REPORT ON CORPORATE GOVERNANCE
APPLICABILITE OF CODE OF CORPORATE GOVERNANCE
SEBI Notification dated 2nd September, 2015 modified the Listing Agreement as Listing Regulations, 2015. According to the said Regulation, the Listing regulation is applicable to all companies whose equity shares are listed on a recognized stock exchange. However, compliance with the corporate governance provisions shall not apply, in respect of
a) The listed entity having paid up equity share capital not exceeding rupees Rs.10 crores and net worth not exceeding Rs.25 crores, as on the last day of the previous financial year.
b) The listed entity which has listed its specified securities on the SME Exchange.
Though the compliance with the provisions of Corporate Governance is not mandatory to the Company, utmost importance has been given to good Corporate Governance in all its activities.
Board of Directors
The Board comprises of Non-Executive, Executive and Independent Directors. The Board consists of 8 Directors comprising of one Non-Executive Chairman, one Executive Director, one Non-Executive Director, one Nominee Director and four Independent
Directors as on 31st March 2016. No Director holds membership of more than 10 Committees of Board nor is Chairman of more than 5 such Committees. No Director is a relative of any other Director. The age of every Director, including Independent Director, is above 21.
* Mr. T R Sivaraman resigned from the Board w.e.f. 13.08.2015
** Mrs. T V Rajalakshmi resigned from the Board w.e.f. 19.03.2016
During the year 2015-16, 7 Board Meetings were held on 06.05.2015, 30.05.2015, 25.07.2015, 13.08.2015 07.11.2015, 30.01.2016 and 19.03.2016. The last Annual General Meeting was held on 25.07.2015.
Independent Directors Meeting
The Companies Act 2013 requires all the Independent Directors to meet atleast once in a year. The meeting must be convened without the presence of the non-independent directors and members of the management. An Independent Director would also evaluate the performance of the chairperson of the company and to review the performance of the non- independent directors and the Board as a whole of the company. These measures would immensely aid in ensuring the smooth and proper functioning of the Board of Directors of a company. The Independent Directors met one time during the financial year 2015-16, on 19th March 2016 and assessed the performance of the company and other directors and advised the Board accordingly.
Audit Committee Meeting
The Audit Committee was constituted on 30.05.2014 as required under Section 177(1) of the Companies Act, 2013. The Audit Committee comprises of three Independent Directors and one Nominee Director. The Chairman of the Committee is a non executive Independent Director. The Committee is entrusted with the responsibility to supervise the Company's internal controls and financial reporting process. The Committee met 4 times during the year on 30.05.2015, 13.08.2015, 07.11.2015 and 30.01.2016. Details of its composition and attendance are given hereunder:-
Stakeholders Relationship Committee
The Committee's role and responsibilities are to expeditiously process transfers, transpositions, transmissions, sub-divisions and consolidations of securities complying with SEBI Regulations and Listing requirements and redressal of Investors' grievances. Further, to ensure speedy processing of regular securities transactions pertaining to small Investors, the Board has delegated powers to the Managing Director and the Secretary.
Nomination cum Remuneration Committee
The Nomination cum Remuneration Committee comprises of 3 Non-Executive Directors. The Nomination cum Remuneration Committee is vested with all the necessary powers and authority to ensure the criteria for
a) appointment of Executive, Non-Executive and Independent Directors to the Board.
b) qualifications, positive attributes and independence of Directors.
c) identifying candidates who are qualified to become Directors and recommending to the Board their appointment and removal.
d) reviewing and determining all elements of remuneration package of all the Executive Directors, i.e. salary, benefits, etc.
No Nomination-cum-Remuneration Committee
Meeting was held during the year under review.
The minutes of the Committee meetings are prepared by the Secretary, approved by the Chairman of the Meeting and the same are circulated to the Board in the succeeding meeting and recorded thereat.
Governance Process & Policies
(i) Policy on Director's Appointment Remuneration
The Board on the recommendations of the Nomination-cum-Remuneration Committee meeting held on 26th March 2015 had approved a Nomination and Remuneration Policy. It inter alia deals with the manner of selection of Board of Directors and Managing Director and their remuneration. This policy is framed as per Section 178 (3) of the Companies Act, 2013.
