REPORT ON CORPORATE GOVERNANCE
1. Company's Philosophy on Code of Governance
Corporate Governance at INDIA STEEL WORKS LIMITED is demonstrated by fair business and corporate practices with all its stakeholders integrity and transparent dealings is the basic norm of Corporate Governance practiced here.
2. Board of Directors
During financial year 2014-15, the Board consists of Ten Directors comprising of four executive Directors, one nonexecutive Director and five Independent Directors, out of which one independent director resigned during the year 2014-15.
(b) Number of Board Meetings:
During the Financial year five Meetings were held on 28th May,2014, 11th August, 2014, 4th September,2014, 14th November, 2014, 13th February,2015. The maximum interval between any two meetings was not more than 4 months.
(c) Information supplied to the Board:
The Board of Directors has access to any information within the Company. At the Board Meetings, directors are provided with all relevant information on important matters, working of the Company as well as all related details that require deliberations by the members of the Board, inter-alia include:
- Annual business plans,
- Production, sales & financial performance data;
- Business review;
- Quarterly and annual financial results ;
- Minutes of the meetings of the Audit and other Committees as well as circular resolutions if any to be passed;
- Significant initiatives and developments relating to labour/human resource relation
- Information on recruitment and remuneration of senior officers just below the Board level,
- Materially important show cause / demand / prosecution / penalty notices and legal proceedings by or against the Company;
- Quarterly details of foreign exchange exposure and the steps taken by the management to limitthe risk of adverse exchange rate movement;
- Any other information which is relevant for decision-making by the Board.
(d) Directors Profile seeking appointment / re-appointment
As required, a brief profile and other particulars of the Directors seeking appointment / re-appointment is given in the Notice of the 28th Annual General Meeting and forms a part of this Report.
(e) Induction & Familiarization Programs for Independent Directors:
The Directors on appointment, are issued a letter of Appointment setting out in detail, the terms of appointment ,duties and responsibilities. Each newly appointed Independent Director is taken through a familiarization programme. The program aims to familiarize the Directors with the Company, their role and responsibilities, business model of the Company etc. The details of such familiarization programme have been displayed on the website of the and the weblink of the same is <http://indiasteel.in/pdfs/Details%20of%20the%20Familirization%20Programs%20for%20> Independent%20Director.pdf
(f) Performance Evaluation:
In compliance with the provisions of the Companies Act, 2013 ('the Act') read with the Listing Agreement, the Board during the year adopted a formal mechanism for evaluation of its performances as well as that of its committees and individual Directors, including the Chairman ofthe Board.
A questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on various parameters. 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. The Directors expressed their satisfaction with the evaluation process.
(g) Independent Directors' Meeting:
In compliance with Section 149(8) of the Act read along with Schedule IV of the Act and Clause 49 (II)(B)(6) of the listing agreement with the stock exchange, the Independent Directors met on 13th February, 2015, inter alia, to discuss:
(a) Evaluation of the performance of non- Independent Directors and the Board as a whole;
(b) Evaluation of the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors;
(c) Evaluation of the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. All the Independent Directors on the Board as on the date of the meeting were present at the meeting.
(h) Code of Conduct:
The Board of Directors of the Company have adopted Code of Business Conduct & Ethics and is applicable to all the Directors and senior management personnel.In terms of the requirements of Clause 49 of the Listing Agreement, the Code of Business Conduct & Ethics, as approved by the Board of Directors, has been displayed at the website of the company, www.indiasteel.in under the heading 'Investors Relations'. The web link of the same is:
All the members of the Board and senior management personnel have affirmed compliance with the Code for the year ended 31st March, 2015 and a declaration to that effect signed by the Chairman & Managing Director is attached and forms part of this report.
The Company has a Code of Conduct for Prevention of Insider Trading in the shares and securities of the Company. This Code, inter-alia, prohibits purchase / sale of shares of the Company by Directors and employees while in possession of unpublished price sensitive information in relation to the Company. This Code is available on the Company's website www.indiasteel.in
All the Board Members and senior management personnel of the Company have affirmed compliance of the Code of Conduct for the year ended 31st March, 2015. A declaration to that effect signed by the Chairman & Managing Director is attached and forms part of the Annual Report of the Company.
3. Committees of the Board
The Board has constituted various mandatory and other Committees from time to time. The terms of reference of these Committees are determined by the Board and their relevance reviewed from time to time. The minutes of the Committee meetings are circulated / tabled at the Board meetings.
(a) Audit Committee
During the financial year, the Audit Committee of Directors comprised of three Non-Executive Independent Directors and one Executive Director viz., Mr. S. P. Khosla - Chairman, Mr. Bimal Desai, Mr. Neeraj Agarwala (up to 12.02.2015) all independent and Mr. Sudhir H. Gupta, Executive Director as member.
• Brief description of terms of reference:
The terms of reference of this committee covers the matters specified for Audit Committees under Clause49 of the Listing Agreement as well as under provisions of the Companies Act, 2013.
