CORPORATE GOVERNANCE REPORT
6.1 Our Philosophy on Corporate Governance
BHEL has established a sound framework of Corporate Governance which underlines commitment to quality of governance, transparency disclosures, consistent stakeholders' value enhancement and corporate social responsibility. BHEL endeavours to transcend much beyond the regulatory framework and basic requirements of Corporate Governance focusing consistently towards building confidence of its various stakeholders including shareholders, customers, employees, suppliers and the society at large. The Company has developed a framework for ensuring transparency, disclosure and fairness to all, especially minority shareholders.
The Vision of BHEL envisages "being a global engineering enterprise providing solutions for a better tomorrow" and its Mission is "providing sustainable business solutions in the fields of Energy, Industry & Infrastructure".
The Corporate Governance Policy of BHEL rests upon the four pillars of Transparency, Full Disclosure, Independent Monitoring and Fairness to all. To strengthen this, BHEL has signed a MoU with Transparency International to adopt 'Integrity Pact'. Our corporate structure, business procedures and disclosure practices have attained a sound equilibrium with our Corporate Governance Policy resulting in achievement of goals as well as high level of business ethics. BHEL's Corporate Governance policy is based on the following principles:
i) Independence and versatility of the Board
ii) Integrity and ethical behave our of all personnel
iii) Recognition of obligations towards all stakeholders - shareholders, customers, employees, suppliers and the society
iv) High degree of disclosure and transparency levels
v) Total compliance with laws in all areas in which the company operates
vi) Achievement of above goals with compassion for people and environment
The Company believes that conducting business in a manner that complies with the Corporate Governance procedures and Code of Conduct, exemplifies each of our core values and positions us to deliver long-term returns to our shareholders, favourable outcomes to our customers, attractive opportunities to our employees and making the suppliers our partners in progress & enriching the society.
6.2 Board of Directors
i. Composition & Category of Directors
Pursuant to Section 2(45) of the Companies Act, 2013 BHEL is a 'Government Company' as 63.06% of the total paid-up share capital of the Company is held by the President of India.
The composition of Board of Directors of BHEL has an appropriate mix of Executive Directors represented by Functional Directors including CMD and Non-Executive Directors represented by Government Nominees & Independent Directors, to maintain the independence of the Board and to separate the Board functions of management and control. As the Chairman is an Executive Director, Independent Directors comprise half of the strength of the Board.
The composition of the Board of Directors is as
No Director of the Company holds office at the same time as Director in more than twenty (20) companies. No Director of the Company is a member in more than ten (10) Committees or is a Chairman of more than five (5) Committees across all companies in which he is a Director.
iv. No. of Board Meetings held, dates on which held
The meetings of the Board are normally held at the Company's Registered Office in New Delhi and are scheduled well in advance. The Company Secretary, in consultation with the Chairman & Managing Director, sends a written notice of each Board meeting to each Director. The Board agenda is circulated to the Directors in advance.
The members of the Board have access to all information of the Company and are free to recommend inclusion of any matter in agenda for discussion. In case of need, the senior management is invited to attend the Board Meetings to provide additional inputs relating to the items being discussed and/ or to give presentation to the Board. The Board meets at least once in a quarter to review the quarterly results and other items on the agenda. Additional meetings are held, when necessary.
During the year under review, the Board met nine times on the following dates:
(i) April 5, 2014
(ii) May 12, 2014
(iii) May 29, 2014
(iv) July 14, 2014
(v) August 12, 2014
(vi) November 14, 2014
(vii) December 11, 2014
(viii) January 7, 2015
(ix) February 12-14, 2015
v. Board's Responsibilities
The Board's mandate is to oversee the Company's strategic direction, review and monitor corporate performance, ensure regulatory compliance and safeguard the interests of the shareholders.
vi. Role of Independent Directors
The Independent Directors play an important role in deliberations at the Board and Committee meetings and bring to the Company their expertise in the fields of engineering, finance, management, law and public policy.
The Independent Directors are part of important
Committees constituted by the Board such as the Audit Committee, Nomination & Remuneration Committee and CSR Committee. In terms of Companies Act, 2013 & Clause 49 of the Listing Agreement, the Audit Committee and the Nomination & Remuneration Committee are chaired by an Independent Director and functions within their respective defined terms of references.
