Sandur Manganese & Iron Ores Ltd
Directors Reports
Dear Members,
The Board of Directors are pleased to present the report of the
business and operations of the Company along with audited financial statements for the
financial year ended 31 March 2023 (year under review/ FY 2022-23).
Financial Results
The summary of the standalone and consolidated financial results is as
follows:
Rs. in lakh
| Particulars |
Standalone |
Consolidated* |
|
FY 2022-23 |
FY 2021-22 |
FY 2022-23 |
FY 2021-22 |
| Net Sales/Income |
2,12,580.76 |
2,24,874.15 |
2,12,580.76 |
- |
| Other Income |
5,883.75 |
3,522.58 |
5,919.74 |
- |
| Total |
2,18,464.51 |
2,28,396.73 |
2,18,500.50 |
- |
| Expenditure |
|
|
|
|
| (i) Variable |
1,51,967.62 |
1,07,877.49 |
1,51,967.62 |
- |
| (ii) Fixed |
21,350.94 |
19,583.58 |
21,371.61 |
- |
| (iii) Depreciation/Amortization |
6,425.50 |
5,560.08 |
6,425.50 |
- |
| (iv) Finance costs |
2,784.76 |
3,843.33 |
2,784.76 |
- |
| Total |
1,82,528.82 |
1,36,864.48 |
1,82,549.49 |
- |
| Profit Before Taxes |
35,935.69 |
91,532.25 |
35,951.01 |
- |
| Less: |
|
|
|
|
| (i) Current Tax |
9,156.98 |
22,453.00 |
9,156.98 |
- |
| (ii) Deferred Tax |
(312.07) |
1,567.67 |
(312.07) |
- |
| Net Profit |
27,090.78 |
67,511.58 |
27,106.10 |
- |
| Share in Profit/(Loss) of associate |
- |
- |
(27.26) |
|
| Net profit after taxes and share of loss
of associate |
27,090.78 |
67,511.58 |
27,078.84 |
|
| Add: Balance brought forward from the
previous year |
1,65,021.86 |
98,410.68 |
1,65,021.86 |
- |
| Profit before appropriation |
1,92,112.64 |
1,65,922.26 |
1,92,100.70 |
- |
| Less: Appropriations |
|
|
|
|
| (i) Dividend on Equity Shares |
1,350.29 |
900.19 |
1,350.29 |
- |
| (ii) Other comprehensive loss/(income) |
80.92 |
0.21 |
80.92 |
- |
| Total |
1,431.21 |
900.40 |
1,431.21 |
- |
| Profit carried to Balance Sheet |
1,90,681.43 |
1,65,021.86 |
1,90,669.49 |
- |
*Sandur Pellets Private Limited, a wholly owned subsidiary, was
incorporated on 7 May 2022 and the Company started presenting its consolidated financial
statements from the current year. Accordingly, the comparatives of the previous year are
not applicable.
Performance Review and State of the Company's Affairs
During the year under review, the Company has a turnover amounting to
Rs. 2,12,581 lakh and EBITDA of Rs. 45,146 lakh. Decrease in turnover compared to previous
financial year was majorly due to lower realisation in mining and ferroalloys segments
coupled with high volatility in coke segment. The segment wise revenue growth/(decline)
against previous year for mining, ferroalloys and coke & energy segments were (18)%,
(10)% and 14% respectively.
The Company recorded profit before tax of Rs. 35,936 lakh after
charging Rs. 6,426 lakh towards depreciation/amortization on fixed assets and Rs. 2,785
lakh towards finance costs. The profit before tax has decreased by 61% over the previous
year mainly due to decrease in realisation per tonne from external sales of Manganese Ore,
decrease in realisation of Iron Ore due to drop in the market price and decrease in
average selling price per MT of Ferroalloys. Further, there has been an increase in cost
of production of ferroalloys and coke due to increase price of their respective raw
materials. The segment wise result decline against previous year for mining, ferroalloys
and coke & energy segments were 41%, 70% and 89% respectively.
After charging current income tax of Rs. 9,157 lakh, deferred tax of
Rs. (312) lakh, the profit after tax (PAT) for the current year has been Rs. 27,091 lakh.
There has been a reduction in the PAT as compared to previous financial year.
STATUTORY REPORTS
Subsidiary and Associate companies incorporated during the year under
review are yet to start their operations. Hence, performance of these companies is
insignificant to the overall performance of the Company.
Projects
Existing Projects
Downhill Conveyor System
The Company's proposal for setting up a 300 tonnes per hour
Downhill Conveyor System (DCS) from the Company's Kammaturu Iron Ore Mine to PMBR
railway siding is under progress. At the head end and the tail end of the DCS, 100% of
electrical work, 85% of fabrication work and 64% of the civil works have been completed.
With current status, the DCS project is envisaged to be commissioned three months after
Stage 2 approval of Forest Clearance is granted by the Government of India, which is under
process. Successful implementation of this project will lead to seamless movement of
product, lower transportation cost and higher realizations as product will be delivered
directly at railway sliding.
Power Purchase
The Company had entered into a Share Subscription and
Shareholders' Agreement (SSSHA) with Renew Green Energy Solutions Private Limited
(RGESPL) and Renew Sandur Green Energy Private Limited (RSGEPL) and Power Purchase
Agreement with RSGEPL for the purpose of captive consumption of renewable power at the
Company's Metal
& Ferroalloys Plant. Pursuant to the SSSHA, the Company invested an
amount of Rs. 3,86,43,000/- towards subscription of 35,13,000 equity shares of Rs. 10 each
at a premium of Rs. 1 each on 6 January 2023 and Rs. 27,05,01,000 towards subscription of
2,45,91,000 equity shares of Rs. 10 each at a premium of Rs. 1 each on 30 March 2023.
Accordingly, as on 31 March 2023, the Company subscribed to 49% equity stake of RSGEPL.
