As on: Apr 26, 2025 04:29 AM
Dear Members
Your Directors are pleased to present their Forty Third Report together with the audited Stand-alone and Consolidated financial statements of the Company for the year ended 31st March, 2024.
Financial Results
This discussion on the financial performance and results of operations of your Company for the year ended 31st March, 2024, which are summarised below, should be read in conjunction with its audited stand-alone and the consolidated financial statements containing financials and notes thereto of Sagar Cements Limited and its subsidiaries, namely Sagar Cements (M) Private Limited and Andhra Cements Limited.
Performance
During the year the Consolidated Revenue from Operations stood at H 2,50,461 Lakhs, registering an increase by 12% as compared to previous year and EBITA stood at H 24,591 Lakhs, registering an increase by 61% as compared to previous year. To avoid repetition in the Directors' Report, further details about other aspects of the performance
of the Company during the year 2023-24 have been furnished in the Management Discussion and Analysis Report as annexure to this report.
Dividend
Dividend is recommended by your Board taking into consideration the factors like overall profitability, cash flow, capital requirements and other business consideration as well as the applicable regulatory requirements read with the dividend distribution policy adopted by your company, which is available on your company's website and can be accessed at:
https://saqarcements.in/wp-content/uploads/2020/08/ Scl Dividend-Distribution-Policy.pdf
In this background, your Board of Directors is pleased to recommend a dividend at H 0.70 per equity share (35%) on the 13,07,07,548 equity shares of H 2/- each of your company. This would result in a total outflow of H 914.95 Lakhs.
Transfer to reserves
No transfer to any reserve is proposed and accordingly, the entire balance available in the Statement of Profit and Loss is retained in it.
Share Capital
Authorised Share Capital:
The Hon'ble National Company Law Tribunal,
Hyderabad Bench vide its order dated 14th September 2023 approved the Scheme of Amalgamation of Jajpur Cements Private Limited ("Transferor Company"), a Wholly-owned Subsidiary with the Company. By virtue of which, the authorised share capital of the Transferor Company (i.e. Equity Share Capital of H 1,10,00,00,000/)- was merged with the authorised share capital of the Company w.e.f. the date of order as mentioned above.
Accordingly, the authorised share capital of the company increased from H 1,82,50,00,000 to H 2,92,50,00,000/- comprising of 1,24,75,00,000 Equity Shares of H 2/- each and 4,30,00,000 Preference Shares of H 10/- each as on 31st March, 2024.
Paid-up Share Capital:
As on 31st March, 2024, the paid-up share capital of the company was H 26,14,15,096/- divided into 13,07,07,548 equity shares of H 2/- each.
Utilisation of funds raised through issue of Equity Shares
The sum of H 3,50,00,00,220/- raised during the year 2022-23 through issue of Equity Shares on a preferential basis has been fully utilised for the purpose for which it was raised and there has been no deviation or variation in utilisation of this sum.
During the FY2024, no funds were raised through Rights Issue, Preferential issue etc. and hence there is no requirement to provide any explanation as required under Regulation 32(4) of the SEBI (LODR) Regulations, 2015.
Subsidiaries, Joint Ventures and Associate Companies
The performance of your subsidiaries viz., M/s. Sagar Cements (M) Private Limited (formerly known as Satguru Cement Private Limited) and M/s. Andhra Cements Limited, both of which were acquired by your company, is satisfactory and on the expected lines.
With a view to achieving more synergy in the operations of your group as a whole, Jajpur Cements Private Limited (wholly owned subsidiary) has since been merged with the holding company, Sagar Cements Limited vide order of the Hon'ble National Company Law Tribunal, Hyderabad Bench dated 14th September 2023.
Salient features of the financials of the above mentioned two subsidiaries have been given in form AOC-1 as Annexure-1 to this report. Your Company does not have any Joint Ventures or Associate Companies.
