REPORT ON CORPORATE GOVERNANCE
1. CORPORATE GOVERNANCE PHILOSOPHY
The Company is committed to the highest standards of Corporate Governance.The Company relies on the strong Corporate Governance systems and policies of business for healthy growth, accountability and transparency. Good Corporate Governance framework enables the Board and Management to achieve the goals and objectives effectively for the benefit of the Company and its Shareholders. The Code of Corporate Governance emphasizes on transparency of systems to enhance the benefits to Shareholders, Customers, Creditors and Employees of the Company. In addition to compliance with regulatory requirements, the Company endeavors to ensure that the highest standard of ethical conduct is maintained throughout the organisation.
The Company has complied with the requirements of the Corporate Governance Code in terms of Clause 49 of the Listing Agreement with the Stock Exchanges as disclosed herein below.
2. BOARD OF DIRECTORS
The Board of Directors along with its Committees provides focus and guidance to the Company's Management as well as directs and monitors the performance of the Company.
The Board of Directors presently comprises of five Directors, having rich experience and specialized skills in their respective fields, out of which four are Non-Executive Directors. The Company has a Non-Executive Chairman and three Independent Directors comprising more than 50% of the total strength of the Board. The Non-Executive Directors are also more than 50% of the total number of Directors with the Managing Director being the only Executive Director on the Board of the Company.
Board Training and Induction
At the time of appointing a Director, a formal letter of appointment is given to him, which inter alia explains the role, function, duties and responsibilities expected of him as a Director of the Company. The Director is also explained in detail the compliances required from him under the Companies Act, Clause 49 of the Listing Agreement and other relevant regulations and his affirmation taken with respect to the same. Each newly appointed Independent Director is taken through a formal induction program including the presentation from the Managing Director & CEO on the Company's manufacturing, marketing, finance and other important aspects. The Company Secretary briefs the Director about their legal and regulatory responsibilities as a Director. The induction for Independent Directors include interactive sessions with Executive Committee Members, Business and Functional Heads, visit to the manufacturing site etc. On the matters of specialized nature, the Company engages outside experts/consultants for presentation and discussion with the Board members.
3. COMMITTEES OF DIRECTORS
3.1 Audit Committee
The Company constituted a Qualified and Independent Audit Committee comprising of three Non-Executive Independent Directors and one Non-Executive Non-independent Director in accordance with the provisions of Clause 49 of the Listing Agreement and Section 177 of the Companies Act, 2013.
The Committee is empowered with the powers as prescribed under Clause 49 of Listing Agreement and Section 177 of the Companies Act, 2013. The Committee also acts in terms of reference and directions of the Board from time to time.
During the year under review, five Audit Committee Meetings were held on 08th May, 2014, 18th July, 2014, 22nd August, 2014, 17th October, 2014 and 19th January, 2015. The composition of the Audit Committee and the attendance of each Member of the Committee at the meetings were as follows:
The Chairman of the Audit Committee also attended the last Annual General Meeting of the Company.
The Managing Director, Chief Financial Officer, Internal Auditors and Statutory Auditors are also invited to the meetings, to brief the Committee and to answer and clarify queries raised at the Committee Meetings. The Company Secretary acts as the Secretary of the Committee.
Nomination and Remuneration Committee
In compliance with the provisions of section 178 of the Companies Act 2013, read along with clause 49 of the listing agreement, the Board at its meeting held on 8th May 2014 considered and approved the change in the nomenclature of the existing Remuneration Committee as the "Nomination and Remuneration Committee".
The Nomination and Remuneration Committee comprises of three Non-Executive Directors out of which two are Independent. During the year under review, three meetings of the Remuneration Committee was held on 8th May, 2014, 16th September, 2014 and 19th January, 2015. The composition of the Nomination and Remuneration Committee and the attendance at its meeting is as follows:
The Nomination and Remuneration Committee reviews the remuneration package payable to Executive Director(s) and Executives in the top level Management of the Company and gives its recommendation to the Board and acts in terms of reference of the Board from time to time.
Apart from the above, he was also eligible for the Leave Encashment, Leave Travel Concession, Gratuity and Contribution to Provident Funds and other benefits in terms of his appointment and rules of the Company.