As on the date of this Report, 33 MW Solar Power Plant and 9.9 MW Wind
Turbine Generators with associated electrical equipment's interconnecting the power
with Karnataka Power Transmission Corporation Limited (KPTCL) grid has been successfully
commissioned at Kudligi Taluk, Vijayanagara District, Karnataka State. With successful
commissioning and injection of above power to the grid, the objective of Rights Issue as
mentioned in the Letter of Offer dated 21 July 2022 i.e., the procurement of power at
cheaper cost to operate all the three existing furnaces of ferroalloy plant and other
expansion activities at Vyasankere, Hosapete Taluk, Vijayanagara District, Karnataka State
has been achieved.
Future Projects
The Company is exploring different strategic possibilities and
evaluating the opportunities from different parameters in order to sustain growth, achieve
substantial market share and meet its future needs. Future market for the envisaged
products, availability of infrastructure facilities and utilities are some of the critical
aspects that the Company is considering as part of next phase of expansion into
beneficiation of ores, manufacturing of pellets and setting up an integrated steel
manufacturing facilities. Appropriate decisions in this regard will be taken by the
Company based on the expert opinion, analysis and evaluation.
The following events occurred till the date of this Report:
Approval for enhancement in Maximum Permissible Annual Production
(MPAP) of Manganese Ore
On 22 February 2023, the Central Empowered Committee (CEC) constituted
by the Hon'ble Supreme Court of India, has
grantedapprovaltotheCompany,forenhancingtheCompany's Manganese Ore production from
2.86 lakh tonnes to 5.82 lakh tonnes (5.50 lakh tonnes in Mining Lease No. 2678 and 0.32
lakh tonnes in Mining Lease No. 2679). The CEC has granted approval after examining in
detail the recommendations of the Technical Committee of the Government of Karnataka and
the report of the Indian Council of Forestry Research & Education, Ministry of
Environment, Forest & Climate Change (MoEFCC) and keeping in view the Hon'ble
Supreme Court's order dated
13 April 2012 and the Judgements dated 18 April 2013 and 14 December
2017.
Grant of Environmental Clearance (EC) for increase in Iron Ore
production from 1.60 Million Tonnes Per Annum (MTPA) to 4.50 MTPA along with proposed 7.0
MTPA Beneficiation Plant and a Downhill Conveyor System
MoEFCC, Government of India, examined the Company's application
under EIA Notification 2006 and its further
amendmentsthereto,andafteracceptingtherecommendations of Expert Appraisal Committee (EAC)
during 9th EAC (Non-Coal Mining) meeting held during January 17-18, 2023 and 12th EAC
meeting held on March 21-22, 2023, has accorded Environmental Clearance on 25 April 2023
for enhancing Iron Ore production from 1.60 MTPA to 4.50 MTPA, retaining the Manganese Ore
production at 0.582 MTPA. MoEFCC has also granted approval for the proposed 7.0 MTPA Ore
Beneficiation Plant, 1.2 km Down Hill Conveyor System and 0.15 MTPA Crushing &
Screening Plant of Iron Ore and Manganese Ore in the Company's Mining lease area of
1860.10 ha (ML No: 2678).
Approvals
Subsequent to obtaining EC from MoEFCC for enhancement in production,
the Company has applied for combined Consent For Establishment (CFE) to Karnataka State
Pollution Control Board (KSPCB) seeking enhancement in Iron Ore production from 1.6 MTPA
to 4.5 MTPA, Manganese Ore production from 0.286 MTPA to 0.582 MTPA, setting up a
Beneficiation Plant of 7.0 MTPA and 1.2 km Downhill Conveyor from Kammathuru Iron Ore mine
to PMBR railway siding. On receipt of approval for Consent for Establishment from KSPCB,
the Consent For Operations (CFO) will be obtained in phased manner for enhancing the
Manganese Ore production from current 0.286 MTPA to 0.582 MTPA followed by Consent for
Operations for enhancement in Iron Ore production from 1.60 to 4.50 MTPA, Beneficiation
Plant and Downhill Conveyor Project.
The Company had represented to CEC on 26 April 2023 seeking enhancement
of MPAP of Iron Ore in Mining Lease No. 2678. The CEC after examining the proposal,
advised Federation of Indian Mineral Industries (FIMI) on 2 June 2023 for compilation of
the requisite information to enable Indian Council of Forestry Research & Education,
Dehradun to prepare Reclamation & Rehabilitation Plans at the enhanced level of
operations.
Awards and Recognitions
Five Star Rating Award
The Ministry of Mines, Government of India and Indian Bureau of Mines
have introduced the Sustainable Development Framework and have undertaken a system of
rating mining leases.
At the 75th Anniversary of Indian Bureau of Mines held on 1 March 2023
in Nagpur, the Ministry of Mines, Government of India has awarded 5 Star Rating to both
the Mining Leases of the Company, for the year 2021-22. The Company has been receiving
Five Star Rating Awards from inception of this award by Ministry of Mines, Government of
India in the year 2014 -15 and thereafter for all years. Consecutively, this is the 8th
year that the Company has received 5 star rating.
Other Awards
At the 21st MEMC Week organised by the Mines Environment
& Mineral Conservation Association of Karnataka under the aegis of
Indian Bureau of Mines, the Company has bagged a total of 17 prizes, including the overall
first prize for both the mines.
As a part of the 52nd National Safety Day programme, the Company's
plant in Vyasanakere has been awarded "Best Safety Performance Industry" on
BKRISE regional level competition by the Department of Factories and Boilers, Government
of Karnataka.
Change in the Capital Structure
As on 31 March 2023, the authorised share capital of the Company was
Rs. 11,500 lakh comprising of 11,40,00,000 Equity Shares of Rs. 10 each and 1,00,000
Preference Shares of Rs. 100 each. The paid-up share capital of the Company was
Rs. 2,700.58 lakh comprising of 2,70,05,823 Equity Shares of
Rs. 10 each.
