REPORT ON CORPORATE GOVERNANCE
1. Company's philosophy on code of governance:
Sagar Cements believes that adherence to good corporate practice leads to transparency in its operations and improvement in the quality of its relationship with all its stakeholders.
2. Board of Directors: Composition:
The Board of Directors has an optimum combination of Executive and Non-Executive Directors and its composition is in conformity with currently applicable Clause 49 of the Listing Agreement. All the Directors have made the requisite disclosures regarding directorships and Committee positions held by them in other Companies.
Shri G.Suneel Babu, a Nominee director of IDBI, ceased to be director with effect from 5th August, 2014 consequent upon the withdrawal of the said nomination by IDBI.
Seven Board Meeting were held during the financial year 2014-15 and the gap between any two consecutive Board Meetings was not more than four months. These Meetings were held on the following dates: 13.05.2014, 15.07.2014, 13.08.2014, 24.09.2014, 17.10.2014, 22.01.2015 and 18.03.2015.
Board Meetings are convened taking into consideration the business requirements, statutory and regulatory compliances. The Agenda, backed by adequate information, is made available in advance to all the members of the Board, to enable them to take informed decisions on the matters covered in the agenda for the respective meetings. Members of the senior management team are invited to attend the Board Meetings as and when required, which provides additional inputs to the items being discussed by the Board.
The Company has adopted a Code of Conduct for all its Directors and Senior Executives and the same is available on the Company's website, www.sagarcements.in
3. Audit Committee:
Composition as on 31st March, 2015:
Shri O.Swaminatha Reddy, a Chartered Accountant, is a Financial Consultant. Shri K.Thanu Pillai, M.B.A.,CAIIB, has retired from State Bank of Hyderabad as its Managing Director. Shri K.Rajendra Prasad, is the nominee director of APIDC. Company Secretary is the Secretary of the Committee. The composition of the Committee is in conformity with Clause 49 of the Listing Agreement. The Chairman of the Committee was present at the last Annual General Meeting.
Terms of reference:
Terms of reference of the Audit Committee is as per Clause 49. Apart from this, the Committee reviews reports of the internal and statutory auditors and discusses their suggestions, internal control systems, scope of audit and observance of the auditors.
The Audit Committee, which met five times during 2014-15, held its meetings on 13.05.2014, 15.07.2014, 13.08.2014, 17.10.2014 and 22.01.2015 in the said period.
The statutory and internal auditors are invited to attend all the meetings of the Committee. The Cost Auditors appointed by the Company under Section 148 of the Companies Act, 2013 attended the Audit Committee meetings, where cost audit reports were discussed.
The Committee has adopted a Policy for Nomination and Remuneration, which is aimed at attracting, retaining, developing and motivating a high performance workforce and individual performance is assessed and rewarded through annual appraisal process. A gist of the said policy is given below. Company does not have any Employee Stock Option Scheme.
General Appointment Criteria:
i. The Committee shall consider the ethical standards of integrity and probity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and accordingly recommend to the Board his / her appointment.
ii. The Company should ensure that the person so appointed as Director/ Independent Director/ KMP/ Senior Management Personnel shall not be disqualified under the Companies Act, 2013, rules made thereunder, Listing Agreement or any other enactment for the time being in force.
iii. The Director/ Independent Director/ KMP/ Senior Management Personnel shall be appointed as per the procedure laid down under the provisions of the Companies Act, 2013, Rules made hereunder, Listing Agreement or any other enactment for the time being in force.
Additional Criteria for Appointment of Independent Directors:
The Committee shall consider qualifications for Independent Directors as mentioned under the head 'Definitions' of the Policy and also their appointment shall be governed as per the provisions of Clause 49 of the Listing Agreement (as amended from time to time ) and Companies Act, 2013.
Policy on Board diversity:
The Board of Directors shall have the optimum combination of Directors from the different areas / fields as may be considered appropriate and relevant to the operations of the Company.
The Board shall have at atleast one Board member who has accounting or related financial management expertise and atleast three members who are financially literate.
The Committee will recommend the remuneration to be paid to the Managing Director, Whole-time Director, KMP and Senior Management Personnel to the Board for their approval.
The level and composition of remuneration so determined by the Committee shall be reasonable and sufficient to attract, retain and motivate directors, Key Managerial Personnel and Senior Management of the quality required to run the company successfully. The relationship of remuneration to performance should be clear and meet appropriate performance benchmarks. The remuneration may also involve a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals:
1. Executive Directors/ Managing Director
Besides the above Criteria, the Remuneration/ compensation/ commission etc. to be paid to Executive Director/ Managing Director etc., shall be governed as per provisions of the Companies Act, 2013 and rules made thereunder or any other enactment for the time being in force.
