CORPORATE GOVERNANCE REPORT
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
The Company's philosophy on Corporate Governance envisages the attainment of the highest levels of transparency, accountability and equity, in all facets of its operations, and all its interactions with the stakeholders including shareholders, employees, customers, government, suppliers and lenders and to build the confidence of the society in general. The Company believes in adopting the philosophy of professionalism, transparency and accountability in all areas and is committed to pursue growth by adhering to the highest national and international standards of Corporate Governance.
2. BOARD OF DIRECTORS
The Board has an appropriate composition of Executive, Non-Executive and Independent Directors. The Independent Directors on the Board are experienced, competent and reputed names in their respective fields. The Independent Directors take active part at the Board and Committee Meetings, which adds value in the decision-making process of the Board of Directors. The details of composition of the Board, number of other Directorship, Chairmanship/Membership of Committee of each Director in other Companies, attendance of Directors at the
Board Meetings and last Annual General Meeting are given below:
(ii) Shareholding of Non-Executive Directors
The number of Equity Shares of the Company held by Non-Executive Directors of the Company are as under:
(iii) Board Meetings
The Board meets at least once in every quarter to review quarterly results and other items on agenda. Additional meetings are held when necessary. Four Board Meetings were held during the financial year ended 31st March, 2015. These were held on 21st April, 2014, 30th July, 2014, 12th November, 2014 and 5th February, 2015.
3. AUDIT COMMITTEE
(i) Terms of Reference
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:
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 utilised 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. All related party transactions and subsequent modification thereof shall require prior approval of the Audit Committee.
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. The appointment, removal and terms of remuneration of the Chief Internal Auditor shall be subject to review by the Audit Committee.
14. 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;
15. Review the internal audit report and discuss with internal auditors of any significant findings and follow up there on;
16. 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;
17. 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;
18. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (incase of non-payment of declared dividends) and creditors;
19. To review the functioning of the Whistle Blower mechanism;
20. Approval of appointment of CFO after assessing the qualifications, experience and background, etc. of the candidate;
21. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee;
22. Management discussion and analysis of financial condition and results of operations;
23. Where a valuation is required to be made in respect of any property, stocks, shares, debentures, securities or goodwill or any other assets (herein referred to as the assets) or net worth of a company or its liabilities under the provision of this Act, it shall be valued by a person having such qualifications and experience and registered as a valuer in such manner, on such terms and conditions as may be prescribed and appointed by the audit committee or in its absence by the Board of Directors of that Company.
24. The Chairman of the Audit Committee shall be present at Annual General Meeting of the Company to answer shareholder queries.
All these Directors possess knowledge of corporate finance, accounts and corporate laws. The Statutory Auditors, Internal Auditors and Senior Executives of the Company are invited to attend the meetings of the Committee, whenever necessary. The Company Secretary acts as the Secretary of the Committee.
(iii) Meetings and Attendance
During the financial year ended 31st March, 2015, four meetings were held on 21st April,2014, 30th July, 2014, 12th
4. NOMINATION AND REMUNERATION COMMITTEE
(i) The terms of reference of the Committee as per the Nomination and Remuneration Policy of the Company inter-alia includes the following:
a) reviewing the structure, size and composition (including the skills, knowledge and experience) of the Board at least annually and making recommendations on any proposed changes to the Board to complement the Company's corporate strategy, with the objective to diversify the Board;
b) to recommend to the Board the appointment and removal of Director or kMP or Senior Management Personnel;
c) to carry out evaluation of Director's performance;
d) assessing the independence of independent directors;
e) to make recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract;
f) making recommendations to the Board on the remuneration/ fee payable to the Directors/ kMPs/Senior Officials so appointed/re-appointed;
g) ensure that level and composition of remuneration of Directors, kMP's and Senior Management is reasonable and sufficient. The relationship of remuneration to performance is clear and meets appropriate performance benchmarks;
h) to devise a policy on Board diversity;
i) to develop a succession plan for the Board and Senior Management and to regularly review the plan;
j) such other key issues/matters as may be referred by the Board or as may be necessary in view of the Listing Agreement and provision of the Companies Act, 2013 and Rules thereunder.
(iv) Nomination and Remuneration Policy
The Board, on the recommendation of the Nomination & Remuneration Committee approved a policy for appointment and removal of Directors, key Managerial Personnel and Senior Management and their remuneration. The Nomination and Remuneration policy is attached as Annexure III to the Board's Report.
5. EVALUATION OF THE BOARD'S PERFORMANCE
Pursuant to the provisions of Companies Act, 2013 and the Clause- 49 of the Listing Agreement, the Board has carried out the evaluation of its own performance, that of various Committees of Directors and the Directors individually. The exercise covered various aspects of the Board's functioning such as composition of the Board & Committee(s), their functioning & effectiveness, contribution of all the Directors and the decision making process by the Board.
The evaluation of Independent Directors' was carried out by entire Board and that of the Chairman and the non-independent Directors were carried out by the independent Directors.
The Directors express their satisfaction with the evaluation process.
6. FAMILIARISATION PROGRAMME
The Familiarisation Programme of the Company has been disclosed on its website and a weblink thereto is as under: <http://www.hegltd.com/pdf/Familiarisation_Programmes_for_> Independent_Directors.pdf
7. STAKEHOLDERS RELATIONSHIP COMMITTEE
(i) Broad Terms of Reference
The Stakeholders Relationship Committee shall consider and resolve the grievances of various security holders of the Company. It shall specifically look into the redressal of stakeholders/ investors complaints in a timely and proper manner.
8. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
(i) Broad Terms of Reference
(a Formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013.