During the year under review, the Board of Directors of the Company in
its meeting held on 10 April 2022, approved issue of up to 1,80,03,882 equity shares of
face value of Rs. 10 (Rights Equity Shares) each at a price of Rs. 10 per equity share
(Issue Price) for an amount not exceeding Rs. 18,00,38,820 on a Rights Basis to the
eligible equity shareholders of the Company in the ratio of 2 Rights Equity Shares for
every 1 fully paid-up equity share held by the eligible equity shareholders as on the
Record Date, that is on Wednesday, 27 July 2022 which got allotted on 9 September 2022.
Accordingly, the issued, subscribed and fully paid-up share capital of the Company has
increased from Rs. 9,00,19,410 divided into 90,01,941 equity shares of Rs. 10 each to Rs.
27,00,58,230 divided into 2,70,05,823 equity shares of Rs. 10 each.
The Company has neither issued equity shares with differential rights
as to dividend, voting or otherwise nor shares (including sweat equity shares) to
employees of the Company under any scheme. Further, the Company has not issued debentures,
bonds, convertible or non-convertible securities or warrants and has not held any shares
in trust for the benefit of employees where the voting rights are not exercised directly
by the employees. The Company has not bought back any of its securities during the year.
Change in the Nature of the Business
During the year under review, there was no change in nature of
business.
Dividend Distribution Policy
As per Regulation 43A of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations),
top 1000 listed companies based on market capitalization are required to formulate a
dividend distribution policy. Accordingly, the Company has adopted the Dividend
Distribution Policy which sets out the parameters and circumstances which are to be
considered by the Board in determining the distribution of dividend to its Members and/or
retaining profits earned by the Company. The Company's Dividend Distribution Policy
is available on the Company's website at https://www. sandurgroup.com/policies and
annexed to this Report as
‘Annexure A'.
Dividend
The Directors have recommended a dividend of Rs. 5 per equity share of
Rs. 10 each (50%) For the year ended 31 March 2023. The said dividend is subject to the
approval of Members at the ensuing Annual General Meeting of the Company. According to the
Finance Act, 2020, dividend income will be taxable in the hands of the Members w.e.f., 1
April 2020, and the Company is required to deduct tax at source from the dividend payable
to the Members at prescribed rates as per the Income Tax Act, 1961.
Transfer to Reserves
As permitted under the Companies Act, 2013 (the Act), the Board does
not propose to transfer any amount to general reserve and has decided to retain the entire
amount of profit for the financial year 2022-23 in the statement of profit and loss.
Transfer of Amount to Investor Education and Protection Fund
As per Section 124(5) of the Act read with rules made thereunder,
dividends remaining unpaid/unclaimed for a period of seven years from the date of transfer
to the unpaid dividend account is required to be transferred to Investor Education and
Protection Fund (IEPF). Further, the shares in respect of which dividend has not been paid
or claimed for seven consecutive years shall be transferred by the Company in the name of
IEPF.
In pursuance of the above, the dividend remaining unclaimed or unpaid
in respect of dividends declared for financial year 2014-15 amounting to Rs. 1,40,670 have
been transferred to the IEPF during the financial year 2022-23. Consequently, 504 shares
belonging to 8 Members in respect of which dividends remained unpaid/unclaimed for seven
consecutive years were also transferred to IEPF.
In the interest of the Members, the Company sends periodical reminders
to the Members to claim their dividends to avoid the transfer of dividends or shares to
the IEPF Authority. Notices in this regard are also published in the newspapers and the
details of unpaid/unclaimed dividends and Members whose shares are liable to be
transferred to the IEPF Authority, are uploaded on the Company's website at
https://www.sandurgroup. com/shares-transferred-to-iepf.
It may be noted that as per the above-mentioned provisions of the Act,
the unpaid/unclaimed dividend pertaining to the financial year 2015-16 and
unpaid/unclaimed first interim dividend pertaining to the financial year 2016-17, along
with the underlying shares are due to be transferred to IEPF by 21 October 2023 and 19
December 2023 respectively. Members who have not encashed the dividend warrant(s) from
financial year 2015-16 onwards, may forward their claims to the Company/Registrar and
Transfer Agents before 7 October 2023, to avoid any transfer of dividend or shares to the
IEPF Authority.
The information in respect of unpaid/unclaimed dividend and shares
thereto along with due date for transfer to IEPF are given below:
Financial Year |
Date of declaration |
Due date for transfer to
IEPF |
Unclaimed dividend As on 31
March 2023 |
Unclaimed shares As on 31
March 2023 |
2015-16 (Final dividend) |
14 September 2016 |
21 October 2023 |
1,45,458.00 |
48,486 |
2016-17 (Interim
dividend-I) |
12 November 2016 |
19 December 2023 |
1,43,844.00 |
71,922 |
2016-17 (Interim
dividend-II) |
31 March 2017 |
7 May 2024 |
55,732.00 |
55,732 |
2016-17 (Final Dividend) |
26 September 2017 |
2 November 2024 |
96,764.00 |
48,382 |
2017-18 (Interim Dividend) |
27 December 2017 |
2 February 2025 |
2,52,430.00 |
50,486 |
2017-18 (Final Dividend) |
1 September 2018 |
7 October 2025 |
1,06,798.00 |
53,654 |
2018-19 (Interim Dividend) |
14 November 2018 |
21 December 2025 |
1,78,111.50 |
50,989 |
2018-19 (Final Dividend) |
21 September 2019 |
28 October 2026 |
1,10,792.50 |
31,655 |
2019-20 (Interim Dividend
I) |
11 November 2019 |
18 December 2026 |
71,950.00 |
35,975 |
2019-2020 (Interim Dividend
II) |
5 March 2020 |
11 April 2027 |
1,99,810.00 |
39,962 |
2020-21 (Final Dividend) |
22 September 2021 |
29 October 2028 |
2,38,216.00 |
26,157 |
2021-22 (Final Dividend) |
28 September 2022 |
3 November 2029 |
1,19,210.00 |
24,743 |
The voting rights on the shares lying with IEPF shall remain frozen
till the rightful owner claims the shares. The benefits arising out of the shares
transferred to IEPF is credited to IEPF Authorities. The Members can claim the same from
the IEPF Authorities.
