CORPORATE GOVERNANCE REPORT
COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE:
In Bihar Sponge Iron Limited, Corporate Governance is an integral part of the Company's values, ethics, business practices and norms. Towards this, the Company consistently evaluates and defines its management practices aimed at enhancing its commitment and delivery of the basic tenets of the Corporate Governance.
BOARD OF DIRECTORS:
The Company has non-executive Chairman and the number of independent directors is not less than half of the total number of directors. None of the Directors on the Board is a member of more than 10 committees and Chairman of more than 5 Committees (as specified in Clause-49), across all the companies in which he is a director. The necessary disclosures regarding Committee positions have been made by the Directors.
Four Board Meetings were held during the year on 29th May, 2014; 19th September, 2014; 14th November, 2014 and 6th February, 2015.
CODE OF CONDUCT FOR BOARD MEMBERS AND SENIOR MANAGEMENT
The Company has adopted the Code of Conduct for the Directors and Senior Management of the Company. The Company has received confirmations from both the Directors as well as Senior Management regarding compliance of the Code of Conduct for the year ended 31st March, 2015. The Code is posted on the website of the Company i.e. www.bsil.org.in
INFORMATION REGARDING REAPPOINTMENT OF DIRECTORS:
Mrs. Kumkum Modi, Director of the Company retires by rotation and being eligible, offers herself for re-appointment. Mrs. Kumkum Modi is a Non-Executive director. She is a Post-Graduate from Delhi University and has experience in the area of administration and business management. She is also a Director in the following public companies: SBEC Sugar Limited and Modi Hitech India Limted.
PERFORMANCE EVALUATION OF DIRECTORS
The Nomination and Remuneration Committee of the Board laid down the criteria for performance evaluation of all Directors. The performance evaluation has been done by the entire Board of Directors, except the Director concerned being evaluated. The criteria for performance evaluation are as follows:
Role & Accountability
- Understanding the nature and role of Directors' position.
- Understanding of risks associated with the business.
- Application of knowledge for rendering advice to management for resolution of business issues.
- Active engagement with the management and attentiveness to progress of decisions taken.
- Own recommendations given professionally without tending to majority or popular views.
Leadership & Initiative
- Heading Board Sub-committees.
- Driving any function or identified initiative based on domain knowledge and experience.
- Commitment to role & fiduciary responsibilities as a Board member.
- Attendance and active participation.
- Proactive, strategic and lateral thinking.
Meeting of Independent Directors
During the year, meeting of Independent Directors was held on 6th February, 2015 to review the performance of the Board as a whole and Chairman on parameters of effectiveness and to assess the quality, quantity and timeliness of flow of information between the management and the Board. Familiarisation Programme
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.
Composition of Audit Committee is in accordance with the requirements prescribed by the Code of Corporate Governance. Audit Committee has following directors: i). Mr. G.C. Jain- Chairman
ii) Mr.J. C. Chawla
iii) Dr. Shyam Vyas.
iv) Mr. Madan Lal
All the Members of the Audit Committee are Non-executive & Independent Directors and also financially literate. The Company Secretary of the Company acts as a Secretary to the Committee. A representative of Thakur, Vaidyanath Aiyar & Co., the Statutory Auditors and a representative of Sarat Jain & Associates, Concurrent Auditors are permanent invitees to the Audit Committee meetings and the Cost Auditors are invited at the meeting as and when required.
Four meetings of Audit Committee were held during the year on 29th May, 2014,14th August, 2014, 14th November, 2014 and 6th February, 2015.
The terms of reference of the Audit Committee are in conformity with the revised requirements of Clause 49 of the Listing Agreement read in conjunction with Section177 of the Companies Act, 2013. The functions of the Audit Committee broadly cover the following:
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 thecompany;
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. Explanation (i): The term "related party transactions" shall have the same meaning as provided in Clause 49(VII) of the Listing Agreement.
The Audit Committee shall also mandatorily review the following:
a) Management discussion and analysis of financial condition and results of operations;
b) Statement of significant related party transactions (as defined by the audit committee) submitted by management;
c) Management letters/letters of internal control weakness issued by the statutory auditors;
d) Internal audit report relating to internal control weakness;
e) The appointment, removal and terms of remuneration of the Chief Internal Auditor.
The Audit Committee in pursuance to Section 177 of the Companies Act, 2013 shall act within the term of reference specified in writing by the Board which shall inter alia include the following:
(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.