Criteria for selection of Non-Executive Directors
(a) The Committee will identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as director.
(b) Directors would be chosen from diverse fields of expertise drawn from industry, management, finance and other disciplines.
(c) In case of appointment of independent directors, the Committee will satisfy itself with regard to the independent nature of the directors vis-à-vis the company conforming in entirety to the conditions specified under Section 149 of the Companies Act, 2013 read with Schedule IV thereto and the Rules made there under and the Listing Regulation.
(d) The Committee will ensure that the candidate identified for appointment as a director is not disqualified in any manner under Section 164 of the Companies Act, 2013.
(e) In the case of reappointment of non independent directors, the Board will take into consideration the performance evaluation of the director and his engagement level.
2. Remuneration Policy
The remuneration policy aims at attracting and retaining suitable talent and devising a remuneration package commensurate with competition, size of the company, its nature of business and considered appropriate to the respective role and responsibilities.
The remuneration policy seeks to ensure that performance is recognized and achievements rewarded. Remuneration package is transparent, fair and simple to administer, besides being legal and tax compliant.
3. Remuneration of Directors & Key
The Nomination-cum-Remuneration Committee recommends the remuneration of directors and KMPs which is approved by the Board of Directors and where necessary further approved by the shareholders through ordinary or special resolution asapplicable.
The Managing Director is the only executive director entitled for managerial remuneration. Dr. G.A. Pathanjali has been appointed as Managing Director for a tenure of three years from 01.04.2014. Considering the losses currently suffered, the Managing Director was paid minimum remuneration in accordance with the approval granted by special resolution at the Annual General Meeting held on 21.07.2014. His remuneration for FY 2015-16 is disclosed under Note 34 of the Financial Statements. There is no service contract containing provisions of notice period or severance package.
Mr. S.V. Raju, Company Secretary is the Key Managerial Personnel (KMP).
No Director or their relatives holds an office or place of profit in the company.
Other than direct or indirect equity holding and sitting fee, there is no pecuniary relationship or transaction between the company and its non-executive directors. No stock option has been issued by the company to Executive Directors.
Remuneration of Directors
Non Executive Directors are paid sitting fee of Rs. 5000/- per meeting of Board and Committee Meetings. The details of remuneration paid to Non-Executive Directors during the year by way of sitting fee for attending the Board / Committee Meetings are as under:-
(ii) Performance Evaluation
The Board of Directors in March 2015 on the recommendations of the Nomination-cum-Remuneration Committee approved the Board evaluation framework. It has laid down specific criteria for performance evaluation covering -
? Evaluation of Board process
? Evaluation of Committees
? Individual evaluation of Board members & the Chairperson
? Individual evaluation of Independent Directors
Evaluation of all Board members is done on an annual basis. Templates incorporating specific attributes are used and commonly agreed comments and remarks are recorded against each attribute.
The Independent Directors in their exclusive meeting on 19.03.2016 did the evaluation on the performance of Chairperson, non-independent directors and the Board as a whole. They have expressed overall satisfaction on such evaluation. All directors were present at this meeting.
The Board at its 19.03.2016 meeting evaluated the performance of each of the
3 Committees and also the functioning of each of the Independent Directors (excluding the Independent Director being evaluated). The Board has recorded its overall satisfaction and decided in terms of Para VIII(2) of Schedule IV to the Companies Act, 2013 that Independent
Directors be continued in their respective offices.
(iii) Code of Conduct
The Board has formulated a Code of Conduct for Directors and Senior Management Personnel of the Company which is posted on its website. It is hereby affirmed that all the Directors and Senior Management Personnel have complied with the Code and a confirmation to this effect has been obtained from them individually for FY 2015-16.
Further, the Senior Management Personnel have declared to the Board that no material financial or commercial transactions were entered into by them during FY 2015-16 where they have personal interest that may have a potential conflict with the interest of the company at large.
(iv) Risk Management
The company has a robust risk management framework to identify and evaluate business risks and opportunities. It seeks to create transparency, minimize adverse impact on the business objective and enhance the company's competitive advantage. It aims at ensuring that the executive management controls the risk through means of a properly defined framework.
