REPORT ON CORPORATE GOVERNANCE
Your Company is committed to good Corporate Governance, based on an effective Independent Board, separation of supervisory role from the executive management and the constitution of Committees to oversee critical areas of business operations.
1. PHILOSOPHY ON CORPORATE GOVERNANCE
Your Company's Corporate Governance philosophy encompasses not only regulatory and legal requirements but also strives to enhance members' value through
- good strategic direction
- sound business decisions
- prudent financial management
- high standards of ethics throughout the organisation
- ensuring transparency and professionalism in all decision making processes relating to transactions of the Company and
- achieving excellence in Corporate Governance through:
- conforming to the prevalent mandatory stipulations/guidelines on Corporate Governance.
- Regular review of the Board processes and the management systems for further improvement.
Your Company has adopted a Code of Conduct for members of the Board and Senior Management. The Code aims at ensuring consistent standards of conduct and ethical business practices across the Company. Your Company has received confirmations from all concerned regarding their adherence to the said Code.
Pursuant to the New Listing Regulations, a confirmation from the Chief Executive Officer of the Company regarding compliance with the Code by all members of the Board and senior management is annexed to this Annual Report. The full text of the Code is furnished at the end of this Report and is also displayed on the Company's website www.hindujafoundries.com
2. BOARD OF DIRECTORS
As on March 31, 2016 your Company's Board of Directors comprised 11 Directors (out of which more than 50% of the Directors are Independent Directors) with Mr. Dheeraj G. Hinduja as Non-executive Chairman.
Your Company appointed Independent Directors who are renowned people having expertise in their respective field and areas of practice. They also fulfill the requirement of "Independence" prescribed under the regulations.
Every Independent Director, at the first meeting of the Board in which he/she participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he/she meets the criteria of independence as required under Section 149(7) of the Companies Act, 2013.
The obligations with respect to Independent Directors under Regulation 25 of the New Listing Regulations are made known to Independent Directors so appointed. The Company also has familiarized Independent Directors about the foundry industry, in general and the business model and other relevant information about the Company.
The Company had issued a formal letter of appointment to all Independent Directors and the terms and conditions of their appointment have been disclosed in the website of the Company.
Performance evaluation of Directors
The Nomination and Remuneration Committee of the Board has laid down the criteria for performance evaluation of all Directors. The performance evaluation is being done by the entire Board of Directors, except the Director concerned being evaluated. The criteria for performance evaluation are as follows:
Role & Accountability
- Understanding the nature and role of Independent Directors' position.
- Understanding of risks associated with the business.
- Application of knowledge for rendering advice to management for resolution of business issues.
- Offer constructive challenge to management strategies and proposals.
- Active engagement with the management and attentiveness to progress of decisions taken. Objectivity
- Non-partisan appraisal of issues.
- Own recommendations given professionally without tending to majority or popular views. Leadership & Initiative
- Heading Board Sub-committees.
- Driving any function or identified initiative based on domain knowledge and experience.
- Commitment to role & fiduciary responsibilities as a Board member.
- Attendance and active participation.
- Proactive, strategic and lateral thinking.
Meeting of Independent Directors
During the year, a meeting of Independent Directors was held to review the performance of the Board as a whole on parameters of effectiveness and to assess the quality, quantity and timeliness of flow of information between the management and the Board.
Your Company follows a structured orientation and familiarisation programme through various reports or codes or internal policies for all the Directors with a view to update them on the Company's policies and procedures on a regular basis.
Periodic presentations are made at the Board meetings on business and performance, long term strategy, initiatives and risks involved.
The details of familiarisation programme have been posted in the website of the Company under the web link <http://www>. Hindujafoundries.com/companies-act-2013-compliance
Non-executive Directors' compensation and disclosures
Non-executive Directors (including Independent Directors) have been paid a sitting fees of Rs.20,000 per Committee / Board meeting attended by the directors including attendance by video Conferencing, as prescribed under the Companies Act, 2013.
Other Provisions as to Board and Committees
The Board met 10 times during the year and the time gap between any two meetings did not exceed 120 days.
During the 18 months period ended March 31, 2016, none of the Directors of the Company was a member of more than 10 specified Committees or Chairman of more than 5 such Committees in companies in which he/she was a Director.
Your Company's Directors promptly notify any change(s) in the committee positions as and when they take place.
