REPORT ON CORPORATE GOVERNANCE
In compliance with Clause 49 of the Listing Agreement entered into with the Stock Exchanges applicable as on 30th September, 2014.
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE :
The Company's philosophy on Corporate Governance envisages accountability, responsibility and transparency in the conduct of the Company's business and its affairs and accordingly lays great emphasis on regulatory compliances. The Company firmly believes that Corporate Governance is a powerful tool to sub-serve the long term growth of the Company and continues to give priority to the principles and practice of Corporate Governance and has accordingly benchmarked its practices with the existing guidelines of corporate governance as laid down in the Listing Agreement.
2. BOARD OF DIRECTORS ('Board') :
(a) Composition :
The Company has an optimum combination of Executive and Non-Executive Directors in conformity with Clause 49 of the Listing Agreement entered into with the stock exchanges, to maintain the independence of the Board and to separate the Board functions of governance and management.
As on 30th September, 2014 the Board comprises of a Chairman and Managing Director (Executive), 2 (two) Executive Directors and 6 (six) Non-Executive Independent Directors including a woman Director. All the members of the Board are persons with considerable experience and expertise in industry, finance, management and law.
The Chairman and Managing Director provides leadership to the Board and to the Management in strategizing and realizing business objectives and is supported by the Executive Directors. The Independent Directors contribute by giving their valuable guidance and inputs with their independent judgment on the overall business strategies and performance.
None of the Directors on the Board is a Member of more than 10 (ten) Committees and Chairman of more than 5 (five) Committees (as specified in Clause 49 of the Listing Agreement), across all the Companies in which he / she is a Director as per the disclosures made by all the Directors.
None of the Independent Directors on the Board serve as an Independent Director in more than seven listed companies. None of the Whole time Directors on the Board serve as an Independent Director in more than three listed companies.
(b) Changes in Board Composition :
Effective from 1st January, 2014 till date the following changes have taken place in the Board composition:
1) Mr. Peter Gammon ceased to be a Non-Executive Director (Chairman Emeritus) with effect from 28th June, 2014 by virtue of his resignation from the Board.
2) Mr. Parvez Umrigar ceased to be a Non-Executive Director with effect from 31st July, 2014, by virtue of his resignation from the Board.
(c) Board Meetings :
The Board meets at least once in each quarter inter-alia, to review the quarterly financial results. The gap between two consecutive meetings is less than 120 days. In addition the Board also meets whenever necessary. The Board periodically reviews compliance reports of all laws applicable to the Company. Steps are taken by the Company to rectify instances of non - compliances.
During 9 (nine) months period under review the Company held 8 (eight) Board Meetings on 14th February 2014, 18th February 2014, 18th March 2014, 3rd April 2014, 14th May 2014, 3rd June 2014, 13th August 2014 and 21st August 2014.
(d) Directors' Attendance Record and Directorships held:
The names and categories of the Directors on the Board, their attendance at Board Meetings during the 9 (nine) months period and at the last Annual General Meeting, also the number of directorships and committee memberships held by them in other Companies are given below:
Mr. Peter Gammon resigned as Director (Chairman Emeritus) w.e.f 28th June, 2014. ** Mr. Parvez Umrigar resigned as Director w.e.f 31st July, 2014.
*** Includes Directorships in private limited companies. Details are as on 30th September, 2014.
a) Chairmanship / Membership of Committees includes only Audit and Stakeholders Relationship Committee.
b) Mr. Chandrahas C. Dayal and Mr. Atul Dayal are related to each other.
