REPORT ON CORPORATE GOVERNANCE
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE:
Bhagyanagar India Limited to set the highest standards of Corporate Governance right from its inception benchmarked with the best class practices across the globe. Effective Corporate Governance is the manifestation of professional beliefs and values, which configures the organizational values, credo and actions of its employees. The aim of "Good Corporate Governance" is to ensure commitment of the board in managing the company in a transparent manner for maximizing long-term value of the company for its shareholders and all other partners. It integrates all the participants involved in a process, which is economic, and at the same time social.
Hence it harmonizes the need for a company to strike a balance at all times between the need to enhance shareholders' wealth whilst not in any way being detrimental to the interests of the other stakeholders in the company.
2. BOARD OF DIRECTORS:
a) Composition and Category of Directors:
In terms of compliance with the requirement of clause 49(I)(A) of Listing Agreement, the Company endeavour to have an optimum combination of Executive and Non-Executive Directors to maintain the independence of the Board and separate the functions of Governance and Management through Board and Committees. As on 31st March, 2015, the Board consist of the following:
• 6 Independent Non-executive Directors;
• 4 Executive Directors;
• 1 Non-Executive Director.
d) Number of Board Meetings held and the date on which held:
In terms of compliance with the requirement of clause 49(I) (C) of Listing Agreement, 5 (Five) Board Meetings were held during the financial year ended 31.03.2015. The maximum gap between any two Board Meetings was not more than 120 days at any time.
The dates on which the Board meetings were held are: 12.05.2014 08.08.2014 22.09.2014 11.11.2014 11.02.2015
Details of the Board Committees and other related information are provided hereunder:
3. AUDIT COMMITTEE:
(i) Brief description of terms of reference:
The terms of reference stipulated by the Board to the Audit Committee includes review of the following:
• Management Discussion and Analysis of financial condition and results of operations;
• Statement of significant related party transactions submitted by Management;
• Management letters / letters of internal control weaknesses issued by the Statutory Auditors;
• Internal Audit Reports relating to internal control weaknesses; and
• The appointment, removal and terms of remuneration of the Chief Internal Auditor.
• Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
• Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the Statutory Auditor and the fixation of Audit fees.
• Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors.
• The annual financial statements before submission to the Board for approval, with particular reference to following with the Management:
i. Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of Clause (3C) of Section 134 of the Companies Act, 2013
ii. Changes, if any, in accounting policies and practices and reasons for the same.
iii. Major accounting entries involving estimates based on the exercise of judgment by Management
iv. Significant adjustments made in the financial statements arising out of Audit findings
v. Compliance with listing and other legal requirements relating to financial statements
vi. Disclosure of any related party transactions
vii. Qualifications in the draft Audit Report.
• Reviewing, with the Management, the quarterly financial statements before submission to the Board for approval.
• Reviewing, with the Management, performance of Statutory and Internal Auditors, adequacy of the internal control systems.
• Reviewing the adequacy of internal audit function, if any, including the structure of the Internal Audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.
• Discussion with Internal Auditors any significant findings and follow up there on.
• Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.
• Discussion with Statutory Auditors before the Audit commences, about the nature and scope of Audit as well as post-Audit discussion to ascertain any area of concern.
• To review the functioning of the Whistle Blower Mechanism.
• To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.
4. NOMINATION & REMUNERATION COMMITTEE:
(i) Brief description of terms of reference:
During the year at a meeting of the Board of Directors of the Company held on 12th May, 2014 in compliance with the provisions of the Companies Act, 2013 and the listing agreement, the Board has renamed its "Remuneration Committee" as the "Nomination and Remuneration Committee". The brief terms of reference of the Nomination and Remuneration Committee, inter alia, include the following:
a. Identifying and selection of persons for appointment as directors and senior management in accordance with the criteria laid down and to recommend to the Board their appointment.
b. Formulate the criteria for determining qualifications, positive attributes and independence of a Director.
c. Recommend/review remuneration of the Managing Director and Whole time Director(s) based on performance and defined assessment criteria.
d. Recommend to the Board a policy for selection and appointment of Directors, Key Managerial Personnel and other senior management positions.
e. Formulate and review criteria for evaluation of performance of the Board of Directors
f. Devise a policy on Board diversity.
g. Succession planning for the Board level and key management positions.
h. Carry out any other function as mandated by the Board from time to time and/or enforced by any statutory notification/amendment.