STAKEHOLDER RELATIONSHIP COMMITTEE:
The Investors'/Shareholders Grievance Redressal Committee was first constituted on 11th September, 2001 as Investors'/ Shareholders Grievance Redressal Committee. The Investors'/Shareholders Grievance Redressal Committee was dissolved and Stakeholder Relationship Committee is constituted on 29th May, 2014 in its place pursuant to Section 178 (5) of the Companies Act, 2013.
The Stakeholder Relationship Committee has following independent directors:
i) Mr. G.C. Jain * ii) Mr. J. C. Chawla, iii) Dr. Shyam Vyas, iv) Mr. B. D. Garg, v) Mr. Madan Lal
and the Company Secretary of the Company acts as a Secretary to the Committee.
* Mr. G.C. jain has resigned from the Board, w.e.f. 15th April, 2015, thus ceased to be the member of stakholder relationship committee.
BRIEF DESCRIPTION OF THE TERMS OF REFERENCE:
The functioning and terms of reference of the Committee is as prescribed under and in due compliance with the Listing Agreement with the Stock Exchanges with particular reference to transfer, dematerialization, re-materialization, complaints of shareholders etc. During the year under review, the Committee met four times on 29th May, 2014,14th
August, 2014, 14th November, 2014 and 6th February, 2015.
Mr. Manoj Kumar, Company Secretary of the Company is the Compliance Officer of the Company.
NOMINATION AND REMUNERATION COMMITTEE:
The Remuneration Committee was constituted by the Board in March, 2006. The Committee has been reconstituted on 22nd August, 2012. The Remuneration Committee was dissolved on 29th May, 2014 and Nomination and remuneration Committee was constituted.
The following persons are the Members of the Committee:
i) Mr. G.C. Jain, Chairman, ii) Mr. J. C. Chawla, iii) Dr. Shyam Vyas, iv) Mr. B. D. Garg v) Mr. Madan Lal The Company Secretary acts as a Secretary to the Committee.
Two Nomination and Remuneration Committee meetings were held during the year on 14th November, 2014 and 6th February, 2015.
The terms of appointment and remuneration of the executive directors are reviewed by the Nomination and Remuneration Committee keeping in view the performance, industry practice, present compensation package, etc and then recommend the same for the approval of the Board of Directors and the shareholders. Committee has also approved a policy on Nomination & Remuneration of Directors, KMP and Senior Managerial Personnel which has been placed on the website of the company: www.bsil.org.in
Details of Remuneration paid to Directors for the year ended on 31st March, 2015.
The Non-Executive Directors (NEDs) are paid remuneration by way of Sitting Fee of Rs. 1,000/- per meeting for attending the meetings of Board and/or Committees thereof.
POSTAL BALLOT :
No resolution requiring a postal ballot was proposed at the last Annual General Meeting of the Members.
No resolution which requires approval of Members by postal ballot is being proposed at the ensuing Annual General Meeting.
There were no materially significant related party transactions (i. e. Transaction of the Company of the material nature) that may have potential conflict with the interest of the Company at large. However, related party transactions during the year are mentioned in Note no 3 under "Notes Related to Accounting Standards" under Annexure -1 of Accounting Policies & General Notes.
There has not been any non compliance, penalties or strictures imposed on the Company by the Stock Exchanges, SEBI or any other statutory authority, on any matter related to capital markets during the last three years.
MEANS OF COMMUNICATIONS:
Half Yearly Report to Each Household of Shareholders:
The Company has not yet started sending the half yearly report to each household of shareholders but if any shareholder seeks any information then the same is provided by the Company.
In compliance to the Clause 41 of the Listing Agreement the Company regularly intimate the un-audited financial results to the stock exchange, immediately after the same
is taken on record by the Board/Committee of Directors of the Board and are published in widely circulated English daily "The Financial Express" and Hindi daily "Naya India"
as is required under the Listing Agreement with the Stock Exchanges. The same are also faxed to the Stock Exchanges where the Company is listed and also displayed on the website of the Company.
CEO/CFO CERTIFICATION ON THE FINANCIAL STATEMENT:
Pursuant to Clause 49 of the Listing Agreement, the Chief Executive Officer/Director Finance have submitted the desired certificate to the Board of Directors and the same have been taken on record by the Board of Directors in their meeting held on 12th May, 2015.
