CORPORATE GOVERNANCE REPORT
Company's Philosophy on Code of Governance
Corporate Governance refers to, but not limited to, a set of laws, regulations and good practices & systems that enable an organisation to perform efficiently and ethically to generate long term wealth and create value for all its stakeholders. Corporate Governance requires everyone to raise their levels of competency and capability to meet the expectations in managing the enterprise and its resources optimally with prudent ethical standards. The Company recognises that good corporate governance is a continuous exercise.
Adherence to transparency, accountability, fairness and ethical standards are an integral part of the Company's function. Your Company's structure, business dealings, administration and disclosure practices are aligned to good corporate governance philosophy. Your Company has an adequate system of control in place to ensure that the executive decisions taken should result in optimum growth and development which benefits all the stakeholders. The Company aims to increase and sustain its corporate values through growth and innovation.
Date of Report
The information provided in this Report on Corporate Governance for the purpose of unanimity is as on 31st March, 2016. This Report is updated as on the date of the Report wherever applicable.
Board of Directors
The Company recognises the importance of a diverse board in its success. The Board is entrusted with the ultimate responsibility of the management, direction and performance of the Company and has been vested with the requisite powers, authorities and duties. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) mandate that for a company with a non-executive chairman, atleast one third of the board should comprise of independent directors. As on 31st March, 2016, the Board comprised of 9 (nine) directors, of which 6 (six) (two third) were Independent Directors including the Chairman. The composition of the Board is compliant with the requirements of Regulation 17(1) of the Listing Regulations.
The composition of the Board of Directors as on 31st March, 2016, the number of other Board of Directors or Board Committees of which a director is a Member/ Chairperson and the attendance of each director at the Board meetings and the last Annual General Meeting (AGM) of the Company were as follows:
The composition of the Board and other provisions as to Board and Committees are in compliance with the Listing Regulations. The Independent Directors of the Company fulfil the criteria for "independence" and / or "eligibility" as prescribed under the Listing Regulations and Section 149 of the Companies Act, 2013 (the Act). Except Shri Vivek Saraogi and Smt. Meenakshi Saraogi, who are related to each other (Shri Vivek Saraogi is son of Smt. Meenakshi Saraogi), no director of the Company is related to any other director of the Company.
None of the directors on the Board is a member of more than 10 committees and / or Chairman of more than 5 committees, reckoned in terms of Regulation 26 of the Listing Regulations. The Independent Directors of the Company do not serve in more than the prescribed number of companies as independent directors in terms of the requirements of the Listing Regulations.
The Board has devised proper system to ensure compliance with the provisions of all applicable laws and periodically reviewed the compliance reports of all laws applicable to the Company and necessary steps were taken to ensure the compliance in letter and spirit.
The Board of Directors of the Company met 5 (five) times during the year 2015-16. Atleast one meeting of the Board was held in
In terms of Regulation 25 of the Listing Regulations, the Company is required to conduct various programmes for the Independent Directors of the Company to familiarise them with their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc.
The details of such programmes for familiarisation of the Independent Directors are put on the website of the Company at the following web-link: <http://www.chini.com/familiarisation_programme.pdf>
Independent Directors' Separate Meeting
Schedule IV to the Act and the Listing Regulations mandates the Independent Directors of the Company to hold atleast one meeting in a year, without the attendance of non-independent directors and members of the management. During the year ended 31st March, 2016, the Independent Directors met on 8th February, 2016, inter alia, to review performance of Non-Independent Directors & the Board as a whole, to review performance of the Chairman of the Company and to assess the quality, quantity and timeliness of flow of information between the management of the Company and the Board.
Code of Conduct
In terms of Regulation 17 of the Listing Regulations, there exists a Code of Conduct, laid down by the Board, for all Board Members and Senior Management of the Company. The Code of Conduct is available on the website of the Company. The Board Members and Senior Management Personnel have affirmed compliance with the said Code in terms of Regulation 26 of the Listing Regulations.