The Board meetings are held at the registered office of the Company. Agenda of the business to be transacted at each meeting is given to the Board in advance together with relevant information and explanations. The Board deliberates on every matter placed before it before arriving at a decision / approving matters placed before it. The Company Secretary conveys the decisions of the Board to the Senior Management to initiate action. The information as required under Annexure IA to Clause 49 is being made available to the Board. The Company did not have any pecuniary relationship or transactions with Non-Executive Directors during the year.
g) Reviewing with the management the quarterly and half yearly financial results before submission to the Board.
h) Reviewing the adequacy of internal audit functions, 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.
i) Scrutinizing of the inter corporate loans & investments.
j) Discussion with Internal Auditors, any significant findings and follow up thereon.
k) 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. l) Approval or any subsequent modification of transactions of the Company with related parties.
m) To look into reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (incase of nonpayment of declared dividends) and creditors. n) Review and monitor the auditor's independence and performance, and effectiveness of audit processes. o) To review the functioning of the Whistle Blower and Vigil mechanism. p) Valuation of undertaking or assets of the company where ever it is necessary.
q) 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 backgraound, etc. of the candidate. r) All such other functions as may be specified from time to time. Meetings:
(ii) Stakeholders' Relationship Committee :
In order to ensure compliance with the requirements of Section 178 of the Companies Act, 2013 and revised clause 49 of the listing agreement (applicable w.e.f 151 October,2014) the nomenclature of the Investor Grievance Committee was changed to Stakeholders Relationship Committee with revised role which also includes to consider and resolve the grievances of all security holders of the Company. Composition:
The Stakeholders' Relationship Committee comprises of four (4) Non-Executive Independent Directors viz.: (1) Mr. Chandrahas C. Dayal (Chairman) (2) Mr. Atul Dayal (3) Mr. Naval Choudhary and (4) Mr. Atul Kumar Shukla. Ms Gita Bade - Company Secretary acts as Secretary to the Committee.
Terms of reference:
The Stakeholders Relationship Committee primarily attends to and resolves grievances of the Company's shareholders and other stakeholders.
During the 9 (nine) months period ended 30th September, 2014 the Committee held 12 (twelve) meetings on 7th January, 2014, 15th February 2014, 22nd March 2014, 29th March 2014, 7th April 2014, 29th April 2014, 15th May 2014, 23rd June 2014, 7th July 2014, 15th July 2014, 22nd July 2014 and 29th September 2014. Necessary quorum was present at all the meetings.
Name, Designation and Address of Compliance Officer:
Ms. Gita Bade
Company Secretary Gammon India Limited'Gammon House', Veer Savarkar Marg,
Prabhadevi, Mumbai - 400 025. E-mail Id: gita.bade@gammonindia .com Telephone : 022 - 6115 3000. Facsimile : 022 - 2430 0221.
Name, Designation and Address of Investor Relations Officer: Mr. Mandar Godbole
Asst. Manager – Secretarial Gammon India Limited 'Gammon House', Veer Savarkar Marg, Prabhadevi, Mumbai - 400 025. E-mail Id: email@example.com Telephone : 022 - 6115 3000. Facsimile : 022 - 2430 0221.
(iii) Nomination & Remuneration Committee :
In order to ensure compliance with the provisions of Section 178 of the Companies Act, 2013, the nomenclature of the Selection and Remuneration Committee was changed to Nomination and Remuneration Committee.
The Nomination & Remuneration Committee comprises of 3 (three) Non-Executive Independent Directors viz.: (1) Mr. Chandrahas C. Dayal (Chairman) (2) Mr. Naval Choudhary and (3) Mrs. Urvashi Saxena. Ms Gita Bade - Company Secretary acts as Secretary to the Committee.
Terms of reference:
The role of the Nomination and Remuneration Committee is:
(a) To identify persons who are qualified to become directors or who can be appointed in the senior management.
(b) To formulate criteria for evaluation of Independent Directors and the Board.
(c) To devise a policy on Board diversity.
(d) To recommend the appointment/ removal of directors or senior management personnel.
(e) To carry out evaluation of every director's performance.
(f) To formulate criteria for determining qualifications, positive attributes and independence of a director.
(g) To recommend to the Board, policy relating to remuneration for the directors, key managerial personnel and other senior employees and to review the policy at regular intervals.
(iv) Nomination & Remuneration Policy
The Nomination and Remuneration policy provides a framework for appointment of Directors, Key Managerial Personnel and senior management, their performance evaluation and fixing their remuneration based on their performance.