3. AUDIT COMMITTEE
The Audit Committee which acts as a link between the management, external and internal auditors and the Board of Directors of the Company is responsible for overseeing the Company's financial reporting process by providing direction to audit function and monitoring the scope and quality of internal and statutory audits.
The Audit Committee comprises Mr. D J Balaji Rao, Independent Director as Chairman, Mr. T Anantha Narayanan, Non-executive Director as Member, Mrs. Mohana Srinivasan, Independent Director as Member.
Mr. S Ragothaman who was the member of Audit Committee, ceased to be a member upon his resignation from the Board with effect from November 18, 2015.
All members of the Audit Committee are financially literate and have expertise in accounting/financial management.
Mr. D J Balaji Rao, Chairman - Audit Committee was present at the Annual General Meeting held on December 22, 2014
The Managing Director and CEO, Chief Financial Officer and Chief Operating Officer attended meetings of the Committee as invitees. The Statutory Auditors are permanent invitees to the Audit Committee Meetings. Mr. S Venkatasubramanian, Company Secretary is the Secretary to the Committee.
Terms of Reference
i. Overseeing the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
ii. Recommendation for appointment, remuneration and terms of appointment of auditors of the Company;
iii. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
iv. 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.
v. Reviewing, with the management, the quarterly financial statements before submission to the board for approval;
vi. 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 utilized 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
vii. Review and monitor the auditor's independence and performance, and effectiveness of audit process;
viii. Approval or any subsequent modification of transactions of the Company with related parties;
ix. Scrutiny of inter-corporate loans and investments;
x. Valuation of undertakings or assets of the Company, wherever it is necessary;
xi. Evaluation of internal financial controls and risk management systems;
xii. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
xiii. 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;
xiv. Discussion with internal auditors of any significant findings and follow up there on;
xv. 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;
xvi. 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;
xvii. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, members (in case of non-payment of declared dividends) and creditors;
xviii. To review the functioning of the Whistle Blower mechanism;
xix. 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 background, etc. of the candidate;
xx. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
4. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprises of Mr. Sridhar Venkiteswaran, Independent Director as Chairman, Mr. Dheeraj G Hinduja (Non-Executive Director), Mr. Sudhanshu K Tripathi (Non-Executive Director) and Mr. Vijay Vaid (Independent Director) as members.
Consequent to the resignation of Mr. S Ragothaman as a member of Board with effect from November 18, 2015, he ceased to be a member of Nomination and Remuneration Committee.
The Remuneration Policy is annexed at the end of this Report
Terms of Reference
(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;
(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
(c) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals:
(d) formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;
(e) formulation of criteria for evaluation of Independent Directors and the Board;
(f) devising a policy on Board diversity;
(g) identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.
5. STAKEHOLDERS RELATIONSHIP COMMITTEE
The Committee consists of Mr. T Anantha Narayanan, (Non-Executive Director) as Chairman, Mr. Sudhanshu K Tripathi (Non-Executive Director) and Ms. Bhumika Batra, (Independent Director) as members.
Terms of Reference
- shall consider and resolve the grievances of debenture holders, members and fixed deposit holders of the Company.
- Any other matters referred to by the Board in relation to the stakeholders.
This Committee which was formerly constituted in alignment with the requirements of the erstwhile Clause 49 of the Listing Agreement, oversees redressal of shareholder and investor grievances and approves issue of share certificates arising out of loss/destruction, sub-division, consolidation, rematerialization etc.
The Committee also reviews the performance of the Company's Registrar and Transfer Agents (R & TA) and their system of dealing with and responding to correspondence from all categories of members. The manner and timelines of dealing with complaint letters received from Stock Exchanges / SEBI / Ministry of Corporate Affairs etc., and the responses thereto are reviewed by this Committee.
Based on the delegated powers of the Board of Directors, the Managing Director approves the share transfers / transmissions on a regular basis and the same is reported to at the next meeting of the Committee, normally held at every quarter.
Details of complaints received and redressed
During the 18 months period ended March 31, 2016, 58 complaints were received, which were redressed to the satisfaction of the complainants. There were no pending complaints at the year - end.
Rights of Members
Your Company protects and safeguards members' rights, provides adequate and timely information, opportunity to participate effectively in general meeting and ensure equitable treatment to all members
Role of stakeholders in Corporate Governance
Your Company recognises the rights of its stakeholders and encourages co-operation between the Company and stakeholders to enable participation in Corporate Governance process.