(iv) REMUNERATION POLICY:
The nomination and remuneration committee has adopted a Nomination and Remuneration Policy which, interalia, deals with the manner of selection of Board of Directors, KMP & other senior management and their remuneration. The extract of the same is as follows:
a) Remuneration to Executive Director and KMP:
Executive Directors and KMP are eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee. The Executive Director and KMP remuneration is determined based on levels of responsibility and scales prevailing in the industry. The executive directors are not paid sitting fee for any Board/ Committee meetings attended by them.
b) Remuneration to Non-Executive Directors:
The Non- Executive / Independent Director may receive remuneration by way of sitting fees for attending meetings of Board or Committees thereof.
(i) Details of Remuneration of Non - Executive Directors:
The Company pays Sitting fees to all the Non-executive Directors at the rate of X 10,000/- for each meeting. The details of Sitting Fees paid to the Non-executive Directors for attending Board Meetings and Committee Meetings during the financial year 2014-15 are as follows:
(ii) Pecuniary relationship or transactions of Non-Executive Director:
Apart from receiving sitting fees for attending the Board and Audit Committee Meetings, the Non-Executive Independent Directors do not have any other material pecuniary relationship or transactions with the Company, its promoters or its Management, which in the opinion of the Board may affect independence of judgment of such Directors.
FAMILIARISATION PROGRAMMES FOR BOARD MEMBERS:
Your Company follows a structured orientation and familiarisation programme through various reports/codes/internal policies for all the Directors with a view to update them on the Company's policies and procedures on a regular basis. Periodic presentations are made at the Board Meetings on business and performance, long term strategy, initiatives and risks involved. The framework on familiarisation programme have been posted in the website of the Company.
CODE OF CONDUCT:
The Company has in place a comprehensive Code of Conduct applicable to all the employees and Non-executive Directors including Independent Directors. The Code is applicable to Non-executive Directors including Independent Directors to such extent as may be applicable to them depending on their roles and responsibilities. The Code gives guidance and support needed for ethical conduct of business and compliance of law. A copy of the Code has been posted on the Company's website.
INDEPENDENT DIRECTORS' MEETING:
During the year, meeting of Independent Directors was held to review the performance of the Board as a whole on parameters of effectiveness and to assess the quality, quantity and timeliness of flow of information between the management and the Board.
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Board Committees. A structured questionnaire was prepared after circulating the draft forms, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
The Performance evaluation of the Chairman and Managing Director and the Non-Independent Directors was carried out by the Independent Directors. The Directors express their satisfaction with the evaluation process.
5. STAKEHOLDERS RELATIONSHIP COMMITTEE:
(i) Brief description of terms of reference:
During the year at a meeting of the Board of Directors of the Company held on 12th May, 2014 in compliance with the provisions of the Companies Act, 2013 and the listing agreement, the Board has renamed its "Shareholders Grievance Committee" as the "Stakeholders Relationship Committee". The Stakeholders Relationship Committee constituted by the Board of Directors interalia approves transfer of shares and redresses shareholders / investor's grievances and complaints regarding non-receipt of Dividends, Annual Reports, etc.
6. RISK MANAGEMENT COMMITTEE:
The Company has constituted a Risk Management Committee which has laid down procedures to inform the Board of Directors about the Risk Management and its minimization procedures. The Board of Directors review these procedures periodically.
(i) Disclosures on materially significant related party transactions i.e., transactions of the company of material nature, with its promoter, the directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of company at large:
Besides the transactions mentioned elsewhere in the Annual Report, there were no materially significant related party transactions during the year conflicting with the interest of the Company.
(ii) Details of non-compliance by the company, penalties, strictures imposed on the company by Stock Exchange, SEBI or any statutory authority, on any matter related to capital markets, during the last three years: None.
