REPORT ON CORPORATE GOVERNANCE OF THE COMPANY
1. Company's philosophy on Corporate Governance in brief
The philosophy of the Company in relation to Corporate Governance is to ensure fairness, transparency, integrity, equity, honesty and accountability in its dealings with its customers, dealers, employees, lenders, Government and other stakeholders including shareholders. The Company is committed to achieve and maintain the highest standards of Corporate Governance. The Company has adopted various codes, policies and programs to carry out its operations in a transparent and ethical manner. Some of the important codes, policies and programs adopted in this regard are -
• Code of Conduct for Directors and Senior Management:
• Vigil Mechanism Policy:
• Related Party Transaction Policy:
• Nomination and Remuneration Policy:
• Corporate Social Responsibility Policy:
• Policy on Material Subsidiaries:
• Policy on Board Diversity and Succession Plan:
• Familiarization Program.
2. Compliance of Clause 49 (as amended) of the Listing Agreement
In line with this, we are pleased to inform you that, as on 31 March 2015, the Company is in compliance with all the mandatory requirements of Clause 49 and other applicable clauses of the Listing Agreement entered into with the Stock Exchanges. The necessary disclosures as required under Clause 49 of the Listing Agreement have been covered in this Annual Report.
3. Board of Directors
3.1 Composition and Category of Directors and number of outside Directorship and Committee Positions held as on 31 March 2015
The Board of Directors of the Company consists of11 (eleven) members which comprise of:
• Three Independent Non-Executive Directors:
• Three Promoter Executive Directors:
• One Promoter Non-Executive Director:
• Two Non-Independent Non-Executive Directors; and
• Two Non-Promoter Executive Directors
1. For this purpose, only two Committees viz. the Audit Committee and the Stakeholders Relationship Committee have been considered. This excludes Committee positions held in private limited companies, foreign companies and companies under Section 8 of the Companies Act, 2013.
2. Ms. Nityangi Kejriwal was appointed as a Non-Executive Director of the Company with effect from close of business hours on 31 March 2015 in the casual vacancy caused by the resignation of Mr. Rama Shankar Singh from the Board from the close of business hours on 31 March 2015.
3. Mr. Vyas Mitre Ralli and Mr. Mahendra Kumar Jalan were re-appointed as Whole-time Directors of the Company for a period of 5 years each from 21 December 2014 and 22 January 2015, respectively.
4. Mr. Bhaskara Nageswararao Mandavilli, an Independent Director resigned from the Board w.e.f. 27 March 2015.
3.2 Attendance of Directors at the Board Meetings during the Financial Year ended 31 March 2015 and at the last Annual General Meeting (AGM)
During the Financial Year ended 31 March 2015, 8 (eight) Board meetings were held and the gap between any two consecutive meetings held during the year did not exceed 120 days. The
1. The amount of sitting fees for attending Board & Audit Committee meeting was raised from Rs.20,000 per meeting to Rs.50,000 per meeting and for the meeting of Independent Directors of the Company, the sitting fees was fixed at Rs.50,000 per meeting. The fees for attending any other meeting was fixed at Rs.20,000 per meeting during the financial year 2014-15 as per Rule 4 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. These Directors are also entitled to reimbursement of expenses for participation in Board and other meetings.
2. The Members at the 59th AGM of the Company held on 2C August 2014 had approved payment and distribution of Commission amongst Directors (other than Executive Directors) for a period of 5 years commencing from 1 April 2014, in such amounts or proportions and in such manner as may be directed and decided by the Board, within the ceiling of 1% per annum of the net profits of the Company computed in the manner referred to in Section 19C of the Companies Act, 2013.
3. Independent Directors did not have any pecuniary relationship or transactions (except receipt of remuneration as Directors) with the Company during the year under review.
