Your Directors are pleased to present their Thirty Seventh Annual Report together withthe audited Stand-alone and Consolidated financial statements of the Company for the yearended 31st March 2018.
To avoid repetition in the Directors' Report and the Management Discussion and AnalysisReport the information under these reports is furnished below as a composite summary ofthe performance of the various aspects of the business of your company.
This discussion on the financial condition and results of operations of the Companyshould be read in conjunction with the Company's audited stand-alone and consolidatedfinancial statements and notes thereto for the year ended 31st March 2018which are summarized below:
| || || |
Rs. in Lakhs
| ||Stand-alone ||Consolidated |
|Particulars ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Total income ||79461 ||64312 ||108502 ||94511 |
|Total expenses ||71852 ||61908 ||103935 ||94089 |
|Profit before tax ||7609 ||2404 ||4567 ||422 |
|Total Tax ||2670 ||1155 ||1941 ||814 |
|Profit after Tax ||4939 ||1249 ||2626 ||(392) |
|Other Comprehensive Income ||(20) ||(4) ||(12) ||(23) |
|Total Comprehensive Income ||4919 ||1245 ||2614 ||(415) |
|Basic & Diluted Earnings per share of Rs. 10 each ||24.21 ||6.98 ||12.87 ||(2.19) |
Higher capacity utilisation and growth in demand for cement in 2017-18 enabled yourcompany to achieve its highest ever revenue from its stand-alone operations registering agrowth of 23% over the previous year. On a consolidated basis the total revenue crossedRs. 1000 crores during the year under report.
Dividend is recommended by your Board in the context of the Company's overallprofitability free cash flow capital requirements and other business needs as well asthe applicable regulatory requirements.
In this background an interim dividend of Rs. 2.50 (25%) per share on the 20400000equity shares of Rs. 10/- was announced for the year 2017-18 on 26th October2017 and the same was paid on 16th November 2017. Your Board has recommended afurther dividend of Rs. 1.50 (15%) per share for the year 2017-18. The total dividend forthe year 2017-18 would accordingly work out to Rs. 4/- (40%) per share involving a sum ofRs. 98211840 which includes a sum of Rs. 16611840 towards dividend tax.
The above said further dividend of Rs. 1.50 per share if approved by the shareholdersat the ensuing Annual General Meeting will be paid within 30 days of the said approval.
Transfer to reserves
As no transfer to any reserve is proposed the entire balance available in the Profitand Loss Account is retained in it.
The paid up share capital of the company is Rs. 204000000/- consisting of20400000 equity shares of Rs. 10/- each and there was no change in share capital duringthe year under report.
Pursuant to the approval accorded by the Shareholders at their Extraordinary GeneralMeeting held on 23.11.2016 your board in the year 2016-17 had raised a sum of Rs. 48.96crores by preferential allotment of 611986 equity shares of ` 10/- each at a premium ofRs. 790/- per share and by allotment of 2400000 equity shares of Rs. 10/- each at apremium of ` 710/- per share through Qualified Institutional Placement to fund theexpansion of grinding capacity of your unit at Bayyavaram from 0.3 million tons to 1.5million tons for setting up of a coal based power plant of 18 MW capacity at yourMattampally Unit and for meeting its other general corporate purposes from time to time.Your directors are happy to inform you of the successful completion of the expansion ofthe said grinding unit well ahead of the schedule. The setting up of the power plantwhich is progressing well is also expected to be completed by the end of March 2019.
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 being the world's second largestproducer of cement and because of its strong connection with other sectors such asconstruction transportation coal and power cement industry occupies an important placein the economy providing employment directly and indirectly to more than a millionpeople.
One of the main features of the Indian cement industry is that the location oflimestone reserves in some of its states has resulted in the formation of what ispopularly known as cement clusters and Nalgonda in Telangana where your company'sMattampally unit is located is one of such clusters . The proximity to coal deposits isalso an important factor in setting up of a cement plant. Cement being a high bulk and lowvalue commodity competition also tends to be localized since the cost of transportationof cement to distant markets often results in the product being uncompetitive in thosedistant markets.