(b) Recommend and monitor the amount of expenditure to be incurred on the activities referred to in clause (a); and
(c) Monitor the Corporate Social Responsibility Policy of the Company from time to time.
(ii) Composition of the Committee
The composition of the Corporate Social Responsibility Committee is as under:
. INDEPENDENT DIRECTORS' MEETING
As stipulated by the Code of Independent Directors under the Companies Act, 2013 and the Listing Agreement, a separate meeting of the Independent Directors of the Company was held on 5th February, 2015 to review the performance of Non-independent Directors (including the Chairman, Managing Director & CEO) and the Board as a whole. The Independent Directors also reviewed the quality, content and timeliness of the flow of information between the Management and the Board and its Committees which is necessary to effectively and reasonably perform and discharge their duties.
10. VIGIL MECHANISM /WHISTLE BLOWER POLICY
The Board on the recommendation of Audit Committee has adopted a Whistle Blower Policy. The details of the same is disclosed on the website of the Company and a weblink thereto is as under: <http://www.hegltd.com/whistle-blower-policy.aspx>
a) There are no materially significant transactions with the related parties viz. Promoters, Directors or the Management, their Subsidiaries or relatives conflicting with Company's interest. Suitable disclosure as required by the Accounting Standard (AS)-18 (Related Party Disclosures), has been made in the Annual Report.
b) There are no pecuniary relationships or transactions of Non-Executive Directors vis-a-vis the Company that have a potential conflict with the interests of the Company.
c) No penalties or strictures have been imposed on the Company by the Stock Exchanges or SEBI or any statutory authority on any matter related to capital markets during last three years.
d) The Company has complied with the mandatory requirements of the Clause 49 of Listing Agreement.
e) No personnel have been denied any access to the Audit Committee of the Company.
f) The Company has complied with all the applicable Accounting Standards.
g) The Internal Auditor directly reports to the Audit Committee.
h) The Chairman, Managing Director & CEO and Chief Financial officer have certified to the Board, inter-alia the accuracy of financial statements and adequacy of Internal Controls for the financial reporting purpose as required under Clause 49(IX) of the Listing Agreement, for the year ended 31.03.2015. The annual Certificate given by the Chairman, Managing Director & CEO and the Chief Financial Officer is published in this report.
13. Code of Conduct
There is a Code of Conduct for the Directors and Senior Management Personnel. This Code is a comprehensive code applicable to all Directors and members of the Senior Management. A copy of the Code has been put on the Company's website www.hegltd.com
The Code has been circulated to all the Members of the Board and Senior Management Personnel and compliance of the same has been affirmed by them. A declaration signed by the Chairman & Managing Director in this regard is given below:
"I hereby confirm that:
The Company has obtained from all the members of the Board and Senior Management Personnel of the Company, affirmation that they have complied with the Code of Conduct framed for Directors and Senior Management Personnel in respect of the financial year 2014-15."
14. MEANS OF COMMUNICATION
The Company publishes its quarterly results in leading national newspapers as per the requirements of the Listing Agreement. These results are displayed on the website of the Company along with other news releases and presentations, if any, made to institutional investors or to analysts among others. All other vital information is also placed on the website of the Company.
16. shareholders information
a) Annual General Meeting:
Date & Time, Venue
Tuesday, 22nd September, 2015 at 11.30 A.M. at the registered office of the Company at Mandideep, Near Bhopal, Distt. Raisen, Madhya Pradesh - 462 046.
b) Financial Calendar:
Financial Year: 1st April, 2015 - 31st March, 2016. Reporting:
a) First quarter results : Within 45 days of end of the 1st Qtr
b) Second Quarter Results : Within 45 days of end of the 2nd Qtr
c) Third Quarter Results : Within 45 days of end of the 3rd Qtr
d) Results for Fourth Quarter & the FY : Within 60 days of end of the FY
c) Date of Book Closure : 16th September, 2015 to 22nd September, 2015 (both days inclusive)
d) Dividend payment date: Dividend if declared shall be paid/ dispatched to the shareholders between 5th October, 2015 and 8th October, 2015.
e) Listing of Shares on Stock Exchanges
2.National Stock Exchange of India Limited
3.Madhya Pradesh Stock Exchange Limited
f) Stock Code / ISIN No.
Equity Shares: BSE: 509631 NSE: HEG
ISIN No .: INE545A01016
h) Registrar and Transfer Agent
M/s. MCS Share Transfer Agent Limited F-65, Okhla Industrial Area, Phase-I, New Delhi-1 10020 Phone : 011-41406149 - 52 Fax : 011-41709881 E-mail Id: email@example.com
i) Share Transfer System:
Share Transfers are attended and registered on fortnightly basis and the same are returned within 30 days from the date of receipt, if the documents are in order in all respects.
) Dematerialisation of shares and liquidity.
3,89,21,954 shares were dematerialised till 31.03.2015 which was 97.40.% of the total paid-up Equity Share Capital of the Company on that date. Trading in shares of the Company is permitted in dematerialised form only.
m) Outstanding GDRs/ADRs/warrants or any Convertible instruments, conversion date and likely impact equity.
There are no such instruments outstanding as on 31st March, 2015.
n) Plant locations
a) Mandideep (Near Bhopal), Distt. Raisen- 462046, Madhya Pradesh.
b) Village Ranipur, Tawa Nagar, Distt. Hoshangabad - 461001 Madhya Pradesh.
o) Address for correspondence:
HEG Limited Secretarial Department Bhilwara Towers, A-12, Sector -1, Noida - 201301 Phone:0120-4390300, 4390000 Fax:0120- 4277841 E-mail: firstname.lastname@example.org Website: www.hegltd.com