The Members whose unpaid/unclaimed dividends or shares are transferred
to the IEPF can request the Company/Registrar and Transfer Agent as per the applicable
provisions in the prescribed e-form IEPF-5 for claiming the unpaid/unclaimed dividend or
shares out of the IEPF. The process for claiming the unpaid/unclaimed dividend or shares
out of the IEPF is also available on the Company's website at https://www.
sandurgroup.com/others.
Bijan Kumar Dash, Company Secretary and Chief Compliance Officer is the
Nodal Officer under the provisions of IEPF.
Subsidiary Company, Associate Company and Joint Ventures
During the year under review, the Company had incorporated a Wholly
Owned Subsidiary (WOS) company with the name "Sandur Pellets Private Limited" on
7 May 2022 by subscribing to 100% of its share capital. There has been no change in the
nature of business of the WOS. The Company does not have any material subsidiary as per
Regulation 16(1)(c) of Listing Regulations. The Policy on Determining Material Subsidiary
is uploaded on the Company's website at https://www. sandurgroup.com/policies.
On 5 May 2023, the State Level Environment Impact Assessment Authority,
Karnataka, constituted by Ministry of Environment and Forest, Government of India approved
the transfer of Environmental Clearance (Order No. SEIAA 46 IND 2020) dated 11 February
2022 for establishment of Iron Ore and Manganese Ore Beneficiation plant at Sy No.
89(Part),
97/3, 98 & 99, Jaisinghpur (Venkatagiri) village, Sandur Taluk,
Ballari District, Karnataka which was earlier granted to M/s. Excel Mining and Infra
Services in favour of Sandur Pellets Private Limited, WOS of the Company. Accordingly, the
WOS is in the process of initiating its business operations in the year 2023-24.
Pursuant to the Share Subscription and Shareholders' Agreement
entered with Renew Green Energy Solutions Private Limited and Renew Sandur Green Energy
Private Limited (RSGEPL), the Company has subscribed to 49% of the paid-up equity share
capital in RSGEPL, thereby making it an associate company.
The Company does not have any joint ventures.
The disclosure pursuant to first proviso to Section 129(3) of the Act
read with Rule 5 of the Companies (Accounts) Rules, 2014 is annexed with this Report as
‘Annexure B'. Further, as per the provisions of Section 136 of the Act, the
standalone and consolidated financial statements of the Company along with relevant
documents and separate audited financial statement in respect of Company's
subsidiary, are available on the Company's website at https://www.sandurgroup.com/
subsidiaries.
Significant and aterial Orders passed by the Regulators or Courts or
Tribunals impacting the going concern status of the Company
There are no significant and material orders passed by the
Regulators/Courts/Tribunals that would impact the going concern status of the Company and
its future operations.
Material changes and commitment, if any, affecting the financial
position of the Company which occurred between the end of the financial year to which
these financial statement relate and the date of the report
No material changes and commitment affecting the financial position of
the Company occurred between the end of the financial year to which financial statement
relate and the date of this Report.
Particulars of contracts or arrangements made with related parties
In terms of clause (h) of Section 134(3) of the Act read with Rule 8(2)
of the Companies (Accounts) Rules, 2014, the particulars of the contracts or arrangements
entered into by the Company with its related parties as referred to in Section 188(1) of
the Act in Form No. AOC-2 is annexed with this Report as
‘Annexure C'.
During the year under review, all related party transactions entered
into by the Company were on an arm's length basis and in the ordinary course of
business. All Related Party Transactions are placed before the Audit Committee of the
Company and placed before Board for information/approval, as and when required. With a
view to ensure continuity of day-to-day operations, an omnibus approval is obtained for
related party transactions which are of repetitive nature, entered in the ordinary course
of business and at arm's length basis.
A statement giving details of all related party transactions entered
pursuant to the omnibus approval so granted, is placed before the Audit Committee on a
quarterly basis for its review.
Further, the Company has not entered into any contract/
arrangement/transaction with related parties which are considered to be material as per
Regulation 23 of the Listing Regulations and the Company's Policy on Related Party
Transactions. In terms of Regulation 23(9) of the Listing Regulations, the Company submits
the details of related party transactions as per the specified format to the stock
exchange on a half yearly basis.
In line with the requirements of the Act and the Listing Regulations,
the Company has formulated a Policy on Related Party Transactions and the same can be
accessed on the Company's website at https://www.sandurgroup.com/policies.
Particulars of Loans, Guarantees or Investments
The particulars of investments made under Section 186 of the Act have
been disclosed in the financial statement. The Company has not granted any loans or
provided guarantees under Section 186 of the Act.
Deposits
The Company does not have any deposits at the beginning of the
financial year and has neither accepted nor renewed any deposits during the year under
review. Thus, provisions of Section 73 of the Act are not applicable to the Company.
Directors and Key Managerial Personnel
As on the date of this Report, the Board consists of seven members -
one Managing Director, one Whole Time Director, four Independent Directors (including one
Woman Director) and one Non-Executive Non-Independent Director. The Chairman of the Board
is a Non-Executive Director.
Induction
During the year, the Company has not appointed any Director or Key
Managerial Personnel.
Re-appointments
During the year, the following re-appointments were made by the
Company:
• Jagadish Rao Kote (DIN: 00521065) was re-appointed as an
Independent Director by the Members of the Company through Postal Ballot on 17 July 2022,
for a second term of five consecutive years with effect from 27 May 2022 to 26 May 2027.