Further though the structure of Indian cement industry is considered to be a highlyfragmented one still 70 % of the total cement production is from its top 20 cementcompanies.
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' which are giving a push to the demand for cement providing further boost to thissector 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 hopefully grow by 8% in thecurrent year.
Company's stand-alone performance with reference to its operational performance:
Demand for cement is a derived demand as it depends on growth of Infrastructureconstruction and realty sectors which were on the path of recovery after a slow-downwitnessed in the later part of the year 2016-17 due to disruption caused bydemonitisation. Further revival of demand for cement in Telangana and Andhra Pradesh thatwas expected following the bifurcation of the erstwhile State of Andhra Pradesh is alsonow gaining momentum easing the pressure on the pricing front though only marginally.However even as the infrastructure sector is slowly looking up the housing segmentwhich is the biggest demand driver for cement is yet to resume its potential growth.
Viewed in the above background the overall performance of your company on astand-alone basis during the year 2017-18 in terms of production sale revenue andaverage net sales realization per ton of cement is satisfactory.
In terms of volume your company achieved an increase of 28% and 30% in the cementproduction and sales respectively over the previous year which aided by a marginalincrease in average sales realization per tonne of cement by 4.5% resulted in an increaseof 23% in revenue and a 68% increase in the EBITA over the previous year.
|Particulars ||2017-18 ||2016-17 |
|Cement Production in MTs ||1941145 ||1521565 |
|Cement Sales in MTs ||2004808 ||1537237 |
|Average Net Sales Realization per MT (` ) ||3214 ||3077 |
|Total Revenue ( ` in lakhs) ||79461 ||64312 |
Subsidiaries Joint Ventures and Associate Companies
In the year 2015 your company acquired the entire equity stake in BMM Cements Limitedwhich has now been renamed as Sagar Cements (R) Limited. This wholly-owned subsidiary hasits cement plant of 1.00 Million MTs per annum capacity along with a coal based captivepower plant of 25 MW capacity in Gudipadu Village in Ananthapur District A.P.
After overcoming the initial constraint of operating at a very low capacity due tooutsourcing lime stone at a higher cost for its cement production on account of lack ofpermission to extract the limestone available in its captive mines this unit is nowmaking use of the lime-stone available in the said captive mines after obtaining necessarypermission therefor and is currently operating at around 70% capacity. Its power unit isoperating at 87% capacity.
As you are aware the cement produced by this subsidiary is sold under the brand name"SAGAR CEMENT". With this subsidiary further consolidating itself and improvingupon its operations the investments made by your company in this subsidiary will prove tobe beneficial to your company in the long run.
Statement containing salient features of the financial statement of the above mentionedsubsidiary has been given in Form AOC-1 in the Annexure 1 to this report.
Your Company does not have any Joint Ventures or Associate Companies.
Grinding Unit in Bayyavaram
We had earlier informed you of the acquisition of a grinding unit of 181500 MTcapacity at Bayyavaram in Visakhapatnam District in Andhra Pradesh and of the company'splan to expand its capacity to 1.5 million tons. Your Directors are happy to inform youthat the said expansion as earlier mentioned in this report has since been completed.
The acquisition of the above said grinding unit and the subsequent expansion of itscapacity enable your company to transport the surplus clinker available at its plant inMattampally to the said unit for grinding into slag cement to meet the demand in marketsin Odisha West Bengal and in the Vizag region 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 currently more on the investments in their infrastructure sector.
Opportunities and threats:
Constraints on inputs:
The cement industry is a highly energy intensive sector. Energy along with other rawmaterials mainly comprising coal and lime stone forms a most critical component in themanufacture of cement. While your company does not face any problems with respect to theavailability of limestone it attaches high priority to keep its energy cost which formsa significant portion of the input costs to the minimum. This is sought to be achievedamong other means by ensuring an optimum combination in the consumption of indigenouscoal along with imported coal which is relatively cheaper.