Details of Remuneration paid to Directors during the period ended 30th September, 2014:
All Executive Directors are paid salary, allowances, perquisites performance linked incentives and commission while Non-Executive Independent Directors receive sitting fees for attending Board and Committee meetings. Payment of remuneration to the Chairman & Managing Director and the Executive Directors is governed by an Agreement entered into between the Company and the Managerial Personnel, the terms and conditions of which have been duly approved by the Board and the Shareholders of the Company.
The Company had made an application to the Ministry of Corporate Affairs ("MCA") seeking its approval for payment of remuneration of Rs. 6 Crores p.a. to Mr. Abhijit Rajan - Chairman & Managing Director for each of the years that is 2012-13 & 2013-14 respectively, which was rejected by the MCA.The Company has preferred an appeal to the MCA for review of its decision. Further, the Company has also made an application to the MCA seeking its approval for payment of 'Minimum Remuneration' of Rs. 6 Crores p.a. to Mr. Abhijit Rajan for the period from 1st January, 2014 to 31st March, 2015, for the financial year 2015-16 & for the period 1st April, 2016 to 16th May, 2016 and the same is awaited.
Service Contract, Severance Fees & Notice Period:
The terms of employment stipulate a notice period of 3 (three) months, for termination of appointment of Chairman & Managing Director and Executive Directors, on either side. There is no provision for payment of severance fees.
Sitting Fees to Non-Executive Independent Directors:
Non-Executive Independent Directors of the Company do not draw any remuneration from the Company other than sitting fees for attending Board and Committee meetings. None of the Non-Executive Independent Directors have entered into any pecuniary transaction or relationship with the Company.
* Mr. Parvez Umrigar ceased to be Director w.e.f 31st July, 2014
** Mr. Peter Gammon ceased to be Director (Chairman Emeritus) w.e.f 28th June, 2014
(v) Corporate Social Responsibility Committee :
The Board of Director at its meeting held on 3rd April, 2013 constituted "Corporate Social Responsibility Committee" ("CSR Committee") as required under Section 135 of the Companies Act, 2013.
The CSR Committee comprises of the Chairman & Managing Director- Mr. Abhijit Rajan and 3 (three) Non-Executive Independent Directors viz.:
(1) Mr. Chandrahas C. Dayal,
(2) Mr. Naval Choudhary and
(3) Ms. Urvashi Saxena.
The Chairman of the Committee is Mr. Chandrahas C. Dayal
Ms Gita Bade - Company Secretary acts as Secretary to the Committee.
Terms of reference:
The role of the Corporate Social Responsibility Committee is to:
(i) formulate and recommend to the Board a Corporate Social Responsibility Policy to indicate the activities to be undertaken by the Company as specified in Schedule VII and amendment thereof.
(ii) recommend the amount of expenditure to be incurred on the activities to be undertaken by the Company; and
(iii) monitor the Corporate Social responsibility Policy from time to time.
No meetings were held during the 9 (nine) months period ended 30th September, 2014.
(B) Non-mandatory Committees:
Review Committee of Independent Directors :
The Board in its meeting held on 25th November, 2013 constituted a Review Committee of Independent Directors.
The role of the Review Committee of Independent Directors is to review, inter alia, the Company's projects on a periodical basis andall project related issues as well as such matters as may be refered to the Committee by the Board.
The Committee comprises of 3 (three) Non-Executive Independent Directors viz.:
(1) Mr. Naval Choudhary (Chairman) (2) Mr. Chandrahas C. Dayal and (3) Mrs. Urvashi Saxena.
Ms Gita Bade - Company Secretary acts as Secretary to the Committee.
4. COMPANY POLICIES :
During the year under review, the Board adopted the following policies:
(a) Policy on Related Party Transactions:
Pursuant to Clause 49 of the Listing Agreement and upon recommendation by the Audit Committee, the Board of Directors, at its meeting held on 21st August, 2014, approved and adopted the Policy on Related Party Transactions. This Policy can be viewed on the Company's website viz. www.gammonindia.com in the "Investors" Section.
