CORPORATE GOVERNANCE REPORT
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE:
The Company has set itself the Vision of to be an integrated steel player with global presence and reach. As a part of its strategy to achieve global vision, the Company is committed to adopt "the best practices" followed in Corporate Governance Arena.
The Board considers itself as a Trustee of its Shareholders and all other stakeholders and acknowledges its responsibilities towards them for maximize long term value of the Company. The Company recognises that the Board is accountable to all the Stakeholders for good governance. Corporate Governance encompasses a set of systems and practices to ensure that the Company's affairs are being managed in a manner which ensures accountability, transparency and fairness in all transactions in the widest sense. The philosophy of the Company in relation to Corporate Governance is based on principles of equity, fairness, transparency in all its operations, make appropriate disclosure and enhance shareholders value without compromising in anyway and in compliance with laws and regulations.
The Company expects to realize its Vision by taking such actions as may be necessary in order to achieve its goals of value creation, safety, environment and people.
2. BOARD OF DIRECTORS:
The current policy of the Company is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and to separate its functions of governance and management. As on 31.03.2015 the Board of Director consists of fifteen (15) Directors, out of which Eleven (11) are Non Executive Directors, Seven (07) of whom being independent.
The Directors have expertise in the fields of industry, operations, finance, legal and management. The board shapes the vision of the Company and provides strategic guidance and independent views to the Company's management while discharging its fiduciary responsibilities
3. BOARD MEETINGS:
The Board of Directors of the Company meets at regular intervals to discuss regular business matters and decide on Company's strategy, policies and programs. Board Meetings are usually held at Registered and Corporate Office of the Company at New Delhi. During the year five (05) Board Meetings were held on 30/05/2014, 12/08/2014, 20/09/2014, 14/11/2014 and 14/02/2015. Maximum time gap between the two consecutive meetings had not exceeded 4 months.
The agenda for Board Meetings and notes are circulated to the Directors in advance and all material information is included in the agenda for facilitating well informed and meaningful deliberation and decision making. The agenda of the meetings of the Board inter alia includes annual operating plans, capital budgets and updates therein.
4. AUDIT COMMITTEE :
The Company has an Audit Committee of Directors since 28-06-1997. The Audit Committee was reconstituted on 20.09.2014. Presently the Committee consists of Four Directors namely (1) Sh. B.B. Tandon (2) Sh. B.B. Singal (3) Sh. M.V. Suryanarayana and (4) Sh. Ashwani Kumar.
Sh. B.B. Tandon is the Chairman of the Audit Committee.
The committee's composition meets with the requirements of Section 177 of the Companies Act, 2013 and clause 49 of the Listing Agreement.
As per Section 177 of the Companies Act, 2013 the Audit Committee acts in accordance with the terms of reference specified in writing by the Board which, inter alia, include —
i. the recommendation for appointment, remuneration and terms of appointment of auditors of the company;
ii. review and monitor the auditor's independence and performance, and effectiveness of audit process;
iii. examination of the financial statement and the auditors' report thereon;
iv. approval or any subsequent modification of transactions of the company with related parties;
v. scrutiny of inter-corporate loans and investments;
vi. valuation of undertakings or assets of the company, wherever it is necessary;
vii. evaluation of internal financial controls and risk management systems;
viii. monitoring the end use of funds raised through public offers and related matters.
The Audit Committee shall have powers, which should include the following:
1. To investigate any activity within its terms of reference.
2. To seek information from any employee.
3. To obtain outside legal or other professional advice.
4. To secure attendance of outsiders with relevant expertise, if it considers necessary.
Role of Audit Committee in terms of Clause 49 of the Listing Agreement are detailed hereunder:-
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 Statutory Auditors and Cost 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:
a. 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
b. Changes, if any, in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment by management
d. Significant adjustments made in the financial statements arising out of audit findings
e. Compliance with listing and other legal requirements relating to financial statements
f. Disclosure of any related party transactions
g. Qualifications in the draft audit report
5. Reviewing, with the management, the quarterly financial statements 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 utilisation 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 mechanism;
19. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate
20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
21. Reviewing the following information:
I. Management discussion and analysis of financial condition and results of operations;
II. Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
III. Management letters / letters of internal control weaknesses issued by the statutory auditors;
IV. Internal audit reports relating to internal control weaknesses; and
V. The appointment, removal and terms of remuneration of the Chief internal auditor
During the year, the committee has met four (4) times 30/05/2014, 12/08/2014, 14/11/2014, and 14/02/2015. Sh. B. B. Tandon, Sh. B.B. Singal, Sh. M.V. Suryanarayana and Sh. Ashwani Kumar have attended all the meetings of the Audit Committee held during the tenure of the members. Mr. V. K. Mehrotra (ex-member) has attended one meeting of Audit Committee held on 30.05.2014.