After successfully commissioning the Waste Heat Recovery Plant with an initial capacityof 6 MW capacity which is presently operating at 8.50 MW capacity at its Mattampallyplant your company is now setting up a coal based plant of 18MW capacity at the saidunit. Further as your company is also keen on meeting its power requirement fromrenewable energy sources apart from setting up of a solar power plant of 1 MW capacity atthe said plant it has recently acquired 2 mini hydel power units one with a capacity of4.3 MW on the Guntur Branch Canal and the other with a capacity of 4 MW in Lock-in-Sula inKurnool District both in Andhra Pradesh.
Your directors hope that the above measures would contribute to your company's effortsin further optimizing 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. As 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 plant your company is also weighing variousother options available to it like setting up of grinding stations/full fledged cementplants in distant areas where opportunities exist to cater to the local market and thisis sought to be achieved through routes 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 recently was served by yourcompany from its plant at Mattampally in Nalgonda District of Telangana is now beingserviced 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 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 circumstance your company which has its major markets in TelanganaAndhra Pradesh and in the border areas of the other neighboring States needs to look intoexpanding its Markets beyond these areas. However the freight cost involved in moving thematerial from its plants at Mattampally and Bayyavaram to these areas discourages it todo so as the price of the locally produced cement in such areas would tend to be muchcheaper.
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 might only have a token presence at present.
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 controlled bya few players. Sagar Cements proposes to meet some of the challenges posed by thisdevelopment by focusing on cost reduction and by further improving its brand imagegreater expenditure on advertising strengthening its distribution networks as well as byother customer-focused initiatives. Apart from these Sagar Cements is looking foropportunities to expand its market through strategic alliance and setting up of grindingstations wherever viable.
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 per capita consumption of cement is still very low in India and therefore there isa vast scope for growth in its demand on the long term. However for such a real growth tohappen there should be an overall growth in investments in the real estate andinfrastructure sectors. Since India is emerging as one of the fastest growing economies inthe world the future outlook for cement looks to be bright provided governmentformulates growth oriented policies so that our per capita cement consumption matches atleast with some of the developing economies. Notwithstanding the plans to expand itsmarket in other states Telangana and Andhra Pradesh will continue to be the major marketsfor your Company. With the respective Governments in these states rightly focusing on thedevelopment of infrastructure along with the importance given by the Union Government forthe development of National Highways Rural and Urban Roads Affordable Housing PortConnectivity Development of smart cities etc. coupled with private agencies coming upwith a slew of their own infrastructure development projects demand for cement in theseand their neighboring states is expected to see a significant growth which augurs wellfor your company which with its aggressive and innovative marketing duly supported byits well motivated marketing personnel is poised to grab the opportunity available inthis scenario.
However till such time that the above scenario becomes a reality your company mayhave to continue to face the problems like rising input and distribution costs despitethe efforts being made by your company as mentioned above to mitigate the same.
The impact of the Goods and Services Tax rate has since been absorbed by the cementindustry. The Company on its part will optimize the distribution/warehouse network underGST regime to further improve its operational efficiency.
Therefore taking an overall view of the above your Board is cautiously optimisticabout the future outlook for your company.
Risk Management System:
Your Company attaches utmost importance to the assessment of internal risks and themanagement thereof in all its dealings. Your Company is constantly on the lookout foridentifying opportunities to enhance its enterprise value. Keeping the need to minimizethe risks associated with such efforts every proposal of significant nature is screenedand evaluated for the risks involved and then approved at different levels in theorganization before implementation.
With a view to overcoming the risk of dependence upon any particular marketing segmentor region your Company is trying to reach out to a wider section of its ultimateconsumers. As the cement industry is witnessing rapid additions to its capacity inTelangana and A.P. in order to mitigate the risk associated with it Sagar Cements whoserevenue is mainly from sales in these two states is looking for growth opportunities inother States as well where infrastructure spending is set to get a boost.
