed ||- |
|Market Price in BSE ||654.00 ||45.00 ||1353.33 |
f. Affirmation that the remuneration is as per the remuneration policy of the Company:The Company affirms that remuneration is as per the remuneration policy of the Company.
Policy on dealing with related party transactions is available on the website of thecompany (www.sagarcements.in).
Whistle Blower Policy
The company has formulated and published a Whistle Blower Policy to provide VigilMechanism for employees of the company to report their genuine concerns. The provisions ofthis policy are in line with the provisions of the Section 177 (9) of the Act and theListing Regulations and the same is available on the company's web site.
Deposits from public
The company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
Conservation of Energy Technology absorption and Foreign Exchange Earnings and Outgo:
The particulars required under Section 134 (3) (m) of the Companies Act 2013 have beenprovided in the Annexure 7 which forms part of the Report.
All the properties of the Company have been adequately insured.
Your company is committed to keep the pollution at its plant within the acceptablenorms and as part of this commitment it has inter-alia adequate number of bag filters inthe plant.
Sub Committees of the Board
The Board has Audit Committee Nomination and Remuneration Committee InvestmentCommittee Corporate Social Responsibility Committee Stakeholders' Relationship Committeeand Securities Allotment Committee. The composition and other details of these committeeshave been given in the Report on the Corporate Governance forming part of the AnnualReport.
A certificate as stipulated under Schedule V (E) of the Listing Regulations from theStatutory Auditors of the Company regarding compliance with the conditions of CorporateGovernance is attached to this Report along with a report on Corporate Governance.
Material changes and Commitments since the end of the Financial Year
Your company acquired 65% equity stake in Satguru Cement Private Limited and an 100%equity stake in Jajpur Cements Private Limited in May 2019 and by virtue of theseacquisitions both the above companies have become subsidiaries of your company.
There were no other material changes or commitments between the end of the financialyear and the date of this report.
Statements in these reports describing company's projection statements expectationsand hopes are forward looking. Though these are based on reasonable assumption theactual results may differ.
Your Directors wish to place on record their appreciation of the valuable co-operationextended to the Company by its bankers and various authorities of the State and CentralGovernment. They thank the Distributors Dealers Consignment Agents suppliers and otherbusiness associates of your Company for their continued support. Your Board also takesthis opportunity to place on record its appreciation of the contributions made by itsemployees at all levels and last but not least of the continued confidence reposed by youin the Management.
| ||For and on behalf of the Board of Directors |
|Hyderabad ||O. Swaminatha Reddy |
|22nd May 2019 ||Chairman |