Further, in line with DPE OM dated 28th December, 2012 on Model Role & Responsibilities of Non-Official Directors for CPSEs, the Board had constituted a Committee of Independent Directors. The said Committee is in compliance with the requirements of Clause 49 of Listing Agreement and the Code of Independent Directors under Companies Act, 2013. The minutes of all the Board Level Committee Meetings are circulated and discussed in the Board Meetings. Details regarding familiarization programme of Independent Directors are available on the website of the Company 'www.bhel.com' at web link : <http://www.bhel.com/investor_relations/> pdf/familiriazation_progrm_for_IDs.pdf
vii. Information placed before the Board of Directors
The information under the following heads are usually presented to the Board of Directors of BHEL either as part of the agenda papers or are tabled/ presented during the course of Board meetings:
• Annual operating plans and budgets and any updates
• Capital budgets and any updates
• Quarterly results for the company and its operating divisions or business segments
• Minutes of meetings of Audit Committee and other Committees of the Board
• Minutes of Board Meetings of unlisted subsidiary companies
• Statement of all significant transactions and arrangements entered into by unlisted subsidiary companies
• The information on recruitment of senior officers just below the Board level
• Details of any Joint Venture or R&D project or technical collaboration agreement requiring approval of Board of Directors
• Significant labour problems and their proposed solutions. Any significant developmentin Human Resources/ Industrial Relations front like signing of wage agreement, implementation of Voluntary Retirement Scheme etc.
•Sale of material, nature of investments, subsidiaries, assets, which is not in normal course of business
•Quarterly details of foreign exchange exposures and the steps taken by management to limit the issues of adverse exchange rate movement, if material
• Action Taken Report on matters desired by the Board
•Disclosure of Interest by Directors about directorships and Committee positions occupied by them in other companies
•Quarterly report on compliance of various laws
•Information relating to major legal disputes
•Status of Arbitration cases
•Short term investment of surplus funds
•Any contract(s) in which Director(s) are deemed to be interested
•Status of shareholders' grievances on quarterly basis
•Significant Capital Investment proposals
•Changes in significant accounting policies & practices and reasons for the same
•Performance of various units/ functions
•Any other information required to be presented to the Board either for information or approval
viii. Selection of New Directors
As per Articles of Association of BHEL, the President of India through Department of Heavy Industry, Ministry of Heavy Industries & Public Enterprises, appoints the Chairman & Managing Director, Functional Directors and Part-time Official Directors on the Board of BHEL and also nominates Part-time Non-official (Independent) Directors on the Board of BHEL.
The Independent Directors are selected by the Department of Heavy Industry in consultation with the Search Committee of the Department of Public Enterprises which maintains a panel of eminent personalities having wide experience in the field of Management, Finance, Engineering, Administration and Industry.
ix. Membership term & Retirement policy
The appointment of Chairman & Managing Director and Functional Directors shall be on such terms and conditions, remuneration and tenure as the President of India may from time to time determine.
Two Part-time Official Directors viz. Additional Secretary/ Joint Secretary, Department of Heavy Industry, Ministry of Heavy Industries & Public Enterprises and Additional Secretary & Financial Adviser, Ministry of Commerce and Industry are nominated by the Government of India on the Board of BHEL. They continue to be on the Board of BHEL at the discretion of the Government of India.
The tenure of Part-time Non-official (Independent) Directors is decided by the Department of Heavy Industry. Normally, an Independent Director is appointed for a period of three years.
x. Code of Conduct
As part of BHEL's persisting endeavour to set a high standard of conduct for its employees, a 'Code of Business Conduct and Ethics' was laid down for all Board Members and Senior Management personnel and the same was revised in line with changes in the regulatory framework & changing business dynamics and to incorporate other relevant provisions to strengthen the Code. Pursuant to revised Clause 49(II)(E) of the Listing Agreement with the Stock Exchanges, the Board of Directors of BHEL in its 465th meeting held on 14th November, 2014 revised and approved the "Code of Business Conduct & Ethics for Board Members and Senior Management Personnel" of the Company. The Code encompasses:
• General Moral Imperatives;
• Specific Professional Responsibilities; and
• Specific Additional Provisions for Board Members and Senior Management Personnel.