Your Company has adequate system to manage the financial risks of its operations. Thissystem 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 which is supported byan ERP and compliance management systems. Their audit committee assists the board ofdirectors in monitoring the integrity of the financial statements reservations if anyexpressed by the company's auditors including the financial cost internal andsecretarial auditors and based on their inputs your board is of the opinion that thecompany's internal controls are adequate and effective.
Human resource development and Industrial Relations
Your Company continues to enjoy cordial relationship with all its personnel working atits Plants Offices and on the field.
Your company is organizing training programmes wherever required for the employeesconcerned to improve their skill. Employees are also encouraged to participate in theseminars organized by the external agencies on the subjects related to the areas of theiroperations.
Your company continues to focus on attracting and retaining competent personnel andproviding them with a holistic environment where they get opportunities to grow andrealize their full potential. Your company is committed to providing all its employeeswith a healthy and safe work environment.
Under the Sexual Harassment of Women at the work place (Prevention Prohibition &Redressal) Act 2013 your company has constituted an Internal Complaints Committee. Nocomplaints were received or disposed off during the year under the above Act.
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 you are aware your company's Laboratory at its Plant in Mattampally is therecipient of the Accreditation by the National Accreditation Board for Testing andCalibration Laboratories (NABL) which is the sole accreditation body for testing andcalibration of 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 annual accounts the applicable accounting standards havebeen followed and there are no material departures;
ii. the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that period;
iii. the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the directors have prepared the annual accounts on a going concern basis;
v. the directors have laid down internal financial controls to be followed by thecompany and such internal financial controls are adequate and operating effectively;
vi. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Directors and Key Managerial Personnel
In accordance with the provisions of Section 152 of the Companies Act 2013 Dr.S.AnandReddy and Shri John-Eric Fernand Pascal Cesar Bertrand will be retiring by rotation at theensuing Annual General Meeting and being eligible offer themselves for re-appointment.Accordingly the resolutions seeking the approval of the members for the saidreappointments have been incorporated in the notice of the annual general meeting of thecompany.
Excepting Mrs. S.Rachana who is a director in Panchavati Polyfibres Limited and inR.V.Consulting Services Private Limited whose transactions with the company have beenreported under the related parties disclosure under notes to the accounts none of thenon-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 each Independent Director inaccordance with Section 149 (7) of the Companies Act 2013 that he meets the criteria ofindependence as laid out in sub-section (6) of Section 149 of the Companies Act 2013.
Number of meetings of the board
Six (6) meetings of the board were held during the year 2017-18. Details of thesemeetings have been given in the corporate governance report which forms part of theAnnual 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 availableon the Companies website www.sagarcements.in.
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 and functioning etc.
M/s. Deloitte Haskins & Sells Chartered Accountants (FR No.008072S) were appointedas Statutory Auditors of the company by the company at the 34th Annual GeneralMeeting held on 23rd September 2015 to hold office from the conclusion of thesaid Annual General Meeting till the conclusion of the 39th Annual GeneralMeeting. Though the said appointment was required to be ratified at every annual generalmeeting under Section 139 in accordance with the Companies Amendment Act 2017 enforcedfrom 7th May 2018 by Ministry of Corporate Affairs the appointment ofStatutory Auditors is not required to be ratified at every annual general meeting anymore.
Auditors' Report and Secretarial Auditors' Report
The auditors' report on the financial statements of the company is part of this reportand it does not contain any qualifications reservations or adverse remarks.
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 are noadverse remarks in the said report. Your company has complied with the SecretarialStandards applicable for holding Board and General Meetings.
M/s.Narasimha Murthy & Co. (FR No.000042) Cost Auditors of the company have beenappointed as Cost Auditors of the company for the year ending 31st March 2019.A resolution seeking shareholders' ratification of the remuneration payable to the CostAuditors has been included in the notice of the AGM. The reports submitted by the CostAuditors are filed with the appropriate authorities.