The Board opined that he is a person of integrity and possess relevant expertise and
experience (including proficiency) and he satisfies the independence criteria as laid down
under the Act and the Listing Regulations.
• At the 68th Annual General Meeting (AGM) held on 28 September
2022: a. In terms of the provisions of Section 152(6) of the Act, Mohammed Abdul Saleem
(DIN: 00061497), Director of the Company, liable to retire by rotation and who being
eligible, offered himself for reappointment, was re-appointed by the Members.
b. Hemendra Laxmidas Shah (DIN: 00996888) who was on the Board as
Non-Executive Director was appointed as an Independent Director, for a term of five
consecutive years with effect from 1 October 2022 to 30 September 2027. The Board opined
that he is a person of integrity and possess relevant expertise and experience (including
proficiency) and he satisfies the independence criteria as laid down under the Act and the
Listing Regulations.
c. Mohammed Abdul Saleem (DIN: 00061497) was reappointed as Whole Time
Director designated as Director (Mines) for a further term of three years with effect from
1 October 2022 to 30 September 2025.
d. Bahirji Ajai Ghorpade (DIN: 08452844) was reappointed as Managing
Director for a further term of three years with effect from 1 October 2022 to 30 September
2025.
During the period from 1 April 2023 till the date of this Report,
subject to the approval of the members, the following reappointments are proposed to be
made:
• In terms of the provisions of Section 152(6) of the Act, T. R.
Raghunandan (DIN: 03637265), the Director of the Company is liable to retire by rotation
at the ensuing Annual General Meeting and being eligible, offered himself for
reappointment.
• The Board at its meeting held on 3 August 2023, accorded its
approval for appointment of Latha Pillai (DIN: 08378473), as an Independent Director of
the Company for a second term with effect from 8 March 2024 to 7 March 2029 (both days
inclusive), subject to Members' approval at the ensuing Annual General Meeting. The
Nomination and Remuneration Committee (NRC) at its meeting held on 17 May 2023, had
reviewed domain skills, professional experience and industry exposure of Latha Pillai,
Independent Director and noted that she fulfils the skills/expertise/competencies required
in context of the Company's business. Thereafter, the NRC considering the excellent
rating assigned to Latha Pillai during performance evaluation for the year 2022-23,
recommended her appointment for a further period of five consecutive years to the Board as
it will be advantageous and beneficial for the Company. Further, the Company has received
a notice in writing from a Member proposing her candidature for the office of Director
pursuant to Section 160 of the Act. The Board opined that she is a person of integrity and
possess relevant expertise and experience (including proficiency) and she satisfies the
independence criteria as laid down under the Act and the Listing Regulations.
Cessation
During the year, S. S. Rao (DIN: 00150816) ceased to be the Independent
Director of the Company from closure of business hours on 10 November 2022, upon
completion of his second term. The Board of Directors and the Management of the Company
placed on record their profound appreciation for the contributions made by S. S. Rao
during his association with the Company over the years.
As on 31 March 2023, the following were the Key Managerial Personnel of
the Company as per Section 2(51) and 203 of the Act:
• Bahirji Ajai Ghorpade, Managing Director;
• Mohammed Abdul Saleem, Whole Time Director designated as
Director (Mines);
• Uttam Kumar Bhageria, Chief Financial Officer & Chief Risk
Officer;
• Bijan Kumar Dash, Company Secretary & Chief Compliance
Officer.
Board Meetings
The Board meets at regular intervals to discuss and decide on
Company's business policies and strategies apart from other regular and important
business items. However, in case a special and urgent business requires approval of the
Board, such approval is taken by passing resolution through circulation, as permitted by
law, which is taken on record in the subsequent Board meeting.
During the financial year 2022-23, the Board met eight times i.e., 10
April 2022, 18 May 2022, 6 July 2022, 21 July 2022,
11 August 2022, 10 November 2022, 9 February 2023 and 24 March 2023.
The details and particulars of Board meetings are given in the Corporate Governance Report
forming part of this Report.
Policy on Directors' Appointment and Remuneration
The Company has adopted Policy on Nomination and Remuneration of
Directors, Key Managerial Personnel (KMPs) and other employees which inter-alia includes
criteria for determining qualification, positive attributes, independence of a director
and other matters provided under sub-Section (3) of Section 178 of the Act and relevant
provisions of Listing Regulations. The Members may refer Corporate Governance Report for
details regarding this policy. The policy is also available on the Company's website
at https://www. sandurgroup.com/policies. During the year under review, the Policy was
reviewed and amended by the Nomination and Remuneration Committee and the Board at its
meeting held on 11 August 2022.
Declaration by Independent Directors
All the Independent Directors of the Company meet the criteria of
independence as provided under Section 149(6) of the Act and Regulation 16(1)(b) of
Listing Regulations. Declarations to this effect have been received from them as
prescribed under Section 149(7) of the Act. Further, in terms of Regulation 25(8) of the
Listing Regulations, they have confirmed that they are not aware of any circumstance or
situation which exists or may reasonably be anticipated that could impair or impact their
ability to discharge their duties. During the financial year 2022-23, there has been no
change in the circumstances affecting their status as Independent Directors of the
Company.
The Independent Directors have also complied with the Code for
Independent Directors prescribed in Schedule IV to the Act and Code of Conduct for
Directors and Senior Management formulated by the Company under Regulation 17(5) of
Listing Regulations.
Board Evaluation
The Nomination and Remuneration Committee and the Board have laid down
the manner in which formal evaluation of the performance of the Board, committees,
individual Directors and the Chairman has to be made annually.