4. No Stock Options have been granted to any Independent or Non-Executive Director of the Company.
4. Board Committees 4.1 Audit Committee
The Audit Committee was reconstituted during the year under review. The Committee's terms of reference was specified by the Board in accordance with the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
The Committee comprises of the following Directors as on 31 March 2015:
Mr. Binod Khaitan, Chairman - Independent Director
Mr. Pradip Kumar Khaitan - Independent Director
Mr. Naresh Chandra - Non Executive Non Independent Director
The representatives of Statutory Auditors, Internal Auditors, Cost Auditors as well as the Executives heading the Finance, Accounts and other Departments of the Company are invited to attend meetings as and when required by the Committee. The Company Secretary acts as the Secretary to the Audit Committee.
The broad terms of reference of the Audit Committee include review of financial reporting process and all financial results, statements and disclosures etc. and recommend the same to Board, review internal audit reports and discuss the same with internal auditors, evaluation of internal control systems and risk management systems, to meet the statutory auditors and discuss their findings, their scope of audit, post audit discussion, adequacy of internal audit functions, audit qualifications, if any, changes in accounting policies and practices, reviewing approval and disclosure of all related party transactions, reviewing with the management the performance of statutory and internal auditors and to recommend appointmenl/removal and remuneration of auditors, reviewing the functioning of Vigil Mechanism and compliance with statutory requirements etc.
4.2 Nomination & Remuneration Committee
Nomination & Remuneration Committee (NRC) was constituted by the Board on 11 April 2014 and its terms of reference were specified in accordance with the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
The Committee comprises of the following Directors as on 31 March 2015 :
Mr. Binod Khaitan, Chairman - Independent Director
Mr. Pradip Kumar Khaitan - Independent Director
Mr. Shermadevi Yegnaswami Rajagopalan - Non-Executive Director
The Company Secretary acts as the Secretary to the Nomination & Remuneration Committee.
The terms of reference of the NRC is to formulate the criteria for determining qualifications, positive A attributes and independence of a director and recommend to the Board, a policy relating to the remuneration of the directors, Key Managerial Personnel (KMP) and other employees; identifying persons who are qualified to become directors and who may be appointed in senior management; t recommend to the Board their appointment and removal; formulate criteria for evaluation of / Independent Directors and the Policy on Board Diversity & Succession.
The Nomination and Remuneration Committee of the Company has formulated the Nomination and Remuneration Policy of the Company. The Policy applies to appointment of the Directors, KMPs and Senior Management Personnel as well as determining the remuneration payable to them.
4.3 Stakeholders' Relationship Committee
The name of Shareholders/Investors Grievance Committee was changed to Stakeholders' Relationship Committee (SRC) and its terms of reference were specified by the Board at its meeting held on 10 May 2014 in accordance with the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
The Committee comprises of the following Directors as on 31 March 2015: Mr. Binod Khaitan, Chairman - Independent Director Mr. Mahendra Kumar Jalan - Executive Director Mr. Uddhav Kejriwal - Executive Director
The Company Secretary acts as the Secretary to Stakeholders' Relationship Committee.
The terms of reference of SRC comprises of overseeing the redressal of grievances of security holders and investors on issues like share transfer, non-receipt of Annual Reporl/dividends, amongst others. In accordance with Clause 49 paragraph VIII(E)(4) & (5) of the Listing Agreement with the Stock Exchanges, the Board has delegated powers of share transfers and mitigation of shareholders grievances to M/s. Maheshwari Datamatics Pvt. Ltd. (MDPL), the Registrar and Share Transfer Agents (RTA) of the Company.
1. Mr. Uddhav Kejriwal was appointed as a member of the Committee w.e.f. 23 March 2015.
During the year under review, Ms. Kavita Bhavsar resigned from the office of Company Secretary and Compliance Officer. Mr. Prem Kumar Bafana was appointed as the Company Secretary and Compliance Officer of the Company with effect from 15 December 2014 and is responsible for monitoring the Share Transfer process and report to the Stakeholders' Relationship Committee.
At the beginning of the year under review, there was no complaint remaining unresolved. During the year, the Company received nine complaints and these nine complaints were duly resolved. There was no complaint which was pending at the end of the year.
*M/s. Bihani Rashmi & Co., Practicing Chartered Accountants were appointed as the Scrutinizer for the purpose of submitting Report on Voting (including e-voting) at the AGM held on 28 August, 2014.