• Whistle Blower Policy
The Company has been formulated Whistle Blower Policy to establish a Vigil Mechanism for directors and employees of the Company. This Policy covers misuse or abuse of authority, fraud or suspected fraud, violation of company rules, manipulations, negligence causing danger to public health and safety, misappropriation of monies and other matters or activity on account of which the interest of the Company is affected and formally reported by whistle blowers.
The vigil mechanism provides a channel to the employees and directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and directors to avail of the mechanism and also provide for direct access to the Chairperson of the Audit Committee in exceptional cases.
This policy, however, neither releases employees from their duty of confidentiality in the course of their work nor can it be used as a route for raising malicious or unfounded allegations against people in authority and/ or colleagues in general. It is affirmed that no personnel has been denied access to the Audit Committee. The Whistle Blower Policy of the Company has been uploaded and can be viewed on the Company's website, www.indiasteel.in
• CEO Certification
The Managing Director & CEO has issued a Certificate pursuant to the provisions of Clause 49 of the Listing Agreement certifying the Financial Statements, the Cash Flow Statements and the Internal Control Systems for financial Year ended March 31, 2015 Venue and the same was placed before the Board of Directors at their meeting held on 30th May,2015.
(b) Stakeholders Relationship Committee :
In compliance with the provisions of Section 178 of the Act and the Listing Agreement, the Board has renamed the existing Shareholders/Investors Grievance Committee as "Stakeholders Relationship Committee". This Committee ensures speedy disposal of all grievances/complaints relating to shareholders/investors. The terms of reference of the Committee include the following:
- To specifically look into complaints received from the shareholders of the Company;
- To oversee the performance of the Registrar and Transfer Agent of the Company;
- To recommend measures for overall improvement in the quality of services to the investors; The Committee comprised of:
Four meetings were held during the year. The meeting was attended by all the members of the Committee. During the year 2014-15, the Company has not received any shareholders' complaints and there were no requests for dematerialization were pending as on 31st March, 2015.
Share Transfers in physical form are lodged with Link Intime India Private Ltd.. Transfers up to 2500 shares were processed and approved on weekly basis. A summary of transfer / transmission of securities of the Company, if any are also placed at every Stakeholders Relationship Committee. 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 Exchange.
(c) Nomination and Remuneration Committee:
a) To guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel and senior management personnel;
b) To evaluate the performance of the members of the Board as well as Key Managerial Personnel and senior management personnel and to provide rewards linked directly to their efforts, performance, dedication and achievement relating to Company's operations;
c) To recommend to the Board on remuneration payable to the Directors, Key Managerial Personnel and senior management personnel;
d) Assessing the independence of Independent Directors;
During the financial year 2014-15, the Nomination & Remuneration Committee met on 28th day of May, 2014 & 13th February, 2015, Mr. Neeraj Agarwal & Mahesh Sheregar were absented from the Meetings respectively.
Appointment & Remuneration Policy:
A. Policy for appointment and removal of directors, KMP and senior management personnel
(i) Appointment Criteria and Qualifications
a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as director, KMP or senior management personnel and recommend to the Board his/her appointment.
b) A person should possess adequate qualifications, expertise and experience for the position he / she is considered for appointment.
c) The Company shall not appoint or continue the employment of any person as Managing/ Whole-time Director who has attained the age of seventy years, provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of the shareholders by passing a special resolution based on the explanatory statement annexed to the notice for such motion indicating the justification for extension of appointment beyond seventy years.
a) Managing Director / Whole-time Director
The Company shall appoint or re-appoint any person as its Executive Chairman, Managing Director or Whole-time Director for a term subject to the provisions of the Companies act 2013 & rules made there under, not exceeding three years at a time for the time-being. No reappointment shall be made earlier than one year before the expiry of term.
b) Independent Director
- An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report.
- No Independent Director shall hold office for more than two consecutive terms of upto a maximum of five years each, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director, provided that the Independent Director shall not, during the said period of three years be appointed in or be associated with the Company in any other capacity, either directly or indirectly.
- At the time of appointment of Independent Director, it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company or such other number as may be prescribed under the Act.
The Committee shall carry out evaluation of performance of every Director, Key Managerial Personnel and senior management personnel at regular intervals.
Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, Rules & Regulations thereunder, the Committee may recommend to the Board with reasons recorded in writing, removal of a Director, Key Managerial Personnel or senior management personnel subject to the provisions and compliance of the said Act, Rules & Regulations.
The Directors, KMP and senior management personnel shall retire as per the applicable provisions of the Act and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP and senior management personnel in the same position/remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.
B. Policy for remuneration to directors, KMP and senior management personnel
(i) Remuneration to Managing/Whole-time Directors, KMP and senior management personnel
The remuneration/ compensation/ commission etc. to be paid to Managing/Whole-time Directors shall be governed as per provisions of the Companies Act, 2013 and Rules made there under or any other enactment for the time-being in force.