During the evaluation process, it was ensured that all the provisions
relating to Board evaluation of the Act and Listing Regulations, are followed. The
criteria for evaluation were based on the Guidance Note on Board Evaluation issued by the
Securities and Exchange Board of India (SEBI) and the guidelines issued by Institute of
Company Secretaries of India (ICSI). The Board evaluation was done internally. All
Directors responded through a structured questionnaire giving feedback about the
performance of the Board, its Committees, individual Directors and the Chairman. The
questionnaire for evaluation of Board was based on several parameters like structure of
the Board, meetings of the Board, functions of the Board, relationship and communication
between Board and management and professional development of Directors. Similarly, the
evaluation criteria for Committee, individual Directors, and the Chairman were set on
different parameters.
At the Board meeting that followed the meeting of the Independent
Directors on 9 February 2023, the outcome of evaluation was discussed. The feedback
received on the performance evaluation of individual Directors was intimated separately to
each Director by the Chairman of the Board by mail. Similarly, outcome of evaluation of
Chairman of Board was intimated to him by the elected Chairman of the separate meeting of
Independent Directors.
Meeting of Independent Directors
A separate meeting of Independent Directors for the financial year
2022-23 as per Clause VII (1) of Schedule IV under Section 149(8) of the Act and
Regulation 25(3) of the Listing Regulations was held on 9 February 2023, wherein the
Independent Directors reviewed the performance of Non-Independent Directors, Chairman of
the Board and the Board as a whole.
Training and Familiarisation Programme for Independent Directors
Details of training and familiarization programme are provided in the
Corporate Governance Report forming part of this Report.
Board Committees
The Board has constituted six Committees to assist the Board in
effectively discharging its functions and responsibilities. These committees support
Board's work in line with the applicable provisions of the Act and Listing
Regulations, namely:
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders Relationship Committee;
4. Corporate Social Responsibility Committee;
5. Risk Management Committee;
6. Corporate Sustainability Committee.
In addition to the above, the Board at its meeting held on
10 April 2022 constituted a "Right Issue Committee" of the
Board to decide detailed terms and conditions of the Company's Right Issue and
matters connected or incidental thereto. The Board at its meeting held on 10 November 2022
taken note of the dissolution of the Right Issue Committee after completion of Rights
Issue formalities in all aspects.
The details of the Committees including composition, terms of
reference, meeting details etc., are provided in the Corporate Governance Report forming
part of this Report.
The recommendations, if any, of these Committees are submitted to the
Board for approval. During the year under review, the Board had accepted the
recommendations of the Committees.
Vigil Mechanism
The Company believes in conducting its affairs in a fair and
transparent manner by adopting highest standards of professionalism, honesty, integrity
and ethics. The Company has established a vigil mechanism towards this approach. In
accordance with Section 177(9) of the Act read with Rule 7(2) of the Companies (Meetings
of Board and its Powers) Rules, 2014, the Company's Audit Committee oversees the
vigil mechanism which has been established to address genuine concerns about unethical
behaviour, actual or suspected fraud, leak of Unpublished Price Sensitive Information or
violation of the Company's Code of Conduct and Ethics Policy, if any, expressed by
the Director(s) or employees or any other person.
The Company has adopted a Whistle Blower Policy which provides for
adequate safeguards against victimisation of Director(s) or employee(s) or any other
person who avail such mechanism. The Company has also provided direct access to the
Chairman of the Audit Committee in matters concerning financial, accounting and concerns
relating to officers belonging to above Senior General Manager level.
The Whistle Blower Policy is available on the Company's website at
https://www.sandurgroup.com/policies. During the year under review, the Policy was
reviewed and amended by the Audit Committee and the Board at its meeting held on 18 May
2022.
Directors' Responsibility Statement
In accordance with the provisions of Section 134(3)(c) of the Act, the
Directors confirm that: (a) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation relating to material
departures;
(b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as at 31 March 2023
and of the profit and loss of the Company For the year ended 31 March 2023;
(c) 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;
(d) the Directors have prepared the annual accounts for the financial
year ended 31 March 2023 on a ‘going concern' basis;
(e) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and are
operating effectively; and
(f) 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.
Details in respect of frauds reported by Auditors under sub-Section
(12) of Section 143 of the act other than those which are reportable to the Central
Government
The Auditors have not reported any frauds during the year under review.
Adequacy of Internal Financial Controls
The Company has established a robust framework for internal financial
controls. The Company has in place adequate controls, procedures and policies, ensuring
orderly and efficient conduct of its business, including adherence to the Company's
policies, safeguarding of its assets, prevention and detection of frauds and errors,
accuracy and completeness of accounting records and timely preparation of reliable
financial information. The Company has a well-defined delegation of power with
well-defined authority and responsibility matrix defining the financial limits for
approving revenue as well as capital expenditure. Segregation of duties has been well
defined to remove the concentration of power within few offcials. The Company uses a
state-of-the-art Enterprise Resource Programming (ERP) system to record data for
accounting, consolidation and management information purposes and connects to different
locations for efficient exchange of information. It has continued its efforts to align all
its processes and controls with global best practices.
M/s. P. Chandrasekar LLP, Chartered Accountants, have been appointed to
oversee and carry out internal audit of Company's activities. The audit is based on
an internal audit plan, which is reviewed each year in consultation with the Statutory
Auditors and approved by the Audit Committee. In line with international practice, the
internal audit plan aims at review of internal controls and risk in operations. The Audit
Committee reviews audit reports submitted by the internal auditor. Suggestions for
improvement are considered and the Audit Committee follows up on them. During the year,
such controls were assessed and no reportable material weaknesses in the design or
operation were observed. Accordingly, the Board is of the opinion that the Company's
internal financial controls were adequate and effective during the financial year 2022-23.
The Statutory Auditors in their report has stated that the Company has,
in all material respects, an adequate internal financial controls system with reference to
standalone and consolidated financial statements and such internal financial controls with
reference to standalone and consolidated financial statements were operating effectively
as at 31 March 2023, based on the criteria for internal financial control with reference
to standalone and consolidated financial statements established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
Annual Return
A copy of Annual Return, in Form MGT-7, pursuant to the provisions of
Section 92(3) of the Act read with relevant Rules of the Companies (Management and
Administration) Rules, 2014 as amended from time to time is available on the website of
the Company at https://www.sandurgroup.com/agm-postal-ballots.