The Members, at the Annual General Meeting held on 21st July, 2011 approved the payment of remuneration by way of commission to the Non-Whole-time Directors of the Company, for a period of five years, for each financial year commencing from 1st April, 2011. All the Non-executive Directors are eligible to receive Commission up to a maximum of 1% of profits calculated in accordance with the provisions of Section 197, of the Companies Act 2013, in addition to the sitting fees.
The remuneration by way of commission to the NonExecutive Directors is approved by the Board of Directors on recommendation of the Nomination and Remuneration Committee and distributed to them based on their contribution as well as time spent on operational matters other than at the meetings. The details of sitting fees, for attending the Board Meetings and Committee Meetings, and Commission for the year under review are as follows:
Other than the sitting fees and commission paid to NonExecutive Directors there were no material pecuniary relationship or transaction with the Company.
The Company has not issued any stock options to its Directors /employees.
POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The Nomination and Remuneration Committee has adopted a Nomination and Remuneration Policy which, inter alia, deals with the manner of selection of Board of Directors, Key Managerial Personnel & Senior Management and their remuneration. The relevant extract of the same is as follows:
1. APPOINTMENT OF DIRECTORS, KMP OR SENIOR MANAGEMENT PERSONNEL
The Nomination and Remuneration Committee identifies and ascertains the integrity, qualification, expertise and experience of the person for appointment as a Director, KMP and/or Senior Management Personnel. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person are sufficient / satisfactory for the concerned position. The appointment of a Director or a KMP, as recommended by the Nomination and Remuneration Committee further requires the approval of the Board.
2. REMUNERATION OF DIRECTORS, KMP OR SENIOR
Remuneration to Executive Directors, Directors other than Executive Director and KMP :
The remuneration/ compensation/ commission etc. to Directors and KMP will be determined by the Nomination and Remuneration Committee and recommended to the Board for approval. The remuneration/ compensation/ commission etc. shall be subject to the prior/post approval of the shareholders of the Company and Central Government, wherever required. Increments to the existing remuneration/ compensation structure of Directors and KMP shall be recommended by the Committee to the Board which should be within the slabs approved by the Shareholders in the case of Directors.
Remuneration to Executive Director and KMP
Executive Directors and KMP are eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee. The Executive Director and KMP participate in a performance linked variable pay scheme which is based on the individual and company performance for the year, pursuant to which the Executive Director and KMP may be entitled to performance-based variable remuneration.
Remuneration to Directors other than Executive Director:
The Non- Executive / Independent Director may receive remuneration by way of fees for attending meetings of Board or Committee thereof. Remuneration /Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding 1% of the net profits of the Company computed as per the applicable provisions of the Companies Act, 2013.
Remuneration to Senior Management Personnel:
The remuneration payable to Senior Management Personnel including their increments will be determined by the Managing Director and recommended to the Nomination and Remuneration Committee for approval. Senior Management shall be eligible for a monthly remuneration as may be approved by the Committee. The Senior Management Personnel participate in a performance linked variable pay scheme which is based on the individual's and company's performance for the year, pursuant to which the Senior Management may be entitled to performance-based variable remuneration.
Stakeholders Relationship Committee:
In compliance with the provisions of section 178 of the Companies Act 2013, read along with clause 49 of the listing agreement, the Board at its meeting held on 8th May 2014 considered and approved the change in the nomenclature of the existing Investors Relations Committee as the "Stakeholders Relationship Committee".
The Stakeholders Relationship Committee comprises of three Independent Non-Executive Directors. During the year under review, four Stakeholders Relationship Committee Meetings were held on 08th May, 2014, 18th July, 2014, 17th October, 2014 and 19th January, 2015. The composition of the Stakeholders Relationship Committee and the attendance of each Member of the Committee at the meetings were as follows:
The Stakeholders Relationship Committee is empowered to oversee the redressal of investor complaints pertaining to share transfer, non-receipt of Annual Reports, dividend payments, issue of duplicate share certificate transmission of shares and other miscellaneous complaints. In accordance with Clause 49 of the Listing Agreement, the Board has authorised the Company Secretary, who is also the Compliance Officer, to approve share transfers / transmissions and is empowered to oversee the redressal of investor complaints.