The company has laid down appropriate procedures to inform the Board about the risk assessment and minimization procedures. The Board periodically revisits and reviews the overall risk management plan for making desired changes in response to the dynamics of the business. The company is not currently required to constitute a Risk Management Committee as it is applicable to top 100 listed entities, determined on the basis of market capitalization, as at the end of the immediate previous financial year according to Regulation 21 of SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015.
(v) Whistle Blower Policy
In deference to Section 177 (9) of the Act read with relevant Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Company has established a vigil mechanism overseen by the Audit Committee. This has been uploaded in the Company's website. No complaint under this facility was received in FY 2015-16.
(vi) Policy for Prevention of Sexual Harassment at Workplace
The company has in place a Policy for Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received on sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaint on sexual harassment was received during FY 2015-16.
Quarterly Financial Results
Pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Quarterly Financial Results are approved by the Board on the recommendations of the Audit Committee. These are communicated to BSE after the conclusion of the Board Meeting and the abstract of the results are published in leading dailies, as required, within the stipulated time. These are also immediately posted on the company's website. Accounting Treatment
In the preparation of Financial Statements, no accounting treatment different from that prescribed in any Accounting Standard has been followed.
Pursuant to Section 148, of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the company has appointed Mr. S. Hariharan, Practising Cost Accountant (Membership No.20864), to undertake cost audit of the company for FY 2015-16. His remuneration was approved by the shareholders at the 54th AGM.
Secretarial Standards & Secretarial Audit
Pursuant to Section 118 (10) of the Companies Act, 2013 every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India. The company's practices and procedures mostly meet with all these prescriptions and residual requirements will be taken care of.
Pursuant to Section 204(1) of the companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed Mr. B Kalyanasundaram a Practicing Company Secretary (Membership No. A672, C.P.No.2209) to undertake the secretarial audit of the company for FY 2015-16. The secretarial audit report was placed before the Board on 28th May 2016.
There are no qualifications in the secretarial audit report. Pursuant to Section 138(1) of the Companies Act, 2013 the company has appointed M/s. Maharaj N R Suresh and Company (ICAI Regn.No.001931S),Chennai to conduct internal audit of the functions and activities of the company for FY 2015-16. The Internal Auditor reports directly to the Audit Committee.
Review of Directors' Responsibility Statement
The Board in its Report has confirmed that the annual accounts for the year ended 31st March 2016 have been prepared as per applicable accounting standards and policies and that sufficient care has been taken for maintaining adequate accounting records.
The Company has no subsidiary.
The company has not accepted deposits from the public and there are no outstanding dues in respect thereof.
(i) No strictures / penalties have been imposed on the company by the Stock Exchanges or SEBI or any statutory authority on any matters related to the capital market during the last 3 years.
(ii) No significant and material orders were passed by the Regulators, Courts or Tribunals impacting the going concern status and the company's operations in future
(iii) No loan or advance in the nature of loan was made during the year or outstanding at the close of the year to Associates or Firms/ Companies in which a director of the company is interested. Accordingly no disclosure in terms of Clause 32 on this score is applicable.
General Shareholder Information
Provided in the "Shareholder Information" section of the Annual Report.
Compliance Certificate of the Auditors : Not Applicable
Shareholder Information AGM Details
Date and Time : Saturday, the 30th July, 2016, 11.00 A.M.
Venue : New Woodlands Hotel Pvt. Ltd., No.72-75, Dr. Radhakrishnan Road, Mylapore, Chennai - 600 004.
Book Closure : Monday, the 25th July, 2016 to Saturday, the 30th July, 2016 (Both days inclusive)
Cut-off date for e-voting : Saturday, the 23rd July, 2016
Name & Address
Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers Dalal Street, Mumbai 400 001 Phone :022- 2272 1233 22721234 Fax : 022 - 2272 2082 E-mail : <mailto:email@example.com>firstname.lastname@example.org <mailto:email@example.com>om Website : www.bseindia.com
Listed from : May 1962
Stock Code : 504176
The Listing Fee for the financial year 2016-17 has been paid to the above Stock Exchange.