B. Information about Directors proposed to be appointed/re-appointed as required under Clause 49 IV(G)(i) of the Listing Agreement with the Stock Exchanges formed a part of the explanatory statement of the notice for Annual General Meeting.
C. The Company has also passed a special resolution at the Extraordinary General Meeting of the Company held on 12 May 2014, under Section 42 and 62 of the Companies Act, 2013 with respect to issuance of fresh Equity Shares of the Company on preferential basis to the Promoter/Promoter Group Companies of the Company.
D. During the Financial Year 2014-15, the Company had conducted two Postal Ballots under the Companies (Management and Administration) Rules, 2014. M/s. Bihani Rashmi & Co., Practicing Chartered Accountants, were appointed as the Scrutinizer for overseeing the Postal Ballot and e-voting process.
Procedure followed for both the aforesaid Postal Ballot exercise : Members were provided with the facility to cast their vote by using e-voting platform of National Securities Depository Limited or by sending Postal Ballot Form. The Postal Ballot Notice, Ballot Form and accompanying documents were dispatched to shareholders along with postage prepaid envelope via Registered Post. The process of e-voting was followed as per Companies (Management and Administration) Rules, 2014. The Scrutinizer submitted a Report on combined voting i.e. e-voting as well as Postal Ballot. The Results were declared on the basis of the Scrutinizer's Report.
As on date, no special resolution is proposed to be conducted through Postal Ballot.
6. Code of Conduct
A Code of Conduct has been laid down for all Board Members and Senior Management of the Company. The same was revised by the Board of Directors in its meeting held on 29 October 2014 to bring the Code in line with the requirements of Companies Act, 2013. All the Board Members and Senior Management of the Company have affirmed compliance with the Code of Conduct of the Company. A declaration signed by the Managing Director to this effect is annexed hereto. The Code is also posted on the Company's website at the web link -http://www.electrosteelcastings.com investors/pdf/code-of-conduct-49.pdf.
A. Materially significant related party transactions having potential conflict with the interest of the company at large.
There were no materially significant related party transactions which may have potential conflict with the interest of the Company at large. Details of materially significant related party transactions are presented in the Notes to the Financial Statements. The related party transaction policy of the Company is hosted on the website of the Company at the web link- <http://www.electrosteelcastings.com/investors/pdf/related-party-transaction-policy.pdf>.
B. Penalties/Strictures imposed by Stock Exchanges/SEBI during last 3 years
During the last three years, no penalties/strictures were imposed on the Company by Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets.
C. Vigil Mechanism
The Company have adopted a Whistle Blower Policy towards Vigil Mechanism and the same is hosted on the website of the Company at web link - <http://> www.electrosteelcastings.com/investors/pdf/vigil.pdf No personnel was denied access to the Audit Committee.
D. Unclaimed Dividends
A separate section on Unclaimed Dividends on the website of the Company at web link -<http://www.electrosteelcastings.com/investors/unclaimed-dividend.asp> provides information on unclaimed dividends in the interest of investors of the Company. The Company intimates its shareholders through written communication requesting them to claim their unclaimed dividends before the same are transferred to Investor Education & Protection Fund Account of the Central Government.
8. Means of Communication
The Company's quarterly/half-yearly/yearly financial results are published in national english newspaper(s) as well as newspaper(s) published in vernacular language of the region where the Registered Office of the Company is situated, such as, The Economic Times, Business Line, Business Standard, Financial Express, Mint and Lokakatha. The Company also submits its releases and financial results to the Stock Exchanges on which the securities of the Company are listed i.e. The National Stock Exchange of India and BSE limited. The Company's results and official news releases, presentations made to institutional investors or to the analysts, if any, are also displayed on the Company's website www.electrosteel.com
9. Investor Grievance Redressal
The Company receives grievances, if any, from its investors either through a written process i.e. letters, emails or fax messages or through verbal communication by means of phone calls etc. at its Registered Office at Dist. Sundergarh, Odisha or at Corporate Office at Kolkata or at the Office of Company's Registrars & Share Transfer Agents. The relevant details of Registrars & Share Transfer Agents are given in point no. 7 of Shareholder Information section. The Company has dedicated a designated email id i.e. firstname.lastname@example.org to enable members and other investors to correspond with the Company.
