REPORT ON CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PHILOSOPHY
The Company believes that sound ethical practices, transparency in operations and timely disclosures go a long way in enhancing long-term shareholders' value while safeguarding the interest of all the stakeholders. It is this conviction that has led the Company to make strong corporate governance values intrinsic to all its operations. The Company is led by a distinguished Board, which includes independent directors. The Board provides strong oversight and strategic counsel. The Company has established systems and procedures to ensure that the Board of the Company is well-informed and well-equipped to fulfill its oversight responsibilities and to provide management the strategic direction it needs.
In terms of revised clause 49 of the Listing Agreement, the details of compliances, for the fifteen months period ended 31st March 2015, are as follows :-
BOARD OF DIRECTORS
Composition of the Board
As on 31st March 2015, the Company's Board comprised of Nine Directors viz., Seven Non-Executive Directors (out of which three are Independent Directors); a CEO & Managing Director and a Wholetime Director. The Chairman of the Board is an Independent Director.
The composition of the Board is in conformity with Clause 49 of the Listing Agreement which stipulates that: (i) the Board should have at least a woman director; (ii) not less than 50% of the Directors should be Non-Executive Directors; and (iii) where the Chairman of the Board is a Non-Executive Director not related to the promoter group, at least one-third of the Board should comprise of independent directors.
Number of Board Meetings
During the fifteen months period from 1st January 2014 to 31st March 2015, the Board of Directors met six times on 12th February 2014, 2nd May 2014, 27th June 2014, 25th July 2014, 5th November 2014 and 6th February 2015. The maximum time gap between any two consecutive board meetings was less than 120 days.
Code of Conduct for Board Members and Senior Management Personnel
The Board had approved a Code of Conduct for Board Members and Senior Management Personnel of the Company which also incorporates the duties of independent directors as laid down in the Companies Act, 2013. The Code has been displayed on the Company's website viz., www. mycemco.com . The Board Members and Senior Management Personnel have affirmed compliance with the aforesaid Code. A declaration signed by the CEO & Managing Director in this regard is attached and forms part of this Report.
Directors with Materially Significant Pecuniary Relationships or Business Transactions with the Company
The Company does not have any pecuniary relationship with any of the Directors and has not entered into any transaction, material or otherwise, with them except for the remuneration / sitting fees and payments / reimbursement of travelling, lodging and boarding expenses.
BOARD LEVEL COMMITTEES
The Company has the following Board Level Committees:
a) Audit Committee,
b) Stakeholder's Relationship Committee,
c) Corporate Social Responsibility Committee and
d) Nomination and Remuneration Committee.
The Board of the Company takes all decisions with regard to constituting, assigning, co-opting, delegating and fixing the terms of reference of the Committees. Recommendations / decisions of the Committees are submitted / informed to the Board for approval / information.
The Audit Committee of the Company as on 31st March 2015 comprised four members namely, Mr. S. Krishna Kumar (Chairman of the Committee), Mr. P.G. Mankad, Mr. Pradeep V. Bhide and Mr. Jamshed Naval Cooper. During the period from 1st January 2014 to 31st March 2015, the Audit Committee met five times on 12th February 2014, 2nd May 2014, 25th July 2014, 5th November 2014 and 6th February 2015. The time gap between any two meetings of the Audit Committee was less than four months. The quorum for the meetings of the Audit Committee is one-third of the members of the Committee, subject to a minimum of two independent members present at the meeting.
The terms of reference of the Audit Committee were amended to align them with the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The role of the Audit Committee is to provide oversight over the accounting systems, financial reporting and internal controls of the Company. The powers and role of the Audit Committee are as set out in the Listing Agreement and Section 177 of the Companies Act, 2013.
The Company Secretary acts as the Secretary to the Committee. The Chief Financial Officer and the representative(s) of the Statutory Auditors and the Internal Auditors are invited to attend the meetings of the Audit Committee. Mr. S. Krishna Kumar, Chairman of the Audit Committee, possesses accounting and financial management expertise and all the members of the Committee also have accounting and financial knowledge.