2. Non executive Independent Directors
The Non-Executive Independent Director may receive remuneration by way of sitting fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall be subject to ceiling/ limits as provided under Companies Act, 2013 and rules made thereunder or any other enactment for the time being in force.
3. KMPs / Senior Management Personnel
The Remuneration to be paid to KMPs/ Senior Management Personnel shall be based on the experience, qualification and expertise of the related personnel and governed by the limits, if any prescribed under the Companies Act, 2013 and rules made thereunder or any other enactment for the time being in force.
Remuneration to the Managing Director and Whole time Directors:
The Company pays remuneration to its Managing Director and other Whole time Directors by way of salary and perquisites, which are fixed components and by way of commission, a variable component. Remuneration is paid in accordance with the recommendation made by the remuneration committee and approved by the Board of Directors which is subject to further approval of the shareholders and Central Government, wherever required
The company has adopted Policy for Evaluating the performance of its management personnel, the gist of which is as under:
Performance of Evaluation of Executive Directors
The Executive Directors shall be evaluated on the basis of targets / criteria, if any, given to them by the board from time to time.
Performance Evaluation of Non-Executive Directors
1. How well prepared and well informed the non-executive directors are for board meetings.
2. Frequency of the attendance at the board meetings by the directors.
3. Willingness to spend time and effort for learning about the company and its business.
4. Quality and value of contribution at board meetings.
5. Interaction with other board members, senior management and other members.
6. Can they present their views convincingly, yet diplomatically?
7. Whether they listen to the views of others.
Performance Evaluation of Independent Directors
1. Ability to contribute to and monitor corporate governance practices
2. Active participation in long-term strategic planning
3. Commitment to the fulfillment of a director's obligation and fiduciary responsibilities
Evaluation of Board and its Process
1. The frequency of meetings
2. The length of meetings
3. The administration of meeting
4. The number of committee and their roles
5. The information to board members and between board members
6. The quality and quantity of information
7. The performance of individual director:
- Personal relationship
- The collective performance of the board / committee as a team
- The individual performance and contribution
Performance Evaluation of Chairman
1. Leadership skill
2. Leadership and communication with board
3. Are board members allowed to raise views and concerns
Remuneration to Non-Executive Directors:
Non-Executive Directors are not in receipt of any remuneration other than the sitting fee of Rs.20,000/- for each meeting of the Board and Committees thereof attended by them.
5. Stakeholders' Relationship Committee:
Shri R.Soundararajan, Company Secretary, is the compliance officer for the above purpose. Based on the information obtained from the Company's Registrars, the Company had received 26 complaints from the investors during the year 2014-15 and all these complaints, being routine in nature, were redressed in the normal course by the Registrars themselves. There were no complaints pending as on 31st March, 2015. In view of these and also of the fact that all requests for transfer of shares held in physical forms were swiftly approved by the officials of the Company in terms of the authorization given to them by the Board, the need for convening a meeting of the Committee was not felt during the year 2014-15.
Corporate Social Responsibility Committee
Corporate Social Responsibility Committee as required under Section 135 of the Act, was constituted on 13th August, 2014.
Your company is committed to operate and grow its business in a socially responsible way, while reducing the environmental impact of its operations and increasing its positive social impact. It aims to achieve growth in a responsible way by encouraging people to take small every day actions that will impact a big difference. This SCL CSR Policy is guided by the following principles:
1. To conduct its operations with integrity and responsibility keeping in view the interest of all its stakeholders.
2. It believes that growth and environment should go in hand and hand.
3. It looks formal collaboration with different stakeholders including Governments, NGOs, IGOs, Suppliers, Farmers and Distributors to tackle the challenges faced by the society
During the year, one meeting of the CSR Committee was held on 22nd January, 2015.
i. Related Party Transactions:
Full disclosures of related party transactions as per the Accounting Standard 18 issued by the ICAI have been given under note 2.33 of the Notes to Financial Statements of the Annual Accounts for the year ended 31st March 2015. These transactions were entered into in the ordinary course of business and at arms length. There were no materially significant transactions with Directors, their relatives or the Senior Management that may have potential conflict with the interests of the Company at large. The Register of Contracts containing transactions, in which Directors are deemed to be interested, is placed before each meeting of the Board. All related party transactions had prior approval or omini bus approval of the Audit Committee of the Board.
ii. Statutory compliance, Penalties and Strictures:
There was no instance of non-compliance by the Company on any matter relating to capital market during the last three years or any penalties imposed or strictures passed on the Company by the Stock Exchanges, SEBI or other statutory authorities relating to capital market during the said period
iii. Compliance with Mandatory requirements and adoption of Non-Mandatory requirements:
(a) The Company has implemented all the mandatory requirements of Clause 49 of the Listing Agreement.