A copy of the said revised Code has been placed on the Company's website 'www.bhel.com' Additional suggestions/ ideas to improve the said Code are gladly invited.
xi. Charter of the Board of Directors
For the purpose of clearly defining the roles and responsibilities of the Board and individual Directors, the Board has laid down a Charter of the Board of Directors. The Charter also articulates our corporate governance objectives and approach.
xii. CEO/CFO certification
CEO / CFO certification pursuant to Clause 49(IX) of the Listing Agreement is enclosed at Annexure-II of the Directors Report.
6.3 Board Level Audit Committee i. Terms of reference
The terms of reference of the Board Level Audit Committee specified by the Board are in conformity with the requirements of Section 177 of the Companies Act, 2013 as well as Clause 49 of the Listing Agreement and are as follows:
1. 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;
2. Recommendation for appointment, remuneration and terms of appointment of auditors of the company;
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
4. Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval, with particular reference to:
i. Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 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;
5. Reviewing, with the management, the quarterly financial statements and auditor's report thereon before submission to the board for approval;
6. Reviewing, with the management, the statement of uses/ application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/ prospectus/ notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
7. Review and monitor the auditor's independence and performance, and effectiveness of audit process;
8. Approval or any subsequent modification of transactions of the company with related parties;
9. Scrutiny of inter-corporate loans and investments;
10. Valuation of undertakings or assets of the company, wherever it is necessary;
11. Evaluation of internal financial controls and risk management systems;
12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
13. 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;
14. Discussion with internal auditors of any significant findings and follow up there on;
15. 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;
16. 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;
17. 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;
18. To review the functioning of the Whistle Blower/ Vigil mechanism;
19. To review the Audit paras referred to BLAC by the Internal Audit / Board and / or Govt. of India and to provide its suggestions / guidance/ comments on the issues referred to it.
20. Discussion with Statutory Auditors/ Internal Auditors periodically about internal control systems.
21. To seek professional advice from external sources in appropriate cases, wherever required;
22. The Audit Committee shall also review the following information:
a. Management discussion and analysis of financial condition and results of operations;
b. Statement of significant related party transactions;
c. Management letters / letters of internal control weaknesses issued by the statutory auditors; and
d. Internal audit reports relating to internal control weaknesses;
23. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
ii. Composition of Committee, name of Members & Chairperson
The Audit Committee comprises of 2/3rd members as Independent Directors as mandated by the Listing Agreement. Further, the Committee is chaired by an Independent Director. The member directors comprise of professionals of repute and standing with background in commerce, finance, administration and governance, both national and international.
The Audit Committee was last reconstituted w.e.f. 30th December, 2014. The Committee comprises of the following directors:
Director (Finance) will be permanent invitee in the meeting. Company Secretary shall act as Secretary to the Committee.
Head of Internal Audit and a representative of the Statutory Auditor may be present as invitees for the meetings of the Audit Committee. The Auditors of the Company and the Key Managerial Personnel shall have a right to be heard in the meetings of the Audit Committee when it considers the Auditor's Report but shall not have the right to vote.
iii. Meetings and Attendance
The Audit Committee met five times on 29th May, 2014, 14th July, 2014, 12th August, 2014,14th November, 2014, and 12th February, 2015 during the year 2014-15. The detail of attendance of each member is given in the above table.
6.4 Remuneration Committee
i. Remuneration policy
BHEL being a Public Sector Undertaking, the appointment and remuneration of CMD & Functional Directors are decided by the Govt. of India. The part-time non-executive directors are not paid any remuneration except sitting fees are paid to Independent Directors for attending meetings of the Board or Committee thereof. Moreover, the terms of appointment of CMD & Directors, as approved by the President of India, provide for fixation of certain perks and benefits like leased accommodation, payment of HRA, furnished accommodation, productivity linked incentive etc., as per rules of BHEL.
ii. Terms of reference
The Board in its meeting held on 2nd January, 2014, decided to merge the erstwhile Remuneration Committee and Remuneration Committee on PRP and constituted a single "Remuneration Committee" with the following terms of reference.