Auditors
Statutory Auditor
M/s. R. Subramanian and Company LLP, Chartered Accountants, Chennai
(Firm Registration No. 004137S/ S200041), were appointed as Statutory Auditors of the
Company at the 63rd AGM held on 26 September 2017 in terms of the provisions of Section
139 of the Act, to hold office until the conclusion of 68th AGM.
As the term of five years of the M/s. R. Subramanian and Company LLP
came to an end at the conclusion of 68th AGM, based on the recommendation of the Audit
Committee and the Board, the Members of the Company at the 68th AGM held on 28 September
2022 appointed M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Registration
No.008072S) as the Statutory Auditors of the Company for a term of five consecutive years
i.e., from the conclusion of 68th AGM till the conclusion of 73rd AGM of the Company, at
such remuneration as may be mutually agreed between the Board of Directors and the
Auditors. In terms of Companies (Amendment) Act, 2017, effective from 7 May 2018, the
requirement of seeking ratification of auditors' appointment at every Annual General
Meeting has been dispensed with.
The Auditors Report on the financial statement of the Company For the
year ended 31 March 2023, is forming part of this Report.
Secretarial Auditor
Pursuant to the provisions of Section 204(1) of the Act and Regulation
24A of the Listing Regulations, the Company is required to annex with its Board's
Report a secretarial audit report, given by a Company Secretary in Practice. N. D. Satish,
Practicing Company Secretary (having ICSI Membership No. F10003 and Certificate of
Practice No. 12400) has been appointed as Secretarial Auditor of the Company for the
financial year 2022-23. The Secretarial Audit Report is forming part of this Annual Report
as ‘Annexure D'.
In accordance with Regulation 24A of Listing Regulations read with SEBI
Circular No. CIR/CFD/CMD1/27/2019 dated
8 February 2019, the Company has obtained Secretarial Compliance Report
for the financial year ended 31 March 2023 from the Secretarial Auditor of the Company and
the same has been submitted to the stock exchange (BSE) on 29 May 2023.
Cost Auditor and Cost Records
In terms of Section 148(2) of the Act read with Rule 4 of the Companies
(Cost Records and Audit) Rules, 2014, the Company is required to get its cost accounting
records audited by a cost auditor. The Board had, at its 359th meeting held on 11 August
2022, appointed M/s. K. S. Kamalakara & Co. as Cost Auditors for the financial year
2022-23 and the same was ratified by the Members at the 68th Annual General Meeting of the
Company.
The Board after considering the recommendations of the Audit Committee,
reappointed M/s. K. S. Kamalakara & Co. as Cost Auditors for the financial year
2023-24. A resolution seeking approval of the Members for ratifying the remuneration
payable to the Cost Auditors for financial year 2023-24 is provided in the Notice of the
ensuing Annual General Meeting.
In accordance with Rule 6(5) of the Companies (Cost Records and Audit)
Rules, 2014, the Cost Auditor is required to submit his report within 180 days from the
date of closure of financial year and the Company is required to file the same with the
Ministry of Corporate Affairs (MCA) within 30 days from the date of receipt of the cost
audit report. The Cost Audit Report for the financial year 2021-22 was filed with the MCA
on 26 August 2022.
The Cost accounts and records as required to be maintained under
Section 148(1) of the Act are duly made and maintained by the Company.
Internal Auditor
The Company has appointed M/s. P. Chandrasekar LLP, Chartered
Accountants as Internal Auditor of the Company as mandated under provisions of Section 138
of the Act to evaluate the internal controls and financial reporting.
Auditors Observation
There are no qualifications, reservations, adverse remarks or
disclaimers made by the Statutory Auditor, Secretarial Auditor, Internal Auditor and Cost
Auditor in their respective reports.
Secretarial Standards
Pursuant to the provisions of Section 118 of the Act, the Company has
complied with the applicable provisions of the Secretarial Standards issued by the
Institute of Company Secretaries of India and notified by Ministry of Corporate Affairs
(MCA) except delay in circulation of agenda papers and draft minutes of Board/Committee
meetings to Board of Directors or Committee members in few instances. However, all the
members of the Board/Committees approved minutes of the meetings and the same were taken
note of in the subsequent meeting.
Corporate Governance
Corporate Governance Report forms part of this Report. A Certificate on
Corporate Governance Report as required under
Regulation 34(3) read with Schedule V of Listing Regulations, issued by
M/s. Deloitte Haskins & Sells, Chartered Accountants, is annexed to this Report as
‘Annexure E'.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report as required under clause
(e) of Regulation 34(2) read with Schedule V of the Listing Regulations, forms part of
this Report.
Business Responsibility & Sustainability Report
Business Responsibility & Sustainability Report as required under
clause (f) of Regulation 34(2) of the Listing Regulations depicting initiatives taken by
the Company from an environmental, social and governance aspect forms part of this Report.
Statement concerning Development and Implementation of Risk Management
Policy of the Company
The Board has constituted Risk Management Committee to proactively
identify, assess and mitigate risks in order to protect its business, improve Corporate
Governance and enhance stakeholders' value. The Risk Management Committee lay down
procedures for risk assessment and minimization. It shall serve as the ‘eyes and
ears' for the Company which would ensure that the Company is insulated from risks
both at the macro and micro level. The Risk Management Committee periodically reviews the
various risks associated with the Company's business, industry, operation and
recommends steps to be taken to control, monitor and mitigate the risk.
The Company has in place a Risk Management Policy to identify and
evaluate various business risks and opportunities. The Risk Management Policy is available
on website of the Company at https://www.sandurgroup.com/policies.