(b) The audited financial statements of the Company are unqualified.
(c) The Internal Auditor make presentations to the Audit Committee on their reports.
(d) The Company has adopted the 'Whistle Blower Policy' and no personnel has been denied access to the audit committee.
(e) Reconciliation of Share Capital Audit:
A qualified practicing Company Secretary carries out a share capital audit to reconcile the total admitted equity share capital with the National Securities Depositories Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) and the total issued and listed equity share capital. The audit report confirms that the total issued / paid-up capital is in agreement with the aggregate of the total number of shares in physical form and the total number of dematerialized shares held in demat form with above depositories.
9. Subsidiary Companies:
The Company does not have any subsidiaries.
10. Means of Communication: Quarterly results:
As part of compliance with Clause 41 of the Listing Agreement, the Company furnishes its quarterly financial results to the Stock Exchanges where its shares have been listed, followed by publication in the newspaper in accordance with the said Clause.
Newspapers in which the results were published:
. General Shareholder information:
a. Annual General Meeting:
Date & Time : 4.00 p.m. on Wednesday, the 23rd September, 2015
Venue : Hotel Golkonda, Masab Tank, Hyderabad - 500 028.
Financial Year : 1st April to 31st March
Book Closure Dates :From 17.09.2015 to 23.09.2015 (both days inclusive
Dividend payment date :
The company has already paid an interim dividend @ 50% i.e., Rs.5.00 per equity shares of Rs.10/- each for the year 2014-15. The Board has since recommended a further dividend @ 25% i.e., Rs.2.50 per share as final dividend, subject to its declaration by the members at the Annual General Meeting and the same will be paid to the eligible shareholders within 30 days of its declaration.
Dividend is declared at the Annual General Meeting of the shareholders, based on the recommendation of the Board of Directors. Such recommendation is made by the Board, taking into account inter-alia, company's performance during the year under review, future expansion plans, funds requirements, liquidity position.
Listing on Stock Exchanges:
Company's shares have been listed on the National Stock Exchange of India Ltd. Mumbai and BSE Ltd. Mumbai. There are no dues against listing fee payable to these Exchanges.
Stock and ISIN Codes for the Company's shares:
ISIN Code and Scrip Codes for the Company's shares on the above said Exchanges are as below:
Name of the Stock Exchange Scrip Code
National Stock Exchange of India Limited, Mumbai : SAGCEM
BSE Limited, Mumbai : 502090
ISIN : INE229C01013
i. Registrar and Share Transfer Agents:
Karvy Computershare Private Limited Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Hyderabad -500032 Phone:040-67162222 Fax:040-23001153 e-mail: firstname.lastname@example.org Toll Free No: 1800-3454-001 Website: karvycomputershare.com
j. Share Transfer System:
More than 97% of the equity shares of the Company are held in electronic form. Transfer of these shares is affected through the depositories with no involvement of the Company.
As regards transfer of shares held in physical form, the transfer documents can be lodged either with the Company at its Registered Office or with the Company's Registrars and Share Transfer Agents, whose address has been given above.
All proposals for transfer of shares held in physical form are scrutinized by the Company's Share Transfer Agents and, subject to the same being found to be in order, are approved jointly by the Joint Managing Director and the Company Secretary, who, for administrative convenience and speedy approvals, have been delegated with the necessary authority for the purpose by the Board of Directors, who note these transfers at their subsequent meetings.
l. Dematerialization of Shares and liquidity:
Trading in the shares of the Company needs to be in the electronic form only. The Company has subsisting agreements with NSDL and CDSL for the purpose. The ISIN number for the company's shares is - INE229C01013. Shares representing 97% of the share capital were kept in dematerialized form as on 31st March, 2015 as detailed below:
Details of outstanding GDR / ADR / Warrants or any other convertible instruments:
There are no outstanding GDR / ADR / Warrants or any other convertible instruments.
n. Plants Location:
1. Mattampally Via: Huzurnagar Nalgonda District Telangana - 508204
2. Pedaveedu Village Via: Huzurnagar Nalgonda District Telangana - 508204
q. Address for investors related correspondence:
Company Secretary Sagar Cements Limited Registered Office: Plot No.111, Road No.10, Jubilee Hills Hyderabad - 500033 Tel. 040 - 23351571 Fax: 040 - 23356573 Email: email@example.com