(a) Oversight of the company's policy on specific remuneration packages, perquisites for Whole-time Directors including pension rights and any compensation payment, which are not fixed by the President of India.
(b) Approve certain perquisites for Whole-time Directors which are within the powers of Board. Review of the elements of remuneration package of individual directors summarized under major groups, such as incentives/ benefits, bonus, stock options, pension etc.
(c) Finalization of policies on perks and benefits and other related matters which are not fixed by the President of India but within the powers of Board.
(d) Approval of fixed component and performance linked incentives based on the performance criteria.
(e) Finalization of the criteria of making payments to Non-Executive Directors.
(f) Recommendation of fees/ compensation/ stock options, if any, to be paid/ granted, to non-executive directors, including independent directors, to the Board of Directors/ Shareholders.
(g) To decide the bonus/ variable pay pool and policy for its distribution across the executives and non-unionised supervisors.
(h) Carrying out any other function related to the terms of reference of the Remuneration Committee.
iv. Meetings and Attendance
The Committee met once on 13th November, 2014. The detail of attendance of each member is given in the above table.
In line with the requirements of Companies Act, 2013 and revised Clause 49 of the Listing Agreement, the Board of Directors w.e.f. 30th March, 2015, merged the Board Level Nomination Committee & the Remuneration Committee and renamed the merged committee as the Nomination & Remuneration Committee. The terms of reference and other details of the "Nomination & Remuneration Committee" are given at Point 6.5 of this Report.
6.5 Nomination and Remuneration Committee i. Terms of Reference
In line with the requirements of Section 178 of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement, the Board constituted the Nomination & Remuneration Committee (NRC) w.e.f. 30th March, 2015 having the following terms of reference:
a) To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal and to carry out evaluation of every director's performance. Senior Management means personnel of the company who are members of its core management team excluding Board of Directors comprising all members of management one level below the executive directors, including the functional heads.
b) To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees in compliance with the provisions of Act/ LA/ DPE guidelines.
c) Formulation of criteria for evaluation of Independent Directors and the Board.
d) Devising a policy on Board diversity.
e) To recommend to the Board nomination of BHEL officials in the Boards of its subsidiaries and other government organizations which are required to be approved by the Board of BHEL before further submission to DHI.
f) Oversight of the company's policy on specific remuneration packages, perquisites for hole-time Directors including pension rights and any compensation payment, which are not fixed by the President of India.
g) Approve certain perquisites for hole-time Directors which are within the powers of Board. Review of the elements of remuneration package of individual directors summarized under major groups, such as incentives/benefits, bonus, stock options, pension etc.
h) Finalization of policies on perks and benefits and other related matters which are not fixed by the President of India but within the powers of Board.
i) Approval of fixed component and performance linked incentives based on the performance criteria. j) Finalization of the criteria of making payments to Non-Executive Directors.
k) Recommendation of fees/compensation/stock options, if any, to be paid/granted, to non-executive directors, including independent directors, to the Board of Directors/ Shareholders.
l) To decide the bonus/ variable pay pool and policy for its distribution across the executives and non-unionised supervisors.
m) Carrying out any other function related to the terms of reference of the NRC.
6.6 Shareholders' Committees
6.6.1 Share Transfer Committee
The Board constituted a Share Transfer Committee on 25th March, 1992, which comprises Chairman & Managing Director, Director (Power) and Director (Finance) of the Company. The Board of Directors revised the terms of reference of the Committee w.e.f. 1st August, 2014. The Share Transfer Committee will consider and approve all share related issues, other than transfer of shares viz. transposition, subdivision, consolidation, issue of duplicate share certificate etc. in physical mode.
Meetings during 2014-15
The Share Transfer Committee met 16 times during the year. The minutes of the Share Transfer Committee meetings are periodically placed before the Board of Directors.