A declaration to this effect for the financial year 2015-16 from the Managing Director of the Company is annexed to this Report.
The Board has constituted various committees consisting of Executive and Non-Executive Directors of the Company to meet various mandatory requirements of the Act and the Listing Regulations as well as to perform other critical functions. Currently, the Board has 6 (six) committees: Audit Committee, CSR Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Executive Committee and Share Transfer Committee. The composition of the said committes have been disclosed on the website of the Company. The Company Secretary acts as the Secretary to all the Committees of the Board.
The Audit Committee acts as the link between the management, the Statutory and Internal Auditors and the Board of Directors of the Company.
Terms of Reference
The terms of reference of the Audit Committee are in conformity with the requirements of Regulation 18 of the Listing Regulations and Section 177 of the Act. Terms of reference of the Audit Committee includes overseeing the financial reporting process, review of financial statements, ensuring compliance with the regulatory guidelines, review of internal audit reports, recommending appointment and remuneration of auditors to the Board of Directors and to review adequacy of internal control systems and internal audit function and other matters specified for Audit Committee under the Listing Regulations and Section 177 of the Act. The Audit Committee also reviews information as per the requirement of Part C of Schedule II to the Listing Regulations.
Composition, Meetings and Attendance
The composition of the Audit Committee is in accordance with the provisions of the Act and Regulation 18 of the Listing Regulations.
As on 31st March, 2016, the Audit Committee comprised of 6 (six) directors - 5 (five) of whom are Independent, Non-Executive and 1 (one) is Promoter, Executive. All of them are experts in corporate finance, accounts and corporate laws. The Chairman of the Committee is an Independent Non-Executive Director, nominated by the Board. The Committee meetings were attended by the
Chief Financial Officer of the Company as an invitee. The Statutory Auditors also attended the meetings as and when required. The Committee also invited the representatives of Internal Auditors for obtaining valuable guidance from their expertise in best practices in Internal Audit. The Cost Auditors were also invited whenever the Cost Audit related matters were considered. The minutes of the Audit Committee meetings were circulated to the Board, discussed and taken note of. All recommendations made by the Audit Committee during the year were accepted by the Board
Nomination & Remuneration Committee
The terms of reference of the Nomination & Remuneration Committee cover all the areas mentioned under Regulation 19 of the Listing Regulations and Section 178 of the Act. The broad terms of reference of the Committee includes:
(i) To formulate the criteria for determining qualifications, positive attributes and independence of a Director;
(ii) To recommend to the Board a policy relating to the remuneration for the directors, key managerial personnel and other employees of the Company;
(iii) To identify persons who are qualified to become directors and who may be appointed in senior management;
(iv) To evaluate the performance of all Directors.
As on 31st March, 2016, the Nomination & Remuneration Committee comprised of 4 (four) directors, all of whom are Non-Executive, Independent Directors.
The Criteria for selection of Directors (including Board Diversity) and persons in Senior Management along with the Remuneration Policy as recommended by the Nomination & Remuneration Committee and approved by the Board of Directors are annexed to the Board's Report and are also available on the Company's website.
The Non-Executive Directors do not have any pecuniary relationship/ transactions with the Company in their personal capacity other than Commission (not exceeding the limits prescribed under the Companies Act, 2013) and Sitting Fees (paid at the rate of Rs.40,000/- for attending each meeting of the Board and Rs.20,000/- for attending each meeting of the Committees thereof). The aggregate commission payable to the Non-Executive Directors is upto one percent of the net profit of the Company with a maximum ceiling of Rs.30 Lacs per annum in such proportion and manner as fixed by the Board of Directors.
The Commission payable to the Managing Director, Joint Managing Director and Director cum Chief Financial Officer are at the rate of one percent of the net profit of the Company, subject to a ceiling of Rs.150 Lacs p.a. each in case of Managing Director, Joint Managing Director and Rs.48 Lacs p.a. in case of Director cum Chief Financial Officer
Performance Evaluation and Criteria
Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out the performance evaluation of its own performance and that of its Committees as well as evaluation of performance of the Directors individually. The performance evaluation of the Independent Directors was also carried out by the entire Board (excluding the director being evaluated).