Pursuant to the approval accorded by the Board on 26th February, 2024. Your Company has made an offer for sale (OFS) of 46,08,607 equity shares of face value of H 10/- each through stock exchange mechanism equivalent to 5% of the total issued equity share capital of Andhra Cements Limited, a subsidiary company for achieving Minimum Public Shareholding by Andhra Cements Limited. Accordingly the shareholding in Andhra Cements Limited stands at 90%.
Performance of your Company's Plants
Your Company's integrated cement plants located at Mattampally in Suryapet District, Telangana and at Gudipadu Village, Ananthapur District, Andhra Pradesh and the grinding unit located at Bayyavaram village, Visakhapatnam District, Andhra Pradesh and Kalinga Nagar Industrial Complex, Tehsil - Dangadi, Jajpur District, Odisha are doing well and the products generated in these units are catering to the major market in South India and parts of Odisha and its neighbouring States. Further details about the performance of these plants have been given elsewhere in the Integrated Report.
Future Outlook, Risk Management System and Internal Control and its adequacy
Details relating to future outlook, risk management system and internal control and its adequacy have been given in detail in the Management Discussion and Analysis Report, which is part of the Directors Report.
The Company has an adequate Internal Financial Control System, commensurate with the size, scale and complexity of its operations.
The company has a suitable risk management policy to identify and mitigate risks. This Policy, inter-alia, includes identification of various elements of risk, including those which, in the opinion of the Board, may threaten the existence of the Company.
Human resource development and Industrial Relations
Your Company continues to enjoy cordial relationship with all its personnel at its Plants, Offices and on the field.
Your company is organising training programmes wherever required for the employees concerned to improve their skill. They are also encouraged to participate in the seminars organised by the external agencies related to the areas of their operations.
Your company continues to focus on attracting and retaining competent personnel and providing a holistic environment where they get opportunities to grow and realise their full potential. Your company is committed to providing all its employees with a healthy and safe work environment.
Sexual Harassment
Regarding the Sexual Harassment of Women at the work place (Prevention, Prohibition & Redressal) Act, 2013, your company has an Internal Complaints Committee.
No complaints were received or disposed off during the year under the above Act and no complaints were pending either at the beginning or at the end of the year. Your Company has complied with the provisions relating to the constitution of Internal Complaints Committee (ICC). ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. ICC has its presence at corporate office as well as at manufacturing units.
Awards and Recognitions
Your company has already achieved ISO Certification ISC 9001:2015 for Quality Management System Standard, ISC 14001:2015 for Environmental Management System Standard, ISC 45001:2018 for Occupational Health and Safety Management System Standard and ISC 50001:2018 for Energy Management.
Further your company has achieved following awards: Mattampally unit:
• was awarded with "Best Management Award" by Labour Department, Government of Telangana in May, 2023
• was awarded 2nd Prize in Mines Safety week by Mines Safety and Productivity Council in December, 2023
• was awarded Excellence on ESG Parameters Award by QCFI in January, 2024
• was awarded 3rd prize in the large mechanised mines by Mines Environment & Mineral Conservation Week 2023-24 in March, 2024
Bayyavaram unit:
• was awarded National award for excellence in Energy Management in September, 2023
• has received QCFI Excellence Award in Energy, Health & Safety and Water
• has received Management Appreciation to the team leaders QCFI Excellence Award in Energy, Health and Safety and Water
• has received CII Safety Leadership Award for the year 2023
Gudipadu unit:
• was awarded 24th National Award for the year 2023 for Energy Efficient Unit by CII in September, 2023
• has received Best performance award felicitated by Bureau of Indian Standards, Andhra Pradesh in
i January, 2024 for the products of CPC and PPC for
Zero failures for the last three consecutive years
• was categorised as Excellent Unit for the 3rd Edition of National Awards from Quality Circle Forum of India, Hyderabad Chapter in the following modules:
a. Water Excellence
b. Bio-Diversity
c. Climate Change Mitigation
d. AFR Excellence
e. Environmental Excellence
f. Health and Safety Excellence
g. Productivity Excellence
Directors Responsibility Statement
Pursuant to Section 134 (5) of the Companies Act, 2013, your board of directors, to the best of their knowledge and ability, confirm that:
i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
ii. the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;
iii. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the 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 the company and such internal financial controls are adequate and operating effectively;
vi. the directors have devised proper systems to ensure compliance with the provisions of 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. Anand Reddy and Shri John-Eric Bertrand will be retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Necessary resolutions seeking the approval of the members for the re-appointments have been incorporated in the notice of the Annual General Meeting of the company.