(b) Policy on Material Subsidiaries:
Pursuant to Clause 49 of the Listing Agreement and upon recommendation by the Audit Committee, the Board of Directors, at its meeting held on 21st August 2014, approved and adopted the Policy on Material Subsidiaries. This Policy can be viewed on the Company's website viz. www.gammonindia.com in the "Investors" Section.
(c) Whistle Blower Policy:
Pursuant to Clause 49 of the Listing Agreement and upon recommendation by the Audit Committee, the Board of Directors, at its meeting held on 21st August, 2014, approved and adopted the Whistle Blower Policy. This Policy can be viewed on the Company's website viz. www.gammonindia.com in the "Investors" Section.
(d) Nomination & Remuneration Policy:
Pursuant to Clause 49 of the Listing Agreement and upon recommendation by the Nomination & Remuneration Committee, the Board of Directors, at its meeting held on 13th August, 2014, approved and adopted the Nomination & Remuneration Policy. This Policy can be viewed on the Company's website viz. www.gammonindia.com in the "Investors" Section.
5. OTHER INFORMATION :
(a) The Corporate Identity Number allotted to the Company by the Ministry of Corporate Affairs is : L74999MH1922PLC000997
(b) Code of Conduct :
The Company has laid down a Code of Conduct for all Board members and the Senior Management Personnel. The Code of Conduct is available on the Company's website viz., www.gammonindia.com All the Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct. A declaration to this effect signed by the Chairman & Managing Director forms part of this Report.
Procedure for Conducting Postal Ballot:
After receiving the approval of the Board of Directors and consent of the scrutinizer, notice of the Postal Ballot containing text of the Resolution and Explanatory Statement to be passed through postal ballot, Postal ballot Form and self-addressed postage pre-paid envelopes are sent to the shareholders to enable them to consider and vote for or against the proposal within a period of 30 days from the date of dispatch. The Company also provides e-voting facility to enable the shareholders to cast their vote by electronic means. A notice is also published in the newspapers regarding dispatch of Postal Ballot notices. After the last date of receipt of ballots, the Scrutinizer, after due verification, submits the result to the Chairman. Thereafter, the Chairman declares the result of the postal ballot. The same along with Scrutinizer's Report is submitted to the Stock Exchanges and also displayed on the website of the Company.
6. OTHER DISCLOSURES :
i. Other than transactions entered into in the normal course of business for which necessary approvals are taken and disclosures made, the Company has not entered into any materially significant related party transactions i.e., transactions of material nature, with its Promoters, Directors or the Management, their subsidiaries or relatives etc. that may have potential conflict with the interest of the Company at large. However the Company has annexed to the accounts a list of all related parties as per the Companies Act, 2013 and Accounting Standard 18 and the transactions entered into with them.
iii. A qualified practicing Company Secretary conducts Share Capital Reconciliation Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) along with shares held in physical form and the total issued and listed capital. The Share Capital Reconciliation Audit Report confirms that the total issued/paid-up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL.
iv. The Chairman and Managing Director and the Chief Financial Officer have certified to the Board in accordance with Clause 49 (V) of the Listing Agreement pertaining to CEO / CFO Certification for the period ended 30th September, 2014.
v. The Companies risk management framework is being reviewed and revised to minimize risk and strengthen risk assessment.
7. MEANS OF COMMUNICATION :
(a) Financial Results: As required under the Listing Agreement, Quarterly and Half-Yearly results of the Company are published within forty five days from the end of the respective quarter and the annual audited results are announced as and when approved by the Board. The financial results are published usually in the Free Press Journal/ Navshakti/ Economic Times/ Business Standard/ Sakal/ Maharashtra Times.
(b) News Releases, Presentations etc.: Official news releases, detailed presentations made to media, analysts, institutional investors etc. if any, are displayed on the Company's website viz. www.gammonindia.com Official announcements are sent to the Stock Exchanges.
(c) Website: The Company's corporate website www.gammonindia.com provides information about the Company's business. It also contains a separate dedicated Section 'Investor Relations' where shareholders information is available. The Annual Report of the Company is also available on the website in a user-friendly and downloadable format.