Mr. P Rajesh Kumar Jain, Company Secretary is the Compliance Officer of the Company. All investor complaints, which cannot be settled at the level of the Compliance Officer, are placed before the Committee for final settlement. Sixteen investor complaints were received during the year under review, which were resolved at the level of the Compliance Officer itself. There were no pending investor complaints pertaining to the Financial Year ended 31st March, 2015.
Corporate Social Responsibility (CSR) Committee:
In accordance with section 135 of the Companies Act 2013, read along with rules framed there under, the Board at its meeting held on 8th May 2014 considered and constituted the Corporate Social Responsibility (CSR) Committee.
The Terms and Reference of the Committee are as follows:
(a) formulate and recommend to the Board, a Corporate Social Responsibility Policy;
(b) recommend the amount of expenditure to be incurred on the activities as specified in Schedule VII of the Companies Act;
(c) monitor the Corporate Social Responsibility Policy of the company from time to time.
(d) To do such act as specifically prescribed by Board and
(e) To carry out such other functions, and is empowered to act as required, in terms of Companies Act 2013, read with rules framed there under, Listing Agreement and rules and regulations framed by Securities Exchange Board of India, including any amendment or modification thereof.
The Corporate Social Responsibility (CSR) Committee comprises of three Non-Executive Directors out of which two are Independent. During the year under review, one Corporate Social Responsibility (CSR) Committee Meeting was held on 17th October, 2014. The composition of the Corporate Social Responsibility (CSR) Committee and the attendance of each Member of the Committee at the meetings were as follows:
During the year under review, the Independent Directors met on December 23rd, 2014, inter alia, to discuss:
• Evaluation of the performance of Non Independent Directors and the Board of Directors as a whole;
• Evaluation of the performance of the Chairman of the Company, taking into account the views of the Executive and Non Executive Directors.
• Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
All the Independent Directors were present at the Meeting
Disclosures on Materially Significant Related Party Transactions:
Besides the transactions mentioned elsewhere in the Annual Report, there were no materially significant related party transactions during the year conflicting with the interest of the Company.
Details of Non-Compliance and Penalties:
There was no non-compliance during the last three years by the Company on any matter related to Capital Market. There were no penalties imposed nor strictures passed on the Company by any Stock Exchanges, Securities and Exchange Board of India or any Statutory Authority relating to the capital markets.
The Managing Director and 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 financial year ended 31st March, 2015.
Compliance Certificate for Corporate Governance from Auditors of the Company is annexed hereto and forms part of this Report.
Code of Conduct:
The Company has posted the Code of Conduct for Directors and Senior Management on its website. The Code of Conduct is applicable to all Directors and Senior Management Personnel of the Company. All the members of the Board and Senior Management of the Company have affirmed compliance with their respective Codes of Conducts for the Financial Year ended 31st March, 2015. A declaration to this effect, duly signed by the Managing Director is annexed hereto and forms part of this Report.
Details of Compliance with Mandatory Requirements and Adoption of the Non-mandatory Requirements:
The Company has complied with the mandatory requirements of Clause 49 and is in the process of implementation of Non-mandatory requirements.
Relationships inter-se among Directors:
In accordance with the provisions of Sub-Section (77) of Section 2 of the Companies Act, 2013, none of the Director(s), on the Board of the Company is related to each other
Prevention of Insider Trading
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Company Secretary is responsible for implementation of the Code.
All Board Directors and the designated employees have confirmed compliance with the Code.
6. MEANS OF COMMUNICATION
Quarterly and half-yearly reports are published in two Newspapers - one in English and one in Telugu.
The Financial Results are submitted to the Stock Exchanges with in the stipulated time in accordance with the Listing Agreement and simultaneously displayed on the Company's website www.hil.in The Company Law Department of the Company serves to keep the investors informed by providing key and timely information like details of Directors, Financial Results, Shareholding Pattern, etc.