Particulars of loans guarantees and investments
The particulars of loans guarantees and investments have been disclosed in thefinancial statements at appropriate places.
Transactions with related parties
None of the transactions with related parties falls under the scope of Section 188 (1)of the Act. Information on transactions with related parties pursuant to Section 134 (3)(h) of the Act read with rule 8 (2) of the Companies (Accounts) Rules 2014 are given inAnnexure-3 in Form AOC-2 and the same forms part of this report.
All related party transactions entered into during the financial year were on armslength basis and in the ordinary course of business. There were no materially significantrelated party transactions entered into by the company with the promoters key managementpersonnel or other designated persons that may have potential conflict with the interestsof the company at large. All related party transactions had prior approval of the AuditCommittee and were later ratified by the Board.
Corporate Social Responsibility
The brief outline of the Corporate Social Responsibility (CSR) Policy of your companyalong with the initiative taken by it are set out in Annexure-4 of this report in theformat 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 provided under Section 92 (3) of the Act an extract of annual return is given inAnnexure-5 in the prescribed Form MGT-9 which forms part of this report a copy of thesame 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 are given inthe Annexure-6 which forms part of this report.
a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year is as under:
|Particulars ||Ratio to Median Remuneration |
|Non-Executive Directors * || |
|Executive Directors || |
|Shri S.Veera Reddy ||63.14 |
|Dr.S.Anand Reddy ||53.25 |
|Shri S.Sreekanth Reddy ||48.30 |
*Non-Executive Directors are not paid any remuneration other than sitting fee.
b. The percentage increase in the remuneration of each director chief executiveofficer chief financial officer company secretary in the financial year is as under:
|Director Chief Executive Officer Chief Financial Officer and Company Secretary ||% increase in remuneration in the financial year During the financial year these directors were not paid any remuneration other than sitting fee in which there was no increase |
|Shri O.Swaminatha Reddy || |
|Shri K.Thanu Pillai || |
|Shri T.Nagesh Reddy (APIDC Nominee) || |
|Shri John-Eric Fernand Pascal Cesar Bertrand || |
|Shri V.H.Ramakrishnan || |
|Mrs.S.Rachana || |
|Shri S.Veera Reddy ||112.46 |
|Dr.S.Anand Reddy ||79.12 |
|Shri S.Sreekanth Reddy ||115.61 |
|Shri R.Soundararajan ||9.56 |
|Shri K.Prasad ||12.47 |
c. The percentage increase in the median remuneration of employees in the financialyear: 5.62%
d. The number of permanent employees on the rolls of Company: 507
e. The explanation on the relationship between average increase in remuneration andCompany performance: On an average employees in India received an annual increase ofaround 10%.
In order to ensure that remuneration reflects Company performance the performance ofthe company is also one of the parameters for fixing the remuneration to the employees.
f. Comparison of the remuneration of the key managerial personnel against theperformance of the Company:
|Aggregate remuneration of key managerial personnel (KMP) in FY 2017-18 (` crores) ||3.24 |
|Revenue (` crores) ||794.61 |
|Remuneration of KMPs (as % of revenue) ||0.41 |
|Profit before Tax (PBT) (` crores) ||76.09 |
|Remuneration of KMP (as % of PBT) ||4.26 |
g. Variations in the market capitalization of the company price earnings ratio as atthe closing date of the current financial year and previous financial year are as under:
|Particulars ||March 31 2018 ||March 31 2017 ||% Change |
|Market capitalization (in Crores) ||1886.02 ||1622.72 ||16.23 |
|Price Earning Ratio ||38.19 ||113.96 ||66.49 |
h. Percentage increase or decrease in the market quotations of the shares of thecompany in comparison to the issue price at which the company came out with its lastpublic offer:
|Particulars ||March 31 2018 ||June 22 1992 ||% Change |
|Market Price in NSE ||923.00 ||Not listed ||- |
|Market Price in BSE ||924.55 ||45.00 ||1954.56 |
i. Average percentage increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof.