6.6.2 Stakeholders Relationship Committee
i. Terms of Reference
The Board of Directors on 12th May, 2014 reconstituted the Shareholders'/Investors' Grievance Committee as the Stakeholders Relationship Committee in line with the requirements of Companies Act, 2013 and revised Clause 49 of the Listing Agreement. The Committee shall specifically look into the redressal of grievances of shareholders, debenture holders and other security holders including complaints related to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc.
ii. Composition of Committee, name of Members & Chairperson
The Stakeholders Relationship Committee was last reconstituted w.e.f. 30th December, 2014. The Committee comprises of the following directors:
Company Secretary shall act as Secretary to the Committee.
Company Secretary is the Compliance Officer in terms of Clause 47 of the Listing Agreement with the Stock Exchanges.
iii. Meetings and Attendance
The Committee met four times on 29th May, 2014, 15th July, 2014, 13th November, 2014 and 28th January, 2015 during the year under review. The detail of attendance of each member is given in the above table.
Detail of shareholders' complaints
As reported by Karvy Computershare Private Limited (RTA) to SEBI, 759 complaints were received from the shareholders during the year under review and all complaints were redressed up to 31st March, 2015. No complaint was pending at the end of the period under report.
6.7 Board Level Committee for
Corporate Social Responsibility i. Terms of Reference
Pursuant to the DPE Guidelines on Corporate Social Responsibility for CPSEs, the Board constituted the Board Level Apex Committee for CSR on 25th November, 2010 for proper & periodic monitoring of CSR activities. The
Committee is presently christened as the Board Level Committee for Corporate Social Responsibility. The Board of Directors in its meeting held on 12th May, 2014 reconstituted the Committee in line with requirements of Companies Act, 2013. The terms of reference of the Committee are as under:
1. Formulation and recommendation to the Board the Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII to the Companies Act, 2013;
2. Recommendation of the Projects, Programs and amount of expenditure to be incurred on the activities referred to in clause (1); and
3. Monitoring the Corporate Social Responsibility activities of the company from time to time.
4. Ensuring compliance with guidelines on Corporate Social Responsibility and Sustainable Development issued by the Government of India from time to time.
ii. Composition of Committee, name of Members & Chairperson
shall act as Secretary to the Committee.
iii. Meetings and Attendance
The Committee met six times during the year on 15th July, 2014, 11th August, 2014, 18th
September, 2014, 13th November, 2014, 11th December, 2014 and 28th January, 2015. The detail of attendance of each member is given in the above table.
6.8 HR Committee
i. Terms of Reference
The Board constituted the HR Committee on 31st May, 2006 specifically to look into the following matters:
a. Review of present policies with respect to promotion and reward/ incentive to the Executives.
b. Suggest both short term and long term changes in the policies to prepare BHEL for the changed/ emerging business environment.
ii. Composition of Committee, name of Members & Chairperson
The HR Committee was last reconstituted on 16th July, 2012. The Committee comprises of the following directors:
6.9 Committee of Independent Directors
i. Terms of Reference
The Board, in line with DPE OM dated 28th December,2012onModelRole& Responsibilities of Non-Official Directors for CPSEs, constituted Committee of Independent Directors, whichi salso in compliance with the requirements of Schedule
IV of the Companies Act, 2013 and Clause 49(II)(B)(6) of the Listing Agreement.
6.10 Board Level Nomination Committee
i. Terms of Reference
The Board constituted the Nomination Committee on 22nd March, 2013 to recommend to the Board nomination of BHEL officials in the Boards of its subsidiaries and other government organizations which are required to be approved by the Board of BHEL before further submission to DHI.
ii. Composition of Committee, name of members & Chairperson
Secretary shall act as Secretary to the Committee.
iii. Meetings and Attendance
The Committee met once during the year on 13th March, 2015. The detail of attendance of each member is given in the above table.
In line with the requirements of Section 178 of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement, the Board of Directors w.e.f. 30th March, 2015, merged the Board Level Nomination Committee with the Remuneration Committee and renamed the merged committee as the Nomination & Remuneration Committee.
6.11 Board Level Risk Management Committee
i. Terms of Reference
In line with revised Clause 49 of the Listing Agreement, the Board of Directors on 14th November, 2014 constituted the Board Level Risk Management Committee. The terms of reference of the Committee are as under:
(i) To review the Company's risk governance structure, risk assessment and risk management frame work, guidelines, policies and processes for risk assessment and risk management.