(ii) Remuneration to Non-Executive/ Independent Director
The non-executive Independent /Non-Independent Director may receive remuneration/ compensation/ commission as per the provisions of the Act. The amount of sitting fees shall be subject to ceiling/limits as provided under the Act and Rules made there under or any other enactment for the time being in force.
The Nomination & Remuneration Policy of the Company has been uploaded and can be viewed on the Company's website www.indiasteel.in
6. Means of Communication
The quarterly un-audited and yearly audited financial results are publishedin English and regional language newspapers. The financial results, shareholding pattern and other corporate communication to stock exchanges,
filed in compliance of the Listing Agreement, are available at the website of BSE and corporate website of the Company www.indiasteel.in . Information about the Company and its businesses, including products, financial results, shareholding pattern, code of conduct, etc. is available at the corporate website: www.india steel in..
General Shareholders Information:
A. Annual General Meeting :
Date : 28th day of September, 2015.
Time : 11: 30 a.m.
Venue: India Steel Works Complex, Zenith Compound, Khopoli, Raigad-410203.
B. Date of Book Closure and Dividend Payment:
• Date of Book closure : Monday, 21st September, 2015 to Monday, 28th September, 2015(Both days inclusive).
• Dividend Payment Date: No dividend has been recommended by the Board of Directors
C. Company Identification Number (CIN): L29100MH1987PLC043186
D. Stock Exchange Listing: The Stock Exchange, Mumbai
E. Stock Code:
1. ISIN : INE072A01029
2. The Stock Exchange, Mumbai :513361
G. Registrar & Share Transfer Agents
Members are requested to correspond with the Company's Registrar & Transfer Agent: LINK INTIME INDIA PVT LIMITED Phone: 022 25946970, C-13, Pannalal Silk Mills Compound, Fax : 022 25946969 L. B. S. Marg, Bhandup (West), Email ID: email@example.com < Mumbai-400 078 Website: www.linkintime.co.in
H. Compliance Officer Dilip Maharana, Company Secretary
Indiabulls Finance Centre, 1101, 11th floor, Tower- 2, SenapatiBapatMarg, Elphinstone (W), Lower Parel, Mumbai - 400 013. Tel No. +912249102007, Fax No. +912249102099, Email: firstname.lastname@example.org
I. Share Transfer System
Share Transfers in physical form can be lodged with Link Intime India Private Ltd. (Intime). The transfers are normally processed within a period of 15 days from the date of receipt if the documents are complete in all respects. Requests for dematerialization of shares are processed and confirmation is given to the respective depositories i.e. NSDL and CDSL within 15 days. 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.
L. Dematerialization of shares and liquidity
The Company has arrangements with National Securities Depository Ltd. (NSDL) as well as the Central Depository Services(India) Ltd. (CDSL) for a demat facility. 99.54% of the Company's Listed Equity Share Capital was dematerialized as on 31.03.2015. The Company's shares are traded on the Stock Exchange, Mumbai.
M. Plant Locations:
Zenith Compound, Khopoli, Dist. Raigad, Maharashtra-410203 Tel. No. +91 21 92265812 Fax No. +91 21 92264061
N. Address for correspondence:
India Steel Works Limited Indiabulls Finance Centre, 1101, 11th floor, Tower- 2, Senapati Bapat Marg, Elphinstone (W), Lower Parel, Mumbai-400013 Tel No. +912249102000, Fax No.+912249102099 Email:email@example.com Website: www.indiasteel.in
O. NON-MANDATORY REQUIREMENTS:
The compliance with non-mandatory recommendations of the Clause 49 of the Listing Agreement with Stock Exchange are:
(a) Maintaining Non-Executive Chairman's Office: The Company has Executive Chairman so maintaining of such office not required.
(b) Shareholder Rights: The quarterly and half yearly financial performance are published in the newspapers and are also posted on the Company's website, the same are not being sent to the shareholders;
(c) Audit Qualifications: The Company's financial statement for the year 2014-15 does not contain any audit qualification;
(d) Separate posts of Chairman and CEO :The Company has separate post of chairman and MD/CEO.
(e) Reporting of Internal Auditor: The Internal Auditor of the Company reports to the Managing Director(s) and has direct access to the Audit Committee.
(f) The Company has formed a business risk evaluation/management Committee consisting of the following members:
1) Chairman & Managing Director
2) Whole-time Directors
3) Operational/Department Head(s) The objectives and scope of the Risk Management Committee broadly comprise of
1. Oversight of risk management
2. Reviewing the policy and framework in line with applicable legal requirements / guidelines;
3. Reviewing risks and evaluate treatment including initiating mitigation actions
4. Defining framework for identification, assessment, monitoring, mitigation and reporting of risks.
5. Within its overall scope as aforesaid, the Committee shall review risks trends, exposure, potential impact analysis and mitigation plan.