Stakeholders' Relationship Committee
The Stakeholders' Relationship Committee as on 31st March 2015 comprised three members namely, Mr. P.G. Mankad (Chairman of the Committee), Mr. Pradeep V. Bhide and Mr. Jamshed Naval Cooper. During the period from 1st January 2014 to 31st March 2015, the Committee met 5 times on 12th February 2014, 2nd May 2014, 25th July 2014, 5th November 2014 and 6th February 2015 to take note of shareholders' grievances, if any.
Mr. Rajesh Relan, Legal Head & Company Secretary is the Compliance Officer of the Company and also acts as secretary to the Committee. During the period under review four complaints were received from shareholders, which were resolved satisfactorily. There were no pending investor complaints as on 31st March 2015.
Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee as on 31st March 2015 comprised three members, namely, Mr. S. Krishna Kumar (Chairman of the Committee), Dr. Albert Scheuer and Mr. Sushil Kumar Tiwari. During the period from 1st January 2014 to 31st March 2015 the Committee met three times on 2nd May 2014, 25th July 2014 and 6th February 2015. The terms of reference of the Committee are in line with the provisions of the Companies Act, 2013 and the Rules made thereunder. The details of attendance of the members of the Corporate Social Responsibility Committee are given below:
Nomination and Remuneration Committee
The Committee as on 31st March 2015 comprised three members, namely, Mr. Pradeep V. Bhide (Chairman of the Committee), Mr. P.G. Mankad and Dr. Albert Scheuer. During the period from 1st January 2014 to 31st March 2015, the Committee met three times on 2nd May 2014, 27th June 2014 and 6th February 2015. The terms of reference of the Committee are in line with the provisions of the revised Clause 49 of the Listing Agreement and Section 178 of the Companies Act, 2013 and the Rules made thereunder.
Nomination and Remuneration Policy
The Board on the recommendation of the Nomination and Remuneration Committee (NRC) has approved a Nomination and Remuneration Policy for Directors and Senior Management Personnel. The said policy provides that while considering a proposal for appointment of a director, NRC shall inter alia consider qualifications, positive attributes, area of expertise, independence, number of Directorships and Memberships held in various committees of other companies by such person. The Board considers the recommendations of NRC and takes appropriate decision.
The said Policy provides that while determining the remuneration it should be ensured that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors, senior management personnel and other employees. The remuneration is divided into two components namely, fixed component comprising of salaries, perquisites, allowances, retirement benefits etc., and variable component comprising of performance based incentive. Balance between fixed and variable pay is maintained so as to achieve short term and long term performance objectives. The Nomination and Remuneration Policy can be accessed at the website of the company, www.mycemco.com .
The annual increments and performance incentives are decided through a structured performance management system, which takes into account criticality of the roles and responsibilities, employees' competencies, the Company's performance vis-a-vis the achievement of annual operating plan, individuals performance vis-a-vis Key Performance Indicators (KPIs), industry benchmark and current compensation trends in the market.
Remuneration of Wholetime Director
The Company has not paid any remuneration or sitting fees to its non-resident directors namely, Dr. Bernd Scheifele, Dr. Lorenz Naeger, Dr. Albert Scheuer, Mr. Daniel Robert Fritz and Ms. Soek Peng Sim, during the period under review. The Company does not pay any sitting fees/commission/ remuneration to Mr. Jamshed Naval Cooper, CEO & Managing Director. The remuneration of Mr. Cooper is being borne and directly paid by HeidelbergCement AG. No sitting fees/commission/remuneration was paid to Mr. Ashish Guha, former CEO & Managing Director as his remuneration was borne and directly paid by HeidelbergCement AG. The notice period of Mr. Jamshed Naval Cooper, CEO & Managing Director is six months. The Company does not have any Stock Option Scheme.