5. NOMINATION AND REMUNERATION COMMITTEE :
In compliance with the provision of Section 178 (1) of the Companies Act, 2013 Nomination and Remuneration Committee was constituted. Presently the Committee comprises of Sh. M.V. Suryanarayana, Sh. B. B. Tandon, Sh. B.B. Singal and Smt. Sunita Sharma .
Sh. M.V. Suryanarayana (Non Executive director) is the Chairman of the Committee.
During the year three meetings of Nomination and Remuneration Committee were held on 20.09.2014, 14.11.2014 and 14.02.2015 which was attended by all the members of the Committee except Mrs. Sunita Sharma who could not attend the meeting held on 20.09.2014.
TERMS OF REFERENCE OF THE COMMITTEE
• 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 to recommend to the Board their appointment and removal.
• To carry out evaluation of every director's performance.
• 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 for the directors, key managerial personnel and other employees.
• To formulate remuneration policy and ensure that-
(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;
(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
(c) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals
The remuneration policy is directed towards rewarding performance based on review of achievement on a periodical basis. The remuneration policy is in consonance with the existing Industrial practice. The remuneration structure of the Executive Directors comprises of salary, perquisites and allowances, contribution to provident fund, leave encashment and gratuity
6. STAKEHOLDERS RELATIONSHIP COMMITTEE:
The nomenclature of existing Shareholders'/ Investors' Grievance Committee has been changed to Stakeholders Relationship Committee w.e.f. 30.05.2014. This Committee comprises of Sh. B.B. Singal, Sh. Neeraj Singal, and Sh. P.K. Aggarwal, Directors. This Committee has been constituted for considering and resolving the grievances of security holders of the company. Sh. B.B. Singal is the Chairman of the Committee board has designated Mr. O.P. Davra as the Compliance Officer.
The total number of complaints received and replied to the satisfaction of Shareholders during the year under review were 3. All the complaints were disposed off and there was no complaint pending as on March 31, 2015.
7. COMMITTEE ON BORROWINGS, INVESTMENTS AND LOANS:
The Company has a Committee on Borrowings, Investment and loans. Presently the committee consists of three Directors namely (1) Sh. B. B. Singal, (2) Sh. Neeraj Singal and (3) Sh. Nittin Johari. Sh. B.B. Singal is the Chairman of the Committee.
Seventeen (17) Nos. of Meetings of Committee of Board of Directors on Borrowings were held during the year 2014 - 2015 on 09.04.2014, 15.05.2014, 23.05.2014, 03.06.2014, 11.06.2014, 13.06.2014, 28.06.2014, 26.07.2014, 10.09.2014, 29.09.2014, 15.11.2014, 01.12.2014, 27.12.2014, 04.02.2015, 16.02.2015, 04.03.2015, 27.03.2015.
8. CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITEE
The Company has constituted Corporate Social Responsibility (CSR) Committee comprising Sh. B.B. Singal, being its Chairman and Sh. Nittin Johari and Sh. B. B. Tandon as its members.
The Committee's prime responsibility is to assist the Board in discharging its social responsibilities by way of formulating and monitoring implementation of the framework of 'Corporate Social Responsibility Policy', observe practices of Corporate Governance at all levels, and to suggest remedial measures wherever necessary.
The Committee's constitution and terms of reference meet with the requirements of the Companies Act, 2013.
Terms of Reference of the Committee, inter alia includes the following:
I. To formulate and recommend to the Board, a Corporate Social Responsibility (CSR) Policy indicating activities to be undertaken by the Company in compliance with provisions of the Companies Act, 2013 and rules made there under;
II. To recommend the amount of expenditure to be incurred on the CSR activities;
III. To monitor the implementation of the CSR Policy of the Company from time to time.
During the year two meetings of Corporate Social Responsibility Committee was held on 14.11.2014 and 14.02.2015 which was attended by all the members of the Committee
9. INDEPENDENT DIRECTORS' MEETING
During the year under review, the Independent Directors met on 9th March 2015 to discuss and review :
• the performance of non-independent directors and the Board as a whole
• the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors
• the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties
The meeting was attended by all the independent directors.