Further, Dr. S. Anand Reddy and Shri S. Sreekanth Reddy will be holding their current Office as Managing Director and Joint Managing Director respectively till 30th October, 2024 and your Board on the recommendation of its Nomination and Remuneration Committee has re-appointed these directors in their respective office. The resolutions seeking the approval of the members for the above said re-appointments have been incorporated in the notice of the annual general meeting of the company.
Excepting Mrs. S. Rachana, who was a director and major shareholder in R V Consulting Services Private Limited, whose transactions with the company have been reported under the related parties disclosure
in the notes to the accounts, none of the other nonexecutive directors has had any pecuniary relationship or transactions with the company, other than the receipt of sitting fee for the meetings of the Board and Committees thereof attended by them.
During the financial year, Shri R.Soundararajan, Company Secretary and compliance Officer retired from services with effect from 10th November, 2023 and in his place, the Board of Directors appointed Shri J.Raja Reddy as Company Secretary and Compliance Officer with effect from 11th November, 2023.
Independent Directors Declaration
The company has received necessary declarations from all the Independent Directors of the Company in accordance with Section 149 (7) of the Companies Act 2013, that they meet the criteria of independence as laid down in Section 149(6) of the said Act and Regulation 16 (1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). There has been no change in the circumstances affecting their status as an Independent Director during the year.
The Independent Directors have also confirmed that they have complied with Schedule IV of the Companies Act, 2013 and the Company's Code of Conduct.
The Board of Directors is of the opinion that all the Independent Directors possess requisite qualifications, experience and expertise in industry knowledge and corporate governance and they hold highest standards of integrity.
Number of meetings of the board
During the year 2023-24, six meetings of the board were held and the details of these meetings of the Board as well as its Committees have been given in the
corporate governance report, which forms part of the Integrated Report.
Credit Rating
Details of Credit Ratings obtained by the Company have been given in the corporate governance report, which forms part of the Integrated Report.
Policy on directors' appointment and remuneration and other details
The company's policy on directors' appointment and remuneration and other matters provided in Section 178 (3) of the Companies Act, 2013 have been disclosed in the corporate governance report.
Under Section 178 (3) of the Companies Act, 2013, the Nomination and Remuneration Committee of the board has adopted a policy for nomination, remuneration and other related matters for directors and senior management personnel. A gist of the policy is available in the Corporate Governance Report.
Board evaluation
The Board of directors have carried out an annual evaluation of its own performance and of its committees as well as its individual directors, on the basis of criteria such as composition of the board / committee structure, effectiveness, its process, information flow, functioning etc.
Change in the Nature of Business
There is no change in the nature of business of the Company
Auditors
M/s. Deloitte Haskins & Sells, Chartered Accountants (FR No.008072S), who were re-appointed as Statutory
Auditors of the company by the Shareholders at their 39th Annual General Meeting held on 9th September 2020 for a second consecutive term of 5 years will be holding their said office from the conclusion of the said Annual General Meeting till the conclusion of the 44th Annual General Meeting to be held in the year 2025, at such remuneration as may be mutually agreed between the Board of Directors of the Company and the said Auditors.
Auditors' Report and Secretarial Auditors' Report
Auditors' Report
The auditors' report does not contain any qualifications, reservations or adverse remarks and it is an unmodified one.
Secretarial Auditors' Report
In accordance with Section 204 (1) of the Companies Act, 2013, the report furnished by the Secretarial Auditors, who carried out the secretarial audit of the company under the said Section is given in the Annexure-2, which forms part of this report. The Secretarial Audit Report of Sagar Cements (M) Private Limited, a material subsidiary of the company is also given in the said Annexure.