Familiarisation programmes for Board Members
The Board members are provided with necessary documents to enable them to familiarise with the Company's procedures and practices. Presentations are made at every Board Meeting with respect to the strategy, business model, operations, markets, business environment, risk management, etc. The Board is also updated on matters relating to changes in regulatory framework.
At the time of appointment, a Director is given a formal letter of appointment, which inter alia explains the role, functions, duties and responsibilities expected from him/ her as a Director of the Company. The Director is also briefed on the compliances required from him under the Companies Act, Clause 49 of the Listing Agreement and other applicable regulations. The CEO & MD also has a one-to-one discussion with the newly appointed Director which helps the newly appointed Director to understand the Company, its business and the regulatory framework in which the Company operates and equips him/her to effectively fulfil his/her role as a Director of the Company.
The details of familiarisation programmes for Independent Directors are posted on website of the Company and the same can be accessed at <http://mycemco.com/investor->relations/familiarization-programme-independent-director.
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a Performance Evaluation Policy has been formulated containing the criteria and methodology for facilitating performance evaluation of the Board, as a whole, Committees of the Board and the directors individually. In accordance with the criteria contained in the said Policy the Board has carried out performance evaluation of its own performance, its Committees and the Independent Directors. The Nomination and Remuneration Committee has also evaluated the performance of all the Directors.
The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors at their separate meeting. The Directors have expressed their satisfaction on the outcome of the performance evaluation.
Meeting of Independent Directors
The independent directors of the Company met on 13th March 2015 inter alia to discuss performance evaluation of non-independent directors and Board as a whole, performance evaluation of Chairman of the Company and evaluation of the quality, content and timeliness of flow of information between the management and the Board. All the Independent Directors were present at the meeting.
The Company does not have any subsidiary company.
Related Party Transactions
All the transactions entered into between the Company and its related parties during the fifteen months period ended 31st March 2015 were in the ordinary course of business and on an arm's length basis. The particulars of such transactions have been disclosed in the notes to accounts of the Balance Sheet presented in the Annual Report. The Company has not entered into any fresh contract or arrangement or modified any existing contract or arrangement after the date on which Section 188 of the Companies Act, 2013 became effective. A statement of all related party transactions is placed before the Audit Committee on a quarterly basis, specifying the nature and value of the transactions.
Pursuant to Clause 49 of the Listing Agreement, the Company has framed a Policy on Related Party Transactions and the same has been posted on the Company's website. The web-link to access the said policy is <http://mycemco>. com/related-party-transaction-policy.
Management Discussion and Analysis
This Annual Report has a detailed chapter on Management Discussion and Analysis.
Wherever necessary, Directors and Senior Management Personnel make disclosures to the Board relating to all the material financial and commercial transactions where they have a personal interest that may create a potential conflict with the interest of the Company at large. All the related party transactions have been disclosed in the notes to the accounts of the Balance Sheet presented in the Annual Report. All the Directors have disclosed their interest in Form MBP-1 pursuant to Section 184 of the Companies Act, 2013 and Rules made thereunder and as and when any changes in their interests take place, they are placed at the Board Meetings for taking the same on record.
The Senior Management and the Board of Directors of the Company review the adoption of the non-mandatory requirements under Clause 49 of the Listing Agreement, from time to time.
Vigil Mechanism/Whistle Blower Policy
The Company has established a Vigil Mechanism/Whistle Blower Policy to deal with the instances of fraud and mismanagement, if any. The Company is committed to developing a culture where it is safe for employees to raise genuine concerns or grievances about unethical behaviour, fraud, conflict of interest and violation of the Code of Conduct. The purpose of this policy is to provide a framework for an effective vigil mechanism and to provide protection to employees or directors reporting such genuine concerns. The Vigil Mechanism/Whistle Blower Policy is posted on the website of the Company. No grievance was received from any employee during the period under review.
Disclosure of Accounting Treatment in preparation of Financial Statements
The Company has followed the accounting standards laid down by the Institute of Chartered Accountants of India (ICAI) in preparation of its financial statements.