The performance evaluation of the Board, its Chairman and the Non-Independent Directors were carried out by the Independent Directors. The Nomination & Remuneration Committee also carried out evaluation of every director's performance. The evaluation for the year 2015 - 16 was carried out through structured questionnaires (based on various aspects of the Board's functioning, composition, its committees, culture, governance, execution and performance of statutory duties and obligations). The Directors expressed their satisfaction with the evaluation process.
The Executive Committee, constituted during the year by the Board of Directors of the Company, met 3 (three) times during the year 2015-16. The terms of reference of the said Committee includes the following:
i. To approve and / or authorise opening of bank accounts, cash credit, current, dividend payment or otherwise and to give instructions relating to such banking accounts.
ii. To borrow money/monies, from time to time, for the purpose of the Company, from banks / Financial Institutions.
iii. To authorise affixation of the Company's Common Seal.
iv. To confer signing powers and authorities on such officers and employees of the Company as deemed fit for various operational and statutory matters.
v. To perform such other function as may be delegated by the Board of Directors from time to time.
Pursuant to the provisions of the Act, the CSR Committee is required to formulate and recommend to the Board, a Corporate Social Responsibility Policy indicating the activities to be undertaken by the Company as specified under Schedule VII to the Act and also recommend the amount of expenditure to be incurred therein. It monitors the Corporate Social Responsibility Policy of the Company from time to time. During the year ended 31st March, 2016, 2 (two) CSR Committee meetings were held on 27th May, 2015 and 8th February, 2016. The composition and attendance of the members of the CSR Committee are as follows:
i) Stakeholders Relationship Committee
The Stakeholders Relationship Committee considers and resolves the grievances of security holders of the Company. The Stakeholders Relationship Committee also oversees the redressal of shareholders' and investors' grievances in relation to the transfer of shares, non-receipt of annual report, non-receipt of declared dividend, among others. During the year ended 31st March, 2016, 2 (two) Stakeholders Relationship Committee meetings were held on 12th August, 2015 and 8th February, 2016. The composition and attendance of the members of the Stakeholders Relationship Committee are as follows:
ii) Share Transfer Committee
The Share Transfer Committee of the Board deals with various matters/ requests relating to share transfer/transmission, allotment, issue of duplicate share certificates, demat/remat, split and consolidation requests and other matters relating to transfer and registration of shares.
During the year ended 31st March, 2016, 18 (eighteen) Share Transfer Committee meetings were held on 18th April, 2015, 4th May, 2015, 20th May, 2015, 29th June, 2015, 17th July, 2015, 4th August, 2015, 26th August, 2015, 15th September, 2015, 28th October, 2015, 9th November, 2015, 21st November, 2015, 30th November, 2015, 14th Dedember, 2015, 19th January, 2016, 16th February, 2016, 4th March, 2016, 16th March, 2016 and 30th March, 2016.
The Board has designated Shri Nitin Bagaria, Company Secretary as the Compliance Officer. Details of Shareholders' complaints
A total of 32 (thirty-two) complaints were received and replied to the satisfaction of the shareholders during the year ended 31st March, 2016. There were no outstanding complaints as on 31st March, 2016. No share was pending for transfer as on 31st March, 2016.
Details of Resolution passed through Postal Ballot
During the year ended 31st March, 2016, the Company has passed the following Special Business through Postal Ballot (including e-voting), conducted in accordance with the provisions of Sections 108 and 110 and other applicable provisions of the Act read together with Rules 20 and 22 of the Companies (Management and Administration) Rules, 2014 (as amended), Secretarial Standard 2 on General Meetings and the Listing Regulations:
Special Resolution: To keep Register of Members etc. at a place other than the Registered Office of the Company.
Notice of Postal Ballot were sent through permitted modes (email, speed post and courier) to all the members of the Company along with Postal Ballot Form and postage pre-paid self-addressed envelopes (in case of physical dispatches). The said dispatch was completed on 25th February, 2016.