In terms of Regulation 21 of the Listing Regulations, Uttam Kumar
Bhageria is the Chief Risk Officer of the Company.
The Company believes that periodic review of various risks which has a
bearing on the business and operations of the Company is vital to proactively manage
uncertainty and changes in the internal and external environment so that it can limit the
adverse impact and capitalize on opportunities.
The Company's risk management is embedded in the business
processes as a part of review of business and operations. The Board with the support of
the management periodically assess various risks associated with the business and
operations of the Company and considers appropriate risk mitigation processes. However,
there are certain risks which cannot be avoided but the impact can only be minimized.
The Management Discussion and Analysis Report forming part of this
Report also contains information on risk and concerns relating to industry. The Company
has well defined roles and responsibilities of Board of Directors, Audit Committee, Risk
Management Committee, Chief Risk Officer to have a seamless process in place regarding
risk identification, assessment, mitigation and monitoring.
Corporate Social Responsibility
Pursuant to the provisions of Section 135 of the Act read with rules
made thereunder, the Corporate Social Responsibility Committee has been constituted by the
Board for the purposes of recommending and monitoring the CSR initiatives of the Company.
The details such as composition, terms of reference, meetings held etc., are mentioned in
the Corporate Governance Report forming part of this Report.
Details of Policy Developed and Implemented by the Company on its
Corporate Social Responsibility (CSR) Initiatives
The Company as a responsible corporate citizen has been, for close to
seven decades, consciously contributing towards betterment of the local area and living
standards of its people, and also protection and improvement of the environment. In
accordance with Section 135 of the Act, the Company has undertaken CSR activities,
projects and programs, excluding activities undertaken in pursuance of its normal course
of business.
Reaching out to under privileged communities is a part of the
Company's philosophy and culture. The Company shall continue to be mindful of its
social and moral responsibilities towards consumers, employees, members, and the local
community. The Company works primarily through Karnataka Seva Sangha (Implementing Agency)
towards supporting projects in the areas of education, healthcare and sanitation,
community development including protection of national heritage, restoration of historical
sites, and promotion of art and culture, enhancing vocational skills; promoting healthcare
including preventive healthcare, and rural development, environmental sustainability and
ecological balance, promotion of traditional arts and handicrafts.
As against the approved budget of CSR contribution of
Rs. 889.42 lakh for financial year 2022-23, Rs. 680.40 lakh was spent,
and Rs. 209.02 lakh was transferred to unspent CSR account as per provision of Section 135
(6). Rs. 209.02 lakh will be spent during financial year 2023-24 for the Ongoing Project
of construction of three Schools of Sandur Education Society. The Annual Report on
Company's CSR activities of the
Company undertaken during the year 2022-23 is furnished in
‘Annexure F'.
The Company's Corporate Social Responsibility Policy can be
accessed on Company's website at https://www.sandurgroup. com/policies. The Members
may refer to the Annual Report on CSR for details regarding the policy. During the year
under review, the Policy was reviewed and amended by the Corporate Social Responsibility
Committee and the Board at its meeting held on 10 November 2022.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Particulars relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo as prescribed in Section 134(3)(m) of the Act read
with Rule 8(3) of the Companies (Accounts) Rules, 2014 are set out in ‘Annexure
G' to this Report.
Particulars of Employees
In terms of the first proviso to Section 136 of the Act, the Reports
and Accounts are being sent to the Members excluding the information required under Rule
5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, which is available for inspection by the Members at the Registered Office of
the Company during business hours on working days of the Company. Any Member interested in
obtaining the same may write to the Company Secretary of the Company.
The statement containing information as required under the provisions
of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is given in ‘Annexure H' and
forms part of this Report.
Remuneration received by Managing Director/ Whole Time Director from
Holding Company or Subsidiary Company
During the year under review, the Managing Director/Whole Time Director
has not received any remuneration from holding company or subsidiary company.
Credit Rating
During the year under review, there has been no change in the credit
ratings of the Company. As on 31 March 2023, the Company had the following credit ratings:
Instrument Details |
Amount (in Rs. lakh) |
Rating upgraded |
Name of credit rating
agency |
Long term rating Short term
rating |
89,600 |
A (Stable) A1 |
ICRA |
Long term rating Short term
rating |
89,600 |
A (Stable) A1 |
CRISIL |
Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
In compliance with the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has constituted
an Internal Complaints Committee (ICC) for the prevention and redressal of complaints
related to sexual harassment at workplace. During the year under review, no complaints
were received relating to sexual harassment.
Disclosure of Transactions of the Company with any person or entity
belonging to the Promoter/ Promoter Group which holds 10% or more shareholding in the
Company
The transactions with the person or entity belonging to the
promoter/promoter group which hold (s) 10% or more shareholding in the Company have been
disclosed in the accompanying financial statements.
General Disclosures
No disclosure or reporting is required in respect of the following
items as there were no transactions on these items during the year under review: a) the
details of application made or any proceeding pending under the Insolvency and Bankruptcy
Code, 2016 (31 of 2016) during the year along with their status as at the end of the
financial year.
b) the details of difference between amount of the valuation done at
the time of one-time settlement and the valuation done while taking loan from the Banks or
Financial Institutions along with the reasons thereof.
Acknowledgement
The Directors wish to thank members of judiciary, its associates and
legal fraternity for their strong commitment to justice, fairness and equity. The
Directors also extend their gratitude to the Union and the State Governments for their
support as well as confidence and recognitions bestowed on the Company.
The Directors wish to place on record their appreciation of all its
employees for their commendable teamwork, professionalism and dedication. And ultimately,
the Directors wish to thank all the government agencies, promoters, business associates,
banks and investors for their continued support and trust.
|
For and on behalf of the Board of
Directors |
|
T. R. Raghunandan |
| Place: Bengaluru |
Chairman |
| Date: 3 August 2023 |
DIN: 03637265 |