Details of Non-compliance by the Company in the last three years
Your Company has complied with all the requirements of the Listing Agreement with the Stock Exchanges and SEBI Regulations. No penalties or strictures have been imposed on your Company by the Stock Exchanges or SEBI or any other Statutory Authority in connection with violation of capital market norms, rules, regulations, etc. in the last three years.
The Company has a structured Risk Management Policy. The business risks have been classified under the broad heads - strategic, operational, financial and legal & compliance risks. The Company's risk management policy lays down a bottom-up process comprising of risk identification, analysis and evaluation, treatment and control. The business risks are evaluated by the Audit Committee and the Board of Directors on a quarterly basis.
Means of Communication
The quarterly and annual financial results are published in the English and Hindi editions of Business Standard.
The Quarterly / Annual Financial Results, Shareholding Patterns, Annual Reports etc., are displayed on the websites of the stock exchanges (BSE & NSE) as well as on the Company's website - www.mycemco.com and the same can be accessed thereat.
The Company attends the earnings calls/investors' conferences organised by the recognised market intermediaries and the presentations, if any, given to investors/analysts at such conferences are posted simultaneously on the Company's website for information of the investors.
During the year under review presentations were made to the Institutional Investors/Analysts after announcement of financial results and the same can be accessed at the Company's website, www.mycemco.com .
GENERAL SHAREHOLDERS INFORMATION:
During the period under review, Mr. Ashish Guha (DIN: 00004364) tendered his resignation from the position of Chief Executive Officer and Managing Director (CEO&MD) of the Company on 2nd May 2014. The Board of Directors accepted the resignation and relieved Mr. Guha with effect from close of business hours on 30th June 2014. The Board places on record its appreciation for the valuable services rendered by Mr. Guha during his tenure.
The Board has, subject to the approval of the members, appointed Mr. Jamshed N. Cooper (DIN: 01527371) as an additional director and also as CEO&MD of the Company with effect from 1st July 2014. The Company has received a notice under Section 160(1) of the Companies Act, 2013 from a member proposing his appointment as a director at the ensuing AGM. A brief profile of Mr. Cooper is given in the Notice of AGM.
The Board has subject to the approval of the members, reappointed Mr. Sushil Kumar Tiwari (DIN: 03265246) as Wholetime Director of the Company for a further period of two years from 10th June 2015 to 9th June 2017.
Dr. Bernd Scheifele (DIN: 01467699) has tendered his resignation from the position of Director of the Company with effect from close of business hours on 10th September 2014. The Board has appointed Ms. Soek Peng Sim (DIN: 06958955) as an Additional Director on 16th September 2014. As an additional director Ms. Sim holds office up to the date of the ensuing Annual General Meeting. The Company has received a notice under section 160(1) of the Companies Act, 2013 from a member proposing her appointment as a director at the ensuing AGM. A brief profile of Ms. Sim is given in the Notice of AGM.
Dr. Albert Scheuer (DIN: 02170574) retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible offers himself for re-appointment.
Mr. P.G. Mankad (DIN: 00005001), Mr. S. Krishna Kumar (DIN: 01785323) and Mr. Pradeep V. Bhide (DIN: 03304262) were appointed as Independent Directors by the members for a term of five years from 1st April 2014 to 31st March 2019 in the last Annual General Meeting held on 19th June 2014 and they continue to be on the Board of Directors. All the independent directors have given declarations regarding fulfiling the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
Annual General Meeting
Date : 7th August 2015
Day : Friday
Time : 9.30 A.M.
Venue : Epicentre, Apparel House, Sector 44, Institutional Area, Gurgaon, Haryana
The financial year of the Company was extended by three months i.e., up to 31st March 2015 to comply with the provisions of Section 2(41) of the Companies Act 2013, which inter alia provides that the financial year of a company should end on 31st day of March every year. Thus the Annual Report contains financial statements and reports for the fifteen months period from 1st January 2014 to 31st March2015. The current financial year is of twelve months from 1st April 2015 to 31st March 2016.