(ii) To review Company's risk mitigation strategies relating to identified key risks as well as the processes for monitoring and mitigating such risks.
(iii) Report to the Board on the Committee's activities for information and recommend proposed changes, if any, to the Board for approval.
i. Disclosures on materially significant related party transactions that may have potential conflict with the interests of Company at large
The Company has not entered into any materially significant related party transactions that may have potential conflict with the interests of the Company at large. Nonetheless, transactions with related parties have been disclosed in Point No. 17 of Note 31 - Other Notes on Financial Statement in the Annual Report.
ii. Non-compliances/ penalties & strictures imposed on the Company related to capital markets during the last three years
No such non-compliance has occurred nor any penalty or stricture been imposed on the Company in the last three years. The company has set the highest standards with respect to observance and conformity with laws and all compliances are made before the deadlines, stipulated by statute.
iii. Whistle Blower policy
In pursuance of the DPE Guidelines on Corporate Governance for Central Public Sector Enterprises and clause 49 of the Listing Agreement between listed Companies& the Stock Exchanges and section 177 of the Companies Act, 2013, a histle Blower Policy for BHEL has been approved by the Board of Directors in its 464th meeting held on 12.8.2014.
Accordingly, the detailed histle Blower Policy of the Company was formulated and it was issued by Corporate HR and the Competent Authorities in this regard have been specified therein. A copy of the histle Blower Policy has also been placed on the website of the Company 'www.bhel.com'
The complaints received under the Policy are being processed as per the guidelines in this regard.
iv. Details of compliance with the requirements of DPE Guidelines on Corporate Governance, compliance with mandatory requirements and adoption of the non-mandatory requirements of Clause 49
All mandatory requirements of the DPE Guidelines on Corporate Governance for CPSEs & revised Clause 49 of the Listing Agreement have been duly complied with by the Company except those relating to required number of Independent Directors on the Board.
with regard to non-mandatory requirements under revised Clause 49, BHEL is already in the regime of unqualified financial statements. Other non-mandatory requirements will be gradually complied with on need basis by the company.
Inline with the DPE guidelines,listing agreement and with the objective of providing the Directors a) insight into guidelines and procedures for successful discharge of their statutory duties, b) better understanding of the business environment to envision the future and develop strategies and c) need based training to meet the Specific requirements of the board members, BHEL Board has approved a policy for Training of Directors. It covers both general and specific trainings more tuned towards company specific areas.
No expenditure has been debited in books of accounts which is not for the purpose of business and no expenses incurred and accounted which are personal in nature and incurred for the Board of Directors and Top Management.
v. Presidential Directives
No Presidential Directive was received during the last three years i.e. 2012-13, 2013-14 & 2014-15.
vi. Risk Management
In pursuance with Clause 49 (IV) (C) of the Listing Agreement and Clause 7.3 of the DPE Guidelines on Corporate Governance for CPSEs, BHEL has in place a Board approved Risk Management Charter & Policy (RMCP), laying down procedures to inform Board members about the risk assessment and minimization. The RMCP provides the overall framework for risk management (RM) of the company. The RM process includes Risk identification, Risk assessment, Risk evaluation, Risk categorisation, Risk mitigation and escalation/ reporting of the risks as per defined process and periodicity and RM governance structure. RMCP also includes mechanism for review of risks and its periodicity.
In line with revised Clause 49 of Listing Agreement, a Board Level Risk Management Committee (BLRMC) was constituted in Nov'14 with assigned responsibility of reviewing, monitoring, guiding & approving risk policy and Risk Management System/Plan. Besides this, Risk Management Steering Committee (RMSC), having Executive Directors/ Functional Heads from Corporate Functions and Business Sectors as members is responsible for adopting and getting implemented the RM framework across the organization. Chief Risk Officer (CRO) is the convener of RMSC and is responsible for reporting to BLRMC/Board based on deliberation in RMSC.
In addition, 35 Risk Management Committees (RMC) have been formed at the Business Sectors/ Regions/ Plants/ Corporate Functions level, in the RM Organization structure comprising key decision makers within the respective areas. RMC is responsible for adopting and implementing the RM framework at the respective Units/ Regions and Plants.