The average annual increase was around 15.42% for personnel other than managerialpersonnel.
Increase in the managerial remuneration (Whole-time Directors) for the year was 101.21%(including commission).
j. Comparison of remuneration of the each key managerial personnel against theperformance of the Company:
|Description ||MD ||CS ||CFO |
|Remuneration in FY2017-18 (lakhs) ||268.00 ||27.52 ||34.65 |
|Revenue (lakhs) || ||79461 || |
|Remuneration as % of revenue ||0.337 ||0.035 ||0.044 |
|Profit before Tax (PBT) (lakhs) || ||7609 || |
|Remuneration (as % of PBT) ||3.522 ||0.362 ||0.455 |
k. The key parameters for any variable component of remuneration availed by thedirectors:
Commission is the only variable component which depends on profit earned by the comapnyduring the relevant year and the same is subject to approval of theshareholder/remuneration committee / Board and to other applicable regulatory approvals.
l. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year: None.
m. 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.
Other Disclosure requirements
A report on corporate governance together with auditors' certificate thereon has beenfurnished as part of the Annual Report.
Policy on dealing with related party transactions is available on the website of thecompany (www.sagarcements.in).
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 plants 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
There were no material changes or commitments between the end of the financial year andthe date of this report.
Statements in these reports describing company's projection statements expectationsand hopes are forward looking. Though these expectations etc. are based on reasonableassumption the actual results might differ.
Your Directors wish to place on record their appreciation of the valuable co-operationextended to your 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 byemployees of your company at all levels and last but not least of the continuedconfidence reposed by you in the Management.
| ||For and on behalf of the Board of Directors |
|Hyderabad ||O. Swaminatha Reddy |
|19th July 2018 ||Chairman |
(Pursuant to first proviso to sub-section (3) of Section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)
Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures Part "A": Subsidiaries
(Information in respect of each subsidiary to be presented with amounts in Lakhs)
|Sl. No. ||Particulars ||Details |
|1. ||Name of the subsidiary ||SAGAR CEMENTS (R) LIMITED |
|2. ||Reporting period for the subsidiary concerned if different from the holding company's reporting period ||Not Applicable |
|3. ||Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries ||Indian Rupees |
|4. ||Share Capital ||10381 |
|5. ||Reserves & surplus ||(3013) |
|6. ||Total Assets ||55054 |
|7. ||Total Liabilities ||55054 |
|8. ||Investments ||Nil |
|9. ||Turnover ||34375 |
|10 ||Loss before taxation ||(2876) |
|11. ||Provision for taxation ||729 |
|12. ||Loss after taxation ||2147 |
|13. ||Proposed Dividend ||Nil |
|14. ||% of shareholding ||100% |
Notes: The following information shall be furnished at the end of the statement:
1. Names of subsidiaries which are yet to commence operations: Nil.
2. Names of subsidiaries which have been liquidated or sold during the year: Nil
Part "B": Associates and Joint Ventures
The Company doesnot have any Associates or Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures:
|Name of Associates/Joint Ventures ||Nil |
|Latest audited Balance Sheet Date ||Nil |
|Shares of Associate/Joint Ventures held by the company on the year end ||Nil |
|No. ||Nil |
|Amount of Investment in Associates/Joint Venture ||Nil |
|Extent of Holding% ||Nil |
|Description of how there is significant influence ||Nil |
|Reason why the associate/joint venture is not consolidated ||Nil |
|Net worth attributable to shareholding as per latest audited Balance Sheet ||Nil |
|Profit/Loss for the year ||Nil |
|Considered in Consolidation ||Nil |
|Not Considered in Consolidation ||Nil |
1. Names of associates or joint ventures which are yet to commence operations: Nil
2. Names of associates or joint ventures which have been liquidated or sold during theyear: Nil
| ||S.Veera Reddy ||Dr.S.Anand Reddy |
| ||Managing Director ||Joint Managing Director |
| ||S.Sreekanth Reddy ||K.Prasad |
| ||Executive Director ||Chief Financial Officer |
|Place: Hyderabad ||R.Soundararajan || |
|Date: July 19 2018 ||Company Secretary || |
Annexure - 6
Particulars of employees as required under Section 197 of the Companies Act read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014
|Name of the Employee ||Shri S.Veera Reddy ||Dr.S.Anand Reddy ||Shri S.Sreekanth Reddy |
|Designation ||Managing Director ||Joint Managing Director ||Executive Director |
|Age ||82 years ||54 years ||46 years |
|Remuneration received (` ) ||16800000 ||12600000 ||10500000 |
|Commission received (` ) ||10000000 ||10000000 ||10000000 |
|Nature of employment ||Contractual ||Contractual ||Contractual |
|Nature of duties ||General Management ||General Management ||General Management |
|Qualification ||- ||M.B.B.S. ||B.E. (I & P) P.G. Dip. in Cement Technology |
|Experience (Years) ||57 ||25 ||22 |
|Date of Commencement of Employment ||13.07.1991 ||21.11.1992 ||26.6.2003 |
|Last Employment held ||Nil ||Nil ||Nil |
Shri S.Veera Reddy Dr.S.Anand Reddy and Shri S.Sreekanth Reddy are related to eachother.
Annexure 3 Form No. AOC-2
[ Pursuant to Clause (h) of sub-section (3) of Section 134 of the Act and Rule 8 (2) ofthe Companies (Accounts) Rules 2014 ]
Form for disclosure of particulars of contracts / arrangements entered in to by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third provisothereto.
1. Details of contracts or arrangements or transactions not at arm's legth basis:
Sagar Cements Limited has not entered into any contract or arrangement or transactionwith its related parties which is not in its ordinary course of business or at arm'slength during financial year 2017-18.
2. Details of material contracts or arrangements or transactions at arm's length basis:
There were no material contracts or arrangements or transactions with related partiesduring the financial year 2017-18.
| ||On behalf of the Board of Directors |
|Hyderabad ||O.Swaminatha Reddy |
|19th July 2018 ||Chairman |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required under Section 134 (3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is given below:
Conservation of Energy and Technology Absorption
Your company attaches utmost importance to conservation of energy by adoptinginnovative measures through usage of eco-friendly and cheaper fuels reducing wastage andoptimizing the consumption of energy. Some of the specific measures undertaken in thisdirection are listed below.
1. Coal Mill and Cement Mill filter bags have been replaced with Membrane bags toreduce emission levels from 50 mgm/nm3 to 30 mgm/nm3.
Optimization of Plant Capacity
Company has taken up Plant optimization program to enhance the production capacity andreduce the Power and Fuel Consumption.
The following initiatives have been taken.
1. Optimization of Cement Production.
2. Completion of enhancement in the capacity of Grinding Unit at Bayyavaram VillageAnakapally Visakhapatnam from 0.30 million tons to 1.5 million tons.
3. Commissioning of 6 MW WHR Power Plant.
4. Commissioning of 1.25 MW Solar Power Plant.
5. Setting-up of 18 MW Coal Based Power Plant (under implementation).
6. Acquisition of 8.3 MW Hydel Power Plants.
Research and Development
Your Company Collaborates with National Council for Cement Building & Materials forResearch and Development activities and appointed CII for Plant Energy Audit.
Foreign Exchange earnings and Outgo
Details of foreign exchange earnings and outgo as per the Companies Act 2013 aregiven below.
| || ||(Rs. in Lakhs) |
|Particulars ||For the year ended 31st March 2018 ||For the year ended 31st March 2017 |
|1 Outgo ||1720.19 ||167.52 |
|2 Inflow ||Nil ||Nil |