Financial Calendar for 2015-16
Proposed Board Meetings for taking on record quarterly financial results for the financial year 2015 -16 are as under 2015. The current financial year is of twelve months from 1st April 2015 to 31st March 2016.
Financial Calendar for 2015-16
Proposed Board Meetings for taking on record quarterly financial results for the financial year 2015 -16 are as under There are no arrears of listing fees to be paid to the Stock Exchanges.
Dematerialisation of shares and liquidity
The Equity Shares of the Company are actively traded at BSE and NSE in dematerialised form. International Securities Identification Number (ISIN) for both the depositories, viz., NSDL and CDSL is INE578A01017. As on 31st March 2015, 99.18 % of the Equity Shares of the Company were held in dematerialised form. The shareholders who wish to get their shares dematerialised can submit the share certificates together with the Demat Request Form to the Depository Participant with whom they have opened a demat account.
The Company has on 16th December 2013 issued and allotted 370 unsecured, redeemable, non-convertible debentures ("Debentures") of face value of MINR 10 each, aggregating to MINR 3,700 to HeidelbergCement AG for the purpose of refinancing the long term loans obtained from banks.
The Debentures have been issued in dematerialized form and are listed at wholesale debt segment of BSE Limited. ISIN allotted by the Depositories is INE578A08012.
Share Transfer System
Share transfers are processed and share certificates duly endorsed are delivered within a period of fifteen days from the date of receipt, subject to documents being valid and complete in all respects. The Board has delegated the authority for approving transfer, transmission, etc. of the Company's securities to the Company Secretary. The Company obtains from a Company Secretary in Practice half-yearly certificate of compliance with the share transfer formalities as required under Clause 47(c) of the Listing Agreement and files a copy of the said certificate with Stock Exchanges.
The shareholders who wish to transfer their shares held in physical form can lodge the duly completed request for registration of transfer of shares with Integrated Enterprises (India) Ltd., Bengaluru. In case of transfer of shares, deletion of name of deceased shareholder, transmission or transposition of names in respect of shares held in physical form it is mandatory to submit photocopy of PAN Card of the transferee(s), surviving holder(s), legal heir(s) and joint holder(s) respectively along with the request for transfer, transmission or transposition.
Outstanding warrants and their implications on equity
As on 31st March 2015, there are no outstanding GDRs, ADRs, convertible warrants or any other instruments convertible into equity shares, issued by the Company.
Addresses for correspondence
Registered Office: HeidelbergCement India Ltd. 9th Floor, Tower C, Infinity Towers DLF Cyber City, Phase II Gurgaon, Haryana - 122002
Phone Nos. : 0124 - 4503795 Fax No. : 0124 - 4147698
E-mail-Ids : email@example.com firstname.lastname@example.org email@example.com
Registrar & Share Transfer Agents:
Integrated Enterprises (India) Ltd. (Unit: HeidelbergCement India Ltd.) 30, Ramana Residency, 4th Cross, Sampige Road, Malleswaram,
Bengaluru - 560 003, Karnataka Phone Nos. : 080-23460815 to 23460818 Fax No. : 080-23460819
Email-Ids : firstname.lastname@example.org and email@example.com
Axis Trustee Services Ltd.
Axis House, 2nd Floor, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai - 400 025
Phone Nos : 022-24252525/43252525 E-mail-Ids : firstname.lastname@example.org
(a) HeidelbergCement India Ltd.
P.O. Ammasandra District Tumkur Karnataka - 572211
(b) Diamond Cements (Unit of HeidelbergCement India Ltd.)
P.O. Narsingarh District Damoh Madhya Pradesh - 470675
(c) Diamond Cements (Unit of HeidelbergCement India Ltd.)
Village Imlai District Damoh Madhya Pradesh - 470661
(d) Diamond Cements (Unit of HeidelbergCement India Ltd.)
Village Madora District Jhansi Uttar Pradesh - 284121