The Secretarial Audit Reports does not contain any qualification, reservation, or adverse remarks.
Secretarial Standards
Your company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India from time to time and that such systems are found to be adequate and operating effectively.
Maintenance of Cost Records
Cost records are required to be maintained by the Company under Section 148 (1) of the Companies Act, 2013. Accordingly, such accounts and records made and maintained.
Cost Auditors
M/s. Narasimha Murthy & Co., Cost Accountants (FR No. 000042) have been appointed as Cost Auditors of the company for the year ending 31st March 2025. A resolution seeking shareholders' approval for ratification of the remuneration payable to the said Cost Auditors has been included in the notice of the AGM.
The reports submitted by the Cost Auditors are duly filed with the appropriate authorities under Section 148 of the Companies Act, 2013.
Details in respect of frauds reported by Auditors under Section 143 (12) other than those which are reportable to the Central Government.
No frauds were reported by the Auditors under Sub-Section 12 of Section 143 of the Companies Act, 2013 read with the Rules made there under.
Particulars of loans, guarantees and investments
The particulars of loans, guarantees and investments have been disclosed in the financial statements at appropriate places.
Disclosure of Accounting Treatment
The applicable Accounting Standards as notified from time to time under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2016 issued by the Ministry of Corporate Affairs, have been followed in preparation of the financial statements of the company.
Transactions with related parties
Information on transactions with related parties pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with rule 8 (2) of the Companies (Accounts) Rules,
2014 are given in Annexure-3 in Form AOC-2 as part of this report.
All related party transactions entered into during the financial year were on an arm's length basis and in the ordinary course of business. There were no materially significant related party transactions entered into by the company with the promoters, key management personnel or other designated persons that may have potential conflict with the interests of the company at large. All related party transactions had prior approval 1 of the Audit Committee and were later ratified wherever required and obtained shareholders' approval as and when required.
1
Policy on transaction with related parties:
Policy on dealing with related party transactions is available on the website of the company (www.sagarcements.in).
Corporate Social Responsibility
A brief outline of the Corporate Social Responsibility (CSR) Policy of the company along with the initiative taken by your company are set out in Annexure-4 to this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.
This policy is also available on the website of the company, www.sagarcements.in.
Cybersecurity Commitment and Initiatives
Your Company recognises the critical importance of safeguarding our information assets and systems from ever-evolving cyber threats. As a responsible corporate entity, we are committed to protecting the confidentiality, integrity, and availability of the data entrusted to us by our customers, partners, employees, and other stakeholders. To this end, we have voluntarily embarked on a comprehensive Cybersecurity programme aimed at identifying, assessing, and mitigating potential risks across our IT infrastructure and processes.
We have engaged experts in the field of Cybersecurity and an entity empaneled with the Indian Computer Emergency Response Team (CERT-In), to conduct an in-depth cybersecurity assessment of our organisation. This exercise, involved a thorough evaluation of our servers (including application, database, and report servers), endpoints, firewalls, network devices, and security practices against industry standards and best practices.
We have developed a time-bound plan to elevate our cybersecurity maturity to align with global standards and best practices. Implementation of high-priority initiatives, such as database activity monitoring and cybersecurity policy roll out, is already underway, with substantial completion of the remediation road-map targeted by end of FY2025.
As we progress on this multi-year journey, we will continue to assess and refine our cybersecurity strategies to stay ahead of emerging threats. Annual technical assessments, including VAPT exercises, will help validate our controls and identify new areas for improvement.
We are also investing in the skills and resources needed to embed security as a core value and discipline across the organisation.
We firmly believe that a proactive and diligent approach to cybersecurity is essential to preserving the trust of our stakeholders and the resilience of our business in the digital era. Our voluntary engagement of external experts and adoption of industry best practices reaffirms SGC's commitment to upholding the highest standards of corporate governance and risk management.
We will keep our stakeholders updated on the progress of our cybersecurity initiatives through regular
disclosures. As always, we remain committed to fostering a secure and resilient operating environment and welcome any feedback or suggestions in this regard.