The Equity Shares of the Company are traded in compulsory demat form and are available for trading under both the Depository Systems in India, namely, NSDL and CDSL. Its International Securities Identification Number (ISIN) is INE783E01015. The details of dematerialised and physical holding as on 31st March 2016 are furnished hereunder
Registrar and Share Transfer Agent
For Physical and Demat Forms: Cameo Corporate Services Ltd. "Subramanian Building", 5th Floor 1, Club House Road, Chennai 600 002 Phone : 044-28460390(5 Lines) Fax : 044-28460129 E-mail : firstname.lastname@example.org
Shareholders holding shares in electronic form shall address their correspondence to their respective Depository Participants.
Shareholders holding shares in physical form and desirous of making a nomination in terms of Section 72 of the Companies Act, 2013 are requested to submit to the Registrar and Transfer Agent in the Form No.SH.13 <http://No.SH.13> prescribed under Rule 19 of the Companies (Share Capital and Debentures) Rules,2014 which can be had on request or downloaded from Company / MCA website. In the case of Demat holding, shareholders shall submit the same to their Depository Participants.
As regards transfers, change of address or status, dividend mandate and other share related queries, investors shall communicate with:-
(a) respective Depository Participants, in case of demat holding
(b) the Registrar & Transfer Agent, in case of physical holding
All queries on Annual Report, dividend and other clarifications may be addressed to the Registered Office of the Company at:
ESVIN House, 13, Old Mahabalipuram Road Perungudi, Chennai 600 096 Phone: 044 - 24960335 / 39279318 Fax: 044- 24961785 Email: email@example.com Website:www.highenergy.co.in
Mr. S. V. Raju, Secretary of the Company is the Compliance Officer under SEBI (Registrar to an Issue and Share Transfer Agents) Regulations, 1993 and under Chapter III read with Regulation 6 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015.
Powers are delegated to the Managing Director and Secretary to deal with regular transactions in securities of small investors, while other cases are decided by the Stakeholders Relationship Committee. Investor requests are attended to within 7-15 days from the date of receipt. There were no shares pending for transfer as on 31st March 2016.
M/s Cameo Corporate Services Ltd., have been appointed as RTA for shares held both in physical and electronic forms, and services for the transfer and dematerialisation of shares are provided to the shareholders through the Registrar and Transfer Agent (RTA)
High, low in prices and volume of trading during each month in the last financial year are as follows: (as reported by the "Bombay Stock Exchange Limited").
The Company has created a mail I.D firstname.lastname@example.org exclusively for the purpose of addressing to, complaints, if any, from investors. Investors can mail any of their grievances to the above mentioned e-mail id for redressal.
SEBI vide Circular dated 3rd June 2011, has advised all listed companies about processing of Investor complaints in a centralized web based complaint system called "SEBI Complaints Redressal System" (SCORES). All complaints received from shareholders of listed companies are posted in this system. Listed companies are advised to view the complaint and submit Action Taken Report (ATR) with supporting documents in SCORES. For the year ended 31st March 2016, no complaints were received and hence not posted in this system against our Company.
Note : Out of above, Non Résident indiens/ Overseas Corporate Bodies hold 80957 shares constituting 4.52%.
Pakkudi Road, Mathur Industrial Estate, Mathur 622 515, Pudukkottai District, Tamilnadu, India Phone : 91-431-2660323, 2660324 Fax : 91-4339-250516 Email : email@example.com Website : www.highenergy.co.in No. of Employees : 135
No Resolution was required to be passed by postal ballot at the last AGM nor is being proposed at the ensuing AGM. However, e- voting facility will be provided to all shareholders as required under Companies Act, 2013 in the ensuing Annual General Meeting.
Under the Companies Act 1956, dividends that are unclaimed for a period of seven years gettransferred to the "investor Education and Protection Fund" administrated by the Central Government statutorily. The following table gives the dates of Declaration of Dividend and the corresponding dates when unclaimed dividends are due to be transferred to the Central Government. Remainders were sent to shareholders, who have not yet encashed the Dividend, to claim the same from the Company well before the due date of transfer to IEPF.
For the Board of Directors)
PLACE :Chennai 600 034
DATE : May 28, 2016