(iii) Whistle Blower policy:
Pursuant to Section 177(9) and (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has formulated Whistle Blower Policy for vigil mechanism for Directors and employees to report to the management about the unethical behavior, fraud or violation of Company's code of conduct. The mechanism provides for adequate safeguards against victimization of employees and Directors who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in exceptional cases. None of the personnel of the Company has been denied access to the Audit Committee. The policy is available on the Company website, www.bhagyanagarindia com.
(iv) Non Mandatory Requirements:
Adoption of non-mandatory requirements of Clause 49 of the Listing Agreement is being reviewed by the Board from time to time.
9. MEANS OF COMMUNICATION:
i. Financial / Quarterly Results:
The Company intimates un-audited as well as audited financial results to the Stock Exchanges, immediately after the Board meetings at which they are approved. The results of the Company are also published in at least one prominent national and one regional newspaper having wide circulation. Normally the results are published in Business Standard (English) and Suryaa (Telugu). The financial results are also displayed on the Company's website www.surana.com and www.bhagyanagarindia.com
ii. Newspapers wherein results normally published
The official news releases are published in Business Standard and Surya (Telugu) Newspapers, Detailed presentations made to institutional investors, financial analyst, etc. are displayed on the Company's website www.surana.com and www.bhagyanagarindia.com
The website www.bhagyanagarindia.com contains a separate dedicated section for the Company's "Investor Relations" where shareholders' information is available. The full Annual Report, shareholding pattern etc. is also available in the 'Investor Relations' sections on the website of the Company.
CEO/ CFO Certification
In line with the requirements of Clause 49 (V) of the Listing Agreement, Shri Narender Surana, Shri Devendra Surana, Managing Directors, Shri Surendra Bhutoria, Chief Finance Officer have submitted a certificate to the Board, certifying inter-alia, that the Financial Statements and the Cash Flow Statement for the year ended March 31, 2015 were reviewed to the best of their knowledge and belief, that they do not contain any material untrue statement, do not omit any material facts, are not misleading statements, together present a true and fair view and are in compliance with the applicable laws and regulations. The certificate further confirms that the transactions entered into by the Company for establishing internal control, financial reporting, evaluation of the internal control systems and making of necessary disclosures to the Auditors and the Audit Committee have been complied with.
Dividend History of the Company:
Pursuant to the provisions of Section 124 of the Companies Act, 2013, Dividends for the financial year ended 31st March, 2009 and thereafter, which remain unclaimed for a period of seven years, will be transferred to the Investor Education and Protection Fund established by the Central Government pursuant to Section 124 of the Companies Act, 2013, Information in respect of the due date for transfer of such unclaimed dividend to the said fund is given below:
The members are advised to send all the unencashed dividend warrants pertaining to the above years to our RTA for revalidation or issuance of Demand Draft in lieu thereof and encash them before the due dates for transfer to the IEPF. It may also be noted that once the Unclaimed Dividend is transferred to the Investor Education and Protection Fund, no claim shall lie in respect thereof.
The Management Discussion and Analysis Report:
A Report of the Management Discussion and Analysis is attached as part of the Annual Report.
10. GENERAL SHAREHOLDER INFORMATION:
Annual General Meeting
Date Time Venue : 30th September, 2015 10.00 AM Grand Solitaire Hotel, 1-240, 41 & 43, S.D. Road, Parklane, Secunderabad-500003
Financial Calendar : 1st April to 31st March.
Date of Book Closure : 25.09.2015 to 30.09.2015 (both days inclusive)
Dividend Payment Date : 07.10.2015
Listing on Stock Exchanges
National Stock Exchange of India Limited
Stock Code : 512296 on BSE BHAGYNAGAR on NSE
ISIN Number for NSDL & CDSL
ii) Registrar and Transfer Agents
Share Transfers & Communication regarding Share Certificates, Dividends & Change of Address may be sent to
M/s KARVY COMPUTERSHARE PRIVATE LIMITED
Karvy Selenium Tower B, Plot No 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad - 500 032 Phone # +91-40-67162222 Fax # 91-40-23420814, Toll Free No.1800-3454-001 Email ID: email@example.com Website : http//www.karvy.com
iii) Share Transfer System
The Transfer of shares in physical form is processed and completed by Registrar & Transfer Agents within a maximum period of 30 days from the date of receipt, provided all the documents are in order. In case of shares in electronic form, the transfers are processed by NSDL/CDSL through respective Depository Participants. In compliance with the Listing Agreement with the Stock Exchanges, a Practicing Company Secretary carries out audit of the system of transfer and a certificate to that effect is issued.