Shri Vivek Saraogi, Managing Director and Shri Nitin Bagaria, Company Secretary of the Company, were authorised by the Board and were responsible for conducting the entire postal ballot and e-voting process under the provisions of the Act read together with the rules made there under and in terms of the Listing Regulations.
The Board had appointed Shri Mohan Ram Goenka, Company Secretary in Practice as the Scrutinizer, for scrutinizing the Postal Ballot process in a fair and transparent manner. On the basis of the
Means of Communication
The quarterly and annual results were published in the leading English and Bengali newspapers such as Business Standard (All editions) and Arthik Lipi. Subsequent to the applicability of the Listing Regulations, the extracts of the quarterly / periodic results were published in the said newspapers and the full format of the results were filed with the Stock Exchanges and were available on the Stock Exchange websites www.nseindia.com and www. bseindia.com The results were also displayed on the Company's website www.chini.com
Presentations were also made to the analysts, institutional investors, fund managers, among others from time to time. Such presentations were also posted on the Company's website.
i) The Company does not have any materially significant related party transactions, which may have potential conflict with the interests of the Company at large. The transactions with related parties, in normal course of business, have been disclosed separately in the Notes to the Financial Statements. The Company has disclosed the policy on dealing with the related party transactions on its website at the following web-link: <http://www.chini.com/Policy_on_materiality_of_Related_> Party_Transactions.pdf
ii) There were no instances of non-compliances related to capital markets during the year under review and no penalties/ strictures were imposed against the Company during the last three years.
iii) Whistle Blower Policy framed by the Company to deal with unethical behavior, victimization, fraud and other grievances or concerns, if any, is available on Company's website at the following web-link: <http://www.chini.com/Vigil_Mechanism_Policy.pdf>.
During the year 2015-16, no personnel has been denied access to the Audit Committee.
iv) All mandatory requirements relating to corporate governance under the Listing Regulations have been appropriately complied with and the status of non-mandatory (discretionary) requirements is given below:
1. The Company doesn't bear any expenses of the Non-Executive Chairman's Office.
2. The Financial Statements are free from any Audit Qualifications.
3. The Company has appointed separate persons as its Chairman and Managing Director.
4. The Internal Auditors of the Company report directly to the Audit Committee.
v) The Company doesn't have any unlisted subsidiary company as defined in the Listing Regulations and therefore corresponding disclosures have not been made.
vi) In terms of the Listing Regulations, the Management Discussion and Analysis Report forms part of the Annual Report. Disclosures relating to risks including commodity price risk, foreign exchange risk, etc., have been adequately covered under the Management Discussion and Analysis Report.
vii) The CEO & CFO Certification for the year 2015-16 forms part of the Annual Report.
viii) The Company has followed the prescribed Accounting Standards in preparation of its financial statements.
ix) The Company has laid down Risk Assessment and Minimization procedures and the same are periodically reviewed by the Board. The Company has a defined Risk Management Policy approved by the Board of Directors of the Company. Further, the Company has adequate internal control systems to identify risks at appropriate time and to ensure that the executive management controls the risk through properly defined framework.
x) Other items which are not applicable to the Company have not been separately commented upon.
General Shareholders' Information
Annual General Meeting (AGM) and Book Closure Dates
The Day, Date, Time and Venue of the 40th Annual General Meeting and Book Closure Dates in relation thereto have been indicated in the Notice convening the AGM, which forms part of the Annual Report.
The financial year of the Company is from 1st April to 31st March every year.
Financial year calendar for 2016 - 17 (Tentative)
Results for the quarter ending 30th June, 2016 - 2nd week of August, 2016
Results for the quarter ending 30th September, 2016 - 1st week of November, 2016
Results for the quarter ending 31st December, 2016 - 1st week of February, 2017
Results for the quarter ending/Annual 31st March, 2017 - 3rd week of May, 2017
Details of Listing of Equity Shares and Stock Code
National Stock Exchange of India Ltd. (NSE) Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra - Kurla Complex, Bandra (E), Mumbai 400 051.