During 2014-15, the Company level Top 10 risks were cascaded into further 24 nos. of measureable risk-parameters and their Likelihood & Impact scale identified. These measurable risks were pilot assessed based on past data so as to capture the organization risk level including prioritisation. The suitable Risk Responses are being taken to mitigate/ minimize these top risks.
vii. Auditor's certificate on Corporate Governance
Auditor's certificate on Corporate Governance is enclosed.
6.14 Communication of financial and other information
As required under Clause 41, Company issues a notice of at least 7 days in advance to the Stock Exchanges of the Board Meetings in which the unaudited/ audited financial results are due for consideration. Further, the said results are intimated immediately after they are taken on record/ approved to the Stock Exchanges. These financial results are published within 48 hours of conclusion of the Board or Committee meeting at which the financial results were approved in at least one English daily newspaper circulating in the whole or substantially the whole of India and in one daily newspaper published in the language of the region, where the registered office of the Company is situated and also uploaded on the Company's website (www.bhel.com).
Other information pertaining to shareholders viz. details of unpaid dividend, Annual Reports etc., are also displayed on the Company's website. Official news releases including important events like receipt of major orders, major project commissioning are posted on the website of the Company and simultaneously sent to the Stock Exchanges. The transcripts of investors' conferences and presentations made to institutional investors/ analysts, if any, are also uploaded on the website of the Company.
In compliance with Clause 54 of the Listing Agreement, the Company's website also contains additional updated information like shareholding pattern, compliance with corporate governance, contact information of the designated officials of the Company responsible for assisting and handling investor grievances etc.
6.15 General Shareholder Information
Date 22nd September, 2015
Time 10.00 AM
Venue : FICCI AUDITORIUM, Barakhamba Road, (Tansen Marg), New Delhi-110 001
ii. Financial year : 1st April, 2014 to 31st March, 2015
iii. Dates of Book Closure ; 16th September, 2015 to 22nd September, 2015 (Both days inclusive)
iv. Dividend payment date : On or before 21st October, 2015
v. Dividend History:
BHEL has been following "Stability cum Growth" policy with regard to dividend payment. The details of dividend paid by BHEL and the amount of unclaimed dividend as on 31.03.2015 are summarized as under:
vi (a) Listing on Stock Exchanges and Stock Code
BHEL's shares are listed on the following Stock Exchanges for which listing fees for 2014-15 has been paid:
Name of the Stock Exchange
1. Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 : 500103
2. National Stock Exchange of India Limited
Exchange Plaza, Plot no. C/1, Block - G, Bandra Kurla Complex, Mumbai - 400 051 Bandra (East), : BHEL
(b) Payment of Annual Custodian Fee to Depositories
The Annual Custodian fee has been paid to NSDL and CDSL for the financial year 2014-15.
vii. Delisting of Equity Shares
BHEL filed necessary application with Calcutta Stock Exchange Association Limited (CSE) for delisting. Final approval from CSE is still awaited, however, "BHEL" Scrips has not been appearing in the list of securities listed on the CSE.
ix. Policy on Insider Trading
BHEL endeavors to preserve the confidentiality of unpublished price sensitive information and to prevent misuse of such information. For this purpose and in line with the SEBI (Prohibition of Insider Trading) Regulations, 1992, the Company had adopted "Code of Conduct for Prevention of Insider Trading" on 26th August, 2002. The Board has appointed Director (Finance) as the Compliance Officer under the Code. Pursuant to SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2008 issued in November, 2008, BHEL had revised its "Code of Conduct for Prevention of Insider Trading" w.e.f. 29th January, 2009.
SEBI vide notification dated 15.01.2015, introduced the SEBI (Prohibition of Insider Trading) Regulations, 2015, replacing the existing SEBI (Prohibition of Insider Trading) Regulations, 1992 to become effective on 120th day from the date of its publication in the Official Gazette i.e. w.e.f. 15th May, 2015. In line with SEBI (Prohibition of Insider Trading) Regulations, 2015, the Board, in its, 469th meeting held on 6th April, 2015, approved the 'Code of Conduct for Regulating & Reporting Trading by Insiders and for Fair Disclosure, 2015' to be effective from 15th May, 2015. The objective of the Code is to regulate, monitor and report trading by Designated Employees and other Connected Persons towards achieving compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015. The Code also provides for practices and procedures for fair disclosure of unpublished price sensitive information.
x. Registrar & Share Transfer Agent (RTA)
M/s Karvy Computershare Private Ltd.