10. SUBSIDIARY COMPANIES
There is no material non-listed subsidiary Company requiring appointment of Independent Director of the Company on the Board of Directors of the subsidiary companies. The requirements of Clause 49 of the Listing agreement with regard to subsidiary companies have been complied with.
A Notice of postal ballot dated 14-02-2015 pursuant to Section 110 and other applicable provisions of the Companies Act, 2013 (the "Act"), if any, read together with the Companies (Management and Administration) Rules, 2014 has been sent to the members.
Mr. R.S. Bhatia, a practicing Company Secretary (CP No. 2514, FCS 2599) was appointed by the Board of Directors of the Company as the scrutinizer for conducting the Postal Ballot process and e-voting process in a fair and transparent manner.The result of Postal Ballot was scheduled to be announced on Monday, 27th April, 2015 at the Registered Office of the Company.
12(a) Disclosures on materially significant related party transactions i.e. transactions of the Company of material nature, with its promoters, the Directors or the Management, their subsidiaries or relatives etc. that may have potential conflict with the interest of Company at large.
- There were no materially significant transactions with related parties which were in conflict with the interests of the Company.
12(b) Detail of non-compliance by the Company, penalties, strictures imposed on the company by Stock Exchange or SEBI or any Statutory Authority, on any matter related to capital markets, during the last three years.
12(c) The Company has adopted a Whistle Blower Policy and has established the necessary mechanism for employees to report concerns about unethical behaviour. No person has been denied access to Audit Committee.
13. MEANS OF COMMUNICATION:
Timely sharing and disclosure of consistent, comparable, relevant and reliable information on the Company's performance is at the core of its Corporate Governance Policy. Summary of major efforts of the Company in this regard is given below:
The Company publishes un-audited quarterly financial results and audited annual financial results normally in "Business Standard" (English), and "Business Standard" (Hindi) Newspapers. The results are promptly furnished to the Stock Exchanges for display on their respective websites. The results are also put on the website of the Company i.e. <http://www.bhushansteel.com> after the Board Meetings.
Annual Report containing inter alia, Audited Annual Accounts, Consolidated Financial Statements Directors' Report, Management Discussion and Analysis and other regulatory reports is circulated to members and others entitled thereto. The management Discussion and Analysis Report forms part of Annual Reports. The Annual Report of previous years are also available on Company's web-site.
Corporate Presentation of the Company covering inter alia Company's Overview, Growth History, Key Highlights and Summary Operating & Financial Performance is regularly given to institutional investors and latest Corporate Presentation is available on Company's web-site.
Corporate Filling and Dissemination System (CFDSS)
As per requirements of Clause 52 of the Listing Agreement, all the data relating to financial results, shareholding pattern etc. have been electronically filed on the Corporate Filing and Dissemination System (CFDS) portal (www.corpfiling.co.in )
14. GENERAL SHAREHOLDERS' INFORMATION :
(i) Annual General Meeting for the year ending 31st March, 2015 - On Saturday, 19th September, 2015 at 11.00 A.M at Air Force Auditorium, Subroto Park, New Delhi - 110010.
(ii) As required under Clause 49(IV) (G) (i) of the Listing Agreements with the Stock Exchanges, particulars of Directors seeking appointment at the forthcoming Annual General Meeting (AGM) are given in the Notes to the Notice of the AGM to be held on 19th September, 2015.
(iii) Financial Year : 1st April To 31st March
Financial Reporting for the Quarter ending :
30th June, 2015 : On or before 14th August, 2015
30th September, 2015 : On or before 14th November, 2015
31st December, 2015 : On or before 14th February, 2016
31st March, 2016 ;On or before 30th May, 2016
(iv) Date of Book Closure :
The Book closure starts from 14th September, 2015 to 19th September, 2015 (both days inclusive) for the purpose of 32nd Annual General Meeting of the Company to be held on 19th September, 2015.
(v) Dividend payment date : No dividend has been declared for 2014-15.
(vi) Listing of Shares & Stock Code;
The Equity Shares of the Company are listed on the following Stock Exchanges.
(1) Bombay Stock Exchange Ltd. (Stock Code : 500055)
(2) National Stock Exchange of India Ltd. (Stock Code : BHUSANSTL)
Annual Listing Fee including fees for the year 2015-16 have been paid on due dates to both the Stock Exchanges i.e. BSE and NSE.
viii) Share price performance in comparison to broad based indices - NSE Nifty and BSE Sensex based on share price on 31-03-2015.