(d) Annual Report: Annual Report containing, inter alia, Audited Annual Accounts, Consolidated Financial Statements, Directors' Report, Auditors'Report and other important information is circulated to members and others entitled thereto. The Management Discussion and Analysis (MD&A) Report forms part of the Annual Report.
8. MANDATORY REQUIREMENT :
The Company has complied with the mandatory requirements of Clause 49 of the Listing Agreement relating to Corporate Governance.
9. NON-MANDATORY REQUIREMENTS :
Subsidiary Monitoring Framework:
All Subsidiaries of the Company are Board managed with their Boards having the rights and obligations to manage such Companies in the best interest of their stakeholders. As a majority shareholder, the Company has nominated its representatives on the Boards of subsidiary Companies and monitors the performance of such Companies, inter alia, by means of taking Consolidated Accounts and including all items of the subsidiaries as required under Section 212 of the Companies Act 1956, except the items which are exempted by the Ministry of Corporate Affairs.
10. GENERAL SHAREHOLDER INFORMATION :
Date, Time and Venue of the 93rd Annual General Meeting
Tuesday, 24th March 2015 at 3.30 P.M. at Ravindra Natya Mandir P. L. Deshpande Maharashtra Kala Academy 3rd floor (Mini Theatre), Sayani Road, Prabhadevi, Mumbai - 400 025.
Financial Calendar for the year Starting from 01st October, 2014 -30th September, 2015 (Tentative)
• Results for the quarter ending 31st December 2014 - Second week of February 2015.
• Results for half year ending 31st March 2015 - Second week of May 2015.
• Results for quarter ending 30th June 2015 - Second week of August 2015.
• Results for year ending 30th September 2015 - Second week of November 2015.
Date of Book Closure ; 19th March 2015 to 24th March 2015 (both days inclusive)
Listing on Stock Exchanges:
(a) Equity Shares
(i) BSE Limited P. J. Towers, Dalal Street, Fort, Mumbai 400 001. Telephone: 022 - 2272 1233/34 Facsimile: 022 - 2272 1919 (Stock code - 509550)
(ii) The National Stock Exchange of India Limited
Exchange Plaza, Plot No. C/1, 'G' Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051. Telephone: 022 - 2659 8100/8114 Facsimile: 022 - 2659 8137/8138 (Stock code - GAMMONIND EQ)
(b) Global Depositary Receipts (GDR)
Luxembourg Stock Exchange, 11, Avenue de la Porte - Neuve B.P.165, L-2227 Luxembourg. Telephone: +352 40800 - 3142 Telefax: +352 40800 - 3100 Cusip No. : 36467M200 Common Code: 20772565
Listing Fees : Paid to the above Stock Exchanges for the Financial Year 2014-2015.
International Securities Identification No. (ISIN) : Equity: INE 259B01020 GDR: US36467M2008
Registrar & Share Transfer Agents
M/s. Link Intime India Private Limited, C-13, Pannalal Silk Mills Compound, LBS Road, Bhandup (West), Mumbai 400 078. Telephone: 022 - 2596 3838 Facsimile: 022 - 2594 6969 e-mail : firstname.lastname@example.org
Share Transfer System
Trading in Company's shares on the Stock Exchanges takes place in electronic form. However physical shares are normally transferred and returned within 15 days from the date of lodgment provided the necessary documents are in order.
B. PLANT LOCATION
1. Delhi Workshop : Gammon India Limited Opp. Gurudwara Balasahib, Bhagwan Nagar, New Delhi- 110 014
2. Taloja Workshop : Gammon India Limited Plot no. 7 MIDC - Taloja, Dist. Raigad - 410 208
3. Butibori Workshop : Gammon India Limited Central Workshop, Plot no. G-56 M.I.D.C., Butibori Nagpur - 441 122
4. Ranchi Workshop : Gammon India Limited 8/137,151 Floor opp. Sundarm Apartment, Doranda Ranchi - 843 002
16. ADDRESS FOR CORRESPONDENCE:
'Gammon House', Veer Savarkar Marg, Prabhadevi, Mumbai - 400 025. Telephone : 022 - 61153000. Facsimile : 022 - 2430 0221. Website : www.gammonindia.com Email : email@example.com