iv) Reconciliation of share Capital Audit:
As stipulated by the SEBI, a qualified Practicing Company Secretary carries out the Share Capital Audit to reconcile the total admitted Capital with NSDL and CDSL and the total issued and listed capital. The Audit is carried out every quarter and the Report thereon is submitted to the Stock Exchanges and is also placed before the Board of Directors. The Report inter-alia confirms the total listed and paid up share capital of the Company is in agreement with the aggregate of the total dematerialised shares and those in the physical mode
vii) Dematerialisation of Shares & Liquidity
The trading in Company's shares is permitted only on dematerialized form. In order to enable the shareholders to hold their shares in electronic form and to facilitate scrip-less trading, the Company has enlisted its shares with NSDL and CDSL.
viii) Plant Locations:
i) Bhagyanagar India Limited Plot No. P-9/13(1) & P-9/14 IDA, Nacharam, Hyderabad – 500 076
ii) Harinam Wires (Copper Unit) Plot No. P-9/13, (A), (B), (C), Industrial Development Area Nacharam, Hyderabad - 500 076.
iii. Hardware Park Plot No. 22B, Raviryal Village, Maheshwaram Mandal, R. R Dist, Hyderabad – 532 409
Wind Power Division
Kapatguda, Gadag District, Karnataka (9MW)
Solar Power Division (5 MW) Sy. No. 468-470, 477 & 478 Munipally (V & M), Medak District, Telangana.
ix) Address for correspondence
Sl. No. Shareholders Correspondence for Address
1. Transfer/Dematerialization/ Consolidation /Split of shares, Issue of Duplicate Share Certificates, Non-receipt of dividend/ Bonus shares, etc., change of address of Members and Beneficial Owners and any other query relating to the shares of the Company.
M/s. Karvy Computershare Pvt. ltd.
Karvy Selenium Tower B, Plot No 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally Hyderabad - 500 032 Phone # +91-40- 67162222 Fax # 91-40- 23001153, Toll Free No.1800-3451-001 Email ID: firstname.lastname@example.org Website : www.karvy.com
2. Investor Correspondence / Queries on Annual Report, Revalidation of Dividend Warrants, Sub- Narender Surana
Managing Director Division, etc.
Bhagyanagar India Limited
5th Floor, Surya Towers, S.P.Road, Secunderabad - 500 003. Ph Nos. 040 - 27845119/ 44665750 E-mail : email@example.com Investorservices firstname.lastname@example.org Website : www.surana.com www.bhagyanagarindia.com
11. Depository Services:
For guidance on Depository Services, Shareholders may write to the Company or to the respective Depositories:
National Securities Depository Ltd
Trade World, 4th Floor, Kamala Mills Compound, Lower Parel, Mumbai – 400 013 Tel : 091-022-24972964-70 Fax : 091-022-24972993 / 24976351 Email :email@example.com.
Central Depository Services (India) Ltd Phiroze Jeejeebhoy Towers, 17th Floor, Dalal Street, Mumbai – 400 023 Tel : 091-022-22723333/22723224 Fax: 091-022-22723199 Email : firstname.lastname@example.org
12. Company's Policy on prevention of insider trading:
Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulations, 2015, and in continuation with your Company's efforts to enhance the standards of corporate governance in the Company, and to strictly monitor and prevent insider trading within the company, your company has in place a Code of Conduct which is approved by the Board.
The Managing Director is acting as Compliance Officer for the said purpose. The code is applicable to all such employees, officers, Directors and Promoters of the Company who are expected to have access to the unpublished price sensitive information relating to the Company and the same is being implemented as a self-regulatory mechanism. The code has been circulated to all the members of the Board and Senior Management and others concerned the compliance of the same has been affirmed by them.