During financial year 2014-15, share price of the Company was down in NSE by 85.79% and 85.52%% in BSE as compared to increase in NSE Nifty by 26.18% and BSE Sensex by 24.50%.
(ix) Share Transfer System:
Pursuant to SEBI Circular Nos. D&CC/FITTC/CIR-15/2002 dated 27.12.2002 and D&CC/FITTC/CIR-18/2003 dated 12/02/2003, M/s.
RCMC Share Registry Pvt. Ltd., which is already the Depository Interface of the Company for both NSDL & CDSL, have been appointed as Registrar and Transfer Agents (RTA) w.e.f. 31/03/2003 for all the work related to share registry in terms of both physical and electronic.
Share Transfer Committee:
It approves the transfer and transmission of securities, issuance of duplicate share certificate. This Committee comprises of Sh. P.K. Aggarwal and Sh. O.P. Davra.
Physical Mode :
Transfers of Equity shares in physical form are registered within a period of 15 days from the date of receipt. After the transfer, Share Certificates are immediately sent. The Equity shares of the company are to be traded compulsorily in Demat mode w.e.f. 25.09.2000.
Dematerialised Mode :
The Company's Equity Share are eligible for dematerialisation. The Company had signed Agreements with both the Depositories namely: NSDL and CDSL. The Shareholders may therefore hold Company's Share in Electronic Mode. The company's ISIN No. for both the Depositories is INE824B01021.
xi) Dematerialisation of Shares & Liquidity:
225669855 equity shares of the Company's paid up equity share capital has been dematerialized upto 31st March, 2015. Trading in equity shares of the company is permitted only in dematerialized form as per notification issued by the Securities and Exchange Board of India (SEBI).
(xii) Outstanding GDRs/ADRs/ Warrants or any convertible instruments, conversion date and likely impact on equity
- Not Applicable
(xiii) Plant locations:
(i) Site-IV, Sahibabad Industrial Area, Sahibabad, Distt. Ghaziabad, U.P.
(ii) Village - Nifan, Savroli and Dehvali, Taluka-Khalapure, Distt. Raigad, (Near Khopoli), Maharashtra.
(iii) Meramandali, Distt. Dhenkanal, Orissa.
(xiv) Transfer of unclaimed amounts to Investor Education and Protection Fund :
The investors are advised to claim the un-encashed dividends lying in the unpaid dividend accounts of the Company before the due date (as indicated in the Notes to the Notice) before crediting the same by the Company to the Investor Education and Protection Fund.
During the year under review the Company has credited Rs. 1,74,983/-to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act, 1956 in respect of the Unpaid/ unclaimed dividend amount relating to the Final dividend declared in 2006-07.
15. CEO AND CFO CERTIFICATION
As per provision of the Clause 49 of the Listing Agreement CEO and CFO give Quarterly and Annual Certificate to the Board on Financial Results before the Board in terms of Clause 41 of the Listing Agreement.
16. DECLARATION REGARDING COMPLIANCE WITH THE CODE OF CONDUCT
This is to inform you that the company has adopted Code of Business Conduct and Ethics for its employees including the Managing Director/ whole-time Directors/ Non-executive Directors. The said Code is posted on the Company's website.
I confirm that the Company has in respect of the Financial year ended 31st March, 2015 received from the senior management team of the Company and the Members of the Board a declaration of compliance with the Code of Business Conduct and Ethics as applicable to them.
For the purpose of this declaration, Senior Management team means the members of the Management one level below the Managing Director as on 31st March, 2015.
ADDRESS FOR CORRESPONDENCE :
Registered Office :
Bhushan Steel Limited Ground Floor, Hyatt Regency Complex, Bhikaji Cama Place, New Delhi-110 066. Tel. : 011-39194000, 71194000 Fax : 011-46518611, 26478750 Eemail@example.com Web site : www.bhushansteel.com
Registrar and Transfer Agent :
RCMC Share Registry Pvt. Ltd. (Unit : BHUSHAN STEEL LIMITED) B-25/1, First Floor, Okhla Industrial Area Phase II, New Delhi - 110020. Phone : 011 - 26387320, 26387321, 26387323 Fax : 011 - 26387322 e-mail: firstname.lastname@example.org