6. RISK ASSESSMENT AND MINIMISATION PROCEDURE
The Company has constituted a Risk Management Committee which met on August 13, 2015 and reviewed that the Company has an appropriate and effective Enterprise Risk Management system with appropriate policies and processes which carries out risk assessment
i. Disclosures on materially significant related party transactions that may have potential conflict with the interest of the Company at large
There were no materially significant related party transactions that had potential conflict with the interests of the Company at large.
Particulars of contracts or arrangement with related party
The particulars of every contract or arrangement referred to in sub-section (1) of section 188 of the Companies Act, 2013 and entered into by the Company with its related parties including contracts or arrangements or transactions on an arm's length basis have been disclosed in Form AOC - 2 as Annexure - H.
The policy on related party transactions as approved by the Board is uploaded on the Company's website. None of the Directors has any pecuniary relationship or transactions vis- a-vis the Company.
ii. Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchanges or SEBI or any Statutory Authorities on any matter relating to Capital markets during the last three years.
The Company has complied with all the requirements of the Listing Agreement of the Stock Exchanges as well as regulations and guidelines of SEBI. No penalties have been levied or strictures have been passed by SEBI, Stock Exchanges or any other Statutory Authorities on matters relating to Capital Markets in the last three years.
iii. Whistle Blower policy
Your Company has established a Vigil Mechanism/ Whistle Blower Policy to enable stakeholders (including Directors and employees) to report unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct. The Policy provides adequate safeguards against victimisation of Director(s)/ employee(s) and direct access to the Chairman of the Audit Committee in exceptional cases. The Protected Disclosures, if any reported under this Policy will be appropriately and expeditiously investigated by the Chairman.
Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. The Whistle Blower Policy has been disclosed on the Company's website under the web link <http://www.hindujafoundries>. com/ companies-act-2013-compliance and circulated to all the Directors / employees.
iv. Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("New Listing Regulations")
The Company complies with all the requirements of the New Listing Regulations.
Your Company has complied with the mandatory requirements and adopted the non-mandatory requirements of the New Listing Regulations.
v. Details of compliance of discretionary requirements of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("New Listing Regulations")
Your Company has complied with the discretionary requirement of "D" and "E" of Regulation 27 (i), of Schedule II, Part E, of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("New Listing Regulations").
9. MEANS OF COMMUNICATION
(a) As stipulated under Regulation 47 of the New Listing Regulations, the Quarterly Results are published in one English National Newspaper and one Tamil Newspaper within 48 hours of the conclusion of the Board meeting in which the results are approved. They are also displayed in the website of the Company www.hindujafoundries.com
(b) The Company's website also displays official press/news releases and several other details/ information of interest to various stakeholders.
(c) A Management Discussion and Analysis Report is being presented as part of the Directors' Report.
(d) Green Initiative: As part of Green initiative, the Company sent request to members on September 26, 2013, January 17, 2014 and December 22, 2014 and sought their concurrence to send all communications to them by electronic mail. The Company is committed to good and faster communication to all members and in this regard the Company will take the support of the Depository Participants and Registrar & Share Transfer Agents to ensure that the members receive communication in a fast and effective way.
10. CODE OF CONDUCT
Your Company has adopted a Code of Conduct for members of the Board (incorporating duties of Independent Directors) and the Senior Management. The Code aims at ensuring consistent standards of conduct and ethical business practices across the Company. Your Company has received confirmations from all concerned regarding their adherence to the said Code.
Pursuant to the New Listing Regulations, the Managing Director and the Chief Executive Officer have confirmed compliance with the Code by all members of the Board and the Senior Management.
The full text of the Code is furnished in this Report and also hosted on the Company's website under the web link <http://www>. Hindujafoundries .com/corporategovernance.
11. CODE OF CONDUCT FOR PROHIBITION OF INSIDER TRADING
Your Company has adopted a Code of Conduct as per Securities and Exchange Board of India (SEBI) (Prohibition of Insider Trading) Regulations, 2015. All Directors, Designated Employees who could have access to the Unpublished Price Sensitive Information of the Company are governed by the Code. During the period 18 months ended March 31, 2016 under review, there has been due compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015.