1. Annual General Meeting
Date, time and venue of the next Annual General Meeting
Friday, 11 September 2015, at 11.30 A.M., at Rathod Colony, Rajgangpur, Sundergarh, Odisha 770 017, India
b) Financial Year : 1 April 2014 to 31 March 2015
c) Date of Book Closure : 5 September 2015 to 11 September 2015 (both days inclusive)
d) Dividend Payment Date : On or before 10 October 2015
e) Outstanding ADRs / GDRs / warrants or any convertible instruments, conversion date and likely impact on equity.
21,05,000 GDRs were outstanding as on 31 March 2015 and represented an equal number of underlying Equity Shares. Since the underlying Equity Shares represented by GDRs have been allotted in full, the outstanding GDRs have no impact on the Equity Share Capital of the Company.
f) Listing at Stock Exchanges
i) Equity shares & its Stock Codes at Stock Exchanges
a) BSE Limited (BSE) P J. Towers, Dalal Street, Mumbai 400 001 (Scrip Code - 500128)
b) The National Stock Exchange of India Limited (NSE) Exchange Plaza, 5th Floor Bandra Kurla Complex, Bandra (East), Mumbai 400 051 (Symbol - ELECTCAST)
ISIN for Equity Shares - INE086A01029
Secured Redeemable Non Convertible Debentures of Rs.10,00,000/- each (NCDs)
All NCDs issued by the Company are listed at-The National Stock Exchange of India Limited (NSE)
Exchange Plaza, 5th Floor,
Bandra Kurla Complex,
Bandra (East), Mumbai 400 051
10.75% NCD StockCode-ELCA17; ISINNo. INE086A07117
11%NCD Stock Code - ELCA18; ISIN No. INE086A07125
12.50% NCD Stock Code - ELCA18; ISIN No. INE086A07133
g) Listing Fee to Stock Exchanges
Listing Fees for the financial year 2015-16 have been paid to BSE and NSE for both Equity Shares and NCDs.
7. OTHER INFORMATION
Registrar and Share Transfer Agent for physical & demateriali-sed shares M/s. Maheshwari Datamatics Pvt. Ltd. 6, Mangoe Lane, 2nd Floor, Kolkata 700 001 Phone: 033 2248 2248/2243 5029 Fax: 033 2248 4787 E-mail: email@example.com
Share transfer system
Share transfers are registered and returned within the period of 7 days from the date of lodgment if the documents are complete in all respect. The Company offers the facility of transfer cum dematerialisation to its shareholders.
Dematerialization of shares and liquidity
As per directives of SEBI, the Company's shares are tradable compulsorily in electronic form. The Company's shares are available for dematerialisation at National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL). The International Securities Identification Number (ISIN) of the Company, as allotted by NSDL and CDSL, is INE086A01029. As on 31 March 2015, 99.04% of the shares of the Company stand dematerialized.
Unit 1 : 30, B.T. Road, Sukchar, Khardah 24-Parganas (North), West Bengal 743 179
Unit 2 : Gummidipoondi Taluk, PO. Elavur, District Tiruvallur, Tamil Nadu 601201
Unit 3 : Haldia, Kasberia PO.Khanjan Chawk, Haldia Midnapore (East), West Bengal 721 635
Unit 4 : Parbatpur Coal Mine, PO. Batbinor District: Bokaro, Jharkhand 827 013 (till 31 March 2015)
Unit 5 : Bansberia Works, Saptagram Panchayat PO. Adconnagar, Chak Bansberia West Bengal 712 121
Address for Communication
Mr. Prem Kumar Bafana Company Secretary Electrosteel Castings Limited G.K. Tower, 19, Camac Street, Kolkata 700 017Phone: (033) 2283 9990 Email: firstname.lastname@example.org
For and on behalf of the Board of Directors
Pradip Kumar Khaitan
DIN : 00004821
Place : Kolkata
Date : 12 May 2015