Stock Code : BALRAMCHIN
BSE Ltd. (BSE) PJ Towers, Dalal Street, Fort, Mumbai 400 001.
Stock Code : 500038
The Calcutta Stock Exchange Ltd. 7, Lyons Range, Kolkata 700 001. [Application for delisting has been made].
Stock Code : 12012
Listing fee for the year 2016-17 has been paid to each of the above named stock exchanges.
National Securities Depository Ltd. Trade World, 4th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai 400 003.
Central Depository Services (India) Ltd. Phiroze Jeejeebhoy Towers, 17th Floor, Dalal Street, Mumbai 400 023.
ISIN : INE119A01028 (Equity Shares)
NSE - BACH.NS and BSE - BACH.BO
Registrar and Share Transfer Agent (w.e.f. 1st April, 2016)
Karvy Computershare Private Limited 1st Floor, 49, Jatin Das Road, Kolkata- 700029.
Karvy Computershare Private Limited Karvy Selenium Tower B, Plot No. 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad-500032. Tel. No. 040-67161500 Fax No. 040-23420814 Toll Free No.18003454001 Email: email@example.com Website: www.karvycomputershare.com
Share Transfer System
All valid share transfer requests / demat requests are processed and put into effect within a maximum period of 15 days from the date of receipt.
The Company provided share registration and other investor services through its in-house department up to 31st March, 2016.
M/s. Karvy Computershare Pvt. Ltd. has been appointed as the Registrar and Share Transfer Agent of the Company with effect from 1st April, 2016, for servicing all matters relating to physical and demat shares such as transfer, transmission, dematerialisation, rematerialisation, dividend etc. Accordingly, members may please address all correspondence and requests relating to the Shares of the Company to M/s Karvy Computershare Pvt. Ltd at any of the above mentioned addresses.
Unit 1 : Balrampur (Sugar, Co-generation, Distillery and Organic Manure divisions), Dist. Balrampur, Uttar Pradesh.
Unit 2 : Babhnan (Sugar, Co-generation, Distillery and Organic Manure divisions), Dist. Gonda, Uttar Pradesh. Unit 3 : Tulsipur (Sugar division), Dist. Balrampur, Uttar Pradesh.
Unit 4 : Haidergarh (Sugar and Cogeneration divisions), Dist. Barabanki, Uttar Pradesh.
Unit 5 : Akbarpur (Sugar and Co-generation divisions), Dist. Ambedkarnagar, Uttar Pradesh.
Unit 6 : Mankapur (Sugar, Co-generation, Distillery and Organic Manure divisions), Dist. Gonda, Uttar Pradesh.
Unit 7 : Rauzagaon (Sugar and Co-generation divisions) Dist. Faizabad, Uttar Pradesh.
Unit 8 : Kumbhi (Sugar and Co-generation divisions), Dist. Lakhimpur-Kheri, Uttar Pradesh.
Unit 9 : Gularia (Sugar and Co-generation divisions), Dist. Lakhimpur-Kheri, Uttar Pradesh.
Unit 10 : Maizapur (Sugar division), Dist. Gonda, Uttar Pradesh.
Disclosures relating to risks and activities including commodity price risk, foreign exchange risk, etc., have been adequately covered under the Management Discussion and Analysis Report forming part of the Annual Report.
Shri Nitin Bagaria, Company Secretary Balrampur Chini Mills Ltd. FMC Fortuna, 2nd Floor 234/3A, A.J.C. Bose Road Kolkata - 700 020 Phone : (033) 2287 4749 Email - firstname.lastname@example.org The Company has designated email@example.com
(email id) exclusively for the purpose of registering complaints by investors.
For and on behalf of the Board of Directors
Dr. Arvind Krishna
DIN - 00846939
Saxena Vivek Saraogi
DIN – 00221419
Date: 20th May, 2016