12. GENERAL SHAREHOLDER INFORMATION
i. 55th Annual General Meeting
Day : Thursday
Date : June 16, 2016
Time : 11.00 A.M.
Venue : Rani Seethai Hall, 603, Anna Salai, Chennai - 600 006.
ii. Financial Calendar
FINANCIAL YEAR 2016-17
Unaudited results for the quarter and three months ending : June 30, 2016
Before Second week of August 2016
Unaudited results for the quarter and six months ending September 30, 2016 : Before second week of November 2016
Unaudited results for the quarter and nine months ending December 31, 2016 : Before second week of February, 2017
Audited results for the year ending March 31, 2017 :Before end of May, 2017
Closure Dates : June 7, 2016 to June 16, 2016 (both days inclusive).
Dividend payment date : N.A.
Listing/Stock Code of equity shares
NAME OF EXCHANGE
Bombay Stock Exchange Limited (BSE)
STOCK CODE : 505982
National Stock exchange Limited (NSE)
STOCK CODE : HINDUJAFO
vii. REGISTRAR AND SHARE TRANSFER AGENTS
All share registry work in respect of both physical and demat segments are handled by a single common agency M/s. Integrated Enterprises (I) Ltd., II floor, "Kences Towers" 1, Ramakrishna Street, North Usman Road, T Nagar, Chennai 600 017 as the Registrar and Transfer Agent (R & TA) of the Company for all aspects of Investor servicing relating to shares.
viii. SHARE TRANSFER SYSTEM
The authority relating to transfer, transmission and transposition of shares are vested with the Stakeholders Relationship Committee. In order to speed up the process of transfer related activities, the said Committee had authorized the Managing Director to approve all routine transfer, transmission and transposition of the shares.
ix. UNCLAIMED DIVIDEND
The amount of dividends remaining unclaimed for a period of seven years is to be transferred to the Investor Education and Protection Fund. Accordingly, the dividend declared for all the financial years ended upto March 31, 2008 and remaining unclaimed has been transferred to the Investor Education and Protection Fund after the completion of the statutory period of seven years. The amount so transferred cannot be claimed either from the Company or from the Fund. As on date no unclaimed divedend is required to be transferred.
x. DETAILS OF UNCLAIMED SECURITIES SUSPENSE ACCOUNT
As per SEBI directive, outstanding unclaimed shares are being transferred to Unclaimed Securities Suspense Account and the voting rights on these shares remain frozen till the rightful owner claims such shares
Shares arising out of the certificates that have been returned undelivered to the Company are lying in the unclaimed securities suspense account. In view of the same, shareholders shall approach the Company/Registrar and Share transfer Agents (R&TA) with proper supporting documents for claiming such shares
xiii. DEMATERIALIZATION OF SHARES AND LIQUIDITY
The shares, listed on the BSE Limited ("BSE")and the National Stock Exchange of India Limited ("NSE") are to be traded only in dematerialized form. The ISIN of the shares is INE291F01016. The shares are traded on the BSE and NSE.
As on March 31, 2016, 206813658 shares were held in dematerialized form representing 99.88 % of the total shares. The balance was held in physical form.
xiv. PLANT LOCATIONS:
Ennore Kathivakkam High Road,Ennore, Chennai 600 057.
Hyderabad Ductron Castings Unit, B-15, IDA, Uppal, Hyderabad 500 039. (Closure process of this unit is in progress) Plot K-2, SIPCOT Industrial Estate, Arneri Village, Sriperumbudur - 602 105 Kanchipuram District Sriperumbudur
xv. ADDRESS FOR CORRESPONDENCE
Investors may contact the Registrar and Transfer Agents for matters relating to shares, dividends, Annual Reports and related issues at the following address:
M/s. Integrated Enterprises (I) Ltd II Floor, "Kences Towers", No. 1, Ramakrishna Street, Off North Usman Road, T Nagar, Chennai 600 017 Phone : 044 - 28140801 - 03 Fax : 044 - 28142479 E-Mail : email@example.com
For other general matters or in case of any difficulties/grievances investors may contact:
Mr. S Venkatasubramanian Company Secretary & Compliance Officer Hinduja Foundries Limited Kathivakkam High Road Ennore, Chennai 600 057 Phone : 044 - 25752103/ 044 - 42016742 Fax : 044 - 25750390/ 044 - 42021443 E-Mail : firstname.lastname@example.org email@example.com