105-108, Arunachal Building, 19, Barakhamba Road, New Delhi - 110 001
Tel. : 011-23324401 43681700/01/02/21 Fax: 011-23730743 Email: ksbldelhi karvy.com
UNIT: BHEL Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032Tel.: 040-67162222 Fax : 040-23001153 Email: firstname.lastname@example.org einward.ris karvy.com Website: www.karvycomputershare.com
RTA's performance in servicing shareholders has been satisfactory. All the investor grievances have been promptly attended to.
xi. Share Transfer System
The share transfer system with respect to physical shares consists of activities like receipt of shares along with transfer deed from transferees, its verification, approval and dispatch of duly endorsed share certificates to the respective transferees within the prescribed time as per the Listing Agreement. In line with Listing Agreement, share certificates are being issued within 15 days of date of lodgment for transfer, sub-division and consolidation. All share transfer activities under physical segment like receipt/dispatch of documents and their verification are being carried out by M/s. Karvy Computershare Private Limited.
xiii. Dematerialisation of shares and liquidity
In accordance with the directions of the Securities & Exchange Board of India (SEBI), trading in BHEL shares by all categories of investors in demat form has been made compulsory w.e.f. 5th April, 1999. BHEL has executed agreement with both the depositories of the country i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for admission of its securities under demat mode. As on 31st March, 2015, 99.94% of the total equity share capital of BHEL is being held in demat mode by the shareholders. Shareholding of Hon'ble President of India (being the Promoter of the company holding 63.06% of the paid-up share capital of the company) is also held in dematerialized form. The International Securities Identification Number (ISIN) allotted to Company is INE257A01026.
xiv. Outstanding GDRs /ADRs / Warrants or any convertible instruments, conversion date and likely impact on equity: Nil
xv. Plant locations
BHEL Manufacturing Units
1. Electronics Division
2. Electronics Systems Division
3. Electro Porcelain Division
Bhopal 4. Heavy Electrical Plant
Goindwal 5. Industrial Valves Plant
Haridwar 6. Heavy Electrical Equipment Plant
7. Central Foundry Forge Plant
Hyderabad 8. Heavy Power Equipment Plant
Jagdishpur 9. Insulator Plant
10. Centralised Stamping Unit
Jhansi 11. Transformer Plant
Rudrapur 12. Component Fabrication Plant
Ranipet 13. Boiler Auxiliaries Plant
Tiruchirappalli 14. High Pressure Boiler Plant
15. Seamless Steel Tube Plant
Thirumayam16. Power Plant Piping Unit
Visakhapatnam 17. Heavy Plates & Vessels Plant
BHEL Repair Units Mumbai
1. Electrical Machine Repair Plant
Varanasi 2. Heavy Equipment Repair Plant
BHEL Subsidiary Kasaragod 1. BHEL Electrical Machines Ltd.
xvi. Address for correspondence
Shareholders can send their queries regarding Transfer of shares, Non-receipt of dividend, Revalidation of Dividend Warrants and any other correspondence relating to the shares of the Company either to:
KARVY COMPUTERSHARE PVT. LTD.
Delhi: 105-108, Arunachal Building 19, Barakhamba Road New Delhi – 110 001 Phone: 011-23324401 43681700/01/02/21 Fax: 011-23730743 Email: email@example.com
Hyderabad: Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad – 500 032 Phone: 040-67162222 Fax: 040-23001153 Email: firstname.lastname@example.org email@example.com
Shri I.P. Singh Company Secretary BHEL
Regd. Office: BHEL House, Siri Fort, New Delhi – 110 049 Phone: 011-26001046 Fax: 011-66337533 Email: firstname.lastname@example.org
Note: Shareholders holding shares in electronic mode should address all correspondence to their respective depository participants.