GENERAL SHAREHOLDER INFORMATION:
33rd Annual General Meeting is scheduled to be held on 19thday of August, 2015 at 11:00 A.M. at the Company Guest House, Umesh Nagar, Chandil, Dist. Saraikela- Kharsawan - 832401, Jharkhand as per notice.
Financial Calendar for taking on record financial results for next financial year ending 31st March, 2016.
For First Quarter UFR ended 30.06.2015: By 14thAugust, 2015
For Second Quarter UFR ended 30.09.2015: By 15th November, 2015
For Third Quarter UFR ended 31.12.2015: By 15th February, 2015
For Audited Financial results for the year ended 31.03.2016: By 30th May, 2016
Thursday the 13th day of August, 2015 to Wednesday the 19th day of August, 2015 (both days inclusive)
Dividend payment date:
In view of losses incurred by the Company, no dividend has been recommended by the Board of Directors for the year ended 31st March, 2015.
LISTING ON STOCK EXCHANGES:
Your Company is listed at Bombay Stock Exchange Limited, the address of which is given below:
Stock Exchange Stock Code
Bombay Stock Exchanges Limited,
Phiroz Jeejeebhoy Towers, 25th Floor, Dalal Street, Fort, Mumbai-400001
Stock Code 500058
On 21st March, 1998, the Company after complying with the conditions of Circular No. 6/9/SE/78 dated 28th June, 1979 issued by Ministry of Finance, Department of Economic Affairs, Stock Exchange Division, applied to Ahmedabad, Calcutta, Delhi and Madras Stock Exchanges for de-listing of Equity Shares. The Company has received the letter of confirmation of de-listing from Madras Stock Exchange Association Limited only, matter is pending with others stock exchanges. The Company vide its letter dated 25th September, 2007 applied for voluntary de-listing of Shares from Magadh Stock Exchange, the matter is pending with the Exchange.
The Company has paid listing fee for the financial year 2015-2016 to Bombay Stock Exchange Limited only.
Registrar and Transfer Agents:
M/s. Beetal Financial & Computer Services Pvt. Limited is the Registrar and Share Transfer Agent of the Company. The physical transfer of Equity Shares and Electronic connectivity for the depository mode for both NSDL and CDSL is being provided by M/S Beetal Financial & Computer Services Pvt. Limited whose address given below:
M/s. Beetal Financial & Computer Services Pvt. Limited,
99, Madangir, Behind Local Shopping Centre, New Delhi - 110062
Telephone no(s) 011-29961281, 282, 283, Fax: 011-29961284 E-mail : firstname.lastname@example.org
Share Transfer System:
The Company, in compliance of SEBI circular no. 15/2002 dated 27th December, 2002, has appointed M/S Beetal Financial & Computer Services Pvt. Limited, (Category-I SEBI registered Registrar & Share Transfer Agents) as Share Transfer Agent who follows the Share Transfer System as prescribed by the Securities & Exchange Board of India (SEBI). The share transfer requests in physical form sent by shareholders are manually checked. If the transfer deed and the enclosures are valid, the shares are transferred within 15th days, otherwise objection memo is sent to the Transferor with necessary advice to take the required steps. The Share Transfer Committee generally approves once in a fortnight the applications received from members. Distribution of Shareholding as on 31st March, 2015:
Dematerialization of shares:
The equity shares of the Company are available for dematerialization. The Securities Identification Number (ISIN) of the Company is INE 819C01011. The equity shares are now tradable only in dematerialized mode.
Share held in physical and dematerialized from:
As on 31st March, 2015, 55.91 % of Equity Shares were held in dematerialized form and the rest were in physical form. Outstanding GDRs /ADRs /Warrants or any convertible instruments, conversion date and likely impact on equity: The Company has no GDRs/ADRs or any convertible instrument.
Plant location of the Company:
Umesh Nagar, Chandil, District SaraikelaKharsawan- 832401 (Jharkhand)
Address for correspondence:
All the queries of investors regarding the Company's shares may be sent at the following address:
BIHAR SPONGE IRON LIMITED
Umesh Nagar, Chandil, District Saraikela Kharsawan-832401 (Jharkhand) Website: www.bsil.org.in, Email: email@example.com
Shareholders desirous of making a nomination in respect of their shareholding in the Company, as permitted under Section 72 of the Companies Act, 2013, are requested to submit to the Company in prescribed Form SH-13 for this purpose.