Annual Return
Annual Return in Form MGT-7 is available on the company's website and the link for the same is https://saqarcements.in/wp-content/uploads/2020/08/ SCL-Annal-Return-2023-24.pdf
Particulars of Employees
The information required under Section 197 of the Act read with Rule 5 (1) and 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been given in the Annexure-5, which forms part of this report.
a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:
c. The percentage increase in the median remuneration of employees in the financial year: 3.97
d. The number of permanent employees on the rolls of Company: 815
e. The average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year is around 10.48%. The managerial remuneration is as per the approval accorded by the Nomination and Remuneration Committee of the Board and Shareholders.
f. Percentage increase or decrease in the market quotations of the shares of the company, compared to its price at which the company came out with its last public offer:
(L) *
(L) **
* Face value of H 2/- each **Face value of H 10/- each
g. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms that remuneration is as per its remuneration policy.
Whistle Blower Policy
The company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for directors and employees of the company to enable them to report their genuine concerns, if any. The provisions of this policy are in line with the provisions of the Section 177 (9) of the Act and the SEBI Listing Regulations and the said policy is available on the company's website www.sagarcements.in.
Deposits from public
The company did not accept any deposits from public during the year.
Disclosure on Donations to Political Party
The company had donated an amount of H 250 Lakhs in the form of electoral bonds during the FY2024.
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 been provided in the Annexure-6, which forms part of this Report.
Insurance
All the properties of the Company have been adequately insured.
Pollution Control
Your company is committed to keep the pollution at its plant within the acceptable norms and as part of this commitment, it has, inter-alia, adequate number of bag filters in the plant.
Sub Committees of the Board
The Board has Audit Committee, Corporate Social Responsibility Committee, Stakeholders' Relationship Committee, Risk Management Committee, Nomination and Remuneration Committee, Investment Committee and Securities Allotment Committee. The composition and other details of these committees, have been given in the Report on the Corporate Governance, which forms part of the Integrated Report.
Compliance Certificate
A certificate as stipulated under Schedule V (E) of the SEBI Listing Regulations from a Practicing Company Secretary regarding compliance with the conditions of Corporate Governance is attached to this Report along with our 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 and the date of this report.
Significant and material orders passed by the Regulators
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
Cautionary Statement
Statements in this report and its annexures describing company's projections, expectations and hopes are forward looking. Though, these are based on reasonable assumption, their actual results may differ.
Investor Education and Protection Fund (IEPF)
During the year, the Company has transferred the unclaimed and unpaid dividend of H 13,75,190/- to IEPF. Further 47,058 corresponding equity shares on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF Rules. The details of the resultant benefits arising out of shares already transferred to the IEPF, year-wise amounts of unclaimed/unpaid dividends lying in the unpaid dividend account up to the year, and the corresponding equity shares, which are liable to be transferred, are available on our website, at https://sagarcements.in/ investors/dividend.
Details of difference in valuation
The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.
Business Responsibility and Sustainability Report (BRSR)
Pursuant to Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015, a Business Responsibility and Sustainability Report is given in Annexure-I.
Other Disclosures
Your Directors state that no disclosure or reporting is required in respect of the following items, during the period under review:
a. There was no issue of equity shares with differential voting rights as to dividend, voting or otherwise etc.
b. There was no issue of shares (including sweat equity shares) to the employees of the Company under any Scheme.
c. No application has been admitted against the Company under the Insolvency and Bankruptcy Code, 2016.
d. There was no instance of one time settlement with any bank or financial institution.
e. Neither the Managing Director nor the Wholetime Director of the Company received any remuneration or commission from any of the subsidiary companies.
Acknowledgement
Your Directors also place on record their appreciation of the valuable co-operation extended to the Company by its bankers and various authorities of the State and Central Government. Your Directors thank the Distributors, Dealers, Consignment Agents, suppliers and other business associates of your Company for their continued support. Your Board also takes this opportunity to place on record its appreciation of the contributions made by the employees of company at all levels and last but not least, of the continued confidence reposed by you in the Management.