The Company also display's official news on its website www.hil.in
7. GENERAL SHAREHOLDER'S INFORMATION:
Date, time and Venue : Thursday, 30th July, 2015 at 3.00PM Asbestos Centre, Road No. 13, Banjara Hills, Hyderabad
Financial year : 1st April, 2014 to 31st March, 2015
Book Closure : From 27th July, 2015 to 30th July, 2015 (both days inclusive)
Dividend Payment Date : Within one Week from the date of declaration in the Annual General Meeting.
Listing on Stock Exchanges
1) Bombay Stock Exchange Limited, Phiroze Jeejeebhoy Towers, Dalal Street, MUMBAI - 400001.
2) National Stock Exchange of India Limited. 'EXCHANGE PLAZA' 5th Floor, Plot#C/1, G-Block, Bandra-Kurla Complex, Bandra (E), MUMBAI - 400051.
Name of the Stock Exchange Bombay Stock Exchange Limited National Stock Exchange of India Ltd.
509675 / HIL
The Listing fee for the year 2015-2016 has been paid to both the above said Stock Exchanges.
Registrar and Transfer Agents
M/s.Venture Capital and Corporate Investments Private Limited, 12-10-167, Bharat Nagar, Hyderabad - 500018 Tel: 91-40-23818475 / 476, Fax: 91-40-23868024 Email:email@example.com
Share transfer System
Share Transfers in physical form shall be lodged with the Registrars at the said address.
The share transfers are generally processed by our Registrars within 15 days from the date of receipt provided the documents are complete in all respects.
Pursuant to Clause 47(C) of the Listing Agreement with the Stock Exchanges, certificates, on half-yearly basis, have been given by a Practicing Company Secretary duly certifying compliance of shares transfer formalities.
Dematerialization of shares and liquidity
: The shares of the Company are under compulsory dematerialize trading.
The Company has made necessary arrangements with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialization facility. As on 31st March, 2015, 98.12% of the Company's Equity Shares are in dematerialised form.
The ISIN No. / Code for the Company's Equity Shares is INE557A01011. Shareholders can open an account with any of the depository participants registered with any of these depositories.
1. Sanatnagar, Hyderabad - 500018 (Telangana)
2. Faridabad, Sector-25 - 121005 (Haryana)
3. Jasidih, Industrial Area - 814142 (Jharkhand)
4. Dharuhera, Plot No.31, Rewari District - 122106 (Haryana)
5. Thimmapur, Mahboobnagar District - 509325 (Telangana)
6. Vijayawada, Plot No.289, IDA, Kondapalli - 521228 (Andhra Pradesh)
7. Chennai, Kannigaiper Vil., Tiruvallur District -601102 (Tamil Nadu)
8. Wada, Musarane Vil., Thane District - 421312 (Maharashtra)
9. Sathariya, SIDA, Jaunpur District - 222022 (Uttar Pradesh)
10. Thrissur, Mulangunnathukavu Post - 680581 (Kerala)
11. Balasore, IDCO, Plot No. 72, ND Centre, Somanathpur - 756019 (Odisha)
12. Golan, Village,Valod Taluka, Tapi District - 394640 (Gujarat)
13. Jhajjar, Amadalshahpur, Village- Akeri Madanpur, -124146 (Haryana).
14. 3.60 MW (2x1.80 MW) at Kutch Dist, Gujarat.
15. 1.25 MW near Coimbatore, Tirupur Dist, Tamilnadu.
16. 2.50 MW (2x1.25 MW) at Jodhpur Dist, Rajasthan.
17. 2.00 MW at Jaisalmer Dist, Rajasthan.
: Mr. P Rajesh Kumar Jain
Company Secretary & Compliance Officer
HIL Limited 7th Floor, SLN Terminus, Survey No.: 133 Beside Botanical Gardens, Gachibowli,
Hyderabad-500032. Tel: 91 40 30999000, 30999121 (D) Fax: 91 40 30999240 Email: firstname.lastname@example.org
Address for Correspondence
The above Report was approved by the Board of Directors at their meeting held on 27th April, 2015.
On behalf of the Board of Directors
Place : New Delhi,
Date :27th April, 2015